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(approximate $ exchange rates: US$1 = HK$7.8, US$1 = RMB$6.8) Aug 31, 2009
Five historic buildings – including the Old Tai Po Police Station – will be restored under a government scheme which aims to preserve Hong Kong’s heritage architecture. The Development Bureau said on Friday it was inviting proposals from non-profit-making organizations (NPOs) to help with restoration work under the Revitalizing Historic Buildings Through Partnership Scheme. The five buildings will be part of the second batch to be restored under the scheme. Along with the police station in Tai Po, the Blue House Cluster in Wan Chai, the former Fanling Magistracy building, the Old House at Wong Uk Village in Sha Tin, and the Stone Houses in Kowloon City. The government said successful NGOs applying under the scheme would receive a one-off grant, worth a maximum of HK$5 million. This is to cover the renovation and start-up costs for up to the first two years. Nominal rents would also be charged for the buildings. Commissioner for Heritage Jack Chan said the government hoped to use the buildings in a more innovative way. “By transforming them into unique cultural landmarks, we hope to promote active public participation in the conservation of historic buildings and, in particular, create jobs at a district level,” Mr Chan said. The Development Bureau will arrange open days with tours in September for applicants to visit the buildings. The deadline for applications is December 28. The revitalization program was first mentioned by Chief Executive Donald Tsang Yam-kuen in his October 2008 policy address. For more information, see: www.heritage.gov.hk
Fortis Insurance Co (Asia) is
demanding that former regional director Inneo Lam Hau-wah, who was at the center
of the recent PCCW (0008) privatization controversy, immediately pay back
HK$34.92 million he borrowed from the company to make payments on a luxury Bel-Air
apartment.
China's legislature yesterday adopted the first law on the country's armed police force, which reaffirms the central government's control over it and clarifies its duties. First established in 1982, the People's Armed Police is a special half-police, half-military force entrusted with the umbrella mission of "protecting internal security". However, its chain of command and administrative status have not always been clear. The high-profile use of the PAP in major events, from the Sichuan earthquake to riots in Tibet last year and Xinjiang this year brought its duties and rights under public scrutiny. "The passing of the PAP Law will not only provide a clearer legal basis and legal protection for the PAP when they carry out their safety missions, but will also provide legal guidance for the PAP to rein in their behaviour when carrying out their missions," National People's Congress Standing Committee law-drafting-office director Wang Shangxin said yesterday. Commander of PAP Wu Shuangzhan was quoted by Xinhua as saying yesterday that the PAP had been deployed more frequently in recent years on missions to restore social stability. As it had to handle more and more difficult situations, the law was urgently needed. The new legislation of the PAP, originally administered under the country's Defence Law, will divide its roles into eight main categories, from the protection of key personnel and strategic facilities to the handling of riots, violent crimes, terrorist attacks and other threats to society. The new law spells out limits on an armed police officer's power, including that they must not illegally detain or search a citizen, and must carry identification when on duty. But, ultimately, it reaffirms the joint and paramount jurisdiction of the State Council and the Communist Party's Central Military Commission over the PAP. A telling difference between the final draft of the law, which was passed yesterday, and the first draft in April, is a clause stating that all deployment of the PAP must follow a protocol set by these two top decision-making bodies. Although the protocol is not new, it now underlines the central government's determination to keep deployment of the PAP closely in its hands, mainland analysts have said. The passing of legislation in China normally requires three readings at the National People's Congress, but the PAP Law was passed yesterday after the second reading. Mr Wang said this was because discussions had been carried out for years on the law, which is built on existing regulations, with no real changes. Descended from internal guards and border patrols in earlier years of the People's Republic, the 680,000-strong PAP is considered a unit of the military, but subject to "unified leadership and management, with command divided by levels". The State Council is mainly in charge of daily deployments and the budget of the PAP, while the military is in charge of personnel affairs, political education and training. China said on Friday it has revised its tariffs on imported auto parts after losing an appeal against a WTO ruling that it was breaking international trade rules. Effective from Tuesday, all imported auto parts will be taxed at the same rate regardless of the percentage of foreign-made parts used to make a vehicle, according to a notice posted on the website of the National Development and Reform Commission. The notice gave no details or reason for the change. However, Beijing was required to amend its regulations after the World Trade Organisation ruled against its policy of requiring foreign automakers to buy more than 40 per cent of the components used in any locally made vehicle from local suppliers or pay more than double the usual tariff on imported parts. The WTO ruling last year that such policies violate international trade rules was a rare coup for mainland’s trading partners. Beijing lost an appeal against the ruling in December. Mainland argued that the higher tariffs were needed to prevent automakers from evading steep vehicle import duties by importing cars in large chunks. The US, the 27-nation EU and Canada contended that the tariffs encouraged car parts companies to shift production to mainland, costing Americans, Canadians and Europeans their jobs. Failure to change the policy could have resulted in the imposition of sanctions.
Riled residents on Shanghai track
attack - The construction of a high-speed rail link between Shanghai and the
nearby city of Hangzhou is raising protests among residents who say the trains
will run too close to their apartments - the latest hiccup in the long-debated
project.
Aug 28 - 30, 2009
A Japanese-American gambler who lost more than US$110 million in Las Vegas casinos is waging a Nevada court battle, the outcome of which could affect Hong Kong legal judgments against such high-rollers. Terrance "Terry" Watanabe, who lost the money in casinos owned by Harrah's Entertainment, is asking a Las Vegas court to throw out charges that he defaulted on gambling debts. He alleges the casinos plied him with alcohol and prescription drugs to keep him intoxicated while playing. He also claims that under the casinos' system for granting credit to high-rollers, his "markers" were, in essence, loans and that he should be given greater leeway in paying them. The Clark county district court has scheduled a hearing today to consider motions filed by the Nebraska philanthropist, who once ran a direct marketing business importing toys and novelty items from the mainland and Hong Kong. He is asking the court to dismiss a grand jury indictment against him for writing 38 bad cheques to pay gambling debts of US$14.7 million. If successful, Mr Watanabe's move could prompt a rethink of the way that Las Vegas casinos have, for decades, enforced gambling debts via the courts. It is a system that has been recognized repeatedly over the years in Hong Kong legal judgments against local, Macau and mainland high-rollers. By all accounts, Mr Watanabe, 52, was a "whale", or a gambler of epic proportions. His lawyers estimate his play at Harrah's Caesars Palace and Rio casinos in Las Vegas accounted for around 20 per cent of revenue at both properties in 2006 and 2007. Harrah's - the world's largest gaming company by revenue - created a unique "chairman" level in its customer loyalty programme, issuing Mr Watanabe a membership card signed by Harrah's chairman and chief executive Gary Loveman. Mr Watanabe's gaming history statement for 2007, issued by Harrah's and filed with the court, shows he lost US$112.01 million gambling at seven of the company's casinos that year. About half of that amount was from playing slot machines. "Terry Watanabe was among the most noteworthy gamblers in the history of Las Vegas," court documents filed by his lawyers said. Spokesmen for Harrah's did not reply to an e-mail and a phone call seeking comment. In the 1980s and 1990s, while running his family's Oriental Trading Company, which he sold to a private equity group in 2000, Mr Watanabe made about 20 trips a year to Hong Kong and the mainland. He would occasionally bet on horse races at the Hong Kong Jockey Club or visit casinos in Macau, but nothing on the scale of his recent Las Vegas activity, a source close to him said. Mr Watanabe was indicted by a Clark county grand jury in April on felony charges of theft. The judge in the case is scheduled to hold a hearing today on motions filed by Mr Watanabe's lawyers seeking to throw out the charges. Mr Watanabe's lawyers claim Harrah's Caesars Palace and Rio casinos plied him with alcohol and prescription painkillers over the course of several months in late 2007. While visiting the casinos during this period Mr Watanabe was "significantly and visibly intoxicated", to the point that his speech was slurred, according to filings by his legal team. He walked into doors and took naps at the tables while gambling, the filings said. Gaming watchdogs can take disciplinary action against casinos who allow visibly intoxicated people to gamble or supply them alcohol. But perhaps the bigger legal challenge being mounted by Mr Watanabe's lawyers is to the Nevada casino industry's system of issuing credit and collecting debt. High-rollers visiting Las Vegas usually sign credit agreements with casinos specifying a maximum amount of credit that can be issued. Each time a player draws down funds against the credit line he signs a specific "marker" for the amount, which is paid in chips. If the player loses and doesn't pay, casinos can then deposit the markers with the bad cheque unit of the local district attorney's office, which, under Nevada law, is empowered to take legal action to reclaim the debt on behalf of the casinos. Since at least the early 1990s, Nevada casinos have used Hong Kong courts to enforce gambling debts incurred in Las Vegas by punters from the city, Macau and the mainland. While casinos are illegal in Hong Kong, there are multiple precedents for local courts accepting the Nevada laws governing casino credit agreements. They allow Las Vegas creditors to enforce a debt against a punter's Hong Kong assets. High-profile cases have included that of Macau legislator, junket operator and developer David Chow Kam-fai. In 2000, he was sued in Hong Kong for nearly US$5 million in gambling debts related to a 1995 credit agreement he signed at the Sheraton Desert Inn in Las Vegas, which was subsequently acquired by casino developer Steve Wynn. Mr Chow and Mr Wynn settled out of court in 2004. This month, a High Court judge ruled that high-roller Henry Mong Hengli must pay US$3 million in casino debts to Mr Wynn's Wynn Las Vegas, which he ran up last year. Mr Watanabe's lawyers are seeking to dismiss the charges partly on the grounds that the credit markers he signed should not have been treated by Nevada authorities as "bad cheques" that were repayable on demand. His lawyers contends that he had a standing agreement with Harrah's that allowed him at least 60 days to repay markers - terms which made them more akin to loans. Should the judge agree with that argument, it could have a far-reaching impact on how courts in Nevada, and, in turn, Hong Kong handle casino debt cases. While Mr Watanabe may be one of the biggest whales in the pond, other high-rollers will no doubt be watching.
The former mayor of the thriving southern Chinese city of Shenzhen, who is under investigation for graft, was on Thursday stripped of his seat in the national parliament, state media said. The standing committee of the National People’s Congress stripped Xu Zongheng of his position due to “serious disciplinary violations”, Xinhua news agency reported. Xu, 53, was removed as Shenzhen’s mayor in June and placed under internal Communist Party investigation, a move that usually leads to the filing of criminal charges. According to Hong Kong news reports, Xu is being investigated for his links to leading Chinese tycoon Huang Guangyu, who was arrested earlier this year on suspicion of economic crimes, including manipulation of the stock market.
Telecom Corp (SEHK: 0728) and Reliance Communications begin operating a new kind of Silk Road - the first direct terrestrial cable link between the two countries. The fiber-optic cable system, which was constructed separately on each end by the two carriers in a span of 15 months, was opened yesterday to bring high-capacity, enterprise-class connection to both countries' major cities and rural areas. Han Yihu, managing director at China Telecom, described the terrestrial link as "a landmark" that would "improve opportunities for international business development" in India and the mainland. Neighboring countries like Nepal, Bhutan, Sri Lanka, Pakistan and Bangladesh are also expected to benefit in the long term, due to the increased communications network bandwidth and global connection options. "India and China represent the largest growing economies in the world, and the current global economic environment requires ever increasing high-bandwidth, converged applications to be run between these markets," Reliance Communications president Punit Garg said. Bilateral trade last year between India and China was up 34 per cent year on year to US$51.8 billion. In the first half this year, bilateral trade was down 32 per cent year on year to US$19.61 billion due to the economic slowdown. Owen Best, president at Reliance Globalcom, the international business unit of New Mumbai-based carrier Reliance Communications, said the new cable system has an initial capacity of 20-gigabit per second. But it is designed to ramp up to the multi-terabit per second range. One terabit per second is a unit of data transfer rate equal to 1,000 gigabits per second. The China Telecom-Reliance cable crosses the Himalayan mountain pass of Nathu La, linking the Tibetan border town of Yadong on the mainland to the city of Siliguri in the Darjeeling district on the Indian state of West Bengal. Nathu La, part of the ancient Silk Road trade route, was re-opened in 2006 following a series of trade agreements between Beijing and New Delhi. The pass had been sealed by India since 1962 after the Sino-Indian border conflict. Previously, the only available option for high-bandwidth network connection between the two countries was via undersea cable routes through Hong Kong or Singapore. The disruption to major communications services in the Asia-Pacific due to recent typhoons and earthquakes has clearly exposed the risk of depending on those cables without redundant links on land, Mr Best said. The Reliance side of the terrestrial cable system stretched about 250 kilometers from the border pass. The length on the China Telecom side was not known. The project was part of a December 2005 deal between the two carriers to provide direct telecommunication services between India and the mainland. Calls between the two countries were routed via the United States or Europe. Foreign aviation suppliers are competing for business opportunities arising from China's plans to build a jumbo jet. The nation is set to unveil a model for the commercial jet in two weeks. Commercial Aircraft Corporation of China Ltd (COMAC), which is in charge of the domestic jumbo jet project, will present a miniature of the homemade passenger jet C919 at the Asian Aerospace International Expo and Congress in Hong Kong between Sept 8 and 10, the expo organizer said. It will be the debut appearance of C919, it said. For the first homemade jumbo jet, the letter C represents China as well as COMAC, the first 9 implies forever in Chinese culture, and 19 means the jet will have 190 seats. As COMAC is pushing ahead with the homegrown passenger aircraft project, it has also accelerated talks to pick global partners for the program. The company has been intending to invite global cooperative partners to participate in its development plan. Wu Guanghui, chief designer of the program and deputy general manager of the Shanghai-based COMAC, said earlier that the aircraft will be designed and assembled in Shanghai, but will source parts and components globally, which is a model adopted by the two dominant aircraft groups, Boeing and Airbus. He said his company will choose international suppliers through bidding, but priority will go to foreign suppliers that design and manufacture products with domestic companies in China. The work of choosing suppliers is expected to be completed this year, Wu said in March. During the past 40 days, executives from major global aviation suppliers have paid intensive visits to COMAC, after the latter issued the invitation for tender on July 10 for engines and airborne equipment to be used on C919. Visitors included top managers of Honeywell, HP, Zodiac, Liebherr and Moog, according to the COMAC website reports. Because foreign suppliers are encouraged to enter into partnerships with Chinese manufacturers, Goodrich Corp made an attempt on Aug 12 to sign contracts with Xi'an Aircraft International Corp (XAIC) to form its first two overseas joint ventures, to manufacture landing gear and engine compartment components. "We believe they will give us an opportunity, as joint ventures, for both XAIC and Goodrich to participate in the C919," Goodrich President and CEO Marshall Larsen said. Meanwhile, China is speeding up independent development of aero-engines, so that China-made engines can power C919 as soon as possible. The first domestically developed engine for C919 is expected to be ready in 2016, and efforts will follow to develop a series of aero-engines, Wang Zhilin, deputy general manager of AVIC Commercial Aircraft Engine Co Ltd (ACAE), said yesterday. ACAE General Manager Zhang Jian said the company has completed its engine development plan, which is being examined by experts and will soon be delivered to the State Council for approval. he Guangzhou-based 21st Century Business Herald reported yesterday that the C919 project could bring nearly 200 billion U.S. dollars to suppliers by 2050. Citing industry information, the report said China needs 1,600 new jumbo jets, worth 150 billion to 180 billion U.S. dollars, by 2020. By 2050, China will need more than 3,000 new planes, which, together with other smaller aircraft and freight planes, will be worth 350 billion to 400 billion U.S. dollars. Zhou Jisheng, deputy designer of the C919, was quoted as saying that the parts on bidding, such as engines and airborne equipment, could amount to 50 percent of the cost for manufacturing a jumbo plane in the case of the Boeing 787. Therefore, suppliers could get nearly 200 billion U.S. dollars from the C919 project, the newspaper said. The homemade jet has been set to take its maiden flight in 2014, and acquire airworthiness approval and be delivered to customers in 2016. COMAC will develop cargo carriers and business jets in the future. China has been the world's fastest-growing aircraft market. According to statistics released by the Civil Aviation Administration of China, more than 193 million passengers traveled by air last year, compared to 186 million in 2007. The combined fleet of the country's air companies has risen to 1,961 from 1,591 civil aircraft in 2007. Aug 27, 2009
Troubled conglomerate Citic Pacific said on Wednesday its first-half net profits plunged 43.4 per cent because of reduced contributions from its steel investments.
Listing candidate China All Access
(Holdings) - which provides satellite and wireless data communication
applications for city public safety and disaster emergency management in the
mainland - said net profit grew 39.6 percent last year to 67 million yuan (HK$76
million) on increased turnover. Beijing will require hospitals to disclose information on pricing, treatment plans and procedures for filing complaints in an attempt to reduce patient complaints and improve transparency. The Ministry of Health issued a draft document earlier this week listing information-disclosure requirements for medical institutes. The document mandates that hospitals tell patients about the quantity and charges for medicines, implants, disposable medical supplies and services for each treatment plan. Zhang Wei , assistant professor of management at the Shanghai-based China Europe International Business School, said the new regulation would give patients a better idea of the total cost of treatment. Hospitals supposedly have a price list on every service and medicine. But patients often have no idea how much they will end up paying. Extortionate medical bills and errors are often the causes of disputes - sometimes resulting in mass protests and even leading to a bizarre profession called "medical troublemakers", who stage protests, damage hospital property, or even harm doctors on behalf of disgruntled patients and their families. After almost four years of interdepartmental bickering and horse-trading, the government in April finally released its blueprint for medical reform, aiming to overhaul the ailing health system and slash costs. A key to this is transparency on how bills are calculated to avoid arbitrary charges, unnecessary surgery and excessive use of expensive drugs. The draft also requires hospitals to tell patients of the fees for expensive services such as a stay in the intensive care unit, dialysis, fitting of artificial joints, organ transplants and scans, as well as medicine not covered by insurance schemes. Such requirements may standardize the information, but most hospitals already had price lists and usually informed patients beforehand as deposits were required. More importantly, public awareness of service quality at each hospital is a key to reducing disputes. "There are internal assessments of the quality of medical services for each hospital, but they are not disclosed to the public," said Zeng Yixin , a professor at Sun Yat-sen University in Guangzhou. Professor Zhang said local governments should compile a valid database on the qualities of all hospitals. "For example, in the US, hospitals have to release information about the mortality rate of their heart bypass surgery," he said. But cancer patient Yan He , 28, of Hefei , Anhui , said hospitals informed him of the fees, but he could not afford the medicine. He is now more than 100,000 yuan (HK$113,600) in debt after being diagnosed last year.
China Everbright Bank has received
regulatory approval for an 11.5 billion yuan (HK$13.06 billion) private share
placement, the bank said on Wednesday, moving it closer towards its initial
public Offering. Country Garden Holdings, which specializes in large-scale residential developments in Guangdong province, posted a 78.43 per cent jump in first-half earnings.
Aug 26, 2009
Hong Kong exports plunged 19.9 per cent year-on-year in July, as overseas demand for mainland goods remained subdued despite talk of a global economic recovery, the government said on Tuesday. Celebrity chef Jamie Oliver is planning to launch 30 Italian family-style restaurants in Asia, with the first one set to open its doors to his gastronomic followers in Hong Kong early next year. The move marks the first step in taking his chain Jamie’s Italian – which now has five eateries in England – outside his hometown, to a region which takes pride in its rich diversity of international cuisine and where the economy is picking up faster than anywhere else in the world. “Why Asia? Of all the markets, it has by far the fastest-growing economy,” said Edward Pinshow, president of Tranic Franchising, which formed a venture with Jamie’s Italian International for the Asia expansion. “The Chinese have become extremely fond of Italian food. In Japan, Jamie’s become a household name,” he said on Tuesday. Mr Pinshow told reporter that the first stage of the expansion was to open six restaurants in Hong Kong and Singapore, for which he is now raising about 200 million US dollars.
Hong Kong attracted about 551,000 fewer visitors to its trade fairs and conventions last year compared to 2007, a better-than-expected decline, the Hong Kong Exhibition and Convention Industry Association's annual survey has found. Visitors to trade shows in many other markets suffered drops of between 10 per cent and 25 per cent, it said. Hong Kong's 9.4 per cent drop in trade visitors means that the total number fell to about 5.31 million last year from some 5.86 million in 2007. The relatively strong showing last year was generally because of a mild 3 per cent drop in the number of mainland visitors. Regional visitors fell 13 per cent and other overseas visitors dropped 11 per cent. The association's chairman, Stanley Chu, described the findings as encouraging. "With government and industry support, I am confident that the industry will quickly come out of the current recession." The survey measures attendance based on the number of events visited, meaning one person who visits two shows during a trip will be counted twice. The findings are based on 96 questionnaires to which 55 trade show organizers responded. The companies staged 110 exhibitions in Hong Kong last year. Organizers are keen to establish Hong Kong as a major event hub despite competition from the Pearl River Delta as well as Macau. Trade visitors generally spend twice as much as tourists, according to the Tourism Board.
Organizers of this year's East Asian
Games have given in to public pressure with the final destination of the torch
relay at the 100-day countdown to be held at Golden Bauhinia Square in Wan Chai
instead of TV City.
Top-seeded Svetlana Kuznetsova needed three sets Monday to overcome China's Zheng Jie 6-1, 6-7 (5), 6-4 in the first round of the Pilot Pen tennis tournament, the final warmup before the US Open. PGA Championship winner Yang Yong-eun will renew his rivalry with Tiger Woods on Asian soil in November after confirming his participation at the US$7 million HSBC (SEHK: 0005) Champions on Monday. The 37-year-old South Korean, who became the first Asian man to win a major by out-duelling world number one Woods in Minnesota this month, will return to Shanghai for the Nov. 5-8 tournament, now a World Golf Championship (WGC) event. Yang is a former champion at the Sheshan International Golf Club, having stormed up the leader board in the final round of the tournament in 2006 to beat Woods by two strokes.
Malaysian low-cost carrier AirAsia said on Tuesday it will launch its seventh route into China in October while Singapore-based budget carrier Jetstar Asia announced it would begin flights to mainland in December. AirAsia will be the first airline to fly direct from Kuala Lumpur to Chengdu, the capital of Sichuan province, with four weekly flights from October 20, it said in a statement. The carrier said the new route would be operated by its long-haul affiliate AirAsia X. AirAsia already flies to Shenzhen, Guangzhou, Guilin and Haikou in the south, Hangzhou in the east and Tianjin in the north. It also has flights to Hong Kong and Macao. Singapore-based Jetstar said it will be aiming to expand into mainland and from October increase flights to Manila from seven to 10 per week. It will also run three daily trips instead of the current two to Bangkok from next month.
Aug 25, 2009
Mingfa Group, a Fujian-based property developer, is planning to raise as much as HK$6 billion on the Hong Kong stock market in the fourth quarter of this year, market sources familiar with the offering said. The developer, set up in 1994 in Xiamen, is a privately owned firm that focuses on the development of large scale multifunction commercial and residential complexes. It has appointed Deutsche Bank and Merrill Lynch as sponsors for its listing plan on the main board and has already submitted an application to the stock exchange, the market sources said. Mingfa is the latest in a string of mainland real estate firms seeking to float their shares on the Hong Kong market to raise funds to develop properties for homebuyers and offices for the business sector in the world's fastest-growing economy. Guangzhou property giant Evergrande Real Estate is planning an initial public offering of at least US$1 billion by October 31, Shanghai-based Glorious Property aims to raise US$1 billion, and Shenzhen residential developer Fantasia aims to raise about US$500 million, sources familiar with their listing plans said earlier. Brokers said Mingfa's location in Fujian would appeal to investors as it stood to benefit from closer economic ties across the Taiwan Strait and Xiamen was regarded as a home away from home for many overseas Chinese or Chinese nationals in Taiwan. Weak market sentiment in the first half of the year discouraged new listings and there were 23 initial public offerings in the first seven months against 29 in the same period a year ago. Total capital raised dropped 52 per cent year on year to HK$27.49 billion in the first seven months, down from HK$57.55 billion a year ago. However, with investor sentiment now on the mend more listing candidates are coming to market. Taiwan-based funeral service provider Sino-Life Group aims to raise up to HK$150 million with the first listing on Hong Kong's Growth Enterprise Market this year, sources close to the deal said. The firm generated revenue of 41.8 million yuan (HK$47.43 million) last year, up from 36.95 million yuan in 2007. Net profit was 6.93 million yuan against 7.56 million yuan previously.
Hopewell Holdings (SEHK: 0054) and its Hong Kong-listed subsidiary, Hopewell Highway Infrastructure (HHI), are expected to benefit from the green shoots of economic recovery in the Pearl River Delta. "We expect [Hopewell's] underlying profit to drop 76 per cent year on year to HK$1.31 billion due to the large exceptional profit booked in fiscal year 2008," Credit Suisse analyst Cusson Leung wrote in a report. "However, the stock is a good proxy to get exposure to the economic recovery in the Pearl River Delta." For the fiscal year to June 2008, Hopewell's net profit jumped 127 per cent to HK$5.97 billion, mainly because of HK$4.79 billion of exceptional gains from selling the Nova City property project in Macau and a joint venture managing the Guangzhou East-South-West Ring Road. Stripping out the one-off items, Hopewell's net profit last fiscal year would have been reduced to HK$1.18 billion. That means Credit Suisse's net profit forecast of HK$1.31 billion for fiscal year 2009 would be 11 per cent higher than last year's earnings. Six analysts surveyed by Bloomberg have a consensus forecast of HK$1.45 billion net profit for Hopewell on revenue of HK$1.05 billion for the fiscal year to June. Infrastructure, operated by Hopewell's toll-road subsidiary HHI, accounts for the lion's share of the group's profit, with property a distant second and hotels third. In property investments, Mr Leung expects that the profit contribution from Hopewell's rental income will rise 37.8 per cent to HK$351 million, driven by its two commercial buildings in Wan Chai - the QRE Plaza and Hopewell Centre - as well as improving occupancy of EMax shopping centre in Kowloon Bay. Mr Leung forecasts that infrastructure profit, contributed by HHI, will grow 10.8 per cent to HK$1.15 billion for the period, accounting for 70.9 per cent of Hopewell's earnings before interest and tax (ebit). "We expect the infrastructure contribution to increase 10 per cent for [this fiscal year], as we saw a turnaround in the average daily traffic growth of the GS Superhighway from February," wrote Mr Leung. HHI, 70.3 per cent owned by Hopewell, holds 48 per cent of the Guangzhou-Shenzhen (GS) Superhighway, its main asset. Citigroup analyst Jenny Zhen expects HHI's core earnings to rise 40 per cent for the fiscal year to June, mainly because of traffic recovery in the GS Superhighway with the completion of maintenance work on a section of the highway. Ms Zhen forecasts GS Superhighway's toll revenue will rise 10 per cent to HK$1.75 billion for the fiscal year to June, accounting for 96 per cent of HHI's total toll-road revenue. Excluding exceptionals, HHI's profit will rise 40 per cent to HK$1.17 billion. With the exceptional items, Ms Zhen predicts HHI's net profit would fall 42 per cent to HK$1.17 billion. From high-definition televisions, to digital cameras and notebooks, if nothing takes your fancy at the 6th Hong Kong Computer and Communications Festival, you probably already have it all. Laser printers at HK$300, laptops at HK$2,000 and 40-inch HDTVs at HK$6,000 are just some of the bargains offered at the festival, which closes today at the Hong Kong Convention and Exhibition Centre. Crowds started queuing as early as 6am on the weekend. The festival attracted 120,000 visitors on Friday, 160,000 on Saturday and 170,000 yesterday. In comparison, the weeklong book fair from July 22 to 28 drew 70,000 by the afternoon of its first day. This year, about 250 participating companies occupied more than 900 booths at the computer festival. Many visitors arrived ready to splash out to their heart's desire, with many bringing their own suitcases or trolleys to carry around bulky items.
First Eastern Investment will become
the first to tap China's private equity market as it launches three local
currency funds of up to 6 billion yuan (HK$6.8 billion) in the next 12 months,
chairman Victor Chu Lap-lik said.
A massive celebration in Tian'anmen Square on Oct. 1, at which President Hu Jintao will give a keynote speech, will commemorate the 60th anniversary of the founding of the new China. A military parade and mass pageant would follow, said a spokesperson for the 60th National Day celebration preparation committee of the Beijing municipal government Monday. Timetabling for the celebrations is not yet available The military parade would highlight the achievements China has made in its defense sector during the past six decades and showcase its resolution to safeguard world and regional peace and stability. The mass pageant would involve about 200,000 citizens and 60 floats, on the theme of the "Motherland and I Marching Together". On Sept. 30, the eve of National Day, a huge reception, hosted by the State Council, will be held in the Great Hall of the People. On the night of Oct. 1, a gala at the Tian'anmen Square is to feature "colorful performances and a splendid fireworks display", with senior party and government leaders present. From Oct. 1 to 3, major parks in Beijing are to host parties and functions to celebrate National Day. In addition, an exhibition highlighting China's progress during the past 60 years will be held in the Beijing Exhibition Center near the city zoo over the last two weeks in September. Also during that time, a grand musical, "Road to Revival", with a cast of about 3,200, will be staged at the Great Hall of the People. It will depict the past 169 years of Chinese history chronologically from the Opium War to the present. "We will try our best to create a festive environment at an economical cost," said the spokesperson. The military parade, mass pageant and evening gala will be rehearsed at Tian'anmen Square several times from Aug. 29 to Sept.26. "Preparation are going on smoothly," the spokesperson said. "We will make sure of a successful celebration."
The National Audit Office says 753 million yuan (HK$854 million) in agricultural funds misused by 10 provincial-level governments has been returned to its proper use. Henan, the top refined lead producing province in the mainland, has shut down up to 240,000 ton of annual lead smelting capacity in recent days after lead poisoning was reported to have affected hundreds of children in Shaanxi province, smelter officials said on Monday. “Three plants were shut on Sunday, with a monthly output 15,000-20,000 tons,” a senior executive at a large lead smelter in Henan told reporters. He added the closed capacity was in Jiyuan city. A sales manager at a medium-size lead smelter in Henan said the provincial government had asked lead smelters to shut down capacity that did not meet national environmental standards in China, the world’s top lead producer. “About a third of the province’s lead smelting capacity could be closed eventually,” he said. Henan has more than 1 million tons of lead smelting capacity and less than half have reached that standards, the manager estimated. “There are increasing voices asking for closure,” a trade manager at a major lead smelter in Henan said. He added the provincial government had not issued an official document to force smelter closing such capacity but given verbal requests. Henan produced a third of China’s refined lead at 600,996 tons in the first half, up 9.13 per cent, according to the China Nonferrous Metals Industry Association. China’s fourth-biggest zinc producer Dongling Group is maintaining full production at two zinc lines with combined annual capacity of 150,000 tons in Shaanxi province, after shutting a 100,000-tonne lead and zinc plant blamed by locals for being a source of lead poisoning.
Aug 22 - 24, 2009
Consumer prices fell 0.3 per cent last month as Hong Kong experienced deflation for the first time after about five years of rising prices, government data shows. Filipino and Indonesian maids in Macau are campaigning against a bill that would ban them from the city for six months if their contracts are terminated.
A police department head in the Xian Public Security Bureau is under investigation for corruption after his former subordinates signed a petition and reported him to local media.
Beijing police are mobilising 800,000 residents for a two-month crime-watch campaign in a bid to boost public security ahead of the 60th anniversary of the founding of the People's Republic. Rupert Hoogewerf, founder and publisher of the list of the mainland's richest tycoons, has defended himself against criticism that his list is a jinx, bringing misfortune to those who appear on it. China's current account surplus dropped in the first half of this year, the first time in six years as the global downturn affected the nation's exports. The country posted a surplus of US$130 billion in the current account, the broadest measure of trade in goods and services, a decline of 32 per cent from a year ago, the State Administration of Foreign Exchange (SAFE) said yesterday. The mainland's capital and financial account surplus was valued at US$33.1 billion, down 54 per cent from the same period a year ago, the foreign exchange regulator said. "The drops didn't match China's rising economic profile in the world," said Zhang Youwen, the chief world economy researcher at the Shanghai Academy of Social Sciences. "The surplus growth will sooner or later return to positive territory when the global economy turns around." The surplus in the commodity trade hit US$118.2 billion, down 8.4 per cent. A deficit of US$18.6 billion was recorded for trade in services. The shrinking surplus under the capital account reflected Beijing's efforts to encourage outbound investment at a time when foreign direct investment declined amid the financial turmoil. China drew foreign investment worth US$43 billion between January and June, down 17.8 per cent from a year earlier. As of July, the country's foreign investment had dropped for 10 consecutive months, the Ministry of Commerce said. The SAFE did not provide detailed figures on the nation's outward investment, but Stephen Green, Standard Chartered Bank's chief China economist, estimated the country invested a total of US$18 billion abroad in the first half. "Overseas direct investment appears to be back on track with a flurry of deals announced in recent weeks," said Mr Green, who forecast that China's full-year outbound investment would probably exceed the foreign funds it received. Hu Xiaolian, the former head of the SAFE, said in April that the risk of an outright reversal of capital flows was small since the country still posted surpluses in both its current and capital accounts. The smaller surpluses in both current and capital accounts were a double-edged sword to the world's third-biggest economy, Mr Zhang said. "China does not necessarily need the mountainous foreign exchange reserve since it could only use it to buy US treasury bonds," he said. "However, the surplus will still grow in future amid China's increasing economic strength." The nation's foreign exchange reserve topped US$2.13 trillion at the end of June, an increase of 185.6 billion yuan from the end of last year, SAFE said. Guangzhou R&F Properties (2777) posted a 90 percent drop in half-year net profit as it wrote off 241.2 million yuan (HK$273.66 million) in deposit from the termination of its Foshan land use rights contract. A surge in lending has helped Industrial and Commercial Bank of China (1398) - the world's most profitable lender - increase first-half net profit by 2.9 percent to 66.42 billion yuan (HK$75.34 billion). Chinese President Hu Jintao and Serbian President Boris Tadic on Thursday agreed to establish a strategic partnership between the two countries. Aug 21, 2009
The charity that runs Hong Kong's only private school for drug offenders yesterday dismissed allegations that it was using government money to finance its investments in Hong Kong, the mainland and Japan. The Christian Zheng Sheng Association said it had income of HK$128 million between 1998 and 2008, of which HK$83 million came from its school on Lantau Island where students' fees are paid by the Social Welfare Department. But it said the operating cost of the Christian Zheng Sheng College during the period was HK$84 million, and that it had to subsidise the school to the tune of HK$1 million from its other income - which includes donations and earnings from investments. The association - embroiled in a row over a plan to move its campus to Mui Wo - was speaking out for the first time about allegations it used government money to fund businesses, including a restaurant, tea house, hotel, farmland and a brothel, on the mainland and in Japan and Hong Kong. It said it used its investments to fund its operations, including subsidising the school when necessary, and it did not run the brothel, although the brothel was in a building registered in its name. School board chairman Ho Kwok-keung said the association was just like the YMCA or Caritas. "They have hotels and they also make investments and the profit is used to finance their services." The press conference was the latest development in a long-running row over the school's plans - backed by government officials including Chief Executive Donald Tsang Yam-kuen - to move from cramped quarters on the Chi Ma Wan Peninsula to a vacant school building in Mui Wo. The association also said the college would make its latest budget report, for 2007, public once it was approved by the school's board of directors. One of the allegations was that the charity was keeping its 130 students in quarters designed for 60 while it had a surplus of HK$20 million. But the association said the budget report would show it had a surplus of only HK$2 million. Most of the college's students are admitted under probation orders and can apply for Comprehensive Social Security Assistance of HK$10,465 a month to cover their fees. But principal Alman Chan Siu-cheuk said the fees were not enough and since it was registered as a private school in 1998 the college had suffered a HK$1 million loss, which was covered by the association. He said every penny received from the school's students was spent on them and on college facilities. "All our mainland projects, including orphanages in Fujian and Henan , are funded by donations to the association and designated for the mainland by the donors." A member of the college's board of directors, Chui Hong-sheung, who is also the president of Hang Seng School of Commerce, said many private schools had endowment funds for investment to support their expenditure. While many invested in stocks and bonds, Mr Tsui said: "The association has the vision to invest with `double benefits'. The investment not only can generate money, it can also serve as training grounds for students." The association is a tax-exempt charity under the law, which allows charity work in poverty, education and religion in any part of the world. The only two paid directors are Mr Chan, who receives HK$39,000 a month and association chief executive Jacob Lam Hay-sing who gets HK$41,000 a month. Mr Chan also noted the association's business investments were part of their education mission. "Our students can work at our restaurant and other businesses to learn vocational skills. They also visit our orphanages and do social service on the mainland," he said.
Kerry Properties (SEHK: 0683) is to
release a block at phase two of its Central Residences luxury project in
Shanghai's high-end residential district, at more than 80,000 yuan (HK$90,704)
per square metre to Hong Kong buyers this week.
Downturn lifts demand for export
insurance - The demand for export credit insurance is on the rise amid concerns
about foreign buyers facing financial difficulties in the economic downturn. China becomes Japan's biggest trading partner in both exports and imports in the first six months this year, the Japan External Trade Organization (JETRO) said Wednesday.
Aug 20, 2009
Almost a third of Star TV's Hong Kong employees, or between 150 and 200 people, will lose their jobs in the coming 10 months under a corporate restructuring of News Corporation's Asian broadcast business. The widely expected move had "nothing to do with the economic downturn", a company spokesman said. Chief executive Paul Aiello will resign but stay until the end of the year to ensure a smooth transition. The business will split into three units - Star India, Star Greater China and Fox International Channels. Fox International will include Star World, Star Movies and the Fox and National Geographic Channel brands. A new News Corporation office will be established in Hong Kong, comprising a small group of Star executives. James Murdoch, chairman and chief executive for Europe and Asia at News Corporation, said: "We are now reshaping a big, regional organisation into three highly focused business units, each of which will be intensely competitive in its target marketplace. "While it was once natural to have a larger, regional headquarters, the company has now reached a scale in its key local markets where we are ready to empower the teams on the ground and move a number of functions to be closer to viewers."
Shanghai Electric Group (2727) will invest 2 billion yuan (HK$2.26 billion) in increasing its production capacity for nuclear- and wind-power equipment over three to five years. More than 8,000 cargo boats have been stranded on a Yangtze Delta waterway after high water levels caused by Typhoon Morakot created navigational hazards. The bottleneck on the waterway connecting Changxing and Huzhou in Zhejiang to Shanghai extended 40 kilometers. The 145-km waterway carries 80 percent of coal for power stations in Zhejiang, Jiangsu and Shanghai. Morakot took water to a record high. Aug 19, 2009
Samsung Securities, South Korea's largest brokerage by market value, intends to hire 50 people in Hong Kong by the end of the year and is in talks with at least three potential partners for a venture in the mainland.
Yesterday at approximately 2:20 p.m., access to international websites such as Yahoo has been sluggish, with widespread outages in access to MSN. China Unicom has announced the FNAL/RNAL submarine cable was broken between Hong Kong to Taiwan on August 12 due to the Morakot typhoon. China Unicom is actively taking steps to restore normal service. China Everbright (SEHK: 0165) Securities rose 32 per cent in its Shanghai market debut on Tuesday after raising 11 billion yuan (HK$12.50 billion) in its IPO, within expectations but more subdued than last month’s sizzling debuts after a market rally stalled. Analysts said the relatively uneventful start to trade for mainland’s 10th-largest brokerage, and only the second securities house in the country to list via an IPO, could encourage regulators to move cautiously in bringing large IPOs to market. Local-currency A shares in Everbright Securities began trading on the Shanghai Stock Exchange at 30 yuan, up 42 per cent from their IPO price of 21.08 yuan, and after a half hour of trade were up 32.35 per cent at 27.9 yuan. A survey of analysts by the official China Securities Journal had forecast the shares would rise to 25 to 30 yuan on their debut. “Its opening price was within our expectations,” said Wei Tao, an analyst with CITIC China Securities. “The regulators will continue to approve new listings, but will be cautious on heavyweights.” Two large IPOs that listed in Shanghai late last month by China State Construction Engineering Corp and Sichuan Expressway, the first listings in Shanghai since the lifting of a 10-month suspension of mainland IPOs, had surged on their trading debuts. China State Construction ended its first day of trade up more than 50 per cent from its IPO price and Sichuan Expressway more than tripled, spurring concerns about unbridled speculation, although both shares, while still above their IPO prices, have steadily retreated since then. Shanghai’s share market has cooled in recent weeks after a roaring rally of more than 90 per cent from the start of the year was finally derailed, with worries about stretched valuations compounded by signs of a slowdown in the economic recovery, a clampdown in bank lending and new supplies of equity. The benchmark Shanghai Composite Index has fallen 18 per cent from a 14-month intraday peak hit nearly two weeks ago. Monday’s 5.8 per cent slide was the index’s biggest one-day drop in nine months, although on Tuesday the market was showing signs of stabilising. Everbright Securities offered 520 million shares, or 15 per cent of its expanded capital, at a price of 21.08 yuan each, valuing it at 72 billion yuan, or nearly 60 times its last year earnings. That compares with a historical price-earnings ratio of 28 for Citic Securities, mainland’s largest listed brokerage and the only other securities house to list on the mainland via an IPO. Several others have listed through reverse takeovers of listed firms or other means. Mainland brokerages’ earnings have been bolstered by a 60 per cent rally in stocks in the first half of this year, which boosted their commission income and investment returns, with Citic Securities posting a rise of 3.6 per cent in second-quarter profit. Everbright Securities is controlled by the country’s second-biggest financial conglomerate, Everbright Group. Everbright hired Orient Securities to arrange its Shanghai IPO.
China Investment Corp (CIC), the country's US$200 billion sovereign wealth fund, is set to pour up to US$2 billion into the US mortgage system by hiring mandates under the US Treasury-backed public-private investment plan, sources said. Under the investment plan launched earlier this year, the United States government plans to seed several public-private investment funds that would combine taxpayer money with private capital to buy as much as US$40 billion in toxic securities from banks. The CIC's move comes after the US and China ended their first annual "strategic and economic dialogue" late last month, where they agreed to lead the global economy out of recession and Beijing expressed hope for safer investments in the world's biggest economy. "The Chinese government is always trying to seek a more ideal way to invest in US assets rather than purely buying US government bonds all the time," said one of the sources. "Some might think US$2 billion for a US$200 billion sovereign fund is not big money, but it can be regarded as an innovative and positive option for Chinese investment." The companies in talks with CIC are designated managers of the investment plan and include Alliance Bernstein, with sub-advisers Greenfield Partners and Rialto Capital Management; Angelo Gordon with GE Capital Real Estate; BlackRock; Invesco; Marathon Asset Management; Oaktree Capital Management; RLJ Western Asset Management; Trust Co of the West; and Wellington Management, according to the sources. CIC has yet to select any firms as mandates but is expected to make a decision before the end of this month, said the sources with direct knowledge of the matter. Established by the central government in late 2007, CIC is keen to participate in the investment plan as it expects the US property market to start to recover gradually later this year, the sources said. CIC declined to comment.
Aug 18, 2009
The tourism commissioner has defended the plan to turn the Tsim Sha Tsui Star Ferry bus terminus into a piazza, saying there would be a new bus stop nearby and the terminus had no heritage value anyway. "There will be a new covered bus stop outside the Cultural Centre, which is about one minute away from the Star Ferry pier," Tourism Commissioner Margaret Fong Shun-man said. "It will serve 11 of the 14 bus lines using the existing terminus. For passengers of the three other lines, they will be able to interchange for free at Tsim Sha Tsui East to the new bus stop." Ms Fong also said there would be covered access from the new bus stop to the Star Ferry pier and the piazza plan was supported by the Yau Tsim Mong District Council. The plan to demolish the public transport interchange and build the piazza to give the district extra appeal and boost tourism has met strong resistance. Some critics say that it will take 15 minutes to walk from the Star Ferry to the new bus terminus at the former Wing On Place Garden in Tsim Sha Tsui East, which would also affect ferry patronage. Activists also say the terminus, which has been there since the 1920s, is part of the city's collective memory and they have sought to make it a Unesco-listed site. Ms Fong said the taxi stop would be moved to Salisbury Road, which would allow 16 taxis - five more than now - to queue. She said the Antiquities and Monuments Office had said the bus terminus had no heritage value. "The piazza plan aims to offer a leisure space for performance, just like Covent Garden [in London]," Ms Fong said. She rejected suggestions a shopping mall would be erected on the piazza and promised the existing Star Ferry Pier, the clock tower, the five flagpoles and graffiti by the "King of Kowloon" Tsang Tsou-choi would be preserved. An old train carriage would be converted into a new visitor centre to reflect the fact that the piazza had been next to the railway station before it made way for the Cultural Centre. Asked if there would be any bus stop pole or sign at the piazza to commemorate the bus terminal, Ms Fong did not rule out the possibility and said it depended on the design - to be announced early next year. Leslie Chan Ka-long, chairman of concern group Our Bus Terminal, said the new transport arrangements would make traffic worse in the already busy Salisbury Road. "It's not feasible for the new bus stop to serve 11 routes in both directions. It will be very congested," Mr Chan said, adding that the group had studied traffic flows in the area. "The westbound lane of Salisbury Road, which is already very busy, will be a lot worse if the taxi rank is moved there, too." Although passengers on three of the bus lines could transfer for free to reach the pier, it would be inconvenient for them as they would need more time to complete their journeys, he said.
The decline of Hong Kong's air traffic has been slowing, according to the Airport Authority's latest figures. This news comes after the government reported the city's first economic growth in more than a year, with second-quarter gross domestic product up 3.3 per cent on the first quarter. The authority said cargo traffic had bounced back from the double-digit plunges recorded since November. Last month Chek Lap Kok airport handled 291,000 tonnes of cargo, four million passengers and 23,315 flights - representing a year-on-year drop of 8.3 per cent, 9.5 per cent and 9.9 per cent, respectively. The number of Hong Kong residents flying had seen yearly growth of about 3 per cent, while visitor numbers dropped 17 per cent and transfer or transit passengers dipped 10 per cent. Airport Authority chief executive Stanley Hui Hon-chung said passenger traffic had been boosted with the summer holidays and receding anxiety about swine flu. He believed the overall figures would see milder drops in the coming months but it would take some time before performance returned to pre-crisis levels. "The latest figures indicate that the downward momentum may have slowed," Mr Hui said. "The business climate is still challenging as economic activities remain low."
China and Southeast Asian countries have successfully concluded talks on setting up a free-trade zone next year to boost economic integration and ease concerns about China's growing international clout. A pact promoting investment links was signed on Saturday in Bangkok between Commerce Minister Chen Deming and economic ministers from the 10-member Association of Southeast Asian Nations (Asean). China is the eighth-largest investor in Southeast Asia, with investment of US$2.2 billion last year. Accumulated Asean investment in China is US$52 billion. Mr Chen said free and fair mutual investment would be established after barriers to trade in goods and services had been removed. Up to 7,000 items would have no tariffs from next year in the joint market of nearly 2 billion people. Chinese people would be able to enjoy a variety of Southeast Asian fruits and Asean residents could purchase Chinese clothes and electrical appliances at cheaper prices, he said. Despite the recession, China's investment in Asean countries has surged, with Premier Wen Jiabao announcing in April a US$10 billion fund to support the region's infrastructural development. Mainland analysts said that Beijing had maintained its policy of offering economic incentives in exchange for political understanding and support from China's suspicious Asian neighbors. Chai Yu , a regional trade expert at the Chinese Academy of Social Sciences, said Beijing had been focusing on forging close ties with Asean countries in recent years. Mr Wen had said "winning the trust [of Asean] was of utmost importance". But Southeast Asian countries remained wary of China's ambition to build up its naval power, despite its burgeoning industrialization and market of 1.3 billion people. Dr Chai said that although the immediate economic benefits from the regional free-trade pact would not be as significant as were expected, China apparently eyed its potential for boosting long-term growth. "China has demonstrated willingness as a rising power to help its Asian neighbors economically by giving Asean countries its most-favoured-nation status," she said. "In return, China has made it clear it needs a relatively stable and amicable regional situation for development." But Pang Zhongying , an expert on international affairs at Renmin University, said the impact of closer economic links on geopolitical politics should not be exaggerated. He noted that despite a non-binding 2002 treaty between Beijing and other Asian nations aimed at easing tensions in the South China Sea, Sino-Asean ties were still plagued by glaring differences on political and security issues, notably the dispute over the Spratly Islands and the development of the Mekong River. "If the free-trade pact can be implemented, it will help forge better political ties. But it remains to be seen how much economic interdependence can alter the regional political landscape," Professor Pang said.
Aug 17, 2009
Sam Ngai, the spokesman and manager of production company Star Overseas Ltd., will leave his current position on Friday. "I am going to enter a new phase of my career and start my own business," Ngai wrote in an e-mail which he distributed to various media organizations on Wednesday. Star Overseas, owned by Hong Kong comedian Stephen Chow, has been suffering from personnel losses in the past few years, as partners, managers and artists have left the studio one after another for different reasons. Ngai's announcement has prompted questions about how his resignation will affect the company and Chow's future acting career. But Ngai said the company's movie business is operating smoothly. The comedy movie "Jump," which stars the company's actress Zhang Yuqi, is scheduled to be released soon, while several other projects, including an animated version of "CJ7," are also under negotiation, the Chengdu Shangbao quoted Ngai as saying. Ngai also said Chow has already shifted his career focus. "Actually, Stephen Chow was not only engaged in the movie business," Ngai said. "In the past year, he focused mostly on other fields, which was not well-known by the public." Ngai said he did not know who would replace him. "It's Chow's business," he said. Founded in 1996, Star Overseas has produced or co-produced five movies, including the "Kung Fu Hustle" and "CJ7." It also helped turn several actresses such as Huang Shengyi, Zhang Yuqi, and Xu Jiao into film stars.
Aug 16, 2009
The Centre for Health Protection (CHP) said on Friday a 40-year-old woman had contracted a strain of the human swine influenza (HSI) virus that is resistant to Tamiflu.
Sri Lanka and China’s Exim Bank signed deals worth more than US$350 million to build a highway and an oil bunkering facility near one of the world’s biggest shipping lanes, Sri Lanka’s Foreign Ministry said on Friday. The bunker terminals will be built at the Hambantota port on Sri Lanka’s southern coast, where the state-run Exim Bank has already pledged US$360 million to the initial construction phase being carried out by mainland firms. The other agreement will finance the building of highway from the Sri Lankan capital Colombo to the international airport 30km north in Katunayaka. Currently, the journey can take hours because of the narrow, traffic-clogged roads. “The signing of the two agreements will pave the way for much needed infrastructure requirements which will have an immense impact on the country’s future socio-economic development,” the ministry said. Mainland in July won the rights to Sri Lanka’s first exclusive economic zone, located in Mirigama with easy access to the Colombo port and airport. Hong Kong-based conglomerate Huichen Investment Holdings will pay US$28 million to build the turnkey business park, where mainland firms can set up shop. It follows a model mainland has used successfully in African nations, to house manufacturing and other businesses alongside their mainstay mineral and resource extraction firms. Mainland and India are competing to win lucrative and strategic investments in Sri Lanka since the military defeated the Tamil Tiger separatist rebels and ended a 25-year war in May. Both countries backed President Mahinda Rajapaksa’s government when it came under western-led criticism for refusing to slow its offensive while the Tigers held more than 100,000 civilians hostage in a tiny war zone. India is wary of the mainland’s beachhead in Hambantota, widely viewed as part of China’s “string of pearls” policy to give it coaling stations around the region. New Delhi views it as part of its giant neighbor’s plans to strategically encircle India. India in its budget this year has pledged a minimum US$104.6 million to Sri Lanka’s post-war development and has already staked a claim to do much of the construction in the former war zone in the north. Mainland meanwhile has offered an US$891 million, 20-year loan with a 2 per cent interest rate to build the second and third phases of the 900 megawatt coal-fired Norochcholai power plant. Sri Lanka’s US$40 billion economy this year is expected to see foreign direct investment surpass last year’s record US$889 million. China is winning a global race to create "green collar" jobs, six months after countries worldwide launched US$500 billion (HK$3.9 trillion) spending plans to drive a low-carbon economy. Following the economic downturn, both the United States and Europe aim to spur jobs in a green push to fight climate change and boost energy security, but China may leapfrog both this year in new wind power. China passed the United States in numbers of new wind turbines built in the first half of 2009, data from Beijing- based specialists Azure International shows, and is also increasing its share of the main solar demand market, Europe. "I think China is definitely winning the race," said Wu Changhua, China director of the London-based environment body The Climate Group, citing support for low-carbon LED lighting and electric cars as well as wind and solar. "A low-carbon economy is mainstream thinking," she said, adding that Chinese development was helped by swifter centralized decision-making compared with its rivals. In wind power, local demand often means local jobs that's especially true in China where an unofficial rule says all installed turbines must include 70 percent local content. International companies' market share there is falling. "In the first half [of 2009] that decline continued," said Sebastian Meyer, head of research at Azure International. Tough financing markets plus falling oil prices have dented clean energy prospects worldwide and created a glut of turbines and solar panels, with recovery expected from next year, aided by new stimulus programs. In solar power, Germany will dominate demand this year, according to Barclays Capital, overtaking Spain following a cap on state support there. But mainland manufacturers will continue to grab an increasing share of production despite a fall in prices, their key differentiator, said New Energy Finance analyst Jenny Chase. China accounted for about a third of the market for global solar cell production in 2008 while Europe's share declined to about a quarter. Last year Europe collectively installed 4.3 GW of solar photovoltaic power and 8.5 GW of wind, tipping the United States into second place in both. But the wind ranking may change - China added about 4.5 GW in the first half of 2009, Azure's Meyer said, putting the country on track to pass the United States which installed 4 GW. HSBC forecast a drop in US and European demand this year. The Global Wind Energy Council expects China to take top spot in 2009, said secretary- general Steve Sawyer. Two weeks ago China fixed the price for wind power using a so-called feed-in tariff, and a state-backed economic stimulus and credit loosening have boosted projects. The United States is likely to be China's chief rival in new wind power, analysts say, overtaking Europe where some countries are hamstrung by planning delays. A protest last week at a British turbine factory against 625 job losses appeared doomed after owners Denmark's Vestas won a repossession order. Vestas is moving the facility to the United States, and has won plaudits from analysts for its second place in a more lucrative market, behind GE. US energy secretary Steven Chu said last week US$3 billion in new renewables grants would boost green jobs.
Chinese food and drug regulators are required to report food accidents to their superiors and local health authorities within six hours, according to a government draft regulation Thursday. The draft, issued by the State Food and Drug Administration (SFDA), demands that once accidents occur involving 30 or more people, food and drug regulators at or above the county level should report them to their superiors and local health authorities within six hours. With regard to food safety accidents that occur on campuses, during important nationwide festivities, involve 100 people or more, or kill one or more people, food and drug regulators should not only abide by the "six hour regulation," but also report them to the SFDA "in a timely manner," according to the draft. Catering service runners, should they find food accidents, are asked to immediately stop using all suspicious food and cooking facilities and protect the site. They are also required to report to medical authorities and food regulators at or above the county level within two hours. The draft regulation also stipulates that heads at schools, companies or government organs will be held accountable if food accidents occur twice in one year in their cafeterias. The SFDA also asked food and drug regulators at all levels to formulate emergency plans to deal with food accidents based on local conditions. China will continue its policy of subsidizing farmers' purchase of automobiles in a bid to spur vehicle sales, as part of the government's concerted efforts to stimulate domestic demand, a government official said on Thrusday. The policy, put in place earlier this year, has proven to be successful and will be extended, Li Yizhong, minister of industry and information technology, said at a news conference in Beijing on Thrusday. China's vehicle sales posted a 63-percent year-on-year growth in July, which is usually the worst period of the year for auto sales, according to figures released by China Association of Automobile Manufacturers. The country sold 1.09 million vehicles last month, the fifth consecutive month that the number has exceeded the 1-million-unit mark. "The fundamental reason behind the dynamic performance is the series of stimulus policies we doled out," Li said, pointing to other incentives. The government has cut in half the purchasing tax on passenger vehicles with engines smaller than 1.6 liters, a policy that it said will last until the end of this year. Li did not say whether the government would extend the policy. The government has also introduced policies under which customers can get subsidies if they trade in their old vehicles for new ones."The impressive double-digit auto sales growth against the backdrop of a worldwide industry slump is largely attributed to our policy stimulus and shows they are successful," Li said. The minister also said the government would push ahead aggressively with mergers and acquisitions among the enterprises to improve industrial consolidation. He said his ministry was working on guidance and restructuring details for 10 major industries, without going into specifics. Li said China's industrial growth slump has been reversed and corporate profitability has improved considerably. Industrial output rose 10.8 percent in July from a year earlier, after gaining 10.7 percent in June, the second time since September last year that output has seen double-digit growth, the National Bureau of Statistics said on Tuesday. "The overall industry performance is heading in a good direction," Li said. "The economy is turning better but it does not signal that the difficult period is behind us." Aug 15, 2009
Public satisfaction with the Hong Kong government is at its lowest point in six years, a survey shows. People also consider themselves worse off than at any time since 2002.
Acting chief executive Henry Tang Ying-yen yesterday proposed sending Taiwan a donation of HK$50 million for typhoon relief work.
Hutchison Whampoa (0013) said its
first-half net profits fell 32.9 percent - confounding even more doom-laden
forecasts due to losses in its European mobile unit shrinking faster than
expected. With central banks talking about a possible pullback from "loose" monetary policies, Hong Kong's top monetary official has warned investors to be wary of any potential impact a policy change may cause.
China's industrial head admitted yesterday that the launch of the pornography-filtering Green Dam software was, to some extent, a mistake. Li Yizhong , minister of industry and information technology, openly regretted the order, which required all personal computers sold on the mainland after July 1 to have the program either pre-installed or with a disk included. The order, which the ministry issued to all PC makers in June, had been made without thorough consideration and had been plagued by ambiguous language, leaving the public with the impression that the ministry was bullying citizens to install the program, Mr Li said. Forcing everyone to install Green Dam was not the government's intention, and it "absolutely" would not happen, he said, adding that the central government welcomed criticism on Green Dam-Youth Escort software. "Chen Deming [the minister of commerce] and I received some letters from business communities in the United States and western Europe. I think most of them came with good intentions. They pointed out the shortcomings of our work," Mr Li said. He added that the original purpose was for voluntary installation. When people bought a computer, they would be given a floppy disk or CD and could chose whether to install the program. But he said the administrative document did not make this clear, prompting some people to worry about the safety of individual privacy, censorship and violation of World Trade Organisation treaties. Mr Li also conveyed an equally clear, if not stronger, message: do not confuse the Green Dam error with general policy. Some people had used the issue as a political weapon to denounce the mainland's policing of cyberspace, he said, calling those words and actions neither honest nor responsible. The central government received many petitions from social groups, parents and others, urging it to do something to shield the younger generation from internet pornography, which they said was spreading globally. But although the government had bowed to pressure and stopped the installation of Green Dam on new computers, Mr Li said it would continue to finance and support the development and installation of porn-filtering programs. Schools and internet cafes would still be required to install Green Dam on all computers. Green Dam's developers were improving the software's performance and closing its security loopholes, Mr Li said. His remarks were considered sincere by some internet users on the mainland, but others were blase. Li Zhiyuan of Beijing, who opposed the filter, said the admission had come too late and that the fiasco had almost died out. "I went to Zhongguancun [Beijing's computer retail and research centre] the other day and tried to find an official copy of Green Dam as a souvenir. I couldn't find one," he said. "So keep the copy if you have one. It's already history." Shanghai's first sex-education camp for children aged eight to 13 began this week, but only six boys enrolled and the girls' section was cancelled. The 2,800 yuan (HK$3,276) privately run three-day camp coincides with the start of school summer holidays and emulates a program popular in eastern Nanjing, the Shanghai Daily reported. "We are going to have a really private talk which cannot be shared with girls or strangers," teacher Gao Weiwei told the boys. Health and education experts have warned China has to shift its sex education strategy from focusing on teaching married couples birth control, saying unmarried young should be targeted.
Aug 14, 2009
Hutchison Telecommunications International (2332) said yesterday it will sell control of Israeli mobile operator Partner Communications to local entrepreneur Ilan Ben-Dov for US$1.38 billion (HK$10.76 billion).
China's restrictions on the sale of books, films and music from the United States violate global commerce rules, the World Trade Organisation ruled, handing US President Barack Obama's administration its first trade victory over the mainland. WTO judges largely sided with a US complaint that accused China of making US companies sell copyright-protected products such as magazines, CDs and video games through state-approved or state-run businesses. The ruling, handed down in June but made public only yesterday, also went against mainland curbs on foreign producers of audiovisual goods that exempt domestic rivals. The ruling "is an important step towards ensuring market access for legitimate US products in the Chinese market", US Trade Representative Ron Kirk said. The issue is one of the biggest irritants in the Sino-US commercial relationship. Improvements in China's protection of patents for products such as pharmaceuticals, car parts and copyrights for movies and software may help American companies even more than changes in its currency policies, analysts say. "We recommend that the Dispute Settlement Body request China to bring the relevant measures into conformity with its obligations," the judges said in their 469-page report. The ruling stops short of a clear-cut US victory. Judges agreed with the Chinese argument that its criminal law was strong enough to deter piracy. The US failed to convince the panel that thresholds for criminal prosecution of people pirating copyrighted goods are so high they effectively allow sales of illegal items on a commercial scale. The case was one of two the US lodged against China at the WTO in April 2007 aimed at stopping what it said is rampant piracy of copyrighted audiovisual products. The other complaint argued that Chinese law is not harsh enough on counterfeiting and sets too high a value on pirated movie and music discs before prosecuting violators. WTO judges also issued a mixed ruling on that case, saying China must protect copyrighted content banned by state censors and Chinese regulators can't release confiscated products back into the market.
China's top economic planner, the National Development and Reform Commission, unveiled Wednesday a draft regulation on monopoly prices. The regulation applies to cases of monopoly prices both inside and outside the country, when monopoly prices outside the country impact the domestic market, according to the regulation posted on the commission's Web site. Other than deals reached among more than two parties for the purpose of monopolizing prices, power abuse of government agencies to eliminate or limit competition is also regarded as violation of the regulation. Those who violate the regulation would be punished according to stipulations in the country's anti-monopoly law, according to the commission. Individual retailers or producers may face confiscation of illegal earnings and a fine of up to 10 percent of last year's sales, while industry associations are subject to a fine of no more than 500,000 yuan (73,529.4 U.S. dollars) or could be dismissed as an association. Government agencies that violate the regulation would be ordered by their superiors to correct their actions, and officials held responsible would be disciplined according to relevant laws. The commission said the regulation was aimed to prevent monopoly prices and to endorse fair competition so as to safeguard the interests of consumers and the public. The commission is soliciting public opinion for the regulation until Sept. 6. Aug 13, 2009
The gloomy economy seems to have made little difference to Hongkongers' daily spending habits. Almost 80 per cent still spend the same amount on daily necessities as they did before the economic slowdown hit, and more than half continue to buy luxury items, according to a survey. For food staples, 86 per cent of the 1,006 respondents said they had not cut their budget, and almost 70 per cent said they still visited coffee shops or tea houses just as often as before. Brendan Shair, managing director of Synovate Hong Kong, a market research company that conducted the study, said most Hongkongers stuck to their usual spending and saving habits, despite the difficult economic times. "On a regular day when you go to the markets and some of the shops, they are still buzzing with people," Mr Shair said. The survey included 26 markets in Europe, Asia, and South and North America. In Hong Kong, about 60 per cent of respondents - the highest figure after Denmark's 75 per cent - said they were saving as much and as regularly as they had done before the financial slowdown. That compared with 22 per cent who said they were putting less money aside. At the same time, figures on people's earnings showed that Hong Kong was being less affected by the economic situation than its neighbours were. Nearly seven out of 10 Hongkongers said they were earning the same now as they were six months ago, in contrast to 24 per cent who said they had less income. By comparison, 30 per cent of South Koreans, 44 per cent of Japanese, and 43 per cent of Taiwanese said they had earned less over the past half-year. Hongkongers' better-than-expected economic position was also reflected in another study unveiled yesterday by ESDLife, an online wedding information provider. It found that couples were showing few intentions of cutting down on their wedding expenses in the face of continuing uncertain times. According to the study of 1,781 respondents who are planning to marry in the coming year, the average budget for a wedding was HK$226,352, which is 3.3 per cent less than in a similar survey last year. The couples tended to spend less on the rings, other jewellery, gowns and suits but more for wedding photographs or videos, the survey said. However, their concerns about the economy came to light when asked how many children they would like to have. Half planned to have two or more, which represents a drop of 11 percentage points from last year. And 35 per cent preferred only one child, up nine points on last year. After doling out four rounds of sweeteners worth HK$87.6 billion since February last year, the government has decided it is time to stop the giveaways and get on with developing industries it hopes will help the battered economy grow. In his policy address in October, Donald Tsang Yam-kuen is unlikely to offer any more handouts, according to several people familiar with the government's position. Instead, the chief executive will unveil measures to support the six service industries selected as "pillars" to diversify the economy in future. One of the people said: "We don't see any need for providing extra giveaways in the next policy address. The relief measures announced in October's policy address and the budget in February have helped revitalise the retail market and improve public sentiment." However, the government will come under pressure to provide more help for the disadvantaged, with welfare groups saying it has wasted money on across-the-board handouts that helped people who did not need it. A government official said Mr Tsang would use the policy address to announce two urban sites for private university campuses as part of efforts to develop education, one of the six economic pillars identified by a government-appointed task force on responses to the global downturn. Mr Tsang is also expected to widen tax deductions for company spending on research and development in an effort to spur innovation and technology, another of the so-called pillars. (The others are medical services, environmental industries, cultural and creative industries and food safety and product testing.) The chief executive starts consultations on the policy address on Monday. Government Economist Helen Chan said in June that Hong Kong's economy could see growth in the second quarter after a year of contraction. Despite its view that the handouts have improved sentiment, the government acknowledges they may not have made it any more popular. The latest relief was announced in May, when Financial Secretary John Tsang Chun-wah rolled out measures worth HK$16.8 billion which he characterised as economic stimulus. The package largely expanded upon existing tax concessions and help for businesses. The handouts were the fourth in 15 months. At the time, the finance chief did not rule out further relief if the economy worsened. Ho Hei-wah, director of the Society for Community Organisation, which helps the city's needy assert their rights, said the government should devote more resources to helping the working poor instead of spending money indiscriminately. Chua Hoi-wai, business director of the Hong Kong Council of Social Service, agreed, saying most of the handouts had been designed to please the public. He cannot see the rationale for subsidising everyone's electricity bills to the tune of HK$300 a month. Li Kui-wai, associate professor of economics at City University, said the chief executive should make a long-term investment for the community, such as by beautifying the urban environment and creating jobs for people on low incomes.
Macau's gambling-reliant economy will come under further strain from the financial crisis, Chinese Premier Wen Jiabao said on Tuesday during a meeting in Beijing to formally appoint Macau’s next leader. “The financial crisis is continuing to deepen and spread. The difficulties you face are still great,” Mr Wen told Macau’s incoming chief executive, Fernando Chui, who will take up his five-year term on December 20. Citing a Chinese proverb, Mr Wen said it was important for Mr Chui to start well so that future difficulties could be overcome, with the world’s largest gaming hub hard hit by the downturn and Beijing-imposed visa curbs on Chinese visitors. “This way, during your term you can overcome all sorts of difficulties,” Mr Wen said, while calling on Chui to unite all sectors in Macau to achieve new results. Mr Chui, who has pledged to lessen Macau’s overwhelming reliance on gambling sector revenues through “appropriate diversification” of the city’s economy and to clean up Macau’s corruption-tainted image, said he would do his best with the worst not yet over. “Macau’s economy has been relatively stable, but it has also been impacted to a certain extent. We expect that in the coming period we haven’t yet seen the bottom, so we have to make sure that our work to fight the financial crisis is well done.” Mr Chui’s comments on Macau’s economic and gaming prospects contrast with the recent bullishness of gaming analysts who expect Macau to recover more swiftly than Las Vegas given its proximity to China and its vast pool of gambling-mad punters. Macau’s gross gaming revenues, which exceeded those of Las Vegas in late 2006, are expected to rise 11 per cent year-on-year in the fourth quarter, according to BNP Paribas. The former Portuguese colony is unlikely, however, to see a return to the explosive growth rates seen since 2002 when it liberalised its gaming sector and opened up to gaming goliaths like the Las Vegas Sands and Wynn Resorts. Three new casinos are expected to open in the next two years while Macau will also face regional competition from upcoming mega casinos in Singapore. The low-key Mr Chui, a former culture official from a wealthy Macau family was elected unopposed by a pro-Beijing 300-person electoral college last month. This will be the first leadership change for Macau since it reverted to Chinese rule in 1999, with incumbent chief executive Edmund Ho having served since then.
The Hong Kong Monetary Authority (HKMA) Tuesday announced the launch of the Central Money markets Unit (CMU) Fund Order Routing and Settlement Service, which has become operational. The CMU Fund Order Routing and Settlement Service is a new service provided by the CMU of the HKMA. It is designed to make fund order routing and settlement safer and more efficient by streamlining the processing of investment fund transactions among market participants. The new service provides a standardized platform for processing subscription and redemption orders and settlement and custody of investment funds among CMU members including investment houses, distributors, or custodians initiating the orders, and transfer agents receiving them. Eddie Yue, deputy chief executive of the HKMA, said that investment funds have become an increasingly important international financial intermediation channel in addition to banking, equity and debt securities. However, he said, there is no standardized processing platform for investment funds in Hong Kong at present. The launch of the CMU Fund Order Routing and Settlement Service will address the fund industry's need for an automated and standardized platform to make the process more efficient and reduce operational risks and back-office costs. Leveraging on the existing infrastructure, the new Service will further expand the service coverage of the CMU and contribute to the safety and efficiency of Hong Kong's multi-dimensional financial infrastructure, thereby reinforcing Hong Kong's role as the regional settlement hub and an international financial center, he said.
A major theme park in Guangzhou has quietly closed after nearly 15 years in business, amid reports that more than 70 per cent of mainland theme parks lose money. Shijie Daguan - Grand World Scenic Park- opened in October 1995 to great fanfare. Its kitsch collection of replica historic buildings and world architecture was a hit with residents eager to experience more of the world. The park attracted an estimated 100,000 visitors a month despite tickets costing 100 yuan (HK$113). But in recent years the park, owned by Shijie Daguan Holding Company, had been embroiled in a series of disputes and been hit by declining visitor numbers. It was taken to auction twice in 2005 after accumulating debts of 200 million yuan, but failed to attract a buyer. Early this year a group of 40 people went to the park armed with guns and knives in what police said was a dispute over money. They smashed up attractions until police arrived. One person was shot and at least a dozen were arrested. A notice at the park's main entrance yesterday said it was undergoing renovation and business was suspended. Repeated calls to the park's office went unanswered. There are 2,500 theme parks on the mainland, but 70 per cent of them are losing money and only 10 per cent are making a profit, the Guangzhou Daily reported yesterday, citing unnamed research. Grand World Scenic Park is the seventh theme park in Guangzhou to close in recent years, though other new parks have also been opened. Theme parks that opened in the mid-1990s have been the worst hit, as they have struggled to keep up with the changing tastes of an increasingly well-travelled population. Zeng Yi , manager of Nanhu International Travel Service, said in the past, when people had less money, they went to theme parks for fun. "But now they travel everywhere and don't need to see replicas - they just go and see the real things." Zhang Hui , dean of the tourism management school at Beijing International Studies University, said mainland theme parks were too slow to add new attractions and expand. "China has not worked out a sustainable business model for theme parks," he said. "Nowadays, they must be large-scale, hi-tech, interactive, and a blend of culture and entertainment."
Net profit at China Eastern Airlines (0670), rocketed 900 percent in the first half from the same period last year, with the nation's third biggest carrier mainly benefiting from mark-to-market gains on hedging its jet fuel requirement. Beijing will announce a plan to choose the country's first female astronaut at the end of the year. "Preparations for the selection of female astronauts are underway but we do not have the detailed schedule yet," said Chen Shanguang, director of the Scientific Research Training Center for Chinese Astronauts, which is responsible for the selection. "We will publicize the selection plan at the end of this year," Chen said, the Beijing News reported yesterday. Yang Liwei, the nation's first spaceman and now the vice chief of the training center, said the standards for female astronauts have already been determined. These are based on scientific data from experiments conducted on volunteers, Yang added.
Aug 12, 2009
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Hong Kong:
The assets of the Exchange Fund, which is used to back the Hong Kong dollar,
totaled HK$1,863.9 billion at the end of July, the Hong Kong Monetary Authority
(HKMA) said on Monday. The figure was HK$30.7 billion higher than the total at
the end of June, with foreign currency assets rising HK$39.1 billion while Hong
Kong dollar assets fell HK$8.4 billion, the city’s de facto central bank said in
a statement. The rise in foreign currency assets was mainly a result of
purchases of foreign currencies with Hong Kong dollars and valuation gains on
foreign currency investments. These increases were partly offset by a decrease
in securities purchased but settled in the following month. The decline in Hong
Kong dollar assets was mainly a result of a decrease in Exchange Fund Bills and
Notes issued but not yet settled and fiscal draw downs, which were partly offset
by valuation gains on Hong Kong equities held by the Exchange Fund and an
increase in bank borrowings.
Kenneth Lau attends the Heung Yee Kuk
consultative assembly on the Guangzhou-Shenzhen-Hong Kong rail link in Yuen
Long. Rural leaders in Pat Heung have urged the government to consider moving a
village whose residents have refused to make way for the multibillion-dollar
railway project that will connect the city to the national high-speed network.
Kenneth Lau Ip-keung, a Heung Yee Kuk member who yesterday met representatives
of villages that will be affected by the Guangzhou-Shenzhen-Hong Kong express
rail link, suggested the government move the community of Tsoi Yuen Tsuen - a
strategy not used since the 1970s.
The Hong Kong police force has long
been dubbed Asia's finest, our firefighters have won numerous medals at the
World Firefighters Games and our immigration officers provide speedy service
that lets us clear immigration in just eight seconds, a source of pride given
the long queues in other cities. But this summer something has gone wrong with
our disciplined services officers. Thousands of policemen threatened to stage a
protest on the streets, ambulancemen said they might not provide some
paramedical services to patients, and immigration officers publicly mocked their
customs counterparts for idling at border control points. Meanwhile, the public
was left puzzled and uneasy about all the demands for pay rises, and open
arguments about salary differences between the officers during a global downturn
that has seen many people suffer pay cuts and lay-offs. It all stemmed from
police frustration at a long-awaited report on a review of the disciplined
services grade structure, released last November, and the government's handing
of it. The row has highlighted the crucial and unique role played by the
services both in the post-handover special administrative region and the
previous colonial structure. Hong Kong does not have its own army, and PLA
troops are only in the city for defense. Law and order is maintained by the six
official disciplined services - the police force, Fire Services Department
(which includes the Ambulance Command), the Immigration Department, Customs and
Excise Department, Correctional Services Department, Government Flying Service -
and the Independent Commission Against Corruption, considered the de facto
seventh service. With 53,005 officers, the services account for 32 per cent of
all civil servants. They are recognized as guardians of the city's stability.
But their pay scales and mechanisms have not been reviewed by the government for
21 years, despite many reforms. Until the November report, the last study was
the Rennie Review, conducted in 1988 when the political and social landscape
were very different. To add to the frustration, the overdue report was seen as a
let-down. Tony Liu Kit-ming, chairman of the Police Inspectors' Association,
said: "While the management and unions in the force had very high expectations
of the review, we realised that the government had just given us false hope."
Throughout the two-year consultation on the review, he said, many views and
suggestions had been given to the government, and the lack of any objections had
led them to believe that the government agreed. "But in the end we found our
views had just vanished - like into a black hole," he said. A key complaint by
the police was that their request for a pay mechanism independent from that of
the other services was rejected. However, the report did recommend pay rises for
nearly all grades of disciplined services officers. A police station sergeant
with 30 years of service and earning HK$37,265 - already not a bad salary for a
person with only secondary-school education, which is all most veteran
junior-rank policemen have - would get a rise of nearly HK$3,000, to HK$40,900.
By comparison, a fresh university graduate in recent years has typically been
able to command only about HK$16,000. If all the recommendations in the report
were implemented, they would cost the taxpayer an additional HK$700 million a
year. When they were unveiled in November - at the height of the financial
turmoil - Civil Service minister Denise Yue Chung-yee said the increases should
be deferred "until Hong Kong's economy has returned to stability". The unions
took a wait-and-see attitude. But their patience evaporated in June when, as
news on their pay rises was still pending, the government announced a pay cut of
5.38 per cent for senior civil servants and a freeze for middle and lower ranks.
"This is an injustice," Mr Liu said. "Why does the minister, with a salary of
HK$180,000, have the same level of pay cut as a senior inspector on HK$50,000?"
Thousands of off-duty policemen prepared to take to the streets in protest,
which they called off only after a personal pledge by their commissioner, Tang
King-shing, to fight for early and backdated implementation of the
recommendations in the grade structure review. Political commentator Lo Chi-kin
said Mr Tang's intervention was "a significant turning point" in the disciplined
services pay dispute. "The commissioner took the role as union head, which
totally deviated from the established procedures for handling pay issues," Dr Lo
said. Mr Tang as commander of the force had the responsibility to present a
clear stance on the labour rights of policemen and on the legitimacy of the
police protest and its effects on society. He did neither and "dramatically
switched his role to union head", Dr Lo said. Police are not allowed to go on
strike. Demonstrations are allowed, but none has been held in the past three
decades. Also, no trade union is allowed in the force, which is why the four
bodies commonly referred to by the media as police unions - an accurate
reflection of their function - are officially just "associations". The impact of
Mr Tang's words quickly began to be felt outside the force with other services,
which are allowed unions, agitating for their leaders and bosses to back them as
well. At times, the discord descended into name-calling, with some disciplined
officers lampooning firefighters for playing volleyball or having barbecues
while on standby in fire stations, and the immigration union saying at a press
conference that they were treated as a third-class department. An Immigration
Department officer told journalists that customs officers were "always idling".
The starting salaries for immigration staff are the lowest of all the services.
They start on HK$24,050 - compared with HK$27,155 for officers of the same rank
in the customs, fire services and correctional services departments, and
HK$29,460 for a new police inspector. Chief Executive Donald Tsang Yam-kuen's
June 25 declaration of his family links to the police and "deep affection" for
the force only served to deepen the divide. "My father was a police officer, my
younger brother was a police officer, my sister-in-law was a police officer, my
uncle was a police officer," he recalled, in urging the police to reconsider
their protest. While the march was called off, a police unionist confided that
Mr Tsang's words had spurred ill-feeling in the force, with many thinking he had
made them a joke among the other disciplined services, while not helping them in
their pay fight. "This is an example of the poor political spin-doctoring skills
that the chief executive's aides provide," the unionist said. Firefighters'
union chairman Chiu Sin-chung was moved to declare at a press conference in the
middle of this month: "The chief executive is not our relative, but all
disciplined services are his limbs, his brothers. We believe the chief executive
does not wish to see the brothers in discord and criticising one another." He
went on: "As a responsible labour union, we will not threaten residents or
confront the government to get what we want. This is selfish behavior." This
summer of discontent seems set to simmer for several more weeks, with Miss Yue
due in either September or October to present for discussion a proposal for
Exco's final decision on the implementation of the review. Disciplined services
unions have realised that the review will not result in any structural change,
but are determined that any pay rises should be backdated to November and that
the government should promise a proper salary review every six years. Without
these, the dispute can only heat up again, resulting in a more vociferous union
movement in all the disciplined services. The Government Disciplined Services
General Union has scheduled a forum for Wednesday and has invited heads of the
services to attend, to listen to their grievances before the Civil Service
Bureau submits its proposal. Dr Lo believes that something else is needed - an
open clarification from Mr Tang of his role in the pay review, as his
intervention deviated from established procedures and put chiefs in other
disciplined services under pressure.
President Ma Ying-jeou
comforts a woman made homeless by landslides after Typhoon Morakot struck her
village of Hsinkai, Pintung county, in southern Taiwan. Taiwan's president has
not ruled out a chance meeting with the Dalai Lama when the Tibetan spiritual
leader visits next week, officials said on Friday, a move that would sour the
island's recent closer ties with the mainland. Beijing brands the India-based
Dalai Lama as a separatist and has lashed out at Taiwan’s opposition, which
invited the Dalai Lama subject to President Ma Ying-jeou’s approval. China’s
reaction is also seen as a blow to Mr Ma, elected last year pledged to improve
relations with Beijing, but only in the short-term. Neither side has discounted
the possibility of a chance encounter during the Dalai’s Sunday-Friday visit to
comfort victims of deadly Typhoon Morakot, the island’s worst storm in 50 years.
China: Hunan,
one of China's top indium producers, has shut almost all crude indium production
this month after environmental checks, trading sources said on Friday.
China Mobile chairman Wang Jianzhou
says smartphones using the company's operating system will be introduced soon.
HTC Corp, the No 1 maker of mobile telephones using Google's Android and
Microsoft Corp's Windows operating systems, will supply one handset model to
China Mobile (SEHK: 0941) this year and six next year, said Wang Jianzhou,
chairman of the mainland's leading mobile network operator. Taiwan-based HTC
would manufacture a smartphone for China Mobile, the world's biggest telephone
firm by market value, based on the country's TD-SCDMA technology, Mr Wang said
yesterday. China Mobile plans to expand into the smartphone market as growth in
subscriber numbers slows. Shipments of smartphones, mobile telephones that
enable users to make voice calls, check e-mail and browse the internet, were
forecast to exceed voice handsets by 2014, RBC Capital Markets Corp said in a
report. China Mobile has climbed 3.3 per cent this year, lagging behind the
benchmark Hang Seng Index's 43 per cent; HTC's 8.7 per cent advance this year
trails the Taiwan Weighted Index's 48 per cent increase. Last week, China Mobile
posted its first decline in profit since 1999. It said it would co-operate with
vendors including Dell and HTC to develop handsets that used its own operating
system. Smartphones based on China Mobile's operating system, which uses Android
technology, would be introduced "soon", Mr Wang said last week. China Mobile
added 15.96 million users in the three months to June, compared with 22.5
million a year earlier. It had 493 million subscribers at the end of last month,
more than the combined populations of the United States and Japan. The stock
fell 1.19 per cent to HK$79.05 in Hong Kong yesterday, while HTC closed up 1.81
per cent in Taipei.
Bank of China (Hong Kong) said Thursday
its half-year profit fell by 5.6 percent from a year earlier, dragged lower by
falling interest income amid the deepening economic downturn. The bank's net
profit for the six months ending June 30 amounted to 6.69 billion Hong Kong
dollars, down from 7.09 billion Hong Kong dollars in the same period last year.
China's State Council, the Cabinet, warned Wednesday of overcapacity in emerging
sectors such as wind power, saying the country would move to "guide" development
troubled by overcapacity and redundant projects. Overcapacity has persisted in
the steel and cement sectors, while redundant projects have surfaced in the
emerging sectors of wind power and polysilicon, said a statement issued after an
executive meeting of the State Council, presided over by Premier Wen Jiabao.
"Overcapacity and redundant projects remain prominent because of slow progress
in industrial restructuring in some of these sectors," the statement said.
"Guidance" would be particularly enhanced on the development of steel, cement,
plate glass, coal chemical, poly silicon, and wind power sectors, it said. The
guidance would include strict controls on market access, reinforced
environmental supervision, and tougher controls over land use. Banks were
ordered to lend money for these sectors in strict accordance with present
industrial policies. Relevant government agencies would also strengthen
monitoring over industrial capacity in these sectors, and jointly release
information on topics such as the current scale of operations, public demand,
and government industrial policies, said the statement. 
Paul Chu waves farewell to the media yesterday at HKUST's campus in Clear Water
Bay. Hong Kong should seek the chance to position itself as something more than
a financial hub following the financial meltdown, says the soon-to-retire head
of Hong Kong University of Science and Technology. It would be in the city's
best interest to co-operate with the mainland on the development of top
technologies similar to those from Silicon Valley, Paul Chu Ching-wu suggested
yesterday. The United States and Japan were devoting more attention to
technological development after the crisis savaged their financial sectors and
Hong Kong should follow their lead, he said at a media luncheon. "[The
economies] of China and Hong Kong will recover faster than those in other areas.
But we should seek the chance to position ourselves best," he said. Focusing on
a single field could make society unstable, he warned. "The economic base of
Hong Kong is very narrow. When it does well it does very well. When it's not
doing so well, the situation turns really bad." An HK$18 billion Research
Endowment Fund, approved this year, was a good initiative that boosted
researchers' spirits. But the government should make sure resources went to
outstanding projects, he said. "Hong Kong is a wealthy society. But it is
impossible for all its eight universities to become top universities by
international standards." There should be "mission differentiation" among
universities, with each receiving resources to develop its key strength, the
president said. The renowned scientist saw great potential in technologies that
helped conserve energy. Semi-conductors - his research area - could help reduce
energy loss during its transmission and save tens of billions in US dollars.
Physical constraints meant it might not be possible to place solar panels in the
city, but Professor Chu said local researchers could help mainland partners
develop materials to transform sunshine into energy. Hongkongers had to seize
the opportunity to co-operate with the mainland - the world's fastest growing
economy. "The window of opportunity is already narrowing," he said, referring to
great advances by mainland cities. In September, Professor Chu will hand over to
Tony Chan Fan-cheong after eight years as president. His biggest regret was that
the "University of Science and Technology hasn't turned into Massachusetts
Institute of Technology yet". Eight years ago, his friends in the US bet he
would not come to Hong Kong; now they bet against him returning to the US, he
joked. The generosity of Hongkongers, such as their contributions to
typhoon-stricken Taiwan and quake-hit Sichuan , had touched him. Professor Chu
said the next stage of his life was conducting superconductivity research in the
US in the hope of discovering a semi-conductor that worked at room temperature.
"There are some goals that a person goes after in life. I still want to pursue
my dream in the scientific field," he said. "I hope young people will find their
aspirations and create something new for mankind."
A union representing
rank-and-file civil servants yesterday called on the government to extend
retirement age from 60 to 65, saying the extra years in the service would help
them make ends meet in old age. Although it is estimated that public coffers
could initially save more than HK$500 million a year if the plan is carried out,
senior officers and an academic believed it would block the career path of
middle-age officials. At a meeting with Chief Secretary Henry Tang Ying-yen,
Federation of Civil Service Unions chairman Leung Chau-ting said that many
retired rank-and-file civil servants received small pensions and keeping them in
the civil service could keep them off welfare. The government estimates that
HK$17.5 billion will be paid to 109,750 pensioners in the current financial
year. The total pension liability exceeds HK$427.6 billion. The Civil Service
Bureau estimated that about 3,400 civil servants would retire each year up to
2012-13. If these officers work for another five years, it is estimated that an
annual spending of about HK$540 million would be deferred, while the
government's pension liability would also be reduced as the payout period would
be shortened. However, Mr Leung's proposal was given short shrift by other civil
service unions. Senior Government Officers Association senior vice-chairman
Philip Kwok Chi-tak said that "having the old hands at the helm for all eternity
would affect the grooming of the next generation". James Sung Lap-kung, a public
administration academic at City University, said Mr Leung's proposal was not
realistic, because senior civil servants could earn more in the private sector
after retirement. A spokeswoman for the Civil Service Bureau said the government
had no plans to change the retirement age of civil servants. 
Sir Harry Fang at a fund-raising gala film
premiere on March 5, 1981, at the Palace Theatre with Emily Shum (left), Anson
Chan and (far right) his wife Laura Fang Ip. Throughout his long professional
life, Sir Harry Fang Sin-yang, who died on Monday aged 86, was gripped by a
passion to help the disabled. His success in doing so was recognised at the
highest level. The professor of orthopaedic surgery at the University of Hong
Kong was the first Asian to become president of Rehabilitation International. It
was typical that when he was hit by a stroke at the age of 78, he kept a diary
about his struggle to cope. He noted every step of his long road back to a
fruitful life. The affable doctor laughed. "I'm benefiting from some of the
programs I helped create." With his good humour, ready smile and ability to
listen to anyone, Harry Fang was hugely popular. They had a name for him, one in
which he took great pride: "the father of rehabilitation". For most of his
distinguished career, he concentrated on making life better for the disabled,
including those incapacitated by crippling disease. "For those I can't cure," he
said, "at least I can improve the way they live, help them to enjoy a full and
better life." He did that for thousands of people in Hong Kong and millions more
on the mainland, helping them look forward to a quality of life that never used
to be possible. Rehabilitation is now taught in medical institutions throughout
the mainland. Kit Sinclair, past president and ambassador of the World
Federation of Occupational Therapists, who worked closely with Sir Harry for
more than 20 years on rehabilitation projects, described Sir Harry as "the
grandfather of rehabilitation in Hong Kong and [the mainland]". "He dedicated
his life totally to trying to improve the lot of people with disabilities," she
said. "Sir Harry had the vision and foresight to prepare doctors in China to
take up roles in rehabilitation through a truly innovative training program. He
was inspirational in his breadth of thinking; of ways to spread rehabilitation
techniques to every corner of China. His goal was to train 2,000 rehabilitation
workers by the year 2000. This he accomplished by 1997." Dr Sinclair said Sir
Harry's commitment to the principles of rehabilitation, his dynamic personality,
his enthusiasm about people and the betterment of their lives had been a great
inspiration to all who worked with him. Ruby Ho Shui-wan, who has been manager
of the occupational therapist department at the MacLehose Rehabilitation Centre
and chairwoman of the Hong Kong Occupational Therapy Association, agreed. "He
was a dedicated man, a visionary," said Ms Ho, who worked with him for two
decades. "He was so terribly charming and nice that people would do anything he
asked. Sir Harry saw the need for rehabilitation in China. He knew the mould [in
the mainland] should not be the same as in Hong Kong because in rural areas of
China methods and daily interaction are so very different. "He initiated and
created workshop community-based rehab in 1986. In Guangzhou, they set up a
place for people to learn how to become occupational therapists, with students
from many different provinces. Then fully trained occupational therapists would
be able to help people all over China." Barbara Duncan, communications director
of Rehabilitation International, said Sir Harry had founded many organizations
on his own. "He collaborated with Beijing to build, from ground up, the Chinese
Disabled People's Federation. Once he put his magic hands on it, people poured
through the doors." Sir Harry, who was an uncle of former chief secretary Anson
Chan Fang On-sang, traced his family roots to Anhui province. He was born on
August 2, 1923, during his father General Fang Zhenwu's posting at the
Kuomintang headquarters in Nanjing. In the 1930s, General Fang believed that the
Nationalists should be fighting alongside the Communists against the Japanese -
a view seen as undesirable at the time. He was killed by Kuomintang agents, Sir
Harry suspected, in 1942. The rest of the family, led by Sir Harry's mother,
fled Nanjing and lived for a time in Shanghai before reaching Hong Kong in 1936.
Sir Harry studied at Queen's College and went on to study medicine at HKU.
During the occupation, he fled Hong Kong and continued his studies on the
mainland. He later gained a master's degree in orthopaedic surgery at the
University of Liverpool, England. It was while working in the wards at Queen
Mary Hospital in the 1950s that Sir Harry began his intense interest in making
life better for those with untreatable conditions. It was an era of fast-rising
prosperity (SEHK: 0803) for Hong Kong, and he felt keenly that those who fell by
the wayside should be cared for adequately. A high-rise construction worker had
fallen and was hopelessly crippled. He would never walk again. Sir Harry not
only helped the man gain rightful compensation, but also helped renovate his
resettlement estate flat so the wheelchair-bound man could move from bed to
toilet to kitchen. Then he found him a job in a factory. But realizing he had
helped only one person, he was spurred into public service. "There were so many
others who needed help," he recalled 45 years later. The best way to help the
strickened lead full lives, he believed, was to teach them to look after their
own needs. To do that, society had to offer special schools, therapy programs
and trained staff. Sir Harry made full use of his 1974 appointment to the
Legislative Council. By 1977, the government had published its first paper on
rehabilitation and later laid down a 10-year plan. When he landed a five-year
term on the Executive Council in 1978, Sir Harry used his influence to expand
treatment and to emphasise top quality education for therapists. His work gained
further momentum after he became president of Rehabilitation International in
1980. The UN declared 1981 the year of the disabled and, two years later,
announced the decade of the disabled. Sir Harry was delighted; the doctor had
fought for both moves. Sheila Purves, project director of the Hong Kong Society
for Rehabilitation, which Sir Harry founded, described him as the epitome of
leadership. "He would launch an ambitious project and give you his enthusiasm.
He worked so hard we always had to run to keep up. "Dr Fang truly realized that
surgery and hospitals weren't enough. What would happen to these young people
after their surgery? Rehabilitation centers were needed in Hong Kong. Just
because they were injured didn't mean they could not have a productive life."
For many years, Sir Harry said, treatment for people with such ailments as
cerebral palsy had been non-existent in Asian societies. Such patients led lives
without hope or purpose, lying in a bed and waiting to die. Sir Harry believed
that the survival spirit in people could conquer grave injuries or disabilities,
and, with proper treatment, they could become useful, contributing members of
society. A great way to do that, he believed, was through sport; he was the
founding father of the Far East and South Pacific Games for the Disabled and was
awarded the Paralympic Order in 2001 from the International Paralympic
Committee. His idealism rubbed off on others. He organised Hong Kong's first
disabled sports day, in 1970, founded the Paralympic committee in 1972 and, by
1982, was able to watch athletes from more than 20 countries take part in the
Far East and South Pacific Games for the Disabled at Sha Tin. "Sports are
competitive," he said. "They stretch people to the limit, goad them to
excellence. A disabled person winning a gold medal for Hong Kong becomes a hero
and gains widespread recognition." It was a matter of immense satisfaction for
him to note that Hong Kong's disabled athletes had won 2,000 medals through the
years. Sir Harry himself also won awards, including a knighthood in 1996 and the
Grand Bauhinia Medal in 2001, both in recognition of his lifelong work for the
disabled. Ms Duncan, calling Sir Harry a true humanist, said: "You could be the
queen or someone like me, and he would treat you the same. He received diplomas,
honorary degrees, a knighthood and every sort of honor one can think of, but he
never changed. "The special thing about Harry was he truly understood the need
for regional representation. New York and Geneva weren't going to cut it. Harry
really got down to the everyday communication and regional representation which
is so important. He saw openings and took them." After suffering his first
stroke, Sir Harry suddenly found himself in a similar condition to many of those
whom he had helped over the years. Ever optimistic, he insisted on following the
lessons he had preached, and returned to work as soon as he could. But Sir Harry
had a second stroke in 2003, and remained in hospital until he died. St Paul's
Hospital superintendent Dr David Fang Chun-sang, a nephew, said Sir Harry was
truly the founding father of equal opportunity. "Equal opportunities for sports,
recreation and work for the disabled, among other things," he said. "He held the
helm for society for 40 years and he has set the bar for the future. The effort
must go on." Sir Harry is survived by wife Laura Fang Ip Hung-cho, a son and
four daughters. 
Bilateral trade between
the mainland and India is expected to receive a big boost as China Low interest
rates and risk aversion have drawn more investors to the property market despite
the low yields it offers because rent rises are failing to match the
demand-driven increase in capital values, agents say. Hong Kong Lands Registry
data show 13 deals of more than HK$100 million were closed in the commercial
property market in July, and total deal values reached HK$3.05 billion for the
month, an increase of 68.5 per cent on the HK$1.81 billion worth of transactions
in June. A total of 114 transactions of more than HK$100 million were done so
far this year, with transaction values reaching about HK$25.7 billion - down 49
per cent on deal values of HK$50.3 billion for the same period last year,
according to property consultancy DTZ. The July result was a 20-month high for
sales values in the sector, according to Centaline Property Agency's research
department. And more recent transactions show there is still no sign that
investor appetite for commercial property is set to slow, agents say, citing the
purchase announced last week by a Taiwanese investor and China Railway (SEHK:
0390) Logistics of 12 retail and office floors at Grand Millennium Plaza in
Sheung Wan for a total of about HK$1.3 billion. Sino Land bought the 87-unit
Fraser Suites serviced flats project in Wan Chai for HK$580 million last week.
Hong Kong's second-largest developer, Cheung Kong (Holdings) (SEHK: 0001), has
also been in the market with its associated companies in recent weeks, buying
two small sites in Hung Hom and North Point for a total of HK$580 million. Henry
Lam, a director of investment at Knight Frank, believes developers have returned
to the acquisition trail because of strong sales in the last few months and
limited land supply in urban areas. The outlook for the residential market was
also encouraging, he added. "Demand for high-end residential flats in Hong Kong
is unlimited due to the influx of mainland buyers and high land prices." The
latest surge in investment activity follows a sluggish start to the year and
bolsters suggestions that a turnaround is under way in investment sentiment.
"Investors share different views about the market outlook as the property market
is at a turning point. So you can see many investors offload their properties,
while others are aggressive in acquisitions," said Alvin Yip Kwok-ping, the
co-head of investment for China at DTZ. The year-to-date outcome was dragged
down by a sharply lower number of deals completed in the first quarter because
of the blow to confidence and economic growth from the global financial crisis.
Sentiment had begun recovering in recent months, said agents. Kent Fong Chi-kit,
the co-head of investment at property agency Cushman & Wakefield, said while
investors and industrial enterprisers were the most active in looking for
investment opportunities, foreign funds continued to focus on disposing of their
properties. Gross yields on property deals in recent months ranged between 3 and
4 per cent, with a notable exception being the sale by Wing On Travel of the
Rosedale on the Park hotel earlier this month at a yield of 6.5 per cent. Until
recently, investors had remained willing to make aggressive bids to secure
low-yielding properties, said Mr Fong. "They are cash-rich, and record low
interest rates have helped them to generate higher net rental yield," he said.
But Mr Fong now doubted whether the investment trend would be sustained at
present levels despite lagging yields. "Rental yields of many retail shops have
dropped to just 3 per cent or so, and net returns for investors will be reduced
once interest rates begin rising again. In the meantime, it is unlikely that we
will see a significant rise in retail rents in the short term," he said. Mr Lam
believes a lack of reliable alternative investments and risk-aversion arising
from the global financial crisis could continue to support investment in the
market. "There are not many reliable investment alternatives available in
financial markets," he said. That assessment was backed by Wong Chung-kwong, the
general manager of the property unit of Capital Strategic Investment, which has
responded to demand from investors by taking profit on its portfolio. "Rents on
offices and retail properties have not rebounded significantly while their
capital values have jumped sharply. I don't understand the reasoning behind the
increase in capital values. Perhaps the investors are cash-rich and lack
alternative investment targets," he said. Meanwhile, the booming market has
provided Capital Strategic an opportunity to offload what it calls "non-core"
properties. Last week, it sold an office building at Stanley Street in Central
for HK$150 million in a deal that yielded just 2.3 per cent for the buyer. Now
it is looking to buy back into the market, eyeing deals of HK$1 billion to HK$2
billion. Agents said Nexxus Building in Central and the remaining office floors
at Grand Millennium Plaza in Sheung Wan are the major targets of investors in
the short term. 
HSBC Holdings (0005),
which is committed to further development in China, has vowed to support
Shanghai's bid to become a financial center like Hong Kong. "I sincerely hope
that Shanghai will become a financial center, as China is able to have two
centers, given its size," Vincent Cheng Hoi-chuen, chairman of HSBC's
Asia-Pacific unit, said yesterday. Cheng said that competition in the banking
sector between Hong Kong and Shanghai will only emerge in the capital market,
and the two places should collaborate to sustain their development. "There
should be enough capacity for companies to list in both or either market at the
same time, despite more and more companies planning to go public in the capital
market," Cheng said. He added the HSBC group will continue to commit resources
to the mainland, tapping the country's growth potential. The group's latest
venture is HSBC Life Insurance, which started operations yesterday in Shanghai.
The firm is a 50-50 joint venture with Beijing-based National Trust. The new
insurer, which currently employs 180 people, plans to hire 320 more staff within
a year, said chief executive Terry Lo Kin-wing.
China has boosted efforts to become the
dominant player in green energy - especially in solar power. Mainland companies'
strategies have resulted in the halving of the price of solar panels on the
United States market over the past year. Suntech Power Holdings, China's biggest
solar panel maker, said it was selling solar panels in the US for less than the
cost of materials, assembly and shipping to build market share. Backed by strong
government support, Chinese firms are preparing to construct US plants to
assemble their products to bypass protectionist laws. "I don't see Europe or the
United States becoming major producers of solar products - they'll be
consumers," said Thomas Zarrella, chief executive of GT Solar International, a
US firm that sells equipment to solar panel makers. Since March, mainland
authorities at the national, provincial and even local levels have competed with
one another to offer solar companies ever more generous subsidies, including
free land, and cash for research and development. State-owned banks are flooding
the industry with loans at considerably lower interest rates than available in
Europe or the US. Suntech, based in Wuxi in Jiangsu province, is on track this
year to surpass Q-Cells of Germany to become the world's second-largest supplier
of photovoltaic cells, behind only First Solar in Tempe, Arizona.
Workers clean up the logo for the
Bank of China in Beijing. On Thursday, mainland's third-largest commercial bank
by assets, said that its first-half profit slipped 2.5 per cent as lower
interest rates hurt its margins. Bank of China, the country’s third-largest
commercial bank by assets, said on Thursday that its first-half profit slipped
2.5 per cent as lower interest rates hurt its margins. Profit fell to 41.1
billion yuan (HK$46.70 billion), or 0.16 yuan per share. That compared with a
profit of 42.2 billion yuan in the first half of last year. However, the second
quarter saw a 21 per cent improvement in net profit compared with the first
quarter of the year, the Beijing-based lender said. All the mainland banks have
been squeezed by the narrowing of the spread between benchmark interest rates
and financial market rates following repeated rate cuts by mainland’s central
bank to boost economic growth amid the global financial crisis. Bank of China
said its net interest income fell 8.3 per cent from a year earlier to 74.7
billion yuan. Net fee and commission income edged 2.6 per cent higher to 22.95
billion yuan, it said. An increase in government-supported loans aimed at
stimulating the flagging economy helped to offset some of the decline in
interest income, the bank said. Bank of China said its total loans rose nearly
31 per cent in January-June, while total assets jumped 18 per cent in the same
period, to 8.2 trillion yuan. The bank reported a 14.4 per cent rise in net
profit last year, down sharply from a 31 per cent rise in 2007.
Out-going Hong Kong
Monetary Authority (HKMA) chief executive Joseph Yam Chi-kwong said on Wednesday
that Hong Kong’s currency peg to the US dollar should be retained. Mr Yam made
the comments at a farewell press conference on Wednesday afternoon. He will
officially step down on Sunday after 16 years as head of the HKMA. During his
tenure, the Hong Kong economy has weathered many storms, most notably the 1997
Asian financial crisis and last year’s global credit crisis. The HKMA chief
executive and other government officials have consistently defended the peg,
saying it has been a bulwark against currency speculation for over 25 years.
However, some commentators believe it should be replaced by a different system –
or possibly one linked to the mainland’s yuan. The Hong Kong dollar is pegged at
7.80 to the US dollar but can trade between 7.75 and 7.85. The HKMA is usually
obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85. Mr Yam said
the peg was still working well. “Hong Kong has developed a very healthy currency
system. Besides, the market has also developed confidence in the system,” Mr Yam
said. “I am sure the government and my successor will continue to support it,”
he said. Mr Yam also said he did not have any specific plans in the short-term.
“I intend to go to travelling in October,” he said. “But if the mainland or Hong
Kong’s financial sectors want my help, I will certainly consider it. I have
great enthusiasm for the finance industry,” Mr Yam added. He said he did not
need to offer advice to his successor, Norman Chan Tak-lam. Mr Chan will
officially become chief executive of the HKMA on Monday. “Mr Chan has a wide
knowledge of the financial and banking systems in Hong Kong. I am sure he will
do a good job,” said Mr Yam.
Minibuses will soon be required to install equipment limiting speed at 80km/h.
The speed limiters, which will cost between HK$6,000 and HK$8,000, will be made
part of licensing conditions either in the 2010 or 2011 legislative years,
government sources said. The devices will prevent a driver from accelerating
past a benchmark speed as a precaution following a spate of deadly accidents
involving minibuses. The sources said three German-made speed limiters have been
approved by the government as they meet standards set in the United
Nations/Economic Commission for Europe International Vehicle Regulation and the
European Community Council Directive. Higher speed settings will be allowed for
green minibuses that need to travel on expressways. About 400 buses serving less
than 40 routes can get this exemption, the sources said. The devices, which will
have mechanical and electronic versions, will be sealed to prevent tampering.
The government will be asking minibus manufacturers to help with the
installation, the sources said. The Transport Department is drafting laws that
it hopes will be passed by 2011 at the latest which will penalize minibuses not
equipped with the devices. Public Light Bus General Association chairman Ling
Chi-keung said they will meet with the department on Friday to discuss the
details of the scheme. "We need to know if the manufacturers will provide
maintenance and other details," Ling said. "We also want to discuss a grace
period for old minibuses." On top of the speed limiters, black boxes similar to
those on planes will also be made mandatory for new minibuses, the sources
disclosed. But previous black box trials on old minibuses proved the equipment
was susceptible to damage and tinkering. The sources said new rules on black
boxes will ensure they are located in an appropriate location that will protect
it from wear and tear and tampering. Training sessions on driving behavior and
attitude for people wanting to enter the trade will also be made available. On
July 27, a minibus collision on the Yuen Long highway killed four and injured
13. Two other women died on June 12 in a Mong Kok crash involving a minibus and
a double-decker bus.
Parents with children moving into
Secondary Four classes in September under the new "3-3-4" education system will
have to fork out between HK$2,000 and HK$3,000 to buy textbooks that meet the
new syllabus.
Harry Fang Sin-yang - a leading pioneer of scientific medical rehabilitation in
Hong Kong - died at the age of 87 on Tuesday after a prolonged illness.
Yacht Club bids to host top race -
It's the Formula One of yachting, and Hong Kong wants a piece of it. The Royal
Hong Kong Yacht Club hopes to bring America's Cup-class racing to Victoria
Harbour. And the government, having lost to Singapore and Qingdao the chance to
host a leg of the world's other top-notch yachting event, the 2008-09 Volvo
Ocean Race, is backing it. With the America's Cup having descended into farce
with holder Alinghi and challenger Oracle embroiled in a messy legal dispute
ahead of their showdown in February in Dubai, the Louis Vuitton World Series has
been conceived to give the rest of the world a chance to compete in America's
Cup-class yachts. The Yacht Club has not said how much it would cost to stage
the event but has applied for help from the government's Mega Events Fund
towards the cost of hosting a seven-day World Series regatta in November next
year. A person with knowledge of the club's application said it was for HK$10
million. Sailing superpowers New Zealand and the United States have agreed to
compete in the World Series, and the club is planning to enter a joint Hong
Kong-mainland team. The regatta, which would be the biggest sailing race held in
Hong Kong, meets the requirements of the HK$100 million fund, which include
attracting visitors to the city and bringing economic benefits. Chan Pak-ling,
the Yacht Club's public relations and communications manager, said one of the
prerequisites for applying the fund was to have attendance of at least 10,000
for the regatta. The club is confident thousands of Hongkongers would turn out.
It has proposed the regatta village be set up at Central's Pier 10, now under
construction on reclaimed land in front of City Hall. "This is like the Formula
One of yachting and it is an honour for Hong Kong to host such a race," Ms Chan
said. "New Zealand and the United States have already agreed to come with their
top sailors, who have America's Cup experience." The club was hoping teams from
Australia, South Africa, Italy, France and Britain would also take part, she
said. A senior Home Affairs Bureau official with responsibility for sport said
the government welcomed the proposal as an opportunity to host world-class
competition. "We are still studying the proposal, but a race like the America's
Cup in Hong Kong has plenty of merit," he said. The club's funding application
will be assessed next month.
The extra cost of using
cleaner diesel in Hong Kong's ferries is likely to be much less than ferry
operators have claimed, the environment watchdog says. Ultra-low-sulphur marine
diesel, which went on trial in five ferries yesterday, would cost about 60 HK
cents a litre more than conventional diesel, not up to HK$3 as the companies had
estimated, the Environmental Protection Department said. But one of the
operators said the cleaner fuel would still push up its operating costs by 10
per cent, increasing pressure for a fare rise. A department spokesman said clean
diesel now cost HK$4.50 a litre, compared with HK$3.90 for conventional marine
diesel, subject to oil-price fluctuations. Hong Kong & Kowloon Ferry said that
price difference would lead to a 10 per cent rise in operating costs if all its
vessels used the fuel. "The additional cost would erode our meagre profit and
increase pressure for a fare rise," general manager Nelson Ng Siu-yuen said.
Launching the nine-month trial of the cleaner fuel yesterday, the Environmental
Protection Department said it would pay up to HK$10 million in incentives for
ferry operators to take part. The money was for fuel subsidies and technical
monitoring. The trial would provide data on operating costs, and the impact on
maintenance and technical performance to help officials decide whether all
ferries should use cleaner fuel. The fuel, 100 times lower in sulphur, will be
supplied to five selected ferries by an oil barge operated by Sinopec (SEHK:
0386) in Cheung Sha Wan. These are New World First Ferry's Xin Hui III and VIII
between Central and Cheung Chau and Xin Ying running from Central to Mui Wo;
Hong Kong & Kowloon Ferry's Hoi Ming connecting Central and Peng Chau; and a
Hong Kong and Yaumati Ferry car-carrier between Kwun Tong and North Point. The
Star Ferry did not join the trial, saying its own trial of cleaner diesel in
2006 resulted in loss of power, higher fuel consumption, and engine corrosion.
"We will still keep track of the trial results of other ferry operators,"
general manager Johnny Leung Tak-hing said. The department spokesman said there
had been no mechanical problems for government vessels since they started using
the cleaner fuel in 2000. He said there were other solutions to resolve the
operators' worries about the lubricating effect of sulphur in the engines. The
spokesman said that if all local passenger ferries switched to the cleaner fuel,
the total sulphur emissions from the marine sector could be cut by about 12.5
per cent. Other sulphur emissions come from domestic vessels such as barges and
fishing boats, as well as ocean-going vessels and cross-border ferries. The
Marine Department said four local vessel operators were convicted for
black-smoke emissions last year, compared with none in 2007. 
The developer sold 709
units in the 2.5 billion yuan Evergrande Splendor in Chongqing on Sunday,
raising 564 million yuan. Guangzhou-based property giant Evergrande Real Estate
Group can offer projects at stunningly low prices because of the standardised
approach it is using to ensure developments would be "built fast and sold fast".
The 2.5 billion yuan (HK$2.84 billion) Evergrande Splendor project undergoing
construction on an 800,000 square metre site on the outskirts of Chongqing is
expected to deliver gross returns of as much as 30 per cent because of economies
of scale. Evergrande is trying to raise as much as US$1 billion from a Hong Kong
initial public offering. The developer sold 709 units - due to be completed next
year - for 564 million yuan on Sunday. Located on a site next to a large green
belt, the resort housing development will feature more than 1,500 apartments,
villas and detached houses in its first two phases. Also planned for the site is
a five-star hotel, a convention centre, and a sports and recreation centre.
Overall margins on the development would be boosted by sales of bigger flats and
villas that would be priced between 5,000 yuan and 9,000 yuan per square metre,
much higher than the 3,000 yuan price for smaller units and amounted to no more
than the cost price, taking into account a land cost of about 400 yuan per
square metre and construction costs of 2,500 yuan per square metre, people
familiar with the company said. But revenue generated by the sale of larger
villas and townhouses would lift overall gross margins on the development to
about 30 per cent, the market sources said. James Xia, the chief executive of
Evergrande, said the flats at Evergrande Splendor would represent "value for
money" because of tight control on development costs. "As a way to lower land
costs, Evergrande's strategy is to target the construction of housing projects
on large sites ranging in size from 500,000 sq metres to 1 million sq metres on
the outskirts of cities but close to highways and surrounded by mountains or
lakes," he said. Evergrande Splendor Chongqing is the latest mainland project to
be tackled on this basis, the others being in Nanjing, Tianjin, Kunming, Ezhou
in Hubei, Pengshan in Sichuan, Qingyang in Guangdong, and Suzhou. The group has
projects in 22 cities and a land bank of about 50 million sq metres, and it aims
to achieve contract sales of 30 billion yuan this year. For the first half, it
has pulled in 12.7 billion yuan in sales. "Buyers will see that our fittings,
including those for doors, kitchens and toilets, are more or less the same in
all Evergrande Splendor developments. Through large volume purchase, we are able
to secure bargain prices - even for famous expensive brands of toilet bowls," he
said. Evergrande Splendor's target customers were working-class buyers aged 30
to 40 who were looking for a better living environment at affordable prices, he
said. "We see a great market for this group of buyers." he said. Lou Ming-gang,
a 35-year-old sales manager at an engineering firm, was among the buyers at the
latest launch by Evergrande. He said he wanted to buy a 170 sq metre villa but
when he discovered that all units had been sold out, he bought a 121 sq metre
four-bedroom flat for 430,000 yuan.
Developers bringing some 1.42 million
square feet of new retail space to the shopping district of Tsim Sha Tsui this
year and next are facing strong competition in finding tenants as the retail
market remains weak, say letting agents. "The new malls have positioned
themselves differently in the market. But they are opening for business at
almost the same time and developers could come under pressure to find tenants
unless the economy recovers," said Helen Mak, senior manager of retail services
group at Colliers International. While shoppers would benefit immediately from
the wider choice on offer in the four new malls, competition for tenants would
be fierce. The first of the four new malls in the area - the 80,000 sq ft Cheung
Kong (Holdings) (SEHK: 0001)' 1881 Heritage in Canton Road - has already opened
for business but is still looking for tenants. The occupancy rate of the retail
space reached more than 90 per cent. Yet to open is Associated International's
iSquare and New World Development's K11 - due for completion in the final
quarter, and Chinese Estates (SEHK: 0127)' 29-storey 400,000 sq ft project The
One, which will become Hong Kong's tallest retail complex on completion in
mid-2010. Leasing agents are already searching for tenants for the three
unfinished malls and say that 60 per cent of the 60,000 sq ft iSquare, developed
by Associated International and its parent company Tian Teck Land, has already
been leased. At the last official count in May, New World Development said the
occupancy rate at K11 was just 40 per cent, but agents said this had since been
increased to about 70 per cent. The last time that the retail market was
presented with so much new space to digest was in 2004, when the pipeline of new
supply reached more than 1.23 million sq ft. Then the influx of mainland
travellers and strong economic growth encouraged retailers to open new shops.
Among the new developments that came to the market then were Sun Hung Kai
Properties (SEHK: 0016)' apm in Kwun Tong and Great Eagle Holdings (SEHK: 0041)'
Langham Place in Mong Kok. At Langham Place, more than 90 per cent of the space
was leased by September 2004 and it went on to open in January 2005, while apm
had leased 98 per cent of its total retail space by early 2005 before opening in
March of that year. Joe Lin, a director of retail services department at CB
Richard Ellis, said leasing of the new shopping malls in Tsim Sha Tsui in the
present market conditions would be unavoidably affected by the ongoing shock to
confidence and economic growth arising from the outbreak of the global financial
crisis. "The new malls are all located in the same area. Though they have their
own edge and positioning, most of the branded outlets would only pick one of the
malls to open a new shop," he said. Scheduled to open in November is iSquare,
which cost some HK$1.3 billion to develop and is located at the junction of
Nathan Road and Peking Road, a prime location in Tsim Sha Tsui. Kevin Lam, an
associate director of retail services at DTZ, the sole leasing agency of the
mall, said that to date about 36,000 sq ft or 60 per cent of the total floor
area had been leased at rents that ranged between HK$45 and HK$200 per square
foot. Rents for street-level shops in the mall ranged from HK$600 to HK$800 per
square foot, he said, and tenants that had already signed up included food and
beverage outlets, fashion, make-up and lifestyle shops as well as a cinema
complex. The mall had also proved attractive to European fashion and accessory
brands making their first entry into Hong Kong. The One at Nathan Road launched
its leasing campaign last month but to date has made no announcements concerning
any major leasing transactions. Agents said it was unlikely that rentals in the
existing retail centre Harbour City would come under downward pressure as a
result of the new space coming onto the market in the area. "Harbor City is
well-established. Its leasing and rents will not be affected by the newcomers."
Ms Mak said. 
China Life (2628) - the mainland's largest
insurer - said first-half earnings rose 15.4 percent thanks to higher investment
returns on the back of a rosy stock market. The Beijing-based insurer posted an
interim net profit of 18.22 billion yuan (HK$20.66 billion), compared with 15.8
billion yuan a year ago. The results missed the market consensus of 20 billion
yuan. No interim dividend was declared. Chairman Yang Chao said China Life had
actively responded to capital market changes and adjusted its investment
portfolio on a timely basis so it could ride the market rally. It reduced the
proportion of fixed-income investment and increased equity investment, further
optimizing the investment asset allocation, Yang said in a statement to the Hong
Kong stock exchange. At the end of June, China Life cut its debt securities to
51.49 percent from 61.43 percent a year ago, while equity investment at 13.43
percent improved significantly from 8.01 percent. Yang said the successful
bidding for stakes in China Construction Bank (0939) and Bank of China (3988)
led to satisfactory investment returns. The banks' shares and the insurer's
portfolio adjustments boosted the gross investment yield by 96 basis points to
3.27 percent. Net investment income in the first six months was down 25.18
percent to 18.9 billion yuan, but total investment income rose 64.66 percent to
32.19 billion yuan if net realized gains on assets sold and fair value gains
were counted. The firm made a profit of 11.88 billion yuan from equity sales -
15 times the 742 million yuan it made in the first half of 2008. At the same
time, net fair value gains for holding assets were 1.375 billion yuan, compared
with last year's loss of 6.49 billion yuan. Meanwhile, China Life's gross
written premiums and policy fees were up 10.82 percent to 87.863 billion yuan,
with embedded value reaching 267.3 billion yuan, 11.34 percent higher than at
the end of 2008, maintaining its leading position with about 39.2 percent market
share. Shares of China Life yesterday rose 0.6 percent to close at HK$33.25.
A volunteer crossing guard
looks to discourage jaywalkers in central Guangzhou. Government-backed
neighborhood groups are going door to door in southern China's gritty business
capital with a set of simple requests: please stop spitting in public, cutting
in bus lines and talking loudly in the streets. It's all part of a campaign in
Guangzhou, the mainland's third wealthiest metropolis, to win the coveted
"Civilized City" award - an annual ritual that sparks months of frantic
scrubbing and buffing in cities across the mainland. Women wearing red armbands
patrol the streets and pick up cigarette butts. Volunteer crossing guards with
yellow flags and whistles make sure people wait for green lights. Beggars are
banished from their usual haunts on pedestrian bridges. While some citizens
remain sceptical of the clean-up drive, it jibes with Chinese leaders' goal of
shifting away from the pursuit of economic growth at any cost. They want to
focus more on creating a spiffier, healthier, more cultured and harmonious
society. Each year, the central government awards the prized designation to one
or more cities, and it's a big deal for Guangzhou, as it tries to shed a
reputation for being dirty and crime-ridden. Next year, this historic port city
of 10 million people hosts the Asian Games, which will draw 25,000 athletes,
coaches and journalists from 45 countries. "We have a saying: if you haven't
been robbed, you're not a real Guangzhou person," says Wu Enwei, a 33-year-old
businesswoman whose cellphone was snatched from her hand a few years ago. "The
crime situation has improved, but I still think Beijing and Shanghai are much
better." The civility campaign also highlights how the Communist Party still
likes to indulge in often heavy-handed social engineering, reaching deep into
people's lives to try to mould the masses. Beijing launched a similar campaign
before last year's Olympics, trying to curb spitting, jumping ahead in line,
littering and reckless driving. In Guangzhou, members of neighborhood
committees, government-backed councils that monitor households, are knocking on
doors in the evening and handing out a survey and brochures about improving
civil behavior. Getting the public to support such campaigns is harder now on
the mainland. The dramatic changes in society that began with the economic
reforms 30 years ago have given people more freedom in their private lives. Most
don't rely on the government for a job and apartment. Many have also grown
cynical and suspicious of Beijing's edicts and campaigns. They can ignore the
propaganda or be unenthusiastic without worrying too much about being branded an
anti-revolutionary and sent to prison. One 20-year-old college student serving
as a crosswalk guard in central Guangzhou says his parents, who work for the
government, forced him to volunteer for the duty. He seems embarrassed as he
stands on the curb wearing a yellow sash and carrying a matching flag that says,
"Please wait for the green light". "I don't really understand this `Civilised
City' campaign. It seems so silly," says the student, who only gave his surname,
Chen, because he feared he would run afoul of the government and his parents.
"Every year we do this stuff for a few weeks, and when the inspection is over,
things go back to normal. People continue jaywalking and littering. It's just a
show." City officials responsible for the campaign declined requests for an
interview. Johnny Lau, a mainland analyst teaching at Hong Kong Baptist
University, says cleaning up Guangzhou will be a challenge, but it's something
all mainland cities need to do to remain competitive. "As a prosperous city,
Guangzhou can no longer just focus on its industrial development. It has to
enhance people's living standard to attract more foreign investors," Lau says. A
recent winner of the "Civilised City" award is the prosperous southern port city
of Xiamen, where the streets are famously clean, skyscrapers gleam on the
waterfront, and well restored colonial buildings add charm. That is a far cry
from Guangzhou, which ranked 12th on a list of the world's 20 "Hardest Hardship
Posts" for expatriates by BusinessWeek magazine in March. The city is a
"high-risk location" because of pollution and problems with disease and
sanitation, according to the survey compiled by ORC Worldwide, a New York-based
human resources firm. Many health experts believe that the 2003 deadly outbreak
of Sars originated in the Guangzhou area. The region has long been regarded by
scientists as one of the world's biggest breeding grounds for new flu viruses
because the dense human population lives close to pigs and water fowl on farms
and in markets. The city was once one of Asia's most important. China's last
dynasty, the Qing, in 1757 decided that Guangzhou's port would be the only one
open to the West. All the tea, porcelain, silk and other goods the West was
hungry to buy had to pass through the city. Guangzhou also handled the opium
imported by foreigners, and the first Opium War was fought in and around the
city in 1839-42. With the eventual opening of other ports, Guangzhou's
importance began fading. But as the mainland began to open up economically in
the late 1970s, its entrepreneurial spirit brought prosperity (SEHK: 0803)
again. Yet Guangzhou continues to be eclipsed by the glitzier Shanghai and
Beijing. That does not appear to faze residents such as Ma Li, a 32-year-old
property agent. He says those two cities get most of the attention because the
Shanghainese are flashy show-offs and Beijingers love to talk and occupy the
seat of national power. "We Cantonese are low-key, practical people who like to
be left alone so we can just do our business," he says.
Huawei Technologies had garnered a 10 per cent share of Europe's
telecommunications equipment market and expected to gain more ground this year,
an executive said. The Shenzhen-based firm was targeting a "huge improvement" in
Europe this year, with a focus on wireless equipment, said Tim Watkins, Huawei's
vice-president for western Europe. The company won US$3 billion in contracts out
of the US$30 billion awarded in Europe last year, a 20 per cent gain from a year
earlier, with sales to "all major operators", including Vodafone Group and
Telefonica, Mr Watkins said. Huawei also made a "significant breakthrough" in
the United States, he said. The company's gains defy the trend in the industry,
which has been hurt by falling demand and intensifying price competition. Its
net income rose 20 per cent to US$1.15 billion last year while its major rivals,
Ericsson and Nokia Siemens Networks, suffered an almost 50 per cent drop in
annual profit, and Alcatel-Lucent's full-year loss widened 48 per cent. Aided by
its lower cost base, Huawei now ranks third in the industry, with a global
market share of 14 per cent, behind Ericsson with a 35 per cent share and Nokia
Siemens with 20 per cent, said Kulbinder Garcha, a Credit Suisse analyst.
Huawei's US$2.2 billion joint bid with Bain Capital for 3Com Corp was withdrawn
Washington's concern China would gain access to 3Com's anti-hacking technology.
It was a "misconception" that Huawei was linked to the Chinese government, Mr
Watkins said. He said Huawei had won more than five contracts in North America
this year, including a three-year 4G wireless contract this month from US-based
Clearwire Corp. "It doesn't mean all of a sudden the gate is flying open and
everybody's happy with Huawei, but the important thing is we are moving in."
Hongkong and Shanghai Banking Corp will become the first local lender to charge
for printed statements as it promotes internet banking. The green initiative -
to be launched in 2011 - sparked concern other banks will follow suit and that
it penalizes customers who lack computer skills. Starting October 11, HSBC will
invite 1.6 million personal internet banking service customers to go paperless.
Customers will be notified of new statements via e-mail or short message alerts.
Thirteen kinds of statements, covering integrated accounts and credit card
services, will be available online. Other services will be converted gradually.
In the long term, all 4.2 million customers using the bank's personal financial
services will be covered. Customers who still want printed statements will have
to pay HK$20 per account annually from January 1, 2011. Those aged 65 and above,
and recipients of the government's comprehensive social security and disability
allowances, are eligible for a fee waiver.
Betty Yuen So Siu-mei, one of Hong Kong's highest-achieving women in the world
of business, is in what looks like the fight of her life. The first woman and
the first Chinese to win the top post at CLP Power Hong Kong has breast cancer.
But Yuen is confident this is another battle she will win. The 51-year-old wife
and mother - she has two teenage daughters - is now on leave from her job as the
utility's managing director as she concentrates on treatment. She was diagnosed
as having breast cancer in its early stages. Yuen wanted people to be absolutely
clear about the reason for her absence and avoid speculation, so an official
announcement about her illness was posted on the company's website. It spelled
out Yuen's resolve, saying she is "confident that the illness can be overcome in
its early stage and that her absence will not impact the operation of the
company." With Yuen away, CLP's chief operating officer Richard Lancaster will
be acting managing director for the Hong Kong business, while corporate
development director Chan Siu-hung will handle its nuclear business. "Yuen has
communicated with her staff on this arrangement and expressed her thanks for the
kind thoughts and support given to her by the whole management team and staff,"
the announcement said. A chartered accountant, Yuen earned a bachelor of
commerce degree from the University of Toronto in 1979. She joined CLP in 1999
as director of finance and planning and was promoted to managing director in
2002. Cancer of the breast is the most common of cancers among Hong Kong women
and number three in cancer deaths. The latest complete data available show 2,584
new cases diagnosed in 2006. It killed 463 women that year. Gabriel Choi Kin,
the immediate past president of the Hong Kong Medical Association, said women
with a family history of breast cancer are more prone to developing the disease.
"If one's mother or aunt has breast cancer, the chances that one gets cancer are
higher," Choi explained. Besides genetic makeup playing a part in breast cancer
striking, women who take hormones - such as birth control pills - for an
extended period have a higher chance of developing the disease. Breast cancer
can occur after menopause, though it usually afflicts women in their late 30s.
Screening for breast cancer should be sought at least once in every three years,
Choi said, and women in their 40s should be following this practice. 
Taiwan's government on Tuesday
confirmed that 376 people were killed while 254 were missing after Typhoon
Morakot struck two weeks ago, bringing the worst flooding in the island’s
history. Taiwan’s parliament came out of recess on Tuesday to discuss the
cabinet's NT$100 billion (US$3 billion) budget for reconstruction in the wake of
Typhoon Morakot.
Chinese President Hu Jintao (C)
talks with residents of Uygur ethnic group at a village in Aksu, northwest
China's Xinjiang Uygur Autonomous Region, on Aug. 22, 2009. Hu paid an
inspection tour to the region from Aug. 22 to Aug. 25.
China will continue its stimulus policies
to expand domestic demand and ensure a sustainable flow of credit in light of
uncertainties and problems ahead of a recovery, Premier Wen Jiabao said. Wen
warned against being "blindly optimistic" despite improvements in economic
growth, according to a report on the Cabinet's website. In a downbeat statement
after a trip to the eastern province of Zhejiang - a hotbed of private
enterprise - Wen said Beijing will ensure a sustainable flow of credit and a
"reasonably sufficient" provision of liquidity to support growth. "We must
clearly see that the foundations of the recovery are not stable, not solidified
and not balanced," Wen said. "We cannot be blindly optimistic. Economic
operation still faces many new difficulties and problems. "Therefore, we must
maintain continuity and consistency in macroeconomic policies, and maintaining
stable and quite fast economic growth remains our top priority. This means we
cannot afford the slightest relaxation or wavering." China still faces great
pressure from the slowdown in demand for exports, Wen said, adding that it is
difficult to boost domestic demand in the short term to fill in the gap -
despite the boost from the government's 4 trillion yuan (HK$4.53 trillion)
stimulus package. Wen cautioned that the effects of some government measures
might fade while others would take time to show results, the statement said.
Wen's comments echoed his repeated recent warnings against complacency and
assurances that Beijing's stimulus spending and easy credit will continue. But
they ran counter to increasing optimism among financial analysts who say China
is emerging from its economic slump. The mainland's economic growth accelerated
in the latest quarter on the back of Beijing's huge stimulus spending but
authorities have called for continued vigilance. They say poor corporate profits
and weakness in other areas show a recovery is not fully established. 
China Resources Power Holdings (0836)
reported a 125.5 percent jump in first-half net profit as its electricity
generation segment grew considerably. et profit for the six months ended June 30
hit HK$2.27 billion, up from HK$1.01 billion last year. An interim dividend of 6
HK cents per share was declared. Benefiting from two mainland increases in
tariffs last year and a 3.5 percent year-on-year decrease in per unit fuel cost
in the first half, CRP recorded higher revenues from electricity sales, even
though both gross and net power generation fell. Chief executive Wang Shuaiting
said coal supply exceeds demand, but various factors, including the 60th
anniversary of the founding of the People's Republic, and enhanced safety
controls on coal extraction may drive prices up slightly. CRP will set aside 8
billion to 10 billion yuan (HK$9.07 to HK$11.34 billion) over four years for the
acquisition and consolidation of 17 coal mines into nine. Its annual production
will be three million tons this year, rising to 20 million tons by 2012. The
company will use 40 to 50 percent of its own coal by then. The company expects
the second half of the year to show strong electricity consumption growth. "Our
daily electricity generation in July was 6 to 10 percent higher than that of
June," Wang said. "The mainland economy, especially the industrial sector, has
started recovering." Vice president Wang Yujun said month-on-month generation
growth has been increasing. He added that the positive trend will be further
entrenched as more power plants start operating.
Jia Qinglin (R, front),
chairman of the National Committee of the Chinese People's Political
Consultative Conference, also a member of the Standing Committee of the
Political Bureau of the Communist Party of China Central Committee, meets with a
delegation of the American Foreign Policy Council led by former U.S. House
Speaker Newt Gingrich (L, front) in Beijing, capital of China, on Aug. 25, 2009.
Chairman of Sinopec Su Shulin celebrates the company's interim results at the
Island Shangrila in Admiralty on Monday. China's Sinopec (SEHK: 0386)
Corporation, the world's No 2 oil refiner, said on Monday that it plans total
capital expenditure of 120 billion yuan (US$17.57 billion) over the next two
years to boost refining and production. Vice-President Lei Dianwu made the
remarks at a results news conference in Hong Kong. Sinopec, second to Exxon
Mobil in terms of capacity, posted a record quarterly profit on Sunday that
widely exceeded expectations on the back of higher fuel prices and falling crude
oil prices, underscoring the turnaround in fortunes for China’s once-struggling
refiners. Beijing’s fuel price reform grants refiners a guaranteed profit margin
only if crude stays below US$80 per barrel. Shares of Sinopec rose nearly 5 per
cent in the morning session, but gains were pared to close at HK$6.97, up 0.72
per cent. 
Hong Kong tycoon Carson Yeung said on
Monday he has offered 57.13 million pounds (HK$730 million) to buy English
Premier League team Birmingham City, promising money to buy new players. Yeung,
whose Hong Kong-listed company Grandtop International has a 29.9 percent stake
in the club, said the firm would raise HK$785 million through an open offer of
shares for the acquisition. The businessman’s latest attempt to seize control of
the newly promoted side came after his first bid in 2007 failed to materialise.
But he said he was only waiting for the right moment for the takeover. “The club
was relegated [in the 2007/08] season. I bought it this year because it bounced
back. It’s as simple as that,” he told a press conference in Hong Kong. Yeung
said Grandtop had placed a deposit of three million pounds (HK$38 million) for
the offer, which he said was already accepted by shareholders representing
approximately 50 percent of the existing issued share capital of the club. The
tycoon said he hoped to attract more talent and to encourage exchanges between
mainland and overseas players. He added there was a possibility that he would
personally offer five million pounds (HK$64 million) for team manager Alex
McLeish to buy “better players”. He said the acquisition would open up numerous
opportunities for his apparel and entertainment company to expand and diversify
its business, especially in the mainland. If successful, the takeover would add
to a growing list of foreign club-owners in the English Premier League, which
include the Glazer family from the US at Manchester United and the Russian Roman
Abramovich at Chelsea. Vico Hui, the Grandtop’s executive director, said he was
confident Birmingham City would generate a profit next year. 
Developer seeks new government office's
backing for Lamma resort - A small private developer has just submitted an
application to the new Development Opportunities Office for a huge spa resort
and marina club with residential flats on Lamma Island.
Listing candidate Evergrande Real Estates Group plans to tap the Hong Kong homes
market by working with developers in the SAR, chief executive James Xia has
revealed. We are interested in expanding to the Hong Kong market, and we are
considering cooperating with developers there," Xia said after a project launch
in Chongqing on Saturday. "But we will have to consider very carefully as we are
not familiar with the market." He did not rule out forming a partnership with
New World Development (0017), chaired by tycoon Cheng Yu- tung. New World
invested US$150 million (HK$1.17 billion) for a 3.9 percent stake in Evergrande
and poured another 780 million yuan (HK$885 million) into two property projects.
Evergrande also wants to expand in Taiwan after Hong Kong, Xia said. But he
declined to explain why UBS dropped out in a reshuffle of underwriters for
Evergrande's listing plan. "I don't know where the information came from," he
said, "but we always keep good relations with investors." Evergrande invited
representatives of four investment banks to the Chongqing launch - Goldman
Sachs, Merrill Lynch, BOCI and Credit Suisse. Evergrande aims to raise 3 billion
yuan from five residential projects in Chongqing, having reaped about 400
million yuan in two projects launched in the first half, said Liao Jianing,
general director of Evergrande Chongqing. The developer collected about 562
million yuan from selling 703 units at Evergrande Splendor Chongqing. In another
project launched at the weekend, Evergrande Palace Baotou, it raised 333.6
million yuan from 245 flats. The mainland developer aims to raise as much as
HK$11.7 billion through a Hong Kong initial public offering next month, market
sources said. 
Sandy Lau (C) stands
with first runner up Germaine Li (R) and second runner up Mizuni Hung during the
Miss Hong Kong 2009 pageant in Hong Kong, south China, Aug. 22, 2009. 
Sandy Lau is seen after
winning the crown during Miss Hong Kong 2009 pageant, in Hong Kong, south China,
Aug. 22, 2009.
Mizuni Hung, second
runner-up of Miss Hong Kong 2009, displays a swimsuit in Hong Kong, south China,
Aug. 22, 2009.
Candy Yuen
(L) is titled with Miss Photogenic during the Miss Hong Kong 2009 pageant in
Hong Kong, south China, Aug. 22, 2009.
Competitors display swimsuits during
the final of Miss Hong Kong 2009, in Hong Kong, south China, Aug. 22, 2009.
Sandy Lau (4th L) took the crown of the pageant.
China Petroleum and Chemical Corporation
(Sinopec) said Sunday its net profit in the first half of 2009 rose 332.8
percent year on year because of adjusted refined oil prices in domestic market.
Under international accountant rules, Sinopec's net profit totaled 33.25 billion
yuan (4.87 billion U.S. dollars) in the first half with earnings per share up
0.294 yuan to 0.383 yuan, the company said in a statement to the Shanghai and
Hong Kong stock markets. Of the same reasons, Sinopec predicted its net profit
for the first three quarters will rise over 50 percent year on year. 
China's General Administration of Quality
Supervision, Inspection and Quarantine of China (AQSIQ) made an announcement on
August 23, 2009 that Guangzhou Toyota Motor Co., Ltd. (GTMC) and Tianjin FAW
Toyota Motor Co. Ltd (TFTM) have decided to start recalling some of the Camry,
Yaris , VIOS and Corolla cars from August 25.
The U.S. attaches great importance to its
economic and trade relations with China and is ready to work with China to fight
against trade protectionist measures, said Jon Huntsman, the new U.S. ambassador
to China in his first meeting with Chinese Minister of Commerce Chen Deming in
Beijing on August 22, the first day of his tenure as ambassador. Chen identified
resistance against protectionism as the "imminent priority" in the context of
the global economic recession. He believes that the various meetings between
leaders of the two countries within this year after the success of the first
strategic and economic dialogue will lead to further reciprocal cooperation. Mr.
Huntsman disclosed that President Obama would pay his first visit to China in
November.
A 43 billion yuan Yangtze River dredging plan will enable bigger vessels to
operate from Wuhan's WIT Port and bypass Shanghai. Wuhan, the provincial capital
of Hubei that straddles the Yangtze River, is raising its importance as an
international port by shortening shipping time to Shanghai. The city also hopes
to benefit from a 43 billion yuan (HK$48.79 billion) government plan to dredge
the Yangtze to allow much bigger vessels on the river and enable direct shipping
links between Wuhan and Asian destinations such as Singapore without having to
stop in Shanghai. The government forecasts that cargo throughput along the
Yangtze will rise from 1.2 billion tons last year to 1.8 billion tonnes in 2018.
By 2013, the dredging plan will enable ships of 10,000 deadweight tonnes (dwt)
to sail from Wuhan to Shanghai and beyond to the Pacific Ocean year round. It is
now possible only eight months of the year, said Frederick Wong Wai-keung, the
chief financial officer of CIG Yangtze Ports, a Hong Kong-listed firm that owns
85 per cent of WIT Port in Wuhan. "It will be economical for ships to sail
direct from Wuhan to Asian countries like Japan, South Korea and Singapore
without having to stop by Shanghai. When the ship is bigger, costs are cheaper,"
said David Xie Bing Mu, the general manager of WIT Port. At present, ships do
not sail direct from Wuhan to Asia because it is more economical to transfer
cargo to bigger ships at Shanghai, Mr Xie said. However, some analysts are
sceptical that Wuhan can bypass Shanghai as a port for ocean-bound cargo. "Yes,
it can be done, but it's much more economical for ships to transfer their cargo
to much bigger ships at Yangshan port, which has spare capacity and offer much
cheaper rates," said Charles de Trenck, an analyst at consultancy Transport
Trackers. Another shipping analyst said: "One of the premises of Shanghai's
Yangshan port's existence is it will have huge capacity with lots of
transshipment. "With 50 berths, you need all the cargo you can generate, so the
Chinese authorities won't put all that investment in Yangshan if other ports can
bypass Yangshan to trade direct with Asia." Yangshan port will have 50 berths by
next year capable of handling 15 million 20-foot equivalent units of container
cargo annually. However, Mr Xie maintained it would be economical for 10,000-dwt
ships, which can carry 650 teu, to travel between Wuhan and Asian ports because
of the time saved on transshipment in Shanghai. "Hubei needs to import car parts
from Japan for its car manufacturing industry, so there is a market for ships to
come from Japan direct to Wuhan," he said. Wuhan has shortened the shipping time
between itself and Shanghai's Yangshan port from seven to two days after the
Wuhan government encouraged ships to sail direct from WIT Port by offering them
subsidies. Since then, Wuhan's container throughput has increased significantly.
WIT Port's container throughput rose 44 per cent to 138,888 teu in the first
seven months this year, making it the second-fastest growing container port
operator of China's 84 main container port operators, according to a central
government report. In June alone, WIT Port's container trade grew 68.3 per cent
to 26,000 teu. By comparison, from March to July, total container throughput at
China's ports fell 11.2 per cent, according to the report. Previously, the
shipping time between Wuhan and Yangshan took seven days, because ships had to
stop at one of Shanghai's other ports to offload containers on to feeder
vessels, which moved them to Yangshan for transshipment to international
destinations, Mr Wong said. "There is a long waiting time from docking at
Shanghai and getting the containers on to the feeder vessels. There is also cost
savings because ships had to pay for docking in Shanghai and using the feeder
vessels," he said.
PCCW (SEHK: 0008), the city's biggest
telecommunications operator, yesterday decided against declaring an interim
dividend because it paid out a special dividend of HK$1.30 per share two months
ago. The company, controlled by Richard Li Tzar-kai, reported flat earnings for
the six months to June. Net profit was HK$654 million, down from HK$656 million
a year earlier, but revenue rose 12 per cent to HK$12.7 billion mainly because
of a contribution from its property development at Cyberport. Earnings per share
eased to 9.66 HK cents from 9.68 HK cents. Asked about the interim dividend,
PCCW group managing director Alex Arena said the company had just spent HK$8.8
billion on the special dividend during the period. The special dividend came
after the Court of Appeal rejected a HK$15.93 billion buyout deal launched by Mr
Li's Pacific Century Regional Developments and China Unicom (SEHK: 0762) Group
in April. The rejection followed accusations by the Securities and Futures
Commission and minority shareholders of vote-rigging at the special general
meeting to approve the deal. Mr Arena told analysts that PCCW would review its
dividend policy at the end of the year. "Mr Arena's comments seem to suggest
that PCCW may not sustain its dividend policy in the future," said Marvin Lo, an
analyst at Daiwa Institute of Research. Mr Lo said he was also concerned about
PCCW's debt portfolio because its average debt maturity was about 3.4 years. The
company's net debt rose 32 per cent to HK$30.58 billion because of the special
dividend. For the core telecommunications business, revenue fell 3 per cent to
HK$10.46 billion from HK$11.25 billion a year earlier. Earnings before interest,
tax, depreciation and amortisation (ebitda), which measures cash flow, was down
2 per cent to HK$3.28 billion. Ebitda margin remained stable at 31 per cent.
Cost-cutting during the period sliced 5 per cent off expenses to HK$2.68
billion, paring the operating expense-revenue ratio to 25.6 per cent from 26.1
per cent. PCCW remains the city's dominant player in the fixed-line market with
2.59 million lines, down from 2.593 million a year earlier. But total fixed-line
revenue fell 4 per cent to HK$8.24 billion. This included a 7 per cent fall in
local telephone revenue to HK$2.13 billion. Now TV had 992,000 subscribers as of
June 30, compared with 927,000 a year earlier. It posted an operating loss of
HK$34 million, compared with a HK$40 million shortfall previously, but revenue
rose 5 per cent to HK$1.09 billion. Average revenue per user was stable at
HK$213 a month. PCCW Mobile's performance also improved, with an operating
profit of HK$130 million, up from HK$108 million, but revenue fell 3 per cent to
HK$828 million. Shares in PCCW closed 0.95 per cent higher at HK$2.13 yesterday.
Taiwan's leaders approved a
NT$100 billion (HK$23.51 billion) Typhoon Morakot relief budget yesterday as
public outrage intensified over their tardy response to floods and mudslides
that have left about 500 dead or missing. The funding is for typhoon relief and
reconstruction over the next three years and will go for parliamentary approval
by the end of the week. The official death toll rose to 141, but President Ma
Ying-jeou - whose popularity has sunk to an all-time low since the typhoon -
noted that hundreds were still buried under mud and rock as the island prepared
for three days of mourning starting tomorrow. "We must set a timetable for
reconstruction so the victims can resume their normal lives soon," Hong
Kong-born Ma told a gathering at an orphanage in Liukuei, a ravaged southern
town. A day after a poll indicated Ma's approval rating had sunk to 16 percent
and two Cabinet members offered their resignations, a new round of newspaper
commentaries called on Ma to simply sack ministers for letting down Taiwan and
its people. "The Cabinet lacks credibility in the typhoon victims' and the
general public's eyes," rapped the China Times. "A Cabinet that cannot command
the people's trust and respect should of course be replaced." The Taipei Times
summed up the situation succinctly: "The government has lost the battle of
Typhoon Morakot." Premier Liu Chao-shiuan had said on Wednesday that he would
decide next month whether to accept resignations from the defense minister and
the Cabinet secretary as well as the vice foreign minister. But he would not
respond when asked whether it was true that he too has offered to step down. The
Cabinet secretary drew wrath after trying to justify his dining out with his
family at a five-star hotel on August 8, the day Taiwan felt the full force of
Morakot. It was Father's Day in Taiwan, he argued, so he was "not out of line."
The Defense Ministry came under fire for deploying too few troops during initial
rescue operations, with only 2,100 in action on August 9. The number rose
dramatically five days later, to 43,300. And the vice foreign minister took the
blame for a decision - later overturned - to refuse offers of foreign aid. Ma
has promised a probe and punishment for anyone found negligent. He also said
Taiwan would create a disaster prevention agency and reorient its military
toward a greater focus on search and rescue. Extreme weather now posed a greater
threat than an invasion from the mainland, he added. The flooding and mudslides
that came with Morakot tore apart houses and buildings, ripped up roads and
smashed bridges. It was the worst typhoon ever to strike Taiwan, Ma has said.
Beijing is consolidating its steel
industry, discouraging small firms in the hope that a few large heavyweights
will have greater bargaining power in world markets. Against this background,
Hong Kong-listed geo-thermal energy provider Kai Yuan Holdings Limited (1215)
has agreed to purchase a large stake in three units of mainland steelmaker
Rizhao Iron. Kai Yuan has bought 30 percent of Rizhao Sections and Rizhao Iron
and Steel as well as 25 percent of Rizhao Steel Rolling Company for a total of
HK$5.2 billion. Since December, Du Shuanghua, the owner of Shandong-based Rizhao
Steel, has been accumulating shares in Kai Yuan - a supplier of geo-thermal
energy to companies in Tianjin. Prior to the purchase by Kai Yuan of the Rizhao
units, he had become the single largest shareholder of the Hong Kong-listed
company. So market watchers see Kai Yuan's purchase of Rizhao units as nothing
short of a backdoor listing of Rizhao Steel. Du currently owns a 100 percent
stake in Rizhao Iron and Steel, which is one of the largest non-state owned
firms in the sector. It produces eight million tonnes of steel annually and by
output was ranked 20th among mainland steel mills in 2007. But with the
government-led drive to consolidate the domestic steel industry, Du is being
required to sell his company to state-owned local rival Shandong Iron and Steel.
According to experts, Rizhao Steel cannot avoid being part of Shandong Steel
Group. Prior to Kai Yuan's purchase of Rizhao units, Du, as the chairman of
Rizhao transferred 30 percent shares of Rizhao Steel to Kai Yuan. Many market
watchers see this back- door listing process as a tactical move by Du to
consolidate his assets in order to garner a stronger negotiating position with
Shandong Iron and Steel. After the assets are transferred to a listed company -
controlled by Du - he can demand and is more likely to get a better deal with
Shandong. Kai Yuan's stock has soared four times since January on expectation of
more asset injection. But on June 11 when Kai Yuan Holding purchased the three
Rizhao units, the Ministry of Environmental Protection ordered Rizhao Steel to
stop its building projects, apparently because they did not have ministry
approval. The scheme after completion would have boosted production capacity by
some 7 million tonnes per year. Investors should be aware that if the
negotiations are completed, that means the assets transferred will be required
to shift back. By that time, you would probably expect the share price to fall
sharply. For Beijing, steel is a strategic resource in which profitable private-
owned enterprises must be guided by and follow state-owned enterprises' business
direction. The steel industry has a costly entry barrier and Rizhao, as one of
the most competitive and profitable enterprises, should be facing tremendous
pressure from the province. Regrouping and restructuring is the only alternative
to make a business feasible. According to statistics, private steel firms
performed much better than Laiwu Steel and Jinan Steel, the two subsidiaries of
Shandong Steel Group. Rizhao Steel made over 800 million yuan (HK$907 million)
net profit in the first quarter with more than 7.8 billion yuan revenue, while
Laiwu Steel lost 580 million yuan on revenue of 6 billion yuan. Jinan Steel lost
790 million yuan on 6.07 yuan billion revenue. It is not difficult to think that
both central and provincial governments intend to restructure the business and
transfer some of the profits to state-owned enterprises. Mainland business
people are aware that playing against the government is absolutely unwise. Du is
influential and heads a steel empire but he would not dare oppose state plans.
An attempt to transfer assets to a listed company in Hong Kong is only mist:
behind it is a power struggle. It has already been made clear by the chairman of
Shandong Iron and Steel Cheng Qixiang that restructuring will be fully completed
by the end of this year, Du's diplomatic game is highly risky and betting on Kai
Yuan would be quite opportunistic. Investors assume that the profit of Rizhao
Steel would contribute 995 million yuan to Kai Yuan this year. The assumption is
correct only if Rizhao's assets can be legally and completely transferred to Kai
Yuan without any hindrance. Personally, I would not bet against state policies
and the same principle applies to Kai Yuan and Rizhao's strategic and diplomatic
partnership. 
The Potala Palace is illuminated
during the fireworks display to celebrate the Shoton Festival in Lhasa, Tibet,
Aug. 20, 2009. The Shoton (Sour Milk Drinking or Yogurt) Festival is held on the
first day of the seventh month according to the Tibetan calendar. During the
celebration, various kinds of religious and recreational activities will be
held. 
Medical authorities in central
China have discovered more than 1,300 cases of suspected lead poisoning in
children, state media said, in the second such incident this month and bringing
the total to 2,200. Authorities in the city of Wugang in Hunan province have
shut down a smelting plant and detained two of the company's executives on
suspicion of "causing severe environmental pollution," Xinhua News Agency said.
Locals had complained of large amounts of thick smoke and dust coming out of the
Wugang Manganese Smelting Plant since it began operations in May last year, it
said. A total of 1,354 children - or about 70 percent of those under the age of
14 that lived in four villages near the smelter - were found to have levels of
lead in their blood that exceeded safety standards, the report said. Seventeen
of the most severely affected have been hospitalized. A primary school, a middle
school and a kindergarten are located within a 500-meter radius of the plant,
which was shut down last week, it added. Provincial medical teams were
conducting secondary tests to confirm the initial results. So far, they have
found 45 cases in which lead levels exceeded 200 milligrams per liter, the
report said. Lead levels of between zero and 100 milligrams are considered
normal. A reading of more than 200 milligrams is considered hazardous, with
children more vulnerable to lead poisoning, which can harm the nervous system.
The Wugang incident comes on the heels of another case in northern Shaanxi
province, where more than 850 children have been affected by lead poisoning
caused by pollution from a smelting plant, according to Xinhua. More than 170
children in Shaanxi's Changqing township were hospitalized, the agency said. On
Monday, villagers stormed the Shaanxi smelter, smashing trucks in anger. The
plant has also been shut down.
Li Shaode believes spot rates for coal and oil this quarter will be better than
in the first half. China Shipping Development saw its net profit dive 80.7 per
cent in the first six months of this year as freight rates for coal and oil
slumped, but the company said it expected profit to improve this half. The
company, the mainland's biggest coastal energy shipper, said it had invested in
clean energy development in a nation thirsty for energy. China Shipping has
created a joint-venture shipping company with PetroChina (SEHK: 0857) to
transport liquefied natural gas (LNG) from Australia's Gorgon field to
Guangzhou. The venture, in which China Shipping owns 90 per cent, will invest
US$400 million to US$600 million to buy two to three LNG vessels, managing
director Mao Shijia said yesterday. The terms of the shipping contract will be
finalised as early as next quarter. In addition to the Australian LNG contract,
the company was negotiating with Sinopec (SEHK: 0386), the mainland's
second-largest oil company, an LNG shipping contract with Papua New Guinea, Mr
Mao said. The LNG project would not generate profit in the first three years
because of the high sunk cost, or irrecoverable expenses, said BOC (SEHK: 3988)
International transport analyst Jimmy Lau. An LNG vessel costs twice the price
of a crude oil vessel carrying the same energy content. LNG shipping is a
capital-intensive investment, but returns are relatively stable with contract
terms stretching 20 to 25 years and investment returns above 10 per cent, Mr Mao
said. Hindered by the global economic downturn, the company's net profit fell to
613.64 million yuan (HK$696. 17 million) from 3.18 billion yuan a year earlier.
Shipping volume dropped 10.6 per cent to 101.6 billion tonnes/nautical mile,
while sales were down 54.8 per cent to 4.12 billion yuan. The operating margin
was under pressure because freight rates and the proportion of international oil
shipping fell. The contracted price for coal shipments signed this year was down
39 per cent year on year. Chairman Li Shaode said the spot rates for coal and
oil in the third quarter would be better than in the first half. He believed
freight rates for oil would climb as the recession eased. As the gap between
domestic and international coal prices has narrowed, it would stimulate demand
for domestic coal from power plants in southern China, benefiting the company,
said Mr Lau. China Shipping will take delivery of 14 oil tankers in this half,
of which five are very large crude carriers, boosting its tanker fleet to 2.2
million deadweight tonnes. Some smaller shipping companies were requesting a
merger with China Shipping, said Mr Li, but he did not elaborate. The firm is
also looking for merger and acquisition opportunities to secure its shipment
volume. The company had committed to taking delivery of 64 vessels worth 19
billion yuan as of June 30. About 60 per cent of that amount will come from bank
borrowing, of which 85 per cent has been secured with preferential interest
rates - the London interbank offered rate plus 34 to 35 basis points. Mr Li said
the company had no plans at the moment to tap the capital market for funds, as
it has an ample supply of credit.
China Mobile (SEHK: 0941), the
mainland's biggest mobile operator, has suffered its first earnings decline
since becoming a publicly listed company in 1997 as an industrywide
restructuring last year exposed it to tougher competition. The world's biggest
phone company by market value said second-quarter profit dropped 2.62 per cent
to 30.12 billion yuan (HK$34.17 billion) from 30.93 billion yuan last year.
Revenue increased 7.6 per cent to 111.64 billion yuan. An industry revamp
allowed fixed-line giant China Telecom Corp (SEHK: 0728) to enter the
mobile-telephone market last year for the first time, encroaching on a sector
all but dominated by China Mobile. It is the company's first earnings drop in a
decade. China Mobile has also been hobbled with the mainland's untested 3G
technology, TD-SCDMA, while its competitors are allowed to use the more
commercially popular international standards. For the first half to June, China
Mobile's net profit rose 1.4 per cent to 55.32 billion yuan, with revenue
growing 8.9 per cent to 212.91 billion yuan. The margins on earnings before
interest, tax, depreciation and amortisation (ebitda), which measures the
profitability of a mobile operator, fell to 51.6 per cent from 53.2 per cent.
China Mobile chairman Wang Jianzhou said the company had added several million
new subscribers each month and maintained a stable dividend payout. "The
quarterly profit drop was mainly due to the weak macroeconomic environment
arising from the financial crisis," Mr Wang said. "But we are also facing
intensifying market competition and high mobile-telephone penetration in large
cities like Beijing and Shanghai." As mobile penetration along the nation's
eastern coastal region reaches saturation levels, the company will shift its
focus to central and western China where few people have mobile phones. "A lot
of the customers they are signing up are in the rural areas who don't spend as
much," Daniel Baker at Mirae Asset Securities in Hong Kong said. "In the metro
areas, there have been a few price cuts, which are not helping things." China
Mobile added 35.8 million users in the first half, down from 45.25 million a
year earlier, as its share of new customers dropped to 66 per cent from 85 per
cent. Total subscribers reached 493 million, up 18.9 per cent. Average revenue
per user, a benchmark to measure users' spending pattern, however, dropped 10.7
per cent to 75 yuan per month. China Mobile's 3G mobile service, running on the
mainland-developed TD-SCDMA technology, had 1.08 million subscribers by the end
of July and targets to have three million by the end of the year. Separately,
the company clarified that it has no exact timetable for its domestic listing.
"It is clear that we are on the way to a domestic listing," said Mr Wang. "But
what we consider is how to minimise the impact on our Hong Kong listing status."
He said China Mobile is not likely to issue A shares directly on the mainland,
given the regulatory difference between mainland and Hong Kong markets. "We
suggest the regulator set up a new regulatory platform to handle the listings of
all overseas-registered firms," Mr Wang said. 
Australia has said it does not support
autonomy in the restive Xinjiang region, in an attempt to arrest a slide in ties
as China's media brand Australia "Sino-phobic". Relations soured after an
Australian visa was granted to Rebiya Kadeer, the exiled leader of the Muslim
Uygur minority in Xinjiang, and an Australian Rio Tinto mining executive was
arrested on allegations of espionage. Australian Foreign Affairs Minister
Stephen Smith told Parliament yesterday that allowing Ms Kadeer to visit did not
mean support for her views on Uygur autonomy. "We have a long-standing position
to respect the territorial integrity and sovereignty of the western provinces so
far as China is concerned," Mr Smith said. China blames Ms Kadeer for
instigating ethnic riots in Xinjiang this year, a charge she has repeatedly
denied. It criticised Australia's decision to give her a visa and cancelled a
high-level diplomatic visit. The China Daily, the Communist Party's official
English-language paper, said in an editorial that Australia's "Sino-phobic
politicians" were leading the world's "anti-China chorus" and siding with Ms
Kadeer. "The cancellation of a visit to Australia by [the] Chinese vice-foreign
minister is a restrained and reasonable response on the part of Beijing when
that country has challenged China's core national interests," it said. "By
providing Kadeer a platform for anti-Chinese separatist activities, Canberra
chose to side with a terrorist and severely hurt China's national interests."
Australia's ambassador to China returned home for consultations on Wednesday,
but Canberra denied it signaled a protest. "He hasn't been rushed back to
Canberra. He comes back on a regular basis," Mr Smith told national radio. China
is Australia's biggest export market, with two-way trade worth US$53 billion
last year. Major Australian exports last year included iron ore, wool and copper
ore. Canberra, in stressing the strength of its ties with China, has pointed to
this week's US$41.5 billion deal to sell liquefied natural gas to PetroChina (SEHK:
0857). "The China-Australia relationship is always full of challenges, and it
always has been thus and it will be thus for a long time to come," Prime
Minister Kevin Rudd said. "We approach this relationship mindful of our
interests in China, mindful of Chinese interests in Australia." Mr Smith said
Canberra was working through its differences with Beijing methodically,
including the arrest of Rio Tinto executive Stern Hu. Officials of the mining
giant expressed concern for their arrested colleagues, but said they respected
China's legal process. 
The Heung Yee Kuk and a lawmaker have
called for tighter monitoring of a controversial drug rehabilitation school even
as its management sought to refute allegations it is involved in unseemly
investments in the mainland.
The Food Expo has proved a huge success,
with the traditional final-day rush pushing the attendance up 15 percent on last
year to 350,000. Retailers reported a jump in sales as a crowd of mostly
housewives on the hunt for bargains filled the Hong Kong Convention and
Exhibition Centre on day five of the expo. Hong Kong Trade Development Council
assistant executive director Raymond Yip Chak- ya expressed satisfaction after
the five-day crowd easily eclipsed last year's 314,000. Expo debutant Sun Wah
Japanese Food, which sold Japanese snow crabs at less than half the retail
price, had to refill its shelves three times just to meet demand. A
representative of the operator said Sun Wah would definitely return next year.
Elsewhere, sorrow turned to joy for two customers who had broken down in tears
after discovering an offer of 100 meatballs for HK$1 had been a sellout success
before they arrived. "We gave each of them two packs of meatballs for free,"
said Pius Chan Ngok-sing, the marketing manager of Tai Po Chun Hing. In the
final hours of the expo, five packs of fishballs normally priced at HK$80 by Tai
Po Chun Hing were reduced to HK$60. Chan said turnover was up 20 percent on last
year and volume was up 40 percent. Yuen Tai Trading, a distributor of Jumbo
Brand canned food, cleared its stock by selling 10 cans of Jinhua Ham luncheon
meat for HK$80. Managing director Lee Fuen said one housewife bought an entire
carton of 48 cans. Champion Fair sales manager Horace Wu Hung-kwong said his
company sold more than 200,000 cans of tinned food during the expo. And the
managing director of On Kee Dry Seafood, Richard Poon Kuen-fai, said turnover
reached HK$1.5 million - 50 percent higher than expected. "We could have made
even better profits because many customers asked for high- end products," Poon
said, "but we sold only middle-priced stocks here." One visitor, Wendy Yeung,
took a day off work to visit the expo with her sister yesterday. They spent more
than HK$2,000 filling three trolleys and several shopping bags with food.
Thirsty wine trade uncorks grape career opportunity - Hong Kong has developed a
keen thirst for sommeliers as it emerges as a regional wine hub. Demand from the
catering industry for wine experts has at least tripled in the past year despite
tightening budgets due to the economic crisis. A measure of this came as the
Hong Kong Sommelier Association published its first list of 134 recognized
sommeliers yesterday - and revealed that at least 200 well-paid vacancies
remain. "The market potential is much greater than that," said HKSA chairman
Nelson Chow Kwok-ming. "Despite the fact that some Chinese restaurants have
recognized the importance of matching Chinese cuisine with wine, many have still
not caught up with the trend." After wine duty was abolished last year, the
association was flooded with calls from hotels, clubhouses and restaurants
looking for sommeliers able to market and recommend wine to diners. The number
of calls may have dropped off, but despite the economic crisis, a healthy number
keep coming. The association has introduced an examination system and has
recognized more than 40 sommeliers and eight senior sommeliers in the past
month. One of the eight certified seniors is the China Club's Henry Chang Kwok-wai
who started as a waiter 18 years ago after finishing Secondary Five. He is set
to represent Hong Kong in the World's Best Sommelier Competition in Chile next
April. Chang will be up against representatives from 40 member countries of the
Association of Sommeliers. But before then, he will take part in the Best
Sommelier of Asia-Oceania competition in Osaka, Japan. Self-taught Chang, 44,
had no formal wine education and learned about wine tasting from working in
Western restaurants and extensive reading. He won the Best Sommelier Hong Kong
competition in 2007 during which he was able - while blindfolded - to identify a
red wine's country of origin, year of production, type of grapes used and price.
"I do this with other wine-loving friends in our leisure time as well. I enjoy
the anticipation I get from wine tasting," Chang said. "Sometimes I look at the
bottle or sniff the wine and I cannot help imagining the taste of the contents."
Chow said many of the listed sommeliers started at the bottom and are now
high-ranking executives in the catering industry. "We are in need of new blood
and hope this system can facilitate the grooming of new talent," he said. 
Chief Executive Donald Tsang
gestures while talking about co-operation as Guangdong governor Huang Huahua
looks on at the Hong Kong-Guangdong conference at the Convention and Exhibition
Centre. Hong Kong and Guangdong yesterday signed eight pacts to strengthen
co-operation, including a letter of intent on the development of service sectors
and high-end industries in Qianhai , Shenzhen, and collaboration in other areas.
The agreements covered proposals to increase exchanges in financial development,
disease prevention and control, education, environmental protection and
intellectual property protection. The deals were struck at the 12th plenary
session of the Hong Kong-Guangdong Co-operation Joint Conference. About 50
Guangdong officials, led by governor Huang Huahua , travelled to Hong Kong for
the two-hour meeting, with their counterparts led by Chief Executive Donald
Tsang Yam-kuen. Under a document, signed by Chief Secretary Henry Tang Ying-yen
and acting Shenzhen mayor Wang Rong , the two cities will jointly study ways to
promote service industries in Qianhai, a 10 square kilometre zone in Shekou .
The two sides will also encourage Hong Kong enterprises to run businesses there.
After the meeting, Mr Tsang said: "We believe there is ample opportunity to
develop Qianhai into a modern industrial area that will complement what is
happening in Hong Kong - complement what we are trying to achieve in Hong Kong
as an international financial and trading centre." He said the planning of the
area was still at a very early stage and he did not think the development of
financial services would pose a threat to Hong Kong. "Even the reclamation works
of Qianhai haven't been completed yet ... These are only some preliminary ideas
and we will conduct in-depth studies later." Both sides agreed to rename the
Hong Kong-Shenzhen Airport Rail Link the Hong Kong-Shenzhen Western Express
Link, to accurately reflect the area it would serve. A team of experts will be
set up under an existing task force to advise the governments on construction of
the railway and other transport connections in the western areas of the two
cities. A new group of experts will be set up under the joint conference to
strength Hong Kong-Guangdong co-operation in the financial sector. Members will
include government officials, market regulators and financial professionals. To
boost co-operation in the education sector, the governments will explore the
feasibility of private schools in Shenzhen offering a Hong Kong curriculum for
local children living on the mainland. On health care services, the two
administrations will encourage cross-border research and production of drugs and
vaccines, and strengthen exchanges between medical personnel from both sides.
Health authorities from the two sides will hold a conference next month to
review the accreditation system of Hong Kong medical practitioners who want to
provide services in Guangdong. Mr Huang said he believed the co-operation
measures would aid the economic recovery in both places. By promoting
collaboration among Hong Kong, Macau and Guangdong, he said the region would
hopefully become the most competitive place in the Asia-Pacific area. The
governor said he had visited Hong Kong Exchanges and Clearing (SEHK: 0388), the
Hong Kong Monetary Authority and the University of Science and Technology on
Tuesday. 
The ICAC yesterday
charged the chairman of a Hong Kong body-building association for his alleged
roles in a bribery scam that helped a suspended athlete compete at the 2006
Asian Games in Doha, and in a government subvention fraud. Simon Chan Siu-man,
chairman of the Hong Kong China Bodybuilding and Fitness Association, faces one
count of conspiracy for an agent to accept an advantage and one of fraud. Chan,
39, was released on bail and is scheduled to appear in Eastern Court tomorrow
morning. A person familiar with the case said bodybuilder Andy Wong Kwong-sun,
who won a gold medal at the Hong Kong championship in June, and Asian
Bodybuilding and Fitness Federation general secretary Paul Chua had been under
investigation in relation to the case. The conspiracy charge alleges that
between May 2006 and February 2007, Chan conspired together with Mr Chua and Mr
Wong for Mr Chua to accept US$10,000 from Mr Wong. In return, Mr Chua was said
to have shortened or lifted the period of suspension from participation in any
bodybuilding competition imposed on Mr Wong, and enabled him to participate in
Doha in December 2006. The Independent Commission Against Corruption found that
Mr Wong was banned from any bodybuilding competition for two years after failing
a doping test in October 2005 at the Asian Championships in South Korea. Two
other Hong Kong bodybuilders, Chan Yun-to and Marco Lam Man-shing, were also
found guilty of doping violations at those championships, according to the
International Bodybuilding Federation. The three bodybuilders should have served
two-year bans, until October 2007, before being able to represent Hong Kong
again in international competition. However they all competed in Doha. Mr Chan
won a gold medal in the men's under-75kg category, while Mr Lam was a bronze
medallist in the under-90 kg category. Mr Wong finished 10th in the under-65kg
category. The fraud charge alleges that between the end of 2007 and May 15,
2008, Simon Chan falsely represented in the annual returns of his association
for the financial year ended March 31, 2007, that the statement of programmes
subvented by the Leisure and Cultural Services Department was correct and the
spending listed in the accounts was genuine. Chan allegedly induced the
department to accept the annual return submitted as genuine and not to demand
the return of more than HK$250,000 in subvention. In July, the chairman of the
Hong Kong East Asian Games Planning Committee, Timothy Fok Tsun-ting, confirmed
that the bodybuilding competition at the Games in October had been cancelled.
The resumption of capital flows into Hong Kong, particularly from the mainland,
is boosting the city's ailing commercial property market, which was badly hit by
the global financial crisis. While average rentals for grade A office space
continued to slide in the second quarter - down 5.8 per cent from the first
three months - the rate of decline had slowed from 10.2 per cent in the first
quarter, according to property consultant Savills. In the core Central market,
rents fell 7.8 per cent in the second quarter, but this was only about half the
15 per cent decline in the first quarter, as more mainland businesses began
looking for new set-ups and relocation opportunities in the central business
district. Helping to lift sentiment in the sector was the expectation that since
Beijing's foreign reserves remained at a record high US$2.13 trillion in June,
the government might raise quotas issued under its qualified domestic
institutional investor scheme, according to analysts. Under the scheme,
qualifying local investors are given quotas to invest in offshore markets. Many
of those investments are directed at Hong Kong or channelled through the city's
financial intermediaries. Swiss investment bank UBS estimated in a recent report
that about half of the US$62 billion in QDII quotas issued since the inception
of the scheme in 2006 had found its way into the Hong Kong capital market - a
pattern that encouraged fund managers to set up operations in the city. UBS
believes the increase in quotas, if approved, will boost the Hong Kong stock
market as well as raise demand for local financial services and hence office
space. So far this year, mainland-backed investment funds including Harvest Fund
Management, China AMC, China Southern Fund and E Fund Management have set up
subsidiaries in the city, and several additional funds have applied to the
Securities and Futures Commission for approval to establish branches in Hong
Kong. The rejuvenated financial market has also benefited commercial property,
and Ricky Lau, senior director for commercial at Savills, said mainland
companies already listed or planning to list in Hong Kong had dominated the
office leasing market recently. "They are not looking for large office spaces
but can afford high rents," he said. Recent examples include Renhe Commercial (SEHK:
1387, announcements, news) Management, which rented a 4,500 square foot office
in One IFC, and Zhong Rong Group, which set up its Hong Kong headquarters in Two
IFC, taking 1,600 sqft. Kaisa Group Holdings leased 5,000 sqft in the same
commercial premises, Mr Lau said. "Many international financial institutions
laid off staff and now need to replace the headcount," said Eric Wong Chun-yu,
the co-head of Asian property research at UBS, which now expects office rentals
to rise 28 per cent from June to the end of next year against its previous
forecast that rentals would drop 35 per cent this year and rise 5 per cent next
year. Cusson Leung, an analyst at Credit Suisse, believed improved hiring
intentions in the banking and financial services industry would benefit the
office sector and revised his office rents projection from broadly unchanged
next year to a rise of 20 per cent. Mr Leung said he believed the worst was over
and the decline in demand in the sector had bottomed. CLSA head of Asian
property research Aaron Fischer also believed Hong Kong office rents would
bottom out in the second half, sooner than he had forecast. He expects demand to
remain confined to smaller financial services companies. "Bigger banks are not
yet expanding space, as they are still sitting on excess space from deals struck
during 2007," he said. Mr Fischer said office rents would likely stay flat next
year after a 38 per cent drop this year. Champion Real Estate Investment Trust,
which owns the grade A Citibank Plaza in Central, was also cautious about the
outlook for the commercial property market. "The financial sector has stopped
shrinking, but it may not translate immediately into strong demand for office
space," said the trust's manager. 
ExxonMobil Corp's Gorgon plant in
Australia will supply PetroChina with 2.25 million tons of liquefied natural gas
a year over 20 years. China and Australia have kissed and made up to the tune of
more than US$40 billion, overlooking recent tensions to seal a gas supply
agreement that is the latter's biggest deal on record. PetroChina (SEHK: 0857,
announcements, news) , the nation's biggest oil and gas producer, late on
Tuesday ordered 2.25 million tonnes of liquefied natural gas (LNG) a year over
20 years from ExxonMobil Corp's Gorgon plant in Australia in a deal totaling
US$41.29 billion. The deal signals that even as an Australian citizen working
for mining giant Rio Tinto languishes in a mainland jail for allegedly stealing
commercial secrets from the Chinese, realpolitik is prevailing in both Beijing
and Canberra. China, which received its first LNG cargo in May 2006, plans to
build more than 10 terminals on the east coast to meet a government target to
double the use of natural gas in five years by 2010. LNG is natural gas that is
chilled to liquid form for transport by ship to destinations not connected by
pipeline. Woodside Petroleum, the operator of the Browse LNG export project in
Australia, had already agreed to sell fuel worth about A$45 billion (HK$286
billion) to PetroChina. "The long-term interests of the two countries will
always trump the occasional crisis," said Michael McKinley, a professor of
global politics at the Australian National University. "China's interest is in
obtaining resources at the right volume and price and it's able to do so in
Australia." Australian mineral and energy exports to the mainland have been
credited with helping the nation of 22 million people avoid a recession, but the
country's growing reliance on China has raised political tensions. The Gorgon
deal brings the value of various mining and energy deals agreed between China
and Australia over the past year to more than US$183 billion - more than the
gross domestic product of New Zealand. China now consumes almost 80 per cent of
Australia's iron ore exports by volume, up from less than 60 per cent a year ago
and about 20 per cent at the start of the decade. Fortescue Metals Group,
Australia's third-biggest iron ore exporter, remains in talks with Chinese
groups to secure as much as US$6 billion in capital to expand. The relations
between the two nations, which had improved after the election of the
Putonghua-speaking Kevin Rudd as Australian prime minister in 2007, have been
strained recently. The arrest of the Rio executives and Canberra's decision to
approve the recent visit of exiled Uygur leader Rebiya Kadeer have raised
hackles in both capitals, underscoring the vast political divide between the two
countries. But when it comes to energy and minerals, the two sides are on the
same wave length - the bigger the deals the better. "The [PetroChina] deal
proves that Rio is just an individual case ... and the close trade ties between
China and Australia will not be affected," said Han Xuegong, a professor at CNPC
(SEHK: 0135) Managers Training Institute in Shanghai. Officials in both
countries have sought to play down the frictions between them. Australian
Resources and Energy Minister Martin Ferguson was quoted as saying the
ExxonMobilPetroChina deal was "testimony to the strength of Australia's
continuing trade and investment relationship with China".
General Secretary of the
Communist Party of China (CPC) Central Committee Hu Jintao meets with a
delegation of ethnic minorities from Taiwan, headed by actor-turned-politician
Kao Chin Su-mei in Beijing, Aug. 19, 2009. As Taiwan was hit by the most
devastating typhoon in half a century, the Communist Party of China (CPC) top
leader Hu Jintao said Wednesday that the mainland shared "the same feeling" with
Taiwan people. "We share the same feeling with Taiwan compatriots, especially
the ethnic minorities, who suffered serious life and property loss in the recent
disaster. We are very much concerned," said Hu, general secretary of the CPC
Central Committee. Hu expressed deep sorrow and condolences for the typhoon
victims to an actor-turned-politician Kao Chin Su-mei who leads her fellow
ethnic minorities in Taiwan to visit the mainland. As of noon Wednesday, 136
people were confirmed dead in Taiwan,45 injured and 386 missing. The death toll
did not include 523 people who were buried under mudslides in two villages. "The
difficulties Taiwan compatriots are facing mean the same to us," Hu said. "We
will continue helping them in rescue and relief as well as support them in
rehabilitation." The State Council Taiwan Affairs Office spokeswoman Fan Liqing
said Wednesday at a press briefing that the mainland was "keen to lend a hand."
On Aug. 10 right after the typhoon swept the island, the Taiwan Work Office of
the CPC Central Committee contacted the headquarters of Kuomintang, the island's
ruling party, expressing the will of being ready to help. So far the mainland
has donated about 176 million yuan (26 million U.S. dollars) and 25 million yuan
worth of disaster relief materials to Taiwan. The first batch of prefab houses
and 10,000 sleeping bags, 10,000 blankets and 1,000 sterilization appliances
reached Kaohsiung Tuesday. Taiwan leader Ma Ying-jeou on Tuesday expressed
gratitude to the Chinese mainland and the international community for typhoon
disaster relief aid. The mainland also offered to send a civilian helicopter,
rescue experts, medics and engineers to assist relief work even though Taiwan
said these are not needed at the moment. Spokeswoman Fan said, "The two sides
can develop a mutual mechanism of disaster warning, rescue, relief and
rehabilitation." Based on existing cross-Strait seminars on weather forecast and
disaster warning, the two sides can move forwards to share information and
exchange experience, she said. Ordinary people are a major force in raising fund
for help. At a fund-raising stand in Chengdu, capital of southwestern Sichuan
Province, a middle-aged man emptied his wallet and went to a nearby bank to
withdraw more money for donation. "We received help from Taiwan people. So when
they need us, we should spare no efforts," the man said on condition of
anonymity. Sichuan received about 1.32 billion yuan and relief material worth
200 million yuan (29.27 million dollars) from Taiwan after it was hit by the
8.0-magnitude earthquake on May 12, 2008. An online post, wooing donation to
typhoon rescue and relief, has attracted more than 167,000 views since it was
put on the popular mainland online community Tianya on Aug. 11. "I broke into
tears," said netizen Yusufliu, who saw pictures of Xiaolin village in Kaoshiung
where 491 people were buried under the mudslides. "I really feel sorry for
them," the netizen said. "Hope people in Taiwan can pull through this disaster
as early as possible." At the website of Phoenix TV, a netizen said in a post,
"I am a migrant worker. I just learnt form the Internet that I could send short
messages to donate money. I sent five messages, donating ten yuan. Don't laugh
at me as I did not earn much." The mainland and Taiwan, with a long feud after
the civil war 60 years ago, saw warmer ties in the past year, featuring direct
transportation, financial cooperation and more frequent exchange of visits. CPC
top leader Hu said, "People on both sides of the Taiwan Strait are of one family
and Chinese people have a long tradition of lending a hand to those in danger
and difficulties." 
CLP Holdings (0002) posted a 42.3 percent slump in interim net profit to HK$3.24
billion on the lower permitted return, weak electricity demand in China, a
one-off provision of HK$346 million for an Australian solar system investment,
and currency fluctuations. Operating earnings before the one- off item fell 32.5
percent to HK$3.6 billion. Revenue fell 14.6 percent to HK$23.5 billion for the
first six months. "The HK$346 million provision surprised the market expectation
of a 30 percent decline in net income," said Sun Hung Kai Financial analyst
Michael Yuk. The Hong Kong power supplier booked a provision for its 20 percent
stake in Melbourne-based Solar Systems as the firm faced fundraising troubles.
CLP declared an interim dividend of HK$1.04 per share, unchanged from a year
earlier. Earnings per share were HK$1.34. Earnings from the SAR tumbled 27.6
percent to HK$2.93 billion, accounting for 90.4 percent of the company's net
income, as permitted rate of return was slashed to 9.99 percent this year from
13 percent to 15 percent, under the new Scheme of Control. Total electricity
sales fell 0.9 percent to 15,494 gigawatts. Sales to China slid 12.1 percent as
factories in Guangdong shut because of the economic downturn. "We have seen
quite a dramatic shift in demand in China, when generation in Guangxi increased
over 12 percent in July compared to July 2008," said chief executive Andrew
Brandler. China business lost HK$97 million as income from coal-fired projects
dived 71 percent, hit by the financial crisis. Income from India and Australia
was hurt by volatile exchange rates. CLP shares slid 1.87 percent to HK$52.55.
Tourism Board events manager Mason Hung unveils details of Hong Kong's food and
wine festival. For as little as HK$10 a glass, visitors to a food and wine
festival in November will be able to sample products from regions as diverse as
Bordeaux and California. It will be among attractions at the Hong Kong Food and
Wine Year Spotlight Events to be held from October 30 to November 8. The 10-day
series of events, organised by the Tourism Board, will start with the city's
first large-scale outdoor wine-and-dine event at the West Kowloon Promenade.
"Visitors will be able to enjoy the nice harbour view while enjoying fine wine
and gourmet food" at the three-day event, the board's senior manager for events
and promotion, Mason Hung Chung-hing, said. "There will be music, dancing and
multimedia shows every night." Mr Hung said 80 per cent of 140 booths had been
rented, with wine merchants from more than 10 countries - including France,
Italy, the United States, Chile, South Africa and New Zealand. Award-winning
restaurants will also offer fare. Admission will be free. Wine enthusiasts will
be able to buy a wine pass for HK$150, which includes a souvenir wine glass and
up to 12 glasses of wine from any booth. Alternatively, they can buy HK$10
coupons to redeem for a glass of wine. Another two food carnivals will be
organised in Lan Kwai Fong and in SoHo in Central from November 6 to 8, with
about 110 booths. The catering industry is also lending a hand, with wine
appreciation and cooking classes. Visitors can also join a wine cellar tour and
enjoy free corkage at designated restaurants. As it was the board's first such
event, Mr Hung said it could not give an estimate of the number of tourists who
would come, but Hong Kong's catering industry would get a boost. "Overseas
tourists may be wine experts, but they may not know which kind of food goes well
with a particular type of wine, while Hongkongers may know local food well but
don't know which type of wine to match it with," he said. "We hope to help [with
this event]." He said the 10-day event would involve HK$170 million, with HK$130
million coming from sponsorships and income from tickets. 
Hong Kong will use its strength in
financial services and logistics to promote development of service industries
and hi-tech industry in a pilot zone in Shenzhen, under a co-operation agreement
to be signed between the two city governments today. According to the letter of
intent on co-operation in the development of Qianhai in Shekou , Hong Kong is
being encouraged to take part in planning for development of the 10 square
kilometre zone. A Hong Kong official said the agreement would state the
intention of both cities to co-operate in developing Qianhai, and that they
would continue to discuss the details in future. "The agreement will only
outline the direction for co-operation in developing Qianhai, but it will not
include any specific co-operation projects or any investment commitment," the
official said. Both cities would capitalise on Hong Kong's strength in financial
services, trade and logistics to pave the way for development of service
industries and hi-tech industry, the letter of intent stated. Chief Secretary
Henry Tang Ying-yen has said that Qianhai has the potential to become the
"Central of Shenzhen". The proposed rail link to connect Hong Kong and Shenzhen
airports would have a stop in Qianhai. Representatives of the two governments
are scheduled to sign the agreement at a meeting of the Hong Kong-Guangdong
Co-operation Joint Conference in Hong Kong today. At the meeting, the Hong Kong
government and Guangdong authorities will also give an update on progress made
in cross-border co-operation in areas such as environmental protection. Chief
Executive Donald Tsang Yam-kuen, who is due to deliver a speech at the meeting,
said last month that details on how Hong Kong and Guangdong would work together
would be unveiled today.
Police said yesterday they had smashed a high-level drug selling organization
and made the largest cocaine seizure in five years. Police seized 32 kilograms
of cocaine - including two kilograms of crack cocaine - as well as various tools
in the operation on Monday in Ma On Shan, where the syndicate's alleged
mastermind lived. The seizure is worth HK$28 million. It was a follow-on action
from earlier Monday when two kilograms of cocaine valued at HK$2 million were
found in public lockers at Sha Tin's New Town Plaza shopping mall. The market
value for cocaine is about HK$800,000 per kilogram while crack cocaine retails
at HK$1 million to HK$1.1 million per kg.
Curtailing the Legislative Council's
power to summon witnesses would effectively muzzle it as a public watchdog and
threaten Hong Kong's "one country, two systems" policy, a landmark judicial
review hearing was told yesterday. Anthony Lester QC - also known as Baron
Lester of Herne Hill as a member of Britain's House of Lords - was arguing
against a bid by New World China Land chairman Henry Cheng Kar-shun and
executive director Stewart Leung Chi-kin not to give evidence at an inquiry into
controversial former housing chief Leung Chin-man's post-service employment.
Lord Lester, representing Legco, said their application for a judicial review
threatened to "weaken the effectiveness of Legco as Hong Kong's public
watchdog." Also, the very concept of the "one country, two systems" policy, in
which continuity preserves historical legislation, will be challenged, Lester
said. "What the applicants are seeking would amount to a judicial usurpation of
the powers, privileges and responsibilities of Legco, an unnecessary and
divisive struggle between legislative and judicial powers for the sake of a case
without merit," Lester told the Court of First Instance. "It would muzzle Hong
Kong's public watchdog and weaken its ability to obtain information, to call the
government to account, and to provide information and opinions to the public."
Lester said arguments put forward by New World's lawyers were inconsistent with
the "one country, two systems" concept, which relies on the continuity of
relationships established between the three branches of government prior to the
handover. He said only the parliament of Ireland "fettered" its own powers by
not allowing its committees to conduct inquiries that could result in ruining
someone's reputation, the example New World barrister Dinah Rose used to argue
that select committees' powers be curbed. "Everywhere else, the legislature has
the power to operate through committees, and committees have the power to summon
witnesses and call for papers when conducting investigations and inquiries into
matters of public interest," Lester argued.
An aerial photograph shows a village in
Chiayi county surrounded by a tide of mud and debris swept down mountains.
Typhoon Morakot has blown itself out, but Taiwan's political storm has just
begun. The island's vice-foreign minister, Andrew Hsia Li-yan, who had refused
overseas aid, became the first casualty after tendering his resignation. A
string of senior leaders now find their futures hanging in the balance,
including Premier Liu Chao-shiuan, cabinet secretary-general Hsueh Hsiang-chuan,
Defence Minister Chen Chao-min, and the director-general of the Water Resources
Agency, Chen Shen-hsien. A cabinet reshuffle appears increasingly likely before
county-level elections at the end of the year.
Ma Ying-jeou walks into yesterday's news
conference. He and other leaders bowed in apology, and Mr Ma said officials
would be punished. He was speaking at his first news conference since Typhoon
Morakot struck the island 11 days ago, bringing record rainfall that triggered
deadly mudslides and left at least 500 islanders dead. Mr Ma said the armed
forces would undergo intensive disaster- response training. Their budget,
manpower, equipment and strategy would be retooled to take into account disaster
relief and prevention.
China has invested in US$56 billion of
projects globally to try to reduce dependence on ore suppliers Vale, Rio Tinto
and BHP Billiton. China, planning to bankroll a US$6 billion iron ore expansion
of Fortescue Metals Group in Australia, is poised to make further investments to
help break the "stranglehold" of the world's three largest exporters. "The
Chinese steel mills are trying to dilute the concentration of iron ore supply,"
said Mark Pervan, a senior commodity strategist at Australia & New Zealand
Banking Group. "They will be looking for more deals like this." China, the
world's biggest buyer of the ore, has invested in US$56 billion of projects
globally to try to reduce dependence on Vale, Rio Tinto and BHP Billiton, which
control two-thirds of seaborne supply. The nation on Monday scaled back contract
price demands together with the Fortescue deal after seven months of stalled
talks. "[The Chinese] are very keen to see supply away from BHP, Rio and Vale
grow," said Tim Schroeders at Pengana Capital. "[They would want to] lessen the
stranglehold, or perceived stranglehold, that the Big Three have." Fortescue,
Australia's third-largest iron ore exporter, fell 3.9 per cent to A$4.40 in
Sydney, giving it a market value of A$13.6 billion (HK$86.95 billion). The stock
has more than doubled this year as a rebound in demand in China boosted ore cash
prices by about 46 per cent. Chinese lenders will arrange US$5.5 billion to US$6
billion of financing for Fortescue, in which China's Hunan Valin Iron & Steel
Group has a stake, as part of the accord, the Perth-based company said. Most of
the money will be used to expand production, Fortescue chief executive Andrew
Forrest said. "Fortescue and China are hoping the miner has the potential to
break the duopoly of BHP and Rio" for Australian iron ore, said Zhou Xizeng, a
Beijing-based analyst with Citic Securities. BHP and Rio are the two biggest
producers in Australia, itself the biggest exporter of the ore. Fortescue, which
had delayed expanding its iron mine amid a cash squeeze and a slump in demand,
plans to increase capacity to 95 million tonnes by 2012, chief financial officer
Michael Minosora said last week, from about 45 million tonnes now. It had cash
of US$654 million and debt of US$2.8 billion at June 30, according to company
filings.
The government has decided not to
reassemble Queen's Pier at its former site, Secretary for Development Carrie Lam
Cheng Yuet-ngor said. She told the Harbour-front Enhancement Committee yesterday
that the majority of city residents would like to see the iconic colonial
waterfront relic maintain its functional use as a pier. This was indicated by
comment cards, face-to-face interviews, telephone polls and community engagement
forums, she said. Lam added that the majority consensus is for the pier to be
relocated between Central Piers numbers 9 and 10 along the waterfront instead of
at its original site where it would be landlocked by the Central reclamation. In
addition, the change of site would mean the work can be completed in 2013, one
year earlier than planned. The decision to relocate the pier had nothing to do
with technical difficulties, Lam said. "It is based on the majority of public
responses." Lam said 49 percent of those filling in comment cards preferred the
new location against 27 percent seeking a return to the original site. In
face-to-face interviews it was 58 to 27 for the new site. Focus group workshops,
however, were 39-16 for the original site. It has also been decided to
reassemble the clock from the Star Ferry Clock Tower at its original location,
Lam said. A gallery at the site will display various memorabilia salvaged from
the old Star Ferry terminal. The government has further agreed to lower the
development density in front of Two IFC after rising concerns that the density
was too high for a site close to the waterfront. However, a Task Group on Urban
Design Study for the New Central Harbourfront insists that the majority of
Hongkongers prefer Queen's Pier to be reassembled at its original location with
a large lagoon created in front of it. They believe this will maintain the
pier's historic connections with Edinburgh Place and City Hall. The group also
claims the support of architects and heritage concern groups. Engineers and
surveyors on the other hand are in general supportive of the waterfront option.
Green Sense yesterday expressed disappointment at the decision to relocate the
pier, saying it will diminish its historic value. The removal of Queen's Pier in
2007 caused a public outcry and a wave of protests and litigation. Two members
of conservation group Local Action who sought a judicial review against the
decision to dismantle it lost their lawsuit and were recently ordered to pay
HK$270,650 in legal costs. 
The China arm of HSBC (0005) is issuing
up to 2 billion yuan (HK$2.26 billion) worth of bonds in Hong Kong, but there
are no guarantees that subscribers will get at least one board lot if market
response is strong. HSBC Bank (China) announced it will issue at least 1 billion
yuan of two- year retail bonds, with an interest rate of 2.6 percent payable
twice a year. The bonds come in denominations of 10,000 yuan. If demand is
overwhelming, another 1 billion yuan worth of bonds will be issued, with some
going to institutional investors, said David Liao Yi-chien, treasurer and head
of global markets of HSBC China. "We have not allocated the proportion of bonds
to retail investors," Liao said. "We do not guarantee that each investor will
get at least one board lot. They may get nothing if subscribers are too
enthusiastic." The bonds will be available for public subscription from today
until September 4. The distributors include HSBC, Hang Seng Bank (0011), BOC
(Hong Kong) (2388) and Bank of East Asia (0023). In June, HSBC (China) sold 1
billion yuan worth of bonds to institutional investors. The bank is allowed to
issue up to 3 billion yuan of bonds in total, market sources said. Vincent Cheng
Hoi-chuen, chairman of HSBC Bank (China), said the lender has no plan to ask
mainland regulators for a larger share. "We have no plan to issue more bonds
after this ... and have no plan to apply for a larger quota," Cheng said. Liao
estimated the next yuan bond issue will be in two years after applying to
Beijing. Since mid-2007, nine banks have sold 29 billion yuan worth of bonds in
Hong Kong, according to Chief Secretary for Administration Henry Tang Ying-yen.
"The renminbi business is going to add to the breadth and depth of our financial
market and underline our strengths as an international financial center," he
said. China Development Bank said yesterday it concluded its 2 billion yuan bond
issue. Subscriptions were almost double the issue, but each retail investor will
get at least one board lot. The retail tranche will be allocated 1.5 billion
yuan. Separately, Cheng said HSBC is in contact with investment banks about its
listing plan in China, but there is no timetable yet. 
Ping An Insurance (2318) is to keep its equity portfolio at 10 percent to avoid
increasing volatility in the A share market, despite having a positive long-term
outlook. Executives from the mainland's second-largest insurer adopted a
cautious tone yesterday. "We will keep the current equity investment but will
look for more investment opportunities in other areas such as highly liquid and
even commercial property investment if policy allows," chairman Peter Ma Mingzhe
said. President Louis Cheung Chi-yan said equity investment would stay at 10
percent of its portfolio to avoid too much reliance on the domestic stock
market. In the first half, Ping An has already increased its cash level to 14
percent, from 10 percent by the end of 2008, through the sale of low-yield
bonds. Ma also said the insurer is not eyeing other financial institutions. It
will not increase its stake in Shenzhen Development Bank, but will use the
relationship to boost profit and get clients. Last Friday, Ping An said its
first-half profit fell 45 percent year-on- year to 5.22 billion yuan (HK$5.91
billion), or 0.71 yuan a share. Analysts believe its embedded value to be better
than expectations. Citi and Credit Suisse yesterday revised their target price
up to HK$80 and HK$82, respectively. Citi said Ping An could maintain 20 percent
full year net profit growth in 2009. But Credit Suisse downgraded its full year
earnings by 14 percent to 1.45 yuan per share, due to its higher than expected
tax expenses.
Food lovers crammed into the
Food Expo as it ended yesterday. With products being sold at big discounts,
business flourished and total attendance hit a record high. More than 350,000
people flocked to the Convention and Exhibition Centre for the five-day food
fair, 15 per cent more than last year, organiser Trade Development Council said.
Meanwhile, about 90,000 people attended the last day of the Hong Kong
International Tea Fair, which was making its debut in the city and ended on
Saturday at the same venue. The first two days were not open to the public. The
council's assistant executive director, Raymond Yip Chak-yan, said he was
satisfied with the fairs. He said food exhibitors from 24 countries came to Hong
Kong this year, with 10 of the countries attending for the first time.
Ninety-six per cent of buyers interviewed at the tea fair were satisfied with
the event. Countries attending the Food Expo for the first time included Peru,
Pakistan and Mexico. "We featured abalone from Mexico as big as a baby's head,"
Mr Yip said. The managing director of On Kee Dry Seafood, Richard Poon Kuen-fai,
said its abalone and dried scallops had sold out, and he expected sales to be 50
per cent up on two years ago, the last time the company joined the fair. Four
packs of its dried mushrooms, which cost HK$99 for the first four days, sold for
HK$69 on the last day. The marketing manager of meatball manufacturer Tai Po
Chun Hing, Pius Chan Ngok-shing, said sales had risen by 20 per cent from last
year, thanks to a promotion in which 100 meatballs were sold for just HK$1 to
the first 100 customers every day. Some exhibitors slashed prices in the hope of
clearing their stocks so they did not have to put them back in storage.
Communications officer Leung Suet-yee of the Wing Wah bakery company said
business was up 20 per cent on last year, adding that the biggest spender had
splashed out about HK$50,000 on mooncake vouchers. The firm's snowy mooncakes
were on offer at six for HK$100 on the last day, compared with five for the same
price for the first four days. However, strong sales convinced some companies
not to lower prices. The marketing manager of Maxim's bakery, Wincy Cheung, said
there was no need to cut prices. His new mooncakes had attracted many customers
and were still selling well. 
Actors Jacky Cheung, Alan
Tam and Andy Lau (L to R, Front) perform during a charity fundraising soiree in
Hong Kong, China, on Aug. 17, 2009. Actors from China's Taiwan, Hong Kong and
mainland China hold a benefit performance here on Monday to raise money for
Taiwan victims in the typhoon Morakot.
Actors Sylvia Chang and Eric
Tsang host a charity fundraising soiree in Hong Kong, China, on Aug. 17, 2009.
Actors Andy Lau (L) and Sammi perform
singing during a charity fundraising soiree in Hong Kong, China, on Aug. 17,
2009. 
Actors Andy Lau (L) and Richie Ren
Xian-Qi perform during a charity fundraising soiree in Hong Kong, China, on Aug.
17, 2009.
Hong Kong singers and actors perform
along with other Asian entertainers during the "Artistes 88 Fund Raising
Campaign " at the Hong Kong AsiaWorld-Expo yesterday. Showbiz celebrities from
Hong Kong, Taiwan and the mainland converged on a Hong Kong stage last night for
a marathon concert to raise money and show support for the victims of Typhoon
Morakot in Taiwan. The star-studded show at AsiaWorld Expo on Lantau Island was
televised live on major local TV and radio networks and broadcast live via the
Web to a global audience of about 400 million people, organisers said. When the
show ended at 11.30pm HK$50.9 million had been raised. During the four-hour
show, big names from mainland and Taiwan showbusiness joined some of Hong Kong's
top entertainers in taking turns performing and appealing for donations. They
included actor Zhang Guoli , film director Feng Xiaogang and celebrity
journalist Sally Wu Xiaoli , all from the mainland; and from Taiwan, veteran
singer Tsai Chin. Some helped answer the 50 hotlines. Giving the show a boost,
Hong Kong media tycoon Sir Run Run Shaw donated NT$100 million (HK$23.5
million). His wife, Shaw Brothers' deputy chairwoman Mona Fong Yat-wah, speaking
on behalf of Sir Run Run in a cheque presentation ceremony, said: "When we in
Hong Kong are enjoying the warmth at home, we should not forget those who have
lost their homes and relatives in Taiwan. We hope we can do something to bring
our sincere care and concern to Taiwan people." Taking to the stage, Secretary
for Home Affairs Tsang Tak-sing thanked the stars for their efforts to help the
typhoon victims. "I also appeal to the Hong Kong people to continue to donate to
help the victims in Taiwan," he said. Hong Kong stars at the concert included
singer-actors Alan Tam Wai-lun, Andy Lau Tak-wah and Jacky Cheung Hok-yau. Most
spectators, who made minimum donations of HK$20 for admission, said they came to
see their favourite stars and to show their concern for Taiwanese victims. A
tourist from Jiangxi province, a Ms Zeng, donated HK$100. "It's shocking and
it's sad," she said. "Last year I donated for the Sichuan [earthquake] victims.
I want to also show concern and support for fellow countrymen in Taiwan."
Meanwhile, donations from Hongkongers kept flowing in to relief organizations
and agencies. By yesterday nearly HK$20 million had been raised. World Vision
Hong Kong chief executive officer Kevin Chiu Wun-ming said: "The situation in
Taiwan is more serious than we had thought. An estimated 30,000 people remain
stranded." The Legislative Council finance committee approved a donation of
HK$50 million yesterday for relief and rehabilitation work in Taiwan. Funds
raised so far, Hong Kong Jockey Club, HK$10 million; Tung Wah Group of
Hospitals, HK$3 million; Hong Kong Red Cross, HK$3 million; World Vision Hong
Kong, HK$1.9 million; Salvation Army, HK$1.7 million; Hong Kong Baptist Oi Kwan
Social Service, HK$500,000; Hong Kong General Chamber of Commerce, HK$200,000;
Democratic Party, HK$145,000; Association for Democracy and People's Livelihood,
HK$93,000.
Foreign direct investment in the
mainland declined a greater than expected 35.7 per cent year on year last month
as multinationals remained cautious about prospects for the world's
third-largest economy. The Ministry of Commerce said US$5.36 billion was
directly invested last month, US$3.6 billion less than in June, as the mainland
economy continued to feel the impact of the global liquidity crisis. Analysts
said the decline also underscored concern about emerging asset price bubbles on
the mainland. But they played down speculation it was due to a crackdown on the
operations of some multinationals, such as Rio Tinto, some executives of which
were arrested recently. "I think the drop reflects still strained liquidity on
international credit markets for multinationals rather than the fundamentals
within China," said Tao Dong, an economist with Credit Suisse. "In addition,
volatility in monthly foreign investment figures is nothing unusual,
particularly when the summer comes." Foreign direct investment has declined for
10 consecutive months as a result of the global financial crisis. Foreign
investment in the first seven months of the year totalled US$48.3 billion, 20.35
per cent less than a year earlier. But the year-on-year drop has narrowed month
by month since April. Each of the past 13 years saw a sequential decline in
foreign investment between June and July in absolute numbers, according to
statistics from Industrial Bank. "But this year saw the biggest retreat," said
Lu Zhengwei, an economist with Industrial Bank. "It is a sign of growing caution
in China-bound speculative investment." Mr Lu said some of the investment is
"hot money" in disguise, and his research found that the fluctuation generally
correlated with changes in the size of broader hot money inflows in the past.
The mainland stock market soared 90 per cent in the first seven months, fuelling
concern over inflated valuations that triggered sell-offs in the past two weeks.
The once-blistering growth in the property market has also shown signs of a
slowdown as the domestic banking regulator warned of tighter restrictions on
home loans. But Mr Lu and Mr Tao agreed the downward lurch in foreign investment
would not affect the pace of recovery in China. Nor did it have a lot to do with
Beijing's recent clampdown on alleged wrongdoings by multinationals operating on
the mainland. A US State Department spokesman said last Thursday the detention
of four Rio staff since July 5 may have weighed on business investment in the
country. The executives were formally charged with trade secret infringements
and bribery last week. The detention this month of a top executive at a leading
state-owned nuclear power operator was also reportedly linked to murky dealings
with foreign suppliers. "Multinational executives closely follow the news, but
it would take a long time for them to make decisions [based on that]," said Mr
Tao.
The giant panda could be extinct in just
two to three generations as rapid economic development is infringing on its way
of life, state media said, citing an expert at conservation group WWF. The
pandas' habitat is being split up into ever smaller patches, preventing the
animals from roaming freely for mating partners and in turn endangering their
gene pool, the Global Times reported. "If the panda cannot mate with those from
other habitats, it may face extinction within two to three generations," said
Fan Zhiyong, species program director for WWF. "We have to act now."
The average selling price of homes in Hong
Kong hit a 13-month high in July as the residential property market continued to
recover with prices and transactions climbing. The average price breached the
HK$4,000 per-square-foot level last month, according to Midland Realty. The real
estate agency said prices rose for eight consecutive months to reach HK$4,135
psf in July, up 3.5 percent from the previous month. That was also a 21.7
percent increase from HK$3,397 psf at the end of last year. "Despite the
significant price surge, I believe the low interest rate environment will
continue to encourage people to buy and not rent," said Midland Realty chief
analyst Buggle Lau Ka-fai. In the first 13 days of August, there were 769 sale
registrations in the primary market, up 38 percent from the same period last
month, Ricacorp Properties said. The value of the transactions soared 65 percent
to HK$4.75 billion. Ricacorp, Midland and other real estate agents estimate
transactions will reach more than 2,000 this month. Strong sentiment also
boosted the secondary residential market where deals reached a 19-week high over
the weekend. Sales in 10 of the largest housing estates increased 8 percent to
70 transactions from 65 over the previous weekend, according to Midland Realty.
"The strong performance of the primary market shows a strong inflow of capital,
which supports the market and purchasing power is returning to the secondary
market," said Midland Realty director Andy Ho Ming-pui. Properties atop Kowloon
Station were the focus of the primary residential market at the weekend as Hang
Lung Properties (0101) continued to sell apartments at The Harbourside. An agent
estimated the developer sold about 80 flats, at an average of HK$15,000 psf. The
Harbourside is a joint development with MTR Corp (0066) but the two companies
are now selling flats individually. 
The first shipments of foreign aid arrived
in the capital Taipei yesterday as Taiwan struggled to reach more than 1,000
people still stranded by landslides caused by Typhoon Morakot. Aid is expected
from more than 59 donors, including the mainland, Hong Kong and the United
States. Plastic sheeting for makeshift housing arrived from the United States
and water purification tablets came from Australia. Taxi drivers in Taipei
pitched in as well, driving rice and instant noodles to the hard-hit rural
south. The official death toll stands at 124. President Ma Ying-jeou has warned
that the number could rise to more than 500, with hundreds feared buried beneath
the rubble in the village of Hsiaolin alone. He offered another apology for his
government's slow response to the disaster after families said more people could
have been saved. Sorry we were late," he told people in Pingtung county. "As the
president, I will take full responsibility in getting the remaining work done
well." After days of mounting criticism, the president convened his first
national security meeting and replaced the head of emergency operations.
Helicopters crisscrossed southern mountainous regions, airlifting survivors to
safety as 41,000 troops fought raging rivers and crossed collapsed bridges to
reach victims, many of whom have been without food for more than a week. A US
military transport aircraft landed in the southern county of Tainan yesterday.
The United States will also send two heavy-lift military helicopters to help
relief efforts, said Transport Minister Mao Chih-kuo, who is also in charge of
the emergency response. Mao said 3,000 villagers had been airlifted over the
weekend, leaving about 1,000 still stranded in the ruins of flooded and mud-hit
villages. Altogether, 35,000 villagers have been rescued from 44 hard-hit
villages in the south, he said. Resettlement of an estimated 7,000 people whose
homes were destroyed could speed up after a batch of prefabricated houses
arrives from Britain, with more coming from the mainland.
Beachgoers pack Shek O Beach as the
mercury soared yesterday afternoon. Kowloon City recorded a high of 34.5 degrees
Celsius, followed by Wong Tai Sin and Shek Kong with 34.2. The Observatory
predicts fine, hot weather for the next few days. 
There has been a massive
increase in the number of lawyers and law students learning the ropes of
mediation as people become aware of its benefits as an alternative to costly and
time-consuming legal action. Many attribute the surge of interest in this
alternative form of dispute resolution to promotion by the judiciary and the
Department of Justice. Mediation can save the parties money, time and stress,
while maintaining confidentiality. According to Law Society figures, 41 lawyers
attended its mediation courses between January last year and April 1 this year.
Since then, more than 400 lawyers had attended such courses. And while only 11
solicitors became accredited mediators in the 15 months to April 1, more than 30
have been accredited since then. Leung Kong-yui, associate head of the College
of Humanities and Law at the University of Hong Kong's school of professional
and continuing education (SPACE), said it previously had offered only two
mediation courses a year. But this year it had increased class sizes and was
preparing to introduce a fourth class because of a growing waiting list. Mr Kong
said the number of students had doubled this year. The Hong Kong Mediation
Centre, which offers mediation services for a wide range of disputes, said it
had received as many requests for services in the first half of this year as it
had since it was established nine years ago and had had a significant increase
in the number of students taking its courses. Hong Kong International
Arbitration Centre said it now had 445 accredited mediators, and since 2008
there had been an increase of 15 per cent in newly accredited mediators. Bar
Association chairman Russell Coleman SC said that since October 2007, when it
began offering mediation training, until last month, 104 people had taken the
courses, with a further 48 registered to join before the end of the year. The
promotion of mediation has been a priority for the judiciary and the government
in recent years, with the judiciary keen to ease the burden on the courts and
the government keen to develop the city as an international legal services hub.
Since November 2007, Secretary for Justice Wong Yan-lung has led a cross-sector
working group to examine issues such as venues for community mediation,
promotion of mediation in the commercial sector, strengthening training
programmes in law schools, drawing up and implementing a code of practice for
mediators, accreditation, and continued training of mediation professionals. The
working group is expected to complete its report by December, in order to
prepare for consultations early next year. The civil justice reforms that came
into effect in April also included incentives for litigants to attempt
mediation. The efforts to promote mediation were reflected by the turnout at the
Mediation Centre's 10th anniversary celebrations last week, attended by Mr Wong,
prominent members of the legal and judicial community and Sir Laurence Street, a
former chief justice of New South Wales, Australia, also known as the "first
knight of mediation". Sir Laurence said he felt humbled to be coming to the
"home of mediation philosophy", since its principles stemmed from Confucian
principles of peace and harmony. After stepping down from the judiciary in 1998,
Sir Laurence became a vocal advocate of mediation over litigation. "In every
community with an established legal profession, mediation has to be introduced
gently," he said, adding that older practitioners were usually more resistant to
change.
Until recently, the concept of mediation
was almost unheard of, and people saw costly court action as the only way to
decide on a dispute. But now law students are beginning to see mediation as a
required part of their training and mid-career professionals see it as a new
skill that could provide a career change. Regina Yeung Sum-yu is studying
part-time for a law degree and has also enrolled in a mediation course at the
HKU school of professional and continuing education (SPACE). Ms Yeung, who works
in hotel investment, said she first heard about mediation through a friend who
was already an accredited mediator. "Then I went to do my own research and I
could see that while Hong Kong was still lagging behind, this would be a growing
market," she said. Ms Yeung also has personal experience of the disadvantages of
litigation as her company was embroiled in a dispute for six years. "After that,
I can see all the benefits of mediation, in terms of time and money and for
privacy reasons," she said, adding that she was already advising her company to
seek mediation as a way of erasing misunderstandings and resolving disputes
quicker. For Vincent Au-yeung, who has been taking a course at the Mediation
Centre, mediation offers a career change or at least career development. Mr Au
is a police officer and said he might become a full-time mediator because of the
increasing demand for such professionals. "But even if I don't change careers,
the skills are applicable for work in law enforcement," he said. "Often cases do
not require direct action but just mediation between the parties." Associate
head of the college of humanities and law at HKU SPACE, Leung Kong-yui, said
people who took its courses came from a variety of backgrounds, including the
legal profession, engineering and property management, as well as senior
government officials.
Hungary is closing its consulate in
Hong Kong to save money amid the global financial crisis. Its consul general,
Adam Tertak, and consul, Janos Chalupa, returned home last month. Only
vice-consul Bela Nemeth and some local staff remain at the Wan Chai office,
which will close on August 31 after 10 years of operation. While Hongkongers are
granted visa-free access to Hungary for up to 90 days, people who need a visa
should now contact the consulate in Shanghai or the embassy in Beijing. The Hong
Kong office is one of eight Hungarian consulates and four embassies around the
world to close as a measure to cut government spending. The doomed embassies are
in Malaysia, Luxembourg, Chile and Venezuela, while the other consulates are in
Sydney, Toronto, Chicago, Dusseldorf, Lyon, Cracow and Sao Paolo. A spokeswoman
for the Hong Kong government said it had been informed of the move. "We treasure
trade relations with Hungary, which have been growing at an average of 11 per
cent in the past five years," she said. "We believe the decision will not affect
the growing bilateral trade ties." The former communist country was the first to
set up a full consulate in Hong Kong after the handover. At that time, the first
consul-in-charge, Laszlo Vizi, said it aimed to promote the republic as a hub of
commercial activity in central Europe for Hong Kong businesses. Hungary is now
the city's largest export market in Central and Eastern Europe, with total trade
reaching US$1.33 billion last year, according to the Trade Development Council.
It fell to US$421 million in the first half of this year. There are about 80
Hungarians in Hong Kong. The closure will bring the number of consulates in Hong
Kong to 116, along with five officially recognized bodies.
The Kowloon Southern Link had a
baptism of fire yesterday, with protesters calling the MTR Corporation
"heartless" for its operating changes in line with the extended service while
many New Territories residents complained of steep fares for a speedy ride to
urban Kowloon. With the new interchange at Hung Hom for the West and East rail
lines, passengers will take slightly more than 37 minutes to get to the station
from Tuen Mun without having to change trains at Nam Cheong. For those in Yuen
Long, the ride will take less than 27 minutes. The MTRC expects the West Rail
daily average of 200,000 commuters to rise by 30,000 because of the extension.
Yesterday's opening of the interchange attracted the usual early birds who
queued up as early as 4.30am for the first train from Hung Hom to Tuen Mun
through the new Austin station. But 20 to 30 representatives and supporters of
the Democratic Alliance for the Betterment and Progress of Hong Kong wielded
posters and banners that read "MTR is heartless." The protesters were angry over
fares such as HK$12.90 to get from Tuen Mun to Nam Cheong and HK$10.90 from
Sheung Shui to Austin. Operations head Choi Tak-tsan said services were
"generally smooth" and that display board kinks were ironed out by 8.30am and
had "no effect on the train services," Choi said. Many passengers complained of
delays of up to nine minutes while changing over to West Rail trains from
east-bound trains. Choi blamed the delays on it being a Sunday and promised
waits will be minimized today, the first full working day. A DAB survey of 536
passengers at the Fanling Station on August 11 found that 31 percent of
respondents were not aware that the new terminus was Hung Hom and not East Tsim
Sha Tsui. About 46 percent thought that HK$10.90 to get from Sheung Shui to
Austin Station was unreasonable, as opposed to 17 percent who did. Nineteen
percent less respondents said they would take the MTR to Tsim Sha Tsui and 11
percent less would catch the train to the island. 
Sun Qin, deputy director of
the National Energy Administration (NEA), has been appointed general manager of
China National Nuclear Corporation (CNNC) to replace Kang Rixin, who was removed
from his post for "grave violations of discipline", said a notice posted on the
corporation's website on Friday. Sun, 56, was the deputy head of the Commission
of Science, Technology and Industry for National Defense (COSTIND). He also
served as the deputy general manager of CNNC for six years before he became the
deputy director of the NEA in 2008. 
China can sustain three Disney theme
parks, Shanghai's leading tourism official has said, implying that a Disneyland
there would not pose a threat to the Hong Kong park. "China has a population of
1.4 billion or 1.5 billion. It will not be a problem even if there are three
Disneylands here," Li Bincheng , director of the Shanghai Municipal Tourism
Administration's international tourism promotion department, said when asked
about the competition with Hong Kong Disneyland if Shanghai built a theme park.
He said the cost and distance people needed to travel to reach the parks were
the factors that determined which Disneyland tourists would visit, rather than
which city they were in. 
China Shenhua plans to increase its
railway capacity by 50 per cent to 240 million tons by 2015 to meet its growing
demand for logistics. China Shenhua Energy (SEHK: 1088, announcements, news)
plans to spend more than 148 billion yuan (HK$168 billion) by 2015 to double its
coal output, raise the handling capacity of its coal ports by 77 per cent,
increase its railway capacity by 50 per cent, and lift its power generation
capacity more than 33 per cent. At least 30 per cent of the investment will be
funded by equity capital and the rest by loans. The business plan will see the
listed unit of Shenhua Group, the nation's largest coal producer, grow its own
operation organically and by merging smaller rivals to meet the mainland's
rising energy demand, company secretary Huang Qing said. China Shenhua has
budgeted 100 billion yuan to build two large-scale coal mines, each with annual
capacity of 100 million tons. One is in Shaanxi province and the other in Inner
Mongolia. Under government policy directions to consolidate the coal mining
sector, the group will also shut and upgrade small, inefficient, and unsafe
mines. China Shenhua aims to produce 197 million tonnes of coal this year, up
6.1 per cent from last year. About 60 per cent or 240 million tons of its
planned coal output capacity of 400 million tonnes by 2015 would be shipped via
its Tianjin and Huanghua ports in the north. The remainder will be used for
power generation and chemical production in regions near the mines. To meet its
growing demand for logistics, the company has budgeted 20 billion yuan to expand
the Tianjin port's annual handling capacity to 80 million tonnes from 45 million
tons, and that of the Huanghua port to 150 million tons from 85 million tons. At
least 35 per cent of the expenditure will come from equity capital. The company
will also buy additional rail cars that can handle heavier cargoes to double
each train's capacity to 10,000 tons. Its total rail capacity will rise to 240
million tons by 2015 from 160 million tons now. Mr Huang also said China Shenhua
had received government approval to spend 28 billion yuan to build power
stations capable of generating a combined 6,700 megawatts (MW) of power in the
next few years, enough to raise its capacity by 37 per cent from 18,000 MW. Mr
Huang said given China Shenhua's cash pile of 72.3 billion yuan, it would not be
necessary to raise fresh equity to fund the expansion, which would be financed
from internal resources and bank loans. On overseas expansion, the company is
conducting resource development in New South Wales, where it won a A$300 million
(HK$1.96 billion) license a year ago to explore for coal. "Given our lack of
overseas experience, if we start from scratch, we can learn the entire
development process - from obtaining exploration rights, doing exploration,
getting approvals, building and operating mines, labour management to
environmental protection," he said. "This is not to say we will wait until we
finish our first project before we will consider acquisitions. We'll keep our
eyes open for opportunities." Shandong-based rival Yanzhou Coal Mining (SEHK:
1171) last week agreed to acquire all of Felix Resources for just under A$3
billion, making it China's largest investment in Australia's resources sector.
While the deal promised to offer a quick fix to Yanzhou Coal's problem of
stagnant production volumes, the miner's lack of experience in boosting
operations overseas exposes it to significant risk in executing Felix's plan to
expand output to 15.7 million tons by 2012 from 4.8 million tons now, analysts
at Morgan Stanley said in a research report. Meanwhile, Mr Huang expects the
price of high heat value power-station coal will range between 550 yuan and 650
yuan per ton over the remainder of the year, compared with 570 yuan now. He said
prices would rise because of the global economic recovery and higher
environmental protection costs. His view contrasted with that of Huadian Power
International general manager Chen Jihua, who said last week the price of coal
was likely to be flat this year and fall next year as growth in mining capacity
would exceed demand.
What his new wife will think no one
can say, but car salesman Wang Shiping regrets the timing of his spring wedding
cost him an opportunity to earn more money from the booming car market. July,
which is traditionally a low season for car sales, proved instead to be the
fifth consecutive month that total vehicle sales exceeded one million units; and
dealers and salesmen like Mr Wang believe the growing momentum will remain in
August and for the rest of this year. "We don't worry about dwindling
customers," said Chen Jianhui, the sales manager of a dealer that sells Shanghai
Volkswagen's Passat and Lavinda in Guangzhou. "Some are buying a car because
they have earned money from the stock market and some are just following the
crowd to own a car." China now has the only car market that is growing and will
become the world's biggest by the end of the year. Market watchers expect that
sales in the present largest car market - the United States - will not begin to
pick up again until next year at the earliest. By contrast it is expected that
total sales on the mainland could reach 12 million vehicles by the end of the
year, up from 9.38 million units last year. "I think the boom is the result of a
mixed and fortunate coincidence," said Tang Liang, who sells Nissan cars in
Shanghai. "Government taxation incentives and direct subsidies have also
definitely helped." The four trillion yuan (HK$4.54 trillion) stimulus unveiled
by Beijing last year earmarked the vehicle industry for early support. The
government cut consumption tax for vehicles with engines of 1.6 litres or
smaller to 5 per cent from 10 per cent from January 20 to December 31; and it
allocated five billion yuan worth of subsidies to farmers buying three-wheelers
and vehicles with engines of 1.3 litres or smaller between March 1 and the end
of the year. "It's true that because of the tax benefits I decided to own a car
as it is actually a necessity," said Wang Wei, 27, who works as a public
relations officer for a developer. Car dealers said most of their customers set
their sights on spending between 100,000 yuan and up to 200,000 yuan for large
cars to show off their social status. While the big cities suffer from massive
traffic congestion, countrywide there are only 24 car owners for every 1,000
citizens. That ratio indicates the huge upside potential for the industry when
compared to the US, which has an average of 765 vehicles per 1,000 people, and
Europe, which has a ratio of about 300 per 1,000. Zhu Hui, the deputy sales
manager for Chery Automobile, said the sales results were an effect of the
slashing of consumption tax. "A 70,000 yuan 1.6-litre car previously came with a
consumption tax of 7,000 yuan. Now the government has cut the tax in half, it
means a customer has to pay only 3,500 yuan in tax," Ms Zhu said. "What's more,
some carmakers like Chery offered to pay the 3,500 yuan, which meant customers
eventually paid nothing." Chery dealers in Guangzhou sold an average of 160 cars
per month from January to July, up from last year's average of 100 units per
month, she said. Mr Tang said that carmakers also underestimated this year's
sales at the end of last year, "which led to a gap between demand and supply.
And that further inflated the boom". Ma Huadong, a Nissan dealer in Guangzhou,
said the dealership had already achieved its August sales target of 190 units.
On average, 140 cars were sold per month this year, up from 100 units last year.
On top of the lively demand stimulated by government policy, carmakers have
helped themselves by launching promotions since the end of last year. "I spent
some time looking around for a car. Finally, I chose to buy a 110,000 yuan
Nissan because my credit card provided me with attractive benefits," said Water
Tang, who works in the marketing department of a magazine in Guangzhou and earns
8,000 yuan a month. He said that after making a first payment of 30,000 yuan for
the car, he could pay the balance in 12 installments using his credit card
without having to pay surcharges and interest. Car dealers agreed that the sales
boom this year was partly helped by easier credit. In previous years, one in
every 10 cars was bought with the help of loans. But now about one in five deals
was funded by credit, they said.
The recession has hit international
tourist arrivals in Shanghai more severely than many other mainland cities.
Overseas visitor numbers fell nearly 10 per cent in the first half of the year.
Li Bincheng , director of the Shanghai Municipal Tourism Administration's
international tourism promotion department, said the number of overseas visitors
- including those from Hong Kong, Macau and Taiwan - had fallen to 3.9 million,
compared with 4.3 million in the first half of last year. "This is because
Shanghai is comparatively more international and therefore is more prone to feel
the impact of the economic environment overseas," Mr Li said. The decline is
about three times higher than the drop in total overseas tourist arrivals in 28
major mainland cities in the first half year on year, which slumped to about 20
million people, figures from the National Tourism Administration showed. Beijing
recorded a drop of 2.3 per cent, while Tianjin saw an increase of 14 per cent.
But Shanghai fared better than Sanya , Hainan , down 40 per cent; and Zhongshan
, Guangdong, down 30 per cent. Shanghai still managed to attract Hongkongers and
Taiwanese in the first half. It received 201,146 Hongkongers, up 17 per cent,
and 230,500 Taiwanese, up about 8 per cent. Mr Li said Shanghai still expected
to attract about 6.8 million overseas visitors this year, compared with 6.2
million last year. He was also optimistic about prospects for the World Expo
next year. "We are confident that the target of 70 million people can be
achieved," he said. The number of mainlanders coming to Shanghai was still
increasing about 3 per cent annually, he said. adding that he thought many
mainlanders would visit Expo. Estimates showed that only one in 20 visitors to
the six-month event would come from outside the mainland. In a media tour of the
Expo site this month, the main boulevard and frameworks of key structures were
visible - including the China Pavilion, World Expo Centre, Theme Pavilions and
Expo Performance Centre. The Hong Kong Pavilion could not be seen yet, but work
on it started in April. "Our preparations have been going smoothly," said Hong
Hao , director general of the Bureau of Shanghai World Expo Co-ordination. Wu
Penghong , assistant supervisor at the bureau's communication and promotion
department, said work had started on more than 60 of the nearly 100 pavilions.
"On a busy day we expect to see 700,000 to 800,000 visitors and the number
should fall to between 300,000 and 400,000 visitors on a quiet day," he said.
The bureau added that despite the financial crisis, the Expo had attracted more
official participants than expected and no sponsors or participants had
withdrawn. With the theme "Better City, Better Life", the Expo has so far wooed
192 countries and 49 international organisations to participate. The site will
be the largest ever for an expo, covering 5.28 sq km and involving about 18
billion yuan (HK$20.5 billion) in construction costs. Viewed as another
opportunity for the country to shine on the international stage after the
Beijing Olympics, the Expo will run from May 1 to October 31. Tickets are now on
sale. 
The government
has promoted Arthur Yuen Kwok-hang, currently an executive director at the Hong
Kong Monetary Authority, to head its local banking regulation division starting
in January. Mr Yuen will become a deputy chief executive of the HKMA, replacing
Choi Yiu-kwan, who will retire at the end of this year. In effect, Mr Yuen will
be the new right-hand man to Norman Chan Tak-lam, who will replace HKMA chief
executive Joseph Yam Chi-kwong when he retires on October 1. Bankers and
analysts said Mr Yuen was chosen because of his strong regulatory background in
the securities market, especially important as the HKMA begins to tighten
regulations on banks' securities operations after the Lehman Brothers minibond
fiasco. More than 20,000 investors complained they were misled by banks into
buying the structured products issued or guaranteed by Lehman. These products
became almost worthless when the United States investment bank collapsed in
September last year. This prompted the HKMA to impose a range of measures to
tighten regulation on how banks sell their securities business. Mr Yuen is a
former administrative officer and was principal assistant secretary for the
Financial Services Branch in the early 1990s handling securities market
regulation. He was a senior manager at the Securities and Futures Commission for
two years before he joined the HKMA as a division head in 1996. He was promoted
to his current post in 2004. "Mr Yuen has experience in securities regulation
that will be useful as the HKMA now needs to tighten the regulation of banks'
securities business," said Chim Pui-chung, a legislator for brokers. However,
Democrat Kam Nai-wai objected to the timing of the management changes. He said
it was not appropriate for Mr Yam and Mr Choi to leave before the investigation
into the minibond complaints was completed in March next year. "Mr Choi is
handling banking regulation, so he is the one who knows best if there was any
mis-selling by the banks," Mr Kam said. Mr Choi, 54, joined the HKMA in 1993
after working for the Office of the Commissioner of Banking since 1974. He
handled a number of bank runs and government rescue plans in the 1980s. He
rejected market speculation that his departure was related to the retirement of
Mr Yam, saying he had always planned to retire at 55 by the end of this year.
"Norman is a good friend of mine and a good colleague," Mr Choi said. "I
struggled for a while before making the decision to retire." Mr Choi said he
would not join the commercial world after retiring from the HKMA but would study
history and spend time with his family. Tam Ping-shing, chief executive of Hong
Leong Bank's Hong Kong branch, said he regretted that such an experienced
banking regulator had to retire. "One of Mr Yuen's challenges is to make sure
local banking regulation can cope with the challenges ahead and to allow local
lenders to expand on the mainland in future," Mr Tam said.
Japan expressed remorse for its
actions in the second world war yesterday, the anniversary of its 1945 defeat,
but two former prime ministers visited a controversial war shrine seen as a
symbol of its past militarism and occupation of China. Prime Minister Taro Aso
and Emperor Akihito, whose father Hirohito surrendered exactly 64 years ago,
attended a memorial service in Tokyo and expressed sorrow for the suffering the
nation had caused. "Our nation inflicted significant damage and pain on many
countries, especially on people in Asian countries," Mr Aso said during the
nationally broadcast service attended by 5,000 people, mostly elderly veterans
and bereaved families. "On behalf of our people, I express deep remorse and
humble condolences for all of the people who fell victim." Emperor Akihito said:
"I profoundly express my condolences ... with my sincere hope that such war
sufferings will never be repeated." But amid Japan's efforts to own up to its
wartime aggression, former prime ministers Junichiro Koizumi and Shinzo Abe
visited Yasukuni Shrine, which honours some 2.5 million Japanese war dead,
including 14 leading war criminals - and has long been a sensitive issue with
Beijing. Resentment lingers in China over Japan's bloody occupation from 1931 to
1945, while many Koreans have bitter memories of its brutal colonial rule from
1910 to 1945. Sino-Japanese relations hit rock bottom during the five-year
tenure of Mr Koizumi, whose annual visits to the shrine from 2001 to 2006
enraged Beijing. Relations have warmed since Mr Koizumi left office, but Beijing
expressed "serious concern" in April when Mr Aso made an offering to the
controversial Yasukuni war shrine, and warned that the move could harm bilateral
ties. Mr Abe, Mr Koizumi's successor who avoided the shrine while he was prime
minister, made his second consecutive annual visit yesterday. "Today, I made a
visit here to share respect and veneration for spirits of the war dead," Mr Abe
said. Mr Aso has indicated he will stay away from the shrine, although Consumer
Affairs Minister Seiko Noda visited. Last year three ministers, including Mr
Noda, visited the shrine. "I renewed my strong belief that we must not wage a
war," Mr Noda said at the shrine. There was no response from Beijing yesterday.
Ahead of the August 30 national election, some 40 conservative politicians also
made a pilgrimage to the shrine. Opposition leader Yukio Hatoyama, widely tipped
to become the next prime minister, expressed his condolences for those who lost
their lives in the war, while staying away from the shrine. "It is our
responsibility and duty to establish peace by facing history so that we will
neither forget about the bitter and mindless war nor repeat the tragedy," he
said. Mr Hatoyama's Democratic Party of Japan is studying a plan to create "an
alternative non-religious national memorial", which prime ministers and cabinet
members could officially visit without controversy. Hirohito, who was revered as
divine and had never spoken to the public before, went on the radio on August
15, 1945, to announce Japan had to "bear the unbearable" and surrender as its
cities lay in ruins, two of them struck by US nuclear bombs. Under bright
sunshine yesterday, many Japanese veterans and their families worshipped at
Yasukuni Shrine, where right-wing activists also congregated. "I came here for
the first time as I feel younger generations should take over the respect for
the war dead," said Masatoshi Kawano, 19, wearing a traditional kimono with a
Japanese "Rising Sun" national flag in his hand. "Individuals - soldiers or
ordinary people - should not be blamed," Mr Kawano said. "It was a tough time
for everyone. All of them were the victims of the war." Kenji Hata, 66, said:
"No matter what other countries say, it is our duty to respect those who devoted
their lives to the country. We can't help but say any criticism against a visit
to Yasukuni is an interference in domestic affairs."
About 100 Taiwanese and mainlanders have swum across a narrow strait dividing
the Taiwanese island of Quemoy and the Fujian port of Xiamen in a historic event
that is a further sign of warming cross-strait ties. The cross-strait swimming
challenge, held yesterday, was made possible after Taiwan's Mainland Affairs
Council, the island's top mainland-policy-planning body, agreed to the event and
Taiwan's military removed anti-tank and anti-landing-craft barricades deployed
along about 350 metres of the coast at Shuangkou on Lesser Quemoy - where the
swim ended. Escorted by about 50 lifeguards and canoes, jet skis and boats, the
48 swimmers from Taiwan and 49 from the mainland set off from the beach and
finished the 7.1-kilometre "Quemoy-Xiamen Crossing" in two hours and 10 minutes.
Among the swimmers were students, teachers, athletes and businessmen. The
mainland swimmers included policemen, according to the Quemoy county government,
which co-organised the event with its Xiamen counterpart. "Swimming across the
sea to Quemoy was not difficult at all," said Li Yenhan, 22, from Tianjin , who
was the first mainlander ashore. "There were some sea currents near Binlang
islet [held by Taiwan], but after that it was an easy swim." A member of the
Tianjin Swimming Centre, Mr Li finished the course in 70 minutes, while
25-year-old tennis coach Chien Chun-che took 90 minutes. He was the first
Taiwanese swimmer to finish. "It was challenging, but great," said Mr Chien, who
coached Taiwanese players during the World Games in Taiwan last month. Before
the swimmers took the plunge, there was an opening ceremony hosted by the heads
of the Quemoy and Xiamen governments. A lion dance and welcoming ceremony
greeted the swimmers when they arrived in Shuangkou. Organiser Lee Juh-feng, a
Quemoy county magistrate, said: "This is a historic moment which indicates that
the two sides of the Taiwan Strait are taking a further step towards peace.
"After 60 years of hostility, the two sides have come to realise the importance
of peaceful development, and we hope there will be many more exchanges between
Quemoy and Xiamen." There would be many more swims in the future. "The next one
will start in Xiamen next year, and possibly the event could be held twice a
year, signifying closer relationships between the two areas and between the two
sides of the Taiwan Strait." Asked if the government would put back the barriers
in Quemoy, a former defence outpost, Mr Lee said he hoped not. But the defence
ministry said the barriers would have to go back up. Mr Lee said with relations
between Taiwan and the mainland warming since Ma Ying-jeou won a presidential
election in Taiwan in March last year, it was time to end rivalry and military
conflict so that Quemoy would no longer be an island battlefield. The mainland
fired more than 470,000 shells at Quemoy over 44 days in 1958, killing 618
people, in an attempt to take over the small group of islets, the closest of
which is just two kilometres from Xiamen.
Global investors are pumping money into China's opaque media sector as Beijing
beckons foreign capital to help it boost the culture and entertainment sectors
in the world's most populous nation. Investors are raising at least two
multimillion-dollar media-focused funds, while global giants such as News Corp
have also started to test the market with small deals. Late last month, the
State Council surprisingly announced that it would welcome foreign and private
capital to invest in its media-related areas including printing, culture and
entertainment businesses amid industry consolidation. "I think China's media
sector is becoming more open to private capital than ever before as the
government needs big money to help it develop the whole media industry," Neil
Shen, Sequoia Capital China's founding partner, said. Last month, Reuters
reported BOC (SEHK: 3988) International Holdings, the flagship investment
banking arm of Bank of China, is raising a media-focused fund. State-owned China
Development Bank is also working with other investors to launch a media fund
backed by the local government of Shanghai, industry sources said. However,
dealmakers and analysts warned that foreign investors should bear in mind
political risk when making investments in the country's media industry as the
Communist Party is keen to retain tight control over content providers which may
stray from their political agenda. "Running a media company has its risks and
that's the fact in China," said Harry Man, a China partner of leading US venture
capital firm Matrix Partners. "Take it or leave it. If you don't want to take
this risk, don't invest in it." Last month, Sequoia and Matrix Partners, teaming
up with a local firm, agreed to invest US$15 million in Poly Bona, a mainland
movie maker and distributor often described as China's Miramax. More recently,
AdChina, an online advertising agency, received US$30 million from investors
including GSR Ventures and News Corp, in a deal backed by Wendi Deng, Rupert
Murdoch's wife. Local social networking and mini-blog sites like Xiaonei.com and
Zuosa.com, clones of Facebook.com and Twitter.com, are likely to be hot
destinations for venture capital. Compared with the price tag for a stake in
firms like Facebook, small Chinese firms are much cheaper for investment and
foreign funds believe some of them will be leaders.
Frenchman Christophe Schwarz,
better known as the artist Zevs, leaves Eastern Court on Friday. A French artist
who sprayed a bleeding Chanel logo on one of Hong Kong's most expensive pieces
of real estate was on Friday handed a suspended sentence by a city court.
Christophe Schwarz, who goes by the name Zevs, was given a jail term of two
weeks suspended for two years at Eastern Magistrates court after admitting a
charge of criminal damage. The Parisian had daubed a Chanel logo on to Chater
House in Central on July 13, although the piece of prime property is better
known as the location of a major Armani store. His signature style, which he
calls liquidation, is a logo covered in wet paint, which then drips down a wall
creating the effect that the logo is bleeding. He has previously sprayed his
designs on walls in Berlin, New York and Paris, where targets have included
McDonald’s, Yves St Laurent and Chanel. His early morning painting was recorded
in a YouTube video, but he was arrested by police a few hours later along with
two residents, previous reports have said. 
Taiwanese soldiers rescue a villager
using a cable and sling strung across the Ba Si Lan river in Sinfa on Thursday.
Rescuers in Taiwan on Friday battled to reach over 15,000 people still trapped
in mountain villages nearly one week after a powerful typhoon triggered the
island's worst floods in half a century. More than 50,000 troops were struggling
to cross raging rivers and fallen bridges to reach victims across a large swathe
of southern and central Taiwan, many of whom have been without food and water
since Typhoon Morakot struck. President Ma Ying-jeou warned the island-wide
death toll of 117 would likely rise substantially as fears mounted for those
missing.
Casino operator Las Vegas Sands Corp
said overnight on Thursday that its lenders agreed to amend its US$3.3 billion
Macau credit facility, clearing the way for an initial public offering in Hong
Kong. The agreement, first proposed to lenders last month, boosted the company’s
stock more than 12 per cent to US$13.79 on the New York Stock Exchange. “It
gives them, obviously, more flexibility over in Macau and makes an IPO probably
more likely,” said Majestic Research analyst Matthew Jacob. Sands said the deal
includes six quarters of relief from its loan covenants and allows it to sell a
minority interest in its Macau operations. “The concessions … give investors
more confidence in the company’s liquidity,” Mr Jacob said. The Macau amendment
permits Sands to issue up to US$1 billion of senior secured notes. It must use
the proceeds to pay down the credit facility. It also allows Sands to issue
US$500 million of senior unsecured notes, once its leverage ratio gets lower.
The amendment increases the interest rate for the loans under the credit
facility to Libor plus 5.5 per cent per year. If the company sells the stake in
its Macau operations and prepays US$500 million of outstanding loans, the
interest rate would drop to Libor plus 4.5 per cent per year. Macau bank group’s
willingness to amend the facility reflects its belief in Sands’ strategy and the
resumption of growth in Macau, JP Morgan analyst Joseph Greff said in a research
note. Las Vegas-based Sands operates the Palazzo and Venetian resorts on the Las
Vegas Strip, two casinos in Macau and a casino in Pennsylvania. The company said
it is on track to open its next gambling resort, in Singapore, in the first
quarter of next year. Sands, which has come close to violating loan agreements
and has suspended work on several projects, said the amendment increases the
maximum leverage ratio covenant under the Macau credit facility by 1 for the
four quarters beginning July 1, this year and by 0.5 for the two quarters
beginning July 1, next year. Despite a rally over the past two weeks, shares of
Sands are down about 77 per cent from the 52-week high of US$59 set last August.
China Merchants Bank (SEHK: 3968)
said on Friday it would raise 15 billion yuan (HK$17.03 billion) to 18 billion
yuan via a rights issue of Hong Kong-listed H shares and Shanghai-listed A
shares to boost its capital adequacy ratio. Mainland’s sixth-largest lender said
it would issue no more than two shares for each 10 shares held by existing
A-share and H-share holders at price to be a discount to market trading prices.
The A-shares closed at 17.68 yuan on Thursday and H-shares ended at HK$17.72 in
Hong Kong. The A-share rights issue plan is subject to regulatory approval and
the company will seek shareholders approval in a meeting to be held on October
9. Investment banking sources said last month that the bank planned a rights
offering by the end of the year as corporate capital raising in the Hong Kong
and mainland stock markets picks up steam with the rising equity markets. 
China
battery and carmaker BYD (1211) says it plans to issue as many as 100 million A
shares on the Shenzhen Stock Exchange to raise capital for battery and auto
development projects. The proceeds will be used to fund lithium-ion and solar
battery production and expand auto products and accessories. BYD needs much
investment to develop alternative-energy vehicles. Recall that in 2007
PetroChina (0857) listed its A shares when the market was rising. The
state-owned oil and gas producer raised the most amount of money of any new
listing globally. On its debut in Shanghai, PetroChina shares traded at a
price-earning ratio of 55 while the PE ratio for its H shares was 21. US
billionaire Warren Buffett sold Berkshire Hathaway's entire stake in this firm
when its PE ration was below 20. By comparison Exxon Mobil was trading at 13
times its PE ratio in 2007. Bear in mind that mainland bourses are isolated from
the world, hence a huge disparity in stock valuations. Mainland investors are
more aware of the value-investment concept and know that A shares are overpriced
compared to H shares in Hong Kong. BYD is trading at 73 times its PE ratio and
as mainland investors are becoming mature on investment decisions, it is
believed the firm's shares might be fueled by mainland capital before its
Shenzhen listing. According to its annual report, BYD's revenue surged by 43.8
percent year-over-year to 12.394 billion yuan (HK$14.06 billion) on its handset
and auto segments. But reported net profit decreased by 7.1 percent
year-over-year to 596 million yuan because of surging raw material prices and
research and development costs. Revenue from handset components and assembly
services rose 67.9 percent year-over-year to 5.32 billion yuan, accounting for
42.9 percent of total revenue. However, segment operating profit was down 5.4
percent year-over-year to 365 million yuan. Revenue from automobile sales
accounted for 32 percent of total revenue. BYD plans to boost the automobile
revenue to 50 percent of its sales in 2009. I would not call BYD an auto company
and prefer to regard it as a high- tech industrial stock. BYD Auto sold 170,000
vehicles in 2008 and aims to sell 400,000 units this year. In the first half it
sold 176,795 vehicles, a 176 percent increase from a year earlier. Auto sales in
China in the first half of this year have reached an historical high and that
was in the low season. Vehicle sales usually start from June. BYD Auto, facing
keen competition from rivals like Dongfeng (0489) and Geely (0175), plans to
launch five new car models. The S8, G3, L3, S6 and M6 will go on sale in the
coming six months. The S8 is China's first coupe-like sedan that uses hard-top
convertible technology. BYD's innovative and contemporary design has been a
reputed feature among domestic brands. Apart from the design, its
environmentally friendly F3 model has benefited from China's stimulus policy for
small vehicles which includes a tax reduction scheme for buyers. BYD's F3 sales
rose to 20,000 units in June. But whether the tax reduction scheme will be
extended remains to be seen. Last week, BYD Auto said it will spend 60 million
yuan to acquire 100 percent of the equity of bus and coach manufacturer Hunan
Midea Coach from Foshan Weishang. Under the terms of the deal, BYD will invest 3
billion yuan to establish its third new-energy auto production base, covering
four square kilometers, in Hunan. BYD is adept in producing batteries and it
aims to develop renewable- energy vehicles. Acquiring Hunan Midea Coach gives
BYD the license granted by the National Development and Reform Commission to
Midea to produce passenger cars. However, BYD's net cash inflow from operating
activities for the six months ended June 30, 2008 was 1.42 billion yuan. Its
total liability was 18.3 billion yuan, including short-term bank loans of 7
billion yuan and long-term loans of 1.83 billion yuan. BYD's debt level is very
high and, according to its prospectus issued earlier this year, it needs 2.3
billion yuan for research on electric car devices, insulated-gate bipolar
transistor and light-emitting diodes. BYD also needs a great deal of operating
capital for the newly acquired Midea factory to begin production. It seems that
BYD is short of cash. So while investors are optimistic about its electric cars,
mass production has not begun. Only 19 units were sold in June and investors may
not be able to see a big revenue growth contribution from electric cars either
this year or next. Apart from the relatively expensive retail price, its
recharging network and after-sales service are major concerns. I would not say
investors cannot speculate on this stock, in which Buffett has invested. But the
reality is whether you can apply Buffett's investment philosophy after you
scrutinize the intrinsic value of the stock. 
Diplomats watch a sand table of
Xinjiang Tianye Co., Ltd in Shihezi, northwest China's Xinjiang Uygur Autonomous
Region, Aug. 13, 2009. Diplomats from 26 countries and regions to China began a
five-day visit to Xinjiang on Monday, a month after the deadly riot in the
regional capital of Urumqi which left 197 people dead and more than 1,600 others
injured.
Hong Kong's richest person, Li Ka-shing,
believes the worst of the global financial crisis is over but there is still a
long way to go before an economic recovery. The worst may be behind us, but
there would not immediately be a v-shaped rebound. That was impossible, the
chairman of Cheung Kong (Holdings) (SEHK: 0001) and Hutchison Whampoa (SEHK:
0013) said at the companies' interim results announcement. "If you suggest that
the overall economy will recover at the end of this year, I disagree. But if
[you] say it'll not get worse, I agree," Mr Li said. The tycoon said Hong Kong
could not escape the crisis, but its economy was already doing better than many
places in the world. But despite the rising stock market, he said he tended not
to buy shares at the moment and warned investors against borrowing money to play
the stock market. "If keeping on buying shares can earn big money, the whole
world wouldn't need to work hard and you, friends from the mass media, wouldn't
need to sit here and work so hard. Passing a day relaxingly by buying shares and
earning a lot of money in an hour or two - it can't be like that," he said. He
defended Cheung Kong's Lohas Park development when asked by an Apple Daily
reporter how it would sell remaining flats there in view of the strong odour
from a former landfill. He said that newspaper always picked on the company. He
had recently visited the site for a few hours and had seen the greenery of the
landfill, which was beautiful and refreshing. His son, Victor Li Tzar-kuoi, said
the 1,700 families who had bought flats must have visited the site first and
been happy with the fresh air there. Mr Li fended off questions about whom he
would support as the next chief executive, saying: "You shouldn't ask me who I
support. I won't tell you." But he said those who ran for the post should
possess two qualities: competence and public trust. Competency referred to one's
working ability, and trustworthiness was related to one's personal qualities.
The chief executive must not lack either of them, he said. Asked if Executive
Council convenor Leung Chun-ying - who reportedly visited the tycoon, and who
has been tipped as a candidate, had such qualities, Mr Li said a few of his
friends he had had contact with were rumoured to be running for chief executive.
"I won't say I have got a special relationship with someone because he comes
meeting and chatting with me. The most important prerequisite is competence and
trustworthiness ... which is related to the benefit of all Hong Kong people."
Commenting on Chief Executive Donald Tsang Yam-kuen, Mr Li said: "It's not easy
to be him, really, it's not easy ... compared with other countries, Hong Kong is
not bad ... it's quite good." He was content that last week's strike by drivers
and deliverymen at Watsons Water, a subsidiary of Hutchison Whampoa, had been
resolved after "everyone changed their attitude a bit". He said a harmonious,
realistic and practical environment was required in Hong Kong. 
Improving economic conditions have
Ocean Park management in a cheerful mood as the park gears up for its scariest
month of the year. Park chairman Allan Zeman, who dressed up as King of the
Underworld yesterday to promote its Halloween attractions, said visitor numbers
were expected to rise in October, with the brighter economic outlook more than
offsetting any impact from a 20 per cent rise in admission prices, starting from
October 5. "There were 500,000 visitors in October last year, and we are
expecting a breakthrough this year," he said. "I understand some people would
like to not have a price rise; I wish we could make it free but we cannot." The
9th Ocean Park Halloween Bash will be held from September 25 to November 1, with
adult tickets priced from HK$235 up to HK$825 for special party tickets. The
park is spending a seven-figure sum on this year's Halloween event, and plans to
make it the scariest ever. "There will be eight new haunted houses, 13 new shows
and 80 daily performances and 404 wandering ghosts," Mr Zeman said. New
attractions include Hong Kong's first movie-themed haunted house, where visitors
could encounter ghoulish characters from horror stories, such as "Ms Single
Braid" and the "Vampire Catcher". The park will also feature a haunted house
designed by members of the public for the first time. Winston Li Ho-yin and
Michelle Chau Man-yin, from Polytechnic University, beat 70 other competitors in
April and will bring their haunted train station "Purgatory Express" to the
event. "We were often told ghost stories about railways when we were young,
especially a story about the last train heading to hell," Mr Li said. "I would
warn all the visitors not to hold the handrails as you never know what might
happen," The park had planned to raise admission prices from HK$208 to HK$250
for adults and from HK$103 to HK$125 for children on August 1, but its board
postponed the rise. 
Detailed building plans for more rides and attractions at Hong Kong Disneyland
will be submitted to the government for approval this month, paving the way for
construction work on expanding the theme park to start by late December, people
briefed on the matter say. After the plans receive official approval, the
infrastructure work will be tendered out. Several recently sacked Disney "imagineers",
or creative staff, have already been rehired and have started work. More than 30
imagineers were expected to be hired as part of the expansion, those who had
been briefed said. If everything goes smoothly, construction work will start by
the end of the year. The government, which holds 57 per cent of the equity in
the theme park joint venture with The Walt Disney Company, is keen to
demonstrate how the HK$3.63 billion expansion will benefit the community. During
construction, the project will create more than 3,000 jobs and, on completion,
600 more permanent staff will be hired. Board members of Hong Kong Disneyland
met yesterday and will meet again in about three months' time. The expansion
will add three new themed areas, for a total of seven "lands", and see the area
of the theme park increase by about 23 per cent. The new lands are Grizzly
Trail, Mystic Point and Toy Story, which is based on the animated film. Up to
the end of May, more than 17 million people had visited the theme park since it
opened in September 2005, but summer attendance this year had suffered, those
who had been briefed said. The expansion deal is seen as the best possible
option for the government as there is no need for more taxpayer funds. Taxpayers
shouldered about HK$23 billion of the HK$27 billion development cost, yet the
government only acquired a 57 per cent stake. Disney invested just HK$2.45
billion for a 43 per cent share. To facilitate the expansion, Disney will inject
new funds while the government will use previous loans to the theme park to buy
more of its shares. According to details provided by the government to the
Legislative Council last month, the changes to the shareholding structure will
take place in phases starting from Disneyland's 2008-09 financial year, which
ends on September 30. The government will convert more than HK$2.97 billion of
its loans to shares, while Disney will convert its HK$2.76 billion loan to
shares and inject HK$212 million in capital. The changes will lower the
government's stake to 53.43 per cent and increase Disney's holding to 46.56 per
cent. By 2011-12, annual incremental changes will leave the government with
52.19 per cent and Disney with 47.81 per cent.
The MGM Grand Macau hotel. The number
of package-tour visitors to Macau dropped by 46.1 per cent in June, year on
year. Macau recorded a hotel occupancy rate of 60.7 per cent in June, the second
lowest since the 2003 Sars outbreak, following a sharp drop in package tours
from the mainland. The June figure, released on Wednesday by the Statistics and
Census Service, shows a slight improvement from a month earlier, when occupancy
fell to 59.4 per cent. But it still represents a year-on-year decline of 12.6
percentage points. Economist and gaming researcher Zeng Zhonglu, of Macau
Polytechnic Institute, said June's low occupancy was largely due to the swine
flu outbreak, 300 new rooms added to the market with the opening of the City of
Dreams casino resort, and the lingering economic downturn. "June is a
traditionally weak period, and the opening of the City of Dreams led to a bigger
supply of hotel rooms," Professor Zeng said. At the end of June, the number of
hotel rooms had risen 11.7 per cent year on year to 18,128, but the number of
hotel guests had fallen 12.6 per cent to 445,756. Five-star hotels had an
occupancy of 63.1 per cent in June, four stars 64.5, three stars 58.4, two stars
33.8 and guesthouses 40.8. Professor Zeng said the occupancy rate in July was
likely to rebound. The central government began in May to crack down on low-fare
tours involving compulsory shopping. A regulation passed by the State Council
forbids travel agencies from operating tours below costs. It applies to all
mainland-registered travel agencies and therefore affects Macau tours operated
by the agencies. Package-tour visitors dropped in June by 46.1 per cent year on
year to 183,140. Those from the mainland dropped 51.1 per cent to 108,662, while
those from Hong Kong dropped 31.7 per cent to 15,422.
Export trading house Li & Fung, which
reported a 12.84 per cent rise in interim profit to HK$1.4 billion, said it will
cut more costs in the second half of this year to preserve profitability as
overseas demand remains flat. Cost cutting on travel expenses and payroll helped
lift core operating profit 10.77 per cent to HK$1.7 billion in the first six
months of this year, offsetting a 2.32 per cent decline in turnover to HK$46.29
billion. Managing director William Fung Kwok-lun, who expected flat sales from
existing customers in the second half, said the group was ahead of its target of
trimming operating costs by 10 per cent this year. "Our customers expect their
own business will shrink 10 to 15 per cent on average this year, so they will
buy less from us," Mr Fung said yesterday. "However, we are fortunate in this
unfortunate economic climate that they will cut their orders by a smaller
percentage." Li & Fung, which sources consumer goods from shoes and clothes to
electrical appliances in developing countries in the east for importers and
retailers such as Wal-Mart Stores in the United States and KarstadtQuelle in
Europe, pinned its hopes on the final week of this month - or the so-called
"back-to-school" season. "If sales are good, we may get more quick orders for
Christmas and even for the coming spring," Mr Fung said. "US unemployment is
only slightly improved and the housing market is still weak, so it is uncertain
if consumer spending is coming back." However, Mr Fung was optimistic the US
would lead the world out of the economic doldrums early next year. Slumping
markets in the US and Europe, which together generated 91 per cent of the
group's turnover, were so poor that analysts said the insolvencies of retailers
KB Toys and Arcandor collectively shaved off HK$1.9 billion from Li & Fung in
the first half. Amassing US$1 billion in "fire power", Mr Fung said the group
would step up acquisitions. Under a deal signed yesterday with Talbots, it will
source apparel and handbags for about 600 Talbots outlets in the US for US$400
million in sales this year. To save costs, Li & Fung would continue localisation
by moving staff to production sites such as the mainland, Vietnam and
Bangladesh, executive director Bruce Rockowitz said. Mr Fung said natural
attrition had seen its payroll shrink 3.7 per cent, or 533 people, to 13,905 as
of June 30 from the end of last year. This comprised a 263 fall in Hong Kong
staff numbers to 3,336 and a 270 decline in its overseas personnel to 10,569. Mr
Fung said uncertain overseas markets presented a challenge to the group's goal
of lifting turnover to US$20 billion and core operating profit to US$1 billion
in 2010. The interim dividend was raised 8.3 per cent to 26 HK cents per share.
Earnings per share rose 6.39 per cent to 38.3 HK cents. The stock jumped 85 HK
cents or 3.45 per cent to HK$25.45 yesterday before the results announcement.
China's largest airline in terms of
fleet size, China Southern Airlines, opened a subsidiary on the Taiwan island
Thursday. China Southern Airlines was among the first batch of enterprises from
the Chinese mainland to obtain business licenses and set up branches in Taiwan.
The airlines would provide transportation for passengers across the Taiwan
Strait, said board Chairman Si Xianmin. The company had decided to allocate 10
million new Taiwan dollars (about 303,030 U.S. dollars) to help relieve
disasters caused by Typhoon Morakot, the worst to hit Taiwan in nearly half a
century. The Chinese mainland and Taiwan started direct air and sea transport
and postal services on Dec. 15 last year, ending a 59-year ban on such links.
Previously, air and sea services, including mail, had to be rerouted through a
third location. 
Promoters practice their demonstration of
tea-making yesterday ahead of the opening of Hong Kong's first annual tea fair
today. Hong Kong's first tea fair opens today, with 260 exhibitors from 17
countries. Co-organised by the Trade Development Council and the Chinese Tea
Culture International Exchange Association, the Hong Kong International Tea Fair
runs until Saturday. Tea companies from Sri Lanka, India, Vietnam and Africa
have arrived to sell their wares, many with an eye to business with the
mainland, the world's biggest tea exporter. Tea was formerly part of the annual
Food Expo, but it has now been given its own exhibition for the first time. The
council's assistant director, Raymond Yip Chak-yan, said Hong Kong's proximity
to the mainland and commitment to free trade and an open market would attract
many people in the tea industry to come and do business. Mr Yip said the
inaugural fair would promote a stronger tea culture in Hong Kong, citing the
city's record HK$380 million tea and related imports last year, up 10 per cent
from 2007. A Kenyan exhibitor said his main purpose was to sell tea to buyers
from the mainland, because it was a bigger market than Hong Kong. As well as
trade, the fair offers forums on topics such as tea history, investment and tea
varieties. Admission is limited to trade visitors for the first two days. It
will be open to the public from 10am to 10pm on Saturday, with an entrance fee
of HK$25. The Food Expo and the International Conference and Exhibition of the
Modernization of Chinese Medicine and Health Products also open at the
Convention and Exhibition Centre today and will run until Monday. Many new food
products, in particular mooncakes, will make their debut at the food fair. Some
food exhibitors expect a 50 per cent growth in business from last year. The Food
Expo will be open to the public from 10am to 10pm from today until Sunday, and
from 10am to 6pm on Monday.
One of the newspaper stands that
developer Luk Hoi Tong says might pose a hazard to emergency vehicles when the
site is completed. The developer of the demolished Queen's Theatre says it will
not allow shoeshiners to operate within the new premises as it is private
property. It also warned against them being allowed outside its perimeter as
they might block fire engines and ambulances in the event of an emergency.
The fate of Central Market will
return to the agenda of government heritage advisers after submissions in a
public consultation that it should be upgraded and protected. The grade-three
historic building in Des Voeux Road Central, on the government's list of sites
for sale, has no legal protection and is subject to commercial redevelopment.
The Antiquities and Monuments Office said yesterday there were public
submissions calling for an upgrading of its status, based on its social,
historical and architectural merits, plus its rarity and authenticity. When the
site was put on the land sale list in 2006, conditions were laid down to require
the purchaser to display items of historical and architectural interest for
public viewing. A spokesman for the Development Bureau said the government had
no intention of removing it from the land sale list. The community has in recent
years become more outspoken in campaigning for the preservation of the building.
The Institute of Architects conducted a study in 2005, which said the
four-storey structure would be the last piece of 1930s Bauhaus architecture in
the city after Wan Chai Market was partially demolished for a high-rise. It also
said it was the most advanced market in the city when opened in 1939. Katty Law
Ngar-ning, convenor of the Central and Western Concern Group, said it was a
magnificent building and should eventually be declared a statutory monument.
"The current grading was made almost 20 years ago and public sentiments have
changed drastically in recent years, reflected by strong public call for
preservation of the Star Ferry Clock Tower and Queen's Pier. There is an urgent
need to reassess the heritage significance of this important public building,"
she said. The chairman of the Institute of Architects' heritage and conservation
committee, Eric Lee Chung-ming, said the market should be preserved. "It should
be given temporary uses to prevent further deterioration," he said. Kam Nai-wai,
Democratic Party district councillor in Central and Western District, said the
council had always hoped the market would stay "not only because it is historic,
but also it is an important low-rise space in the very dense Central". The
Antiquities Advisory Board will start to review in the next few months all the
proposed gradings of the 1,444 historic sites with the 360 public submissions
gathered during the consultation. Some of the submissions came from building
owners who requested their properties be downgraded or taken from the heritage
list. Other sites where there have been calls for an upgrade are Tin Hau temples
in Shek O and Lei Yue Mun, and shophouses in Shanghai Street which the Urban
Renewal Authority is planning to revitalise. Objections were raised against the
removal from the heritage list of a stone house in Diamond Hill that stands on
the site of a future railway depot.
Derek Wong says it is unlikely that Dah
Sing will have to make a substantial provision for the Lehman minibonds in the
second half. Loan impairment charges and higher costs related to the Lehman
Brothers minibonds slashed Dah Sing Banking Group interim net earnings by 40.61
per cent. The bank posted net first-half profit of HK$306.85 million, down from
HK$516.7 million a year earlier. Loan impairment charges rose 116.15 per cent to
HK$272.49 million, mainly due to higher commercial banking and equipment finance
loan losses. Managing director Derek Wong Hong-hing said the bank also set aside
money for potential resettlement of the minibonds but added that it was unsure
how many customers would accept the offer. "It is unlikely that we will have to
make a substantial provision [for the minibonds] in the second half [of this
year] and next year," Mr Wong said. Sixteen banks sealed a deal with regulators
last month to settle claims with investors over the Lehman minibond saga. Dah
Sing estimated the cost of its minibond buy-back at HK$444 million. The bank
posted a HK$17.68 million operating loss, but that was offset by a one-off gain
of HK$243.98 million after buying back subordinated debt at a discount. Mr Wong
said the bank also made a further write-down of HK$142 million on its exposure
to structured investment vehicles, which had fallen to HK$5 million by June 30.
Operating expenses rose 41.36 per cent to HK$963.88 million, partly reflecting
provisions for the potential settlement of the minibonds. Mr Wong said asset
quality was stabilising and he hoped this would continue in the second half.
Ivan Li, an analyst at Kim Eng Securities, said he was disappointed by the
bank's core business performance, with net interest margin narrowing to 1.98 per
cent from 2.24 per cent a year earlier. Dah Sing and its parent company, Dah
Sing Financial Holdings (SEHK: 0440), did not declare an interim dividend. Mr
Wong said the bank would resume dividend payments when the economy recovered and
business returned to normal. Earnings at Dah Sing Financial fell 20.38 per cent
to HK$300.9 million due to the banking arm's weak performance. The group's
insurance business returned to profit from a loss previously. 
Chairman Peter Lee says there are signs the Hong Kong economy is stabilising,
but uncertainties remain on the path to sustained recovery. Hysan Development (SEHK:
0014), the biggest landlord in Causeway Bay, said earnings at its core business
dropped 4.1 per cent in the first half because of lower gains from financial
investments, but its overall rental business remained resilient. Recurring
underlying profit was HK$580 million for the six months to June, compared with
HK$605 million a year earlier. The decline was due to lower gains from financial
investments and other gains, which totalled HK$23 million, down from HK$117
million. Including one-off items and a HK$397 million fair-value gain on
investment properties, net profit slumped 68.9 per cent to HK$1.07 billion from
HK$3.44 billion a year earlier, when it booked a HK$3 billion revaluation gain.
Revenue climbed 7.59 per cent to HK$851 million. Hysan declared an interim
dividend of 14 HK cents per share, unchanged from last year. Owing to the
deteriorating economy, spot rents for office spaces fell 16 per cent on average
during the first half, said executive director Wendy Yung Wan-yee. However,
rentals for new contracts signed in the first half were 37 per cent higher than
contracts signed three years ago, which helped boost overall rental income. "I
am confident that positive rental reversion could [continue to] be achieved in
the second half, even though the degree will be narrowed," said Ms Yung. During
the period, rental income from the office sector climbed 11.95 per cent to
HK$384 million. The occupancy rate was 91.4 per cent on June 30, falling 6.1
percentage points from the end of last year because the majority of the
contracts due this year expired in the first half. Insurance company Manulife
Financial Corp decided to relocate part of its office space from Hysan's Lee
Garden to Kowloon East. Although the 100,000 square feet of office space to be
vacated would only be available in the second and third quarters of next year,
Ms Yung said it would not put heavy pressure on the office leasing portfolio.
Meanwhile, the retail segment posted moderate growth, with rental income
increasing 4.55 per cent year on year to HK$322 million, while residential
income totalled HK$145 million, up 3.57 per cent. "There are some recent signs
of the Hong Kong real economy stabilising," said chairman Peter Lee Ting-chang.
"There may, however, be uncertainties on the path to a sustained recovery."
Analysts believe office rents in Causeway Bay will decline at a lower pace or
even start stabilising in the second half, which will help relieve pressure on
rental income. But the redevelopment of Hennessy Centre is not expected to be
completed until the end of 2011, which means Hysan will lack a catalyst to
stimulate earnings in the next two years. Hysan shares closed 2.35 per cent down
at HK$20.80 after the results were announced.
A traditional wine vessel exhibited in
front of a painting showing the drinking history of the Chinese people. 
China Construction Bank (SEHK: 0939)
Corp is buying a unit of financial conglomerate American International Group for
US$70 million, its first acquisition outside the mainland in about three years.
The deal, being conducted by China Construction Bank (Asia) Corp, a wholly owned
subsidiary of the world's third-largest bank by market value, also involves
repayment of loans and deposits totaling US$557 million to take over AIG Finance
(Hong Kong). The transaction is expected to be completed in October, subject to
approval from the regulatory authorities, the two parties said. AIG is
offloading assets to repay the US$182 billion bailout loan it received from the
United States government in September last year. It is also in the process of
spinning off its Asian insurance subsidiary, American International Assurance.
AIG Finance operates as a restricted license bank offering financial services
including time deposits, mortgages, private car loans, premium financing,
personal loans, credit cards and other credit facilities. As of the end of June,
it had more than 500,000 customers, with total net loan receivables of HK$4.8
billion and a retail deposits balance of HK$1 billion, according to a statement
from AIG. The combined loans of AIG Finance and CCB (Asia) are expected to total
about HK$50 billion. Charles Ma, president and chief executive at CCB (Asia),
said the acquisition would help its growth, bring diversification to its
consumer loan portfolio and serve as a platform for building its credit card
business. China Construction Bank's last acquisition was in August 2006 when it
bought Bank of America Corp's Hong Kong and Macau unit for US$1.25 billion. Over
the years, CCB (Asia) had increased its branches from 17 to the current 40,
including premier select centres. As of June, its total assets had grown 65 per
cent from December 2006 as advances to customers jumped 67 per cent and deposits
from customers surged 57 per cent. China Construction Bank shares fell 4.17 per
cent to 5.75 yuan (HK$6.52) in Shanghai yesterday, while they were down 1.49 per
cent at HK$5.95 in Hong Kong.
Listing candidate Sundart International
said it is working on HK$1 billion worth of interior decoration projects and the
revenue will be booked in this financial year. New World Development (0017)
chairman Cheng Yu-tong spent a nine- digit sum to subscribe to Sundart's shares
and the institutional tranche of the HK$602 million listing deal is already
oversubscribed, a source close to the deal said. Sundart was the subcontractor
for the interior fitting work of NWD's residential project Parc Palais.
"Contracts in China are worth about HK$100 million, while those in Hong Kong and
Macau are worth over HK$600 million and over HK$200 million, respectively," said
Sundart chief executive Ng Tak-kwan. The company plans to offer 144 million
shares at HK$3.33 to HK$4.18 each, aiming to reap as much as HK$602 million in
Hong Kong. Minimum spending for a board lot of 1,000 shares would be
HK$4,222.18. The retail book opens from today till Friday. Sundart plans to
invest 55 percent of the proceeds to fund future projects, 17 percent to set up
a procurement and prefabrication facility and 15 percent on potential
acquisitions. The contractor plans to tap Middle Eastern markets in Qatar and
Abu Dhabi, aiming to boost revenue from the region to account for 25 percent of
total income in three years, Ng said. Revenue from business in Hong Kong
accounted for 59.2 percent of total income last year, while that of Macau and
the mainland were 37.4 percent and 3.4 percent, respectively. Sundart's net
income soared 78.5 percent year-on-year to HK$143.7 million for the year ended
March 31. Iron ore miner China Vanadium Titano-Magnetite Mining also plans to
list in Hong Kong in October to raise up to HK$1.6 billion, according to market
sources. The firm is the largest non-state- owned operator of iron ore in
Sichuan by output volume.
The Association for the Rights of
Industrial Accident Victims mounts a protest over compensation for McDonald's
delivery workers outside the McDonald's outlet in Tsim Sha Tsui. Fifteen
McDonald's delivery workers injured in traffic accidents at work have sought
help from workers' rights groups to fight for compensation from the fast-food
chain. The Confederation of Trade Unions and the Association for the Rights of
Industrial Accident Victims said the 15 cases had been reported to them since
last month. One involved 32-year-old delivery worker Kwok Chi-lung, who died
after his motorcycle crashed into a taxi in Austin Road, Tsim Sha Tsui, in
February. Association chief executive Chan Kam-hong said Kwok's family had not
received a penny from McDonald's or Rixon Logistics, the firm to which
McDonald's outsourced deliveries. "The wife is devastated and is now taking care
of her baby who is only a few months old." He said he had gone to Tseung Kwan O
Hospital on Sunday to see another delivery worker, aged 25, who suffered severe
abdominal injuries when he crashed his motorcycle in Tseung Kwan O on Saturday.
"The young man was very emotional when I visited him," he said. "He still cannot
talk much. We will help all these workers to fight for the compensation they
deserve." Juo So-in, a spokeswoman for the Catering and Hotel Industries
Employees General Union, a CTU affiliate, said another delivery worker injured
in a traffic accident three months ago could not walk properly and had received
no compensation. "The company just told the workers that since they were all
self-employed, they would not receive any compensation," she said. Last week the
union said the 500 people who deliver McDonald's takeaway meals had been forced
to sign contracts saying they were self-employed. Yet they worked fixed shifts,
were paid a fixed hourly rate of HK$28 and did not provide their own
motorcycles. The contracts made them liable for their own Mandatory Provident
Fund contributions and gave them no paid leave, medical insurance, sick pay or
compensation for work injuries. The self-employment relationship between the
workers and Rixon Logistics was fake, the union said. McDonald's said it was
"deeply concerned" about Saturday's accident. "We are following up with the
outsourced logistics company on compensation for the injured delivering rider
and will ensure he receives reasonable protection." Rixon Logistics said it had
held discussions with its insurer over compensation for the worker injured on
Saturday and he would receive the compensation he deserved. 
Hong Kong received about 827,000
fewer visitors between January and July than in the same period last year, and
July alone accounted for more than 40 per cent of the drop, preliminary data
shows. "There were steep declines in the number of long-haul visitors,
especially from January to April, but short-haul and mainland arrivals only
started to suffer from May," said James Tien Pei-chun, chairman of the Tourism
Board. "My worry is that the numbers are still falling ... and it seems August
will also suffer." Tourism has been hit hard this year, both by the financial
meltdown that decimated household wealth and worsened unemployment and by the
swine flu pandemic, which has put some people off travelling. In the first seven
months, visitor numbers were down 4.9 per cent year on year; the drop in July
was 12.5 per cent. The board is looking for visitor numbers to pick up between
October and December - traditionally the peak season for arrivals. It is
promoting what it calls the Hong Kong Wine and Food Year, and hopes autumn food
and wine festivals will draw more visitors. Last month, it began promoting the
food and wine year to mobile phone users. More than 2,000 iPhone users have
downloaded the application - which offers a Chinese cuisine and wine pairing
guide - since July 3. The board launched another mobile phone promotion, Hong
Kong 720, on May 31, offering iPhone users a virtual tour of attractions,
information about them and locator maps, and some Cantonese phrases. It says the
application has been downloaded more than 50,000 times. Mr Tien said that the
cost was relatively low at "several tens of thousands of dollars" compared with
placing print advertisements and distributing brochures. The applications will
also be developed for other mobile platforms. 
Agnes Chan runs through the dan tian method with Frederick Tsang, who suffers
from autism. East beats West for promoting relaxation - Study finds Chinese
breathing system best - Research by Chinese University suggests that a way of
breathing called dan tian can help practitioners improve their mood and
generally perform better. In the study conducted by the Integrative
Neuropsychological Rehabilitation Centre at Chinese University, 50 adults were
randomly divided into two groups. One practised dan tian breathing and the other
practised Western relaxation techniques. The results showed that after one
month, the group that practised dan tian had increased their left-right brain
alpha asymmetry, which indicated they were more relaxed and happier. They also
had enhanced theta coherence, which meant they could stay focused longer. "We
often can't relax when we concentrate on doing something," Agnes Chan Sui-yin,
the professor who led the research, said. "We can't concentrate when we are
relaxed. So if we can do both at the same time, it's the best condition to
work." In contrast to Western approaches to treating anxiety and depression,
which can be time-consuming and expensive, the dan tian way is effective,
inexpensive and easy to learn. The results were consistent with observations of
clinical cases in which, after a few weeks of intervention, most adults and
children had a more stable mood and had become more attentive, she said.
Michelle Tsang Suen-lam, a mother of an autistic child and another with cerebral
palsy, was one of the centre's patients. She found she was sleeping better after
she had started practising dan tian. "I was always nervous because of my
children's health conditions. I had sought Western and Chinese medicine and
aromatherapy but nothing gave me peace as well as this breathing method," she
said. Her elder son, Frederick Tsang Sze-ming, nine, was diagnosed with autism
when he was two. He had problems focusing and falling asleep at night. She said
she tried music, linguistic and muscle therapy for him, but none had worked as
well as dan tian, which he has been using for nine months. There are two types
of dan tian methods; passive and active. The passive required less training, and
was more suitable for beginners, Professor Chan said. To do passive dan tian,
you put your hands on your dan tian, an area roughly five centimetres below your
navel, while standing or sitting. Gently close your eyes. Visualise your navel
when you breathe in and visualise your nose when you exhale. To do active dan
tian, put your hands on the same place, and pull in your stomach when breathing
in, while keeping mouth and eyes closed. When exhaling, open your eyes slowly.
When inhaling, relax the body and transfer the air that just entered to your dan
tian. Professor Chan said many things in Chinese medicine were scientifically
inexplicable, but her centre was committed to its research.
An HSBC Holdings (SEHK: 0005) listing in Shanghai appears to be a
near-certainty, said a source briefed by the China Securities Regulatory
Commission. But there are likely to be delays as Beijing works through a host of
issues, and there is no guarantee that the bank will become the first foreign
entity to list on the mainland. There are laws to change, biases against foreign
banks and many other companies, including a United States and European exchange
joint venture, and red-chip companies, which also stand anxiously in the queue
to list. The source said the regulator has already given tacit approval to HSBC
and NYSE Euronext - a joint venture between the New York Stock Exchange, the
London International Financial Futures & Options Exchange and markets in Paris,
Brussels and Amsterdam. As yet there is no timetable for either. The banking
source said NYSE Euronext probably would pre-empt HSBC and be the first to land
on the Shanghai bourse because the CSRC believes the exchange operator could
generate stable income. But first, there are legal issues. According to existing
mainland law, companies with 25 per cent or more foreign ownership are barred
from listing on the mainland stock market. Beijing has to revise corporate and
securities laws, as well as related regulations such as the Shanghai exchange's
listing rules, to pave the way for A-share listings by foreign firms. But even
if that is accomplished, there is the issue of priority. The CSRC first would
like to embrace the return of Hong Kong-traded red chips China Mobile (SEHK:
0941, announcements, news) , CNOOC (SEHK: 0883) or Lenovo Group (SEHK: 0992,
announcements, news) before purely foreign-owned companies list, the source
said. Red chips are mainland companies incorporated overseas. Thus their status
on the mainland is the same as foreign firms. "HSBC should have no problem
getting listed on the A-share market since the banking and securities regulators
are really showing a positive attitude towards its plan," the source said. "For
the time being, it must be patient and wait since the CSRC is focusing on red
chips." HSBC is well aware of the intricacies of the process. "We can't
predetermine the issue," said HSBC Asia-Pacific chief executive Sandy Flockhart.
"It's for authorities to decide." However, HSBC does have some history going for
it. "Shanghai is home to HSBC," said Richard Yorke, chief executive of HSBC
China. "We now look forward to listing in the Shanghai Stock Exchange when
regulations permit, and contributing to Shanghai as an international financial
centre." Even with a listing, expansion on the mainland will not be rapid. The
China Banking Regulatory Commission is likely to take a go-slow approach to
approving foreign bank expansion. It wants to protect domestic banks, while the
global credit crisis has somewhat tainted the image of their overseas peers. The
CBRC was under fire last year, when Zuo Dapei, a researcher at the Chinese
Academy of Social Sciences, accused regulators of sacrificing domestic banks to
cosy up to their foreign counterparts. Mr Zuo is an influential adviser to the
central government on financial policies. His remarks were echoed by a host of
domestic economists and bankers, who called on the government to carefully
assess the negative impact of the entry of foreign banks. A CBRC official said
the regulator was concerned about the criticism.
MTR commuters have been assured
that fares will remain unchanged even if the HK$15.4 billion cost to build the
West Island Line surges. "Fares are independent of the final capital cost of the
project," chief executive Chow Chung-kwong said yesterday after a
ground-breaking ceremony for the line, which will be completed in 2014. The
project is a three-kilometer extension of the Island Line from Sheung Wan to
Kennedy Town. There will be three new intermediate stations at Hong Kong
University, Sai Ying Pun and Kennedy Town. According to Chief Secretary for
Administration Henry Tang Ying-yen, it will take only eight minutes to get from
Kennedy Town to Sheung Wan and 14 minutes to Tsim Sha Tsui. Chow described the
new line as a "community railway" as new pedestrian walkways, escalators and
lifts will make traveling within Kennedy Town more convenient. The railway will
also make traveling to new public facilities such as the Kennedy Town swimming
pool easier. The project will generate more than 3,000 jobs and about HK$62
billion in economic benefits. But the cost and the siting of the ventilation
shafts have fueled debate. Since the line was first approved in 2006, the
estimated cost has risen by 73 percent from the original HK$8.9 billion.
Taxpayers will foot HK$12.7 billion, or 82 percent, of the cost. "There is a
clawback mechanism to ensure any government contribution left over will be fully
returned," Chow said. A group of six people protested outside the Kennedy Town
station site over the siting of the proposed ventilation shafts at the Hong Kong
University station. The MTRC is planning two shafts in the pedestrian area on
Hill Road, Kennedy Town, causing concern they will only trap and circulate bad
air from a waste-collection center and from cars running on either side. Chow
said the air from the shafts will be "as good as, if not better" than the air in
the area. Ma Lo Yee-mei, who has lived in the area for 10 years, said the shafts
will only recirculate fumes from car exhausts and spew out bad air from the
center. 
Chinese Premier Wen Jiabao (R)
awards the instrument of appointment as the new chief executive of the Macao
Special Administrative Region (SAR) to Chui Sai On, in Beijing, capital of
China, on Aug. 11, 2009.
Containers waiting for
shipment at the Waigaoqiao Container Port in Shanghai. Figures released on
Tuesday showed exports grew on a month-to-month basis but it still was a steep
drop compared to July last year. Mainland’s export-dependent economy remained
hampered by a “grave” global situation in July, an official warned on Tuesday,
as new data showed continued reliance on government spending to boost growth.
Shipments abroad saw a steep drop in July from a year earlier – although they
grew month-on-month – but investment on fixed assets in the cities rose
massively, the government said. “The grave international environment affected
our exports,” said Li Xiaochao, a spokesman for the National Bureau of
Statistics. “The growth of some sectors’ industrial output remained rather
slow,” he told a briefing in Beijing. Mainland’s economy, the world’s
third-largest, has taken a heavy hit from the global crisis, growing just 7.1
per cent in the first half. That compares with double-digit annual expansion
between 2003 and 2007 as well as for the first two quarters of last year. The
government has set a target of 8.0 per cent growth for the year, a level it says
is needed to create enough jobs and avoid social unrest. Customs authorities
said on Tuesday that July exports stood at US$105.4 billion, a decline of 23 per
cent from a year earlier. Yet the figure pointed to some recovery as it marked
an increase of 10.4 per cent from June, the customs bureau said in a statement.
“We believe that exports will start to recover in the fourth quarter, while the
real estate sector remains strong,” said Li Huiyong, chief economist with
Shenyin and Wanguo Securities in Shanghai. The impact of mainland’s 4 trillion
yuan stimulus package, announced in November, was reflected in investments in
urban fixed assets – a measure of government spending on plants and
infrastructure. “China’s July data release points to continued economic recovery
in the second half, led by strong government-backed investment,” said Jing
Ulrich, an economist with JP Morgan in Hong Kong. “The softness in external
demand has resulted in a greater reliance on investments as a driver of China’s
economic growth,” she said. However, the trade surplus stood at US$6 billion in
July, an increase from US$8.2 billion in June, according to earlier data. The
widening gap highlights a lack of domestic demand as imports fall quicker than
exports. Overall, analysts were confident that mainland would reach its goal of
eight per cent growth this year. “We are optimistic about the economy in the
second half because consumption growth will remain stable while investment
growth will accelerate,” said Hao Daming, an economist with Galaxy Securities,
who predicted 8.3 per cent growth.
China plans to invest at least 700 billion (US$100 billion) yuan a year over the
next three years to improve the country's railway network, a report in the
mainland media said on Tuesday. Mainland plans to invest at least 2 trillion
yuan (HK$2.27 trillion) in railway construction over the next three years,
Xinhua news agency reported on Tuesday, quoting the vice-minister of railways.
Wang Zhiguo said the country would invest at least 700 billion yuan a year over
the next three years, with 247 billion invested so far this year. He said about
20,000km of new railways would be approved for construction by the end of next
year, requiring investment of at least two trillion yuan, Xinhua reported. Late
last year, the ministry said the investment would span construction over a
period of two years. It was not immediately clear why the timeframe had changed.
By the end of this year, mainland would have a total of 86,000km of railway
lines, second only to the United States, Mr Wang said. Russia has 85,500km of
track, according to Russian Railways, while the United States rail network
extends more than 200,000km. The country is making a massive investment in
railway infrastructure in a bid to spur growth in the face of the global
economic crisis. Longer term, mainland aims to have 120,000km of track laid down
by 2020, deputy railway minister Lu Dongfu said in November. Mainland made a
similar move at the end of the 1990s amid the Asian financial crisis by
investing heavily in the road network across the country. The huge cash
injection in the rail system is expected to boost employment and demand for raw
materials, and promote real estate as land and towns near the new railways are
also developed. The railway network in the country is already one of the most
extensive in the world, but it has come under pressure as the nation’s economy
has boomed, giving many of the country’s 1.3 billion people more opportunity to
travel.
China's consumer price index (CPI), a
main gauge of inflation, dipped 1.8 percent in July from a year earlier, the
National Bureau of Statistics said Tuesday.
Chief Secretary Henry Tang
Ying-yen watches the lion dancing as he officiates at the MTR West Island Line
ground-breaking ceremony on Monday. Chief Secretary Henry Tang Ying-yen said on
Monday the controversial new West Island Line railway project would improve
public transport in Hong Kong and create thousands of new jobs. Speaking at a
construction commencement ceremony in Kennedy Town, Mr Tang said the project
would create 6,000 job opportunities. “It is forecasted to bring HK$62 billion
in economic benefits to the community over 50 years of operation,” Mr Tang told
reporters. Most areas of Hong Kong are serviced by the MTR Corporation (SEHK:
0066) rail links – first launched in 1979. But Western District, which includes
the busy residential area of Kennedy Town, has never been connected. The West
Island Line project aims to redress this. However, it is unpopular with many
locals. On Monday morning, television footage showed a group of residents
protesting against the construction of the railway. They told reporters the new
rail line would cause noise and air pollution near their homes. They said this
was because the ventilation shafts of the West Hong Kong Island Line were going
to be built near residential areas. MTR Corporation chief executive officer Chow
Chung-kong told a press conference after the ceremony the ventilation shafts
were an integral part of an underground railway system. “The air exhausted [from
ventilation shafts] will not cause any adverse impact on the air quality of the
surrounding areas. “The corporation will try to serve the needs of residents by
designing smaller ventilation shafts,” Mr Chow said. He also stressed that fares
for the West Island Line would not be raised. “The fare was set according to an
adjustment mechanism and would not be altered despite the rise construction
costs,” Mr Chow said. The three-kilometre West Island Line is an extension of
the existing MTR Island Line from Sheung Wan to Kennedy Town with two
intermediate stations at Sai Ying Pun and the University of Hong Kong. The
project also includes community facilities, such as high-speed lifts at Pok Fu
Lam Road, Bonham Road, David Trench Rehabilitation Centre and Kennedy Town
swimming pool. The project drew public criticism in May as the MTR Corporation
adjusted the estimated cost of the project to HK$15.4 billion – up 73 per cent
from its original HK$8.9 billion budget in 2006. The government then had to
grant HK$12.7 billion in capital to bridge the funding gap of the project.
Chinese Premier Wen
Jiabao shows a State Council order appointing Chui Sai On as the new chief
executive of the Macao Special Administrative Region, Aug. 10, 2009. 
Fernando Chui Sai-on speaks to
electors after winning chief executive election at Macau East Asian Games Dome
on July 26. Beijing on Monday formally appointed Fernando Chui as the new chief
executive of Macau following his unopposed election last month by the gambling
hub’s mainly pro-Beijing electoral committee, state media said. The State
Council, or cabinet, made the appointment at a meeting presided over by Premier
Wen Jiabao, Xinhua news agency reported. A former culture minister of Macau, Mr
Chui pledged to diversify the region’s economy and rid it of corruption after
being named the new chief executive on July 26. Mr ChuiChui, 52, succeeds Edmund
Ho, who led the Macau government since the former Portuguese colony returned to
Chinese rule in 1999 and oversaw the liberalization of the territory’s gaming
sector in 2002. Macau, which has a population of 550,000 people, has a separate
legal system from the mainland and is the only place on Chinese soil where
casino gambling is allowed. Mr ChuiChui’s election was a formality, as he was
the only candidate. He won the support of 282, or 94 per cent, of the southern
Chinese city’s 300-member chief executive electoral committee, formed mostly by
people with ties to Beijing. His five-year term runs from December 20, this
year. Since Macau’s gaming market was liberalized in 2002, it has overtaken Las
Vegas and Atlantic City combined in terms of gaming revenue as gleaming foreign
and locally owned resorts have sprung up. But the staggering growth has suffered
in the past 12 months as mainland authorities, concerned about the problems of
gambling and corruption, have limited the number of visitors to the gaming haven
from the mainland. 
Mai Po manager Bena Smith feeds the nature reserve's new buffalo, which joins
the resident buffalo of three years, Siu Mai. A second buffalo has been
introduced to Mai Po Nature Reserve to help keep the grass under control and
attract birds. Since the first one was introduced three years ago, the wetland
park has saved HK$40,000 a year in site management costs. The conservation body
WWF said the second phase of the Buffalo Wetland Management Research Project
would show the animals could help create an attractive habitat for waterbirds as
well as reduce costs. Bena Smith, WWF Hong Kong Mai Po reserve manager, said:
"It costs about HK$40,000 a year in managing each freshwater pond in the reserve
area, while grazing saves the cost of hiring workers and purchasing equipment to
cut the grass." In co-operation with the Lantau Bovine Association, the new,
six-year-old buffalo has been kept with the original buffalo, named Siu Mai,
which is also six years old, within a 1.8 hectare freshwater habitat since July
29. "Buffaloes can be beneficial in attracting more locally declining waterbird
species such as the greater painted snipe, grey-headed lapwing and cattle
egret," Mr Smith said. Insects the buffaloes attracted were a major food source
for waterbirds and the marsh created by the bovines' trampling provided a
habitat for the birds, he said. The organisation started the research project in
2006 by introducing Siu Mai, a female Asian water buffalo, into the reserve to
investigate how the animals influenced wildlife and to test the efficiency of
buffalo wetland management. "According to the results of initial studies, the
mean bird diversity per hectare in grazed areas is 16.9, compared with 19.3 and
9.5 in managed and unmanaged areas, respectively," Mr Smith said. "We also
discovered about four cattle egrets within the site after the arrival of Siu
Mai." Though Siu Mai had kept the grass down to a height of about 20cm, results
in the winter had not been as good as the organisation expected. "By adding a
new buffalo, we are hoping to keep the grass height at 10cm, especially in the
winter, to benefit ducks," he said. The project will be completed by the end of
next year. "We will cease grazing if the result is negative, otherwise we will
expand the grazing into other freshwater ponds and start phase three of the
research project." The public is invited to take part in a naming competition
for the new member of the Mai Po team and can make online submissions until
August 24. The winner will be given a chance to visit the buffaloes.
Cliff Sun believes Hong Kong is losing its shine as China's window to the West
while Shanghai is intensifying its bid for a more prominent national and global
financial role. Hong Kong industrialist Cliff Sun Kai-lit's first factory on the
mainland was a far cry from the modern production line he oversees today. In
fact, it was in a deserted rural temple infested with mosquitoes. He was among
the first group of Hong Kong businessmen who set up factories in Guangdong in
1979, the year the mainland opened its doors to foreign investment. Mr Sun, the
new chairman of the Federation of Hong Kong Industries (FHKI), recalls the
difficulty of setting up production lines for his family company in the temple
at Nanhai - and the countless nights spent sleeping under a mosquito net. He has
since witnessed the rise of China from a backward society to an economic and
financial powerhouse - an industrial revolution he says Hong Kong has to keep
pace with if it is to remain a regional financial centre. While labour and land
were cheap back in 1979, recruiting factory workers from among the peasants of
the Nanhai area was a big challenge. "At that time, Nanhai was presented as an
affluent rural county in the Pearl River Delta with plenty of hydropower, many
hard workers and tens of thousands of pigs and roosters," said Mr Sun. "After we
set up production lines, we had many workers taking days off to work in the rice
fields and had insufficient hydro-electricity at night as priority was given to
irrigation of the paddy fields." The hardships failed to weaken the resolve of
Mr Sun, who at the time was a fresh graduate from a Canadian university with a
diploma in mechanical engineering. Sensing opportunities in the rapidly
liberalising economy, Mr Sun soon diversified the family's moulding firm, Kin
Hip Metal & Plastic Factory, into manufacturing pots and pans. He set up a
factory in Pinghu, Shenzhen, and soon the company's now-famous Kinox cookware
products were selling well in the United States and European markets. "We have
made this steel-based plastic coffee pot for 28 years - it's a product that
doesn't go out of vogue and you can find it in any restaurant," he said, proudly
displaying a tea-stained pot on his desk. "The type of high-strength plastics we
used in this pot is called polysulfone, which costs three or four times more
than the polycarbonates other manufacturers commonly use. The cheap stuff cracks
at a high temperature and has to be written off." Kinox coffee pots, which have
been the favourite at hotels and bestsellers in department stores for years,
have become so popular that mainland copycats now offer their own version. "It
is not surprising to find that only one in four coffee pots in Guangzhou is a
genuine Kinox," he said. "When the municipal government clamps down on fakes,
there is a good chance you will find two in four." Rampant infr