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(approximate $ exchange rates: US$1 = HK$7.8, US$1 = RMB$6.8) June 22 - 30, 2009
Starting as early as next week, swine flu patients in Hong Kong will not automatically be sent to hospital for isolation, amid growing complaints from frontline doctors that unnecessary admissions are wasting public resources. Health officials expect that the number of swine flu cases will double every three days, and are working with medical experts to project the virus' behaviour. Hong Kong reported 26 new cases yesterday, bringing the total to 247. As of yesterday, more than 170 confirmed swine flu patients and another 130 people who had been in close contact with them were in isolation wards in public hospitals. None had developed severe complications. These patients are under the government's quarantine orders and cannot be discharged until they are found to be no longer infectious. Secretary for Food and Health York Chow Yat-ngok admitted yesterday that sending mild cases to isolation wards had stressed public hospitals. Since Thursday, the Hospital Authority has been admitting only confirmed swine flu patients but not suspected cases or their close contacts. A government source revealed yesterday that as Hong Kong proceeds past containment to the mitigation phase of the outbreak, mild cases would be put under home care, similar to what United States and Australia are doing. "We are revising the policy and will make a decision as early as next week. Under home care, patients would be given Tamiflu, and public-hospital beds would be reserved for severe cases only," the source said. If the outbreak spreads further, mild cases will not even be given Tamiflu. The antiviral will only be used on severely ill patients. Ho Pak-leung, of the Public Doctors' Association and a microbiologist at the University of Hong Kong, said the government should switch from hospital care to home care as soon as possible. "There are complaints from frontline doctors that as the virus appears so mild, there is no clinical basis to isolate the patients. The mitigation effect of isolation is diminishing, as the virus is already rooted in the community," Professor Ho said. One frontline doctor said: "These patients have very mild or even no symptoms; it is a waste of resources to put them in single isolated wards, and this compromises some regular services." Meanwhile, the Food and Health Bureau is working with medical experts at the University of Hong Kong to find an outbreak model for swine flu. Patient information and laboratory results are being analysed to project the virus' infectivity and how long the peak will last. Initial findings are expected in two weeks. The government is also closely monitoring whether the new H1N1 virus will overtake the seasonal H3N2 flu virus in Hong Kong. In the United States, about 90 per cent of flu viruses isolated are swine flu. The government source said this "strain replacement" situation would be one of the key factors in planning strategies. The source said the summer flu peak would be the first wave of the swine flu outbreak, to be followed by a second wave in the winter flu peak. "It is a long battle. Hong Kong has to prepare for two waves that will last until next March or April. We have to prepare for the worst." Bankruptcy petitions in Hong Kong in May jumped 54 per cent from a year earlier, totaling 1,417, as the territory continued to struggle with economic recession, but they fell on a monthly basis for a second straight month, government data showed on Friday. Bankruptcies in April totalled 1,490, up 56 per cent from a year earlier. The number of bankruptcies in May was the lowest since January and marked only the third time since August that bankruptcy petitions, which give an indication of future bankruptcies, had fallen from the previous month. Hong Kong’s economy tipped into recession in the third quarter of last year and the government has forecast it will contract by between 5.5 and 6.5 per cent this year. Economists say it may now be bottoming out, but is likely to remain weak this year. An exhibition to mark the 60th founding anniversary of the People's Republic of China has been held in Hong Kong City Hall, which will last for two weeks. Hundreds of pictures and relics were exhibited to show the close ties between Hong Kong and the mainland during the past 60 years since 1949. Donald Tsang, chief executive of Hong Kong special administrative region, Peng Qinghua, director of the Liaison Office of the Chinese central government in the Hong Kong, Lv Xinhua, special representative of the Ministry of Foreign Affair to Hong Kong, and Zhang Shibo, Commander of the PLA Garrison in Hong Kong attended the opening ceremony. Through exhibitions, the organizers hoped to carry forward the patriotism, review the extraordinary path Hong Kong had gone through and deepen the knowledge of the latest development of the mainland, according to Stephen Lam, secretary for constitutional and mainland affairs of the Hong Kong government. The exhibition was jointly organized by Hong Kong Culture Promotion Association and Chinese General Chamber of Commerce.
Barclays Capital raised its forecast for mainland’s gross domestic product growth for this year to 7.8 per cent on Friday, from 7.2 per cent, citing unexpectedly strong May data and a potential uptick in private spending. Barclays joins a number of institutions that have upgraded their forecasts for mainland’s growth in recent weeks, as a government-led investment boom has helped offset the impact of falling exports on the world’s third-largest economy. The World Bank on Thursday raised its GDP growth forecast for this year to 7.2 per cent from 6.5 per cent. “Our view of China on a recovery path is gaining support from economic developments, with the May data pointing to further acceleration of fixed asset investment and a pick-up in retail sales growth, despite continued weakness in exports,” Barclays economists Wensheng Peng and Jian Chang said in a report. “Overall, the latest data support our view that the Chinese economy should be on an accelerating recovery path in H2, although indicators may not move uniformly in one direction.” Annual growth in fixed-asset investment accelerated to 32.9 per cent in the first five months of the year, up from 31 per cent in January through April, led by the government’s 4 trillion yuan (HK$4.5 trillion) stimulus package. Retail sales growth also picked up in May, to 15.2 per cent, helping offset the impact of a 26.4 per cent fall in exports in the year to May. With the stimulus kicking in, many economists now expect that Beijing will be able to come close to its target of 8 per cent growth for the year as a whole. Barclays now expects GDP growth of 9.6 per cent next year, up from its previous forecast of 9.0 per cent, in part because it sees private investment becoming more of a growth driver. “Rising asset prices should help lift investor confidence and stimulate private investment going forward,” Peng and Chang wrote.
Several dams along the Yellow River are close to collapse just a few years after they were built amid concerns that over 40 per cent of the nation's reservoirs are unsafe, state media said on Friday. Shoddy construction, unqualified workers and embezzlement of funds are threatening dams' safety in the northwestern province of Gansu, the China Daily said - situation that could also put people in danger. "Several dams on branches of the Yellow River in Gansu province are near collapse only one or two years after their construction," the paper said. Citing an investigation by the state-run China Youth Daily newspaper, the report pointed to one dam built in 2006 in Huan county on the Yellow River that has developed a dangerous breach in the middle. Locals were quoted as saying that at least five newly built dams in the area were in very poor condition. An official at the county's water protection bureau, who refused to be named, told reporters the matter was being investigated by the government, but refused to provide any more details. But the dire situation is not only limited to Gansu. More than 40 per cent of reservoirs in China - or 37,000 - are in potential danger of being breached, according to the report. Of these, about 3,640 dams are currently being reinforced, and another 7,600 are in need of immediate attention. In the 10 years to last year, a total of 59 dams were breached in the mainland due to torrential rain and quality defects, the report said. It did not give a casualty figure for these incidents. Environmentalists and rights groups have long warned of the negative impact of dams, citing ecological damage and the forced relocation of residents.
June 20- 21, 2009
Swine flu forced the closure of five more secondary schools yesterday as the number of confirmed cases topped 200, but the government said class suspensions would not be extended to all schools.
Financial Secretary John Tsang Chun- wah admitted for the first time yesterday that a three-member committee concluded its search for a new chief executive of the Hong Kong Monetary Authority late last year - months before the government finally announced the retirement of Joseph Yam Chi-kwong.
Hutchison Whampoa (0013) is offering to buy back more than HK$7.6 billion worth of its sterling- and euro-denominated debt early at discounts of up to 16 percent. The ports-to-telecoms conglomerate, controlled by tycoon Li Ka-shing, said it is willing to buy back up to 350 million (HK$4.4 billion) worth of its sterling-denominated notes. The offer applies to Hutchison's Series B 400 million 5.625 percent guaranteed notes due 2026, which the company is offering to buy back at a 16 percent discount, and its Series A 300 million 5.625 percent guaranteed notes due 2017, which it is offering to buy back at a 4.7 percent discount. Hutchison is also willing to buy back up to 300 million euros (HK$3.24 billion) worth of its euro- denominated notes. The offer applies to its 1 billion euros of 4.625 percent guaranteed notes due 2016, which it is offering to buy back at a 4.5 percent discount. "It's an attractive near-term use of cash resources," a Hutchison spokesman said. The offer is open until June 26, with settlement expected to take place on June 30. Calyon is the dealer manager for the buyback. Hutchison has offered to buy back debt several times since the onset of the global financial crisis as it seeks to take advantage of the low-interest-rate environment to lower its financing costs. The conglomerate had consolidated debt of HK$253.88 billion as of December 31, according to its annual report. Hutchison said 33 percent of its borrowings were in euros as of that date, while 6 percent were in sterling.
A property unit of Australia's biggest bank Macquarie Group has sold a luxury residential project in Shanghai at below cost. The bank recently disposed of the 26-storey City Apartments to a mainland investor for less than 300 million yuan (HK$340.17 million), sources said. Macquarie declined to comment. Macquarie had bought the property for 400 million yuan four years ago. A source said it managed to sell it for more than the price offered by a previous potential buyer. In April, it was reported that Citic Capital's real estate arm was close to buying City Apartments, a 16,000 square metre residential development in downtown Shanghai, for about 250 million yuan. Citic Capital, an investment arm of the mainland's largest financial conglomerate, Citic Group, had been negotiating to buy the property for months but no deal was clinched, sources said. Citic Capital declined to comment. "As the market in the city recovers, the property was sold to a mainlander who was willing to pay a price higher than 16,000 yuan per square metre," one source said. The sale price was estimated at between 17,000 yuan and 18,000 yuan per square metre, another source said. Built in 2000, the residential tower comprises 90 flats. A source close to the bank said the disposal was part of Macquarie's business strategy rather than market sentiment. The company would like to streamline its business to focus on commercial properties, so it wanted to sell the residential asset as quickly as possible, he said. The mainland property market has started to recover in the past few months, with sales of high-end properties surging in some cities, such as Shanghai. The property unit of United States investment bank Morgan Stanley had offloaded all the units at its 58-unit block at Chateau Pinnacle in Xingfu Road in the former French concession area to individual buyers in the past two months. The units were sold at an average price of 60,000 yuan per square metre, a source said.
June 19, 2009
US reform 'will secure Chinese investment' - A sweeping plan for financial regulation unveiled late last night (Beijing time) by US President Barack Obama will offer better protection to China's investments in that country, Chinese experts said yesterday.
June 18, 2009
Testimony in the Nina Wang Kung Yu- sum probate battle about hundreds of millions of dollars changing hands over massages and fung shui services has prompted lawmakers to question whether the proper taxes are being paid for these incomes. Undersecretary for Financial Services and the Treasury Julia Leung Fung- yee said she could not comment on individual cases but hinted that press reports about the highly publicized court showdown would be looked into by tax investigators. Legislator Jeffrey Lam Kin-fung had earlier asked for the number of self- employed people, including fung shui consultants, paying taxes and on whether cases of tax evasion are prevalent. However, Democratic Party lawmaker Lee Wing-tat was more direct. "In a recent estate case in court, it showed one Mr Chan and another gentleman, through the provision of fung shui advice and massage services, had received very huge incomes," he said. It has been alleged in the Court of First Instance that at least HK$700 million in cash from Wang was secreted in trucks at night and given to the fung shui consultant. Leung told lawmakers the Inland Revenue Ordinance states that any person earning income by providing services in his personal capacity is regarded as carrying on a business and is required to apply for registration of business and file tax returns. She said the Inland Revenue Department's intelligence team gathers information before dispatching field teams empowered to obtain personal and bank records to reconstruct an auditee's finances. Gifts such as lai see cannot be taxed by the government, Leung added. However, Association of Chartered Certified Accountants international council member and Islands district councillor Amy Yung Wing-sheung said gifts are still scrutinized by auditors with auditees required to detail the nature and circumstances of the gift. "If there is any hint that the gift is connected to services rendered, it is taxable," she said. City University's department of accountancy associate professor Grant Richardson said bonuses for a job well done are also subject to profits tax. He said self-employed people with no fixed prices for their services are required to report their incomes to the Inland Revenue Department, but added that in any cash transaction where the onus is on the income earner to honestly report the income there is always the possibility of tax evasion. A total of 1,862 cases of tax evasion, amounting to HK$2.56 billion, were processed last year. This compares with HK$2.54 billion in 2007 and HK$2.44 billion the year before, Leung said. She said accidental failure to file an accurate tax return can result in a HK$10,000 fine plus treble the tax undercharged, while willful evasion carries a fine of HK$50,000 and treble the tax undercharged as well as a prison term of three years.
Coca-Cola, General Electric and Wal-Mart Stores are among United States-based companies that might seek to list on China's stock exchanges, UBS said. John Tang, a UBS strategist, said he expected a dozen western companies with a "strong presence" in China to offer shares in the yuan-denominated A-share market. "An A-share [initial public offering] allows foreign companies direct access to much-needed [yuan] funding," Mr Tang wrote in a note to clients. The US companies would benefit from higher valuations on the mainland's stock exchanges, he said. The Shanghai Composite Index has rallied 52 per cent this year, boosted by increased lending and prospects for a recovery in Asia's biggest economy. The index trades at 28 times reported profit, twice the price-earnings ratio of the S&P 500 Index. The mainland would gain by expanding choices for its investors, improving corporate governance and helping the exchanges become more "internationally oriented", Mr Tang wrote. Besides Hong Kong-listed stocks and mainland companies, the central government might allow western companies in the consumer and manufacturing industries to offer shares, Mr Tang said. Donald Straszheim, who runs Straszheim Global Advisors, said US companies might not be interested in listing on the mainland. "China still does not have a sufficiently robust history of equity market stability, either in terms of performance or in terms of rules and regulations," he said. "Until that is the case, I can't see any significant foreign company doing [initial public offerings] in China," Mr Straszheim added. The central government said as early as November 2001 that it might allow foreign companies to list on its domestic bourses. HSBC Holdings (SEHK: 0005, announcements, news) chief executive Michael Geoghegan said last month the bank was looking forward to listing its shares in Shanghai when local rules permitted. NYSE Euronext, the world's largest owner of stock exchanges, has the central government's support for listing in Shanghai, chief executive Duncan Niederauer said last month. Everbright Securities, Zunyi Titanium and Sichuan Expressway may be among the first domestic companies to sell shares publicly on the mainland this year as the government prepares to reopen equity fund-raising activities, which it stopped last year. The companies were working on final documents required for regulatory approval to offer stock in Shanghai or Shenzhen, sources said.
Shanghai formally opened its doors to outsiders yesterday, releasing details of new rules that allow them to become permanent residents. The tiered system will mean some incomers will be able to qualify for the coveted hukou in as little as three years - but for most it will take at least seven. The rules, which are being implemented on a three-year trial basis, are aimed at switching from a quota-based mechanism providing permanent residency according to profession to one based on clearly defined entitlement criteria. "We can definitely guarantee the system is fair and just," said Mao Dali , deputy director of the Shanghai Municipal Human Resources and Social Security Bureau. Mr Mao pledged that city officials would handle applications within 60 working days. The first hukou to be issued using the new criteria could be released within three months, Mr Mao told a press conference yesterday. Under the basic requirement - first floated by the municipal government in February - immigrants must have been formally registered as a resident of the city for at least seven years. Applicants will need a stable income, a "good credit rating" and to have paid social security and tax in the city throughout the period. However, the city hopes the new system will boost its competitiveness in attracting talent. Professionals in certain fields and those holding top-tier national technical qualifications will be able to jump the queue. There is also a shortcut for the wealthy. Immigrants who have posted a taxable income averaging more than 1 million yuan (HK$1.14 million) for three consecutive years will not need to meet the seven-year residency requirement. Entrepreneurs employing at least 100 people in the city for three years will have the same advantage. Teachers and hygiene workers in rural districts around the city's periphery are also being given priority. They can apply after just five years' residency. According to population figures from the Shanghai Municipal Statistics Bureau, fewer than 13.6 million of the city's 18.6 million inhabitants held a local hukou at the end of 2007. But Ye Mingzhong , the deputy director of the Shanghai Municipal Development and Reform Commission, said officials did not expect to be overwhelmed with applications during the first year. "Since the pilot system for issuing residence permits was introduced in 2002, applications have increased year on year, reaching a total of 270,000 by the end of 2008," he said. "But the number of successful applications in '02, '03 and '04 was not so high." Currently there were just 3,000 residency-permit holders who had reached the seven-year requirement. The hukou system used throughout the mainland in effect ties access to public services to a person's place of birth. Shanghai's resident-permit system was initially offered to talented migrants in 2002. It was extended to all immigrants in 2004.
June 17, 2009
Civil service and police inspectors' unions yesterday opposed a proposed 5.38 percent cut in the salaries of senior officials in government and publicly funded organizations that may save HK$2 billion in annual expenditures.
Seafood restaurant owners in Lei Yue Mun say they may have to close when a new rule banning them from pumping seawater from the harbour into their fish tanks is introduced in August. The government is amending the Food Business Regulation to stop fish vendors using seawater from Victoria Harbour and areas in typhoon shelters, which constantly show high levels of E coli bacteria. But seafood restaurateurs in Lei Yue Mun said the change in the law would hit their businesses hard. Restaurants pump their seawater from points 100 metres away from the shore. Peter Law Shing-hing, vice-chairman of the Lei Yue Mun Kaifong Association and a seafood restaurant owner, said the seawater was sterilised before being used in fish tanks. Kwun Tong district councillor Lui Tung-hai said the restaurants had been pumping water from the sea nearby for decades and he could not see any problem. "If they forbid restaurants to pump from the sea, all the restaurants here will close down." The Food and Environmental Hygiene Department found the seawater in the area contained E coli levels higher than the legal limit in seven out of 10 samples taken last year, and tank water in two restaurants was found to be contaminated during tests twice in the past four years. The government has suggested restaurants in Lei Yue Mun buy seawater from elsewhere and transport it to Lei Yue Mun by vehicle. But Mr Law said this would not work, considering the very narrow streets in the area. "When we push the trolleys of water along the road, there will be no room for pedestrians," he said. Lawmakers from a Legco subcommittee examining the amendment suggested after a site visit yesterday that the government could pump cleaner water for restaurant use from another area of the sea. But the undersecretary for food and health, Gabriel Leung, said the government would not get involved in business activities. After lawmakers threatened to vote the law change down, a spokesman for the Food and Health Bureau said yesterday the bureau would press for passage of the amendment through Legco because the new rule was "very important for the health of citizens and food safety".
Tencent Holdings (SEHK: 0700), a Hong Kong-listed Chinese internet service provider, is interested in listing its shares on the mainland, chairman Pony Ma said in an interview yesterday. The company, which celebrates the fifth anniversary of its listing in Hong Kong today, hopes to provide a channel for its 411 million mainland users to buy its shares, although it has not set a timetable. "Given that our company is based on the mainland, we want our users to be our shareholders," Mr Ma said. "We are waiting for the government [to issue] policies regarding listings by foreign companies." Mr Ma said it could be better for red chips, which refer to mainland firms registered overseas, to list on the mainland before other foreign companies. Tencent is registered in the Cayman Islands. "Many investors have expressed interest in the company. Several big investors are able to invest in us, while others we can do nothing about," said Mr Ma. He said the company had no immediate plans to reduce the size of the board lot on the exchange. The company's shares trade in 200-share board lots, which requires a minimum trade size of HK$17,840, based on yesterday's closing price of HK$89.20. The company was listed in Hong Kong in June 2004 at HK$3.70 per share. Tencent, the country's largest instant message service provider by number of active users, has branched out to other internet value-added services, such as online games and social networking communities. "China has about 300 million internet users, and it could reach 500 million in the near future," said Mr Ma. "It is very important for us to draw new users to drive growth." Mr Ma said "100 per cent" of new mainland internet users would register as users of Tencent's QQ messaging service as soon as they bought computers with internet access. Tencent has also invested significantly in new products, such as e-mail and office document services, to meet demand. Mr Ma said Tencent would launch several self-developed online game titles from the second half of the year, after the success of Dungeon and Fighter, a game it had licensed.
Shanghai-listed Hisense Electric plans to raise as much as 1.5 billion yuan (HK$1.7 billion) by placing up to 150 million shares to fund further expansion into upstream segments of liquid-crystal display (LCD) television manufacturing. In a statement to the stock exchange, it said the share offer would target both institutional and individual investors at no less than 10.83 yuan per share. It said proceeds from the placement, which has yet to be approved by the China Securities Regulatory Commission (CSRC), would be used for boosting production capacity in LCD modules and flat-panel television sets. After the expansion, production capacity of LCD modules, a key component for flat-panel television sets, would jump from 1.5 million units to 6.5 million, it said. "This move by the company is a natural action to streamline its industrial chain and control its production cost," said a household appliances analyst with Shenyin & Wanguo Securities. Manufacturing of LCD module, a weak link of domestic television producers' industrial chain, which usually makes up about 70 per cent of the cost of the final product, has been an area of intense competition for domestic television makers. Hisense had attempted to issue additional shares to raise 1 billion yuan to fund an LCD module expansion project in April last year, but the CSRC vetoed the effort for reason not fully clarified. "The currently much-improved sentiment of both the television industry and the domestic stock market has also offered a good time window for the share offer," said the Shenyin & Wanguo analyst. Compared with two years ago, demand for appliances has improved under Beijing's generous subsidies encouraging household purchases. And major indices of local bourses have also risen about 50 per cent since the start of the year amid gradually prevailing talk of an economic bottoming-out in the country. But whether the expanded LCD module line would result in the intended effect had yet to be seen, said Qiu Hongtian, an information technology analyst at Fortune Securities, noting the already intense competition in the LCD sector. "Hisense has to prove its competitive strength against both overseas LCD module producers and domestic specialised makers, which have more advantages in economies of scale than Hisense," he said. Hisense closed down 2.83 per cent at 11.68 yuan yesterday.
June 16, 2009
An additional HK$3 billion in funding is being sought to finance the construction of a highway, six medical and health facilities and 25 rehabilitation projects in Sichuan in a new phase of Hong Kong support for the rebuilding of the quake-stricken province. But officials said the wish of some lawmakers to see the progress in Sichuan for themselves before approving more funding could not be fulfilled at this stage. Democratic Party members said they wanted to visit Sichuan to inspect progress on previous projects before approving the new commitment, listed in a Constitutional and Mainland Affairs Bureau document circulated to legislators yesterday. The government has vowed that Hong Kong's financial commitment to Sichuan reconstruction work will not exceed HK$10 billion. The total granted so far is HK$6 billion. Under the latest plan, about HK$2.3 billion will be used to finance the building of the Mian Mao Highway to improve the transport network of Mianzhu and Mao counties. "As a necessary measure to address the livelihood problems and enable early resumption of the local economy and normal life ... along the road with a total population of about 188,000 people ... it is imperative that the proposed highway project be implemented as soon as possible," the bureau paper said. About HK$300 million would be spent on six projects of medical and health facilities, and another HK$280 million on 25 rehabilitation centres. Democratic Party chairman Albert Ho Chun-yan said legislators should be allowed to visit the sites to assess progress. "It is taxpayers' money. We cannot be too careful in approving the funding request," he said. "Reading progress reports is one thing, seeing for ourselves at the sites is another." But he said it was too early to say whether the party would veto the funding if its request was unheeded. Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung said: "We are all very aware that legislative councillors would wish to visit Sichuan as soon as possible. "We have communicated with the Sichuan provincial government. They appreciate the concern and interest on the part of legislators in Hong Kong. However, as they do have a lot of work to be taken forward, we believe that it is possible that the visit can only take place later." He said the central and provincial governments were hoping to complete the major reconstruction projects in two years, rather than three as originally planned. Officials are expected to submit the funding proposal to the Finance Committee on July 3.
China police say an online gambling racket they have smashed will end up involving the most participants and money exchanged in the nation's history. Twenty-seven people are serving jail sentences, and the trials of 30 others are pending. Gamblers bet on soccer matches, horse racing and also on Hong Kong's Mark Six. "Tens of thousands" of gamblers had bet as much as 50 billion yuan (HK$56.7 billion) nationwide in the operation, Xinhua quoted Gong Daoan , Public Security Bureau chief of Xianning , Hubei , as saying. But because the organisers had transferred the majority of their money overseas it was unlikely to be recovered, Mr Gong said. He added that private business owners, senior managers of state-owned enterprises, and government officials were among those who had gambled. "We found tens of thousands of gamblers from around the country taking part in gambling organised by six gangs between 2004 and 2009. Most of the gambling funds have flowed to overseas gambling groups through underground money-laundering channels," Xinhua quoted Mr Gong as saying. Hubei police began investigating the operation last year, the news agency said. Participants could either bet on overseas websites or ask overseas web managers to bet for them. "Either way, the gambling organisers could guarantee at least 30 per cent profit," Xinhua quoted an officer as saying. The system enabled gamblers to avoid travelling to casinos in Macau and elsewhere outside the mainland. Online gambling appeared to prosper following Beijing's campaign to curtail gambling trips to border towns since 2003. Statistics show the campaign has been working, with the number of border casinos falling from 149 in 2005 to 28 in 2007. But since 2006, the number of online gambling cases on the mainland has been rising. Police in Shanghai, Tianjin , Henan and Liaoning reported smashing operations totalling tens of millions of yuan from 2007 onwards. But the Hubei operation has topped them all, both in the number of participants and money involved. Gambling websites in Taiwan, Macau, Myanmar, the Philippines, Singapore and Malaysia had all made money from mainland gamblers, Xinhua reported.
Xiamen, a major city in Fujian province, is seeking to forge closer financial ties with Taiwan by applying to be the mainland's first and only settlement centre for the official currencies in the two markets, according to Xiamen vice-mayor Ding Guoyan. As a core part of closer cross-strait co-operation in finance and trade, the coastal mainland city was seeking the State Council's approval to set up the planned settlement centre, a short cut to existing fund flows from Taiwan into Xiamen through Hong Kong, he said. "We are fighting for this," Mr Ding said yesterday of the plan. "We are also in talks with Taiwan and Hong Kong about intensified co-operation in logistics, services and financial areas." A race to entice more Taiwanese investments was sparked last month when the State Council promulgated a policy to create a special economic belt in the west of the Taiwan Strait by 2012-20. The special zone spanning southeastern Fujian aims to buoy business, financial and cultural exchanges as well as human relationships across the strait. In another move to cash in on burgeoning trade ties across the straits, China Merchants Holdings (SEHK: 0144) (International) plans to invest in a 15 billion yuan (HK$17.01 billion) port development in Zhangzhou, Fujian, according to top city officials. The Hong Kong-listed port operator was expected to take an unspecified stake in the planned project, which involved constructing as many as 10 berths in the fourth phase of the Zhangzhou port zone, said Liu Keqing, the Communist Party secretary of Zhangzhou. Liu Wei, China Merchants Zhangzhou Development Zone deputy general manager, said China Merchants was in talks with its parent firm about the potential investment in the fourth phase. At present, it is a joint venture between the parent company and the local government's investment arms. The new berths would handle bulk cargo such as logs, steel and agricultural products exported largely to Taiwan and Southeast Asia, Mr Liu Wei added. He said "parts" of the new berths would be ready for operation in 2012. That year is the State Council's medium-term target for the Straits West region to become a national leader in scientific innovation with higher living standards and specialising in direct links with Taiwan.
June 15, 2009
Singapore retail sales suffered their biggest drop since 1999 as shoppers cut back on big-ticket items such as cars and furniture amid the city-state’s worst ever recession. The statistics department said on Monday that retail sales fell 11.7 per cent from a year earlier after dropping 7.3 per cent in March and 5.5 per cent in February. The government also said it slightly revised up its first quarter unemployment rate to 3.3 per cent from 3.2 per cent initially reported in April. The jobless rate was 2.5 per cent in December. “The weakness in consumption initially reflected a shock to confidence, but personal incomes are now suffering as well,” said Robert Prior Wandesforde, senior Asia economist with HSBC (SEHK: 0005). Singapore expects its economy to shrink up to 9 per cent this year, which would be its worst contraction since splitting from Malaysia in 1965. The recession, which began in the second quarter of last year as exports plunged, has started to eat away at jobs and hurt consumer confidence. The April retail sales numbers are also a bad omen for second quarter gross domestic product growth. Singapore’s GDP plunged a seasonally adjusted, annualised 14.6 per cent in the first quarter from the previous quarter, following a 16.4 per cent drop in the fourth quarter. The unemployment rate will likely rise, further undermining consumer demand, Morgan Stanley said in a report on Monday. Many of the new jobs recently created by projects in the pharmaceuticals, chemicals, retail and hotel sectors were from investments laid out years ago, and fresh capital outlays are slowing, it said. “Job losses could soon catch up when the capital expenditure recession invariably intensifies and consumer strength is likely to stay subdued next year,” the report said. Morgan Stanley said it expects Singapore’s economy to shrink 10 per cent this year and grow 3 per cent next year. Sales of motor vehicles fell 28 per cent, furniture and household equipment dropped 11 per cent, and apparel and footwear slid 6.1 per cent, the department said in a statement. Sales fell a seasonally adjusted 3.1 per cent from March.
Poly (Hong Kong) Investments said late on Sunday it planned to sell new shares to a major shareholder at a discount, raising HK$776 million to fund future investment, including building up its land bank, and for working capital. The property firm said it would sell 230 million shares at HK$3.45 each to a major shareholder after the major shareholder completed a sale of the same amount of existing shares at the same price to third party investors. The issue price represented a 7.26 per cent discount to its closing price of HK$3.72 on Thursday prior to a trading suspension. Trading will resume on Monday. BOC (SEHK: 3988) International and Citigroup Global Markets are the placing agents.
Authorities in China and Taiwan, political rivals once on the brink of war, have agreed to remove underwater military barricades and let 100 people swim from one side to the other, Taiwan officials said on Monday. The 8.5-kilometre swim, billed as the latest symbol of peace between the two sides as well as their first military agreement, is set for August 15 between the southeast mainland city of Xiamen and Little Kinmen, an outlying Taiwan-controlled island. “The bigger meaning is that this is a competition for peace,” Kinmen County Magistrate Lee Zhu-feng told a news conference. “We want peace, not war.” Military officials have agreed to remove anti-ship landing barricades, which stand as testament to a skirmish between the two sides five decades ago, county officials said. Protected by coast guard boats from both sides, about 100 professional swimmers, 50 from each side, will go one way from Xiamen through the warm but choppy waters. Next year another 100 swimmers, 50 from each side, plan to do the route in reverse in what could become an long-term annual event, organisers said. In 1958, China bombed the islands of Kinmen, also known as Quemoy, for weeks as it tried to seize them. Kinmen has strategic and military value and remains heavily guarded. The main island of Taiwan is about 160 kilometres from the mainland. The barricades are spikes mounted at an angle on cement bases and designed to spear warships headed toward shore.
Shanghai, an economic powerhouse in eastern China, saw loans for auto buyers grow fastest in credit extension for individuals amid robust sales of motor vehicles in the first five months of this year, the municipal banking regulatory commission said on Saturday. At the end of May, loans outstanding for auto buyers stood at approximately 17 billion yuan (2.49 billion U.S. dollars) in the city, a growth of 55 percent against the end of May 2008. China has since 2004, when it approved its first financing firm for motor vehicles, launched 10 such companies, including four in Shanghai. The four, claiming a two-third share of the municipal auto financing market, recorded 10.6 billion yuan in loans outstanding for auto buyers at the end of May, up 35.29 percent. The local banking regulatory commission said at the end of May, non-performing loan ratio for auto credits stood at no higher than 1.2 percent, below the average NPL ratio in the city. According to China Association of Automobile Manufacturers, China sold 4.96 million home-made motor vehicles in the first five months, up 14.29 percent year-on-year. The total included 3.66 million passenger vehicles, up 21.2 percent. The passenger vehicles included 2.603 million cars, up 16.54 percent. June 14, 2009
Hong Kong doctors are writing false medical certificates that allow mainlanders to dodge the city's immigration rules and give birth here, the Sunday Morning Post (SEHK: 0583) has discovered. They are allegedly signing documents for mainland agencies that say the women have received medical checks within the first 28 weeks of their pregnancy - as required by the immigration policy - so they can secure a bed in a private hospital. The Post understands that one private doctor is being investigated by the Hong Kong Medical Council for allegedly issuing such a forged document. It is not known if this doctor was working with an agency. A Post reporter who approached the agencies posing as a mother-to-be was told they had doctors licensed in Hong Kong and on the mainland who visited Shenzhen to examine clients. Most of the agencies have offices in Shenzhen and offer various packages for pregnant mainlanders. The packages usually cover two prenatal checks in Hong Kong, one standard hospital bed, postnatal accommodation and nanny services, plus help in applying for a birth certificate that establishes the baby's right of abode in Hong Kong. The cost is about 90,000 yuan (HK$100,000). A woman calling herself Ms Zhang, who works for an agency called H. K. Love The Peaceful Household Service, said: "We have doctors who can come to Shenzhen with all their equipment to do the body check and they can prove the check was done, as required by Hong Kong. With the documents our doctor issues, you will have no problem crossing the border." It advertises two offices on its website, in Tai Kok Tsui in Kowloon and in Shenzhen. It claims to provide a one-stop service for women who want to give birth in Hong Kong. For those whose pregnancy is too advanced to be admitted to the city, it boasts: "We can arrange hospital certificates for them, without having them going to Hong Kong." Choi Kin, a former chairman of the Medical Association, said he understood a local doctor had been investigated for allegedly issuing false medical certificates. Dr Choi said the government should clarify whether Hong Kong doctors can cross the border and conduct health checks on mainland women. "Although Hong Kong doctors with a mainland medical licence can now in theory open clinics there under the Closer Economic Partnership Arrangement, nobody has so far practised on the mainland," he said. Leung Ka-lau, lawmaker for the medical sector, said it was illegal for Hong Kong doctors to work with agencies to provide a middleman service. "We can't stop mainland mothers getting middleman agencies to get them to Hong Kong, but Hong Kong doctors are not allowed to link up with such agencies." The government said it was not aware of the situation. The Immigration Department said only that it was an offence to forge a document or make a false representation to an immigration officer. The Health and Welfare Bureau said doctors who had a medical licence for the mainland could perform health checks on mainland woman for immigration purposes as long as the checks were conducted within 28 weeks of the pregnancy. "In the private hospital sector, as long as the hospitals allow the doctors to do so, we have no problem with that," a spokesman said. The Medical Council declined to comment on reports that a doctor was under investigation. Since February 2007, mainland women who are 28 weeks or more pregnant must show a certificate at the border checkpoint, confirming they are booked to give birth at a Hong Kong hospital, in order to enter the city. This is to ensure local women receive priority and to restrict the number of non-locals giving birth to avoid straining the health system.
The government will spend up to HK$50 million on flu medicines after the city confirmed 11 new swine flu cases yesterday, including the first Filipino domestic helper. On the mainland, 24 new cases were reported, the most in one day. The Ministry of Health said the new cases were found in a number of provinces and cities - four cases in Guangdong and Fujian, three cases in Shanghai, Hubei and Sichuan, two cases each in Zhejiang and Hainan, while Jiangsu, Liaoning and Beijing each reported a case. Hong Kong officials warned that the city would probably see a significant rise in the number of cases soon and deaths could not be ruled out. Stocks of flu medicines, including Tamiflu, would cover 15 per cent of the population, said the controller of the Centre for Health Protection, Thomas Tsang Ho-fai. Ten of the 11 new cases were imported, the centre said. The source of infection for another female case has not been determined. The Filipino maid, 28, fell ill on Thursday and was admitted to hospital the next day. At least three other cases have been imported from the Philippines. In the latest confirmed cases, two locals, 17 and 21, were sent to hospital from the airport after they returned from Thailand and the US. A Canadian man, 27, also showed flu-like symptoms at the airport and was admitted to hospital. A 19-year-old woman, who had visited Jiangxi province and Guangzhou before falling ill in Hong Kong, had yet to be categorised as an imported or local case. These latest cases lifted the total number of confirmed cases in Hong Kong to 84. "We expect things to move pretty fast in the next few days in terms of new cases," Dr Tsang said. More locally transmitted cases would come to the surface after the centre finished testing a group of students from St Paul's Convent School in Causeway Bay. By yesterday, 14 students had been confirmed with the virus. Dr Tsang said that going on the US experience, the number of confirmed cases in Hong Kong could be the "tip of an iceberg". Gabriel Leung, undersecretary for food and health, said the peak for summer seasonal flu could arrive in two to four weeks. "There could be people or patients who suffer from complications or even die." The government will assess whether classes in kindergartens, nurseries, primary schools and special schools can resume from June 26. In Japan, a school closure did not put an effective stop to infections because students gathered at other places, Professor Leung said.
Beijing is preparing to exact a form of revenge after its failed attempt to grab a stake in global mining giant Rio Tinto. Its weapon: the country's new antitrust law that could now threaten Rio's planned iron ore venture with rival BHP Billiton. Fearful of an effective global monopoly in iron ore supply, mainland steelmakers are pinning their hopes on an antitrust investigation that could help block the establishment of the venture. Or Beijing could impose sanctions on its operation in China, the world's biggest producer of steel. Rio and BHP, the world's second- and third-largest iron ore producers, earlier this month reached a non-binding agreement to set up a 50-50 joint venture covering their Western Australian iron ore operations. The deal came after debt-ridden Rio cancelled a proposed US$19.5 billion tie-up with mainland state-owned Aluminum Corp of China (SEHK: 2600) (Chinalco) following political opposition in Australia. The Rio-BHP venture will cut costs for the miners but has provoked opposition from steelmakers in China, Japan and Europe, countries that are heavily reliant on imported iron ore. They say the tie-up would further concentrate supply in the hands of a few players in a market where prices of ore have quadrupled from 2004 to last year.
China may soon become the world's biggest luxury market, but cultural challenges to winning customers' hearts for certain types of products remain, industry executives said this week. Champagne house Taittinger said there were many places on the mainland where it could consider making high-quality sparkling wine - champagne can only be made in the northern French region - but Chinese palates were not accustomed yet to the pricey tipple. "It is probably a bit early," Pierre-Emmanuel Taittinger said. "There is not a strong [high-end] wine culture there yet." Hermes, whose chic handbags are handmade in France, would consider making goods on the mainland if it could find artisans to make original items but said it suffered from counterfeiting there. "When they see a counterfeit, they think it is genuine," said chief executive Patrick Thomas. Counterfeits cost luxury groups hundreds of millions of euros in lost sales every year. "The challenge in China is being able to explain to 1.3 billion people what your brand is about," said Van Cleef & Arpels chief executive Stanislas de Quercize. While the number of high-net-worth individuals in China is set to continue to rise steadily, the bulk of the country's population cannot afford upmarket western brands. But luxury groups agree that China, where consumers are very brand-conscious, will soon become the industry's No1 market and will be one of the few emerging markets to enjoy growth this year. "China will be one [of], if not the most important market in the middle, long run," said Scilla Huang Sun, who runs a luxury fund for Julius Baer. "Chinese will not buy the very high end, like the Russians, but there are so many Chinese ... [They] save a lot, and it's a huge country." Bernstein said this month its proprietary survey of Chinese luxury retailers suggested "demand resilience through the first and second quarter of 2009, most notably for mega-brands with high brand recognition". China has become the No 1 market for LVMH's Hennessy cognac and the second-largest for its fashion and leather goods maker Louis Vuitton. For Lamborghini, China will overtake Italy as the second-biggest market behind the United States within three to five years. "They love what is coming out of Europe," said chief executive Stephan Winkelmann. "What is European is something they want to possess." But the carmaker said the tradition of luxury chauffeurs, bigger than sports driving, made expansion on the mainland a challenge. Watchmaker Hublot, which has been on the mainland since January, plans to open 10 shops there by year's end. By 2012, it would like to see China as its third or fourth market, after the US, Europe and Japan. Tom Purces, the chief executive of British luxury carmaker Rolls-Royce, said: "I think there are a lot of people who comment on China as being pictured as the biggest premium market, because they see the growth from a very tiny base to a very large base. "We went from a handful of cars in China to over 100 cars there last year. That's immense in a very short period ... but I don't believe that growth will be sustained at that level."
June 13, 2009
The Peking University associate professor who accused a China Central Television presenter of disloyalty has apologised on his weblog, writing that he had not said she was a spy for Taiwan, only that she was "leaking secrets". Zhou Yijun , of the School of Journalism and Communication, also said in his entry on Saturday that he did so only as a metaphor in an article about students cheating on the National College Entrance Exam. But Professor Zhou refused to say where he obtained the news and the details about Fang Jing. "I will keep my mouth shut. Please don't keep calling me," he wrote. "Even if I am being irresponsible, I only said [Fang] was leaking secrets instead of being a spy." The Oriental Guardian, based in Nanjing , reported that Fang had applied to host Defence Watch, a panel discussion programme on military issues, to gather intelligence. Fang said in a video interview with Web portal Sina.com: "I have no reason to betray my motherland [and] sell my soul. "I have unlimited love and loyalty to the country and its people ... The truth will prove it all." Fang, 38, said she heard of the "groundless rumour" in mid-May and read it in Professor Zhou's blog on Thursday after a colleague had her about it. "I was shocked when I read the news. I can't understand why a public figure would spread rumours in public." The Southern Metropolis News reported that Professor Zhou on Friday sent an e-mail to newspapers saying he was not in a position to give more details. "Wait for the information from the government, court and CCTV." Fang, however, said no one from any governmental department had approached her. She said she would not talk to interviewees, mostly military experts, before the cameras were turned on because she wanted to have a real interview with them. She said she obtained military knowledge via "open channels" like everyone else. "For example, if we talk about F-16 flights today, [I would] google it."
Suzhou party secretary Wang Rong officially took over from disgraced Shenzhen mayor Xu Zongheng yesterday, pledging to push forward reforms and build a clean government, state media reported. Mr Wang was appointed as the acting mayor of Shenzhen. His nomination as mayor has to be approved by the city's legislature - which will not meet until next spring. The widely anticipated nomination was announced yesterday by He Zejun, head of the organisation department in Guangdong, at a meeting of all senior local officials. The meeting was chaired by Shenzhen party secretary Liu Yupu. Mr Wang, a Jiangsu native, pledged that he would push forward with economic and administrative reforms in Shenzhen, and ensure the special economic zone stays ahead of other cities as the mainland's most open economy. He also pledged to build a clean, efficient government that would be responsive to public opinion. Mr Wang's nomination came just a week after the downfall of Xu, who was officially sacked on Thursday for violating party discipline. Xu was detained last Friday, accused of corruption and trying to offer bribes for promotion. Mr Wang, 51, has also been appointed deputy party secretary of Shenzhen. He had been the Suzhou party secretary since 2004. An academic before joining the government, his rise to power has been rapid. He is also an alternative member of the powerful Communist Party Central Committee and even ranks ahead of his new superior, Mr Liu. While many believe Mr Wang will reshuffle the leadership in Shenzhen, his first priority is to bring stability back to a city shaken by the corruption scandal. Several high-ranking officials were linked by the media to Xu's downfall. Over the past few days, all have made public appearances, including Yan Xiaopei - who had been out of the public eye for months because of poor health. Shenzhen civil servants said they hoped the new mayor could quickly repair the city's damaged image and restore rank-and-file morale. "Shenzhen had always been known before this [scandal] for its openness and efficiency. This image has been greatly tarnished by Xu's corruption. I hope Mr Wang will be totally different from Xu," one government employee said. Another official said: "The city's development, particularly infrastructure construction, is lagging behind. We hope Mr Wang can do to Shenzhen what he has done to Suzhou." Suzhou underwent rapid development under Mr Wang's charge. While Beijing appears eager to see stability returning to Shenzhen, it is taking the chance to warn officials. "Let all those who are like Xu Zongheng tremble in fear. We are building a comprehensive anti-corruption network around these people. Like Xu Zongheng and Chen Shaoji [the disgraced former Guangdong police chief], more and more corrupt officials will fall. The storm has just started," read a commentary carried by the People's Daily a day before the formal removal of Xu as Shenzhen mayor.
June 12, 2009
Beijing, Shanghai and Hong Kong have jumped in a year to be ranked among the world's 30 most expensive cities for tourists and expatriate workers. The Chinese capital surpassed Hong Kong, a city well known for its lavish lifestyle, as it rocketed from 104th to 26th position in the latest cost of living survey by ECA International, a human resources company. Beijing costlier than HK, survey finds. Shanghai jumped from 111th to 28th position in the March survey and Hong Kong moved 69 places to become the world's 29th most expensive city. The survey found that as America and Europe bore the brunt of the recession, strong Asian currencies were pushing up the cost of living for staff assigned to major Asian locations. The survey, which featured 15 Chinese cities and is conducted twice a year, compares a basket of 125 consumer goods and services commonly purchased by international assignees in over 370 locations worldwide. Lawrence Ong, a foreigner working for a UN agency based in Beijing, said the capital was more expensive than he had anticipated. "A cup of coffee costs around 30 yuan ($4), about the same price I pay in countries such as Singapore," he said. "It is easy to find very expensive restaurants, or very cheap and affordable ones, but it is quite difficult to find mid-range places." Based on ECA's survey, the China News Agency conducted an online poll about money pressures in Beijing, Shanghai and Hong Kong. More than 80 percent of the 20,000 respondents said their monthly expenditure exceeded their income and that concern about housing costs topped worries about food, clothing and transportation. The ECA survey found Tokyo remained the most expensive Asian city. This was mainly because of the appreciation of the yen against other major currencies. "The strengthening of Asian currencies is the dominant factor contributing to the region being more expensive for visitors than it was 12 months ago," explained Lee Quane, regional director of Asia, ECA International. "In that period, the yuan has continued to strengthen while the yen has appreciated by almost 8 percent against the US dollar. "As a result, people coming from Western countries into Asia will notice a considerable difference in costs compared with 12 months ago," he said. In Hong Kong, although the effect of inflation has been more moderate than last year, the cost of goods and services is now higher, it found. The Hong Kong dollar is pegged to the US dollar. "The main reason is the strengthening of the US dollar over the year," he said. "Companies sending staff into Hong Kong and paying them in their home currency are likely to have seen the purchasing power of their staff adversely affected." Currency fluctuations played a major role in survey rankings, but falling inflation and, in particular, the drop in petrol prices from the record highs of last year, also had an impact. The WHO chief declared here Thursday that the organization has decided to move its A/H1N1 flu alert level to phase six and the widely spreading flu has developed into a full pandemic. Margaret Chan told a news conference that the full pandemic in 41 years was assessed as a "moderate" one. "On the basis of available evidence, the scientific criteria for an influenza pandemic has been met. I have therefore decided to raise the level of pandemic alert from phase 5 to phase 6, the world is now at the start of the pandemic," she said. The WHO do not suggest closing borders and urge countries do not pose restrictions on movement of people, goods and services, she said. The chief said that more flu deaths are expected, but no sudden jump in the death toll. She also urged to stop production of seasonal flu vaccine and turn to A/H1N1 flu vaccine production. The decision was made following consultations with world experts through a teleconference. A WHO statement has been sent to the WHO's members. The declaration is expected amid concerns that the A/H1N1 flu virus, which originated from Mexico two months ago, has widely spread to Asia, Europe, and the Americas. The WHO has raised the alert level to five at the end of April, the penultimate level in its six grades, indicating a pandemic was "imminent." And many experts have been expecting the upgrade of the flu due to its fast-spreading nature. However, experts explained that the highest level by no means indicates the greatest severity of the disease, but simply indicates the geographical spread of this flu. This is the first global flu epidemic in 41 years. As of Wednesday, 74 countries have officially reported 27,737 A/H1N1 infection cases to the WHO, including 141 deaths.
Singapore Airlines (SIA) said on Thursday it will start using the Airbus A380 superjumbo on its Hong Kong route starting next month. SIA, which operates five daily non-stop flights between Singapore and Hong Kong, said the A380 will replace an existing Boeing B777-300ER service. SIA, the launch customer for the superjumbo, currently flies the world’s biggest passenger plane from Singapore to Sydney, London, Tokyo and Paris. The giant plane can carry up to 853 passengers but SIA has chosen a setup with a maximum 471 seats. SIA currently has eight A380s in operation, while it also has a firm order for another 11 and options for six more, the carrier said. Hong Kong's securities watchdog said it has sought court intervention to direct Lehman Brothers Asia to produce documents that could aid its investigation into the minibonds fiasco.
Hosting the Americans last week. Visiting Russia next week. China's busy diplomacy amid the economic crisis reflects the growing sway some say has brought the moment for Beijing to don the cape of a full superpower. Many mainland observers think the woes besetting the wealthy west would help Beijing win a bigger global role, but that expectation comes tethered to warnings the country should not oversell its strength - above all, not imagine dislodging United States dominance or the dollar any time soon. "The leadership is fully aware that the United States will continue to dominate despite the financial crisis," said Zheng Yongnian, director of the East Asian Institute of the National University of Singapore. "China does see opportunities to accelerate its rise, but it's still far from becoming an overall superpower." That caution will be on display next week when President Hu Jintao visits Russia for the first summit of Brazil, Russia, India and China. The four fast-growing countries may discuss ways to reduce reliance on the US, but it is Moscow, not Beijing, that has been the most vocal about diversifying away from US government bonds and making the yuan a global reserve currency. Just last week, when US Treasury Secretary Timothy Geithner was in Beijing to reassure his hosts about the safety of their vast dollar holdings, the Chinese leaders made it clear they, too, wanted to see a strong US economy. China, however, knows well that the game has changed. Its growing prominence is rubbing against its ingrained preference for a muted international role. The line of foreign governments looking to Beijing for an economic boost has raised the question of how far the country should use its vast savings and continued growth during the global slump to advance broader national goals. "There was initially some uncertainty about the strategic impact of the financial crisis," said Yan Xuetong, an international relations expert at Tsinghua University in Beijing. "But now we are seeing clearly that the crisis will lift China's international status ... With countries asking China for its money, it has found its international influence has also expanded." The discussion is also about the right limits for the country's ambitions. The rejection of Aluminum Corp of China (SEHK: 2600)'s tie-up with global miner Rio Tinto last week underscored the pitfalls Beijing faces in extending its reach. While some nationalists say the economic slump marks the end of American pre-eminence, Mr Zheng said Beijing hopes to boost economic and resource security, regional influence and diplomatic reach without riling the US and its allies. "China will continue to climb up the ladder," he said. "But it does not want revolutionary change in the international system." The country is instead pursuing a more oblique strategy of expanding its network of bilateral and international economic lifelines to countries in trouble. "China's focus in countering the crisis will be on its regional neighbours," said Qin Yaqing, vice-president of the China Foreign Affairs University in Beijing and a government adviser. At the height of the global financial turmoil last September, Premier Wen Jiabao said China's biggest contribution to the world would be ensuring its own economy continued to grow. That domestic focus remains a cornerstone of the policy. But since then, Beijing has also unveiled a flurry of currency swaps, loan-for-oil deals and funding pledges that have shown the central government does not want to stand on the sidelines.
Recently, Danish LM Glasfiber, the world’s largest wind turbine supplier, launched its production base in Qinhuangdao, a port city in north China. It will become China's largest production base for wind turbine blades. LM Glasfiber holds one-third of the world market for wind turbine blades. At present, the company has set up factories in Urumqi, the capital city of Xinjiang, and Tianjin. The program in Qinhuangdao will be completed in three phases, with a total investment of more than 300 million yuan. When the whole project is put into production in 2010，its output is expected to reach more than 700 pieces, which will exceed the total output of the two plants in Urumqi and Tianjin.
China said yesterday it would send more delegations to Taiwan to buy goods as a way of helping the self-governing island's export-dependent economy, which has been battered by the global financial crisis. Fan Liqing , spokeswoman for Beijing's Taiwan Affairs Office, said a visit by representatives from 35 firms this month resulted in deals worth more than US$2.2 billion, covering computers, LCD screens, chemicals and textiles. "This is the mainland's way of helping Taiwan overcome the unfortunate effects of the international financial crisis and a positive way of helping them overcome economic difficulties," Ms Fan said. Also, the mainland plans to build an undersea telecoms optical cable across the Taiwan Strait, she said. "We hope that both sides begin to carry out the project in a timely manner," Ms Fan said. Improving communications is the latest chapter in warming ties between the neighbours. In April, Taiwan's president, Ma Ying-jeou, announced that the mainland would allow the island's participation in a World Health Organisation body, a major goal in Taipei's campaign for international recognition. Taiwan's economy contracted at a record pace of more than 10 per cent in the first quarter from a year earlier, keeping the economy deep in recession. Exports last month fell by almost a third from a year earlier, but the fall was slightly less than expected as a slump in demand from the island's major trading partners showed tentative signs of easing. May exports totalled US$16.17 billion and imports were US$13.01 billion, leaving a trade surplus of US$3.17 billion. Mainland exports dropped 30 per cent from a year earlier, a modest improvement from a 33.6 per cent fall in April's data.
June 11, 2009
The government would seek Legislative Council’s approval for an extra HK$1 billion for its Operation Building Bright to help elderly property owners to renovate old buildings, Secretary for Development Carrie Lam Cheng Yuet-ngor said on Thursday. Mrs Lam said they are seeking extra funding for the project after they received overwhelming response from the owners’ corporations. “The deadline for application closed last Saturday and we have received an overwhelming response with a total of 1,100 buildings with owners’ corporations applying,” Mrs Lam explained. She said the extra HK$1 billion would support about an extra 1,000 more buildings. She also said the extra funding could help to create more employment opportunities in the construction sector for about 20,000 workers.
Home sales in Hong Kong's primary property market dropped more than 80 per cent at the weekend as the release by developers of newly launched projects slowed.
Drugs teen enemy No1, says Tsang - No effort will be spared in combating the youth drug problem, especially among students, Chief Executive Donald Tsang Yam-kuen pledged yesterday. "The quicker we act, the more students we can save," he said after an Executive Council meeting. "Young people are Hong Kong's most valuable asset. Drug abuse is their No1 enemy." The government will explore the possibility of an early launch for a pilot school-based voluntary drug testing scheme, the chief executive said. Tsang said he was deeply disturbed "like most Hong Kong people" by the reports of drug abuse among students. Saying the issue needed urgent attention and solution, he pledged more government resources to speed up the implementation of measures recommended by the task force led by Secretary for Justice Wong Yan-lung. "I understand some proposals are controversial, including drug tests for students," said Tsang, speaking before he left for Nanning in Guangxi for three days to attend the Fifth Pan-Pearl River Delta Regional Co-operation and Development Forum and Trade Fair. Secretary for Security Ambrose Lee Siu-kwong will hold talks with schools interested in voluntary testing, Tsang added. Hong Chi-keung, chairman of the Tuen Mun District Secondary School Heads' Association and principal of Ju Ching Chu Secondary School (Tuen Mun), said speeding up the school drug test scheme will help tackle drug abuse. But he warned that some schools, like his, may not be eager to join the pilot scheme as they were worried about the labeling effect. "We would be glad to conduct drug tests if the majority accepts it," he said, adding that schools will worry about being stigmatized if the tests are conducted selectively. Several teen drug abuse cases hit the headlines last week, including that of two 15-year-old girls found in a daze after allegedly taking ketamine on a Tuen Mun beach on Saturday. Last Thursday, three secondary students were found unconscious in a Tin Shui Wai park, also suspected of taking ketamine. Rosaryhill School admitted four students had taken psychotropic drugs in school on Tuesday last week.
Zhuhai is speeding up its construction of highways in a bid to become a traffic center in the western Pearl River Delta (PRD) area, the local transportation authority said. The city will invest more than 14 billion yuan ($2 billion) in 10 highway projects. The work will start this year and continue until 2012, said Zheng Chaolong, director of Zhuhai’s transportation bureau. The highways will link harbors, airports and checkpoints between Zhuhai and Macao, helping develop the city into an important transportation hub in the western PRD region, Zheng said. This year alone, the city has earmarked 3.7 billion yuan for urban provincial highway projects, he said. The tone and nature of US Treasury Secretary Timothy Geithner's maiden trip to China was markedly different from the visits by his predecessor, Henry Paulson. Heated talk of the valuation of the yuan and trade imbalances was set aside for praise and hopes for a co-operative relationship. Part of that is down to Mr Geithner's at times meek demeanour, but it can mostly be attributed to the changed circumstances of global economics. Beijing, not Washington, now holds the cards. That was apparent in the statements issued after Mr Geithner met President Hu Jintao and Premier Wen Jiabao yesterday. The Chinese leaders exuded confidence. The American thunder of old was replaced by a willingness to please. China was on the world stage beside the US and being treated as a friend and equal. This is how the relationship should be. The world's leading developing and developed nations should work closely together. Each has a perspective and advantage in helping resolve global challenges. This cannot happen effectively without a partnership. America's economic woes are largely driving the shift. Trillions of dollars of foreign goodwill is being used to fund US President Barack Obama's efforts to pull his country out of the financial chasm it has fallen into. China is the biggest foreign owner of US Treasury bonds. As of March, it held US$768 billion of such debt. Beijing's US-denominated government and corporate paper investments could well be twice that amount. Mr Geithner's visit was not to negotiate deals or sign pacts. His main goal was to assure Beijing that his country's monetary policy and ballooning deficit would not undermine the value of the US dollar and paper bonds. Yesterday he repeated pledges he made on Monday: that the assets were safe and American spending would be disciplined once a recovery took hold. Just how deep the global financial crisis will be remains uncertain. Individual pieces of data showing a monthly, quarterly or year-on-year improvement do not in themselves constitute a recovery. Mr Wen rightly reminded Mr Geithner that China's stability and growth needed to be assured through tightening oversight of international reserve currencies. The Obama administration needs to keep this firmly in mind because America's return to economic health is in China's interests as much as its own. Trust, respect and co-operation are key. Mr Geithner, Secretary of State Hillary Rodham Clinton and, last week, House of Representatives Speaker Nancy Pelosi, have kept the necessary tone during their visits and meetings. Understanding is essential to building a sound working relationship. Both sides have to be open and transparent. Mr Hu and Mr Obama announced the setting up of a cabinet-level economic and strategic dialogue after meeting in April. The first meeting will be in Washington next month, it was revealed yesterday as Mr Geithner flew out of Beijing. This is a significant and worthy step. There is no better way to further build the ties that are needed. China and the US are equally influential nations. They share common interests and goals. Significant inroads can be made in solving the world's economic, environmental and strategic problems through their working together. It is a relationship that the two have shown an interest in building and one that, regardless of the economic climate, they must remain dedicated and committed to.
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Pointing to "a wave of extreme anger" within their ranks, up to 1,000 police
officers are expected to rally later this month against a possible pay cut. The
protest would be the first by police since 1977, when officers took to the
streets in anger at graft investigations being carried out by the newly formed
Independent Commission Against Corruption. Police union representatives say
officers are unhappy with the government's announcement last month that civil
servants might have to follow the private sector and cut top salaries by 5.38
per cent and freeze the pay of others. They want their own salary-adjustment
mechanism. In a letter sent to the civil service minister, the force said "a
wave of extreme anger and disappointment swept across the Hong Kong Police
Force" upon learning of possible pay cuts. "Morale ... is at its lowest in a
decade" over the way the survey was conducted and "the integrity of the
results", the letter said. Officers have had three salary cuts and two pay
freezes since 1997. The chairman of the Police Inspectors' Association, Chief
Inspector Tony Liu Kit-ming, said individual officers were organising a protest
on June 28, a Sunday. Unionists expected a thousand off-duty officers to
participate. The protest will start at police headquarters in Admiralty, and
continue to the Central Government Offices. "The protest will be conducted in a
peaceful and lawful manner," Chief Inspector Liu said. Most of the committee
members in the inspectors' association including Chief Inspector Liu are likely
to join the protest. No slogans or banners will be used during the protest.
Staff representatives of the Police Force Council, which represents the four
associations of the police, yesterday wrote to the chief executive asking for a
committee to be established to review the survey results. Senior Superintendent
Peter Cornthwaite, who is also a staff representative of the council, said the
Tsang administration's final decision on pay adjustment next Tuesday would have
a big effect on what happened with the protest. "If the Executive Council agrees
to our request to set up a committee of inquiry, this may prevent them from
going for the march. All depends on the response of the government," he said.
Exco member Cheng Yiu-tong had called a meeting with staff representatives of
the Police Force Council on Monday, Mr Cornthwaite said, but the agenda of the
meeting was not known. According to the Police Ordinance, officers cannot
participate in political activities or take part in strikes. Off-duty protests
by officers did not breach any law or police regulations, Chief Inspector Liu
said. A police spokesman said that as of yesterday the force had not received
any notification of a protest organised by officers, and that management would
continue to communicate with the unions. A spokesman for the Civil Service
Bureau said it too would continue to communicate with the force unions, adding
that it was examining the police petition. Lawmakers have called for the
government to take the initiative in commencing talks with the unions.
Independent lawmaker Regina Ip Lau Suk-yee, a former security secretary, said it
was unfortunate to see the police staging a protest. She urged the police
management and the Civil Service Bureau to allay concerns among the police
staff. "I appeal to the police staff to stay calm," she said. Exco member Lau
Kong-wah and unionist lawmaker Lee Cheuk-yan urged the administration to
strengthen its communication with staff over their concerns about the pay trend
survey results. "The government should solve disputes with its labour through
active negotiation. Otherwise, the dispute may undermine public's confidence in
the government," Mr Lee said. Meanwhile, the Government Disciplined Services
General Union, which represents the staff of five disciplined services, has
called for a rally tomorrow to express dissatisfaction with the way of
government has handled the results of a Grade Structure Review, which
recommended a pay rise for long service at the lower levels but deferred the
implementation.
HK's 'sound legal system' wins
praise - Senior mainland judges and officiating guests attend the closing
ceremony of the Advanced Program for Chinese Senior Judges at City University.
Hong Kong's sound legal and judicial system is an important reason for the
city's economic success and social stability, Huo Min, vice-president of the
Guangdong Higher People's Court, said after attending a four-week legal program
at a local university. Speaking at the closing ceremony for the Advanced Program
for Chinese Senior Judges, Mr Huo said that he was impressed with the way the
city's judicial personnel adhered to the rule of law. The advanced program was
organized by City University's School of Law in collaboration with the National
Judges College of the Supreme People's Court of the People's Republic of China.
The course, which started on May 26 and ended yesterday, introduced 28 senior
judges from various mainland cities and provinces to the common law system and
key international legal concepts. Participants visited legal enforcement and
judicial organizations and attended video-link lessons from Columbia
University's School of Law. "This [program] is not simply an academic exchange,"
said Justice Wang Xiuhong, a member of the judicial committee of the Supreme
People's Court. "Most importantly, it allows judges in Hong Kong and China to
better understand and respect each other's political and economic culture." Kuo
Way of City University said that the program had also benefited Hong Kong's
legal development because local practitioners had been able to learn directly
from mainland judges how mediation occurred on the mainland. "We are just
beginning to develop such a system in Hong Kong," he said, explaining that
mediation was different from the adversarial approach used in litigation
locally, in that it allowed disputes to be resolved quicker and more
harmoniously. Professor Kuo said that a similar course would be held later this
year, and the plan was to organize two programs each year for senior Chinese
judges. Elaine Lo, a senior partner with Mayer Brown JSM, the law firm that
sponsored the program, said it would be helpful to Hong Kong firms involved in
litigation or arbitration in the mainland if mainland judges had a better
understanding of the city's legal and judicial system. The advanced program had
served that purpose well, she said.
Television Broadcasts (SEHK: 0511)
general manger Stephen Chan Chi-wan insisted last night the station's management
would not intervene in the editorial policy of its news department. He was
responding at a Broadcasting Authority public hearing to criticism that the
station had downplayed the candle-light vigil on June 4, the 20th anniversary of
the Tiananmen Square crackdown. Mr Chan said that although TVB had not led its
6pm news with the item, it had devoted almost a third of the bulletin to the
vigil and had made it the lead in its 11pm newscast. "The news department is
independent in deciding how to handle news. The management has never
intervened," Mr Chan told the hearing in the lecture hall of the Hong Kong Space
Museum. It was one of three public hearings the authority plans to hold in
relation to the licences of TVB and its rival free-to-air channel, Asia
Television. Their licences were renewed for 12 years in 2003 and the authority
is conducting a mid-term review. Before the hearing, a group of Chinese
University students protested outside the venue, criticising TVB news for
exercising self-censorship. ATV plans to invest about HK$2.3 billion in
equipment and production of programmes over the next six years, while TVB has
said its investment in the same period will amount to HK$5.7 billion. Two more
hearings are planned next month, one on Hong Kong Island and one in the New
Territories.
The
number of Hong Kong-listed Chinese mainland firms has grown to 470 from 0 over
the past 16 years, a senior financial official of the Hong Kong Special
Administrative Region (HKSAR) said on June 18,2009. Financial Secretary John
Tsang said Hong Kong is playing a vital role as a capital formation center for
mainland enterprises. "In the past decade or so, we have seen a much broader
range of companies listing on our stock market," Tsang said, citing the first
Hong Kong listing of a mainland enterprise in 1993. More than half of the Hang
Seng Index constituents were from the mainland now. The HKSAR government is
engaged in ongoing discussions with the relevant parties in Beijing and across
the mainland to further strengthen financial co-operation, he added. 
China: China's
stocks rose for the third straight day Friday, driving the benchmark index to a
10-month high as financial shares gained after the securities regulator approved
the nation's first initial public offering (IPO) since September. 
The organizers of Shanghai World Expo
2010 have ditched a "final" deadline for work on national pavilions to begin by
the end of the month, the deputy chairwoman of the fair's executive committee
said yesterday. Zhong Yanqun said the organizers needed to be flexible to
accommodate countries that were not yet ready to break ground on their Expo
stands - and hinted that construction work could extend to the eve of the
opening on May 1 next year. "Whether you can have a very strict deadline for
building pavilions or participation, in reality, as far as the World Expo is
concerned, it does need to be flexible," she said. "We hope that all of the
self-built pavilions will be able to begin work in July." When pressed on the
situation of the cash-strapped US pavilion project, she said organisers' main
concern was whether they would be ready in time for the opening. "Our time limit
is May 1 next year, when all national pavilions will need to be able to open,"
she said. Ms Zhong's position represented a U-turn on tough statements she made
last month, when she said countries would not be allowed to build their own
pavilions if they failed to begin work by June 30. "If work on a pavilion starts
after June 30 this year, it can't be completed before May 1 next year. This will
affect the operation of the whole World Expo Park," she said at the time.
Nations that failed to meet the deadline would be asked to rent facilities
constructed by the Expo organisers - considerably simpler prefabricated hangars.
The question mark hanging over US participation has been the source of
long-running embarrassment for Expo organizers, who planned on it being one of
the main draws. The largest plot for a foreign country has been set aside for
the US, but it remains the only nation that is yet to sign a participation
agreement. Unlike other countries, the US State Department has ruled out the use
of public funds to pay for its pavilion, which is to be paid for entirely with
private donations. The fund-raising committee announced on Thursday that it had
secured backing from agriculture, industry and finance giant Cargill. A
spokeswoman refused to reveal how much of the estimated US$61 million budget had
been raised. The Shanghai Daily quoted a spokeswoman for the US pavilion saying
it could take another three to six months to raise the cash. With construction
expected to take five months, that could bring work perilously close to the
opening date. However, the US is not the only country facing difficulties.
Shanghai government sources told the South China Morning Post (SEHK: 0583,
announcements, news) that there were concerns about 20 countries. Ms Zhong said
ground had been broken on some 24 of the 40-odd self-built pavilions. The
Shanghai World Expo 2010 is planned to be the biggest and most expensive in the
event's 158-year history. Organisers estimate the Expo will draw more than 70
million visitors during its 184-day run. Just 5 per cent of those are expected
to come from outside the mainland.
The mainland says it made an operating profit of 1 billion yuan (HK$1.13
billion) hosting the Beijing Olympics - but the figure excludes the construction
cost for the venues, a long-awaited National Audit Office report said yesterday.
The Beijing Games wowed the world with extravaganza and organization. However,
the unprecedented national mobilization and single-minded pursuit of grandeur
led many to worry about budget blowouts at the expense of taxpayers. The audit
office has been under mounting pressure to publicize the report, which many hope
will shed light on the scale of spending since Beijing won the bid in 2001. The
report said the organizing committee for the Beijing Olympics (Bocog) had made
20.5 billion yuan in revenue by March 15 this year, 800 million yuan more than
expected from a profit split with the International Olympics Committee,
sponsorship, merchandising and ticket sales. It also reported a total outlay of
19.43 billion yuan for venue upgrades, television broadcasting, accommodation
and personnel. Auditors acknowledged a cost of 19.49 billion yuan to finance 102
new venues and training camps, but failed to reveal spending in other areas such
as environment and security. Economists earlier estimated that Bocog would need
400 billion yuan including costs to clean the environment and basic
infrastructure to stage a decent Olympic Games. Beijing Institute of Technology
professor Hu Xingdou said that was a fair estimation, but there was no point in
discussing if the Beijing Olympics made a profit or how much was lost "because
money was never a top priority for the country to host the Games". "The Olympics
were regarded as the country's coming out onto the world stage and to achieve
that goal the government was willing to spend as much as it needed," he said.
"Look at the number of roads that were built and how many police officers were
ferried to Beijing." The secrecy over some Olympics spending raised concerns
over official corruption after the downfall of Beijing's former vice-mayor Liu
Zhihua in 2006. Liu 60, who was in charge of the municipality's Olympic
construction office, was given a death sentence suspended for two years in April
this year for graft. Auditors admitted that irregularities were uncovered, but
most of the problems were solved. However, the National Stadium, or "Bird's
Nest", was over budget by 456 million yuan due to the complexity of the
engineering work and price increases for raw materials.
Wang Yi (L front), chief of the Taiwan Affairs Office of the Chinese State
Council, greets the overseas Chinese in San Francisco, the United States, June
18, 2009. Wang Yi said here on Thursday that the mainland will focus on
economic, cultural and educational cooperation as well as people-to-people
exchange with Taiwan in a bid to further promote cross-Strait ties. 
Visiting Chinese President Hu
Jintao (L) meets with Slovakian President Ivan Gasparovic for talks in
Bratislava, capital of Slovakia June 18, 2009. Chinese President Hu Jintao and
his Slovakian counterpart Ivan Gasparovic held talks in Bratislava on Thursday
and they agreed to take the 60th anniversary of diplomatic ties as an
opportunity to consolidate their traditional friendship and enrich the contents
of cooperation. Speaking highly of the longstanding friendship between the two
countries, Hu noted in particular the substantial development of bilateral
relations since the Central European country gained independence 16 years ago.
Peking Opera is perhaps China's best
known traditional opera — but traditionalists are now seeking to promote Kunqu
Opera, one of the oldest operatic forms and is considered the bedrock of the
operatic form. Now undergoing a makeover, Kunqu is attracting new audiences
around the world. One example of the opera's resurgence is the Suzhou Kunqu
Opera Theater's adaptation of The Peony Pavilion. Written by Tang Xianzu in the
Ming Dynasty(1368-1644) and first performed in 1598, the opera is about the
romance between Du Liniang and Liu Mengmei. The play is regarded as one of the
most romantic stories in Chinese literature and is often compared to
Shakespeare's Romeo and Juliet. According to producer Bai Xianyong, the story's
theme of love and beauty still resonate. While preserving the story's integrity,
Bai has used modern theater techniques to appeal to a more contemporary
audiences. He cut the original 55-act performance down to 27 for his stage
version and selected young actors to inject vitality into the centuries-old
story. The theater staged the updated version of the famous opera at more than
20 universities around China.
A technician puts a sample of the
A(H1N1) virus into a transfer cabinet during preparations to produce vaccines in
Wuhan, Hubei. The swine flu virus continues to spread across the mainland, with
33 more cases reported yesterday, bringing the number of infections to 297. The
Ministry of Health said that among the new cases, nine were reported in
Shanghai, seven in Guangdong and five in Fujian province . A total of 162
patients remain under treatment, and the others have been discharged from
hospital. The mainland has reported no deaths. In Guangdong, where 63 cases lead
the mainland, the Health Department denied the existence of any community
outbreaks. The province reported seven cases yesterday and nine cases on
Wednesday, but health authorities said they were scattered across the community,
the Guangdong daily newspaper New Express reported. The ministry released a work
plan on Wednesday that would be implemented in case of an outbreak or epidemic
at the community level. Authorities will focus on limiting social contacts and
isolating infection sources rather than trying to spot virus carriers at border
checkpoints as they do now. Meanwhile, dozens of American high school students
quarantined in Hubei after some of their classmates were diagnosed with swine
flu had been cleared for release, an employee of the city's swine flu command
centre said yesterday. Seven in the group, from the private Pacific Ridge School
in Carlsbad, California, tested positive for swine flu and were in hospital in
stable condition. 
Vehicles move on a flooded street in Xi'an, capital of northwest China's Shaanxi
Province, June 19, 2009. Heavy rain has been striking some cities and counties
in Shaanxi Province since June 18. 
The 2008 Beijing Olympics reaped
aprofit of more than 1 billion yuan (146.4 million U.S. dollars), China's
National Audit Office (NAO) said Friday. The Beijing Organizing Committee for
the Games of the XXIX Olympiad (BOCOG) reported income of 20.5 billion yuan and
expenses of 19.34 billion yuan for the 2008 Beijing Olympics, according to an
NAO tracking audit of Games' finances and construction costs of venues. The
Beijing Paralympics broke even with income and costs each totaling 863 million
yuan, said the eighth NAO report of the year. The tracking audit started from
2005, including an audit on the draft final accounts of the BOCOG, according to
NAO. The Games' income mainly came from sales of broadcasting rights, souvenirs
and tickets, assets sales, and sponsorship, while the main expenditure items
involved temporary facilities, sports and communication equipment, accommodation
and medical services. BOCOG spent 831 million yuan on the opening and closing
ceremonies, 332 million yuan on the Olympic torch relay, and 171 million yuan on
the volunteer program. Ticket sales brought in 1.28 billion yuan and assets
sales 240 million yuan. A total of 6.46 million tickets were sold, accounting
for 95 percent of the tickets available. Total investment in the Beijing Olympic
venues stood at 19.49 billion yuan, covering 102 projects in Beijing and five
co-host cities, said the report. Of that investment, 3.5 billion yuan came from
the central government, 8.26 billion yuan was allocated by local governments,
and 1.08 billion yuan from donations from overseas Chinese, according to the
report. No major problems were found during the audit, and no accidents or
quality problems were identified in the construction of the Olympic venues, it
said. BOCOG had maintained "strict control" over spending and income, and kept
"transparent, economical and efficient" accounts, said a statement on the NAO
website. However, minor problems did exist, said the report, including
irregularities in project subcontracting and bidding, as well as a deficit in
the construction of the National Stadium, or the Bird's Nest. The construction
of the stadium went 456 million yuan over budget due to its complicated
structure, technical difficulties, and adjustments in construction standards and
its functions. The estimated budget of the Bird's Nest stood at 3.14 billion
yuan, it said. "The 2008 Olympics and Paralympics were not the most expensive
games ever held," the statement said, citing the expenditure of the previous
Games and the budget of the 2012 event in London. Athens had spent more than 10
billion Euros (11.9 billion U.S. dollars in 2004) staging the 2004 Olympic
Games, and its operating costs stood at 2.4 billion U.S. dollars. The budget of
the 2012 London Olympics and Paralympics reached 9.3 billion pounds (15.2
billion U.S. dollars), according to the British government annual report on
preparations for the Olympics and Paralympics. The profit would be distributed
to the International Olympic Committee, the Chinese Olympic Committee and BOCOG,
which would set up funds for sports development, including improvements to
public sports facilities and promoting mass sports activities, said the
statement.
China's outsourcing industry has
maintained a strong business growth in the first five months of this year
although the financial crisis has reduced demand from foreign companies such as
big banks and insurance companies. Wang Chao, assistant minister of commerce,
said in an industry forum yesterday that the contract value of China's
outsourcing industry reached $2.59 billion from January to March, an increase of
25.9 percent compared with the same period last year. "Although overseas demand
for outsourcing services shrank in the first half of this year, China's software
exports and outsourcing industry still maintained a rapid growth," Wang said at
the China International Software & Information Service Fair in Dalian. But he
said Chinese outsourcing companies still have to face great challenges, as the
global economy cannot recover in the short term. He warned that some small and
medium sized outsourcing companies might have to wind up due as banks have
become cautious in their lending due to the economic crisis. Impacted by the
financial crisis, many of the big companies, especially the financial
institutions, have reduced their outsourcing orders due to shrinking business.
But Chinese outsourcing companies, whose major customers are Japanese companies
rather than US and European firms, still maintained a strong growth due to the
country's relatively lower labor cost, the government's strong support and the
abundant pool of college graduates. "Our software outsourcing business increased
94 percent year on year in the first five months of this year," said Zheng Shiyu,
CEO of Dalian Yidatec Co Ltd, one of China's largest outsourcing firms. The
company acquired two Japanese counterparts during the past ten months and plans
to attract more high-end customers. In order to help it transform from a
manufacturing base to a service hub, China aims to double in five years the
export value of the outsourcing industry by 2010. By achieving that, the
government announced earlier that it plans to woo some 100 multinationals to
transfer part of their service outsourcing industry to China by building 10
cities with international standards. It also plans to help 1,000 Chinese
outsourcing companies grow into medium to large size enterprises within the
five-year period ending 2010. But experts said Chinese outsourcing companies
still have a smaller scale and lack the experience and capacity to deliver
complicated outsourcing services, when compared with their Indian counterparts
like Infosys and TCS. Liu Jiren, chairman of Neusoft, China's largest
outsourcing company, said Chinese outsourcing companies need to grow bigger to
have the advantage of scale. He said Neusoft, which failed in its effort in
March to acquire Dalian Hi-Think Computer Technology Corp, China's second
largest outsourcing company, is still in acquisition talks with many domestic
and foreign companies. He said as more US and European companies are starting to
outsource their business to Chinese firms, China is expected outpace India in
outsourcing in the next five to ten years.
The offspring of female panda Lin Hui lies
on a mattress at Chiang Mai Zoo, north of Bangkok, June 18, 2009. Lin Hui, a
female panda on loan from China, gave birth to the baby panda in Thailand on May
27 after being artificially inseminated with her partner's sperm for a second
time.
Shanghai's most senior Communist Party
official yesterday played down the city's rivalry with Hong Kong and suggested
the two could play complementary roles in the future. It was the first time a
top Shanghai official had addressed the relationship with Hong Kong since the
mainland's economic powerhouse declared its ambition of becoming a global
financial centre. Yu Zhengsheng , the city's party secretary, spoke to the Hong
Kong media in an attempt to ease concerns over a scramble for resources and
talent. "Shanghai is not an international financial centre now," Mr Yu said.
"It's still unclear what shape Hong Kong will take and what it will look like by
2020 as it continues to grow. "But Shanghai and Hong Kong will always be
complementary to each other and the growth of the two cities brings them mutual
benefits." In March, the State Council endorsed a guideline to transform
Shanghai into a global financial and shipping centre by 2020, encouraging it to
take a bold step in developing its capital and monetary markets. The plan
fuelled speculation that Shanghai would eventually eclipse Hong Kong, leading to
a flight of capital and relocation of business. But Mr Yu said: "Shanghai has a
lot to learn from Hong Kong in terms of taxation policy, credit system, market
regulations as well as lawmaking. Hong Kong and Shanghai will always be
brothers." Xu Kuangdi , a former Shanghai mayor, said in 2001 that the two
cities were on an equal footing as they were "two engines of an airplane"
jointly propelling the Chinese economy. Ng Leung-sing, a local deputy to the
National People's Congress and vice-chairman of the Chiyu Banking Corporation,
said Mr Yu had conveyed a positive message. "While our city has long been one of
the world's financial centres, Shanghai has an important status in the country's
financial sector. China is such a big market and it is reasonable to have both
cities serving as financial hubs," he said. "There is no need to worry that Hong
Kong will be replaced by Shanghai." Mr Ng said whether Hongkongers saw
Shanghai's development plan as a threat was their own concern. "If you worry,
others cannot alleviate worries for you. Whether we maintain confidence does not
depend on what a government official says." Lingnan University economics
professor Ho Lok-sang said the two cities could complement each other, as Hong
Kong had an edge over the external market while Shanghai had strong national
networks. But he said they would compete against each other for talent. Mr Yu
said Shanghai's priority was to fine-tune domestic financial markets to ensure
that the city's financial institutions offered first-class services to clients.
The city is still awaiting final approval from Beijing to start trading
stock-index futures at the China Financial Futures Exchange. It was established
in September 2006 but not a single contract has been listed on the bourse so
far. Mr Yu, who is also a member of the Communist Party politburo, said Shanghai
was plotting a campaign against terrorism to guarantee a successful World Expo
in the city next year. He also believed that the United States would take part
in the high-profile event even though it was struggling to raise funds. 
A photographer takes a picture of "Lamma
Winds", Hong Kong's first wind power station, on Lamma Island. The construction
of an offshore wind farm near Sai Kung will add about 2 per cent to electricity
bills while supplying only about 1 per cent of the city's needs, CLP Power (SEHK:
0002) says. The disclosure prompted critics to question the cost-effectiveness
of the estimated HK$6.7 billion project, and whether it would generate even the
predicted amount. The 2 per cent figure was based on the estimated construction
costs of between HK$80 million and HK$100 million for each wind turbine,
including the foundations and undersea cables, CLP said yesterday. The plans
call for the installation of 67 wind turbines, each with a 3MW generation
capacity, at a site 10km from Clear Water Bay. A spokeswoman for the utility
said offshore wind farms tended to be three to five times more expensive than
power plants using conventional fuel. She said the preliminary cost estimates
were in line with overseas wind farms of a similar scale. The final costing
would hinge on further detailed wind studies at the site. "As detailed site data
have yet to be gathered ... only rough estimates can be made at this stage," she
said. It was the first time CLP had offered an estimate of the impact on tariffs
since an environmental assessment for the project was made public early this
month. It said that if 50MW turbines were installed first, the tariff increase
would average 0.8 per cent. When all 67 turbines were in operation, with a total
capacity of 200MW, the rise would be 2 per cent. The power utility had said the
wind farm could generate about 40 million kWh of electricity a year, enough for
80,000 households a year at an annual carbon reduction of 300,000 tonnes. The
generation figure was based on an assumption that the wind would be strong
enough to drive the turbines at full force 25 per cent of the time. But this
assumption was challenged as too optimistic. "Major coastal wind farms in
Guangdong, where the wind resource is richer than in Hong Kong, do not yield
such a high rate," said Jasper Ip Chi-man of Green Future, which promotes
renewable energy. A wrong forecast might affect the pay-back period of the wind
farm and affect power tariffs, he said. Lo Wing-lok of the Country and Marine
Parks Board asked if the money could be better used installing equipment to cut
emissions from coal-fired power stations.
Swire Properties recently reduced
office rents at Pacific Place 20 per cent from last year's peak when leases came
up for renewal, but the company believes Hong Kong's office market has bottomed
out, chief executive Martin Cubbon said. Office rents at One, Two and Three
Pacific Place, comprising 2.2 million square feet, have dropped from as much as
HK$100 per square foot per month last year to "the high 70s to the low 80s", Mr
Cubbon said. "We are positive regarding the Hong Kong market in the coming
months and next year in view of the renewed confidence, as evident in the
surging demand in the residential market and growing confidence in the
international business and financial sector to invest in Hong Kong. "We expect a
gradual pick-up, and we do not see a correction coming." Occupancy rates at One,
Two and Three Pacific Place and Taikoo Place were 99 per cent. Ninety-eight per
cent of spaces of Swire's Cityplaza were let and 91 per cent were occupied in
One Island East. Swire owns 15 million sqft of office and retail property in
Hong Kong and 1 million sqft in Beijing. It plans to increase its investment
properties to 24 million sqft by 2013, of which 8 million will be on the
mainland and 16 million in Hong Kong. The company had less exposure to financial
tenants, analyst Gary Pinge wrote in a Macquarie Research report. Macquarie has
raised its forecast for office rents, saying they will grow 10 to 15 per cent by
next year. This is a reversal of earlier predictions of a 10 to 20 per cent
fall. However, property consultant CB Richard Ellis disagreed, saying grade A
office rents in Central could decline a further 13 per cent in the second half
of the year on top of a 27 per cent fall in the first half. In the residential
market, Swire sold 50 units at its North Point development Island Lodge at an
average of HK$11,000 per square foot when it relaunched the project early this
month.
Voluntary drug testing in schools will
be introduced in September, a year ahead of schedule. All 23 secondary schools
in Tai Po, involving around 20,000 students, will participate in the initial
round. The announcement came on a day when there were five reported cases of
drug abuse in 24 hours, one involving a 14-year-old student. Speaking after a
meeting of the Action Committee Against Narcotics, Commissioner for Narcotics
Sally Wong Pik-yee said the original plan was to introduce a pilot scheme in
2010. "As there are voices urging the tests be speeded up and with several
school principals eager to join the scheme, the test will be implemented this
year," she said. Wong said school principals from several districts have shown
interest, but she did not have exact figures. The initial tests will be
conducted on a small scale, considering current resources for drug
rehabilitation services. Details will be discussed with the Education Bureau.
The names of consultants, who will draw up the guidelines for schools, will be
announced next month. Action Committee Against Narcotics chairman Daniel Shek
Tan- lei said the number of female drug takers under 21 increased 18.5 percent
in the first quarter of this year, though the total number of users under 21
dropped 5 percent to 1,200. Ketamine is still the main drug being abused, he
said. There were five cases in Mong Kok, Tseung Kwan O, Tuen Mun and Wong Tai
Sin within 24 hours of the meeting being held. A 24-year-old woman fell
unconscious in her home in King Lam Estate, Tseung Kwan O, at about midnight on
Wednesday following a suspected ketamine overdose. Police found ketamine in her
home and she was arrested for possession of a prohibited drug before being
admitted to Tseung Kwan O Hospital for treatment. Three students of Ju Ching Chu
Secondary School in Tuen Mun - two aged 14 and one 17 - were arrested yesterday.
A 14-year-old and the 17-year- old were charged with consumption of dangerous
drugs, while the other 14-year-old was charged with providing such drugs. All
three were released on bail and told to report to police a month later. On
Wednesday afternoon, a 16-year-old female student at the same school collapsed
in the Lung Mun Oasis car park, also following a suspected ketamine overdose.
She was admitted to Tuen Mun Hospital and is in stable condition. She was also
arrested for consumption of dangerous drugs. Shek noted that drug rehabilitation
institutions are overcrowded and his committee is studying how to provide more
facilities, particularly with drug testing due to begin in three months.
PS33-Centre for Psychotropic Substance Abusers consultant Ho Fung- kuen said it
takes about two months for a social worker to identify a drug abuser whereas in
the past it took only five to 10 working days. She feared the determination of
youngsters to quit would weaken if they did not get immediate attention.
Meanwhile, anti-drug enforcers seized 3.4 kilograms of ketamine in two separate
incidents yesterday. Customs officers intercepted a man at the Lo Wu border
control and allegedly found 3 kilograms of the drug on him, worth HK$348,000.
The 48-year- old man will face charges of trafficking in dangerous drugs in Fan
Ling court today. A 24-year-old man was arrested when police raided a flat in
Shanghai Street, Mong Kok, and seized 400 grams of ketamine.
Investors are welcoming new listings in Hong Kong, with sportswear firm 361
Degrees International getting a warm response after opening its retail book.
This comes after China Metal Recycling's retail tranche was oversubscribed more
than 44 times. Seven brokerages received margin financing orders of about HK$200
million for 361 Degrees - almost fully covering the retail tranche of HK$217.5
million. "Speculators may shift to invest in the initial public offering market
as shares of Lumena Resources Corp [0067] performed well after its trading
debut," said Ben Kwong Man-bun, chief operating officer at KGI Asia. The firm
received margin orders of HK$40 million for 361 Degrees yesterday. Lumena, which
listed on Tuesday, closed yesterday at HK$2.52. That was 26 percent above its
offer price, making it the best-performing IPO stock this year. Market response
to 361 Degrees was better than expected, Redford Securities head of research
Kenny Tang Sing-hing said, but he doubted the subscription would match that of
CMR, China's largest scrap metal recycling firm."It has to share the market
spotlight with Bawang International, another consumer good producer planning to
float in the market," he said. China Qinfa Group, meanwhile, revealed a plan to
raise up to HK$630 million in the listing market to finance a coal terminal in
Zhuhai and a coal-loading station in Shanxi. The company aims to issue 250
million shares at HK$2 to HK$2.52 each. It is set to go public on July 3 - the
same day as shampoo maker Bawang. Qinfa is expected to face fierce competition
in attracting investors' interest, market watchers said. Moreover, green energy
firm Amber Energy is planning a HK$200 million float, sources said. Its offer
price is expected to be between 8.7 times and 11 times. And China Minsheng
Banking Corp may sell as much as US$3 billion-worth of stock in Hong Kong by
year's end, Bloomberg reported. Thirteen firms are applying to list in the SAR
and 15 have already won approval to launch IPOs, according to Paul Chow Man-yiu,
chief executive of Hong Kong Exchanges and Clearing (0388). 
Despite the economic slump, mainland
information technology and financial services companies are pushing ahead with
key investments in Britain, with an eye to accelerating their expansion across
Europe, British trade officials said. Initiatives from Huawei Technologies,
Alibaba.com (SEHK: 1688, announcements, news) , China Central Television, China
Mobile (SEHK: 0941, announcements, news) , Crystal Digital Technology, China
Construction Bank (SEHK: 0939, announcements, news) Corp and China Merchants
Bank (SEHK: 3968) were just the cream of 59 new mainland projects in Britain in
the past financial year to March, the UK Trade & Investment said yesterday.
Britain's international business development and promotion group ranked China as
the eighth-largest source of foreign direct investment during a strong year in
which Britain saw a record 1,742 new projects from 53 countries, up 11 per cent
from the previous financial year. "China remains a significant investor in
Britain despite the challenging economic climate," said Tony Collingridge, the
head of the Asia-Pacific team at UK Trade & Investment. "Mainland firms see
Britain as a gateway to international connections, including a huge market of
455 million consumers in Europe, and a centre of world-class creativity,
innovation and research and development." More than 400 mainland firms are in
Britain, where about 85 have set up shop since April 2007. Total mainland
investment figures were not provided, but Mr Collingridge said technology and
financial services firms had stepped up their expansion and research and
development programmes. "Huawei grew its British business further through the
addition of a marketing operation. It also forged research and development
partnerships with four British universities," Mr Collingridge said.
Hangzhou-based Alibaba.com, the world's leading business-to-business e-commerce
company, has set up its European headquarters in London. Crystal Digital, one of
the mainland's largest computer graphics firms and the producer of the 3G
imagery and animation used for Beijing's 2008 Olympics bid, also chose London as
its launch pad for expanding across the continent. "We expect mainland companies
to increasingly look at merger and acquisition opportunities over the next 12
months," Mr Collingridge said. There were 130 new foreign financial services
projects in Britain during the financial year, of which 18 were credited to
mainland firms. CCB's decision to set up a London subsidiary, which opened on
June 1, was the biggest of those new mainland projects, he noted. It was the
third wholly owned international subsidiary and the first in Europe for CCB, the
world's second-largest bank by market capitalisation. "CCB's decision to expand
their presence in London sends a strong signal to the world's financial
institutions, showing London remains the world's leading financial and business
centre with easy access into Europe," said chief executive Michael Charlton of
Think London, the official foreign direct investment agency. Mr Charlton said
the British capital was already "the largest recipient of Chinese foreign direct
investment of any city in Europe".
Actress Shu Qi (R) and director
Feng Xiaogang attend the opening ceremony of the first Cross-Straits Film Show
in Taipei of southeast China's Taiwan, June 17, 2009. Movie "If You Are the One"
by Feng Xiaogang was the first to be projected in the film show of movies from
the Chinese mainland and Taiwan.
Airbus has so far edged itself into the
top for plane orders on Tuesday at the Paris Air Show and bettered its American
rival Boeing, despite the global recession this year and recent plane crash,
local media reported on Tuesday. Airbus has secured a contract with Qatar
Airways for 24 medium-haul A320 planes worth US$1.9 billion, followed by new
orders for commercial planes from Vietnam Airlines. The aerospace giant on
Tuesday announced a private order for an A320 Prestige high-end business plane,
the first Asian buyer for the high-end business aircraft. However, the
planemaker still faces the plane crash concerns. Airbus, which hold a press
conference at Paris Air Show Tuesday, defended its response to the recent crash
of an Air France Airbus airliner and insisted their planes were safe, giving an
upbeat assessment of the company prospects. Starting on Monday, the Paris Air
Show celebrates its 100th anniversary and runs through June 21.
China's potential wind power resources
alone are sufficient to meet its entire electricity demand, the country's top
wind power research institute has said. 'Wind can power up entire nation' Xiao
Ziniu, director of the National Climate Center (NCC), said China's onshore wind
power potential has been evaluated at between 700 gW and 1,200 gW, exactly
within the range of the country's 790 gW power generating capacity for 2008. The
NCC released the numbers after 10 of its experts carried out an intensive
investigation of wind power resources across all the provinces of China. "This
result assures us that the country's entire electricity demand can be met by
wind power alone," said Xiao, whose institution functions under the China
Meteorological Administration. The evaluation also revealed that China has 250
gW of potential offshore wind power capacity. Some regions, Xiao said, had more
wind power potential than previously thought. 'Wind can power up entire nation'
China is the world's second largest wind power market, behind only the US, in
terms of newly installed capacity. The Xinjiang Uygur autonomous region was
estimated to have over 100 gW of wind power generating potential, much more than
was estimated earlier. The new investigation methodology used digital
simulation, which resulted in a significant increase in the evaluation potential
compared to the 280 gW onshore resources potential evaluated in 2004, Xiao said.
"It greatly strengthened experts' confidence about the country's wind power
prospects," he said. Zhang Guobao, the director of the National Energy
Administration, had said earlier that China would soon devise favorable policies
to develop mega wind power farms, each with over 10 gW capacity. The National
Development and Reform Commission allocated 280 million yuan to the NCC to
conduct the investigation and work out a development plan for wind power
resources by 2011, Xiao said. "We set up 400 wind towers to test and simulate
the wind energy data so as to analyze the key cities with huge available wind
resources," said Xiao. "The result will come out in July. The next step will be
to test the specific wind power resources in terms of different districts for
these key cities." "The fresh assessment will help the country choose wind power
bases more precisely," he said. By 2008, China was the world's second largest
wind power market, behind only the US, in terms of newly installed capacity.
China added 6 gW of new capacity in 2008, bringing total capacity to 12 gW. The
country's goal to raise its wind power generation capacity to 100 gW by 2020 was
still achievable despite the economic downturn, Shi Lishan, deputy director of
Renewable Energy Department of the National Energy Administration told China
Daily in a previous interview. Zhang said China would build several wind farms
with over 10 gW capacities in the Inner Mongolia and Xinjiang Uygur autonomous
regions, and Gansu, Hebei and Jiangsu provinces, over the next decade. Xiao said
that Jilin and Heilongjiang provinces in northeast China have also started
building 10 gW wind power bases. "The construction of wind power bases is
changing fast," he said. "But one thing is for sure, China will accelerate the
construction of wind power bases in areas that are proved to have huge wind
power potential." The Xinjiang wind power generation base in Hami will produce
20 gW of electricity. Inner Mongolia will have a 20 gW and 30 gW wind power base
in western and eastern parts of the region, respectively. Hebei and Jiangsu will
each have wind power facilities capable of generating 10 gW although 70 percent
of Jiangsu's wind power capacity will come from offshore operations.
More than half of nearly 800 wealthy
Chinese recently polled believe the widening gap between the rich and poor is
also creating an emerging upper class in the country. The survey, carried out by
lifestyle magazine Best Life, interviewed 792 rich Chinese in 62 cities from 27
provinces through local chambers of commerce. Those interviewed were private
entrepreneurs with personal assets of more than 10 million yuan ($1.4 million).
More than 80 percent of those polled also said the income gap between rich and
poor in the country was too wide, the magazine reported this week. "In recent
years, the huge gap between rich and poor has become an indisputable fact in
China," Li Wei, director of the social development department at the Chinese
Academy of Social Sciences (CASS), told China Daily Wednesday. "Our research has
repeatedly shown this and it is not surprising that rich people themselves feel
the same way," Li said. Those polled in the latest survey defined the upper
class in a variety of ways. Some said the upper class included the yuppie group,
while others said the upper class terminology refers to high-society networks,
luxurious lifestyles and even greater social responsibility, the magazine
reported. The country's widening income disparity is considered to be one of its
most pressing social problems, with the average income of 20 percent of the
richest Chinese families 17 times higher than the poorest households, the CASS
reported in its 2009 Blue Book on Chinese Society. China's rapid economic growth
has caused the number of rich people to rise swiftly. By the end of 2007, the
country had 415,000 wealthy people, a 20.3 percent jump from the previous year,
according to the third annual Asia Pacific Wealth Report released by Merrill
Lynch and Capgemini. The rich people in the report were those who owned more
than $1 million in property, excluding their own residence. The average wealth
of rich Chinese is $5 million, the report said. Still, Li maintains the upper
class in China is distinct from the merely wealthy. "I agree that there is such
an elite group in China," he said. "Wealth is just one of the entry passes into
high society and only a small number of people with wealth, social status and
power can be called the upper class." Most of them are business tycoons in both
private and State-owned enterprises, as well as a number of powerful officials,
Li said. "This social differentiation is inevitable in China because of economic
development," he said. "It can be a stimulus for social development as long as
every one has equal access to wealth." Some entrepreneurs acknowledge the
presence of a wealthy class. "I believe there is an upper class in China but I
am not part of it," Kevin Zhou, 31, a private entrepreneur of a large general
motor manufacturer in Chongqing, told China Daily Wednesday.
Foreign direct investment (FDI) has been
in decline for eight months, but the size of the fall in May was smaller than
the one in April, probably signaling an easing off.
The Link Real Estate Investment
Trust (0823) reported an increase of 13.5 percent in full- year distributable
income on strong retail rental revisions and contributions from completed asset
enhancement projects. The firm, which manages retail and car park facilities in
public estates, said distributable income for the year ended March 31 was
HK$1.819 billion, compared with HK$1.602 billion the previous year. The company
has also approved a final distribution per unit of 43.13 HK cents, compared with
38.29 HK cents a year earlier. The total distribution per unit for the year
amounted to 83.99 HK cents, up 12.9 percent. The distribution for the year of
83.99 HK cents represents a distribution yield of 5.5 percent based on the
market price on March 31 of HK$15.32. The Link, which was besieged by protesters
demonstrating against working hours for car park staff before its press
conference, said none of its employees was involved in car park business. This
work was outsourced, according to chairman Nicholas Sallnow-Smith. He said the
company was generating jobs in Hong Kong, and planned to expand its property
investment by HK$2.6 billion over the next few years. That will comprise HK$1.2
billion to complete 11 asset enhancement projects in the next two financial
years and HK$1.4 billion for a further 11 asset enhancement projects. The
average base rent rose 11.8 percent to HK$28.40 per square foot from a year ago
and the retention rate grew 1 percentage point to 72.9 percent. Asked if the
firm will consider cutting rents, Sallnow-Smith said: "It's always one of the
discussions with our individual tenants." On British hedge fund The Children's
Investment Fund dumping its shares of The Link recently, Sallnow-Smith said
only: "Our relationship is fine." 
Two students of Christian Zheng Sheng
College listen as their headmaster, Alman Chan (wearing a blue shirt, at the
rear), speaks with legislators Cheung Man-kwong and Tanya Chan after a
Legislative Council meeting to discuss relocation of the college to a site in
Mui Wo previously occupied by New Territories Heung Yee Kuk Southern District
Secondary School. A vacant school in Mui Wo is likely to be made available to
the Christian Zheng Sheng College, which helps rehabilitate students with drug
problems, despite huge opposition from village residents. After meeting Chief
Secretary Henry Tang Ying-yen, education sector legislator Cheung Man-kwong said
Mr Tang had expressed support for the college's move to a larger premises in Mui
Wo so it could accommodate more students. "Mr Tang said the vacant school was an
appropriate site for the college. He also appealed to Mui Wo residents to calm
down and support students of the drug rehabilitation school with a loving
heart," Mr Cheung said. Since December 2006, the college and Mui Wo School have
vied for the use of the vacant New Territories Heung Yee Kuk Southern District
Secondary School, which ceased operations in September 2007. But a source said
the government was quite determined to give the site to the college. "It is
quite sure that the college will get the site." About 200 Mui Wo residents
marched in Central on Monday to protest against plans to re-site the college in
their village. Hundreds also vented their anger on Sunday during a consultation
session. Island district councillor and Mui Wo Rural Committee member Rainbow
Wong Fuk-kan said residents would not give up. "We will continue to look for
other sites for the college," she said. Undersecretary for Education Kenneth
Chen Wei-on voiced his support for the college's relocation to the Mui Wo site
at a Legco education panel meeting yesterday. Mr Chen was the first top
education official to publicly back the move. "We received submissions from
different parties expressing interest in running education services at the
vacant school site," he said. "We have considered different factors including
public concern about drug abuse problems. We think the site should be given to
the Christian Zheng Sheng College." Addressing Mui Wo residents' demands to use
the vacant school, Mr Chen said there was already enough school places for
students in the town. Mr Chen said the government's aim was to help students
with drug problems return to mainstream schools in the shortest time frame
possible. Some students at Christian Zheng Sheng College are placed in the
school under probation orders for two years, but most opt to stay longer to
complete Form 5. Daniel Shek Tan-lei, chairman of the Action Committee Against
Narcotics, criticised Mr Chen for lacking knowledge about providing education
services for young drug abusers. "Students who only take drugs for fun can
return to mainstream schools very quickly," Professor Shek said. "But some
students turn to drugs because of complicated behavioural, family or emotional
problems, and they find it hard to survive in mainstream schools. These students
should be put in schools for students with special needs." Meanwhile, 31
lawmakers, mostly pan-democrats, yesterday signed a letter urging the government
to give the vacant site to the college, and the letter will be submitted to
Chief Executive Donald Tsang Yam-kuen later this week. Democratic Alliance for
the Betterment of Hong Kong and Federation of Trade Union lawmakers have not
signed the letter.
New private diesel cars will be on sale in Hong Kong next month for the first
time in more than a decade. Audi's distributor Premium Motors confirmed that one
of its latest batch of Euro V diesel-engined cars, the Audi Q7 3.0 TDI Quattro,
had passed the government's stringent emissions standards and would be arriving
in about a month. Motor traders began a global hunt for suitable diesel cars
after the Environmental Protection Department introduced what it called
"improved flexibility in vehicle emissions standards" in January. Diesel engines
are considered more powerful and fuel-efficient than petrol engines, but in the
past they were not welcomed because they emitted high levels of particulates and
smog-inducing nitrogen oxides. But carbon monoxide emissions from Audi's latest
diesel engine were more than six times lower than the emissions standard for a
Euro-V petrol car, nitrogen oxide emissions were 16.7 per cent lower, and
particulate levels 78 per cent lower. Premium Motors managing director Chong Got
said the same diesel engine had been running in Europe for three years, but it
had been difficult to convince Audi to alter the engine's specifications just to
fit Hong Kong's emissions requirements because such a move would only boost
sales by several hundred vehicles a year. "The decision was made beyond business
concerns," he said. "The manufacturer values Hong Kong as a market; they are
more concerned in boosting the brand's name and goodwill." Audi would introduce
more diesel models in the future. The Audi Q7 was expected to cost about
HK$800,000 - 10 per cent more than its petrol counterpart. But the diesel model
had better acceleration and was also about 30 per cent more fuel-efficient than
the petrol model. Diesel sells for HK$8.89 per litre - about two-thirds the
price of petrol in Hong Kong. Motor Traders Association chairman Michael Lee
said he did not believe diesel cars would become very popular in the short term
because most manufacturers were reluctant to alter their diesel engines for a
small market like Hong Kong, and others were exploring alternative green vehicle
models like hybrids and electric cars. Under the existing transport policy, a
person can only register a diesel-engined car as commercial vehicle or a cargo
van. Owners of commercial vehicles have to spare a third of their cabin space
for cargo storage and cannot enter certain places, such as Mid-Levels, at
certain times, although they also enjoy a big waiver on the first-registration
tax. 
Security guards use a metal detector to check visitors before a meeting at the
Legislative Council yesterday. The new security measures at the Legislative
Council building, which came into effect yesterday, will cost HK$45,000 a month.
Legco secretary general Pauline Ng Man-wah said that the cost included the
installation of a door-frame metal detector at the public entrance, a hand-held
metal detector and the hiring of three professional security guards. It was
expected that the height of glass barriers in the public galleries would be
increased by the end of the year at the earliest, she said. The legislature
reviewed its security measures after a mentally ill man slashed himself with a
box cutter in the chamber during the weekly sitting on Wednesday last week. The
53-year-old man, surnamed Ching, was arrested for "contempt of Legco". About 50
members of the public went through the new security checkpoint yesterday. Ms Ng
believed the new arrangement would not discourage the public from observing
Legco meetings, adding that the first day of operation was satisfactory. "We
found the first day arrangement quite smooth and it did not take too much time
for security checks. It took less than two minutes for each individual," she
said. Security measures would be reviewed at the end of this month and the
secretariat would collect views from users before making a decision about
long-term measures. Members of the public are required to store all baggage in
lockers and walk through a door-frame metal detector before they proceed to
Legco public galleries. Guns, pointed or edged weapons, sharp objects and any
items which could cause injury are not permitted inside the building. Food and
water are also not allowed. Tomorrow, the Architectural Services Department will
submit a design for higher glass barriers in public galleries. The Legco
commission is to meet next month to further discuss the proposed design. 
Star Cruises (SEHK: 0678) has
proposed using the China Merchants Wharf in Kennedy Town as an alternative
terminal for its fleet, which cannot be fully accommodated at Tsim Sha Tsui's
Ocean Terminal. But while Central and Western District Council members generally
welcomed the idea, saying it would revitalise the waterfront, some councillors
worried that the absence of supporting infrastructure would frustrate visitors
and might aggravate traffic congestion. In an informal meeting with district
council members yesterday, Star Cruises said the China Merchants Wharf was
appropriate since it had just been refurbished and strengthened and could
accommodate vessels of about 30,000 tons. The company said about 800 passengers
would board at the pier each day. Passengers were expected to disembark from 8am
to 9.30am and board from 4pm to 6.30pm, and would be transported to and from
Tsim Sha Tsui or Sheung Wan in 12 to 16 shuttle buses. A large tent would be set
up for immigration facilities. Councillors were told that the company would
promote cultural features and heritage in the district during cruises. Council
vice-chairman Stephen Chan Chit-kwai said it had been planning to revitalise the
waterfront, and hoped the proposal would boost the district's economy and make
the waterfront more vibrant. But he urged the company to direct its shuttle
buses to the Western Harbour Tunnel to avoid causing serious traffic congestion.
Another councillor, Tanya Chan of the Civic Party, urged the government to
explain details of the proposal. "The pier currently has no supporting
facilities," she said. "Is it safe for passengers? Would the government monitor
the project? The government should inform the public of details clearly." A
Tourism Commission spokesman said Star Cruises would soon consult the district
council formally. The government would help identify berthing arrangements
before the city's second cruise terminal was completed at Kai Tak by 2013, he
said.
A nurse from United Christian Hospital has become the first member of the
frontline medical staff to be hit with the human swine flu. However, Hospital
Authority director Leung Pak-yin said it was not immediately clear whether she
had contracted the virus from a 20-month-old baby she attended or from the
community. The nurse developed minor flu symptoms on Saturday but remained at
work until she developed fever on Tuesday and was taken into isolation for
further laboratory testing. A fifth secondary school was closed yesterday after
a 16-year-old schoolgirl from Evangelize China Fellowship Saint Too Canaan
College in Kwun Tong was confirmed to have human swine flu. Meanwhile, one
parent and 26 more Australian International School students have tested
positive. The school was closed yesterday after two students had come down with
the disease. An 18-year-old student from Hong Kong International School in Tai
Tam was also among the confirmed cases, but she had already stopped attending
class before developing the symptoms. The city had a record high 54 new
confirmed cases in a single day, bringing the tally to 172 so far. Health
authorities have also scaled down their "preventive measures" to mitigation
phase from today. In view of the increasing number of local infections, the
government has stopped contact tracing for air passengers, and for close
contacts of confirmed cases they will seek diagnosis from the designated clinics
and only send patients to hospital if their test result is confirmed. "Since our
isolation measures no longer work in preventing local infection, we will focus
our resources on treating confirmed patients instead," the Centre for Health
Protection controller Thomas Tsang Ho-fai said. But he said it was still not the
time to close all secondary schools. "We are not at the level to decide
immediately that all secondary schools should be closed. However, we are
assessing the situation very closely on a daily basis." Speaking after a
Legislative Council meeting yesterday, Secretary for Food and Health York Chow
Yat-ngok said all schools should be prepared for closure any time, even if the
government had yet to issue the order. "If there are many schools and a high
number of students coming down with the infection, we will of course consider it
[closure of all schools]. However, some schools will start their summer recess
in early July which is about three or four weeks from now." He added all schools
should be ready for the possibility of ending the school term early. Meanwhile,
the mainland's health ministry yesterday announced its worst- case scenario
contingency plan which will restrict movement in residential areas and shut down
entertainment centers to prevent the H1N1 flu strain from spreading. With 264
cases as of yesterday, the ministry's new plan seeks to address possible
outbreaks in residential neighborhoods. Australia yesterday raised its swine flu
alert level to the newly created "protect" stage as the number of cases climbed
above 2,000. 
A Secondary One schoolgirl was rushed to
hospital yesterday after collapsing on the rooftop of a Tuen Mun car park
following a suspected ketamine overdose. It was the fourth incident of apparent
teenage drug abuse in a month. The 16-year-old student was with two other
schoolgirls when she collapsed in the Lung Mun Oasis car park. She was wearing
the uniform of the Ju Ching Chu Secondary School in Tuen Mun. The girl's parents
came from Vietnam but she was born in Hong Kong. Her father is a construction
worker and her mother a housewife. Her 20-year-old sibling said she could not
believe the drug claim as her sister is normally well-behaved. According to a
Mrs Cheung, a resident of the housing estate, the three girls were chatting with
a man in the car park around 2pm. The 16-year-old complained of a headache and
then sweated and vomited before falling unconscious. Her boyfriend, who was
called to the scene, and the other two girls tried to awaken her but in vain.
The police arrived after the two girls had fled, leaving the girl and her
boyfriend on the rooftop. She regained consciousness after ambulance staff
performed first aid and was in hospital last night under observation. School
principal Hong Chi-keung expressed shock, saying it was the first time any
student of the school had been involved in alleged drug abuse. The girl's
academic and discipline grades are average though teachers say her attitude in
school is good. Hong said the school has held anti- drug forums and students had
been warned about the danger of drugs. In addition, teachers often patrol the
neighborhood during lunch breaks. However, a student of the school doubted the
effectiveness of the talks. "They [drug users] may have become addicted to the
drugs and have not yet felt the danger. They may consider the talks to be just a
threat or an exaggeration," the male student said. An Education Bureau spokesman
said it is very concerned about the matter and will liaise closely with the
school. 
Faced with falling exports, the
government says it will try to further revive domestic consumption and maintain
stable growth in investment. China's economy was showing more positive signs of
a recovery but was at a critical juncture, the central government said yesterday
after a cabinet meeting. The State Council, following a meeting chaired by
Premier Wen Jiabao, warned that the foundation of the recovery was not firm
enough yet and it was necessary to step up measures to promote growth. "The
current economic performance has started to show positive changes, favourable
and positive factors are increasing, and the overall situation has stabilised
and is moving towards the good side," the cabinet said in a statement posted on
the government website. But the statement also noted that "the foundation of the
economic recovery is not firm, and that there are many uncertainties as some
regions, some sectors and some companies still faced difficulties". The cabinet
meeting, which was called just two days after the government completed its
week-long release of economic data for May, agreed that the government would
stick to its proactive fiscal policy and moderately easy monetary policy.
Official data released in the past week showed that factory output, retail
sales, fixed-asset investment and bank lending all accelerated, while a decline
in consumer prices slowed last month. But there was a sharper decline in exports
and foreign direct investment. The statement noted that investment growth was
accelerating, consumption maintained a rapid and steady increase and domestic
demand played a stronger role in boosting economic growth. Agricultural and
industrial production grew, regional co-ordinated development was making
progress, the financial market was stable and investor confidence stronger. The
cabinet cited the slump in exports, overcapacity in industrial production,
declining corporate profits and fiscal revenue and rising unemployment as
evidences of difficulties. The better than expected economic data has
strengthened market expectation that the world's third-largest economy could see
an early recovery, helped by Beijing's massive spending programme. The
mainland's two stock exchanges ended higher yesterday, boosted by the bullish
outlook on the economy. The Shanghai Composite Index closed up 1.23 per cent at
2,810.123 points. Still, the State Council statement appealed to officials to
prepare for long-term difficulties. The cabinet stressed that the country still
faced a grim external environment for growth, citing weaker overseas demand and
rising trade protectionism. It reiterated that the government would try to
further revive domestic consumption and maintain stable growth in investment,
including subsidies for the purchase of home appliances and cars in rural areas.
Policies would be launched to encourage inflows of foreign direct investment,
which have slowed in the wake of the global slowdown, while encouraging domestic
companies to invest overseas, the cabinet said, without elaborating.
China Qinfa Group, the mainland's
largest non-state-owned coal trading and logistics firm, is selling its
expansion story to investors this week, hoping to raise up to HK$630 million.
The Guangzhou-based company plans to sell 250 million new shares at HK$2 to
HK$2.52 each and use the proceeds to finance construction of a coal handling
terminal. The group sold 6.3 million tonnes of coal last year, or 1.2 per cent
of total coal sales by non-state firms and 0.4 per cent by all companies in an
extremely fragmented market, its preliminary listing prospectus showed. Sales
volume was 21.3 per cent less than in 2007 amid falling demand from power firms
as economic growth slowed in the second half. In the first four months of this
year, coal sales dropped 78.9 per cent year on year to 538,000 tonnes as talks
between power and coal producers over this year's supply stalled. But Qinfa said
sales rose in April to 274,000 tonnes, compared with the monthly average of
88,000 tonnes in the first quarter. It posted a net profit of 330.69 million
yuan (HK$374.84 million) last year. Excluding a 97.1 million yuan one-off gain
from selling a small stake in an Australian coal mine, underlying pre-tax profit
grew only 20 per cent, against a 59.6 per cent rise in net profit including the
gain. A sharp drop in coal prices last year led the firm to book a 31 million
yuan inventory write-down. It also posted a loss in the first quarter of this
year, but that was almost offset by a profit in April. While there was no
comparable listed firm in Hong Kong, as the others are all coal producers,
analysts said Qinfa's selling price, at 6.7 to 8.5 times its earnings last year,
was valid. "I think the pricing is reasonable and its share price may rise to a
price-earnings ratio of 10 times," said Redford Asset Management head of
research Kenny Tang Sing-hing. Triskele Capital chief investment officer
Tsuyoshi Shiba said a 20 per cent discount to the valuation of coal producers
would be reasonable for coal traders. "Compared with coal producers, the
earnings outlook for traders is cloudier since it is hard for investors to
forecast the firm's inventory management, which is key to a trader's
profitability," he said. Coal mining majors China Shenhua Energy (SEHK: 1088,
announcements, news) and China Coal Energy (SEHK: 1898) are trading at 16.7
times and 14.65 times last year's earnings respectively, compared with 6.7 times
for the smaller Yanzhou Coal Mining (SEHK: 1171). Qinfa bought 46.6 per cent of
its coal from traders and the rest from miners last year. About 75 per cent of
its revenue came from power generators, 8.9 per cent from coal traders and 15.7
per cent from cement and other producers. In addition to chartering vessels,
Qinfa owns five dry-bulk vessels with a combined capacity of 281,717 deadweight
tonnes. About 62.9 per cent of its sales were moved by its own vessels, and the
rest by chartered ones. To relieve a bottleneck at coastal ports in Guangdong,
the firm plans to build a 1.5 billion yuan coal terminal in Zhuhai to provide
transshipment, storage and blending services. It plans to take a 60 per cent
stake in the project, and state-owned Qinhuangdao Port has signed a preliminary
deal to evaluate taking up the rest. The Zhuhai terminal will take 30 months to
build and is expected to have 20 million tonnes of annual throughput capacity.
Analysts said Qinfa's integrated operation allowed it to tighten its
relationships with customers, but any significant expansion of its sales volume
would only come when the Zhuhai terminal was completed. Its small size, despite
being the largest among non-state players, may also limit its gross margin,
which fell to 13.3 per cent last year from 15.6 per cent in 2007, they added.
"In coal trading, Qinfa is relatively big in scale, but the traders generally
don't have much bargaining power against their mega-sized customers, the power
producers," said Mr Shiba.
China Mobile (SEHK: 0941) and Taiwan's
Far EasTone Telecommunications may seek new ways to set up a joint venture on
the mainland to sell mobile applications, according to Douglas Hsu Shu-tong, the
chairman of Far EasTone. The news on a proposed joint venture came on the heels
of Far EasTone shareholders' approval on Tuesday of the disposal of 444 million
new shares to China Mobile at NT$40 (HK$9.42) each. The plan is part of the
strategic alliance between the two companies. "The setting up of the joint
venture will be the second step in the China Mobile-Far EasTone alliance, after
China Mobile successfully wins the regulatory approval to take a stake in Far
EasTone," Mr Hsu said after the general meeting of Asia Cement (China) Holdings.
"Our plan is to initially use the net proceeds from China Mobile to fund the
joint venture. But we may discuss other ways of setting up the joint venture, as
that is much more important for us." China Mobile and Far EasTone entered into a
strategic alliance in April. It was agreed that China Mobile would subscribe to
Far EasTone shares and the two companies would set up a joint venture to enter
the fields of mobile applications and value-added services. China Mobile will
hold a 51 per cent stake and Far EasTone a 49 per cent stake in the joint
venture. "We hope the joint venture will help Taiwanese software companies to
enter the much bigger mainland market," Mr Hsu said. He said the next step would
be for China Mobile to apply to set up a Taiwan-based company to handle its
investment in Far EasTone, which is subject to approval by the Taiwan
government. He was confident the transaction would be concluded by the end of
this year. "The Taiwan government is busy working on the rules regarding
mainland companies investing in the island," Mr Hsu said. "There are no rules in
this area, not only in telecommunications, but in the banking sector as well.
The regulatory framework is lagging the existing market situation. They are now
working on it." China Mobile shares fell 0.77 per cent yesterday to HK$77.20.
Korea National Oil Co (KNOC) and mainland’s Sinopec (SEHK: 0386) are competing
for the takeover of Switzerland-based oil and gas explorer Addax Petroleum,
sources said on Wednesday, with bids valuing the company at more than US$8
billion, including debt. Both KNOC, and Sinopec Group, the parent company of
mainland’s Sinopec, were negotiating with Addax, the sources said. “KNOC has put
in a bid for Addax – for the whole company,” a source with direct knowledge of
the matter said. All sources declined to be named because they were not
authorised to speak publicly about the matter. A spokeswoman for Sinopec said
the company declined to comment when contacted. Africa and Middle East-focused
Addax Petroleum – with a market capitalisation of US$6.1 billion – has projects
in Nigeria, Gabon, Cameroon, and exploration licenses in the Kurdistan region of
Iraq. An acquisition by Sinopec or KNOC would fit with the two companies’
strategy of securing energy assets to fuel their economies. Addax has fields in
West Africa, where Sinopec has interests, and in the semi-autonomous Kurdish
region of Iraq, where KNOC is drilling for oil.
A spokesman for mainland-friendly
Taiwanese President Ma Ying-jeou yesterday dismissed suggestions the island was
drifting towards reunification with the mainland. Wang Yu-chi said the president
believed in maintaining "the status quo" under which the two territories are
ruled separately, unless a majority of islanders vote for change. The
spokesman's comments came after Mr Ma was quoted saying in a recent interview
with the Taipei-based CommonWealth magazine that he would not "rule out" pursuit
of a unified China. The remarks sparked speculation that Mr Ma was moving
towards Beijing's goal of reunification, 60 years after the two sides split at
the end of a bitter civil war. But Mr Wang said the comments had been taken out
of context. "What he was trying to say was that Taiwan's future should be voted
on by the 23 million people here," he said. "Like a great majority of the
locals, he wants to sustain the status quo of the Taiwan Strait." Mr Ma has
repeatedly pledged that during his tenure he would not press for either
reunification or formal independence. Meanwhile, the de facto US embassy in
Taiwan said its new facilities in Taipei would include quarters for security
personnel - raising the possibility that serving US Marines would return to the
island for the first time since Washington transferred diplomatic recognition to
Beijing in 1979. In a statement announcing the dedication of the yet-to-be-
built US$170 million facility, the American Institute in Taiwan said an initial
construction phase would include the security personnel quarters. 
Heung Yee Kuk chief mulls second site for
rehab school - Heung Yee Kuk chief Lau Wong-fat is considering a proposal to
resolve the Zheng Sheng school Mui Wo saga by moving the rehabilitation center
to a vacant school in Kwai Chung.
Hong Kong's unemployment
rate held steady last month for the first time since the global financial crisis
began, surprising economists and prompting hopes that the government's economic
stimulus measures are having an effect. But economists and the government say
the worst is not over and the unemployment rate is likely to rise in coming
months as university graduates start looking for work. Unemployment in the three
months to the end of May was 5.3 per cent, the same as in April. Economists had
forecast a rise to 5.4 per cent. The number of unemployed workers rose by 2,800
from the February to April period, to 199,700, but the workforce increased by
15,700 to an all-time high of 3.71 million. The number of people in work rose by
12,800, to 3.51 million - the first such increase for four months. The
underemployment rate edged up from 2.2 per cent to 2.3 per cent; in the March to
May period, 85,200 people were unable to find more than 35 hours' work a week.
Significantly, the unemployment rate in the hard-hit construction sector fell
for the first time in seven months, to 12.1 per cent, from 12.7 per cent at the
end of April - a sign that government efforts to provide construction work are
paying off. The manufacturing, entertainment and transport sectors also showed
improvement; social workers and people in the food services and wholesale
sectors bore the brunt of the job losses. The Labour Department was notified of
more than 40,000 private sector job vacancies last month, 28 per cent fewer than
a year earlier and 10.2 per cent fewer than in April. Secretary for Labour and
Welfare Matthew Cheung Kin-chung warned against jumping to conclusions. With a
flood of fresh university graduates joining the workforce this summer, the
unemployment rate was likely to rise. Still, he said the government's "various
measures to support enterprises and preserve jobs" were beginning to take
effect. In February the government announced tax rebates and rent and rates
waivers for households and the creation of jobs for nearly 62,000 people. Last
month, it extended the rebates and waivers, waived some business fees and
increased loan guarantees for businesses - measures worth a total of HK$16.8
billion. Economists were less optimistic. Hong Kong General Chamber of Commerce
chief economist David O'Rear doubted jobs were being created. Goldman Sachs
economist Enoch Fung predicted unemployment would hit 5.8 per cent this year -
the highest since April 2005. Mr Fung said improvements in employment growth
would be the key indicator of a turnaround in the job market. The number of
people in work last month was down 20,300, or 0.5 per cent, from a year earlier.
Still, that was half the year-on-year drop recorded in April.
Swine flu forced the
closure of an international secondary school for the first time yesterday after
two students out of 60 who had shown flu symptoms tested positive for the virus.
The summer holiday will begin today for the secondary division of the Australian
International School in Kowloon Tong, where two Grade Eight students were
confirmed to have been infected. The sources of infection for the 13-year-old
boy and 14-year-old girl, who were in different classes, remained unknown.
Centre for Health Protection controller Thomas Tsang Ho-fai said 60 other
students had shown flu symptoms, and 29 were now in hospital. The school was
originally due to close for a month on June 26. The Tang Shiu Kin Victoria
Government Secondary School, which has also closed, had another flu patient
yesterday - a 16-year-old boy who sat "a few seats" away in an exam from a
15-year-old girl who was confirmed to have swine flu on Monday. Two more Form
One students from St Paul's Convent School in Causeway Bay and a Primary Six
pupil at St Anthony's School in Pok Fu Lam have also tested positive. Dr Tsang
said the government would "evaluate if the frequency and severity of cases are
more serious than seasonal flu" before deciding whether class suspension would
be extended to all secondary schools. Three local cases were also found in the
wider community - two women in Fanling - one 18 and the other 49 - and a
34-year-old man in Kowloon Tong, none of whom had travelled overseas recently.
The centre was not certain yesterday whether one other patient, a 45-year-old
man, was a local or an imported case. Dr Tsang said local cases were now
increasing more quickly than imported ones. There were five imported cases
yesterday, with travellers coming from Thailand, the United States, India and
Europe. Asked whether offices would be closed if patients were found there, Dr
Tsang said not unless there were special factors requiring it.
Mainland buyers find housing
estates like the Sorrento above Kowloon Station attractive because of its
accessibility to transport links. Jiangsu businesswoman Ms Li secured Hong Kong
residency in March under the government's Capital Investment Entrant Scheme by
buying a flat in the Sorrento development above Kowloon Station for more than
HK$7 million. To qualify under the scheme, an applicant must invest at least
HK$6.5 million in real estate, equities, debt securities, bank deposits,
subordinated debt or in an eligible collective investment scheme. To expand her
trading business in Hong Kong, Ms Li applied almost a year ago to obtain
residency under the scheme. She chose to buy the 800 square foot flat in
Sorrento instead of investing in the stock market. "I'm not familiar with the
stock market. I am always travelling, and so I don't have time to handle stock
investments. The outbreak of the global financial crisis also showed that the
stock market is risky," she said. "Property investment is more conservative."
Mainlanders seeking to qualify under the scheme have so far spent a total of
HK$7.51 billion in buying properties. Like many of them, Ms Li found the housing
estates above Kowloon Station attractive. She said the area was highly
accessible to transport links and would be even better served by the
Guangzhou-Shenzhen-Hong Kong Express Rail Link, now under construction. She
added that she was attracted to the comfortable living environment and the view
and the proximity to the landmark International Commerce Centre office building.
But she has a "Plan B" if she fails to expand her business in Hong Kong: "Then I
will lease my unit. I've investigated the residential leasing market in the
area. The rents are high." Mainlanders such as Ms Li have become the new targets
of developers in recent years. But their investment in real estate has so far
been much less than their investments in financial markets. By the end of March,
the Immigration Department had granted 2,683 Chinese nationals permanent
residence and Hong Kong identity cards under the scheme, which was launched in
October 2003. However, only 28 per cent of the total qualifying investments were
made in real estate. Eddie Kwan King-hung, managing director of Eddie Kwan
Immigration Consulting Services, said more people had begun investing in
property since the outbreak of the global financial crisis. "In the last two
quarters, about 40 per cent of our clients invested in the property market, as
they began to appreciate that property was a less risky investment after the
financial crisis," he said. Mr Kwan's industry may be one of the few businesses
that could be said to have benefited from the outbreak of the financial crisis.
He said his firm once received 50 to 60 applications a month under the residency
scheme, but between the last quarter of 2008 and the first quarter of this year,
it had received more than 100 applications every month. "The sharp fall in
property and stock prices after the crisis attracted mainland applicants to
invest in Hong Kong. But the number of applicants returned to normal levels in
the last two months, because prices have rebounded significantly." The main
beneficiary of the increase in demand was the property market in Kowloon. Nine
out of 10 applicants bought flats in Kowloon, particularly in Kowloon Station,
said Mr Kwan, who believed this was because the area was near Tsim Sha Tsui, one
of the shopping destinations popular with mainlanders. Thomas Kut On, the chief
executive at Midland Immigration Consultancy, a subsidiary of Midland Realty,
said new residential projects were highly rated by mainland buyers. Property
agents said about 10 per cent of buyers at the Cullinan held Chinese passports,
while a further 20 per cent held Hong Kong identity cards with Putonghua
phonetic transcriptions. The project was launched in February. "It is [quite]
exceptional [that the Cullinan attracted] a high proportion of mainland buyers,"
said Shih Wing-ching, chairman of Centaline Holdings. Rival new projects did not
have so many mainland buyers, he said. Whereas mainland buyers comprised less
than 10 per cent of purchasers in the overall property market, they were
responsible for about 20 per cent of HK$50 million plus deals in the luxury
residential market, he estimated. Mr Shih said the influx of mainland buyers was
mainly because mainland banks had relaxed loan conditions earlier this year. But
he warned that this policy could be reversed at any time. "We will not see the
number of mainland buyers increase sharply in the short term, owing to the
political barrier and exchange controls on the mainland," he said. "Real demand
for Hong Kong property by Chinese nationals will only be truly reflected once
these obstacles have been removed." 
VTech Holdings (SEHK: 0303), a Hong Kong-listed manufacturer of cordless phones
and electronic toys, would expand its operations outside its key market of North
America, chairman Allan Wong Chi-yun said yesterday. The company is seeking to
boost its exposure in the Asia-Pacific and other regions such as South America,
where sales have been less affected by the global financial crisis. "The revenue
from Asia-Pacific and other markets now is less than 10 per cent, which
represents a huge growth potential," said Mr Wong (pictured). "We expect to
double that at the end of this year to 20 per cent." The company announced a new
three-year contract yesterday to supply fixed-line phones to Australian
telecommunications giant Telstra Corp, its first direct presence in that
country. VTech reported a 33.6 per cent decline in net profit for the year to
March to US$143.2 million on a 6.7 per cent drop in revenue to US$1.448 billion.
It declared a final dividend of 41 US cents per share, down from 51 US cents.
North America contributed 53.4 per cent of VTech's revenue in the financial
year, and revenue generated there fell 11 per cent to US$772.8 million. Sales
from the Asia-Pacific dropped 1.6 per cent to US$55.2 million but contributed
only 3.8 per cent of the group's revenue. Mr Wong said orders in the April-June
period had slightly improved from the beginning of the year. However, it would
be difficult for revenue to grow in the year to March 2010, he said. "Things
[will be] better in the next three months, because retailers have started
purchases and our market share is increasing," he said, adding that the company
was healthy, with cash of US$300 million. Shares in VTech closed 1.77 per cent
higher at HK$40.20 yesterday.
A hotel waitress from Hubei is getting her
first taste of freedom in more than a month after being convicted yesterday over
the killing of a government official who tried to force her to have sex with
him. Although the judges at Badong County People's Court ruled that Deng Yujiao
was guilty of intentionally causing bodily harm, they set her free for three
reasons: she acted in self-defence, albeit with "excessive force"; she turned
herself in to police; and she had only limited criminal responsibility because
she was suffering from "a certain level of mental disorder". Deng, 21, killed
Deng Guida , 44, from Yesanguan town with a fruit knife on May 10 when he forced
himself on her in a hotel bathing area. She injured another official who tried
to assault her. Police detained her for murder, but her story spread and brought
an outpouring of support and sympathy on the internet from people all over the
mainland, who applauded her "heroic" behaviour and criticised the dead official
for being immoral and Badong police for what many saw as an unjust charge. Deng
was released from detention and put under house arrest before being handed over
to prosecutors on assault charges on May 31. She has 10 days to decide if she
will appeal against the verdict. Xia Lin , a member of her original defence
team, said he thought Deng could live with the verdict, although the "mental
disorder" finding would reflect badly on her. He called her conviction
regrettable. Zhang Zanning , a professor from Southeast University's law school,
said the verdict was apparently a compromise the court had to make "to please
the higher authorities with a guilty verdict and, at the same time, to heed
public sentiment by letting the woman go. But the legal system will bear the
brunt for losing public trust". Professor Zhang said the verdict was flawed
because Deng had never turned herself in; she had merely called the police
following the stabbing to ask for help. "Seeing that call to police as an
admission of guilt would turn Deng Yujiao from a victim into a perpetrator, and
that would be calling black white," he said.
Chinese President Hu Jintao
arrives in Russian capital Moscow on June 16, 2009. President Hu Jintao was
welcomed by Russian Energy Minister Sergei Shmatko (1st R) after he arrived in
Moscow Tuesday for a state visit.
President Hu
Jintao held talks with Indian Prime Minister Manmohan Singh on the long-running
border dispute between the two countries as India intensified its military
presence along the border. New Delhi deployed four Sukhoi-30 MKI combat aircraft
on the border on Monday, just hours before the two leaders met in Russia on the
sidelines of a Shanghai Co-operation Organisation summit. With the border
demarcation issue not likely to be resolved any time soon, analysts said the
military deployment, which has intensified in recent weeks, was an attempt by
India to increase pressure before negotiations. In their meeting at
Yekaterinburg, Mr Hu told Dr Singh that both sides should safeguard the peace
and stability of their border regions before the border issue could be resolved.
"We hope that both sides will ... make efforts to prevent the boundary issue
from affecting and damaging the relations between the two countries," Xinhua
quoted Mr Hu as saying. But some analysts viewed the deployment at the Indian
airbase in Tezpur, in the state of Assam, as a sign it wanted to beef up its
military presence along the Sino-Indian border. Besides the aircraft, two more
army divisions, each comprising 25,000 to 30,000 soldiers, would be sent near
the border, an Indian official said last week. J. J. Singh, the governor of
Arunachal Pradesh, said the deployment of additional troops was needed because
Chinese soldiers frequently entered Indian territory. The move has drawn
expressions of concern from Beijing, with the Foreign Ministry calling for
peaceful negotiations and state media criticising India's deployment. At a
regular press briefing yesterday, Foreign Ministry spokesman Qin Gang repeated
that China was willing to work with India to resolve the issue. Since a brief
war in 1962, the Asian neighbours have been struggling to settle the demarcation
of a border stretching 3,500km in the Himalayan region. Both claim the other
side has been occupying its territory. Indian media have reported that special
envoys from both sides will meet in New Delhi in August to discuss the issue.
Chen Fengjun , an Indian expert at Peking University's School of International
Studies, said the meeting between Mr Hu and Dr Singh was more rhetorical than a
practical attempt to resolve the border dispute. While Indian media had
suggested that border tensions had intensified and a war was possible, Professor
Chen said the military deployment was a move to increase leverage in
negotiations. "As concerns are mounting in India about a rising China, the
Indian government is also under pressure to get tough with the Chinese side," he
said. At the SCO summit yesterday, Mr Hu also held talks with Iranian President
Mahmoud Ahmadinejad, whose trip was delayed for one day due to protests spurred
by his controversial re-election. A brief report from Xinhua said Mr Hu and Mr
Ahmadinejad "exchanged views on bilateral relations and issues of common
concern" on the sidelines of the summit.
Advertising and consumer spending
on the mainland's media and entertainment industry will probably grow 7 per cent
this year and next, according to a study by accounting firm
PricewaterhouseCoopers. Despite the global downturn, the mainland would still
manage to see a 2.15 per cent gain in advertising revenue this year to US$20.6
billion, the study showed. Global advertising revenue was expected to fall 12.1
per cent this year and rebound to a 1.4 per cent increase in 2011, it added.
Video games and the internet were expected to be the leading growth engines on
the mainland, with spending expected to grow at a compound rate of 15 per cent
and 13 per cent, respectively, this year and next. Spending on digital music and
outdoor media would increase 7.5 per cent during the period, the study
estimated. Revenue from digital media would account for 39 per cent of the total
in 2013, up from 28 per cent last year, it said. PricewaterhouseCoopers' global
leader of entertainment and media practice, Marcel Fenez, said media companies
needed to expand their digital operations, as more and more users were getting
content online than by traditional means, such as printed and broadcasting
media. "Advertisers will gradually realise that their budgets should be
allocated to a platform users stay on for a longer time, and the fact is users
spend more time online. Advertising revenue will migrate from the traditional
platform to online," Mr Fenez said yesterday. Meanwhile, Hong Kong would suffer
a 3 per cent decline in spending on the industry between this year and next,
mainly because of a 16.4 per cent decline in television advertising to US$2.16
billion, the accounting firm said. Advertising on television would drop a
further 2.17 per cent next year to US$2.11 billion and then gain 3.3 per cent in
2011 to US$2.19 billion, it said.
Wealthy investors from the coastal
city of Wenzhou - regarded as the "cradle of Chinese capitalism" - are joining
forces to speculate in the mainland property market after a two-year break,
betting that a revival in demand will drive prices higher. Wenzhou investors had
withdrawn from the property market in 2007 when the central government imposed
tougher measures to cool overheating housing prices. "They are digging out
opportunities everywhere again after gathering funds in their hometown," said Lu
Qulin, the deputy head of Shanghai Uwin Property information Services. According
to data compiled by Uwin, Wenzhou investors spent about 1.34 billion yuan
(HK$1.52 billion) in buying 732 units in Shanghai last month, accounting for 4
per cent of total Shanghai deals for the month. Other targets included Shenzhen,
Hangzhou and Chongqing. Mr Lu said the buying trend would become more obvious
when data for this month was released because Wenzhou buyers had more recently
focused their attention on Shanghai's rural Nanhui district as they bet that
property prices in the area would rise as a result of its integration with
Pudong as announced last month. Sales data shows that property prices in Nanhui
rose 12 per cent to 9,000 yuan per square metre a month after the announcement.
"The area's upside potential is promising as Wenzhou buyers will help to boost
prices by flipping properties," said Mr Lu. In Shanghai, average transaction
prices edged up 2.89 per cent to 14,285 yuan per square metre between June 1 and
14, he added. Helping to boost property prices in mainland cities besides the
demand from wealthy Wenzhou buyers was an inflow of overseas capital, in
particular from investors in Hong Kong, Macau and Taiwan, said Mr Lu. Luxury
apartments with average transaction prices of more than 30,000 yuan per square
metre bought by overseas funds amounted to 452 million yuan last month, up from
316 million yuan in April, he said. Mass and luxury residential projects in
Shenzhen were also another favourite among Wenzhou investors. property agents
said Wenzhou investors bought more than 20 units in an individual mass
residential project in Shenzhen for more than 20 million yuan recently while one
investor alone bought 10 units in a luxury development for 40 million yuan.
According to mainland reports, Wenzhou speculators bought 90 flats in Shenzhen
last month. "There are signs that Wenzhou buyers are back in action in
Shenzhen's primary and secondary market," said Alan Chiang Sheung-lai, the head
of residential property at property consultant DTZ. Wenzhou investors combined
forces to operate in a way similar to private equity funds, buying in bulk
rather than acquiring properties individually, Mr Chiang said. But in view of
the stronger than expected sales, some developers were reluctant to entertain
bulk buyers who asked for discounts, he said. "Developers are also worrying that
these bulk purchasers will offer the discounted units for resale in the
secondary market. This will create direct competition with developers," he said.
Mr Chiang said investors had shifted their stock market gains to properties,
pointing out that average home prices had jumped 20 per cent to 13,000 yuan per
square metre from early this year. "The real estate market will be closely
monitored by the central government and it will introduce administrative
measures any time if prices went beyond public affordability." Yang Hongxu, a
researcher at property consultant and information provider E-House China
Holdings, said investors from Wenzhou, who also speculated on stocks and
commodities of coal and cotton, indicated surplus capital now had to seek new
investment channels in view of inflation risk. "Buying properties is a way to
protect their wealth instead of putting savings in banks to earn a tiny amount
of interest," Mr Yang said. He believed Wenzhou investors would take a
longer-term view this time as property prices were unlikely to jump 30 per cent
within a year.
Despite the hype given to solar energy
development, Shanghai Electric Group, China's largest power generating equipment
maker, has remained steadfast in getting out of the sector, which it deems as
unprofitable, at least in the short-term. The sale of its 35 percent stake in
solar energy equipment maker Shanghai Topsolar Green Energy for 138.6 million
yuan fell through last week because the buyer was said to have defaulted on
payment. Fu Rong, Shanghai Electric's board secretary, said in a written reply
that her company hasn't made a firm decision on what to do next with the unsold
stake in Shanghai Topsolar. But she had said earlier that the disposal of the
company's investment in solar energy was essential because the company couldn't
find a way to incorporate it into its future development plans. She was echoing
the lines of Shanghai Electric's chairman Xu Jianguo, who said that he couldn't
see a profitable future for solar energy despite official efforts to promote the
sector as an alternative energy source to supplement fossil fuel. "Shanghai
Electric's determination to spin off the solar energy business is not in doubt,
given the sector's minor contribution to the company's earnings, "said Zhan
Wenhui, analyst with Haitong Securities in Shanghai. Zhan said around 70 percent
of Shanghai Electric's sales is generated from manufacture of fire-power
equipment. As sales began to decline in recent years, the company has embarked
on an ambitious plan to develop its capability in the production of nuclear and
wind-powered energy generating equipment. After reaching its peak in 2004, the
profitability of Shanghai Electric's mainstay business of fire-powered
generating equipment has been falling steadily. The rate of return on sales of
such equipment in the second half of 2008 fell to 17 percent from more than 20
percent a year back, although the company continued to hold a 30 percent market
share. To raise capital for new ventures, Shanghai Electric in April raised 5
billion yuan by issuing about 700 million new shares at 7.15 yuan apiece. The
company said 1.1 billion yuan of the total fund raised would be invested into
nuclear projects, while 800 million yuan would go to wind power. The company's
A-shares dropped 0.48 percent to close at 10.4 yuan yesterday. "Our target is to
produce 800 to 1,000 mega-watt wind turbines by 2010, and have sales of 10
billion yuan from the wind sector by 2011," Xu told reporters earlier this year.
Xu said wind equipment would be the second sector to clock over 10 billion yuan
sales on the heels of fire-power equipment going forward, due to the recent
strategies to develop new energy. Huang Li, deputy director-general in charge of
energy saving and technology equipment under National Energy Administration,
said last November China would subsidize 800 million yuan to core nuclear and
wind power equipment makers, a move expected to benefit nearly 10 percent of the
companies in the sector, according to Xinhua News Agency reports. Shanghai
Electric started developing wind power since 2004 with the capacity to do volume
production of 1.25 mW and 2 mW wind turbines so far. The company said nuclear
and wind power will take the place of fire-power to lead the electric power
generating over time. Shanghai Electric has so far taken on nuclear-related
orders worth 18.3 billion yuan so far, with almost 50 percent market share in
making the main equipment of nuclear island domestically. Xu said the company's
sales from the nuclear business are likely to grow by 75 percent year-on-year to
touch 3.5 billion yuan in 2009. Around 12 new nuclear projects are in the
pipeline currently, with installed capacity of around 23.7 million kW. However,
Goldman Sachs said in a recent research note that the power equipment industry
still has downside risks due to concerns on growth slowdown in power generation
capacity partly due to the limited number of new power plants approved by the
government. Shanghai Electric gained 2.5 billion yuan in net profit in 2008,
down 9.88 percent year-on-year. 
The
Ministry of Agriculture and local governments released 13 million fries of major
fish species Tuesday into the Bohai Sea to preserve fishing resources. The local
governments were those from Tianjin Municipality and Hebei, Liaoning and
Shandong provinces, which surround the Bohai Bay area. The species released
included prawns, crabs, jellyfish and flounder, said the ministry. Agriculture
Minister Sun Zhengcai said at the event that the increase of fish stocks was a
major step to preserve the aquatic environment and promote the fishing industry.
About 19.7 billion fish fries were released in waters across China last year and
the total could reach 26 billion this year, said Sun. 
Billionaire financier George Soros has
praised the Hong Kong government for thwarting his attempts to undermine the
local currency and stock market in 1998 but maintained he had every right to do
so. Mr Soros, criticised as being a predatory speculator whose highly profitable
currency attacks in 1997 were blamed for destroying the Thai and Malaysian
economies, credited the Hong Kong administration for intervening in the local
stock and futures markets during the Asian financial crisis. But he remained
unapologetic about his actions. The financier made his comments to China Central
Television while in Shanghai on Sunday to give a speech at Fudan University.
"They actually did a very good job defending the Hong Kong dollar, so they
deserve credit. And my attack, if you call it that, was without success. "I
don't feel any sense of guilt ... There is nothing wrong about it. This is a
point people have difficulty understanding because, in speculating in the
financial markets, I do so according to the rules that prevail." Hungarian-born
Mr Soros' actions in 1997 led to him being described as "a villain and a moron"
by Mahathir Mohamad, then prime minister of Malaysia. Mr Soros' latest comments
mirror those he made during a visit to Hong Kong in 2001, when he said local
monetary authorities did "a very good job when they intervened to arrest the
collapse of the Hong Kong market" and that the subsequent damage to the
government's laissez-faire reputation was worth it. The government was generally
perceived to have won the battle with speculators after then-financial secretary
Donald Tsang Yam-kuen went on an unprecedented HK$118 billion stock-buying spree
to defend the currency peg in August 1998. The administration justified its
actions by saying hedge funds such as Mr Soros' Quantum Fund were manipulating
markets by dumping the Hong Kong dollar while taking short positions on the
stock and futures markets. Hedge funds profit in a falling market by shorting
stocks, which allows them to sell borrowed stocks and buy them back at a lower
price. The Quantum Fund was set up in 1969 and started to experiment with
currency manipulation. The fund made money from the devaluation of the Thai baht
in July 1997 by betting on falling stock prices. The attack on the Hong Kong
dollar raised fears the government would have to break the peg to the US dollar.
Sales of large quantities of the local currency flooded Hong Kong with cash and
pushed up interest rates as investors sought a higher rate of return. This
caused capital to flow from equities to interest-bearing investments and bank
deposits as investors abandoned stocks. Had the government failed to intervene
or been unsuccessful in its buying spree, hedge funds that had bet on falling
stock and futures markets would have reaped huge gains.
Tony Tyler must contend with government
regulations as well as consumer beefs with airlines. To celebrate his becoming
chairman of the global airline club last week, Cathay Pacific Airways (SEHK:
0293) chief executive Tony Tyler set out not so much a stall but a whole
department store of complaints about the problems that the aviation industry
faces. It was a typically Tyler feisty effort, full of rambling good sense along
with a few self-serving comments on behalf of airlines. His speech, in Singapore
just before he took up the post of chairman of the International Air Transport
Association, deserves a wider audience. Does it offer hope that he may use his
year in office to try to bring the airlines together to do something practical
to improve the sickly business? With the world's airlines facing losses of US$9
billion this year, some of Mr Tyler's home truths are telling, particularly his
attack on stifling, greedy, often nonsensical government regulations. Mr Tyler's
biggest immediate test is whether he can persuade airlines and governments to
come on board with a sensible scheme to make aviation pay for its greenhouse gas
emissions. Major airlines such as Cathay and British Airways are pressing for a
workable global greenhouse gas tax. Admittedly, they are partly motivated by
fear that unless they can get agreement, individual governments will impose more
expensive piecemeal taxes. The European Union is showing the way, with planned
taxes that will hit non-European airlines such as Cathay heavily. Poorer
countries are pressing to raise US$10 billion from a tax on long-haul flights.
Britain is imposing heavy taxes on all flights, but the money goes to general
revenue, not to protect the environment, "a Brown tax, not a green one", Mr
Tyler mocked. Willie Walsh, chief executive of British Airways, conceded that
the airlines had spent too much time with transport ministers and within the
International Civil Aviation Organisation, a United Nations body, rather than
talking to environment ministers. A lot is expected of Mr Tyler, not least
because he is based in Hong Kong, and China, along with Brazil and India, has
been showing its new political and economic clout. But there are really too many
issues calling for his attention. One is to lobby the European Union to stop
delaying and accomplish the Single European Sky, bringing together all the air
traffic systems. This would save airlines 12 per cent in fuel costs and the
choking planet an equivalent amount of greenhouse gases. Then there is an
ever-growing plethora of rules and regulations. The United States, Mr Tyler
noted, had just issued 177 pages of guidance notes on dealing with passengers
with disabilities. Foreign airlines only have to carry dogs as service animals
in the cabin for disabled passengers, but US airlines must be prepared to carry
miniature horses, monkeys or even ducks if passengers need them for psychiatric
or emotional support. Some countries are planning to fine airlines or demand
compensation for passengers in the case of delays, and Mr Tyler protested that
this was hardly fair if weather, such as typhoons in Hong Kong or snowstorms in
New York, was responsible. But one of the reasons why demands for compensation
have been made is that airlines treat passengers cavalierly. I was once stuck on
board a United Airlines flight for almost nine hours before the flight was
cancelled, without compensation. Mr Tyler claimed that wider recognition for the
oneworld alliance would give passengers the greater competition of three
alliances to choose from. But how is three a better choice than 10 or 20?
Airlines have colluded with governments in setting base fares at unrealistically
high prices. Only fools and business executives on expenses pay them. But they
are a useful base for excess luggage or for imposing a whole range of extra
charges and impositions on special fares. These have led to a baffling range of
booking classes from A to Z for the three (or four, if there is premium economy)
real classes of service on board. Yes, Mr Tyler is right that airlines face
tough times, especially with oil prices rising again. But honesty should require
him to face up to the airlines' warts as well as those of governments and
regulators.
The super freighter Dreamlifter carries the massive wings for the first 787
Dreamliner. Officials say the plane will make its first flight this month. The
most talked about plane at the Paris Air Show will be the one that missed the
flight. Boeing's 787 Dreamliner was expected to be delivered "bang on schedule"
in 2008, commercial planes chief Scott Carson said in June 2007 at the
industry's last Paris gathering. Instead, a date has not even been set for its
maiden flight after production and development delays put the model back two
years.
China has reached a crossroads in
its urbanisation drive, and now is the time to shift the focus to the
environment and people's welfare, according to a report released yesterday by a
central government think-tank. The obsession with industrial output and growth
of gross domestic product was outdated, and the global economic downturn
provided the perfect opportunity to change direction, said the Blue Book of
Cities in China, the annual report by the Chinese Academy of Social Sciences.
The report put the mainland's urban population at 607 million, an urbanisation
rate of 45.7 per cent. It dubbed 2008 as the turning point and predicted the
direction of development would alter from now on. The GDP growth rate dropped -
in some cases significantly - in all major cities last year because of a sharp
decline in exports and industrial output. Furthermore, real estate developers'
previously insatiable appetite for undeveloped land decreased by 8.6 per cent,
according to the report. Shan Jingjing , a key author, said this showed that
urbanisation was about to enter a period of profound adjustment. "The
transformation is about replacing a quantity-first mentality with quality
first," Dr Shan said. "The transformation is about the end of the real estate
development frenzy, which has been tearing down old cities and building up new
ones since the late 1980s. "The transformation is about improving a city's
functions rather than increasing its size." A combination of economic chills
outside the mainland and burning environmental issues inside meant now was the
perfect moment for change. While average annual income increased by 2,000 yuan
(HK$2,300) from the previous year, GDP growth slowed by nearly 4 per cent and
the cost of living increased. There were fewer jobs for new job-market arrivals
and a decline in overseas export contracts wiped out nearly 2 million new urban
jobs, the sharpest drop since 2000. One thing that did not slow was the increase
in vehicles, which put a lot of pressure on air quality, noise controls and
greenhouse gas emissions. The report suggested the government seize the
opportunity to achieve sustainable development, a goal that has long been little
more than a slogan. Beijing was also urged to increase investment in
infrastructure, such as public transport, because the cost of the raw materials
was decreasing. It also suggested upgrading information technology facilities to
reduce the cost of urban living, and installing environmental protection
hardware such as waste-water treatment plants to improve living standards. The
think-tank recommended the central government reform the old, malfunctioning
residential registration system that discriminates against rural residents and
grants numerous privileges in education, employment, medical treatment and
welfare to city dwellers. It also suggested the central government cut carbon
dioxide emissions in its cities because of the international pressure on the
mainland as a major greenhouse gas emitter.
Beijing says the proposed deal
between Rio Tinto and BHP Billiton will certainly affect global iron ore
supplies, thus triggering concern. Beijing says the nation's new anti-monopoly
law gives China the right to investigate the proposed joint venture between
Australia's Rio Tinto and BHP Billiton, but any scrutiny will not damage trade
relations between the two countries. "If you look at the anti-monopoly law of
China, you will find that the joint-venture deal falls within the jurisdiction
of our law," Ministry of Commerce spokesman Yao Jian said yesterday. It was the
ministry's first public comment on the deal and signalled possible antitrust
action against it. Rio walked away from a planned US$19.5 billion equity tie-up
with state-owned Aluminum Corp of China (SEHK: 2600) (Chinalco) earlier this
month and instead proposed a US$116 billion iron ore joint venture with bigger
rival BHP. Mr Yao said Beijing so far had not received any formal application
from the two miners for an antitrust review. But he invoked specific clauses on
industrial concentration in the anti-monopoly law that he said could be the
basis for a legal review. The law says if all participants, whether foreign or
domestic, post either a combined operating income of more than 10 billion yuan
globally or 2 billion yuan in their mainland operations, they must file their
case with Beijing for a review. Mr Yao stressed Rio and BHP were the world's
second and third-biggest iron ore suppliers, jointly making up 80 per cent of
Australia's ore exports and 36 per cent of the world's. "The joint-venture
proposal will surely impact the global iron ore supply, and it's therefore
understandable that both Chinese enterprises and related industries have
expressed their concern over the deal," he said. Earlier this month, Chinalco
expressed "deep disappointment" over losing out to BHP in the Rio deal.
Moreover, last week, the China Iron and Steel Association said it would
"determinedly" oppose the Rio-BHP joint-venture proposal, saying it "had the
colour of monopoly". Despite its strong comments, the ministry assured Canberra
any antitrust scrutiny would proceed in a controlled manner and would not damage
trade relations between the two countries. "China and Australia are very
important trade partners, and the trade relations between us are on the whole
very good," said Mr Yao, noting that China was Australia's second-largest
trading partner. "The operating issues between enterprises of the two countries
will be resolved through lawful means based on commercial principles. We will
work out policies that are beneficial for stabilising overall bilateral trade
and economic relations, therefore a single case won't affect the general
development of relations." Mr Yao also said the ministry had not yet received
any application relating to the proposed acquisition of General Motors Corp's
Hummer division by Sichuan Tengzhong Heavy Industrial Machinery. He said it was
rational and normal for mainland companies to adopt an international outlook.
"It's up to the government [to approve the acquisition]," said Tengzhong chief
executive Yang Yi, when asked in Beijing if the deal would be approved.
Beijing has weighed into a growing dispute over the allocation of funds in its 4
trillion yuan (HK$4.53 trillion) stimulus package after European companies
complained they were being discriminated against in tendering for projects. In
an attempt to hose down simmering tensions over the package, top officials claim
domestic firms are the ones being discriminated against in some contracts. This
counters claims from European manufacturers that they were kept out of wind
turbine contracts. It came after the National Development and Reform Commission
and eight other ministries issued a joint circular early this month, stressing
that government-invested infrastructure projects should favour domestic
suppliers. The NDRC explained that many tenders for equipment actually contained
"discriminatory conditions" that favoured foreign suppliers over domestic ones.
"This is a serious problem, and the relevant industry associations and companies
[domestic suppliers] have shown strong disapproval," the industry policy setter
said. It said favouring foreign suppliers was against government procurement
laws, which stipulate that tenders must be conducted in a fair and transparent
manner. It added that such discrimination would hamper enhancement of the
competitiveness and growth of the nation's equipment manufacturing industry. The
NDRC said government investment projects should follow regulations on government
purchases, which require that unless products or services are unavailable at
reasonable business terms in the domestic market, contracts should be awarded to
local suppliers. Prior approval from regulators is required before they can be
imported. An official at the China Machinery Industry Association said in most
cases where foreign products were chosen against domestic ones and quality and
service are considered the same, higher recognition and trust in foreign brands
was the key factor for the purchase decision. An appreciating yuan and equipment
import tax exemptions in industries supported by Beijing have also favoured
foreign suppliers over domestic ones in some cases. In most nations, priority is
given to domestic suppliers if the terms are the same. The NDRC's comments came
after European Union Chamber of Commerce in China chairman Joerg Wuttke
reportedly said Beijing had embarked on a drive to lock foreign suppliers out of
at least one major wind farm project to help domestic firms absorb surplus
capacity. However, Chinese Wind Energy Association secretary-general Qin Haiyan
yesterday said European contenders had not won contracts because their prices
were too high. He said the foreign firms had offered 6,000 yuan to 7,000 yuan
per kilowatt of wind turbine capacity, compared with 5,000 yuan being offered by
domestic companies. "They said their products are of better quality, but they
are only providing the same guarantee of two years," he said. "What has happened
is that the foreign suppliers have been losing market share to domestic ones in
the past two years as the latter's capabilities caught up rapidly." Foreign
suppliers and their mainland joint ventures saw their market share drop to 24.4
per cent last year while that of domestic suppliers jumped to 75.6 per cent from
44.9 per cent, the association's figures show.
Authorities in China and Taiwan,
political rivals once on the brink of war, have agreed to remove underwater
military barricades and let 100 people swim from one side to the other, Taiwan
officials said yesterday. The 8.5-kilometer swim, billed as the latest symbol of
peace between the two sides, and their first military agreement, is set for
August 15 between Xiamen on the mainland and Little Kinmen, an outlying
Taiwan-controlled island. "The bigger meaning is that this is a competition for
peace," Kinmen county magistrate Lee Zhu-feng told a news conference. "We want
peace, not war." Military officials have agreed to remove anti-ship landing
barricades, which stand as testament to a skirmish between the two sides five
decades ago. Protected by coast guard boats from both sides, about 100
professional swimmers, 50 from each side, will go one way from Xiamen through
the warm but choppy waters. Next year, another 100 swimmers, 50 from each side,
plan to do the route in reverse, in what could become a long- term annual event,
organizers said. In 1958, China bombed the islands of Kinmen, also known as
Quemoy, for weeks as it tried to seize them. Kinmen has strategic and military
value, and remains heavily guarded. The main island of Taiwan is about 160 km
from China. Since Taiwan President Ma Ying-jeou took office in May last year,
the China- friendly leader has eased tension with Beijing through trade and
transit deals, although military distrust lingers. 
Chinese President Hu Jintao (C Front) and other leaders to a meeting of heads of
state of the Shanghai Cooperation Organization (SCO) walk to the venue of an
informal dinner to be hosted by Russian President Dmitri Medvedev (1st R Front)
in Yekaterinburg, Russia, June 15, 2009. Leaders of the Shanghai Cooperation
Organization (SCO) on Monday held a Smaller Meeting in the Russian city of
Yekaterinburg. Present at the meeting were the leaders of the six SCO member
nations -- China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. It
was not immediately known what the leaders had discussed at their meeting, but
such issues as regional security, economic cooperation and the global financial
crisis were the possible topics. On Tuesday, the leaders will hold a Smaller
Meeting with the heads of state or government of the four SCO observer nations,
which is to be followed by an extended meeting. Iran, Mongolia, Indian and
Pakistan have observer status at the SCO. Joint documents will be signed after
Tuesday's meetings, and there will be a press conference given by the leaders of
the SCO, which was founded in 2001 in Shanghai. 
A model presents a creation
inspired from the court dress in ancient China's Tang Dynasty (618-907), during
a show of the 2009 Qingdao Fashion Week in Qingdao, a coastal city in east
China's Shandong Province, June 15, 2009.
Shares of Tse Sui Luen Jewellery (0417),
whose founder and ex-chairman are in jail, almost quadrupled yesterday after
they resumed trading following a break of 3 years. TSL jumped as much as three
times to hit an intra-day high of HK$3.26, up from its last closing price of 81
HK cents in January 2006. They closed at HK$2.98, up 2.68 times. TSL, which
replaced members of its management team and board after a bribery and
embezzlement scandal came to light, said yesterday it could spend nearly 50
million yuan (HK$56.67 million) opening more stores in the mainland this year.
The retailer plans to open fewer than 10 more stores in the mainland this year,
including new stores and renovations of existing stores, TSL chief executive
Erwin Huang said. It will spend 5 million yuan on each store. Huang expects
TSL's mainland operations to report single-digit year-on- year sales growth in
May and June. TSL will also open a total of four more stores in Hong Kong in the
first half of the year. The first - a new store in Mong Kok - opened last night.
Sun Hung Kai Financial strategist Castor Pang Wai-sun warned that TSL's shares
have jumped too high. "If the market continues to have a correction, then this
stock will also follow the market," Pang said. The jeweler's founder and former
chairman, Tse Sui-luen, was sentenced in May 2008 to three years and three
months in jail for helping dole out HK$170 million in bribes to travel agents.
Tommy Tse Tat-fung, his son and the company's chairman at the time, was
sentenced to five years. TSL announced on Friday that it has overhauled its
system for working with tour groups by entering written contracts with travel
agents and eliminating almost all cash transactions with them. TSL reported
earlier that net profit for the 12 months ended February 28, 2009, rose 5.6
percent to HK$104.8 million. It declared a final dividend of 3 HK cents per
share, up from 1 HK cent the year before.
Pregnant mothers, children, the
elderly and those with weakened immune systems have been advised to avoid eight
brands of bottled mineral water which have been found to contain a host of
microorganisms. The warning was issued yesterday by the Consumer Council, which
found levels of heterotrophic plate count - a measurement of microorganisms
including bacteria and fungi - varied from two colony forming units per
milliliter to 550 cfu/ml in eight out of 40 brands tested. According to the
latest issue of the consumer watchdog's Choice Magazine, Fiji natural artesian
water had the highest HPC count at 550 cfu/ml, followed by First Choice (natural
mineral) with 300 cfu/ml. TY NANT was next at 160 cfu/ml followed by First
Choice (French spring) at 120 cfu/ml, Pierval at 58 cfu/ml and Contrex with 38
cfu/ml. Both Evian and Vittel mineral waters came up with 2 cfu/ml. However, the
World Heath Organization has no HPC limit for drinking water, which it said in a
report is more valuable as an indicator of treatment and disinfection at the
bottling stage rather than an indicator for pathogen levels. The WHO report also
said HPC levels were "unsuitable for public heath target setting or as sole
justification for issuing boil water advisories." However, Consumer Council
publicity and community relations chairman Ambrose Ho Pui-him said doctors have
suggested it will be better for young children, pregnant women and elderly
people with weak immune systems to boil their natural mineral water. Hong Kong
University assistant professor of environmental engineering Zhang Tong backed
the council claim, saying the 500 cfu/ml threshhold has been adopted by many
developed nations. Taiwan limits HPC for bottled water at 200 cfu/ml while the
European Union has a 100 cfu/ml limit for bottles incubated at 22 degrees
Celsius for 72 hours. Zhang said the main factor affecting HPC levels is the
length of time the water has been stored. The council's study also revealed
Perrier contained 0.4 milligrams per liter of nitrite, four times higher than
the WHO's acceptable daily intake. An adult weighing 60kg would have to drink
more than 10 liters of the sample per day to exceed the daily intake of nitrite.
People who ingest too much nitrite may suffer from dizziness and have difficulty
breathing. Vincent Wan, chairman of Wan Corporate Services, the sole distributor
of Perrier in Hong Kong, insisted the health risk is practically non-existent.
He said French tests showed nitrite levels at 0.05mg/L, which he expected to be
confirmed with more tests in Hong Kong and France. Wan said the company is in
contact with the council and assured consumers the health risk is practically
non-existent. According to the Centre for Food Safety, there is no specific
legislation in Hong Kong on nitrite levels in bottled waters.
Hong Kong Chief Executive Donald
Tsang Yam-kuen delivers a speech at the FCC to celebrate its 60th anniversary on
Monday. Chief Executive Donald Tsang Yam-kuen on Monday urged Hong Kong people
to support the rehabilitation of young drug abusers on Monday afternoon. Mr
Tsang – giving a luncheon address at The Foreign Correspondents’ Club – said
young people needed patience and understanding. “As a father, I know all too
well that no parents want to see their children abuse drugs, but young people
sometimes go astray,” he said. The chief executive was commenting in the wake of
recent incidents in Hong Kong involving young people abusing drugs. “When our
children make mistakes... a little help and guidance can make a big difference
to their lives,” Mr Tsang said. He also discussed the controversy over the
relocation of Christian Zheng Sheng College from Chi Ma Wan on Lantau to Mui Wo.
The college provides rehabilitation services to young drug abusers. On Monday,
some 200 Mui Wo residents launched a protest at the Outlying Island Ferry Pier
in Central. The protesters claimed the government did not consult them about
relocation of the college. Mr Tsang advised them to be tolerant. “I hope Hong
Kong society as a whole, and Mui Wo residents in particular, can embrace these
young people with love and give them a second chance,” he said. Asked how he
would feel if the school was relocated near Government House, he replied:
“Whether it is near Government House, or anywhere, we have to accept it.” “I
think is a sacrifice we should make,” Mt Tsang added. In related developments on
Monday, the Island District Council met to discuss the issue.
Principal-Assistant Secretary for the Security Bureau Wong Fuk-loi told the
meeting the increasing number of young drug abusers was worrying. He said there
was an urgent need to provide more rehabilitation services, local television
news reported. He also explained that Christian Zheng Sheng College needed to be
relocated. This was because the college did not meet fire safety standards.
Nearby hills also posed land-sliding threats to the college, he said. 
Hong Kong continue to face effects of
global downturn as figures released on Sunday showed that air cargo shipped
through the SAR dropped 17.6 per cent year-on-year in May. Air cargo shipped
through Hong Kong dropped 17.6 per cent year-on-year in May, the city’s airport
authority said, as the global downturn continued to slash demand for goods made
in the mainland. Hong Kong International Airport handled 259,000 tons of cargo
in May as shrinking markets in Europe and the United States hit traffic hardest,
the Airport Authority Hong Kong said in a statement released on Sunday. The
number of passengers passing through the airport, which is one of Asia’s key
transport hubs, dropped 12.7 per cent year-on-year to 3.6 million, the
statistics showed. Passenger markets that suffered most were Southeast Asia,
Taiwan, Japan, mainland and North America. The total number of journeys in and
out of the airport dropped 9.1 per cent over the same period. “The negative
performance reflected largely the impact of continuing global recession and the
new but serious impact of influenza A(H1N1) virus, further weakening the
aviation market and resulting in airlines reducing flight frequencies,” said
Airport Authority chief executive officer Stanley Hui. He said he expected the
trend to continue through June.
A group of building professionals and
former government officials have teamed up to work on plans to turn a former
landfill site into the first eco-village in the Pearl River Delta. The HK$700
million village in Tseung Kwan O will be the most environmentally friendly
holiday camp in the city and a showcase for advanced "green" technologies.
Former chief secretary Sir David Akers-Jones, former director of buildings
Cheung Hau-wai, former Observatory chief Lam Chiu-ying and the chairman of the
Hong Kong Science and Technology Parks, Nicholas Brooke, have been appointed
advisers for the project. The idea of building an eco-village on the 68-hectare
former landfill site in Tseung Kwan O was first floated last year by the
Professional Green Building Council, a non-profit research and education
institute created by a group of building-related professional bodies. Tseung
Kwan O has three landfill sites. The one under discussion has been idle for 14
years. The proposal sees a financially self-sustainable village that would have
zero carbon emissions. It would be run by community organisations rather than
the government or big business. Financial and technical feasibility studies are
expected to be completed this summer. This will be followed by lobbying for
government funding. Universities, green groups and the Youth Hostels Association
have expressed interest in the village. "The idea of transforming a wasteland
into a green village with unique designs will help Hong Kong take a leading role
in both environment and creative industries in Asia," said council chairman Wong
Kam-sing, who is taking the project forward. "Families and organisations in the
village will have to obey the green rules. They could be given limited access to
water and electricity, which would inspire them to think about green living."
The village will comprise five parks with village settlements, showrooms and
education centres on different themes - water, energy, nature, waste and
transport. Visitors to hostels in the "energy park" would be able to try out
various renewable-energy installations, while those in the "earth park" would be
invited to take part in organic farming. The site - larger than the proposed
West Kowloon arts hub - is next to the Lohas Park residential project, which the
MTR Corporation (SEHK: 0066) is touting as a green development. The village is
expected to take up 45 hectares and will be connected to the MTR. A nearby canal
will be revitalised for water activities. The village would rely on two major
income sources: rent and consultancy services. Families staying in hostels would
be charged HK$500 a night, while non-profit organisations would be asked to pay
to hold events. A chance to experience a hi-tech green lifestyle and a range of
activities in the village is expected to be the main draw for families. It is to
be managed by a board including community representatives and professionals, and
is expected to have 200 visitors per day and 400 housing units for a population
of 1,200. The council proposes building the village - only one-storey buildings
would be allowed - in three phases. The council hopes the government will fund
the capital cost of HK$700 million. "It means each person in the city will just
need to pay HK$100," said Mr Wong, adding that the council could raise the
start-up operating cost of about HK$22 million. A source at the Environment
Bureau said it was looking at options for the site. Other proposals include a
soccer academy and a pet garden. The chairwoman of the Legislative Council's
Environment Committee, Audrey Eu Yuet-mee, said a health assessment and a
detailed cost-benefit analysis should be made if the project needed public
funding. 
High rollers in Macau might not be
hitting the VIP baccarat tables like they were a year ago, but increasingly they
are discovering the allure of the one-armed bandit. Slot machines, traditionally
regarded as the epitome of the "grind" or low-end market, have made serious
inroads in high-rolling Macau in recent years. While still only a small piece of
the overall market, revenue from slots has grown to US$742.81 million in the
year to March from US$81.52 million in 2004. At the same time, the number of
machines has increased fivefold to more than 13,000. Despite shrinking winnings
from the credit-driven VIP tables in recent quarters, cash-focused slot revenue
has maintained its double-digit growth rate. Slot manufacturers say much of this
is due to an increase in the variety of games on offer, and indeed several
homegrown firms are cropping up to rival market leaders such as Aristocrat
Technologies, International Game Technology (IGT), Bally Technologies and WMS
Gaming. And then, there are the slot high rollers. Peter Johns, the director of
slot operations at MGM Grand Macau, talks about "carry-bag players" who can bet
as much as HK$40 million on slot machines at a single weekend. The pool of such
slot players in Macau is not large, probably several hundred players, but it is
growing. The heady volumes they wager can lead to significant short-term
volatility for what is otherwise considered slow and steady grind market revenue
for the house. "Ten of them can make or break you," Mr Johns said. The rival
Wynn Macau saw slot wagers rise 42.9 per cent in the first three months of the
year from a year earlier "primarily due to the play of several high-end slot
customers", according to Wynn Resorts' latest quarterly filing. As a result of
the growing competition for business from slot high rollers, casinos are
increasingly offering tailored services. Many machines are programmed to pay
jackpots only after they reach certain levels and big players typically zero in
on a single machine, pumping it full of money in an attempt to hit a big payday.
If a slot high roller's time in Macau runs out before he nails the jackpot, he
will often ask the casino to reserve the unit: "They will say 'Turn off the
machine and I'll be back next Friday'," said Mr Johns. But despite the growth of
high-end play, Macau's slot market is unlikely to rival destinations like Las
Vegas or Atlantic City any time soon. Slot machines accounted for 5.8 per cent
of Macau's total casino revenue in the first quarter, compared with 52.8 per
cent on the Las Vegas Strip. "Slots have not developed that quickly in Macau,
which is in line with the slow development of the mass market in general," said
CLSA gaming analyst Aaron Fischer. Mr Fischer cites a number of barriers to
growth for the tourist "mass market" including the city's underdeveloped
infrastructure and relatively pricey hotel rooms. "All in all, Macau is not yet
fully equipped to handle the grind market," he said. As recently as two years
ago, some analysts were predicting Macau's slot machine segment could grow into
a 30,000 to 50,000-unit market by next year. But delayed or suspended resort
projects, Beijing's visa restrictions for mainlanders and the sheer dominance of
high-roller table gaming have meant slower growth for the slot machine market.
"There's no question those huge numbers people talked about a couple of years
ago have failed to materialise," said Marcus Prater, the executive director of
the Nevada-based Association of Gaming Equipment Manufacturers. But he adds:
"There's still business out there and it's not all doom and gloom." Cath Burns,
the Macau-based vice-president for Asia-Pacific at Bally Technologies, said:
"The visa restrictions meant we couldn't go to 30,000 slot machines. I still
think Macau is a 30,000-unit market but we probably would not get there for
another five years unless visa restrictions are relaxed." Despite the
macro-level challenges, the slot market continues to grow. Revenue from slots
grew 13.22 per cent in the first quarter to 1.53 billion patacas, despite an
11.66 per cent drop in the number of units in operation as casinos sought to
maximise their yields from each game by removing unproductive slots. "People
have to optimise revenue in expansion mode, but the lull is going to help people
catch their breath and focus on optimising the gaming floor," said Kurt Quartier,
the vice-president of international casino markets at IGT. "When we first
started business in Macau, there were no local manufacturers, but we are seeing
more and more emerging Asian manufacturers who look to Macau as their primary
market," said Ian Hughes, the managing director of slot machine testing firm GLI
Asia. GLI tests games for compliance on behalf of gaming regulators in Las
Vegas, Atlantic City, Macau and Singapore, and opened its first laboratory in
Macau in November last year with six full-time local engineers. The firm
expected that number to expand to 10 or 12 engineers by the end of this year,
and that growth would be "very much a function of how much local manufacturers
expand", Mr Hughes said. So, will Asian manufacturers have the same impact on
the global slot industry that their peers have had on the market for other
electronic goods, like DVD players or personal computers? Mr Quartier of IGT,
the world's largest slot machine maker, is unconvinced. "I don't want to sound
dismissive but anybody can make a box," he said. "Making good games is something
different."
Asia’s largest carrier, Japan Airlines
(JAL), said on Monday it would temporarily reduce flights in the region due to
lower demand caused by the global economic crisis. The number of round-trip
flights between Narita International Airport, the main gateway to Tokyo, and
Beijing will be cut from 19 to 14 a week between August 1 and October 24, the
company said in a statement. JAL will also reduce the number of weekly flights
between Narita and Seoul from 28 to 21 between July 1 and October 24. There are
to be other cuts on its Narita routes to Taipei, Shanghai and New Delhi. It will
also cut flights between Haneda, another Tokyo airport, and Hong Kong in
September and October, and between Kansai in western Japan and Seoul from August
1 to October 24. It will reduce services between Kansai and Shanghai over the
same period. “Due to the impact of the recession, a recovery in demand for
flights has been delayed and we plan to secure profitability by adjusting our
supply capacity,” JAL said in a statement. A company spokesman said the airline
would raise the number of flights to current levels following these periods. The
International Air Transport Association said last week that the Asia-Pacific,
which is forecast to lose US$3.3 billion this year, or more than a third of
global losses, may see a recovery next year.
Venture capital and private equity firms
have begun to find some new thirst for investment on the mainland after several
months of inactivity, the market researcher Zero2ipo said in a recent report.
Twenty-six venture capital (VC) and private equity (PE) companies invested $4.81
billion in 15 deals in May after a cautious April that registered only $156
million in total investment, the report said. The financial services industry
attracted by far the most investment in May, some $4.64 billion, or fully 97
percent, of the total. It was one big deal in the finance sector that
dramatically changed the investment mix toward financials. On May 12, PE funds
led by Hopu Investment Management invested about $4.62 billion to buy 8.53
billion H shares of China Construction Bank. Traditional industries had been the
recipient of the most investment in the first four months, yet only $100 million
in new capital was directed to the sector in May. The report said initial public
offerings (IPOs) in overseas markets have begun to recover as well. According to
Zero2ipo, three Chinese companies were listed in May with a combined capital of
$1.35 billion, up 431.7 percent from April. All were manufacturing companies
that raised an average of $449 million. HK-listed Liaoning Zhongwang Group Co,
the country's largest aluminum extrusion products manufacturer and the
third-largest in the world, raised about $1.3 billion on the main board in Hong
Kong, the most among Chinese companies listed in Hong Kong since April of 2008.
It was also the world's largest IPO since the beginning of the year. The other
two Chinese companies were listed on the Korea Stock Exchange and Korea
Securities Dealers Association Quotations, South Korea's counterpart to the
NASDAQ. Six Chinese companies have now been listed in South Korea since August
of 2007. While new capital rose, merger and acquisition (M&A) activities shrank
in May, the report said. The number of M&A deals dropped 27.8 percent from a
month earlier to 13 with a total value of $516 million, down 76.4 percent from
April. Three M&A deals backed by VC and PE totaled $107 in the IT, traditional
and healthcare industries. M&A deals in traditional industries, including
manufacturing, energy, real estate and agriculture, comprised about 82 percent
of M&A total in May. There were three cross-border M&A deals in May, two in
mining in which Jilin Jien Nickel Industry Co invested $3.79 million to acquire
Australia's Metallica Minerals Ltd and $40.38 million for Canada's Liberty Mines
Inc. Due to the sustained impact from the global financial crisis, total capital
raised by VC and PE funds to invest on the Chinese mainland had been in a free
fall since the beginning of 2009. According to Zero2ipo, the total investment by
VC companies dropped 71.2 percent year-on-year to $320 million in the first
quarter, while the investment from PE funds declined 82.5 percent year-on-year
to $2,687 million. Zerio2ipo showed in another report that a number of renminbi
PE funds, represented by a green energy technology fund and an army civilian
industrial fund, are preparing to raise capital. The number of industrial and
equity investment funds that have been approved or recorded by the National
Development and Reform Commission has reached 20, which together plan to raise
200 billion yuan.
The newly released Chery Faira YY at a
media preview during the 2008 Beijing Auto Show. The ongoing financial crisis
that has hit Western countries especially hard is now giving China's homegrown
auto brands some traction in Europe, a must-win battlefield for all
international manufacturers. "If they (Chinese automakers) do it in Europe, they
can do it everywhere," said Hans-Ulrich Sachs, managing director of HSO Motors
Europe, sales agent for China's Brilliance Jinbei Automobile Co Ltd in Germany.
"I believe Chinese auto brands will have a shorter journey to go than their
Japanese and Korean counterparts did decades ago," said Detthold Aden, president
and CEO of BLG Automobile Logistics, Germany's biggest logistics company, which
is based in the northern port city Bremen. Aden said he believes that the
financial crisis, which makes smaller and cheaper cars popular, provides Chinese
medium- and low-end vehicles the best opportunity in Europe. To boost car sales
the German government this January began providing subsidies of 2,500 euros to
consumers for every vehicle more than nine years old that is traded for a new
car with a smaller engine capacity. In April, the government raised total funds
available for subsidies to 5 billion euros from an initial 1.5 billion euros in
the scheme that will expire at the end of the year. "It is (a chance for) a
niche market for Chinese auto brands," said Aden. Tong Zhiyuan, president of
China's Huatai Automobile Group, agrees with Aden. "It's an opportunity for
Chinese cars to enter Europe when local markets cry out for small cars with low
prices and good performance." Tong added that by starting in the small car
segment, Chinese carmakers can escape a face-down with legendary European rivals
in the medium-sized car market. As one of the largest automobile logistics
suppliers in the world with more than 130 years of experience, BLG is "able to
support the Chinese OEMs in any direction", said Michael Bnning, BLG's sales and
marketing director. But Europe's high standards for security, the environment,
styling, safety and performance are major hurdles for Chinese carmakers. "They
will have to cooperate with local industry players," said Bnning. "More than 500
experienced technicians in our technique center will help Chinese cars overcome
some problems and meet local standards." The company will also manage all
necessary compliance and customs papers before Chinese cars enter the market.
Over the past year, BLG and HSO helped Brilliance to improve its emissions to
meet the required Euro IV standard. Feng Ping, vice-president of Chery
Automobile Co Ltd in charge of international business, told China Business
Weekly that Chery is considering contracting with BLG for pre-delivery
inspection (PDI) on Chery cars in Gioia Tauro harbor in Italy. Last year, BLG
transported 10,000 Chery cars from China to Russia that were offloaded at
Bremerhaven harbor in north Germany. "PDI services, which double-checks the
quality and parts and maintains and cleans cars after the long ship journey,
prepare brand-new cars for showrooms. It's good for our brand image that the
cars have no defects prior to receipt by dealers," said Feng. BLG, the
comprehensive logistics partner for Mercedes-Benz, also said it can and would
like to help Chinese automakers establish their overseas manufacturing
facilities in Eastern Europe. BLG is now providing a logistics services package
for South Korea's Hyundai Motors' manufacturing base in the Czech Republic. It
delivers auto parts to the facility and then transports assembled vehicles to 43
countries. "As Chinese cars now focus on the Russian market, BLG has also made
huge investment to expand its logistics network in Eastern Europe. We - BLG and
the Chinese - are going in the same direction," said Manfred Kuhr, deputy
chairman of BLG's executive board. BLG's logistics network, which uses vessels,
railways and trucks, can provide transport to Chinese cars or their CKD -
complete knocked down - and SKD - semi-knocked down - assembles to Russia,
currently the prominent destination for Chinese car exporters, Kuhr said.
"Around 30 years ago, when Japan's Toyota delivered its first car in Europe from
Bremerhaven, one of the largest automobile harbors in the world, people thought
it was impossible for Toyota to sell cars in Western countries. Today Toyota is
the world's top auto manufacturer," said Kuhr. He noted that when BLG and HSO
helped the South Korean brand Hyundai enter the European market 19 years ago,
Europeans also looked down on them. "Yet 350,000 cars under the Hyundai brand
and 150,000 Kia cars were sold in Europe last year. Now it's China's turn," said
Kuhr. Chinese auto brands, including Chery, Great Wall and Geely, now have a
share of the Russian and Ukrainian markets. Only Brilliance has gone into
western Europe, using HSO's 850 dealerships. HSO sold 800 Brillance cars in
Europe in 2008 and aims to increase the number to 3,000 this year, then extend
distribution to France, Spain and Italy. According to a distribution agreement
signed in 2006, HSO will help Brilliance sell 15,800 cars in Europe within five
years. "Last year, 24.63 percent of the cars on the road in Europe came from
outside the continent, the majority from Japan and South Korea," said Sachs.
"According to our survey, 25 percent of the Eurozone's 200 million drivers said
that they wouldn't say 'no' to Chinese auto brands." In addition to Brilliance,
Great Wall, BYD and Huatai also have ambitions in Europe. Xing Wenlin,
vice-president of Hebei's Great Wall Motor Co, told China Business Weekly that
his company "will go to Eastern Europe markets within two years and enter
Western Europe in three to five". Shenzhen-based BYD Auto said that it will
export its electric cars to Europe one or two years after they enter the US in
2011. "We will start selling our cars in Eastern Europe and the south in the
near future," said Tong of Huatai, who declined to disclose a detailed export
plan before his company starts production in its new factory in Inner Mongolia
in July.
Na
Li of China hits a shot during the final of her women's tennis match against
Slovakia's Magdalena Rybarikova at the Aegon Classic in Birmingham on Sunday.
Slovakia's Magdalena Rybarikova defeated China's Li Na 6-0, 7-6 (7/2) on Sunday
to capture the WTA Birmingham grass court tournament, her first career title.
The 20-year-old, ranked 58th in the world, eased to victory in 73 minutes over
the fourth seeded Li who had defeated former Wimbledon champion Maria Sharapova
in the semi-final. Rybarikova said: “I won the first set so easily but the
second was so tough as she started to play so much better. “I was very nervous
in the tie-break but she looked more nervous than me, so that helped me
concentrate even harder.” Victory will take Rybarikova to a career high of 42
when the new rankings are released on Monday. “Winning today is the best feeling
of my career so far. It’s unbelievable, just like a dream,” she said. “I was so
happy that she [Li] beat Sharapova as she is such a great player and I am not
sure I could have beaten her today.” Li said: “I was so excited last night after
I beat Sharapova, I forgot I had a match today. It has been a good week for me
though. I like grass very much."
An advertisement featuring a Hummer
vehicle being displayed at an auto market in Beijing. Sichuan Tengzhong said the
deal to buy General Motor's Hummer brand would be concluded in the coming
quarter. Sichuan Tengzhong’s bid for General Motor's Hummer brand is normal
behaviour for a company seeking to take advantage of the global downturn to
broaden its horizons, a Ministry of Commerce spokesman said on Monday. Media
reports have said little-known Sichuan Tengzhong Heavy Industrial Machinery
could struggle to win official approval to buy the maker of the gas-guzzling
sports utility vehicle from bankrupt GM. The Ministry of Commerce had not yet
received any application related to the deal, spokesman Yao Jian said. “Against
the backdrop of the global financial crisis, it is rational and normal for
Chinese companies to adopt an international outlook,” he told reporters at a
monthly news conference. Sceptics wonder whether Chengdu-based Tengzhong, which
makes special-use vehicles and bridge and highway components, has the experience
and resources to turn the Hummer business around. Mr Yao said the government
expected local companies in general to encounter frustrations as they ventured
abroad because they lacked managerial skills and track records in mergers and
acquisitions. “We hope Chinese companies can learn more about international
rules and make prudent investments,” Mr Yao said. On Sunday, the general manager
of Tengzhong said that the deal should be concluded in the coming quarter. “We
think a deal should be completed by the third quarter,” said Yang Yi. Mr Yang
has little experience dealing with media and was almost apologetic about not
providing more details about the deal. “I hope you can understand, but there are
many things I cannot talk about,” he said. One confidential aspect was the
Hummer price-tag, although analysts say it would be much less than the US$500
million GM was asking for last year. The executive did say that Tengzhong, a
manufacturer of special-use vehicles as well as bridge and highway components,
planned to retain the Hummer management team to ensure quality in the off-road
vehicle and to keep its small but enthusiastic fan base happy. “There will not
be a China Hummer and a US Hummer, he said. “There is only one Hummer.” The
mainland company was also looking to develop the gas-guzzling vehicle into a
global brand – 70 per cent of sales are now concentrated in North America – that
was more fuel-efficient and environmentally friendly, Mr Yang said. “We want to
make a green Hummer,” he said. “We think the Hummer has huge potential in
emerging markets.” Hummer’s global sales fell 65 per cent in January-March amid
rising oil prices and as recession gripped the global economy. “Tengzhong and
Hummer are very aware of the government’s fuel-efficiency requirements,” he
said. “Hummer has already achieved substantial progress in this area.” While Mr
Yang was reluctant to talk about the financial details of the ongoing
negotiations, he did say any deal would not include taking on the GM unit’s
debt. “We would not be responsible for any debt obligations.” The provincial
government of Sichuan has identified the automobile sector as one of four
strategic industrial growth engines. And while the provincial seat favours the
deal, it must still be approved by the central government, which is pushing for
more fuel efficiency from individual citizens and industry. Tengzhong’s lack of
experience in both overseas markets and in the automobile industry has unleashed
a flood of scepticism and even ridicule from some mainland auto executives,
industry analysts and the media over the deal.
A man looks at a stand
featuring airconditioners in a Beijing department store. The Ministry of
Commerce said on Monday that sales of subsidised home appliances in rural areas
rose 42 per cent in May. Sales of subsidised home appliances in rural mainland
rose 42 per cent in May compared with April to 4 billion yuan (HK$4.5 billion),
the Ministry of Commerce said on Monday. The government introduced the scheme to
boost household consumption, which fell last year to a record low of 35.3 per
cent of gross domestic product. Rural buyers of selected televisions, fridges,
washing machines, air conditioners, mobile phones and computers receive a rebate
of 13 per cent of the purchase price. Total sales under the programme, which was
launched on a trial basis in 2007 and went nationwide in February this year, had
reached 15.3 billion yuan by the end of May, Yao Jian, a Ministry of Commerce
spokesman, told a regular news conference. The Ministry of Finance estimates
that the scheme will generate sales of 700 million appliances worth 2.1 trillion
yuan over four years. The programme is small in the broader scheme of things:
nationwide retail sales reached 1 trillion yuan in May. But, encouraged by
initial results, the Commerce Ministry launched another pilot programme on June
1, offering a 10 per cent subsidy to consumers in urban as well as rural areas
who trade in old domestic appliances for new ones. The trial is taking place in
nine provinces and cities, including Beijing and Shanghai. The government has
set aside 2 billion yuan this year to encourage trade-ins.
Ping An Insurance (2318) said yesterday it is under no fundraising pressure to
complete its 22.13 billion yuan (HK$25 billion) deal for a stake of up to 30
percent in Shenzhen Development Bank. The deal will be fully funded by Ping An's
internal resources, said group president Louis Cheung Chi-yan, adding: "This
will not have any impact on our company and we are not under any fundraising
pressure." Ping An - 16.8 percent owned by HSBC (0005) - will spend as much as
10.683 billion yuan to buy up to 585 million new shares issued by SDB. In
addition, the insurer will buy, by way of cash or a share swap, 520 million SDB
shares from private equity firm Newbridge Capital - currently the largest
shareholder of the mainland bank - before the end of 2010. Ping An will pay
11.449 billion yuan in cash or issue 299.09 million H shares to Newbridge. Ping
An prefers Newbridge, now called TPG Capital, to become a new shareholder.
China's second-largest insurer said it will be looking for areas in which it may
cooperate with SDB if the deal proceeds. "Cooperation [is] subject to
[regulatory] approvals ... They are going to have to comply with all relevant
regulations," said Richard Jackson, Ping An's chief finance officer for banking.
Cheung said "the firm has no plans" to raise its stake in SDB to more than 30
percent. But he added: "We are seeking more room for future development." Ping
An shares will resume trading in Hong Kong and Shanghai today and SDB will
resume trading in Shenzhen. SDB chairman Frank Newman said he hopes to introduce
his company's services and products to Ping An. Newman said the lender has no
immediate plan to raise debt capital. "SDB doesn't have specific plans to issue
H shares in Hong Kong," he added.
Hong Kong pop star Aaron Kwok Fu-shing
(R), Chinese actress Hao Lei (2nd, R), and Zhang Tielin (L) attend the promoting
ceremony for their film of Empire of the Silver, at the 12th Shanghai
International Film Festival, in Shanghai, east China, June 14, 2009. 
According to chinanews.com.cn, Fang Jing, the 38-year-old anchorwoman who found
herself in the centre of "Taiwan spy gate" scandal, is back on CCTV's news
channel, hosting the program World Weekly on the evening of June 14, 2009. TV
grab shows Fang Jing is back on CCTV's news channel, hosting the program World
Weekly. It has been 100 days since her sudden absence following the "Taiwan spy
gate" scandal. Fang Jing appeared on CCTV's news program World Weekly at 10:15
pm Beijing time on June 14. With a punctuality and wearing a pair of black
trousers, Fang looked natural and at ease. The subtitle at the bottom of the
screen read "Host: Fang Jing". It seems that the "Taiwan spy scandal" is over.
Fang last appeared on-air on March 1 when she hosted an episode about India's
military strength featuring Rear Admiral Zhang Zhaozhong, a military expert from
the National Defense University. When asked about why she did not host the
program for a few months, Fang said the leaders at CCTV could offer a better and
more authentic explanation. A Yi, full-named Zhou Yijun and an associate
professor with Peking University, said in his blog on June 9 that Fang had asked
to host the military program, Defense Watch so as to acquire military
intelligence and was therefore detained on the evening of May 12. Fang Jing has
denied allegations that she was arrested for spying, saying it's merely
groundless hearsay and she might respond by legal means. She posted the message
on her blog on June 11. This less than 100 characters message has attracted some
one million hits. According to reports, A Yi offered an official apology to Fang
in his blog. "If what I wrote in my blog hurt her, I will say 'sorry' to her
because explanation will create more pain to both Fang and her friends. I hope
the scandal can be pacified and she will be back on CCTV as soon as possible."
Kerry Properties (0683) said it sold 230 units in Tsuen Wan residential project
Primrose Hill with prices up 2 percent on average since it launched last Friday.
Executive director Chu Ip-pui said 30 percent of the homebuyers were investors.
The developer intends to raise the price to HK$6,000 per square foot on average
from the original average price of HK$5,062 psf, he said. Kerry reaped over HK$1
billion from selling 170 flats as at Saturday, he said. He said 12 prime
apartments on the eighth floor were sold for HK$8,000 psf and two on the 50th
floor were sold for HK$7,000 psf. Almost all homes in Block 1 and half of those
in Block 3 were sold, Chu said. Kerry yesterday launched 50 apartments in Block
2 at an average price of HK$5,500 per square foot. "The remaining flats may be
launched after construction completes and prices may rise 6 percent by then,"
Chu said. The project comprises three towers with a total of 548 flats.
Meanwhile, transaction volume in the secondary home market fell 8.7 percent in
the past two days to 63 deals, from 69 deals a week ago, Midland Realty director
Andy Ho Ming-pui said. "Turnover in the secondary market fell because homebuyers
were attracted by newly launched projects and partly due to the rainy weather,"
Ho said. Secondary home trade fell the most in the New Territories, by 24
percent. Trading in residential project City One slumped 50 percent to nine
deals over the weekend. 
Morgan Stanley, Citigroup and Goldman Sachs are frontrunners in the race for
lucrative underwriting roles and may share up to US$350 million in fees in the
estimated US$10 billion Hong Kong flotation of American International Assurance,
sources said. A mainland financial firm is also expected to become a bookrunner
in the otherwise US-dominated deal, with China International Capital Corp, Citic
and BOC (SEHK: 3988) International being shortlisted for the second round of the
beauty contest. More than 30 financial institutions are vying for a role in the
giant share offering slated for the first quarter of next year. AIA is likely to
choose one or two lead advisers, known as underwriters, and three to five
bookrunners that will help the senior banks sell the life insurer's stock. US
banks Morgan Stanley, Citi and Goldman are tipped as likely winners of the most
highly paid roles underwriting the stock sale. Advisers are expected to be
chosen as early as tomorrow and notified by Thursday. Financiers pitching for
the deal said the US Federal Reserve, which bailed out AIA's parent, American
Insurance Group, and is now the majority shareholder, was determined to give
most of the advisory positions to US banks, most of which are still struggling
to make money and repay the government bailouts. "This whole process has had a
strong element of politics and patriotism," one American banker said. AIA, a
pan-Asian life insurer and one of the largest in the region, has US$60 billion
of assets under management and serves 20 million policyholders. It was founded
in Shanghai 90 years ago. Originally, the patriotic element meant equity capital
markets teams in Chinese banks did not expect to make it through to the second
round of the selection process. AIG's financial adviser, Blackstone Group, which
is choosing the line-up of banks for AIA's share offer, has since allowed three
Chinese banks - CICC, Citic and BOCI - to compete for one bookrunning position.
All three are understood to have made it through to the second round. Each of
these institutions' top bankers enjoy good relationships with senior ministers
in Beijing. A Chinese bookrunner may be able to bring money into the deal from
an institution such as state investment fund China Investment Corp. Awarding one
of these government-owned banks a role would also represent the US government
extending an olive branch to Beijing in a volatile period in US-Sino relations.
Other banks believed to stand a good chance of working as bookrunners included
Credit Suisse and Deutsche Bank. But one US bank, Merrill Lynch, is out of the
running. Merrill was bought by Bank of America Corp in a US$50 billion rescue
deal in October last year. Congress is investigating the takeover. Another
politically out-of-favour institution, Switzerland's UBS, did not make it to the
second round. AIA's flotation could be the largest in the world next year. It
looks set to be the biggest equity fund-raising in the world since 2007. The
company will raise US$5 billion to US$10 billion, depending on the size of the
stake its parent, the stricken insurer AIG, decides to sell. AIG needs the cash
after receiving US$180 billion of taxpayer-funded bailouts, which included US$85
billion of loans. Bankers pitching for roles on the share sale expect the deal
fees to be 3.5 per cent of the total amount raised, or US$350 million if AIA
raises US$10 billion.
The number of passengers and volume of
cargo passing through the airport last month shrank by more than 10 per cent
year on year as the global financial crisis and outbreak of human swine flu
weighed heavily on the struggling aviation sector. According to the latest
figures from Hong Kong International Airport, the number of passengers fell 12.7
per cent year on year to 3.6 million last month, while 259,000 tonnes of cargo
were handled, down 17.6 per cent. "In May, both air-traffic movements and
passenger throughput recorded significant drops, more than the average declines
of 5.9 per cent and 4.3 per cent, respectively, for the first four months of
2009," Airport Authority chief executive Stanley Hui Hon-chung said. "The
negative performance reflected largely the impact of continuing global recession
and the new but serious impact of influenza A(H1N1) virus, further weakening the
aviation market and resulting in airlines reducing flight frequencies. This
prevailing trend in passenger traffic and air-traffic movements is expected to
continue and will likely further deteriorate in June." The decline in passenger
numbers was particularly pronounced for visitors travelling from Southeast Asia,
the mainland, North America, Taiwan and Japan. The number of long-haul visitors
has fallen steadily amid the downturn, while the number of short-haul arrivals
has started to decline due to the outbreak of swine flu. For cargo, continued
weakness in consumer demand in the United States and European Union accounted
for May's poor exports, which dropped more than 20 per cent year on year,
airport data show. The decline in cargo throughput last month showed a slight
improvement, in a sign that the downturn may be stabilising. In April, cargo
throughput dropped 19.8 per cent to 257,000 tonnes, although passenger traffic
rose 4.1 per cent to 4.2 million.
Apologies as billed patient fights for life - The case of a seriously injured
woman being charged almost HK$22,000 before being treated for internal bleeding
has exposed a "gray area" that needs to be addressed, Hospital Authority chief
executive Shane Solomon admitted yesterday. Wong Pui, 25, is fighting for her
life in the intensive care unit of Queen Elizabeth Hospital. She was rushed to
the hospital around noon on Friday with multiple fractures of the thighbone,
pelvis and several ribs after being hit in Mong Kok's Sai Yeung Choi Street
South by a minibus. Two people were killed in the accident and seven others
hurt. Her family was asked to pay HK$21,856 for the drug NovoSeven, which is
usually used to control bleeding in hemophilia patients. The family paid for the
treatment by credit card. "The doctors said there was a certain drug that could
stop my daughter's internal bleeding faster. So we paid immediately, though it
was not a small amount for us and we don't know how much medical costs we may
have to shoulder in the future," Mr Wong said. However, Wong admitted there was
no suggestion the hospital would not treat his daughter if he did not pay. He
said a nurse called yesterday to apologize and that the money would be refunded.
Last night the hospital apologized to the family for "any confusion raised from
the incident." NovoSeven is not on the general drug list, the Hospital Authority
said. In his statement, Solomon said the medicine was off-label and the
manufacturer recommended its use only for hemophiliacs. "The hospital incident
reveals that our system needs to be improved to deal better with emergency
life-threatening situations, and to support clinicians' judgments about the best
treatment based on clinical evidence or experience," Solomon said. He said the
authority's guiding principle is to save lives regardless of a patient's
financial position, and that local patients should not be charged for necessary
drugs in life-threatening situations. He said the authority will review the
evidence of this drug's usage in life-threatening situations beyond hemophilia
patients and come up with recommendations to standardize practices. People's
Health Actions chairman Lo Wing-lok said he was shocked to hear about the
incident, which showed the Hospital Authority was tied down by red tape. "I have
been telling mainland medical officers that Hong Kong always puts patients first
... This incident broke common practice and is a serious step backward," Lo
said. Such situations could recur if the authority does not work out a proper
system, he warned. Legco health services panel member Fred Li Wah-ming said he
will table a question on the incident at the next meeting.
Nearly 2,000 buildings along
Victoria Harbour will either switch off or dim their lights for two hours from
8pm to 10pm on Sunday for the second annual Dim-It campaign. Initiated by
Friends of the Earth, the campaign coinciding with Father's Day is being backed
by more than 1,800 buildings and stores, dwarfing the 142 that participated in
last year's inaugural event. More than 2.9 million people, 1,800 buildings, 600
companies and organizations, 160 schools and all the city's universities
switched off their lights for the World Wide Fund for Nature's Earth Hour in
March, resulting in a 5 percent drop in the city's electricity consumption. The
Symphony of Lights that blazes nightly will be cancelled during the campaign.
Joining the voluntary "blackout" are IFC II, HSBC headquarters, The Link's
malls, Samsung's 115-meter-long billboard, the Bank of China's 218 branches and
buildings and 291 Circle K locations. Other building owners should demonstrate
their corporate responsibility to support the campaign to give people a chance
to see the stars, FoE director Edwin Lau Che-feng said. The stars, he added,
have been dimmed many years by air and light pollution. Pledging to continue
their good light habits after the Sunday campaign, 1,001 organizations have
signed the green group's Dim- it Charter, which pledges to switch off outdoor
neon signs and decorative lights no later than midnight every day, starting on
June 21. Joining hands with the International Year of Astronomy 2009 Hong Kong
League, FoE is also organizing a large-scale stargazing event open to the public
along the Tsim Sha Tsui promenade with 100 telescopes on loan from the Hong Kong
Astronomy Society, including its 4.5-meter super-refractor telescope, capable of
500 times magnification. League president Bill Yeung Kwong-yu said the rings of
Saturn should be visible during the event. According to University of Hong Kong
assistant professor of physics Jason Pun Chun- shing, only the moon is visible
in the night sky in most urban areas, with a handful of stars visible in
less-lit areas. He said a 50 percent reduction would allow stargazers to watch
dozens of stars and a few constellations. Hundreds of stars can also be seen at
the High Island Reservoir, Sai Kung East Country Park, Shek O, Plover Cover,
Lantau country parks and Cheung Sha.
Legco security panel chairman Lau Kong-wah
(centre) and fellow legislators check out the HK$1.7 million CCTV system in Mong
Kok. Security gates at the entrances to buildings could be installed at
government expense and mobile surveillance cameras set up in Mong Kok to deter
further acid attacks. Nine lawmakers made these suggestions after a tour to
understand the operations of the "sky eye" surveillance camera system in the
Mong Kok pedestrian precinct, which has been subjected to three acid attacks in
the past seven months. "The 'sky eyes' are not flawless and there are some blind
spots," chairman of the Legislative Council's security panel Lau Kong-wah said.
"However, we cannot deny the effectiveness of the cameras, they have their use."
He said the district council would consider if more cameras - including mobile
ones that are not fixed and could be moved to different locations - should be
installed. "Because there are so many blind spots, I think more CCTVs will
help." Mr Lau's comments came a day after the police concluded that the bottle
of acid thrown in last Monday's attack came from the rooftop of a building at
either 58 Sai Yeung Choi Street South or 60 Sai Yeung Choi Street South. The
lawmaker said neither building was as tall as the one next to it, making it a
blind spot not covered by the HK$1.7 million camera system. He said the
legislators in the tour also requested more police patrols in the area, as well
as other pedestrian zones across the city, to ensure safety. Edmond Chung
Kong-mo, chairman of Yau Tsim Mong District Council, said using mobile "sky
eyes" could prevent their locations from becoming known. The lawmakers also
suggested the government sponsor the installation of security gates, especially
at buildings without owners corporations. People are now free to enter the
buildings as there are no gates or the gates are not locked. However, some shop
owners in those buildings were against the idea, saying that it would hurt
business. 
The WHO did not recommend school closures but stood by the measures taken by the
Hong Kong government, its China representative said yesterday. On Thursday, the
government announced a two-week closure of all 1,800 primary schools,
kindergartens, child care centres and special schools after confirmation of the
first cluster of local swine flu infections among 12 secondary school students.
Hans Troedsson said he did not think the Hong Kong authorities had overreacted
as it was a new type of flu virus and it was unpredictable. "You have to look at
the context and specific situation," Dr Troedsson told a Beijing press
conference held by the World Health Organisation and Ministry of Health. "The
school environment is a vulnerable environment. To take action such as closing
schools even when the school may not be directly infected ... I fully understand
the decisions made. The important thing is when the decision is made it is made
based on risk assessment, and I assume the Hong Kong government has done that,"
he said. Controversy has surrounded the government's move to suspend classes to
protect young children. Dr Troedsson said the WHO did not recommend closing
schools on the mainland as it was not yet necessary. There is a month to go
before the school summer holidays. He said schools could consider advancing the
start of the holidays to avoid the spread of the disease if there was a cluster
of infections among students. He also urged teachers to take the chance to
educate students on hygiene issues, such as frequently washing hands. Ministry
of Health spokesman Mao Qunan said primary and secondary students on the
mainland were the key group to protect and some preventive measures had been
taken. "For example, in Beijing school students are required to have their body
temperatures taken at home and have them checked again at school in the morning
and report them," Mr Mao said. He said schools would be a key link in the next
step of the ministry's strategy to prevent community infection. Schools were
important for the prevention of disease as primary and secondary school students
were more susceptible to a community outbreak, Mr Mao said.
Budget airliners are spreading their
wings overseas by introducing low-fare flights from Shanghai to Hong Kong,
Macao, South Korea and Japan, which, according to analysts, may trigger a price
war in the aviation market soon. A number of budget airlines are poised to start
international flights this year. In April, the Civil Aviation Administration of
China, the nation's aviation regulator, said on its website that it had approved
in principle Shanghai-based Spring Airlines' plan to start short-distance
international cargo and passenger flights. Zhang Wu'an, spokesman with Spring
Airlines, told China Daily that the airline still has to complete some
application procedures to get full approval. "We will work step by step before
launching the flights," he said. Zhang also indicated that the first outbound
flight might not be to Hong Kong, as the market is already saturated there. "The
flights we plan to launch will be based on previous market research, in order to
extract the maximum advantage from the new flights," he said. Jin Air, Korean
Air's budget affiliate, is also planning to start international flights soon to
some cities in China and Thailand. An employee surnamed Kim from Korean Air said
the airline has got permission to start international flights from July.
However, due to the shrinking market demand, a final decision has not yet been
made. "As a low-cost carrier, our ticket prices will surely be lower than
competition," Kim said. Yet another Pusan-based low-cost airline is also
planning to start flights to China and Japan by the end of this year, increasing
competition in the short-distance tourism market. "We are already feeling the
pressure from Air Asia and Tiger Airways, and the challenge will grow bigger.
Though the companies have their own modes of operation and pricing, we are still
confident of increasing our market share," said Zhang. Market observers expect
the round-trip ticket prices between Shanghai and Hong Kong to fall below 1,000
yuan, once Spring Airlines starts its Hong Kong flights. The low fare trips are
also expected to trigger a shopping boom in Hong Kong, often dubbed as the
"shopping heaven" by mainland customers due to its duty-free luxury goods, said
Zhang. "Low-cost flights in China are still in a fledgling state, and if they
cannot expand their market share, their influence is limited," said Li Lei, an
analyst with CITIC China Securities. Michael Peng, sales manager of Shanghai
Business International Travel Service Co, feels that low-cost airlines would not
pose a great threat to major carriers' business. "There are flights every single
hour from Shanghai to Hong Kong. Limited by their resources, low-cost carriers
such as Spring Airlines can hardly benefit a lot from the mainstream market. Not
to mention the business travelers who prefer to pay more for superior services,"
Peng said. "The international flights we are about to operate will be aimed to
satisfy those who cannot afford average international flight tickets. These
clients are highly sensitive to the price. By providing more choices for
diversified customers, we hope to co-exist with traditional flights that are
targeted at business and high-end travelers. And we call this a win-win
situation," Zhang said. 
An exhibition booth of Beijing
Tourism Group, parent company of Beijing Capital Tourism Co at the 2008 Beijing
International Tourism Expo.[CFP] Though the spree of acquisitions and
restructuring in the tourism sector has triggered a rally in related stocks, the
surge could be short-lived due to the worse-than-expected reform plans and weak
corporate fundamentals. In the last four weeks, Beijing Capital Tourism Co, OCT
Holding Company in Shenzhen and Guangzhou Dongfang Hotel Co have announced
restructuring plans. Beijing Capital Tourism surged 6.4 percent on Tuesday,
before its shares were suspended for the temporary shareholders meeting called
to discuss an acquisition plan announced on May 21. In a statement to the
Shanghai Stock Exchange yesterday, the company said it plans to issue 60 million
new shares of its common stock to a Beijing-based company managing State-owned
assets at a price of 15.53 yuan per share. The latter, in return, has sold 100
percent and 77.68 percent stakes in its wholly owned Beijing Xinqiao Hotel Co
and Beijing Heping Hotel Co to Beijing Capital Tourism for 526 million yuan. In
addition, Beijing Capital Tourism will also inject 274 million yuan in cash to
Xinqiao Hotel thereafter. "Mergers and acquisitions have become the in thing for
fully-competitive tourism companies, " said Tang Jianwei, analyst, Guojin
Securities. Last Monday, Dongfang Hotel said the Guangzhou city government has
decided to transfer the company's 51.6 percent stake held by Guangzhou-based
Yuexiu Group and Dongfang Hotel Group to Lingnan International Enterprise Group
Co, controlled by the local government. Following the news the company's shares
rose 2.4 percent to close at 8.6 yuan on May 26, the highest in a year. Broadly
speaking, the tourism sector surged 5.54 percent on Tuesday to outshine all
other industries, with Beijing Tour Co and Shenzhen OCT Holding Company soaring
to their daily limits. "The premium of tourism industry to the major index is
over 100 percent now, much higher than the average of 80 percent in history,"
said Wang Ding, analyst, GF Securities. According to Wang, share prices in the
tourism industry rose nearly 51 times the earnings on average, while the P/E on
major bourses was 24 times. "We don't see any strong profitability in the firms
that announced the restructuring plans. Assets injected into these listed
entities have shown poor performance in the past," said an analyst from Essence
Securities based in Shanghai. Xinqiao Hotel, which was wholly acquired by
Beijing Capital Tourism, for instance, lost 9.08 million yuan in the first
quarter with liabilities of 497 million yuan. But Beijing Capital Tourism
expects the newly added hotel to achieve profits of around 1.93 million this
year. "The acquisition is a strategic move for the parent company to develop a
hotel platform rather than directly lift its performance," said Tang. The
acquisition is expected to dilute Capital Tourism's earnings per share to around
0.5 yuan in 2009, down from 0.75 yuan in 2008. Its shares sank 3.38 percent to
16.3 yuan yesterday.
Visitors peer through a window at an
aquarium in Beijing. Rapid development on the mainland has led to serious marine
pollution around coastal areas, but there is little public awareness of the
issue. 
Chinese President Hu Jintao (2nd L)
arrives in Jekaterinburg, Russia, on June 14, 2009, for a summit of the Shanghai
Cooperation Organization (SCO) and a meeting of BRIC countries, namely Brazil,
Russia, India and China.
Chinese President Hu Jintao (L) is
welcomed by Russian Deputy Foreign Minister Alexei Borodavkin upon his arrival
in Jekaterinburg, Russia, on June 14, 2009, for a summit of the Shanghai
Cooperation Organization (SCO) and a meeting of BRIC countries, namely Brazil,
Russia, India and China.
Egyptian President Hosni
Mubarak (R), also chairman of Egypt's ruling National Democratic Party, meets
with He Guoqiang, member of the Standing Committee of the Political Bureau of
the Communist Party of China (CPC) Central Committee and secretary of the CPC's
Central Commission for Discipline Inspection, in Cairo, Egypt, on June 14, 2009.
He Guoqiang, China's anti-graft chief, on Sunday met here with Egyptian
President Hosni Mubarak, pledging to seek stronger bilateral ties. He, member of
the Standing Committee of the Political Bureau of the Communist Party of China
(CPC) Central Committee, first extended the cordial greetings of Chinese
President Hu Jintao to 81-year-old Mubarak. He hailed Mubarak as "a respected
old and good friend" of the Chinese people for he made great contribution to the
development of bilateral ties. In their hour-long talks at the Presidential
Palace, He reviewed the growth of bilateral ties. Back in 1956, Egypt was the
earliest Arab and African country to establish diplomatic relations with China.
Ten years ago, Egypt took the lead among Arab and African nations in forging
strategic cooperation with China. "The CPC and the Chinese government would like
to take the 10thanniversary of strategic cooperation as an opportunity to
maintain high-level exchanges, enhance political trust, bolster substantial
cooperation for a stronger growth of bilateral ties," said He, also secretary of
the CPC's Central Commission for Discipline Inspection. He lauded Egypt's
efforts to promote China-Arab Cooperation Forum and China-Africa Cooperation
Forum, saying that China supported Egypt to play a bigger role in international
and regional issues. As Egypt will host the fourth ministerial meeting of
China-Africa Cooperation Forum later this year, He said China and Egypt should
work more closely to make the meeting a success. He said China would like to
increase contacts and coordination with Egypt and other members of the forum for
a better China-Africa relationship. Mubarak said Egypt and China, both of which
were countries with long histories and great civilizations, enjoyed a solid
foundation in cooperation in various fields. The Egyptian president also said
more and more Chinese businessmen invested in Egypt in recent years, which
injected a new vitality into bilateral relations. He called for stronger
bilateral cooperation under the new situation. Mubarak, also chairman of Egypt's
ruling National Democratic Party, spoke highly of China's development path,
saying the mode fits China's reality. Furthermore, Mubarak appealed for the
ruling parties of both countries to learn from each other on how to run the
government. Mubarak, who has visited China nine times, said he cherished deep
and solid friendship with Chinese people and leaders and was looking forward to
visiting China again. China's anti-graft chief arrived in Cairo on Saturday for
a three-day goodwill tour, which will also take him to Spain, Jordan and
Mongolia. Late on Saturday, He went to the suburbs of Cairo to visit assembling
lines of vehicles, a cooperative project between Chinese car manufacturer Chery
and an Egyptian car company. 
Chinese actors Zhang
Hanyu (L), Zhou Xun (C) and Li Bingbing attend the opening ceremony of the 12th
Shanghai International Film Festival in Shanghai, east China, June 13, 2009.
Over 300 actors from home and abroad arrived for the Shanghai International Film
Festival on Saturday.
A Chinese submarine smashed into a
sonar device being towed by an American destroyer off the coast of the
Philippines last week, the latest in a series of high-seas encounters between
the two powers. A Pentagon spokesman confirmed yesterday that the USS John S.
McCain "did have a problem with its towed array sonar" which was damaged in
Thursday's incident near Subic Bay. He said the vessels did not collide but gave
no other details. PLA Rear Admiral Zhang Zhaozhong, a professor at the National
Defence University, dismissed the encounter as an "ordinary incident". However,
no such incidents have previously been made public. CNN reported that the
Chinese submarine crashed into the sonar array in an "inadvertent encounter".
The US Navy did not consider it a case of deliberate harassment, the report
said, since the cables attached to the sonar array - a surveillance device used
to monitor submarines and map the sea floor - could entangle a sub's propellers.
Admiral Zhang was quoted by the mainland Global Times newspaper as saying: "The
incident took place in the international waters off Subic Bay. In fact,
collisions between submarines and collisions between submarines and sonar arrays
are ordinary incidents. [The] Chinese and US navies are no exception, they care
about the activities of each other and they track each other." CNN's source
refused to say whether the American warship was aware of the presence of the
Chinese submarine before the collision. The incident comes three months after
five Chinese vessels blocked the path of a US surveillance ship, attempting to
snag the sonar array that it was towing through waters off Hainan. China said
the American ship was violating maritime law, while the Americans said it was
operating legitimately in international waters. A spokeswoman for the US embassy
in Manila, Rebecca Thompson, said only that the USS John S. McCain was operating
in international waters, refusing to even discuss whether the incident took
place. University of the Philippines law professor Harry Roque said it was
alarming if a Chinese submarine was operating close to Subic Bay, site of a
former US military base. "There's always an American warship docked in Subic.
But what's a Chinese submarine doing near Subic?" He said foreign warships were
entitled to the "right of innocent passage" through Philippine waters, but
submarines exercising such rights could not travel submerged. 
Lenovo Group (SEHK: 0992) chairman Liu
Chuanzhi yesterday said the company would emerge from its operational
difficulties within a year if the global financial crisis did not worsen.
"Lenovo now stands at a turning point ... but one year later, you will see a
positive result," Mr Liu said in a speech to the Wharton Global Alumni Forum in
Beijing. "I'm very confident in this expectation." He did not give specific
company data to back up his forecast, nor did he clarify whether a "positive
result" meant simply breaking even. The world's fourth-largest personal computer
maker last month reported a worse-than-expected net loss of US$264 million for
the quarter to March, compared with a US$140 million profit a year earlier.
Analysts had estimated a loss of about US$200 million. It was the second
consecutive quarterly loss for Lenovo, which was US$97 million in the red in the
quarter to December. The chairman attributed the poor performance to the global
financial crisis, which began in September. He said it had greatly eroded sales
to large clients in the mature markets. For the full fiscal year to March,
Lenovo booked a net loss of US$226 million, the biggest since the company's
25-year history, compared with a US$484 million profit a year earlier. Mr Liu
said the economic crisis had exposed the management teams' poor performance.
After the company's acquisition of IBM's personal computer operations in 2004,
and with its continued expansion into global markets, Lenovo's management teams
had been internationalised physically, but not culturally and mentally. He said
the company had set up a core managerial panel - four expatriates and four
Chinese - to straighten out the problems of its management teams across the
world. "With this, we are intending to reshape a new management framework to
truly fit Lenovo," Mr Liu said. "This work is now going on smoothly and well, as
planned, which makes me very happy." But he said his optimism over the
operations in a year's time was based on a basically stable world economic
environment and he did not anticipate the crisis worsening much. "There should
be no problem realising what I'm anticipating, but this to some degree depends
on how and where the global economy will evolve," he said. 
Tata Consultancy Services was
profitable in China in 15 months and is now targeting local firms. Consultancy's
Indian workers, a sign of the high priority the mainland has given to growing
business ties with India. "The Chinese government has always rolled out the red
carpet for us," said Girija Pande, the Asia- Pacific head of Tata Consultancy.
Despite a long border dispute in which the two countries went to war in 1962,
China is India's biggest trading partner in Asia. Some companies, like Tata
Consultancy, hope these ties could prove more resilient to the impact of the
financial slowdown than business with the United States and Europe, a sign of
shifting global economic sands as Brazil, Russia, India and China grow in wealth
and clout. "Entering China was part of our emerging-markets strategy," Mr Pande
said. "And now we've seen that not only is growth faster, they have also fared
better in the crisis." Bilateral trade between China and India, old partners
along the Silk Road, is valued at US$38 billion now, and India has the potential
to export US$157 billion in goods and services to China by 2020, Goldman Sachs
has forecast. From textiles and chemicals to information technology, the
mainland has unseated Japan and is expected to soon replace the US as India's
top trading partner. That may happen sooner than expected, as the financial
crisis has slowed information technology spending in developed markets. "Let's
admit it: China is a large opportunity," N. Chandrasekhar, Tata's chief
operating officer, said recently. "Yes, there will be conflicts and challenges,
but the opportunity is so huge." Tata Consultancy, which gets more than half its
revenue from North America, was the first Indian software firm in China, in
2002. The mainland had a thriving hardware industry and a small software sector
it was determined to develop along the lines of India's US$60 billion a year
world-class industry. So, in 2005, the mainland government invited Indian
software firms to partner it in a joint venture. Tata Consultancy won that bid,
and TCS China, of which the Indian firm owns two-thirds, was formed in 2006.
Microsoft Corp later took a nearly 9 per cent stake in the venture. "When we
first went in, we only had two concerns: Given we were an Indian firm, would we
be able to recruit local people? And who would our clients be?" Mr Pande said.
As it turned out, the mainland high-tech industry and students were well aware
of Tata Consultancy, and the firm had no difficulty replicating its model of
recruiting locals and training them. Starting with multinational clients such as
General Electric, Motorola and Cummins, Tata Consultancy was profitable on the
mainland in 15 months and is now targeting local companies as customers. "There
are several large Chinese firms like Huawei and Haier that are going global. And
everyone knows India and China are where the next multinationals will emerge,"
Mr Pande said. Business in car manufacturing, textiles and chemicals had risen,
but it is in information technology that China and India were especially
complementary, he said, with their focus on "cost-effective" hardware and
software, respectively. Personal computer maker Lenovo Group (SEHK: 0992) has
found a ready market in India, and Indian software firms including Infosys
Technologies, Wipro and Satyam Computer Services have followed in Tata
Consultancy's footsteps, after initial concerns about intellectual property
rights. Asia makes up 12 per cent of Tata Consultancy's revenues now and will
likely contribute about 15 to 17 per cent of revenues in five years, Mr Pande
estimates, when the firm will be 5,000-strong in China. "The opportunity in
China is for us to take," Mr Pande said. "We have grown steadily and slowly,
following the old [Deng Xiaoping] saying that we have in all our offices there:
`You cross the river by feeling the stones'."
Chinese actresses Zhang Ziyi
(C) and Fan Bingbing (R) and South Korean actor So Ji Sub arrive for the opening
ceremony of the 12th Shanghai International Film Festival in east China's
Shanghai, June 13, 2009. 
Chinese actress Zhou Xun (R) and
actor Zhang Hanyu arrive for the opening ceremony of the 12th Shanghai
International Film Festival in east China's Shanghai, June 13, 2009.
As Hong Kong schools closed, pupils
returned to the Fresh Fish Traders' School in Tai Kok Tsui yesterday rather than
stay home alone. China faces increased risk of a mass outbreak of swine flu as
it has failed to track the source of some cases, officials warned a day after
the World Health Organisation declared it a new global pandemic. Mao Qunan ,
spokesman for the Ministry of Health, said in Beijing yesterday the outbreak on
the mainland had entered a new phase, in which local infections with uncertain
sources were occurring and spreading in the community. The warning came as Hong
Kong's Centre for Health Protection confirmed 10 new swine flu cases yesterday -
including two family members of infected secondary students in the city's first
cluster of local infections and another student from the school where the
cluster occurred. There were also seven imported cases - three from the
Philippines, three from the United States and one from Canada - bringing the
total of cases in the city to 73. Mr Mao would not reveal how many mainland
cases had unknown sources - an important indicator that the A(H1N1) virus is now
spreading in the community among those with no travel history - but said most of
the cases were imported and had known sources. Experts were still investigating
the source of some cases, he added. He said tracking down the source of
infection would play an important role in limiting the outbreak and assessing
where it might strike next. So far there was no evidence of significant mutation
of the virus, he added. "The virus strain isolated in our country is the same as
the strain isolated in countries such as Mexico and Canada." The mainland had
seen an increase in imported cases and local infections since the first cases on
May 10 and May 29, respectively, Mr Mao said. "Judging from this, the risk of
our country having scattered local infections and causing continuous spread in
the community has grown day by day," he said. Mr Mao said the country was
prepared to adjust its prevention measures to reduce local infections and
prevent community spread, particularly at border points, but he did not
elaborate on details. "In the early stage we took measures of inspection and
quarantine at the border points and it played an important role in detecting
imported cases and effectively containing the spread of the outbreak," he said.
The WHO has warned that the virus, while appearing moderate in developed
countries, may take a heavier toll in developing countries where sanitary
conditions and health facilities are poor. The Ministry of Health and WHO held
lengthy talks on Wednesday to review and adjust strategies in case the global
health body declared a fully fledged A(H1N1) pandemic. The central government's
strategy of focusing on trying to stop, or at least detect, virus carriers at
border points was a slight departure from the WHO's advisory, which suggests
that nations "focus on caring for H1N1 patients instead of trying to contain the
disease". Mr Mao defended the country's strategy, saying China's situation was
different in that it had many fewer swine flu cases than seasonal flu ones and
most of them were imported. By yesterday, the mainland had reported 141 cases of
swine flu, including 16 new cases from Thursday. Sixty patients had been cured
and released from hospital. There have been no reports of deaths. Hans Troedsson,
the WHO's China representative, praised the mainland's efforts to contain the
disease. He said the organisation had been in regular contact with the ministry
to exchange information. "It's not possible to prevent it, but you can prepare
for and mitigate the impact of a larger-scale outbreak," Dr Troedsson said. "In
that respect, I think China is quite well prepared."
Kith and Mark Lau, aged five and
three, show off Disneyland tickets. Hong Kong's children fanned out across the
city on the first day of class suspension yesterday, accompanying their parents
to work, going to shopping malls and adventure playgrounds, queuing in the rain
for Disneyland - and even going back to school. It looked more like a Sunday
than a Friday as more than 500,000 primary and kindergarten students started the
enforced two-week break from their studies. But while the children may have
relished such unaccustomed freedom, for many working parents it was a big
headache. Several children were spotted at stalls at Mong Kok's Fa Yuen Street
market, sitting around while their parents went about their business. "It will
be tiring for me, sitting here every day," said nine-year old Ken Ng, perched on
a stool in a stall that sells sunglasses. "I don't know what to do." Sam Siu
Chuk-ho, a Primary Four student, helped his mother choose a hat during a
shopping trip. He had just had lunch with his mother and grandmother. "The
suspension of classes can't be helped. But they should warn parents ahead," said
his mother, Joey Chung. "We keep away from playgrounds. I won't take him to
Disney because there is a high risk." It was an even bigger headache for one
father, who was arrested for allegedly going out and leaving his seven-year-old
daughter at home. The 56-year-old, identified only as Leung, was reported to the
police by his ex-wife who called the girl at her Kwai Chung home and found she
was alone. The father, arrested on suspicion of neglecting or abusing a child
under his care, was released on bail and will report to the police at the end of
this month. The daughter was sent to Princess Margaret Hospital for a check-up.
Although classes were suspended, some schools allowed children back while their
parents worked. Leung Kee-cheong, headmaster of the Fresh Fish Traders' School
in Tai Kok Tsui - where 24 students went yesterday - said it was better for
children to go to school than stay home alone. "If parents go to work and leave
their child at home unattended, they are breaking a law," he said. Primary Six
student Cindy Li Tze-ying cooked instant noodles for her headmaster and
schoolmates in her school's kitchen. In the morning, she also helped answer the
phone in the school office. Others helped organise books in the library or did
their own work, Mr Leung said. Most students stayed for an hour or two and left
before lunch time. Mr Leung said that he had no clue where they went. "It is
parents' responsibility to take care of their children ... we can't stop the
students leaving because classes are already suspended," he said. Fifteen
students at the Chiu Yang Kindergarten also returned to their school in Sheung
Wan yesterday. "We are a full-day school and we always support parents who need
to work," principal Chan Chor-hang said. "Although the Education Bureau ordered
the suspension, if parents cannot take care of their children, they can take
them to school." Some tutorial schools also held morning classes yesterday,
placing students further apart than usual as a precaution. At Disneyland, long
queues formed as visitors took advantage of a controversial special offer that
gives unlimited access to students from kindergartens, primary and special-needs
schools until June 30. The visitors were undeterred by an amber rainstorm
warning issued by the Observatory in the morning and waited patiently for the
park to open. Disneyland was criticised by the government on Thursday after
announcing the special offer, which overlaps with the closure of classes. A
Disneyland spokesman said: "Hong Kong Disneyland Resort from time to time
launches promotional packages for different segments of our markets." He said
the resort had a cleaning team that was more than 400-strong to take care of
hygiene issues.
Former Citic Pacific (SEHK: 0267) chairman
Larry Yung Chi-kin and Poly (Hong Kong) Investments together tapped the market
yesterday, netting HK$1.588 billion from a dual sale of 460 million old and new
shares, sources said. Mr Yung cashed out HK$879.8 million from a sale of 255
million shares or a 12.3 per cent stake in the developer at HK$3.45 each. The
price was towards the top end of an indicative price range of HK$3.35 to
HK$3.50. Poly sold 205 million new shares at the same price in the same
placement, according to a sales document sent to fund managers. The overall
offering was increased by 29.1 per cent to HK$1.588 billion from an initial
maximum of HK$1.23 billion. Mr Yung originally planned to sell 200 million
shares, while Poly offered 150 million new shares. Both tranches were increased
not long after the market began trading in the morning, amid strong demand from
institutional investors, sources said. "The order book has been multiple times
subscribed after launching in the first three hours," said a source close to the
offering. "Most of them are good and quality names. "Most investors only got a
small allocation due to an aggressive scale back on orders." The sale price was
at a discount of 7.26 per cent to the stock's close of HK$3.72 on Thursday.
Before the share sale, it was estimated that Mr Yung's stake in the developer
would fall to 1.8 per cent from 14.1 per cent. It was the second time Mr Yung
has exited a Hong Kong investment over the past five weeks. Mr Yung sold a 2 per
cent stake in Citic Pacific for HK$732 million after he left the red-chip
conglomerate. Mr Yung resigned as chairman and director of the company in April
along with managing director Henry Fan Hung-ling after police raided the
company's office as part of a probe into wrong-way bets on foreign currencies.
The offering yesterday translates into 24.1 per cent of Poly's outstanding
shares and 21.5 per cent of the enlarged share capital. BOCI and Citigroup were
the bookrunners. Both banks declined to comment on the transaction. Both the
company and Mr Yung have agreed not to sell any further stakes for three months
after the completion of the share sale. Poly would use the proceeds to fund
future investment including the build-up of land banks and for general capital
purposes, the sales document said. Mainland online video portal Vodone yesterday
also raised HK$79.2 million by selling 144 million new shares to an
institutional investor at 55 HK cents per share. The price represented a 15.38
per cent discount to the stock's close of 65 HK cents on Thursday. OCH-Ziff, a
leading global asset management firm, bought the shares. Vodone said the net
proceeds from the placement would be for general working capital.
Stanley Ho gets honour, and a nice pen -
It's probably easy to give when you have billions from running a casino monopoly
for decades. Nevertheless, Stanley Ho Hung-sun was honoured on Wednesday night
for his philanthropy to arts and culture. Montblanc, which makes very nice pens,
presented its annual cultural patronage prize at the InterContinental Hong Kong
Hotel. This year the Macau mogul was selected for his funding of everything from
the Arts Festival to the ballet to the University of Hong Kong and the Community
Chest. Receiving the Montblanc de la Culture Arts Patronage award from the
company's international chief executive, Lutz Bethge, Ho also got an expensive
pen, plus a US$15,000 donation - pocket change for him - to the arts cause of
his choice. He chose the Hong Kong Ballet, which reciprocated by sending a few
dancers to pirouette during dinner. "I am very honoured to receive this award,"
the 87-year-old tycoon said, before making a couple of witty Cantonese jokes
about ink pens. "My principle is always from society to society. "And supporting
the arts is a life-long effort, but in a speech, the shorter the better."
Everyone waiting anxiously for the main course applauded that sentiment
heartily.
Savannah College of Art and Design
officials, from left, preservation specialist Bob Dickensheets, John Rowan and
Tom Fisher, at North Kowloon Magistracy, Shek Kip Mei. The American arts college
awarded tenancy of the historic North Kowloon Magistracy says it hopes to
recruit local teaching and administrative staff for the opening of its first
Asian branch next autumn. Savannah College of Art and Design, which will convert
the historic building into a campus for its Hong Kong branch, will begin with
about 60 staff members, including 25 faculty members, college senior management
said. Savannah chief academic officer Tom Fischer said recruitment of teaching
staff had not yet begun, but faculty members at campuses in Savannah and Atlanta
in the US, and Lacoste in the south of France had expressed overwhelming
interest in teaching in Hong Kong. "Hong Kong is a great attraction because
everyone knows that Hong Kong is looking into developing a creative economy," Mr
Fischer said, adding that many teaching staff members had previously worked in
Hong Kong and hoped to return. Mr Fischer said that once the curriculum was
approved by the Education and Manpower Bureau, the college would officially
begin a search for teaching staff, and it was hoped some would be found in Hong
Kong. He said the Hong Kong curriculum would match those at other campuses. He
said cultural factors would be important and that staff with Asian backgrounds,
particularly those with a good knowledge of Hong Kong, would be welcome.
Savannah executive director of strategic initiatives John Rowan said a ratio
between local and overseas staff members had yet to be set, but he hoped there
would be as many Hong Kong members of staff as possible. During its first year,
the Savannah College of Art and Design will offer eight majors: animation;
advertising design; graphic design; illustration; interactive design and game
development; motion media design; photography; and visual effects. The college
will also offer sound design as a minor. Mr Fischer said recruitment of students
had not begun, but he expected the numbers would be relatively small, with class
sizes no larger than 20. He was confident that the college would attract
students from throughout the region as the majority of the college's
international students, accounting for more than 20 per cent of its graduate
programmes, were north Asians. He expected that other than traditional courses
such as graphic design, digital media-related courses would be popular. "The
future of animation and film is not in Hollywood but here," Mr Fischer said,
adding it was hoped that such courses would prepare students to enter the movie
industry. He said that students' works were promoted through public events and
exhibitions such as the college's first community event, Silver & Ink, an
exhibition of students' works created over the past academic year held at the
Jockey Club Creative Arts Centre in Shek Kip Mei. Overseas students will have to
rent their own accommodation rather than live on campus during the first years
of the Hong Kong college. Mr Rowan said the college would help students find
budget apartments if required. Future possibilities included collaboration with
nearby Mei Ho House, which could become a Youth Hostels Association lodging
under the revitalisation scheme. But nothing had been decided. The awarding of a
historic building to a foreign institute stirred controversy when the news was
announced in February. Mr Rowan said that since the college had registered as a
non-profit-making, non-governmental organisation, its operation would be
monitored just like other non-governmental organizations. 
Societe Generale Asset Management (SGAM) will launch a US$100 million China fund
targeting foreign investors next month, gunning for returns in mainland consumer
industries with high barriers to entry. The country's urbanisation patterns and
4 trillion yuan (HK$4.54 trillion) economic stimulus plan would help build value
for mainland equities over a long time horizon, Winson Fong, head of Greater
China equities at SGAM, said yesterday. But immediate value was to be found in
shifting short-term consumption needs and the mainland companies in
high-barrier-to-entry consumer industries, such as vehicles and property, that
serve those needs, Mr Fong said. "You have to know what Chinese want to spend
on, what is on their minds every day - it's to buy a house, then a car," he
said. "For housing and for vehicles, the government wants to encourage this kind
of consumption. "It will strengthen their support of the government." SGAM's
current China funds include carmakers, such as Dongfeng Motor Group (SEHK: 0489)
and Geely Automobile Holdings (SEHK: 0175), and car parts companies, such as
Minth Group (SEHK: 0425). The firm also likes mainland-focused property
companies, such as China Overseas Land (SEHK: 0688) & Investment and Guangzhou
R&F Properties. Mr Fong buys blue chips such as PetroChina (SEHK: 0857,
announcements, news) and CNOOC (SEHK: 0883) as well, but he sees more value in
smaller companies off the mainstream radar screen. Trendy consumer names such as
China Mengniu Dairy (SEHK: 2319) and top juice maker China Huiyuan Juice Group
offer less value to investors, he said. "They also have long-term potential, but
the barriers to entry are low, so they will see continuous competitive
pressure," said Mr Fong. "Other brands will rush in - they may not beat you, but
they will disturb your margins." SGAM has about US$2 billion of assets under
management in Hong Kong and Singapore and about US$7 billion in a joint venture
in Shanghai focused on the A-share market.
Bayerische Motoren Werke has won approval to sell BMW-brand cars to central
government officials, a move that can help challenge the dominance of its
European rivals in the world's biggest vehicle market. Beijing spent 80 billion
yuan (HK$90.71 billion) buying official vehicles last year, according to China
National Radio, with Volkswagen's Audi and Daimler's Mercedes-Benz being the
models of choice. Shares of Shenyang-based Brilliance China Automotive Holdings
(SEHK: 1114) rose 15.38 per cent to 90 HK cents yesterday after BMW announced
its mainland venture BMW Brilliance Automotive had been added to the
government's procurement list. BMW started talks with Beijing back in 2007
seeking to put its vehicles on the government's shopping list. Foreign and
domestic carmakers see fast-growing official car sales as an entry point to
further expansion in the market. Beijing has started to replace its official
cars, public transport and taxis with more environment-friendly vehicles. BMW,
which builds the 3-Series and 5-Series sedans with Brilliance China, last year
sold 65,822 cars on the mainland, up 28 per cent from 2007. The joint venture
has started building a second factory in Liaoning province with an annual
capacity of 100,000 vehicles last year. Audi, a joint-venture partner of
Jilin-based First Auto Work Group, sold 118,118 vehicles on the mainland last
year, up 17.08 per cent from 2007. "The approval will help BMW close the gap
with Volkswagen's Audi," said Michael Tyndall, a vehicle specialist with Nomura
Securities in London. Audi, which kicked off its China production in the early
1990s, was the first global brand serving high-ranking government officials with
its hot-selling A6 sedans. The mainland government used to use the domestically
produced Red Flag, or Hongqi, of FAW as official cars before the country opened
its vehicle market to foreign players in the 1990s. The central government is
constantly updating its vehicle procurement list. Besides the top global luxury
brands, other domestic brands on the list include Hong Kong-listed Geely
Automobile Holdings (SEHK: 0175), BYD and Anhui-based Chery Automobile.
In show business circles, they say all publicity is good publicity, but a star
presenter for CCTV who has found herself accused of spying for Taiwan may beg to
differ. Fang Jing , 38, has been forced to deny allegations she was duped into
providing military intelligence by a Taiwanese boyfriend who was eight years her
junior. A little-known Nanjing-based newspaper, the Oriental Guardian, broke the
story on Thursday, claiming Fang had been arrested for spying as early as May
12. It cited a blog written by Peking University associate professor Zhou Yijun,
better known as "Ayi" - a part-time television host. Fang started anchoring
prime-time news bulletins on China Central Television's international channel at
the age of 23, and she has hosted several of the national broadcaster's flagship
programs. The newspaper said Fang applied to host Defence Watch, a panel
discussion programme on military issues, in order to gather intelligence.
Mainstream state media outlets scrambled to grab their share of the gossip. The
People's Daily party mouthpiece ran the story on its website, and the China
Daily confirmed yesterday on its front page that Fang was under investigation
for spying, quoting Zhang Zhaozhong, an expert at the National Defence
University. However, by last night the reports had been removed from the
websites, and a Xinhua report quoting the China Daily had also disappeared.
Professor Zhang noted that Fang last appeared on Defence Watch on March 1. Last
night, Fang rejected the espionage accusations in a newly created blog and
threatened legal action against "those behind the rumour". "No personnel from
any department have questioned me on any issue whatsoever," she said. "The
article [Ayi] wrote came from nowhere. I will use the law to protect my legal
rights." She said CCTV bosses had assigned her to the military programme. She
said it was an area in which she took no personal interest, but she refused to
say why she had been absent from the programme since March. However, sources
said rumours of investigations into the spying allegations had been around for a
while. One journalist, who did not want to be named, said: "All I can confirm is
that she has been investigated by state security police but was released without
any concrete charges." A CCTV source said Fang was well connected at the
national broadcaster and was frequently seen at expats' parties. "She is almost
certain to lose her presenter's job, but it's not clear what other action she
will face," the source said. The unusual saga underscored the crisis facing CCTV.
It is being viewed as an industry bully, and is increasingly scrutinised and
ridiculed for any glitches and scandals. In February, a fire at CCTV's new
complex in downtown Beijing caused by illegal fireworks killed a fireman and
sparked public anger at the broadcaster.
China's 8th riot squad leaves for UN
peacekeeping mission in Haiti - Members of China's eighth riot squad for the
United Nations peacekeeping mission in Haiti wait to depart at Capital
International Airport in Beijing, capital of China, June 13, 2009. 
People visit the 2009 Zhejiang
(Shanghai) Travel Fair in Shanghai, east China, June 12, 2009. The fair kicked
off in Shanghai on Friday, promoting Shanghai's neighbor, Zhejiang Province's
tourist resorts, especially those related to the 2010 Shanghai World Expo.
Archeologists plans to start 3rd
large-scale excavation of Terra-cotta Warriors - Photo taken on June 11, 2009
shows No. 1 pit of the Terra-cotta Warriors and Horses of Emperor Qin Shihuang,
in Xi'an, capital of northwest China's Shaanxi Province. Archeologists have
planned to start the third large-scale excavation of the Terra-cotta Warriors on
June 13, China's fourth Cultural Heritage Day, after a halt of over 20 years.
The United States National
Symphony Orchestra performs during a concert at the National Center for the
Performing Arts in Beijing, capital of China, on June 11, 2009. 
A woman wearing protective
clothing is taken to the infectious diseases centre at Princess Margaret
Hospital in Kowloon yesterday. Eight designated clinics will begin treating
patients with flu symptoms from tomorrow, with the Hospital Authority expecting
demand to increase sharply during a community-wide outbreak. Health officials
yesterday said there were adequate stocks of the antiviral drug Tamiflu. The
eight flu clinics are: Shau Kei Wan Jockey Club Clinic, Sai Ying Pun Jockey Club
General Outpatient Clinic, Central Kowloon Health Centre, Kowloon Bay Health
Centre, South Kwai Chung Jockey Club General Outpatient Clinic, Yuen Chau Kok
Clinic, Fanling Family Medicine Centre and Yan Oi General Outpatient Clinic.
Hospital Authority director (quality and safety) Leung Pak-yin said the
designated flu clinics, which were being converted from public outpatient
clinics, aimed to concentrate on the treatment of swine flu patients and share
the burden which currently fell on the public accident and emergency
departments. The clinics will target patients with flu symptoms such as a fever,
body temperature of 38 degrees Celsius and above, coughs and sore throats. They
will operate along the lines of general outpatient clinics and charge HK$45 per
consultation. Each clinic can treat 120 patients a day. The authority will
conduct laboratory tests on 50 patients daily. Dr Leung said: "The laboratory
tests act as an important surveillance tool to help us understand how the swine
flu spreads in the community. We want to know if the new (A)H1N1 virus is
gradually overtaking the seasonal flu virus and we need that information to
adjust our policy." The authority's laboratory network at six hospitals -
Princess Margaret, Prince of Wales, Queen Mary, Queen Elizabeth, Tuen Mun and
United Christian - has been providing a 24-hour service. The clinics will open
from 9am to 5pm each day and their capacity can be increased by extending these
hours. They will treat walk-in patients and those referred by private doctors.
The number of flu clinics can be increased to 18 if the swine flu cases continue
to rise. Dr Leung said patients with mild symptoms would be asked to stay at
home and rest. Only three groups would be admitted to hospital: women more than
20 weeks' pregnant, children under two and patients with severe breathing
difficulties. The patients will be given Tamiflu. Secretary for Food and Health
York Chow Yat-ngok said the government had stocked up about 20 million doses of
Tamiflu, which would be enough to treat 2 million patients. It has so far used
up about 1,000 doses on swine flu patients and their contacts. Private doctors
are being asked to refer all suspected swine flu patients to public clinics and
hospitals. Dr Chow said the government would need help from private doctors if
the virus spread in the city. President of the Hong Kong College of Family
Physicians Gene Tsoi Wai-wang said doctors would spend more time on asking for
the medical and contact history of flu patients to see if they had contracted
the swine flu virus.
Chung Hwa Travel Service boss Jeff Yang Jia-jiunn hopes to boost academic
exchanges between Hong Kong and Taiwan. The past year has brought a dramatic
warming in ties between Hong Kong and Taiwan, the island's top representative in
the city notes with satisfaction. Obstacles to Taiwanese officials visiting Hong
Kong had almost been eliminated, while the number of Hongkongers visiting Taiwan
on civil exchange tours had doubled, Jeff Yang Jia-jiunn told the South China
Morning Post (SEHK: 0583, announcements, news) yesterday, five days after
Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung completed
a groundbreaking trip to Taipei. The changes, which emerged after the Kuomintang
returned to power last year, marked improved communication, Mr Yang said. "It is
just the start of the normalisation of the Taiwan-Hong Kong relationship ...
there is still some time before a full normalisation, but I believe it will not
be far if both sides make efforts." Mr Yang, managing director of Chung Hwa
Travel Service - Taiwan's top representative body in Hong Kong - estimated that
more than 90 per cent of applications by Taiwanese officials for Hong Kong visas
had been successful over the past year. By contrast, more than 95 per cent of
applications were routinely rejected in February last year. "Communication is
smooth now," Mr Yang said. "When Taiwanese officials come, they state clearly
their purposes of visit and the Hong Kong government does not block them as long
as there is no doubt." The two administrations agreed during Mr Lam's trip last
week that visits would become more frequent. Mr Yang said he hoped corresponding
departments could build relations and exchange experiences. Civil organisations
in Hong Kong had also become more enthusiastic about visiting the island, he
said. "Relatively few Hong Kong groups wanted to visit Taiwan before May 20
[2008, the date of President Ma Ying-jeou's inauguration], because of political
concerns." Since January, 1,500 residents have taken part in exchange activities
in Taiwan organised with Chung Hwa Travel Service's assistance - a doubling of
the 750 in the first half of last year. The total number last year was 1,913.
These groups included charities, green groups and government environmental
bodies, Mr Yang said. Commenting on two non-governmental committees to be
established to oversee bilateral economic and cultural co-operation, he noted
that they would serve as a good platform to take advantage of Hong Kong's
position as an economic hub, before cross-strait interactions were fully
normalised. The role of his organisation - the Bureau of Hong Kong Affairs under
the Taiwan's Mainland Affairs Council - would not change with the introduction
of the platform, Mr Yang said. His next goal was to help boost academic
interactions, as they lagged well behind those between the mainland and Hong
Kong. "There are over 200 professors with Taiwanese backgrounds teaching in Hong
Kong's eight universities, but there have only been scattered scholarly
exchanges," Mr Yang said. "Hong Kong could be an ideal hub for academics from
the three places across the strait, because it has freedom of speech, a good
geographic location and a common language." 
Hong
Kong Disneyland was accused of putting business interests ahead of public safety
yesterday after it seemed to flout a government health measure by launching a
ticket promotion for young children, who are at risk of spreading swine flu.
Targeting kindergarten, primary and special-needs schools in Hong Kong, the
promotion offers unlimited visits to the theme park from today until June 30 for
just HK$250. This is the usual price for one-day admission for children between
three and 11 years old. The government has closed such schools for two weeks in
a bid to contain swine flu. "We have already informed Disney that it should not
make use of this opportunity to do such a promotion," Secretary for Food and
Health York Chow Yat-ngok said. "Closing the schools does not mean that they are
on holiday and can go outside and play. As I have said, they should try to stay
at home. If they go out, they should avoid crowded places." A Hong Kong
Disneyland spokesman said the tickets would go on sale today. "Hong Kong
Disneyland Resort has many open areas planted with over a million trees, which
allow guests to enjoy fresh air," he said. "The safety of our guests and cast
members is always our top priority." But Hong Kong Medical Association president
Tse Hung-hing said the promotion was "improper" and went against government
policy. "There are a lot of opportunities for indirect contact at the theme
park, like holding on to handrails, taking a seat on a ride, queuing up and
using utensils. Also, not all areas are open, so this argument is simply not
sound," he said. "And what do trees have to do with human swine flu? Having
trees does not mean you are free of it." Democratic lawmaker Fred Li Wah-ming
called on the government to halt the promotion and warned of dire consequences
if people became infected with swine flu at the park. Education Secretary
Michael Suen Ming-yeung said: "The whole point of suspending classes is to
ensure that there is no congregation of young children, as very often it is not
easy for them to look after themselves or to take care of their own personal
hygiene. We should make sure that there is no congregation of young children in
large numbers. "So my advice to parents is that they should try as far as
possible not to bring their children to places where there are large numbers of
children, such as playgrounds and shopping malls."
The confirmation of the first local
cluster of swine flu cases yesterday was a milestone for Hong Kong in adjusting
its pandemic policy, the health minister said. Secretary for Food and Health
York Chow Yat-ngok said the city had moved from the "containment" phase to an
early "mitigation" phase in the control of swine flu. This means that, instead
of trying to contain the disease by quarantining all patients and their
contacts, the government will now concentrate resources on mitigating the spread
of the virus and any serious illness or deaths it could cause. Closing schools,
and stringent public hygiene are among the mitigation measures. Since the first
imported swine flu case was reported in Hong Kong on May 1, involving a Mexican
tourist, the Centre for Health Protection has been quarantining all swine flu
patients and tracing their contacts. The patients have also been given
supervised treatment with the anti-viral drug Tamiflu. Dr Chow said that since
the city had moved to the early mitigation stage, the centre would no longer
trace patients' social contacts. The centre would only investigate patients'
close contacts, who had a high risk of becoming infected with the virus. He said
if the virus was spreading widely in the community, the centre would eventually
abolish supervised Tamiflu treatment and use Tamiflu solely to treat swine flu
patients in serious condition. Dr Chow said control measures at border
checkpoints, including health declarations and temperature scans and the daily
reporting of new swine flu cases, would continue. Medical sector legislator
Leung Ka-lau said it was reasonable for the government to close schools
following the 12 reported swine flu cases at St Paul's Convent School in
Causeway Bay, and move to mitigation measures. But Dr Leung said the
administration's flu policy was inconsistent. "The outbreak at St Paul's Convent
School showed that secondary students are subject to the risk of swine flu, but
the government closes primary schools and kindergartens. Secondary schools
should be closed as well," he said.
Supporters of Fernando Chui Sai-on can
break out the champagne today as the former culture minister is set to win
Macau's chief executive race after his major rival called it quits. Chief
prosecutor Ho Chio-meng, widely seen as Dr Chui's only possible threat in the
poll, has decided against running for the top job. A spokeswoman for Dr Ho's
office yesterday confirmed that the chief prosecutor would remain in his job and
not run in the election. Under Macau law, a principal official cannot run for
chief executive unless he or she resigns before the nomination period, which,
for the July 26 election, begins today and lasts until June 23. Eilo Yu Wing-yat,
an assistant professor of government at the University of Macau, said it was
almost certain Dr Chui would now become Macau's new leader. "I believe there
won't be any third person coming out with the power to rival Chui," Professor Yu
said. Finance minister Francis Tam Pak-yuen, once seen as having a slim chance
of taking the top job, had made no resignation announcement by early yesterday
evening. Professor Yu said it would be nearly impossible for Mr Tam to resign
late last night as it would need central government approval to take effect. Dr
Chui and four other Macau residents have picked up nomination forms from the
election co-ordination centre. The other four, including a practitioner of
Chinese medicine and a card dealer, are seen as having little chance of securing
nominations. A candidate needs at least 50 nominations from the 300-member
Election Committee. Political commentator Larry So Man-yum said Dr Chui could
easily win over a majority of the 300 Election Committee members due to his
close ties with them. Although Dr Chui is set to enter an uncontested election,
it is still possible that a role player will join the race. In 1999, businessman
Stanley Au Chong-kit took part in the race against current chief executive
Edmund Ho Hau-wah, who was seen as the sure winner because he had apparently
gained Beijing's nod. Dr Chui comes from one of the city's few ruling clans. His
late uncle, Chui Tak-kei, was a staunch supporter of the Communist Party when
Macau was under Portuguese rule. Gaming mogul Stanley Ho Hung-sun has declared
his support for Dr Chui's candidacy. Dr Chui declared his candidacy and resigned
as culture minister on May 14.
HSBC
Holdings (SEHK: 0005, announcements, news) will become the first lender to
separate its retail banking and wealth management departments after a public
outcry over tellers selling risky financial products to customers. The move is
expected to be followed by other lenders and follows recommendations by the Hong
Kong Monetary Authority that banks tighten regulations on such high-risk
investment products sales. The fallout from the Lehman Brothers Holdings
minibond scandal, in which banks sold highly speculative products to
inexperienced investors, has put selling practices in the industry under the
spotlight. HSBC announced yesterday that three of its 100 branches in Hong Kong
would separate its deposit-taking and investment service areas. The pilot
branches are at Hopewell (SEHK: 0054) Centre in Wan Chai, and Pedder Street and
Lyndhurst Terrace in Central. The scheme will be expanded to all branches by
September. Peter Wong Tung-shun, the bank's executive director, said different
designs would be used for the general banking and investment service areas to
make sure customers could easily differentiate the two zones. Such clear zoning
was in line with the HKMA's recommended measures and would enhance investor
protection, he said. The HKMA received more than 20,000 complaints about mis-selling
by staff of 20 banks, including products that are touted as alternatives to time
deposits but were in fact risky credit-linked notes. About HK$20 billion of the
Lehman products were bought by 48,000 Hong Kong investors. The products became
worthless when the United States lender went bankrupt in September last year.
Sales activities within the investment areas would be audio-recorded and the
tapes kept for seven years, HSBC said. A Standard Chartered Bank spokesman said
the bank was finalising its arrangements and would launch new measures by
September. A spokesman for Hang Seng Bank (SEHK: 0011, announcements, news)
could not be reached for comment. The HKMA suggested banks completely separate
their wealth management businesses from ordinary banking business by October 1
and record sales activities with customers by July 1. Julia Leung Fung-yee, the
Undersecretary for Financial Services and the Treasury, said yesterday the HKMA
had received 500 complaints from people who had lost hundreds of millions of
dollars on a complex credit-linked investment product called Octave notes, sold
by US investment bank Morgan Stanley. Two-thirds of the notes, sold mainly
through 16 retail banks between 2004 and 2007, have lost more than 90 per cent
of their value. Hong Kong investors had bought HK$24.9 billion worth of
structured products, including Lehman minibonds and Octave notes. Of the
credit-linked products, HK$4.5 billion is still outstanding. 
The
Hong Kong Monetary Authority will consult the banking industry on proposals to
revise the liquidity regime in phases before the end of next year, according to
Karen Kemp, an executive director of the de facto central bank. "The current
crisis highlights the importance of liquidity risk," Ms Kemp wrote in the
authority's website yesterday. "This will be a challenging task. But as in the
case of implementing Basel II, we are committed to strengthening the liquidity
regime, which is another cornerstone for maintaining banking stability in Hong
Kong." She said the HKMA would need to look at liquidity risk in the light of
the severe strains experienced by the financial institutions and investment
markets amid the current financial turmoil. Banks with sufficient capital
normally can obtain cheap funding but the turmoil has made borrowing difficult
as financial institutions are reluctant to lend to one another for fear of
counterparty risk. "Even well-capitalised banks can face serious problems if
they have not developed the capabilities to manage liquidity properly in an
increasingly complex market environment," she said. Ms Kemp said liquidity risk
is a supervisory priority of the HKMA so the authority would study how to ensure
the local regulation regime would match the Basel Committee's principles. Under
the Basel principles issued in September last year when the financial crisis
deepened, banks need to have systems and procedures to identify and measure all
liquidity risks. Banks also need to maintain a high level of liquid assets to
withstand stress if their normal funding sources dry up and set up a stress test
programme for the development of a contingency funding plan. The HKMA has co-ordinated
self-assessments by banks to check if they comply with the Basel principles and
is analysing the results. "Our objective is to identify gaps in the authorised
institutions' liquidity-risk management and issues that might affect
implementation of the sound principles," she said. "We recognise the importance
of ensuring that banks in Hong Kong are resilient to market-wide liquidity
shocks similar to those recently experienced by some of their overseas
counterparts. The HKMA is reviewing its liquidity regime." 
Film star Stephen Chow Sing-chi has sold
a house in his joint-venture luxury residential project on the Peak for
HK$41,500 per square foot, 21 per cent less than in his last sale before the
global financial crisis. However, the unit price is a record for a Hong Kong
residential project after the crisis began. A mainlander bought House No 18 at
Pollock's Path, developed by Chow and Ryoden Development, for HK$300 million,
property agents said. The three-storey house has a floor area of 7,229 sqft,
with a private swimming pool, a garden and a view of Victoria Harbor. Bel Global
Resources Holdings chairman Stephen Sy Chin-mong bought House No16 in the same
four-house project for HK$380 million or HK$52,566 per square foot on September
11 last year, just before the bankruptcy of Lehman Brothers. It was the
third-most expensive residential deal in Asia by unit price. The project is on
the site of the former "Skyhigh" development, which was the one-time residence
of former Hongkong Bank chairman Michael Sandberg and Yaohan International
chairman Kazuo Wada. The developers acquired the site for HK$320 million in
2004. Simon Lo Wing-fai, the director of research at Colliers International,
said there had been more transactions of houses worth HK$100 million and above
in recent months as property prices rebounded significantly. It showed buyers
had regained confidence in the real estate market and were willing to offer
aggressive prices for luxury homes, he said. However, he did not believe the
increase in luxury residential prices could be sustained while rents continued
to fall. Mr Lo did not expect rents to catch up until the end of this year or
early next year. Meanwhile, Pacific Century Premium Developments (SEHK: 0432)
chief executive Robert Lee Chi-hong said luxury residential prices would rise 20
to 30 per cent in the next 12 months. "The property market will benefit from the
limited new residential supply and low interest rates. The market will be more
active in the second half," Mr Lee said after the company's annual general
meeting.
Chief Executive Donald Tsang
Yam-kuen, accompanied by government officals, announces the temporary closing of
all nurseries, kindergartens and primary schools following the discovery of a
cluster of local human swine flu cases. All Hong Kong kindergartens and primary
schools would be suspended from Friday for two weeks — and the suspensions might
be extended further, government officials said on Thursday. The announcement
comes as 12 students from St Paul’s Convent School were confirmed with the H1N1
infection. A government spokesman said the students were now being quarantined
in Princess Margaret Hospital. The first local transmission of the H1N1 virus, a
55-year-old man, was disclosed on Wednesday by the Centre for Health Protection
(CHP). A 16-year-old girl from St Paul’s Convent School was also confirmed to be
infected. Chief Executive Donald Tsang Yam-kuen said on Thursday afternoon that
the suspension of classes was necessary to stop more children being infected
with the swine flu virus. “In accordance with our contingency plans... all
primary schools, kindergartens, child care centres and special schools would
suspend classes for 14 days from tomorrow,” Mr Tsang said. The chief executive
made the comments after a meeting of a special government steering committee on
swine flu. “The steering committee has just confirmed the first cluster of local
cases of human swine flu... but we are unable to identify the source of
infection,” Mr Tsang said. “This means that they are indigenous cases. We now
have to migrate from a current containment phase to a new medication phase,” he
added. Food and Health Secretary York Chow Yat-ngok stressed that young children
were more vulnerable to flu attack. Therefore, it was important to suspend
classes. “We do not want to see young kids coming down with human swine
influenza,” Dr Chow said. ”Past flu outbreaks have shown that young children,
especially those under six with flu, are more likely to get complications and be
hospitalised,” the health secretary added. He said it would also important to
ease the fears of parents in Hong Kong. Education Secretary Michael Suen Ming-yeung
said the government would evaluate whether it was necessary to continue the
suspension of classes on June 23. “There are still a number of schools that have
not completed their final examinations. So we have made arrangements with these
schools so that if the government is able to announce the resumption of classes
at the end of the 14-day period... there will be sufficient time for schools to
arrange for the completion of these examinations,” Mr Suen said. He said schools
would have to make individual arrangements for assessments if classes could not
resume after July 10. The Education Bureau will cancel the territory-wide
student assessments scheduled for June 17 and 18. The primary five examinations,
which will help determine the allocation of places for these students when they
move on to secondary one, will continue to take place, but only if classes
resume before July 10. Mr Suen said if classes continued to be suspended after
this date, the Education Bureau would make special arrangements with the
Department of Health. The education secretary also rejected suggestions that the
government had been slow to close schools. Dr Chow said the government had also
informed Disneyland not to have new promotions while school classes were
suspended. Some schools have prepared video teaching materials to be uploaded on
school intranet systems to allow students to study at home while classes are
suspended. The chief executive said the Hospital Authority on Saturday would
open eight designated flu clinics. These clinics have already been set up to
receive patients with influenza-like illnesses. “The authority might expand the
number of clinics to 18 if necessary,” Mr Tsang added. The clinics include: Sai
Ying Pun Jockey Club General Outpatient Clinic; Shau Kei Wan Jockey Club Clinic;
Kowloon Bay Health Centre; Central Kowloon Health Centre; South Kwai Chung
Jockey Club General Out-patient Clinic; Yuen Chau Kok Clinic; Fanling Family
Medicine Centre; and Yan Oi General Out-patient Clinic. They will operate seven
days a week, from 9am to 5pm, including holidays. Dr Chow said the virus had
spread in the community. But he said health experts would not trace people who
had social contact with patients. This was because they were at the same level
of risk as ordinary people. Dr Chow also said the government has 10 to 20
million doses of Tamiflu. This was sufficient for two million patients. Later on
Thursday, Hong Kong reported another imported swine flu case. This was confirmed
around 2pm, Centre for Health Protection controller Thomas Tsang Ho-fai said.
The infected patient is a 43-year-old man who had come to Hong Kong from Europe.
Further details on the patient are not yet available. 
A kindergartener washes her hands
before going to class on Thursday. All of Hong Kong's kindergartens and primary
schools will close on Friday for two weeks by government order.
Hong Kong would not need to make big
changes to its swine flu pandemic strategy even if the World Health Organisation
raised its alert level, the health minister said yesterday. York Chow Yat-ngok
was speaking after WHO chief Margaret Chan Fung Fu-chun said she believed the
world was already in the grip of a pandemic but she was reluctant to make the
official declaration. Dr Chow, the secretary for food and health, said: "No
matter what their decision will be, Hong Kong is already at the highest
emergency alert level. Also, we have already made some long-term arrangements.
Therefore, our current policy will not change greatly. But we will monitor what
the implications are for other countries." Speaking in Geneva, Dr Chan, the
WHO's director general, said it was only the "heavy responsibility" of the
matter that was restraining her from officially declaring a pandemic. A sharp
rise in swine flu cases in Australia might push the WHO to finally announce the
first flu pandemic in 41 years. Its flu chief, Keiji Fukuda, said the agency
wanted to avoid adverse effects if it announced a global outbreak of swine flu.
Dr Fukuda said people might panic, or governments might take inappropriate
actions if a pandemic was declared. Dr Chan said it was important to verify
reports that the virus was becoming established outside North America before
declaring a pandemic. "The decision to make a phase 6 announcement is a heavy
responsibility, a responsibility that I will take very seriously, and I need to
be convinced that I have indisputable evidence," she said. Dr Chan was holding a
conference call with governments yesterday to verify some of the reports she had
received, before making a formal announcement. "Once I get indisputable
evidence, I will make the announcement," she said. The WHO said yesterday the
virus had infected at least 26,563 people in 73 countries and caused 140 deaths.
Most of the cases have been in North America, but Australia has seen a sharp
increase in the past week. The WHO has called an emergency meeting of experts in
Geneva today to discuss the spreading swine flu outbreak. 
China's exports and imports declined in
May, but this was offset by better-than-expected growth in urban fixed-asset
investment - indicating the world's third-largest economy is well on the road to
recovery. Exports contracted 26.4 percent year on year in May and were down 22.6
percent from April. Imports fell by 25.2 percent from a year ago and 23 percent
from April. The trade surplus widened to US$13.4 billion (HK$104.52 billion)
from US$13.1 billion in April, according to the statistics bureau. "For China's
nascent economic recovery to be sustainable beyond the short-term, policymakers
must take steps to ensure that consumption remains on a firm growth trajectory,"
said Jing Ulrich, managing director of China equities at JP Morgan. Goldman
Sachs economists Song Yu and Qiao Hong wrote that falling exports "will become
less of a drag on the overall economy, while the rebound in domestic demand
seems to be getting stronger by the month ... We expect the trade surplus to
narrow in the coming quarters." And Daiwa's Kevin Lai said: "Exports continued
to trend lower on a year-on-year basis, but we expect them to recover over the
next three months." Urban fixed-asset investment grew 32.9 percent in the first
five months to 5.35 trillion yuan (HK$6.06 trillion) versus a pace of 30.5
percent in the first four months. Fixed-asset investment reached 1.64 trillion
yuan in May, versus 1.35 trillion yuan in April. "Fixed-asset investment
surprised again on the upside, underpinned by both government and non-government
investment," Lai said. Bank of America Merrill Lynch said China is now at the
bottom of a U-shaped recovery, adding that a new driver for May's FAI growth was
property investment, which made up more than 20 percent of the total. Credit
Suisse said the trend is likely to continue as real estate developers are
starting to purchase land again. "The high FAI growth bolstered by aggressive
government policies is neither necessary nor possible to sustain in the long
term," Merrill Lynch warned. "But to expect an imminent slowdown or even a
plunge of FAI is unrealistic," the US- based investment bank said. 
The fragile recovery in the Chinese
and global economies has been dealt a blow with the H1N1 flu outbreak declared a
pandemic Thursday night. Analysts and experts in China said the announcement
would have a significant impact on the country's travel, tourism and foreign
trade sectors. In Geneva, the World Health Organization (WHO) told members it
was declaring a pandemic - the first global flu epidemic in 41 years - as
infections climbed in the United States, Europe, Australia, South America and
elsewhere. In a statement sent to health officials, the WHO said it decided to
raise the pandemic warning level from phase 5 to 6 - its highest alert - after
holding an emergency meeting with its flu experts. WHO chief Margaret Chan was
expected to make a formal announcement later last night. In Beijing, Mao Qun'an,
spokesman for the Ministry of Health (MOH), told China Daily last night that a
press conference would be held in the afternoon today to explain the latest
situation. Zeng Guang, top epidemiologist with the Chinese Centers of Disease
Control and Prevention (CDC), said there is no need to panic. China braces for
H1N1 pandemic fallout. The MOH is ready with countermeasures based on the
specific epidemic situation, such as the closure of schools when multiple
infections are detected, he added. Vivian Tan, spokesperson for the WHO Beijing
Office told China Daily last night that China is categorized as a country with
sporadic cases and a few small clusters of domestic transmissions. Tan also said
the MOH told the WHO Beijing Office last month that the country has enough
antiviral medication and is expanding medicine stockpiles. But it is the economy
which looks set to bear the brunt of the announcement. Gao Shanwen, analyst at
Essence Securities, said the travel, hotel, transport, retail sales and
entertainment sectors will see a decline. "And if consumption falls in other
countries, it may affect China's exports, which are already severely hit by the
financial crisis. But considering historical experience, the flu's overall
impact on the economy will be limited," Gao said. Gao Yaosong, director of the
Shanghai Research Institute of International Economy and Trade, agreed the
pandemic alert will deal a big blow to exports and imports, turning matters from
bad to worse. A series of restrictions will be imposed on the movement of both
people and goods, making it difficult for trade delegates to travel overseas
freely, he said. "The news is the last thing we want to hear," said Zhang
Qingzhu, marketing manager of China Comfortable Travel Services in Beijing. "The
government might adopt stricter policies on travel, but what is worse is that
people will have greater fear about travel. It will be a devastating blow for
tour operators," she said. Li Xinjian, a professor at the school of tourism
management of Beijing International Studies University, said that outbound
tourism will be the most severely hit, because H1N1 infections are far worse
overseas. The inbound market, however, will not suffer much more from the raised
alert level, because even at level 5, many foreign tourists had already dropped
plans to visit China because of strict quarantine measures, he said. Zhu Mei, a
spokeswoman for Air China, said the raised alert level could further hit
airlines' international flights. "At level 5, most group visits to North America
were already cancelled now, all airlines face a further drop." The long-awaited
pandemic decision by the WHO is scientific confirmation that a new flu virus has
emerged and is quickly circling the globe. It will trigger drugmakers to speed
up production of a vaccine and prompt governments to devote more money toward
efforts to contain the virus. "At this early stage, the pandemic can be
characterized globally as being moderate in severity," the WHO said in the
statement, urging nations not to close borders or restrict travel and trade. The
WHO also told countries it was in "close dialogue" with flu vaccine makers and
it believed the firms would work "to ensure the largest possible supply of
pandemic vaccine in the months to come". On Wednesday, the WHO said 74 countries
had reported nearly 27,737 cases of swine flu, including 141 deaths. The agency
has stressed that most cases have been mild and required no treatment, but the
fear is that a rash of new infections could overwhelm hospitals and health
authorities - especially in poorer countries. The last pandemic - the Hong Kong
flu of 1968 - killed about 1 million people. Ordinary flu kills about 250,000 to
500,000 people each year. Many health experts say WHO's pandemic declaration
could have come weeks earlier but the international agency has become bogged
down by politics.
Shenzhen mayor, Xu Zongheng, was
officially removed from office on Thursday pending investigations over graft.
The mayor of Shenzhen, Xu Zongheng, has been removed from his post by Beijing
after being investigated for serious disciplinary offences, Xinhua news agency
reported on Thursday. In recent months, a growing string of officials in
Guangdong province including Xu have been investigated in a spreading graft
investigation. Xu was detained nearly a week ago. “Because of serious
disciplinary violations, the Central Government has already decided to remove
him [Xu] from leadership duties,” Xinhua news agency reported. The pro-Beijing
Wen Wei Po newspaper reported earlier that Xu was involved in two alleged
“economic crimes” including links to the former head of Gome Electrical
appliances (SEHK: 0493), Huang Guangyu, now being investigated for alleged
financial irregularities. GOome is China’s top home appliance retailer. Xu’s
bank accounts along with those of various associates and companies have been
frozen as part of the probe, the paper added. Xu, a former car technician, has
been Shenzhen’s mayor since 2005 and is also a deputy secretary of the Communist
Party’s Shenzhen committee. Described as a “hardliner” by mainland media, Xu was
sent from his native central Hunan province to Shenzhen in 1993. He was also
accused of murky ties to Shenzhen property developers, with the city’s red-hot
property market particularly hard-hit during the financial crisis. “His blunt
refusal to put a ceiling on the local housing market caused nationwide
controversy over whether he was representing the interests of major real estate
developers instead of the public, who found housing prices unaffordable,” the
China Daily newspaper wrote. Some experts said Xu’s ousting also reflected a
power struggle between Guangdong’s Beijing-backed Party Secretary Wang Yang and
local officials, with Beijing keen to rein in the free-wheeling region that led
China’s free market reforms almost 30 years ago. “Guangdong officials will be
more well-behaved in future,” said independent Shenzhen-based political analyst
Zhu Jianguo. Last year, Shanghai’s Communist Party chief Chen Liangyu was jailed
for 18 years for corruption-related offences. 
Passengers are seen
silhouetted while two China Eastern Airliners prepare to take off at the Beijing
Capital International Airport. On Thursday, a senior official said that China
Eastern has set up a joint task force with Shanghai Airlines to proceed with a
merger. China Eastern Airlines (SEHK: 0670) has set up a joint task force with
smaller rival Shanghai Airlines to proceed with a merger, a senior executive
said, paving the way for further consolidation of the country’s
fiercely-competitive aviation market. “The two airlines have started discussing
and working on the restructuring,” Liu Jiangbo, vice-president of China
Eastern’s parent said on Thursday. China Eastern’s chairman Liu Shaoyong is the
head of the joint task force, she said. Analysts are positive about the merger
as it will give the combined carrier more than half of the market share in
Shanghai, an aviation hub much sought after by both domestic and foreign
carriers. “The move is long overdue as Shanghai is the only major city in China
that houses two carriers,” said Li Lei, an analyst with China Securities. The
two carriers both suspended trading of their shares earlier this week because of
major restructuring moves. Anticipation of the merger helped push up Shanghai
Air’s shares by 35.2 per cent this year to close at 5.92 yuan on Friday when it
last traded. China Eastern’s domestically traded A shares rose 29.1 per cent
this year to close at 5.33 yuan. After years of double-digit growth, mainland’s
airlines are facing strong headwinds as the global financial crisis strikes
home. Its top three carriers, Air China (SEHK: 0753), China Southern Airlines
and China Eastern lost more than US$4 billion last year. Shanghai Air, which has
been in the red for two straight years since 2007, will be delisted if it fails
to turn around this year, according to mainland’s securities rules. Sources
familiar with the situation said in October that the government was discussing
the possibility of brokering a merger of China Eastern and Shanghai Air to
create a dominant player with more than 50 per cent share of domestic flights in
the financial hub. Conflict of interest between different government bodies and
rejection from Shanghai Air had postponed the deal, but talks began to speed up
after the debt-ridden carriers got financial aid from the government, an
industry source said. China Eastern’s parent group has secured 9 billion yuan
(HK$10.22 billion) in funds from the central government and has agreed to inject
7 billion yuan to the carrier through a share placement deal. Shanghai Airlines,
controlled by the city government, said in February it received a cash injection
of 1 billion yuan. To help nurse its ailing airlines back to health, Beijing
also encouraged mainland carriers to cancel aircraft orders or postpone
deliveries due this year and stopped approving new airlines before next year.
“The government has done a lot already. A state-backed merger is perhaps the
last thing it can do especially for China Eastern, the weakest of the big
three,” said China Securities’ Li.
A visitor inspects an energy-efficient LED panel's construction at an exhibition
in Taipei. Reports on Thursday said mainland officials have invited Taiwanese
companies to supply ten selected mainland cities with ultra-bright,
energy-saving LED lights. Mainland officials have invited Taiwanese companies to
supply selected mainland cities with ultra-bright, energy-saving LED lights, the
latest in a series of big business deals between the rivals. At a two-day
conference that ended on Wednesday, mainland delegates asked leading Taiwanese
light-emitting diode makers to participate in a mainland project to light up 10
cities with cutting-edge LED street lights. Wu Qing, an official of Heilongjiang
Province, said Taiwanese makers can supply the lights in Harbin, capital of the
northeast province known for its long winter nights. Cooler than standard bulbs,
the LED lights could also be installed to light up sculptures in Harbin’s annual
ice festival, she said. Mr Wu was among some 80 mainland officials and business
people who attended the Taipei event, one of several conferences that have taken
place recently in both Taiwan and mainland to promote business co-operation.
Companies from Taiwan and mainland are moving ever closer as investment barriers
fall between the sides under Taiwanese President Ma Ying-jeou’s initiative to
build closer economic ties. Mr Ma wants Beijing and Taipei to set aside
consideration of the island’s political status and focus instead on developing
their economies. Beijing still considers the self-ruled island a part of its
territory six decades after it split from the mainland amid civil war. Li Jinmin,
director of mainland’s Institute of Semiconductors, said LED is one of the most
promising fields for cross-strait cooperation. “Taiwan has the manufacturing
power, while the mainland has talent and a huge market,” Mr Li said. “With the
co-operation, we can jointly tackle the current energy crisis and the financial
crisis.” Businesses from the two sides also signed a letter of intent to jointly
develop new LED materials and technologies and possibly set up a “world-class
joint venture” in the future. Chou Wan-shun, chairman of Taiwan’s I-Chiun
Precision Industry, said Taiwan currently makes high-end and mainland’s low-end
LEDs, and their co-operation could help them challenge world leader Philips
Electronics NV of the Netherlands. Taiwan’s LED industry generated US$1.6
billion in revenues last year, second only to Japan, according to the Taiwan
government. The industry produces illuminating appliances that consume less
energy and have longer life spans. In addition to outdoor and automobile
lighting, LEDs are used in mobile phones and digital cameras because of their
compact size and ultra-brightness.
Beijing has no choice but to keep buying
US Treasuries, Dai Xianglong, the chairman of National Social Security Fund (NSSF),
said in remarks reported on Thursday. “It’s a necessary choice for China to buy
US Treasuries when you weigh up the pros and cons,” the Financial News quoted
Dai, a former central bank governor, as telling a forum in Tianjin. However, Mr
Dai, whose fund manages about US$80 billion, said China should diversify its
vast foreign exchange reserves. China should boost direct investment overseas
and expand its Qualified Domestic Institutional Investor scheme to allow more
portfolio investment abroad, Dai said. A number of senior officials have voiced
concern recently about Beijing’s exposure to US debt, given what they see as
mounting medium-term risk of inflation in the United States. About 70 per cent
of mainland’s US$1.95 trillion in official foreign exchange reserves is held in
dollar assets. The NSSF is a fund of last resort for mainland’s patchwork of
underfunded provincial pensions schemes. It has about 6 per cent of its
portfolio invested overseas currently, according to analysts, and is aiming to
increase that share. Vice-Finance Minister Li Yong said at the same forum that
Beijing would like to see a more “diversified” international currency system
that is based on not only the dollar but also the euro, sterling and major Asian
currencies. Mr Li added that reform of the global financial system would be a
long process and “cannot be completed with a single step”, but that there are
smaller steps that can be taken now as a start. “Because any dramatic
adjustments to the international monetary system are not possible, we can, as
the first step, find a mechanism to restrict and guide fiscal and trade deficits
of the major reserve currency countries,” Mr Li said, in a thinly veiled
reference to the United States. The transcript of Mr Li’s speech was published
on China news portal netease.com. Mr Li’s argument echoed that of many other
officials, including central bank governor Zhou Xiaochuan, who has publicly
discussed replacing the dollar as the world’s reserve currency in the long run.
Wang Xiaoyi, deputy head of the State Administration of Foreign Exchange, said
at the same event that mainland is seeing growing capital inflows, as the
economy is showing signs of picking up. But Mr Wang also warned that financial
risks may still last for a relatively long period, and that the impact on some
parts of the world has been worse than expected. “We should take full stock of
the uncertainties ahead and make good preparations for even greater and
longer-term difficulties,” Mr Wang added. 
Workers disinfect the lobby of Block
43 at Heng Fa Chuen Estate, home of the city's first confirmed domestic swine
flu case - a lawyer with no recent history of overseas travel. An announcement
will be made today on whether all nurseries, kindergartens and primary schools
will be closed for two weeks pending the investigation of what could be the
city's first cluster of swine flu cases. The confirmed infection of a
16-year-old girl and suspected infection of her younger brother and 11
classmates was disclosed after health chiefs also announced the first local
transmission of the new (A)H1N1 virus in a 55-year-old man. The Centre for
Health Protection said last night that the girl, a Form Four student at St
Paul's Convent School in Causeway Bay, had contracted the virus and that her
brother and classmates had developed flu symptoms. Her mother was reported to be
suffering from a fever yesterday. The girl, her brother, mother and 11
classmates were admitted to hospitals last night and all placed in isolation.
The government said the girl had no recent travel history, but the source of
infection was being investigated. Earlier, the centre said the first local
transmission of the virus had been confirmed in a lawyer with no recent history
of overseas travel who is believed to have caught the virus at a company
cocktail party attended by a person infected overseas. He fell ill on Monday and
was sent to Pamela Youde Nethersole Eastern Hospital yesterday. The Centre for
Health Protection has classified the case as second-generation transmission
arising from an overseas imported case. The Education Bureau ordered the St
Paul's Convent School to close for 14 days from today. Last night, the school
said it would close its primary, kindergarten and nursery sections for this
period. Government workers went to the school last night and began cleaning and
disinfection work. Chief Executive Donald Tsang Yam-kuen cut short a visit to
Guangxi and returned to Hong Kong late last night to chair a steering committee
meeting this morning. This will decide whether all nurseries, kindergartens and
primary schools will be shut for 14 days to slow transmission of the disease.
Centre controller Thomas Tsang Hoi-fai said his team would be working around the
clock to interview the students and their families. "The information of whether
these students have any travel history or contacts with any swine flu patients
is of utmost importance to decide our next move," Dr Tsang said. The sick girl,
who lives in Whampoa Garden in Hung Hom, showed flu symptoms on Sunday and her
classmates started to fall sick on Sunday and Monday. The school told the centre
on Tuesday. The younger brother, a student at Alliance Primary School in Kowloon
Tong, suffered from flu between May 30 and June 4. Dr Tsang said it was
uncertain if the girl contracted the virus from her brother, and tests were
under way. University of Hong Kong microbiologist Ho Pak-leung said there should
not be undue alarm even if the pupils turned out to be the first local cluster.
"Hong Kong has done what it needs to do to prepare for a pandemic. During the
Sars outbreak, we did not know the disease and there was no effective drug. Now
we know the virus, and Tamiflu is effective. There is no need to panic." A
21-year-old woman and another woman, who flew in to Hong Kong from Britain and
the United States, were confirmed with swine flu yesterday, taking the number of
cases in the city to 49.
Hong Kong's first local case of the swine
flu virus works at an international law firm and it is believed he contracted
the virus at the firm's recruitment open day last Friday. Thomas Tsang Ho-fai,
controller of the Centre for Health Protection, said the 55-year-old man caught
the flu from another confirmed patient at a cocktail party. Timothy Hill, a Hong
Kong partner at the international law firm Lovells, which employs more than
3,000 people in 27 offices around the world, confirmed that a member of the firm
was yesterday diagnosed with the A(H1N1) virus. The virus is believed to have
been transmitted to the man from a student who was invited to the firm's
recruitment open day last Friday. The 20-year-old student is believed to be a
Hong Kong resident who had travelled from Britain, where he attends university.
Nine people who attended the party had been placed under a new treatment
arrangement since Saturday, when the student's infection was confirmed, Dr Tsang
said. The arrangement required patients, instead of being quarantined, to report
daily to government clinics for a check-up and to take a supervised dose of the
antiviral drug Tamiflu. However, the latest case was not one of those nine. In
the wake of the latest development, all 40 of the guests and staff members at
the gathering would be placed under the above treatment arrangement. So far,
none of them showed any symptoms, Dr Tsang said. Mr Hill stressed that Lovells,
which occupies three floors of One Pacific Place in Admiralty, was still open
and operating as usual. "We are following the advice of the Department of Health
and we will continue communicating with them," he said. Dr Tsang said the
55-year-old, who lives in Heng Fa Chuen, "had no travel history during the
incubation period". He added that the 20-year-old student had been confirmed as
a swine flu case on Saturday. The two are believed to have been in the same room
for about 15 to 20 minutes, but it is not known whether they had direct
face-to-face contact.
The Kwong Yuen Building at 4, Kam
Lam Street in Mong Kok, is one of the buildings put forward for the repair
subsidies. The government's initiative to repair dilapidated residential
buildings has received an overwhelming response from building owners. About
1,100 buildings with owners' corporations have applied to take part in Operation
Building Bright, more than double the places available, Secretary for
Development Carrie Lam Cheng Yuet-ngor said yesterday. Under the scheme -
launched in March - the government will spend HK$1 billion to renovate 1,000
residential buildings that are more than 30 years old - 500 structures with
owners' corporations and 500 of those without. At the close of applications
yesterday, the Development Bureau had received about 1,100 applications from
buildings with owners' corporations, with applications from Yau Tsim Mong
district topping the list at 27 per cent of the total, followed by those from
Sham Shui Po district at 12 per cent. "Obviously our supply cannot meet the
demand," Mrs Lam said. She urged lawmakers to approve an additional HK$1 billion
for the programme, a sum the government is seeking as part of handouts announced
last month, and which is tabled for Legislative Council discussion next month.
The extra billion dollars is expected to benefit a further 1,000 buildings and
create 10,000 more jobs. Mrs Lam said the sum should be enough to meet demand.
Work will start in the autumn at the soonest. The district councils have
nominated 500 buildings without owners' corporations for the scheme. Some of the
500 are among 226 blocks that will receive the subsidy, because they have
already been earmarked for repairs by the Buildings Department. Yau Tsim Mong
district councillor Hui Tak-leung urged the government to set up a central
system to appoint contractors for the repair work to prevent corruption. Funds
made available through the scheme will be used to repair common areas related to
structural safety and sanitation, including concrete, external walls, windows,
vent pipes and underground drainage. The owner of each unit of a building taking
part in the scheme can receive - without going through asset or income means
testing - a grant amounting to 80 per cent of the repair cost, subject to a
ceiling of HK$16,000. Buildings in urban areas with an average rateable value
exceeding HK$100,000 a year, and those in other areas with the value exceeding
HK$76,000, are not eligible for the program.
The first mainland tour group traveling
to Taiwan via Hong Kong on the city's home-ported cruise liner will sail on
August 2. Star Cruises has tailor-made a six-day, five-night itinerary in
response to the new initiative announced by the central government in April to
allow mainland tour groups to travel to Taiwan by taking Hong Kong-registered
vessels. Several mainland travel agents have already signed agreements with Star
Cruises to organize tour groups for the voyage. Executive vice-president William
Ng Ko-yin said Star Cruises has for years been studying and exploring the
feasibility of sailing to the three places across two shores. The advanced
planning led to the speedy launch of the special tour. Before cruising to Taiwan
aboard the 51,039-tonne SuperStar Aquarius, guests can stop over in Hong Kong
for sightseeing, dining and shopping. The six-day trip will also have stop in
Tainan and Taichung before guests disembark at Keelung. The itinerary includes
tours to the Anping ancient city, Cigua Salt Mountains, Sun Moon Lake, Taipei
and National Palace Museum and the landmark Taipei 101 tower. Mainland tourists
can opt to continue their journey on land upon arriving at Keelung. Taiwanese
guests can also embark from Keelung and sail directly to Hong Kong. Commissioner
for Tourism Margaret Fong Shun-man welcomed the new itinerary, saying it will
enrich the travel experience of mainland visitors on the multi-destination trip.
"This new measure will also add impetus to Hong Kong's development as a leading
regional cruise hub," she said. The Tourism Commission, through the Advisory
Committee on Cruise Industry and other channels, is working with the Hong Kong
Tourism Board and the industry to jointly formulate strategies to strengthen
Hong Kong's position as a cruise hub in the Asia-Pacific region.
More than 1,500 old buildings have been
earmarked for a facelift which will create 20,000 jobs, Secretary for
Development Carrie Lam Cheng Yuet-ngor said yesterday. Speaking to reporters
after seeking an additional HK$1 billion from the Legislative Council for
Operation Building Bright, Lam said the original intention had been to help
renovate 1,000 old buildings, 500 of which belonged to owner corporations.
However, more than 1,100 owner corporations applied for financial assistance
under the scheme. "We are faced with an economic crisis and unemployment,
especially in the construction sector, is very high. So we want to create more
jobs for the construction sector," Lam said. The funding for the scheme will be
expanded from HK$1 billion to HK$2 billion if given Legco approval, and the
number of jobs created will increase from 10,000 to 20,000. About a quarter of
applications were from the Yau Tsim Mong area. "I expect we will be able to meet
each and every one of the 1,000-plus applications, provided that they meet the
eligibility criteria," Lam said. The Buildings Department has approved 226 old
buildings not covered by owner corporations and the 18 district councils have
nominated 501 others. On June 19, there will be a lottery to decide which will
be the first 500 buildings to be renovated. Work on the remaining buildings
should begin in the autumn, after Legco approves extra funding, Lam said.
Keiji Fukuda, right, acting
WHO ssistant director, with Margaret Chan, left, WHO director general, attend an
intergovernmental meeting on H1N1 flu preparedness in Geneva last month. WHO
'very close' to declaring H1N1 flu pandemic - The World Health Organisation
(WHO) is on the verge of declaring the first influenza pandemic in more than 40
years, but wants to ensure countries are well prepared to prevent a panic, its
top flu expert said on Tuesday. Keiji Fukuda, acting WHO assistant
director-general, voiced concern at the sustained spread of the new H1N1 strain
– including more than 1,000 cases in Australia – following major outbreaks in
North America, where it emerged in April. Confirmed community spread in a second
region beyond North America would trigger moving to phase 6 – signifying a
full-blown pandemic – from the current phase 5 on the WHO’s 6-level pandemic
alert scale. “The situation has really evolved a lot over the past several days.
We are getting really very close to knowing that we are in a pandemic situation,
or I think, declaring that we are in a pandemic situation,” Fukuda told a
teleconference. Mr Fukuda said a move to phase 6 would reflect the geographic
spread of the new disease. “It does not mean that the severity of the situation
has increased or that people are getting seriously sick at higher numbers or
higher rates than they are right now,” he said. A decision to declare a pandemic
involved more than simply making an announcement, he said. The United Nations
agency had to ensure that countries were able to deal with the new situation and
also handle any public reaction. “One of the critical issues is that we do not
want people to ‘over-panic’ if they hear that we are in a pandemic situation.
That they understand, for example, that the current assessment of the situation
is that this is a moderate level,” Mr Fukuda said. The WHO and its 193 member
states are working hard to prepare for a pandemic, for instance developing
vaccines and building up supplies of anti-viral drugs, he said. The disease,
which has infected over 26,500 people in 73 countries, with 140 deaths, has been
most severe in Mexico, which has reported the highest number of fatalities, more
than 100. These include infections in otherwise healthy young people. A very
real danger after declaring a pandemic was that hospitals could be overwhelmed
by people seeking help when they did not really need it, while other patients
requiring emergency treatment risked being neglected, according to Mr Fukuda.
“In earlier pandemics, in earlier outbreaks, we have often seen that people who
are in the category of being worried but who are not particularly sick, have
overrun hospitals,” he said. Since the new flu strain first appeared, many
people have stopped eating pork, pigs have been culled in some countries, trade
bans on meat imposed, travellers quarantined, and some countries have discussed
closing borders. “These are the kinds of potential adverse effects that you can
have if you go out without making sure people understand the situation as well
as possible,” Mr Fukuda said. Combining human, avian and swine viruses, the new
strain has been dubbed ‘swine flu’, although scientists say this is misleading
and stress there is no risk from eating pig meat. The world is better prepared
but also more vulnerable to the adverse effects of a flu pandemic since the last
one occurred in 1968, due to the speed and volume of international travel. An
H3N2 virus caused an estimated 1-4 million deaths at the time, and became known
as Hong Kong flu. But Mr Fukuda said the WHO would not name the new disease
after a country or animal to avoid misleading stigmas. He voiced concern that
Canadian Inuits had suffered disproportionately in the current outbreak, often
needing hospitalisation. It was not clear if this was due to higher levels of
underlying chronic disease, genetics or poverty. “Inuit populations were very
severely hit in some of the earlier pandemics. This is why these reports raise
such concerns to us,” he said.
A
customer carries a Karstadt shopping bag inside a branch of the department store
chain in Dresden, eastern Germany. Exporter Li & Fung on Wednesday said the
insolvency of Arcandor, the parent company of Karstadt, would impact the
company’s three-year plan to boost sales. Consumer goods exporter Li & Fung on
Wednesday said the insolvency of one of Germany’s biggest retailers, Arcandor,
would impact the company’s three-year plan to boost sales to US$20 billion.
Shares in Li & Fung dropped 5.2 per cent to HK$21.90 by noon on reports of
Arcandor’s insolvency following the German government's rejection of its plea
for emergency state aid. Arcandor accounted for 5-6 per cent of the company’s
last year sales revenue, but its contribution this year had been on the decline,
Li & Fung group managing director William Fung said. Li & Fung, which is a
buying agent for Arcandor, including its Karstadt, Primondo and Quelle
businesses, earlier on Wednesday said the German company owed it around US$5.4
million in outstanding agency commissions. The company may also have to make
provisions for the goodwill related to its 2006 acquisition of the sourcing
business of Karstadt’s, Arcandor’s department store chain, Mr Fung said. Mr
Fung, who said he was in New York working on a potential deal with an American
company, said the company would “work hard” to fulfil its three-year plan
through acquisitions and outsourcing deals in the US and Europe.
An artist's
impression of how the outlet shopping centre would fit in near Chek Lap Kok
airport. Plans to establish Hong Kong as a centre for premium outlet shopping
could be realised soon as the government seeks ways to promote trade, tourism
and economic growth in the economic downturn. The Outlet! Company is looking to
set up shop near the airport, on a site between Terminal Two and the AsiaWorld-Expo
venue. The site is currently occupied by car parks and a temporary golf course.
Premium outlet malls sell merchandise, often surplus stock, of many brands at
discounted prices. The concept allows retailers to move excess inventory. The
Outlet! Company president Daniel Kelly said he thought the government was
seriously considering a recommendation from its Task Force on Economic
Challenges to develop a new premium outlet centre. "I think they're at a point
now where they're looking to make a final decision," he said. "So I don't think
it's far off." "The government, from the very early days, has been very
supportive. They understand that it is a combination of commerce as well as
tourism. They have offered land before but just not the right piece of land."
Although Mr Kelly has been talking to various government departments about the
privately funded project for about nine months, he said there was no concrete
deal on the table yet. Outlet malls are not new to Hong Kong but have met with
varying degrees of success. A number of major retailers have their own outlets,
like Joyce Boutique and Lane Crawford. Swire Properties managed to rejuvenate
Citygate shopping centre in Tung Chung by turning it into an outlet mall with
year-round discounts of between 30 per cent and 70 per cent on more than 60
brands. The proposed site is already earmarked for commercial use, and a premium
outlet mall would not interfere with AsiaWorld-Expo's expansion plans - but the
final decision on the land use rests with the Airport Authority. An authority
spokesman said it was working on its 2030 master plan and had not yet decided on
the long-term use of its land. Under the proposal, a premium outlet shopping
mall would be developed in phases. The first phase is expected to cover between
40,000 square metres and 50,000 square metres and feature 150 to 200 shops. The
entire site of more than 150,000 square metres would include 300 street-level
shops with some two-storey buildings. Investors interested in the project
include Global Sources, which stages trade shows at AsiaWorld-Expo.
Mengniu milk product on display at a Hong
Kong supermarket. On Wednesday, Mengniu said its sales are stabilising and the
negative impact of the melamine scandal has faded. Mengniu Dairy (SEHK: 2319),
one of the firms found to have sold tainted milk products last year, said on
Wednesday its sales were 20 per cent lower than normal in the first five months
of this year. But people were returning to more typical buying patterns for
dairy products and the impact of the scandal was “basically over”, the chief
executive officer of the top milk producer in the mainland told reporters on the
sidelines of the company’s annual meeting in Hong Kong. “The [negative] impact
is basically over,” Yang Wenjun said. “Our products are 100 per cent safe to
consume. All our products are 100 per cent up to standard.” Mengniu was among
several firms in mainland found to have sold milk contaminated with melamine
last year. At least six babies died from drinking infant formula contaminated
with the toxic industrial compound that can falsely raise the results on protein
level tests. Mr Yang also said prices of Mengniu’s dairy products were stable so
far and he expected them to remain so for the rest of the year. Chairman Jiao
Shuge said demand for daily necessities, such as dairy products, has been less
affected than spending on more discretionary items during mainland’s economic
slowdown. In February, the milk producer said authorities had concluded that an
additive osteoblast milk protein (OMP) in its milk products was safe to consume.
The OMP incident triggered a drop in sales of Mengniu products, forcing it to
lose some market share to rivals Yili and Bright Dairy, analysts said. Mengniu
posted a 948.6 million yuan (HK$1.08 billion) loss last year compared with a
935.8 million yuan profit the previous year.
An example of the green trend in
construction is One Island East, developed by Swire Properties. Developers need
incentives to introduce green elements. In a service-based economy such as Hong
Kong, the construction and ongoing occupation and use of buildings account for
as much as 70 per cent of total greenhouse gas emissions. Since the real estate
market - both property and construction - accounts for about a third of the
city's gross domestic product, its disproportionate influence on the economy and
environment therefore cannot be underestimated. Green buildings provide a better
quality of living for users and the community while minimising environmental
impact at the local, regional, and global levels throughout their full life
cycle. The greening of property therefore has a triple bottom-line effect. There
are barriers to green property development, however. One of the most notable
being the initial green premium cost of providing a range of genuinely green
features. To address cost and other barriers and jump-start green property
development as a norm rather than an exception in Hong Kong, several conditions
need to be in place.
A charity has served
up a treat for TV celebrity chef Martin Yan by finally handing over the more
than HK$400,000 he raised to Sichuan earthquake victims. ong Kong Red Cross
confirmed on Friday it has received HK$262,552 from charity Cooking For Life,
the day after The Standard revealed how proceeds from Yan's HK$25,000-a-table
function had been withheld. The event raised HK$402,552 but, up until the latest
payment, only HK$140,000 had been received by the Red Cross - in June last year.
A confirmation letter from the Hong Kong Red Cross was posted on the charity's
website. Speaking to The Standard last week, Cooking For Life chairman Philippe
Bru claimed the HK$262,552 was held up because the Inland Revenue Department
would not allow it to transfer the money outside Hong Kong. Bru said the charity
had intended to share the remaining funds between the Red Cross in Beijing and
Mianyang. The department refuses to comment on individual cases, but Tik Chi-yuen,
who chairs another charity, Committee on Youth Smoking Prevention, said he has
not heard of such a legal constraint. Tik said many charities have been donating
money overseas without problems. Bru said he changed his mind after speaking to
the person in charge of the Hong Kong Red Cross, and with his legal team. He
said both he and Yan agreed the work done by the Hong Kong Red Cross in Sichuan
is satisfactory. However, Bru refused to disclose over the phone how much the
organization has raised by way of donations since it was granted charity status
in February 2008, and how the money was spent. A spokeswoman for the
InterContinental Grand Stanford Hotel, which had been urging the charity to
donate the entire sum raised by Yan to the Hong Kong Red Cross, said it was
unfortunate it took one year to complete the process. The Tsim Sha Tsui hotel
was the venue for Yan's charity function on May 31 last year. "The
InterContinental Grand Stanford is delighted that the funds it helped raise last
year for victims of the Sichuan calamity have been turned over to the Hong Kong
Red Cross," she said.
Some of the 1,000 terracotta
warriors already excavated from the tomb of Emperor Qin Shi Huang. plans to
excavate more of the terracotta warriors at the ancient tomb of the Emperor Qin
Shi Huang outside Xian. Archaeologists hope to uncover more of the elaborately
carved, life-sized officers to add to the 1,000-plus statues already excavated.
Special care will be taken to preserve the figures' painted details, which have
faded almost entirely in those already exposed to the air. The new dig is the
third undertaken since the tomb was first uncovered in 1974, and will focus on
the 2,000-square-metre patch within the tomb's main pit, which holds the bulk of
the warriors. The emperor's tomb and its accompanying museum are among the
mainland's biggest tourist draws, attracting hundreds of thousands of visitors
each year. The fierce figurines with their enigmatic expressions were exhibited
where they were found and protected inside a massive shed. Reproductions in
sizes ranging from midget to full size are sold in gift shops around the
country, and an exhibition of 20 figures and dozens of artefacts from the tomb
broke ticket-sales records when it travelled last year to London, California,
Houston and Washington. Tomb museum director Cao Wei said maintaining the
figures and ensuring their paint did not oxidise would be far more challenging
than the relatively simple task of excavating them. "The only difficulty lies in
how to preserve them afterwards," Mr Cao said, adding that would be the
responsibility of the Shaanxi provincial antiquities bureau overseeing the
excavation. In all, the tomb's three pits are thought to hold 8,000 life-sized
figures of archers, infantry soldiers, officers and acrobats, along with 130
chariots with 520 horses and 150 cavalry horses. It is believed they were
created to protect the immortality-obsessed emperor in the afterlife. At between
1.83 metres and 1.95 metres tall, the statues weigh about 180kg each and are
intricately detailed. No two figures are alike, and craftsmen are believed to
have modelled them after a real army. The tomb was looted less than five years
after Emperor Qin Shi Huang died in 210BC by a rebel army, which set a fire that
destroyed the wooden structures housing the warriors, damaging most of them.
Since their discovery, the figures have been subjected to mould due to humidity
and decay from coal dust produced by local industry. A fourth pit at the tomb
was apparently left empty by its builders, while the emperor's actual burial
chamber at the centre of the complex has yet to be excavated. The emperor, a
figure of fear and awe who died at the age of 50, created China's first unitary
state by conquering rival kingdoms.
Company vice-president Luo Maofeng (left) and chairman Johnson Ko taking
questions at the firm's results announcement yesterday. China WindPower Group,
whose shares soared threefold in the past six weeks, plans to plough 500 million
yuan (HK$567.15 million) into 10 projects that require a combined 5 billion yuan
of investment. Completion of the projects, in which it has stakes of 25 to 60
per cent, would see its attributable capacity rise almost fourfold to 268
megawatts by March next year from 71 MW at present, said chairman Johnson Ko
Chun-shun. Investors bought renewable energy project developers' shares
aggressively in the past two months, pushing their valuations way ahead of the
wider stock market, on speculation Beijing will roll out more favourable
policies to encourage clean energy use. China WindPower closed at 95 HK cents,
up from about 31 HK cents in late April. The latest price represented 46.8 times
the past financial year's earnings, compared with 17 times for the Hang Seng
Index. The mainland's installed wind power capacity roughly doubled in each of
the past four years after Beijing ordered power distributors to buy all of the
nation's wind power output and offered developers tax incentives. In spite of
the explosive growth, some industry insiders said that shoddy equipment, a lack
of power grid investment, poor project site selection and overly aggressive
development rights bidding meant some projects never got built while others were
unprofitable. Four of China WindPower's projects are in operation, while five
others will come on stream this month. Chief executive Liu Shunxing said they
all had linkages to power grids. The company yesterday unveiled a 16.7 per cent
rise in net profit to HK$116.76 million in the year to March, primarily driven
by a HK$28 million gain from sale of project stakes to Hong Kong utility CLP
Holdings (SEHK: 0002). Profit from its wind power operation amounted to HK$15.24
million, up from HK$770,000 a year earlier. Its equipment making, plant
engineering, construction and maintenance businesses turned in a profit of HK$63
million, compared with HK$66.3 million a year earlier.
TPV Technology (SEHK: 0903), the world's
largest computer monitor maker, is seeing overall orders improve amid rising
demand for flat-panel television sets, chairman Jason Hsuan said. The company's
first-quarter net profit tumbled 67.2 per cent year on year to US$14.88 million,
but beat brokerage CIMB's estimate of US$12.7 million. Revenue fell 42 per cent
to US$1.379 billion. CIMB expected TPV's earnings to resume growth from the
fourth quarter on stabilising flat-panel prices, cost-cutting and rising demand.
Shares in TPV rose 7.59 per cent to close at HK$3.26 yesterday. Mr Hsuan said
the business suffered as firms cut spending on information technology in the
quarter. "The penetration rate of computers is still quite low and people need a
bigger screen for leisure or entertainment in the longer term," he said.
Research firm Display Search said global demand for LCD monitors would decline
4.2 per cent year on year to 160 million units this year and could remain flat
next year. TPV's first-quarter overall shipments fell 7.3 per cent to 11.4
million units, while LCD monitor sales slid to 9.8 million units from 11.4
million units, but LCD television sales almost doubled to 1.5 million units. TPV
said firm demand for LCD television sets in North America and Europe could
generate 30 per cent of group revenue by year-end, up from 25.5 per cent in the
first quarter. The average selling price of each LCD monitor fell to US$102.20
in the quarter from US$118.60 in the previous period, but gross margin rose to
4.5 per cent from 3.4 per cent. The average selling price of LCD television sets
fell to US$239.20 from US$277 per unit, but gross margin improved to 5.1 per
cent from 3.7 per cent in the previous quarter. TPV's vice-president of
corporate finance Shane Tyau expected the average selling prices to be steady
and gross margin to improve this year.
"We are working on laws and penalties to
cut down garbage production in the capital and have sped up construction of new
sanitary landfill sites," said Guo Weidong, the publicity division head of the
commission. Beijing currently generates 18,000 tons of trash every day and the
designed capacity of all garbage disposal plants is 11,000 tons, Guo said,
adding all the plants were already overloaded. The volume of the city's trash is
growing by 8 percent annually and the total amount of garbage produced will
reach nearly 12 million tons by 2015, figures show. So far, two of the 13 plants
have already met their maximum capacity and will soon stop operations. Nie
Yongfeng, a professor from Tsinghua University's College of Environmental
Sciences and Engineering said developed countries deal with the problem by
"waste incineration", which is the only solution to the problem, but seldom used
in Beijing for fear of the pollution it generates. "If waste incineration is not
applied immediately, garbage disposal will become a huge problem in the near
future," Nie said. On March 11, the national environment agency called off the
construction of a controversial waste-fuel power plant in the capital because
nearby residents were worried it would pollute water aquifers. Other large
cities such as Shanghai and Chongqing are also facing similar challenges with
regard to waste disposal. On April 11, hundreds of Shanghai residents marched to
protest the expansion of the Jiangqiao garbage incineration plant. The city's
Changshengqiao sanitary landfill plant is expected to be full in 15 years, about
two years ahead of schedule, officials said. The amount of garbage Shanghai
generated in 2007 was five times the size of the Jinmao Tower, the third tallest
building in the world and the tallest in China, the Northern Weekly reported in
April. On Nov 12, garbage disposal facilities in Jiaxing, Zhejing province, were
given a thorough overhaul in response to complaints from the public. The
country's annual urban waste per capita is currently 220 kg, with 8 billion tons
of trash already piled on disposal sites or in landfills in 600 cities, the
Southern Weekend reported. As part of efforts to battle the emerging crisis,
public and private sectors are pushing for more ways to reduce waste output. Xie
Zhenhua, deputy director of the National Development and Reform Commission, said
the ban on free distribution of plastic bags imposed last June has reduced
polythene waste by at least 65 percent. Wang Xiaojun, director of the
environmental group Greenpeace China, said: "We must reduce, reuse and recycle
if we're serious about minimizing pollution."
Starwood Capital Group, headed by
hotel king Barry Sternlicht, founder of the Starwood Hotels empire and the W
Hotels, plans to expand its reach to the mainland and Hong Kong after raising a
war chest of US$2 billion. In a five-year plan, Starwood Capital plans more than
20 new properties under the "Baccarat" and "1" Hotel and Residences brands
either through management agreements, equity investments or by forming joint
ventures with domestic developers. Next week, the group's first managed Baccarat
Residences developed on the mainland at 8 Ji Nan Road, Xintiandi in Shanghai,
will be put up for sale. The 308-unit twin tower project formerly known as
Residence 8 was relaunched as Baccarat Residences. The upmarket development
offers fully furnished units, a signature Baccarat chandelier in the lobby, a