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In Depth Look of Hong Kong - Past, Current & Future
In Depth Look of China - Past, Current & Future
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How to Do Business with China, through Hong Kong & Setting up Business in China?
Hawaii Failed Business Image and Continue Missed Opportunities

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

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

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

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Sept 30, 2009

Hong Kong: The Hong Kong police have launched a fraud investigation into Ernst & Young’s practice in the city following allegations the big four accounting firm falsified and doctored papers it used to defend itself in a civil trial relating to its audit of collapsed former client Akai Holdings. An Ernst & Young Hong Kong partner, Edmund Dang, was arrested at his home yesterday on suspicion of forgery by officers from the commercial crime bureau (CCB (SEHK: 0939)). He was later released on bail without being charged. The CCB also raided Ernst & Young’s premises in Central and Quarry Bay yesterday, a senior police officer and the accounting firm confirmed.

Hong Kong retail sales in August dipped by just 0.2 per cent in value from a year earlier – bringing them virtually back to levels seen before the global financial crisis worsened sharply last September. Economists said the latest figures were a further indication that the economic outlook was getting better. Retail sales have declined for seven straight months. In August, sales fell one per cent by volume, government data showed on Tuesday. The government also said on Tuesday that visitor arrivals in August rose 5.8 per cent from a year earlier – after declining in the three preceding months. Tourists account for 20-30 per cent of retail sales. The territory received about 2,834,178 in visitors in August, Hong Kong Tourism Board (HKTB) figures showed on Tuesday.

Financial Secretary John Tsang Chun-wah was relaxing after heart surgery, Chief Secretary Henry Tang Ying-yen said on Tuesday.

Now 82, Lu Ping looks on Hong Kong as his son and fears for its future. Stand on your own feet and start thinking, Lu Ping tells HK - Hong Kong should stop relying on favors from Beijing and improve its competitiveness, says Lu Ping - the official who was in charge of the city's affairs in the central government in the run-up to the handover. Twelve years after retiring, he still worries about the future of the city he thinks of as his son. He says it is being marginalized by the rapid development of the mainland and risks falling behind Shanghai, Guangzhou and Shenzhen. "While the central government has been offering policy favors for Hong Kong, you can't ask Shanghai and other cities not to develop as a means to maintain Hong Kong's edge. Hong Kong people should have a sense of crisis and strive to enhance the city's competitiveness through their own efforts. You can't always count on the support and favors from the central government to prop up Hong Kong's economy," he said. Lu is also critical of local officials - saying that many are incapable of independent thought, having been trained during the colonial era merely to implement policies dictated by their British superiors. "To be honest, Hong Kong has already been marginalized," Lu, a former director of the State Council's Hong Kong and Macau Affairs Office, said in a wide-ranging interview. "Shanghai is developing itself as a financial centre and is posing a big challenge to Hong Kong, even though [mainland officials] are saying that China would be able to accommodate two financial centers." The central government has endorsed Shanghai's goal of becoming an international financial centre by 2020, and Shanghai is developing Yangshan, a deep-water port 70 kilometers from the city in Zhoushan , Zhejiang province. Lu said Yangshan would be a major rival to Hong Kong's port operations when its third phase was completed next year, since its handling charges were much lower than Hong Kong's. Guangzhou's Baiyun International Airport was also expanding rapidly and becoming a major competitor to Hong Kong's airport, he said. Lu, now 82, said neither the Closer Economic Partnership Arrangement launched in 2003, nor the scheme allowing mainlanders to visit Hong Kong on their own rather than in tour groups, which began the same year, could resolve the city's fundamental economic problems. "There is an urgent need for Hong Kong to speed up economic restructuring. The lesson of the global financial crisis is that Hong Kong should not only rely on real estate and financial services," Lu said. Reflecting on the Sino-British Joint Declaration signed 25 years ago, Lu said the concept of "Hong Kong people ruling Hong Kong" had proved successful, although there was room for improvement. He attributes some of the governance problems since the handover to the inability of colonially trained officials to think independently. The declaration was signed by the Chinese and British governments on September 26, 1984. It promised a high degree of autonomy for Hong Kong after China's resumption of sovereignty. Lu was a member of the Chinese delegation during the talks on the future of Hong Kong and took part in drafting Beijing's post-handover policy on Hong Kong. He became director of the Hong Kong and Macau Affairs Office in 1990 and retired on July 6, 1997. Lu said many Hong Kong officials were lukewarm about Guangdong's proposals for cross-border co-operation in the first few years after the handover since they did not have a long-term perspective of Hong Kong's development (something he considers it vital the next chief executive have). For example, he said, in the mid-1990s many senior Hong Kong officials did not believe it was worth investing in a bridge to Zhuhai and Macau. "Hong Kong has wasted a lot of time and the cost of building the bridge has skyrocketed since then. It is crucial to change the mindset of Hong Kong's civil servants so that they won't only care about the immediate future," Lu said. He hopes there will be progress in electoral arrangements for 2012 to pave the way for direct election of the chief executive in 2017 and of the Legislative Council in 2020, in accordance with the National People's Congress Standing Committee's timetable. He feels it would be very unfortunate if agreement could not be reached on such changes for the 2012 elections. Pan-democrats are threatening to veto any government proposal for reforms in 2012 that does not also provide a road map for implementing universal suffrage thereafter. "I hope various sectors in Hong Kong, including the pan-democratic camp, take into account the city's overall interests," Lu said. He said the pan-democrats' call for the chief executive to resign if Legco vetoes the government's electoral reform plans was impractical. Lu, formerly deputy secretary general of the Basic Law Drafting Committee, admitted the drafters played down the importance of party politics in the 1980s. "There is no party which enjoys a majority in Legco. It's a big problem for the Hong Kong government to secure stable support from the legislature." Still, he does not see any of the city's political parties as being capable of becoming a ruling party. He thinks businesspeople should be more active in politics and devote more resources to winning the hearts and minds of the public. Lu said that, 12 years after the handover, many Hong Kong people still had negative feelings about the mainland, as shown by the near-60 per cent support for pan-democrats. But he is confident their views will change. "There are still some areas in our country where there is room for improvement. With it developing rapidly, I am sure Hong Kong people will show more confidence in the country," he said.

Canadian International School students yesterday mourned principal Alan Dick, who came down with swine flu and died on Sunday. Doctors diagnosed Dick with severe pneumonia. His condition deteriorated rapidly and he died in the afternoon, a spokesman for the Centre for Health Protection said. He tested positive for swine flu yesterday. Dick was one of two people with the disease to die on Sunday, taking the city's death toll to 23. The other was an 86-year-old man with swine flu and other illnesses who died in North District Hospital. Dick, 55, principal of the Lower School of the Canadian International School of Hong Kong in Aberdeen, had been on sick leave the week before being admitted to the Hong Kong Sanatorium and Hospital on Sunday with fever and respiratory symptoms, the spokesman said.

Acting Chief Executive Henry Tang Ying-yen (left) and Vice-Minister of Finance Li Yong celebrate the launching of the bonds in Hong Kong. The Ministry of Finance yesterday started selling 6 billion yuan (HK$6.81 billion) worth of sovereign bonds in Hong Kong, in a move expected to internationalize the yuan and enhance the city's international financial centre status. Acting Chief Executive Henry Tang Ying-yen also described the yuan bond issue as "the best retirement gift" to Joseph Yam Chi-kwong, the outgoing chief of the Hong Kong Monetary Authority. Tang said at the launch ceremony that the yuan would become a major regional and global currency and that he was confident Hong Kong could act as a testing ground for its gradual and steady internationalisation. He expected the sovereign bonds would build a foundation for more yuan-denominated products in the city in future. Tang also said Yam, who will retire tomorrow, had worked hard to build up the use of the yuan in Hong Kong. "The fruit it yields today is the best retirement gift to him," Tang said. Hong Kong's yuan business started in 2004, and yuan deposits stood at 55.89 billion yuan at the end of July. Mainland lenders have been allowed to issue yuan bonds in the city since 2007, with 10 yuan bond issues totalling about 32 billion yuan issued in Hong Kong so far. The ministry's first sovereign bond sale outside the mainland to retail and institutional investors has three tranches. Coupon rates for the two and three-year tranches are 2.25 per cent and 2.7 per cent, respectively, while the five-year tranche - only sold to institutional investors - has a coupon rate of 3.3 per cent.

The German chemical giant BASF said on Tuesday that it would invest two billion euros (HK$22.67 billion) by 2013 in the Asia Pacific region to double its sales there by 2020.

The Ombudsman has faulted Hongkong Post for stuffing letter boxes with unsolicited mail. Its circular service was described as an abuse of the postal service which brought unwanted nuisance and annoyance to the public. An investigation led by Ombudsman Alan Lai Nin concluded the service which distributes promotional mail for clients without address labels encourages paper consumption, according to Sing Tao Daily, sister paper of The Standard. The service was introduced in 1992, with Hongkong Post reaping a HK$111 million profit in fiscal 2007. The Ombudsman initiated an investigation after receiving a complaint from a civil servant in 2007 who was unhappy about receiving unaddressed, unsolicited mail almost every day. It always ends up in the garbage, according to the civil servant. The investigation was wrapped up on September 10 and found the complaint to be substantiated. "A citizen's request not to receive unsolicited mail should be respected by the government," the report said. The Ombudsman said the practice is biased towards providing senders a convenient and economical means to disseminate information without giving due consideration for citizens' choice. The report considered the Mandatory Opt Out Scheme introduced by Hongkong Post in 2007 to be unrealistic as it places an unreasonable burden on recipients to instruct each and every sender to stop sending circular mail to them.

China: Many tourist spots, hotels, restaurants and shops in downtown Beijing closed on Tuesday amid tightened security as the capital prepared for Thursday’s massive parade marking the 60th anniversary of the People’s Republic of China. A keynote address from President Hu Jintao is expected, followed by an elabourate military parade and performances involving 200,000 people, 60 floats and fireworks. Authorities plan to ground flights into and out of Beijing for three hours during the parade, according to state media. The restrictions are similar to the ones put in place for last year’s Beijing Olympics. The Forbidden City and the Great Hall of the People were shut on Tuesday along with many businesses on Chang An Avenue, the city’s major east-west boulevard, including the Raffles and Beijing hotels, supermarkets, Starbucks coffee shops, noodle stalls and tourist boutiques. Armed pairs of riot police stood guard beside armoured vehicles at many of the avenue’s intersections, while subway riders and their bags were scanned with metal detectors. The authorities have even banned the sale of knives at some stores, including large retailers such as Wal-Mart and Carrefour. Tiananmen Square itself and a few other tourist spots, including the Silk Street Shopping Mall, were due to close Wednesday. A row of shops that usually sell watches, silk pyjamas and other souvenirs a few blocks east of Tiananmen Square had its doors taped over with a Beijing police seal, and notices posted nearby said most would re-open on Friday.

Senior Chinese officials Hu Jintao, Wu Bangguo, Wen Jiabao, Jia Qinglin, Li Changchun, Xi Jinping, Li Keqiang, He Guoqiang and Zhou Yongkang meet with role models who had made major contributions to ethnic harmony prior to a ceremony in Beijing, capital of China, Sept. 29, 2009. At the ceremony, 739 organizations and 749 individuals received awards from the State Council (the Cabinet).

Chinese space scientists have completed a high-resolution, three-dimensional map of the entire surface of the moon, an expert involved in the project said. The map marks an important step toward a future lunar landing, Liu Xianlin of the Chinese Academy of Surveying and Mapping, who headed the project review panel, added. After putting its first man into space in 2003 - only the third nation to do so - China aims to launch an unmanned rover on the moon's surface by 2012 and a manned mission there by around 2020. The map was made using image data obtained by a camera on Chang'e 1, China's first lunar probe, Liu said. Chen Yongqi, a professor in the department of land surveying and geo-informatics at Hong Kong Polytechnic University, said the map would help China understand the structure of the moon. "Another objective is to understand the soil of the lunar surface and mineral distribution," Chen said. Liu called the achievement an important step along the path toward a future lunar landing. "This map finishes the primary prospecting of the moon and lays the foundation for further surveys such as choosing the landing point or the path of a satellite." The map was the world's highest-resolution lunar chart, Liu added. Japan launched a lunar probe in 2007, but either had not completed its own map or had not yet publicized it, he said. The United States had sent a probe in the 1990s but the accuracy of their map was not as good, Liu claimed China plans to launch a second lunar probe in October 2010. That is expected to generate a map of an even higher resolution, according to Liu. The Chang'e I was launched on October 24, 2007.

New York’s iconic Empire State Building will light up red and yellow on Wednesday in honour of the 60th anniversary of the People’s Republic of China. Peng Keyu, Beijing’s consul, and other officials will take part in the lighting ceremony that will bathe the skyscraper in the colours of the People’s Republic until Thursday, Empire State Building representatives said in a statement. The upper sections of the building are regularly illuminated to mark special occasions, ranging from all blue to mark Frank Sinatra’s death in 1998, to green for the annual Saint Patrick’s Day. On September 4, 1997 the 102-storey building turned red, white and blue to commemorate Princess Diana.

China's Anhui Jianghuai Automobile said on Tuesday it plans to set up a 2 billion yuan (HK$2.27 billion) joint venture with the truck unit of US construction equipment giant Caterpillar. Jianghuai Automotive will also develop new products with NC2 Global, a tie-up between Caterpillar and US truck maker Navistar International Corp, the mainland firm said in a statement. Jianghuai Automobile and NC2 agreed each will own half of the joint venture, which will produce heavy-duty trucks and accessories in mainland, the statement said.

Taiwan will allow contract chipmakers and flat-panel companies to acquire rivals in mainland, an economic ministry official said on Tuesday, sending semiconductor stocks higher. The official confirmed an Economic Daily report quoting Economics Minister Shih Yen-shiang as saying panelmakers and chip companies using advanced 0.13 micron process technology would be able to directly invest in mainland and buy stakes in mainland rivals. “This is the direction we’re taking, but we don’t have a timetable yet,” Huang Hsien-lin, a section chief, said. Timing is the most crucial thing. We need to maintain Taiwan’s leadership in the technologies.” At about 20 minutes into trade, the semiconductor sub-index was up 2.45 per cent, with TSMC and UMC, the world’s top two contract chipmakers, up more than 3 per cent. AU Optronics, the world’s No 3 LCD maker after South Korea rivals, climbed 2.4 per cent. All the shares outperformed the main Taiex index’s 1.3 per cent gain. Taiwan firms, including AU Optronics, TSMC and UMC, have urged the government to allow them to invest in mainland or use more advanced technologies to help cut costs and compete with global rivals.

Sept 29, 2009

Hong Kong: Financial Secretary John Tsang Chun-wah is in stable condition and recovering well on Monday after undergoing heart surgery on Sunday night.

Hongkong and Shanghai Banking Corporation chairman Vincent Cheng Hoi- chuen will be promoted to chairman of sister lender Hang Seng Bank (0011), as part of an HSBC (0005) management reshuffle, when he steps down from his current post, according to market sources. Cheng - whose expertise is the China region - is set to replace Raymond Chien Kuo-fung, in a move that is in line with HSBC's plan to tap in on the growing importance of Asia and emerging markets. Cheng, 61, was vice chairman and chief executive of Hang Seng Bank from 1998 before he rejoined HSBC as the first Chinese executive director in 2005. Analysts said the appointment "makes sense" and believe Cheng can handle business at both banks at the strategic level. "Margaret Leung Ko May-yee, who was appointed as vice chairman this year, will still be the hands-on person and taking most of the responsibilities at [Hang Seng]," a Hong Kong-based banking analyst said. On Friday, HSBC said the office of its chief executive will be relocated back to Hong Kong in February. It also announced a high-level reshuffle that will take place in the same month. Group chief executive Michael Geoghegan will replace Cheng as HSBC Asia Pacific chairman, while Cheng will continue as chairman of HSBC China and HSBC Taiwan. Peter Wong Tung-shun will be promoted to chief executive of HSBC Asia Pacific. Wong said in a media briefing over the weekend that Greater China will be a fast-growing region, and will be one of his priorities after he assumes his new duties. A few months ago HSBC set up a special committee, chaired by Wong and including chief executives of the bank's operations in the mainland, Hong Kong and Taiwan, to monitor and study upcoming business opportunities. The UK-based lender is also considering setting up a regional office in Guangdong, according to Wong. "The growth momentum of the region will only pick up when Taiwan and the mainland sign the Economic Cooperation Framework Agreement by the end of this year," said Wong, adding Taiwan has so far invested up to US$150 billion (HK$1.17 trillion) in the mainland. Although trade with Taiwan accounts for only 7 percent of Hong Kong's overall trade, capital-raising activities through the city have been increasing. Wong said the flow of Taiwanese funds through the SAR and into the mainland made up between 20 and 25 percent of Hong Kong's total fund flow. "When the ties between Taiwan, Hong Kong and Guangdong become closer, economic integration between Taiwan and the mainland will gradually take shape,"Wong said. The lender plans to add up to 600 new staff in the mainland to cater for the growth.HSBC will today announce another set of executive changes, according to Geoghegan. This will be the second round of appointments after Friday's when, among others, Sandy Flockhart was appointed chairman of personal and commercial banking, based in Hong Kong.

Henry Tang, left, acting chief executive of Hong Kong, and Li Yong, vice-minister of the central Ministry of Finance, attend the launch ceremony of yuan sovereign bonds in Hong Kong on Monday. Mainland on Monday launched the sale of 6 billion yuan (HK$6.82 billion) in government bonds in Hong Kong, the finance ministry said, marking the first such offer outside the mainland. Hong Kong’s chief secretary for administration Henry Tang Ying-yen said the bond sale would help boost the international use of the yuan in a “stable and orderly manner”, the finance ministry said in a statement on its website. Individual and institutional investors can subscribe for two-year and three-year bonds, which carry coupon rates of 2.25 percent and 2.7 percent respectively, the statement said. Only institutional investors will be allowed to subscribe for five-year bonds, which carry a coupon rate of 3.3 per cent.

Hong Kong was in a festive mood yesterday as a host of parades and activities brought tens of thousands of fun-seekers to Hong Kong Island to celebrate the 60th anniversary of the People's Republic. Festooned with national flags and colourful banners, busy streets in Wan Chai, Causeway Bay and Western District were closed for traffic at different times to accommodate events throughout the day. Activities kicked off with an early morning four-kilometre charity walk. Dubbed by some "a mini-long march", 14,000 people from 110 groups walked from Victoria Park in Causeway Bay along the Island Eastern Corridor to Quarry Bay Park. About HK$10 million was raised for the Community Chest. Later Golden Bauhinia Square on the Wan Chai waterfront was transformed into a carnival venue, drawing hundreds of visitors to watch a sea, land and sky parade. The half-hour event included a procession of vessels - among them a fire boat, a Chinese junk, a ferry and yachts - while four helicopters from the Government Flying Service and Heliservices carried out a fly-past. In Western District, a dragon made of crystals stole the show in a massive dragon and lion dance. But the highlight was a large parade in the afternoon, which saw 2,500 participants from 32 local and mainland groups parading from Victoria Park to Southorn Playground in Wan Chai. Executive Councillor Cheng Yiu-tong, who officiated at the opening of the parade, said he was moved to see so many people at the National Day celebrations. "Sixty years is a short period of time from the perspective of history. But in the past 60 years, we have witnessed tremendous developments in our home country." Because of the celebrations, many streets were closed to traffic and more than 70 bus and 15 minibus timetables were changed and routes diverted. The traffic did not resume as normal until the evening. A woman who took her two-year-old daughter to Victoria Park said: "I think it is a good to see people get together and enjoy themselves." But university student Jack Cheung went shopping instead. "I don't really feel strongly about the celebrations. Perhaps some Hong Kong people, like me, are starting to get fed up with marches and parades. We already have a big march on July 1 every year," he said.

Tai Tung Bakery owner Tse Ching-yuen. Tai Tung Bakery, founded during one of the darkest periods of Hong Kong's history, is still battling the odds. No one expected the family-owned Yuen Long business, which was started during the Japanese occupation of the city in 1943 - a time when money was so useless that it was used to wrap the bakery's sweets - to survive. But the much-loved company is thriving more than 60 years later, despite the best efforts of food conglomerates to dominate the market. Small, family-run food factories such as Tai Tung are becoming rarer in Hong Kong as rising rents, competition and labour costs force many to close their doors. Most have gone across the border, but some survive in the city. Across town at Kwun Tong, the Fong brothers - fellow small-business survivors - produce batches of candies in a hot kitchen just as their father did 50 years ago. Tai Tung and Smith's Confectionery have survived because of customer loyalty and the fact they own their own factories. They also produce the best products, judging by the long queue at Tai Tung last week to buy mooncakes for the Mid-Autumn Festival. Tai Tung Bakery chose not to follow most of its competitors by moving production across the border to cut costs. Its commitment to "Made in Hong Kong" means it churns out mooncakes, Chinese wedding cakes, preserved sausages - or lap cheong - and bread from a 4,000 sq ft kitchen on the Tuen Mun industrial estate. Neither can it count on celebrities such as Kelly Chen Wai-lam, who promotes mooncakes for the city's largest food and catering firm, Maxim's Catering, or Eric Tsang Chi-wai for Kee Wah Bakery. "We won't and can't compete with the deep-pocket chain stores, especially splurging on advertising," said Tse Ching-yuen, the owner of the business his late father set up in 1943. "Running a family business is tough, but we survive by trading our profit margins for better quality and reputation." Tse was 13 when the store opened and remembers not having enough candies for its young customers. The Japanese Occupation Currency depreciated so rapidly that profits were eroded. Wild inflation exacerbated the situation, with "a catty [600 grams] of sugar costing 1 Japanese yen one day but going up to 1.5 yen in three days", he said. Three years later, when peace was restored, the Japanese currency eventually became candy wrappers, Tse recalled. "Paper supplies remained so tight that we couldn't find any paper and had to use the currency notes as paper bags." Tai Tung is among the few traditional Chinese bakery factories still surviving in the city - the others being Hang Heung Cake Shop, founded in 1920, and Kee Wah Bakery, in 1938. The global financial crisis has exacerbated the plight of struggling food manufacturers. Last week, traditional Chinese confectionery maker Luk Kam Kee King of Melon Seeds closed after half a century in business. The shop went bust because of unpaid wages and debts. "In any boom or bust time, brand reputation and quality are the priority," Tse said. "That's why we have no intention to move across the border and always keep our ovens and workers in Hong Kong." At the Tuen Mun factory, the 80-year-old chef has been with the company for the past 50 years, leading about 10 workers and operating the production line designed in the 1960s. When Tai Tung was founded 66 years ago, its operating license was issued by Japanese troops and it was written in Japanese. The bakery could only produce peanuts and ginger candies, as peanuts, ginger and sugar were the only ingredients available, Tse recalled. In the 1960s, the store branched into Chinese almond cakes, loaves and Chinese wedding cakes when extra supplies such as green beans, margarine and flour were available, he said. "Traditional wedding cakes have been the best seller for decades, particularly with indigenous villagers," he said. However, with greater availability of raw materials came competition, pushing Tai Tung to produce higher-value delicacies such as mooncakes. "Egg yolks used to be delicacies and expensive," Tse said, adding that the company had imported 700,000 egg yolks from the mainland this year. "Now, they are regarded as cheap stuff." As the Mid-Autumn Festival looms, Tai Tung is rolling out new flavors of mooncakes, including preserved oyster, to fend off competition from chilled mooncakes and ice-cream mooncakes. "We use quality ingredients, say, the best lotus from Hunan and peanut oil from South Africa," Tse said, pointing out that a barrel of peanut oil costs HK$7,000 compared with mainland peanut oil priced at HK$1,000 per barrel. "That's why our mooncakes cost 50 per cent more than our rivals." However, customers seem undaunted by the price. One regular walked into the shop last week and paid HK$7,700 for 20 boxes of mooncakes. Tse, who has been with the bakery since day one, is preparing to pass the torch on to the third generation - his son, Peter Tse Hing-chi. Despite his training as an architect, Peter Tse will continue the business of the old bakery and expand its distribution outlets. Keeping a business in the family is one problem facing the Fong family, which runs the 49-year-old Smith Confectionery in Kwun Tong. Fong Fu-sing, the youngest of the three brothers working with the company their father took over in 1960, said eating candies was far easier than producing them. "Hiring is a problem, as young people do not want to get into this industry," said Fong, wearing a stained apron and cooking rainbow-coloured, clay-like glucose on a stove in a kitchen in a temperature of 45 degrees Celsius. "We still haven't been able to find chef replacements after the old ones died one after another some years ago." Working from the ninth floor of a commercial building, Fong and another brother work in the kitchen making moulds of glucose before throwing them into a machine that produces bright-colored candies ready for packaging. The other Fung brother delivers the group's specialities - Smith nougat, hard boiled candies and soft candies - to traditional confectionery shops such as Chan Yee Jai in Sheung Wan. Some of the candies are exported as far as away as Fiji. "The more bad news on tainted food in China, the better our sales," he said of a recent sales rise of at least 20 per cent. "The `Made in Hong Kong' trademark gives customers confidence." That perhaps explains why Fong has rejected several offers since the 1980s to move the factory to the lower-cost Pearl River Delta. But he is facing other challenges. The factories that used to produce machinery for Smith Confectionery vanished with the city's industrial migration. "We want to make more candies and other types of candies but can't," said Fong, who was forced to let go an order from one of the city's two largest supermarket chains. "Completing the order will take us nine months, but the delivery is in four months, or before the Chinese New Year." However, Fong was confident about future prospects, especially as the Fong brothers own the factory, meaning they can avoid rocketing rents. The Tse family also owns its flagship shop in Yuen Long and the Tuen Mun factory. Fong said: "The business is certainly unviable if you don't own the properties."

More mainland developers plan to tap the Hong Kong market for more than HK$20 billion despite the poor performance of newly listed companies. Evergrande Real Estate - a Guangzhou-based home developer seeking to raise HK$11.7 billion - is set to go through a listing hearing tomorrow. Mingfa Group, which is aiming for HK$8 billion, will also have its hearing tomorrow and Yuzhou Group, which is seeking up to HK$3.9 billion, may present its case later this week. Meanwhile, the directors of United Company Rusal - the world's largest aluminum producer - will decide this week whether to approve an IPO plan to float a 10 percent stake in Hong Kong, the Sunday Times reported. The Russian aluminum giant is expected to start bookbuilding in November and list in December. According to the British newspaper, Rusal is in talks with potential cornerstone investors including sovereign wealth funds China Investment Corp and Singapore's Temasek. Wilmar International, the world's largest palm oil processor, plans to raise as much as HK$31.2 billion from listing 733 million shares of its mainland business. The firm is chaired by Kuok Khoon-hong - nephew of Robert Kuok Hock-nien, known as "sugar king of Asia." Greens Group, a maker of waste heat recovery products had its listing hearing last Thursday. It plans to raise as much as HK$1 billion. Shenguan Holdings, a mainland sausage casing maker, starts bookbuilding today and will open its retail book on Wednesday, eyeing up to HK$1.17 billion, market sources said. The firm plans to invest 240 million yuan (HK$272.38 million) this year and 469 million yuan in 2010 to expand production capacity. Its first-half net income surged 66.5 percent to 129 million yuan. Shenguan's clients include Yurun Group, an unit of China Yurun Food (1068). Yingde Gases, Ausnutria Dairy Corp and China Vanadium Titano-Magnetite Mining, which will close their retail book tomorrow, had their retail tranche oversubscribed 3.5 times, twice and 5.6 times respectively, according to margin financing orders at nine brokers as of Friday. But Wynn Macau's HK$12.6 billion offering was only 61.3 percent covered with subscription via margin financing hitting HK$773 million. Powerlong Real Estate also got a lukewarm. response Both will close their retail book on Wednesday.

Local wine auction sales are expected to top US$60 million this year, about twice the value of wine sold at auction in London, according to estimates from major auction houses. This will see the city solidify its position as the world's biggest fine wine auction market after New York.

Investors keen on punting on mainland property stocks could get another candidate for their share portfolio, with upmarket residential developer Longfor Group said to be reviving plans to seek a US$1 billion listing in Hong Kong. The developer, based in Chongqing, proposed to launch a similar-sized sale last year but the plan was aborted because of a slowdown on mainland equity markets. "This time, the exact flotation size has not been finalized but it will be more or less US$1 billion," said a source familiar with the deal. Longfor, which aims to list in the fourth quarter, is the latest among mainland developers seeking listing status in the city this year as candidates queue up to take advantage of the improved stock market.

More than 1.23 million people - one in six of Hong Kong's population - are living in poverty and the widening wealth gap could lead to instability, the Hong Kong Council of Social Services warned yesterday.

China: China’s state-owned Sinochem bid US$2.5 billion on Monday for Australian farm chemicals group Nufarm, looking to gain a global footprint in a deal that could again test investment ties between China and Australia. The bid sent Nufarm shares up nearly 10 per cent to A$12.22 (HK$82.28), though still substantially below the A$13 offer price, reflecting concerns that the deal still has many hurdles to clear, including due diligence and both shareholder and regulatory approvals.

Star hurdler Liu Xiang will join other top sporting personalities in Beijing on October 1 at a parade marking 60 years of the People’s Republic of China, state media said on Monday. Liu – who made a much-anticipated comeback earlier this month in Shanghai after his dramatic withdrawal from last year’s Beijing Olympics due to injury – will ride on top of a colourful float on Thursday, the Beijing Morning Post said. Other sports stars, including basketball player Wang Zhizhi and former gymnastics champion Li Ning (SEHK: 2331), will join Liu on the float, the report said.

China's domestic helpers may be a step closer to reality. A government think tank has proposed more safeguards for their importation, in a move seen as providing a policy framework that addresses key questions that have stymied bringing in maids from across the border. "There is demand in the market for mainland domestic helpers," a Central Policy Unit official said. "They don't have the racial cultural difference with local people because they don't have the language problem." The official said the idea was first hatched more than two years ago after conflict between employers and their foreign helpers stemming from racial and language differences. Restrictions to avoid people abusing the system in seeking to settle in Hong Kong permanently and bring in mainland wives and relatives will be covered in the research. These include imposing an age limit on mainland maids and restricting them to work in the city for no more than - for example - six years. Instead of allowing people to arrange for someone they know to come and work for them, employers would be given candidates to choose from.

Frugality is the order of the day as the preparations for the 60th anniversary celebrations reach a climax. In a recent circular, the government said extravagance would give way to austerity, and the money saved would be diverted to reconstruction projects in earthquake-hit areas of Sichuan and to efforts aimed at helping the economy rebound from the financial crisis. President Hu Jintao has pledged to avoid extravagance and bring people practical benefits in the celebration, in an effort to promote "social harmony", his ruling mantra. The circular, issued by the general offices of the party's Central Committee and the State Council, and cited by a provincial party official in charge of publicity affairs, ordered local officials to resist any opportunities for personal profit. It banned local agencies' using the anniversary as an excuse to raise funds from businesses. Fund-raising in the name of National Day celebrations by local government agencies has been widespread in the past, but this time the central government said they should not collect fees, ask for financial support or canvass advertisements from enterprises under the name of donations for celebrations.

The State Council has formally approved the construction of Shandong Haiyang Nuclear Power Station, State Nuclear Power Technology Corp (SNPTC) said on Friday.

China has started investigating complaints that American chicken products are being dumped on the mainland and are unfairly benefiting from subsidies, adding to a string of trade disputes with Washington. The Ministry of Commerce said the probe was launched yesterday on broiler products and chicken products, following requests by Chinese companies to investigate the United States imports which they say are hurting the domestic industry. The investigation comes at a time of mutual finger pointing by Washington and Beijing, accusing the other of protectionism, which both say will hurt efforts to end the global economic crisis. A US labour union and three paper companies announced last week they had filed a new trade complaint over imports of Chinese paper. The move came a week after Beijing filed a World Trade Organisation challenge to Washington's decision to raise tariffs on imports of Chinese-made tyres. The two governments also are involved in disputes over access to each other's markets for steel pipes, music and movies. On Tuesday, China appealed against a US victory in a trade dispute over curbs on the sale of US music, films and books in the Chinese market. The same week, President Hu Jintao and US President Barack Obama attended a summit of Group of 20 major economies in Pittsburgh, which issued promises to fix a malfunctioning global economic system including a vow to "reject protectionism in all its forms". At the summit, China played down growing trade tensions with the US, saying the two trading partners must focus on long-term relations and settle their differences through friendly talks.

People attend a parade in Chinatown of Chicago, the United States, on Sept. 27, 2009. The parade was held here on Sunday to celebrate the upcoming 60th anniversary of the founding of the People's Republic of China.

Confucius's 2,560th anniversary - photo taken on Sept. 26, 2009 shows the Great Confucius Statue at Hermann Park in downtown Houston, the United States.

Aviation Industry Corporation of China(AVIC), the country's top aircraft manufacturer, said Sunday total sales revenue in its auto business would reach 30 billion yuan (about $4.39 bln) by 2017. Deputy general manager of AVIC said making big passenger vehicles has become the the corporations's guiding plan for development in its auto business.

Sept 28, 2009

Hong Kong: Health Secretary York Chow Yat-ngok said on Friday that Hong Kong people should prepare for a second wave of human swine flu infections.

HSBC Holdings is moving its chief executive to Hong Kong as Europe’s biggest bank increasingly focuses on Asia. HSBC said on Friday it will stay based in London for tax purposes and had no plans to move, and Britain’s Financial Services Authority will remain its lead regulator. But CEO Michael Geoghegan will move to Hong Kong from February, swinging HSBC’s power base back to its place of birth 144 years ago. “It’s about building this business in Asia. We know the business is coming our way and we intend to be here to take it,” Geoghegan told reporters on a conference call. “West is coming east and we want to be at the gate into China and be in China itself, and the most logical place to work on that strategy is Hong Kong,” he added. HSBC wants to be one of the first overseas companies to list its shares in Shanghai, and chairman Stephen Green said it remains in talks with the authorities there to do so. He declined to say when it is likely to happen. The bank will look to raise between US$3 billion and US$7 billion as part of a Shanghai listing, probably next year, people familiar with the matter have said. HSBC announced several other changes in its management structure. Geoghegan will also become chairman of The Hongkong and Shanghai Banking (SEHK: 0005, announcements, news) Corp from February, replacing Vincent Cheung. Sandy Flockhart will become chairman of personal and commercial banking, and Stuart Gulliver, head of the investment banking business, will become chairman of Europe and the Middle East. HSBC was formed as the Hongkong and Shanghai Banking Corporation in Hong Kong in 1865 and opened a branch in Shanghai in April the same year. It moved to London in 1993 as a condition of the previous year’s takeover of Midland Bank, in a move seen as a major blow to Hong Kong. But the bank is revered in Hong Kong – it is known as “big elephant” – and makes a quarter of its normalized profits and has 30 per cent of its shareholders there.

Broken gravestones and coffin parts are among the waste dumped on Hau Mo-yi's farmland in Sheung Shui. Up to 30 truck drivers face prosecution for illegal dumping, but the Environmental Protection Department is still trying to find out who ordered it. Information about the drivers has been gathered by the Environmental Protection Department, which is collecting evidence for a possible prosecution. If prosecutions go ahead, it is likely to be the biggest enforcement action ever taken in a case of illegal dumping. "We will bring any driver to justice once we are satisfied with the evidence," a senior environment official said. But officials still have no clues as to who was behind the dumping, with most drivers tight-lipped about the mastermind's identity. The drivers were seen in July dumping waste on the land at Ho Sheung Heung, where the land owners have been served notices by the Planning Department to clean up the site by September 30. But some of the orders have been temporarily suspended pending results of eight applications lodged by land owners for a review of the notices. Some of the drivers were believed to be working for Chun Woo Construction and Engineering at the Wo Hop Shek Cemetery in Fanling, where old burial grounds are being excavated and levelled for expansion of the cemetery. Officials say the contractor has been negligent in monitoring the waste flow, which will affect its future chances in bidding for public projects. The only progress made since mid-July is a summons issued to a man arrested by police on July 13 who admitted responsibility for some of the land-filling. The Environmental Protection Department is planning to bring charges against at least one driver for dumping waste without the land owners' consent under the Waste Disposal Ordinance. It is also investigating 20 to 30 others. Yesterday, pieces of gravestones, possible coffin remains, marble vases and pillars, as well as clothing, were seen mixed in the piles of soil dumped at various parts of the site. "The heavy rain ... washed away the topsoil and exposed those gravestone pieces, old coffin parts and burial objects very recently," Hau Mo-yi, whose farmland was ruined by the dumping, said. No one had come to the site to remove the waste since July, she said, and there was no sign that it would be cleared up soon. There are 30 owners of 36 land lots affected by the dumping. All, except one who admitted giving consent and four who have not replied, have denied allowing the drivers to dump the waste. Their denials would spare them from prosecution by the Environmental Protection Department, but they might still face legal action from the Planning Department for unauthorised land-filling in an area zoned for agriculture. Ho Sheung Heung village head Hau Chi-keung said he had done what he could to assist the owners, including fencing off the site and planting saplings to prevent further damage. "They are so grateful for what I have done and offer me chickens and boxes of mooncake to thank me ... but there is really nothing more that could be done to the site," he said. Hau Kam-fai, the registered owner of one of the lots, said he had never received any warnings or letters from the government and was unaware of the September 30 deadline to remove the dumped material. He believed the village head would take care of the matter on his behalf. He said he had never consented to any dumping and insisted that holding land owners responsible would be unfair. "It is like I have been robbed by someone and I am the one charged," Hau said. Legislator Lee Cheuk-yan said he was very disappointed that officials had failed so far to find out the mastermind behind the dumping. He said the land owners were victims rather than perpetrators.

Taiwan will not allow exiled Uygur leader Rebiya Kadeer to visit the island as proposed in December, a government official said on Friday, a move likely to please Beijing but upset anti-mainland factions at home. Kadeer, a former businesswoman who now leads the exile group World Uygur Congress, wanted to visit in December at the invitation of an entertainer close to Taiwan’s anti-China opposition Democratic Progressive Party. Kadeer is accused by Beijing of inciting violence in Xinjiang region. Asked by legislators on Friday, Taiwan interior Minister Chiang Yih-hwa said the government had confirmed it would not allow the visit.

Development in Hong Kong has slowed down in the past 12 years compared with what the colonial government achieved before the handover, Executive Council convenor Leung Chun-ying says.

RTHK chief Franklin Wong Wah-kay has played down fears that a proposed board appointed by the chief executive to advise the broadcaster on its editorial policy will be a tool to interfere with its independence. Wong, the director of broadcasting, said the board could function positively, adding that it should be seen as another platform to channel public views on RTHK. Speaking after a public function at RTHK yesterday, Wong hit back at criticism that setting up the board would result in interference with the broadcaster's editorial policy. "According to my previous experience working with some advisory committees, it can function very positively," he said. "It can help reflect views in the community ... The director of broadcasting makes a final decision whenever different opinions arise." Under the proposal, the director of broadcasting would have to submit RTHK's annual plan to the board. Noting that drawing up an annual plan was a standing practice, Wong, also RTHK's chief editor, said the board would serve as another platform to channel views for reference.

Twenty-five judges and magistrates were appointed to different Hong Kong courts yesterday - the first batch of appointments following the chief justice's announcement this month that he would be retiring early. The new appointments will take effect from Monday. Six of the appointments are to the magistracy, eleven to the District Court, six to the Court of First Instance and one to the Court of Appeal. There is also one new principal family court judge. Madam Justice Susan Kwan Shuk-hing, 55, was appointed to the Court of Appeal, while High Court deputy judges Anthony To Kwai-fung, Peter Line, Maggie Poon Man-kay, Derek Pang Wai-cheong, Colin Mackintosh and District Court judge Au Hing-cheung, aged from 48 to 63, will be Court of First Instance judges. The 11 District Court judges, aged from 42 to 59, are Garry Tallentire, Eddie Yip Chor-man, Katina Levy Law Suet-mui, Chan Chan-kok, Simon Kwang Cheok-weung, Albert Wong Sung-hau, Frankie Yiu Fun-che, Wong King-wah, Poon Siu-tung, Justin Ko King-sau and Douglas Yau Tak-hong. Bebe Chu Pui-ying was appointed principal family court judge. On September 2, Chief Justice Andrew Li Kwok-nang, 60, who is five years short of retirement age, announced he would take early retirement in a year. He said he made the decision mainly to provide for an orderly succession, with a number of senior judges poised to retire over the next five years. He said he believed his successor should be responsible for appointing their replacements. One barrister close to Li described him as a meticulous planner, who would have earmarked candidates for certain roles from the start of their careers. Solicitor Huen Wong, president of the Law Society, said the 25 new appointments were a result of the annual planning for judicial appointments and he believed they were not directly related to the chief justice's succession fears.

China: Beijing said on Friday its checks on pork imports from several European nations were in line with laws and the European Union’s accusation that the mainland was imposing trade protectionism was “groundless”. Beijing has required additional testing on all pork meat from France, Italy, Spain and Denmark and the disinfection of all containers, after swine flu, or the A(H1N1) virus, was found in pigs in Northern Ireland, EU officials said. “This will be of great concern to the EU because it’s interpreted as being protectionism,” EU health and food safety commissioner Androulla Vassiliou said in Beijing this week. However, the mainland’s commerce ministry said pork imports from these countries were still being allowed. It was lawful for Beijing to impose testing and quarantine measures on the meat and the EU protectionism charge was unfounded, the ministry said in a statement faxed to repoters. “The measures China adopted are in line with Chinese laws and relevant rules of the World Trade Organization,” the ministry said. “The EU health and food safety commission’s accusation that China was pursuing restrictive measures and practicing trade protectionism is completely groundless,” it said. The mainland’s quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine, said on Thursday it was not curbing European pork imports but had merely “strengthened inspections”, state press reported. Beijing imported 932,000 tons of pork last year, or 50.6 per cent of its total meat imports, data from the commerce ministry showed.

Chinese President Hu Jintao (L) waves as he arrives for a dinner hosted by U.S. President Barack Obama in Pittsburgh on Sept. 24, 2009. Hu arrived in Pittsburgh on Thursday to attend the Group of 20 summit.

President Barack Obama and first lady Michelle Obama welcome President Hu Jintao as he arrives for the G20 summit dinner in Pittsburgh overnight on Thursday. Leaders of the Group of 20 rich and developing nations will turn their club into the main body for co-ordinating economic policy, reflecting the rise of new heavyweights like China, officials said overnight on Thursday (Friday HK time). At a G20 summit to discuss ways of avoiding a repeat of the financial crisis, the leaders also agreed to give more voting power at the International Monetary Fund to countries that have long been under-represented at the global financial watchdog. The two-day summit convened with the United States pressing its plan to build a more stable global economy in the face of the near meltdown of the financial system last year which plunged the world into recession.

Foreigners take part in a training session in Beijing. With no jobs at home, young foreigners are looking for work on the mainland. Hit by crisis, young foreigners find China a land of opportunity - When the best job Mikala Reasbeck could find after finishing university in Boston was counting pills part time in a chemists for US$7 an hour, she took the drastic step of jumping on a plane to Beijing in February to look for work. A week after she started looking, the 23-year-old from West Virginia had a full-time job teaching English. "I applied for jobs all over the US. There just weren't any," said Reasbeck, who speaks no Chinese but had volunteered at last year's Beijing Olympics. On the mainland, she said, "the jobs are so easy to find. And there are so many". Young foreigners like Reasbeck are travelling to the mainland to look for work in its unfamiliar but less bleak economy, driven by the worst job markets in decades in the United States, Europe and some Asian countries. Many do basic work such as teaching English, a service in demand from Chinese businesspeople and students. But a growing number are arriving with skills and experience in computers, finance and other fields. "China is really the land of opportunity now, compared to their home countries," said Chris Watkins, manager for China and Hong Kong of MRI China Group, a headhunting firm. "This includes college graduates as well as maybe more established businesspeople, entrepreneurs and executives from companies around the world." Watkins said the number of resumes his company received from abroad had tripled over the past 18 months. The mainland job market has been propped up by Beijing's 4 trillion yuan (HK$4.5 trillion) stimulus, which helped to boost growth to 7.9 per cent from a year earlier in the quarter that ended on June 30, up from 6.1 per cent the previous quarter. The government says millions of jobs will be created this year, though as many as 12 million job-seekers will still be unable to find work. Andrew Carr, a 23-year-old Cornell University graduate, saw the mainland as a safer alternative after offers of jobs were withdrawn due to the economic turmoil. Passing up opportunities in New York, San Francisco and Boston, Carr started work last month at bangyibang.com, a website in Shenzhen that lets the public or companies advertise and pay for help in carrying out business research, getting into schools, finding people and other tasks. "I noticed the turn the economy was taking, and decided it would be best to go directly to China," said Carr, who studied Putonghua for eight years. The mainland can be more accessible to job hunters than economies where getting work permits is harder, such as Russia and some European Union countries. Employers need government permission to hire foreigners, but authorities promise an answer within 15 working days, compared with a wait of months or longer in other countries. Rules were tightened ahead of the Olympics, apparently to keep out possible protesters. That forced some foreign workers to leave. Some 217,000 foreigners held work permits at the end of last year, up from 210,000 a year earlier, according to the National Bureau of Statistics. Thousands more use temporary business visas. Reasbeck said it took her two months to find the job in the chemists after she graduated from Boston's Emerson College with a degree in writing, literature and publishing. She said she applied to as many as 50 employers. Today, on top of her teaching job, she works part time recruiting other native-English-speaking teachers. She makes 14,000 to 16,000 yuan a month. "I could have a pretty comfortable life here on not a very high salary. English teachers are in high demand," she said. While many jobs require at least a smattering of Putonghua, some employers in need of other skills are hiring people who do not speak it. Bangyibang.com's founder and chief executive, Grant Yu, has five foreign employees in his 35-member workforce. Yu plans to add more and said he might hire applicants who cannot speak Putonghua if they have other skills. "I don't believe language is the biggest obstacle in communication, as long as he or she has a strong learning ability," Yu said. Feng Li, a partner in a Chinese-Canadian private fund in Beijing that invests in the mining industry, said he needed native speakers of foreign languages to read legal documents and communicate with clients abroad. He plans to recruit up to six foreign employees. "We don't need Chinese guys who speak English like me," he said. One former London banker took a job a year ago with a Chinese private equity firm. He said that even though he spoke no Putonghua, his experience and contacts made him a sought-after asset on the mainland. "I actually earn more out here," said the banker, who asked not to be identified at his Chinese employer's request. "And the hours are shorter." Job hunters from other Asian countries also are taking an interest. An Kwang-jin, a 30-year-old South Korean photographer, has worked as a freelancer for a year in Qingdao . He said the mainland offered more opportunities as South Korea struggles with a sluggish economy. Still, foreigners would face more competition from a rising number of educated, English-speaking young Chinese, some of them returning from the West, said Shaun Rein, managing director of China Market Research Group in Shanghai. "You have a lot of Chinese from top universities who are making US$500 to US$600 a month," Rein said. "Making a case that you are much better than they are is very hard."

China's largest video game operator, Shanda Games, priced its US IPO at the top of its indicated range to raise US$1 billion in the largest US IPO this year, a source said on Friday.

China International Travel Service Corp’s raised 2.6 billion yuan (HK$2.95 billion) in an initial public offering in Shanghai to fund expansion, the company said on Friday. It added that the offering froze a hefty 618 billion yuan in funds for subscriptions, contributing to a funding squeeze in the money market that has pushed up the weighted average seven-day bond repurchase agreement rate, a key measure of short-term liquidity. Beijing-based China Travel, the country’s top tourist agency, priced its 220 million yuan-denominated A shares, equivalent to 25 per cent of its expanded capital after the initial public offering, at 11.78 yuan a share, at the top end of an indicated price range, it said in a statement on Friday. China Travel said in the statement that its A-share IPO price was 49 times last year earnings on a fully diluted basis after the IPO.

Robin Li, CEO of Baidu. a leading search engine in mainland, talks to students on the campus of Stanford University in Stanford, California, on Wednesday. The billionaire founder of a popular search engine drew a big crowd at Stanford University – and it wasn’t one of the guys that started Google. About 600 students crammed into a lecture room on Wednesday to soak up the wisdom of Robin Li, who owns rare bragging rights over Google and its founders, Larry Page and Sergey Brin. Li, 40, is the chief executive and founder of Baidu Inc, a nine-year-old company that dominates internet search in China like Google dominates the market in just about every other major country in the world. The impressive feat earned Li rock-star treatment at Stanford, the place where Page and Brin conceived Google’s technology as graduate students before dropping out to start their now-famous company in 1998. Li, who got his graduate degree from the State University of New York at Buffalo, seemed to relish the adulation he received at his rivals’ old stomping grounds. “That part is sort of special,” Li said in a brief interview after he spent a half hour posing for photos and passing out business cards to the hordes of mostly Asian students who flocked around him after his 50-minute presentation. Li has become an entrepreneurial hero in China, and not only because his company eclipsed Google in that country. He also became a mogul after starting Baidu nine years ago with just US$1.2 million in venture capital. Baidu’s market value now stands at about US$13 billion, and Li’s stake in the Beijing-based company is worth more than US$2 billion. Baidu’s US shares dropped US$11.87, or 3 per cent, in afternoon trading overnight on Thursday to US$383.08 – but they still have seen a 14-fold increase from their 2005 initial public offering price of US$27. Baidu’s meteoric rise from its IPO price also tops Google, whose stock is hovering around US$500 – nearly six times higher than its August 2004 at US$85. Google still dwarfs Baidu by most measures, including the ones most important to investors. For instance, Google brings in as much revenue in three days as Baidu does in three months. (In the most recent quarter ending in June, Baidu earned US$56 million on revenue of US$161 million while Google made US$1.5 billion on revenue of US$5.5 billion.) But that didn’t stop Li from boasting a bit during his give-and-take with the Stanford students. He pointed out that Baidu’s search engine processes more monthly search requests in China than Google does in the United States. And he said Baidu indexes far more of the internet’s content in China than Google does, one the main reasons he thinks his company has built up an enviable lead in the world’s most populous country. Li told the students on Wednesday that Baidu controls a 76 per cent share of China’s search market, but the research firm Analysys International pegs Baidu’s share at about 62 per cent compared to 29 per cent for Google. No matter how the numbers are crunched, Li maintains no search engine understands what the mainlanders want like his company does. “If you can’t find it on Baidu, you can’t find it anywhere else,” Li said. Neither Page nor Brin were anywhere to be found in Wednesday’s crowd, but at least one Google engineer came out to check out the competition. Susan Lin, a Google search specialist manager for the China, Japan and Korea region, even waded through the crowd to meet Li after his talk. “You have to stay in touch [with the competition] and understand what makes them tick,” Lin said shortly before she exchanged business cards with Li. Not that Li shared any big secrets on Wednesday. He told the crowd he doubts the recession is over, no matter what Federal Reserve Chairman Ben Bernanke and many CEOs think. “I still feel the economic situation is not better, but worse,” he said. Although he didn’t mention Yahoo by name, Li seemed to indirectly question the slumping internet company’s commitment to spend more than US$100 million promoting its brand during the next 15 months. “No matter how much money you spend, you cannot economically add traffic to your site,” Li said. For now, Li intends to keep Baidu focused on China and Japan, where the company introduced a search engine in 2007. He told the Stanford students that he has no immediate plans to launch a search engine or open an engineering office in the United States, although he said Baidu might buy some startups in the country. (With just US$491 million in cash at the end of June, Baidu wouldn’t be able to get into a bidding war with Google, which has US$19 billion in the bank.) Li reasons China is a good place to be the search leader because the country’s internet audience has soared from 10 million to nearly 340 million in the past decade with still plenty of room for growth. With so many surfing the Web, “it’s likely we will be able to conquer new problems before American people will conquer them”, Li said.

Agile Property Holdings and Hopson Development Holdings have acquired development sites in Guangdong and Zhejiang provinces respectively for a combined 2.3 billion yuan (HK$2.61 billion).

China's US$297.5 billion sovereign wealth fund is stepping up investments in commodities companies, agreeing to spend US$2.75 billion in the past three days.

Sept 27, 2009

Hong Kong: Construction and engineering company Metallurgical Corp of China (MCC), which raised $2.34 billion in Hong Kong’s biggest IPO so far this year, fell 13 per cent during its first day of trading on a steep valuation, marking the worst market debut in Hong Kong this year. MCC shares opened at HK$5.52, compared with their Hong Kong IPO price of HK$6.35. Dual-listed MCC, which helped build Beijing’s “Bird’s Nest” Olympic stadium, made a modest debut in Shanghai on Monday, rising 35 per cent, in a sign that a flood of new equity is weighing on market sentiment. “MCC’s pricing is a bit high at around 22 times this year projected earnings and its A-shares keep falling in Shanghai,” said Belle Liang, head of Research at Core Pacific-Yamaichi International (HK) Ltd. The shares had steadied at HK$5.58 by 11am HK time while the Shanghai-listed shares were down 4.7 per cent at 6.04 yuan (HK$6.87). Analysts said investors were concerned about MCC’s growth prospects given an expected slowdown in investment in a domestic steel industry facing huge overcapacity.

Hong Kong’s exports in August fell 13.9 per cent from a year earlier by value, improving from July, but still weak, official data showed on Thursday.

Henry Cheng Kar-shun (left), the chairman of New World China Land, and company executive director Stewart Leung Chi-kin appear before the Legco select committee in April. Two executives with New World China Land (SEHK: 0917) lost their High Court challenge on Thursday contesting the right of a Legislative Council select committee inquiry to call them as witnesses. Henry Cheng Kar-shun, chairman of New World China Land, and his executive director, Leung Chi-kin, had been summoned to appear before the select committee. This was to give evidence about the controversial hiring of Leung Chin-man - a former Permanent Secretary for Housing - as a New World China Land director. Cheng and Stewart Leung Chi-kin had appeared once previously before the committee, but refused to appear a second time. The pair argued that the committee had exceeded its powers under the Basic Law. But Justice Andrew Cheung Kui-nung said on Thursday the court should not interfere in the internal workings of the legislature. He said that summoning Cheng and Leung Chi-kin before a select committee could help it investigate whether the employment of Leung Chin-man involved a conflict of interest, local radio reported. Cheung also ruled that New World pay court fees - including those for Legco and the Department of Justice. Lawmaker Ronny Tong Ka-wah said he respected the judge’s decision and stressed that Legco’s select committee had not exceeded its powers. “The judgment has re-affirmed Legco’s independence and showed that a Hong Kong court cannot not interfere with Legco’s operations,” said Tong. New World said on Thursday it was disappointed by the court’s judgment. “We... will be making a decision very soon as to whether to take the matter forward on appeal,” it said in a statement.

Hong Kong customs have seized a massive 140-kilogram haul of ketamine - worth about HK$16 million at Man Kam To, a spokesman said on Thursday.

Key Securities and Futures Commission enforcer Mark Steward is staying on for three more years after Financial Secretary John Tsang Chun-wah announced a last-minute renewal of his contract. The renewal of Steward's contract as executive director (enforcement) - which was due to expire today - has been in the spotlight. Three weeks ago he publicly raised concerns about his future by revealing that he was still negotiating a new contract with government. "There is an issue of principle which needs to be ironed out. It is not about money," Steward said on September 3. His comment stirred market speculation that the government was under pressure to either replace or clip the wings of the man who is widely credited with the SFC's hardline approach. "The government's renewal of Steward's contract will allow the market to feel comfortable that someone is enforcing market rules and protecting investors' interests," said legislator Chim Pui-chung, who represents brokers. The government last night tried to end speculation that it had considered replacing Steward or curtailing his powers. "Mr Steward has made significant contributions to the SFC. We look forward to his continued dedicated service in maintaining and promoting a fair, transparent and orderly securities and futures market in the new term," a government spokesman said in a statement confirming that Steward would stay on for another term. Steward, formerly a securities regulator in Australia, has been praised for his efforts to crack down on insider dealing and other forms of malpractice since joining the SFC three years ago. On his watch, insider dealers have faced criminal prosecution, resulting in 10 convictions over the past 12 months. Steward also took a hardline stance in a legal challenge that scuppered PCCW (SEHK: 0008)'s privatisation plan in April on the grounds of vote-rigging. He also refused to compromise when arguing that banks should repay money to investors in Lehman Brothers minibonds. Steward did not comment on the contract renewal last night. Since his initial comments on September 3, he has not elaborated on the negotiations or explained the "issue of principle" that was finally ironed out with the contract renewal yesterday. "Since joining the SFC in September 2006, Mark has been tireless in leading the enforcement division to combat market misconduct," SFC chief executive Martin Wheatley said last night in a statement. "He is a valuable asset to the commission and I am certain that the SFC will continue to benefit from Mark's commitment and professional knowledge." Meanwhile, Tsang said the SFC's chief operating officer, Paul Kennedy, would leave the commission next year but had agreed to extend his contract by nine months until July 15 to ensure a smooth transition. The government spokesman said Kennedy had indicated that after three years with the SFC, he would like to pursue other interests. The financial secretary has not yet announced if SFC chairman Eddy Fong Ching will stay on when his term ends on October 19, but a regulatory source said Fong was likely to stay for another three-year term.

The board appointed by the chief executive to advise RTHK on its editorial policy would not include members with political affiliations, a government minister said yesterday. Speaking on an RTHK phone-in, Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan tried to ease fears that the proposed board would interfere with the public broadcaster's editorial independence.

Chief executive Steve Wynn says the Macau business will become more of a Chinese company following its listing on the stock market. Las Vegas casino billionaire Steve Wynn yesterday officially confirmed what gaming industry watchers have known for some time: the company he serves as chairman and chief executive is turning "Chinese". Speaking to reporters before today's launch of Wynn Macau's initial public offering in Hong Kong, which seeks to raise up to HK$12.6 billion by selling a 25 per cent stake in the Macau business, Wynn said: "With this IPO, we're a Chinese company with Chinese ownership." By any financial metric, parent firm Nasdaq-listed Wynn Resorts has already been a Chinese company for some time. A toe-to-toe comparison of second-quarter data for the 600-room Wynn Macau and Wynn's two Las Vegas Strip mega-resorts, which have a combined 4,700 rooms, shows the Macau property booked 32 per cent more revenue and 56 per cent more pre-tax earnings than its Las Vegas siblings. At the high end, the Wynn Macau share sale values the firm at 34 times forecast earnings, or US$6.5 billion. That represents 72 per cent of Wynn Resorts' total market capitalisation, which stood at US$8.98 billion, based on Tuesday's closing share price. Wynn said the company's motivation for the blockbuster deal was to "share the ownership of this [gaming] concession with the Chinese public participants, Chinese financial institutions and basically to become more of a Chinese company". "A careful analysis of our numbers will show that we didn't need the money, although that is certainly not a reason not to take it," he said. Local tycoons and a fund have already committed to buy US$250 million worth of the Wynn Macau shares. These cornerstone investors include former Sun Hung Kai Properties (SEHK: 0016) chairman Walter Kwok Ping-sheung, Sogo department store owner Thomas Lau Luen-hung, Malaysian billionaire Quek Leng Chan and mainland-focused local fund management company Keywise Capital Management. Wynn Resorts is seeking gross proceeds of HK$10.65 billion to HK$12.6 billion from the sale, and a "greenshoe" share purchase option extended to underwriters JP Morgan, Morgan Stanley and UBS could add up to HK$1.89 billion to the haul. But, unless the greenshoe option kicks in, only HK$38.8 million will stay with the Macau subsidiary, according to the listing prospectus. The bulk of the proceeds will go to a Cayman Islands firm controlled by the Nasdaq parent company to be used for unspecified purposes, which analysts have speculated may include paying down US-specific debt. "As a consequence, such funds will not be retained by the company to finance its business operations or development," Wynn Macau's prospectus said. Wynn Resorts is selling 1.25 billion shares in the Macau firm at HK$8.52 to HK$10.08 each. Ten per cent of the deal is slated for retail investors, with the rest going to institutions. Pricing is set for October 1, and Wynn Macau will begin trading on October 9.

Swire Hotels is banking on a big-is-better approach to beating low occupancy rates when it opens its Upper House hotel at the Pacific Place complex in Admiralty next week. And in case that does not work, a two-nights-for-one introductory offer could help swell occupancy rates, say letting agents. "Upper House is small by Hong Kong standard in terms of the number of rooms, but it has the largest room sizes in the city," said Swire Hotels managing director Brian Williams. Established last year as a wholly owned subsidiary of Hong Kong-listed conglomerate Swire Pacific (SEHK: 0019) to create and manage small luxury hotels in Hong Kong, the mainland and Britain, Swire Hotels opened its first hotel, the Opposite House, in Beijing last year, and next year it will open its third venture - East - in Quarry Bay. It converted the former Atrium serviced apartments in Pacific Place into 117 rooms sized from 730 square feet, and there are also 21 suites and two penthouses available for well-heeled guests willing to pay for panoramic harbour or island views. The room dimensions mean that in terms of size Upper House offers rooms that are about 46 per cent larger than the average 500 sq ft rooms to be found in most upmarket hotels in Hong Kong, said Simon Lo, director of research and advisory at property consultancy Colliers International (Hong Kong). Luxury travellers who may have tightened their belts because of the global financial crisis could also be enticed to book a stay at the Upper House because of its attractive introductory offers, said Lo. Last month, Swire Hotels launched a two-nights-for-one promotional offer, and with normal rates starting from HK$3,388 per day for a 730 sq ft Island View room, the offer means that until December 31 a two-night stay could be booked at a 50 per cent discount of HK$1,694 per night. Lo said higher-priced hotels had been hit hard by the global financial crisis and in Hong Kong average room rates per night had fallen by as much as 30 per cent. "Hotels will not achieve break-even unless occupancy rates reach 60 per cent. So it is better to give a special offer than leave rooms empty. At least it will cover the operating expenses," he said. In July, the occupancy rate at luxury hotels was 67 per cent, according to figures from the Hong Kong Tourism Board, compared with 81 per cent a year ago. The number of tourist arrivals for the month fell 12.2 per cent year on year to 2.37 million. Competition to fill rooms will be ratcheted up next year, with 19 new hotels and 3,203 rooms due to be added to the market, bringing total room numbers to 63,240, according to the board. Hotels to be opened this year include the Crowne Plaza in Causeway Bay and Cosmo Kowloon Hotel in Tai Kok Tsui. But Williams was upbeat despite those projections. "When you open a new hotel there is always competition," he said, adding that he expects Swire's hotels - the Upper House and East - would achieve break-even in the first year of operation. The 343-room lifestyle business hotel East is due to be opened in Quarry Bay in January and, according to Williams, will target corporate tenants in a district in which the Swire Group owns about 7 million sq ft of offices. Swire Hotels conducted a survey 18 months ago among its corporate tenants to measure the frequency of overseas staff visiting Hong Kong, Williams said, and while it was difficult to produce an accurate figure, the indications were that there were "thousands" of visits a month. The group's hotel portfolio includes a 75 per cent stake in the Mandarin Oriental Hotel in Miami, Florida; while in Hong Kong it has a 20 per cent interest in each of the JW Marriott, Conrad Hong Kong and Island Shangri-la hotels at Pacific Place and in Novotel Citygate.

Cross-border commerce between Hong Kong and Guangdong will go telephonic after October 1, when the city's pre-paid calling card suppliers will be allowed to sell their products and services in the neighboring province. The move, which will be on trial for two years, is sanctioned through a memorandum of understanding signed in Beijing on Monday by the three regulators: Hong Kong's Office of the Telecommunications Authority (Ofta), the national Ministry of Industry and Information Technology and the Guangdong Communications Administration (GCA). The accord was part of the Closer Economic Partnership Arrangement (Cepa).

Hong Kong's corporate advocates of clean and green air yesterday joined more than 500 like- minded organizations around the world to sign the Copenhagen Communique - a document that calls for globally agreed emissions targets and policies to fight climate change.

The most aggressive mortgage lenders in the market are likely to scale back special offers following a warning from the Hong Kong Monetary Authority about containing risks, bankers said yesterday.

China: President Hu Jintao urged US President Barack Obama not to impose duties on more Chinese-manufactured goods after a dispute over tires but emphasised hopes for steady economic ties ahead of a Group of 20 leaders’ summit. Hu and Obama met at the United Nations on Tuesday and their talks covered Obama’s decision this month to place a 35-per cent additional “safeguard” tariff on tire imports from the mainland, a move Beijing condemned as protectionism that could cloud global economic recovery. Obama and Hu, along with other world leaders, will meet again in Pittsburgh at the G20 summit of major rich and developing economies on Thursday and Friday. The tire dispute has threatened to contradict any repeat by G20 leaders of previous vows not to resort to trade protectionism as a way to help their economies. But mild-sounding published comments from Hu suggest Beijing does not want the dispute to fuel wider contention with the US at the summit. Hu pressed complaints over the tire duties during his UN meeting with Obama, but stressed a conciliatory theme that the two countries could keep trade friction under control, the Ministry of Foreign Affairs in Beijing reported in a summary issued on its website on Wednesday. “The special safeguard measures the United States has taken against Chinese-made tires exported to the US suits neither countries’ interests, and similar cases should not recur,” the report cited Hu as saying. “China is willing to work with the United States to keep expanding mutually beneficial economic and trade cooperation, and to appropriately handle economic and trade friction through consultations on an equal footing,” Hu added. Obama imposed the tire tariffs under an anti-import surge mechanism known as Section 421, the first time Washington used the mechanism against the mainland, which agreed to the measure as a price of its admission to the World Trade Organization in 2001. Beijing fears the safeguard rule could be used against other products. Hu told Obama that “China-US relations overall are developing in a healthy direction,” and laid out areas with potential for better cooperation, among them energy, climate change, and international disputes, including North Korea and Iran, the report said. Obama, who plans to visit Beijing in November, also discussed with Hu a call for more balanced global growth that will feature at the G20 summit. Some economists believe imbalances between export-driven economies, especially the mainland, and consumption-driven economies, especially the United States, helped set the stage for the financial crisis. Hu did not directly address that issue in the comments issued by the Chinese Foreign Ministry. But he indicated Beijing would have scant patience for criticism of its exchange rate policies, which some critics say have made Chinese exports excessively cheap, exacerbating those international imbalances. Hu said Beijing had actually done the world a favor by not shifting the exchange rate of its currency. “Since the outbreak of the financial crisis, China has maintained the stability of the Renminbi exchange rate in the face of economic hardships, and this was a contribution to Asia and the world,” Hu told Obama, according to the report.

President Hu Jintao addresses the 64th General Assembly debate of United Nations on Wednesday. Hu urged US President Barack Obama not to impose duties on more Chinese-manufactured goods in talks. the Ministry of Foreign Affairs in Beijing reported in a summary issued on its website on Wednesday.

Mao Zedong’s only grandson has become the youngest general in the People’s Liberation Army at age 39, a mainland newspaper said Thursday.

Zhou Enlai greets North Vietnam president Ho Chi Minh in 1960. Zhou Enlai: gentle face of party who shaped the nation's foreign policy. If Mao Zedong represented a face of young Communist China that was tough and unrelenting, Zhou Enlai was the one who softened the angles on that face and brought the country back onto the world stage. From the United States, France and Japan, to "Asian neighbors" and "African brothers", Zhou helped established diplomatic ties between the People's Republic and the world at a most difficult period, when all but several Communist allies recognised Taiwan instead of Beijing as the seat of the Chinese government. Former US secretary of state Henry Kissinger called him "intelligent, knowledgeable and noble" and compared him to French general Charles de Gaulle as one of the world's best statesmen. Many others remarked on his elegance, humility and candidness. The US table tennis team that visited China in 1971 would no doubt remember Zhou's chat with long-haired player Glenn Cowan on the "hippie" movement. Zhou said it was understandable that "youths are dissatisfied with life, and want to seek truth and change, as his own generation did", but, he added, he was not sure whether the hairstyle would suit Chinese youths. Born into a humble scholar family in Jiangsu province on March 5, 1898, Zhou's talents were recognized early when he became the first fully sponsored student at the famous Nankai University in Tianjin . He was later educated in Japan and Europe, and in France he helped set up the Communist Party. On his return to China he became a Politburo member at the age of 28. Already an exceptional negotiator, he represented the party in many important negotiations with the Kuomintang and foreign countries. He grew familiar with foreign diplomats and journalists when he became the party representative in Chongqing - the wartime capital of China. Zhou became premier when the People's Republic was established in 1949 and served in the position till his death in 1976. He also served as foreign minister until 1958, during which he laid the foundations of Chinese foreign policy which are still adhered to today. He declared the five principles for peaceful co-existence in 1953 as the fundamentals of China's foreign policy - which emphasised "mutual respect" and "non-interference". He headed the Chinese delegation to the Geneva conference in 1954 and helped secure a truce in Indochina, and the independence of Vietnam, Laos and Cambodia. At the Bandung conference in Indonesia in 1955, the first large-scale Asia-Africa meeting of many newly independent countries, China announced the basic principles of its Africa policies: support for anti-imperialist and anti-colonialist movements, and aid without political conditions. Zhou's emphasis on African ties was evident throughout his career, highlighted by his visit to 14 African and Arab countries over a four-month period in 1963 and 1964. During that trip he showed his support for Ghana's president who was facing the threat of a coup at the time; and showed sincerity in heated discussions with pro-Western Tunisia, whose president decided to switch diplomatic ties to the PRC the next day. In 1961, Zhou rejected France's request that China abandon support for Algeria's independence movement in exchange for diplomatic ties with the European power. In October 1971, Algeria initiated the resolution that got China back into the United Nations. However, Zhou's best-told tale remains his secret meetings with Kissinger in 1971, which led to former US president Richard Nixon's visit to China in 1972. Kissinger recalled how at that first meeting the two exchanged ideas on international affairs like "university professors, mutually stimulating, and highly enjoyable". He was also impressed by Zhou's flexibility and pragmatism in the wording of the Shanghai Communique, which at Zhou's recommendation avoided the usual diplomatic vagueness, and spelled out the differences between the two countries up front. This turned out to lend strength to the common points, Kissinger said in an interview with the People's Daily in 2006. When Zhou died on January 8, 1976, condolences from leaders around the world lauded him as a "friend" and brilliant diplomat.

One of China’s top movie studios hopes to raise US$91 million by going public on a new Nasdaq-style market – a move that reflects the increasing sophistication and rapid expansion of the country’s entertainment industry. The China Securities Regulatory Commission said in a statement it will on Sunday review Huayi Brothers Media Corp’s application to list on the Shenzhen Stock Exchange’s ChiNext, a trading board for smaller companies that is expected to launch later this year. Huayi Brothers said in a prospectus issued by the Shenzhen bourse on Thursday that it plans to sell shares for a 25 per cent stake in the company, with the goal of raising 620 million yuan (HK$705 million) for movie and TV productions. The amount is tiny by international standards, but shows the country’s rapidly-growing entertainment industry is entering a new stage of development.

China will need almost 4,000 new passenger planes in the next 20 years, more than tripling the size of its fleet, a leading state-owned aircraft maker said. The country would need 3,796 new aircraft by 2028 to keep up with fast- growing domestic demand for air travel, said Aviation Industry Corp of China in its annual forecast on the nation's civil aviation market. AVIC said China had 1,191 passenger jets as at the end of 2008. The additional planes would in crease the passenger fleet to 4,233, with more than 700 new planes to replace retiring aircraft. "Aircraft with about 150 seats, regional planes and cargo planes are going to be focuses of future development," Wang Boxue, a senior researcher at AVIC, said yesterday at a news conference at the China Aviation Expo. The cargo fleet was expected to increase nearly ninefold to 583 units, compared with 68 at the end of last year. AVIC's estimate echoed a similar forecast from US aviation giant Boeing, which said last week China would require 3,770 new commercial aircraft valued at US$400 billion (HK$3.12 trillion) by 2028. The designer of the largest home- produced commercial jet expects strong interest from domestic and overseas buyers when it starts taking orders next year. Commercial Aircraft Corp of China, designer of the C919 jet, is in talks with potential customers and hopes to get about 90 orders in the first half of 2010, the Beijing Morning Post said. "We will cap the number of initial orders because generally the first customers can get price discounts and other favorable conditions," said Chen Jin, marketing manager for COMAC. The company has opened a tendering process for foreign companies wanting to supply the jet's engine, and will pick a supplier at the end of the year. CFM, a joint venture between General Electric and Snecma of France, had submitted a bid. The jet, which seats between 168 and 190 passengers, is due to make its maiden flight in 2014 and will be delivered to clients in 2016.

Aviation Industry Corporation of China, China's top aircraft manufacturer, has announced cooperation plans with Safran and GE.

China's Ministry of Finance said it started to issue 26.8 billion yuan (3.94 billion U.S. dollars) of book-entry treasury bonds Thursday, the 24th batch of its kind this year. The five-year bonds have a fixed annual interest rate of 2.9 percent, said the ministry in a statement on its website. The sales period of the bonds will run from Sept. 24 to 28. Interest will be paid annually, with the principal paid on maturity, namely Sept. 24, 2014. The bonds will be tradable on Sept. 30.

Sept 25 - 26, 2009

Hong Kong: Accounting firm Ernst & Young on Wednesday settled the US$1 billion negligence claim brought against it by the liquidators of its insolvent former client, Akai Holdings. Ernst & Young admitted one of its Hong Kong partners may have tampered with evidence the firm provided to the court in defence of the case. The partner in question, Edmund Dang, has been suspended pending further inquiries. The settlement, for an undisclosed sum, followed explosive allegations last week from the liquidators’ legal team that Ernst & Young staff had falsified and doctored key evidence in the trial. The settlement deal, struck in the early hours of Wednesday, is believed to run into hundreds of millions of US dollars. Akai was a global consumer electronics giant, listed in Hong Kong, which collapsed in 1999 in suspicious circumstances after reporting a US$1.8 billion loss. Its founder, James Ting, was jailed in 2005 for false accounting but released in 2007 after the Court of Appeal found errors in the prosecution’s case. Ernst & Young, which was Akai’s auditor, had been accused of negligence by the liquidators for failing to avert Akai’s spectacular collapse. In a statement released Wednesday morning, Ernst & Young said one of its partners had been suspended following internal inquiries.

Former US vice presidential nominee Sarah Palin speaks to global investors at the 16th annual CLSA Investors' Forum in Hong Kong on Wednesday. In her first trip to Asia, former US vice presidential nominee and Alaska governor Sarah Palin addressed an annual conference of global investors in Hong Kong. The speech by Palin, who has been criticised for her lack of foreign policy experience, could be an attempt to boost her credentials for a possible bid for the presidency in 2012. In the speech, Palin planned to discuss everything from governance to economics and US and Asian affairs, according to the event’s organiser. Palin started off her speech — which was closed to reporters — with a light talk about the links between her state and Hong Kong, then touched later on economic issues. One attendee said she criticised the US Federal Reserve’s massive intervention in the economy over the last year, arguing its actions only exacerbated the crisis. She also praised the conservative economic policies of former US President Ronald Reagan and former British Prime Minister Margaret Thatcher. Earlier, she talked of Alaska’s salmon exports and complimented Hong Kong as a “beautiful city”, according to a second attendee. Both people spoke on condition of anonymity. Former President Bill Clinton, former Vice President Al Gore and former Federal Reserve Chairman Alan Greenspan have spoken in the past at the conference, hosted by brokerage and investment group CLSA Asia-Pacific Markets.

Executive Councillor Ronald Arculli said on Wednesday Chief Executive Donald Tsang Yam-kuen might not appoint all members of a proposed RTHK advisory board. He made the comments after the Executive Council agreed to keep RTHK’s status as a government department and retain its role as a public service broadcaster. Commerce Secretary Rita Lau Ng Wai-nan has said a board of advisers from different sectors appointed by Tsang had been proposed. This was to improve RTHK’s corporate governance. But Arculli noted that members of advisory boards in Hong Kong were not always selected by the chief executive.

Nina Wang Kung Yu-sum would not have given away her kidnapped husband Teddy Wang Teh-huei's legacy to someone else's husband while she firmly believed he was still alive, a judge who must decide on conflicting claims to the late billionaire's fortune heard yesterday. The argument was put by Denis Chang SC, for the Chinachem Charitable Foundation, on the last day of the 40-day hearing into the rival claims by the foundation and fung shui master Tony Chan Chun-chuen. Chang also accused Chan of telling a series of "blatant lies" that filled 100 pages of evidence. While Chan based his claim on his 15-year affair with Wang, the foundation said a 2006 will leaving him the Chinachem empire was a forgery or just a fung shui will - a geomancy procedure to prolong the terminally ill tycoon's life. The court heard earlier that Wang had always believed her husband - kidnapped in 1990 and later declared dead - was alive, and that Chan had performed fung shui rituals to help her find him. In his closing address on Monday lawyer Ian Mill QC, for Chan, said Wang had given the fung shui teacher "gifts of love" totalling HK$2 billion out of a desire to groom him to take over the Chinachem empire. But Chang said yesterday this was incredible. He said Wang would not want to give her husband's legacy to Chan - married with three children - while she had told the whole world she believed her husband was alive. Mr Justice Johnson Lam Man-hon, sitting in the Court of First Instance, reserved his judgment after Chang and Benjamin Yu SC, also for the foundation, finished speaking. Before he rose he said he would issue his judgment "if not by the end of this year ... early next year." Painting a picture of Chan as a man who lived a luxurious life and owned a private jet at one stage, Chang said he doubted that Wang trusted him to run the business, saying their relationship was "monetary". He said it took 100 pages to set out the blatant lies Chan told the court about the making of the alleged will, of which he had to be the author. He noted that solicitor Winfield Wong Wing-cheong, one of two attesting witnesses to the 2006 will, said the document he signed on October 16, 2006, was a partial will that bestowed a specific gift of HK$10 million to a person surnamed Chan. Chang said it would be too "fanciful" to suggest the 2006 will was prepared by Wang when it was such an "un-Nina-like will", in which the form and language were so different from one she executed in 2002 to leave her estate to the foundation. Wang's deeply rooted charitable intent shown in the earlier will did not appear at all in the later document, but Wang's siblings and friends had testified she had wanted to make charitable contributions, including the setting up of a Nobel Prize-like award on the mainland. Wang had never taken any step to revoke the 2002 will, which she had instructed trusted staff member Ng Shung-mo to keep for her, the barrister said. He contended Wang would have known "a homemade will" would prompt another major probate trial - in the wake of one over her husband's estate, which she won - and would expose her confidential relationship with Chan to the public eye.

With the uncertainty gone, RTHK will regain momentum as the government promises to give the public broadcaster a boost by pumping in fresh resources. Proposals included approval for a move to the new site at Tseung Kwan O costing HK$1.6 billion, resuming recruitment of civil servants and developing digital broadcasting. Rita Lau Ng Wai-lan, the secretary for commerce and economic development, said RTHK would gain new impetus after the decision to keep the station as a government department. "As the guardian of much of the collective memory of the community, RTHK is best placed to be the public service broadcaster in Hong Kong." Director of Broadcasting Franklin Wong Wah-kay hailed the decision and said it meant the government approved of RTHK's contribution to history. "The biggest challenge of my job is the uncertainty of RTHK, which has now been removed," he said. "I will take RTHK forward and come up with the new tasks to provide quality broadcasting services." The new RTHK, as Lau said, would be given "sufficient financial, staffing and spectrum resources" to improve its operation, while more co-operation with mainland and overseas broadcasters were expected. In a paper submitted to the Legislative Council, new provisions would include a digital audio broadcasting service, the first in Hong Kong, and a digital TV spectrum for high-definition programs. Lau said a fund of hundreds of millions of dollars would be set up to sponsor NGO broadcasts. As RTHK expanded its scope of service, Lau said relocation of the station from Broadcasting Drive in Kowloon Tong to a new site in Tseung Kwan O would go ahead. She said the old site could not house digital broadcasting. The project, proposed in 2001, was estimated last year to cost about HK$1.6 billion. Lau also said RTHK could resume recruitment of civil servants. Existing civil servants employed under contract terms may be transferred to permanent terms, while non-civil-service contract staff might also apply for vacancies. Among the 779 staff, 451 are civil servants, 15 are departmental contract staff, and 313 are contract staff who were not employed under civil service terms. There are now 68 civil service vacancies.

Macau casino revenues are up 60 per cent year on year after the first 20 days of the month and are on pace to repeat last month's record-setting haul, according to gaming analysts.

It may not be the right time to invest in initial public offerings, billionaire Lee Shau-kee has warned.

Developers are in a race to win approval for ambitious building projects before the government resumes a campaign to lock in tighter planning restrictions over building heights and densities. Opinions on tighter development controls differ widely and an accelerated campaign by the government last year that saw stricter controls introduced in 13 districts won wide applause from green groups and the general public who are opposed to raising building density in Hong Kong, already one of the world's most densely populated cities. But the campaign, aimed chiefly at setting limits to building heights and plot densities to ensure adequate air flow and sunlight for surrounding buildings, also unleashed a flood of objections from developers and homeowners. Wong Nai Chung was among the most controversial cases, triggering 441 objections and putting the brakes on the policy. As a result, only Chek Lap Kok, Mid-Levels East and Ma On Shan have had building height restrictions imposed so far this year. The slowdown provided a window of opportunity for developers to push through individual approvals before the government tightened district-wide controls, said a surveyor. Dennis Law Sau-yiu, the managing director of small development company Yu Tai Hing, said: "The private sector can't do much about the policy. We can only try to get approvals for the building plans of our projects as soon as possible before the government imposes development controls." Where district-wide restrictions have not yet been spelled out in an outline zoning plan, individual approvals may be secured from the Buildings Department. Swire Properties is among those that found this way to avoid height restrictions. It won approval from the Buildings Department in 2007 for a redevelopment project at 25-35 Seymour Road in Mid-Levels to build a 52-storey residential building. A year later, under an outline zoning plan, the Planning Department issued a directive that would have restricted Swire to constructing a 30-storey building on the site. But armed with its approval from the Buildings Department, it escaped this provision. But this route was not available on all sites, Law said. "We cannot be sure in the beginning about how many old buildings we may acquire and how big the site may be. So how can I produce a building plan? And if I wait until I have acquired sufficient development sites before I apply for a building plan, the government may have imposed development controls by the time I am ready," he said. Edwin Leong, the managing director of another developer, Tai Hung Fai Enterprise, agreed that trying to rush building plans through the approval process with the Buildings Department was the only way to beat the tide of tighter controls. But this would not be easy, he added. "It is difficult to acquire development sites in an urban area. Acquiring old buildings is one of the ways for developers to replenish their land banks. But securing a sufficient number of units in old buildings is a painful process and then we may still have to face tighter development controls when we finish," Leong said. Meanwhile, both developers and the government must deal with the mounting opposition to high-density housing projects from the public and green groups. MTR Corp faced the wrath of action group Green Sense when it invited development tenders for its residential project at Che Kung Temple Station in Sha Tin last year. Green Sense said the project design would block air flow and views for existing residents in the area. It also lobbied the Town Planning Board to reduce the development plot ratio of MTR's Tsuen Wan project from five to three and the number of towers from seven to four last year. Neither of the objections was upheld, but they provided the MTR with a foretaste of the mounting opposition to high-density living in Hong Kong and this year it hastened to secure approvals from the Buildings Department for three other development projects already on the drawing board and not yet subject to outline zoning plans. The rising density of Hong Kong's residential towers prompted Katty Law Kar-ling, who has lived in Mid-Levels for 30 years, to set up the Central and Western Concern Group with several neighbours in 2005 after the government put the former Hollywood Road Police Married Quarters on the land application list. "A lot of tall buildings have been built in the district over the last 10 years. The redevelopment projects blocked views and worsened traffic jams. We believe the government should keep the former quarters for community use rather than residential use. The district lacks open space," she said. Other residents, however, are more concerned about higher values for their old apartments. Alex Lo, a resident of an old building at Seymour Road, received an offer from a developer to buy his flat for HK$11,000 per square foot last year. While he and other residents were considering the deal, the government imposed a height limit on the site. "We haven't heard another word from the developer and the market price of my flat is HK$6,300 per square foot only," Lo said.

China: Gome said on Wednesday that it plans to issue 2.05 billion yuan (HK$2.33 billion) in convertible bonds, with the proceeds to be used for the redemption and repurchase of convertible bonds and general corporate purposes. The electronics retail chain operator said the 3 per cent bonds due 2014, with an option to issue an additional 340 million yuan in bonds, were convertible into 955.92 million shares, or 5.97 per cent of its enlarged share capital, at HK$2.838 each, a 29 per cent premium over the latest closing price. Its shares were down 2.3 per cent at HK$1.94 in early trade.

President Hu Jintao addresses the summit on climate change at the United Nations in New York on Tuesday. In his speech Hu promised, for the first time that the mainland would pursue notable curbs in carbon emissions on a measurable scale. President Hu Jintao on Tuesday promised to put a “notable” brake on the country’s rapidly rising carbon emissions, but dashed hopes he would unveil a hard target to kick start stalled climate talks. The leader of the world’s biggest emitter told a United Nations summit that the mainland would pledge to cut “carbon intensity,” or the amount of carbon dioxide produced for each dollar of economic output, over the decade to 2020. His promise is a landmark because Beijing had previously rejected rich nations’ demands for measurable curbs on its emissions, arguing that economic development must come first while millions of its citizens still live in deep poverty. “It’s still a very significant step – a Chinese leader standing on that platform and saying China will make a mid-term carbon intensity target,” said Yang Ailun of Greenpeace China. “We should think of this as a clear signal that China wants to de-couple carbon emissions from economic growth,” she said. But without a firm figure attached, the offer to reduce emissions intensity may not be enough to rekindle faltering talks on a new global deal to tackle climate change. Hu said only that carbon intensity would come down “by a notable margin by 2020 from the 2005 levels,” which still leaves Beijing and other major powers room for manoeuvre before final negotiations in Copenhagen in December. “I didn’t hear new initiatives so much,” said Todd Stern, special envoy on climate change in the United States, one of the most vocal critics of the mainland’s emissions policy. “It depends on what the number is and he didn’t indicate the extent to which those reductions would be made.” But Xie Zhenhua, Beijing’s top environment official, later told reporters the mainland would soon unveil a target, based on projections that by 2020 it will double its use of renewable energy and dramatically cut energy use per dollar of GDP. “After further study and discussion, we should be able to announce a target soon,” he said in New York. Hu’s choice of a global stage to answer rich nation demands that China take stronger, verifiable steps to control carbon dioxide output was a sign of how rapidly climate change has risen up the agenda of leaders in Beijing. The country’s geography has made it particularly vulnerable to the effects of a warming world, from droughts to flooding and rising sea levels, adding to their sense of urgency. Nobel laureate and former US vice-president Al Gore praised Beijing for “impressive leadership” and said Hu’s goals pointed to more action. “They are very important and we’ve had... indications that in the event there is dramatic progress in this negotiation, that China will be prepared to do even more,” he said. Hu also made clear, however, that the mainland had high expectations from the rest of the world, repeating a long-standing request for more support in moving away from dirty growth. Backed by India and other developing nations, Beijing argues that rich nations emit more per person and enjoyed an emissions-intensive industrialisation, so they have no right to demand others do differently – unless they are willing to pay for it. “Developed countries should take up their responsibility and provide new, additional, adequate and predictable financial support to developing countries,” Hu said. Hu also repeated well-established targets including boosting the portion of renewable energy in the mainland’s power mix, to 15 per cent by 2020, as the country strives to move away from dirty coal. Beijing’s worries about energy security and severe pollution have already prompted the introduction of an energy intensity target from 2006. A carbon target should speed up a planned boost in renewable sources like wind and hydropower. It will also appeal to those in the financial industry who hope to see the mainland set up a carbon trading scheme, because Beijing will be forced to step up its ability to measure output of the gasses, which is key to any market in credits to emit. But while carbon intensity is a financially viable way to contain emissions growth, if economies expand too fast, even massive improvements in efficiency might not be enough to contain dangerously high output of greenhouse gasses.

President Barack Obama meets with President Hu Jintao in New York on Tuesday. Obama told Hu that the US remained "firmly committed" to free trade, despite tariff disputes about tyre and poultry imports. The US President also made a forceful presentation on Iran's nuclear program and raised the issue of North Korea's atomic ambitions.

Mainland's central bank governor Zhou Xiaochuan said on Tuesday that China's financial system has gained in recognition and a bigger role for the country on the global stage is justified.

Visitors look at Geely's Geely GE model at the Shanghai International Auto Show held earlier this year. On Wednesday, the automaker said it would raise HK$2.59 billion by issuing convertible bonds and warrants to an affiliate of Goldman Sachs.

Six weapons systems will make their debut among the 52 types of ordnance in the military parade that forms a key part of the National Day celebrations on October 1. The People's Liberation Army would show its new generation Jian-10 fighter jets, ZTZ99 main battle tanks, JL-2 Julang CSS-N-4 intercontinental missiles, KJ series early-warning aircraft, Zhi-10 armed helicopters and QBZ-95 variant assault rifles during the parade, China News Service said yesterday. It said as many as 15 J-10s and a team of the helicopters would fly over Tiananmen Square, and other new weapons would be among the 56 parade teams on the ground. The report came as Defence Minister Liang Guanglie said that many of China's sophisticated weapons systems now matched, or were close to matching, the capabilities of those in the West. He made the comments in a rare interview posted on the ministry's website on Monday. "This is an extraordinary achievement that speaks to the level of our military's modernization and the huge change in our country's technological strength," Liang said. The PLA has tried to maintain a low profile in the past even though overseas China watchers have stressed that the gap with the militaries of Western countries has narrowed. Beijing-based retired PLA general Xu Guangyu said Liang's speech was aimed at Western countries' accusations of "low transparency of the PLA's development, unclear strategic intention and double-digit growth budget".

China's Xi'an Aircraft Industry (XAC) will deliver the first set of fully equipped wings to Airbus' A320 aircraft final assembly line in north China's Tianjinin the first quarter of next year.

Sept 24, 2009

Hong Kong: Consumer prices in Hong Kong fell by 1.6 per cent in August compared with the same month a year earlier, figures released on Tuesday showed.

A model shows off a cushion-cut pink diamond set in a ring expected to fetch up to US$7 million. Far rarer than its colorless sibling, the pink diamond has been worn by royalty, used by Ben Affleck to woo Jennifer Lopez and adorned the fingers of many a Hollywood celebrity. With only a handful of the pink gemstones produced each year, they command significantly higher prices than colorless diamonds and are considered by some to be the greatest store of wealth - all the more so given that the prices of colorless diamonds fell by around 10 per cent when the global economic meltdown began a year ago. Representatives of mining giant Rio Tinto are in town to sell a small haul of pink diamonds from its Argyle mine in northwestern Australia at this week's jewellery and gem fair - which organizers say is the world's biggest such event. The 43 pink diamonds it is offering for sale weigh a combined 34.74 carats and range from the heart-shaped 2.61-carat Argyle Amour to a 0.46-carat Princess-cut stone. The gems have also been seen by jewellers, collectors and other customers in Mumbai, Sydney and London. "The response from clients has been quite good," Josephine Archer, Rio Tinto's business manager for Argyle pink diamonds, said. The company refuses to disclose the size of winning bids for its pink diamonds, or who the bidders are. For a guide to the kind of prices they can command, auction house Christie's estimated that a rare, five-carat, cushion-cut pink diamond it will sell in Hong Kong on December 1 will fetch between US$5 million and US$7 million. The diamond was set in a ring by renowned jeweller Graff Diamonds. Fancy colored diamonds come in many hues, but pink is one of the rarest and most desired colors. Gemologists are still unable to understand fully what makes a diamond pink, but the coloring is believed to result from a distortion in the gem's molecular structure. The rarity of pink diamonds is evident in the relatively small number of gems included in Rio Tinto's 25th annual global diamond sale. The Argyle mine produces 50 carats of pink diamonds in an average year. Archer said fewer gems had qualified for inclusion in this year's sale because the quality bar had been raised. The largest pink diamond sold in Rio Tinto's annual sales was a 4.15-carat stone bought in 2001 following the September 11 terrorist attacks in the United States. The Argyle mine, which supplies about 90 per cent of the world's pink diamonds, is expected to produce fewer of them in the next few years as a result of cuts in output. However, Archer said production should briefly return to previous levels by 2013. The mine is nearing the end of its useful life, and could be worked out by 2018.

Secretary for Commerce and Economic Development Rita Lau Ng Wai-nan speaks at a press conference on RTHK's future on Tuesday. The Executive Council on Tuesday agreed to keep RTHK’s status as a government department and retain its role as a public service broadcaster. Secretary for Commerce and Economic Development Rita Lau Ng Wai-nan told reporters that a recent survey showed overwhelming public support for the broadcaster. “We have decided to accept the community’s clearly expressed views and retain RTHK as a government department to continue its role as public broadcaster,’’ Lau said. She said the government would issue a charter covering the main aspects of RTHK’s operations. “The charter will set out the relationship between the government and the new RTHK to ensure its editorial independence. A board of advisers from different sectors would also be appointed to help RTHK’s corporate governance. Lau said an existing recruitment and promotion freeze on RTHK staff would be lifted. The government also plans to shortly launch a two-month public consultation exercise on the future role of the broadcaster. The future of RTHK had been uncertain for some time. Staff had protested the freeze on pay and promotions. The freeze had followed a government-commissioned report on public-broadcasting policy in 2006.

The late tycoon Nina Wang, who died in 2007. Wang's alleged lover has been telling deliberate lies in defending his claim to her entire estate, a lawyer said on Tuesday. The remarks came during a sensational courtroom battle over the multibillion-dollar estate of Wang that has gripped Hong Kong for months.

Chief Executive Donald Tsang Yam-kuen participates in Tuesday's Car Free Day by walking from Government House to St. Joseph's Catholic Church to attend mass. After mass, he returned home and then walked to work at the Central Government Offices in Central.

News Corp’s Dow Jones & Co plans to shut down the Far Eastern Economic Review, its storied Hong Kong-based monthly magazine struggling with losses as readers and advertisers move to the internet. The 63-year-old magazine, which has covered business and politics in the region since second world war, will shut down in December, Dow Jones said. In 2004, the publisher of The Wall Street Journal switched the format of the magazine to a monthly from a weekly, cutting 80 jobs, or 10 per cent of Dow Jones’ staff in Asia at the time. “The decision to cease publication of the Review is a difficult one made after a careful study of the magazine’s prospects in a challenging business climate,” said Todd Larsen, chief operating officer at Dow Jones Consumer Media Group. Dow Jones said Hugo Restall, the Review’s editor, will remain a member of The Wall Street Journal’s editorial board. Current Review subscribers will be offered a one-year subscription to the Asian online edition of the Journal. Meanwhile, Dow Jones is investing in other resources in the region: it has expanded local content from Asia in The Wall Street Journal print and online editions, expanded its Chinese online edition and is launching a Japanese-language website this fall.

China: China is on track to surpass its key target of eight per cent economic growth this year, the Asian Development Bank said on Tuesday, boosting its outlook for the world’s number three economy. The ADB raised its growth forecast to 8.2 per cent this year and 8.9 per cent next year, saying the central government’s efforts to jump-start the export-driven economy in the midst of the worldwide downturn had borne fruit. But the Manila-based bank warned that the country must not scrap its stimulus spending too soon, and that a flood of bank lending must not be diverted into “unproductive purposes”.

Japan's Prime Minister Yukio Hatoyama, left, shakes hands with President Hu Jintao before their bilateral meeting at the Waldorf Astoria Hotel in New York on Monday. President Hu Jintao met with Japan’s new Prime Minister Yukio Hatoyama in New York late on Monday ahead of a series of high-profile international meetings. The meeting is Hatoyama’s first face-to-face encounter with another head of state since the inauguration of his centre-left government after he swept to victory in last month’s elections. The leaders of Asia’s top two economies sat down for closed-door talks in a hoteland Hatoyama proposed the joint formation of an EU-style East Asian community, officials said. In the meeting with Hu, Hatoyama said he intends to push for his vision of an East Asian community designed to unify the region, possibly under a single currency. “I told [Hu] that I would like to form an East Asian community by overcoming differences,” including a dispute over exploitation rights for gas fields lying near islands the two countries claim in East China Sea, Hatoyama told reporters. Hu stopped short of agreeing to the proposal but said he wants to “make it a peaceful and friendly sea” by tackling sticking points in the dispute, a government official said. Hatoyama’s center-left Democratic Party of Japan ended more than half a century of almost unbroken conservative rule in a sweeping election victory last month. Last week Premier Wen Jiabao congratulated his new Japanese counterpart, indicating the wish to develop relations between their nations “from a new historic threshold,” state media reported. At the UN general assembly, Hatoyama plans to promote his pledge to cut greenhouse gas emissions by 25 per cent from 1990 levels by 2020, and to help poor countries combat climate change. But the spotlight may fall on the mainland, which according to some measures has surpassed the United States as the top emitter of greenhouse gases blamed for a dangerous rise in global temperatures.

China International Travel Service Corp has set the price range for its Shanghai IPO, aiming to raise up to 2.6 billion yuan (HK$2.96 billion) for an expansion, adding to a slew of fund-raisings that have already unsettled the country’s stock market. Beijing-based China Travel, the country’s top tourist agency, priced its 220 million A shares denominated in yuan, or 25 per cent of its expanded capital after the initial public offering, in the 10.80-11.78 yuan range, it said in a statement published in the official Shanghai Securities News on Tuesday. The range would allow China Travel to raise 2.4-2.6 billion yuan, much more than the 1.7 billion yuan it had previously said it intended to raise, but the high price earnings (PE) ratio reflected in the pricing may dampen demand for its shares. China Travel said in the statement its A-share price range represented 45 to 49 times last year earnings on a fully diluted base after the IPO.

Trading firm Noble Group said on Tuesday that mainland’s sovereign wealth fund CIC bought a 14.5 per cent stake in the firm for US$850 million, giving mainland greater exposure to global commodities markets. The deal follows on from a cooperation pact between CIC and commodity trader Glencore, as Beijing pursues resource firms to give it trading leverage and access to the raw materials needed to feed its economy. Noble is the only major global commodity trading house with a public listing, compared to privately-held but bigger rivals such as Glencore, in which sources said CIC has concluded a co-operation agreement. Noble said in a statement it had agreed to sell 573 million shares to China Investment Corporation at S$2.1137 per share (HK$11.55), an 8 per cent discount to its last traded share price of S$2.30. The placement consists of 438,000,000 newly issued shares by Singapore-listed Noble and 135,000,000 shares from trusts associated with the interests of Noble founder and CEO Richard Elman, Noble said. “The newly issued shares will provide the Noble Group with additional capital to pursue strategic investments in key agricultural markets globally,” Noble said in the statement. Trade in Noble’s shares have been halted for the past week, when it said it was in talks with an unidentified investor for a major stake. The small direct stake by CIC in Noble means the wealth fund is likely to play a hands-off role in the running of its business, while maintaining a role as financial investor. But the pact with Glencore will help CIC get more deeply into commodities trading, industry watchers and analysts say. The placement is subject to approval of the respective boards of directors of Noble Group and CIC and final legal documentation. Merrill Lynch acted as placement agent to Noble and JPMorgan advised CIC. Founded by Richard Elman in 1987 with US$100,000 in savings, Hong Kong-based Noble has expanded into a global empire that includes operations from sugar and ethanol in Brazil, soy crushing facilities in mainland and coal mines in Australia. Noble has more than 100 offices in over 40 countries across five continents. It has more than 4,000 customers worldwide. The move was seen as a step in succession planning for Elman who is 69. Noble said the stake sale did not reduce CEO Elman’s commitment to the firm. Noble’s shares have more than doubled this year, beating the benchmark Straits Times Index which is up by half.

Photo taken on Sept. 21, 2009 shows the platform of Yuanmingyuan Park station on Subway Line 4 in Beijng, capital of China. Construction of the 28.2-kilometer-long Subway Line 4 entered the test phase recently. It will start trial operation before China's National Day on Oct. 1st.

Photo taken on Sept. 20, 2009 shows the Axis and China Pavilion (red) in the World Expo Park in Shanghai, east China. Construction of "one axis and four pavilions", the Axis, China Pavilion, Theme Pavilion, Performing Arts Center and Expo Center, all entered internal construction phase recently. As the landmarks of the Expo Park, "one axis and four pavilions" will become permanent buildings in post-Expo Shanghai.

Sept 23, 2009

Hong Kong: Donald Tsang Yam-kuen will walk to the office today and senior officials will use public transport to show their support for the fight against climate change, as Hong Kong participates in its first World Carfree Day.

Cantopop singers, celebrities, egg tarts and milk tea will be promoted as Hong Kong's hallmark consumer products in an unprecedented trade show in Beijing next month designed to spur the slowing economies of both cities. Lowering entry barriers to the domestic consumer market, Beijing for the first time will host an eight-day show featuring about 300 Hong Kong home-grown brands and products. It will serve as the core of an annual conference - the Beijing-Hong Kong economic co-operation symposium - on October 29 and 30. Beijing's trade promoter, Invest Beijing, through agents, is in advanced talks with various Hong Kong firms, according to people familiar with the talks. These include Emperor Entertainment Group, which runs entertainment businesses, financial services companies and property development firms, and Lai Sun Group, which invests in celebrities and real estate and produces garments. Beijing municipality deputy secretary-general Lu Yong said yesterday that 230 investment projects worth US$15 billion in the high-technology, financial services, city transport, tourism and cultural and innovative industries would be up for grabs for Hong Kong investors. Citing co-operation with five Hong Kong trade organisations such as the Hong Kong Trade Development Council, the Chinese Manufacturers' Association and the Federation of Hong Kong Industries, Lu said some deals would be signed during the conference. "Whether debating on economic issues or cutting deals, the symposium will break new ground in mutual co-operation," he said. "It also means joint efforts in tackling the global financial crisis." The annual conference comes at a time when Hong Kong exporters and manufacturers are seeking growth in the domestic market while Beijing is drumming up consumption to combat the economic slowdown. Invest Beijing deputy director Wang Hongzhuan said Hong Kong brands - fashion, handbags, home electrical appliances, food and health-care products, toys, watches and jewellery - would be showcased. "These are popular among Beijing consumers," Wang said. The show will be held at an exhibition centre converted from the former media centre of the Olympic Village. It will allow Hong Kong firms to tap northern mainland markets such as Dalian, Shenyang and Changchun, and will feature Hong Kong's popular afternoon tea - lai cha - egg tarts and theme parks.

Yahoo's Alfred Tsoi and John Kremer say they will work hard to enhance the user experience for Hong Kong's internet community. Yahoo Hong Kong has overhauled its free e-mail service, the city's most popular with an estimated 1.6 million users, to add more online social-networking features and custom applications. The redesign and mail enhancements, which will be available to users from the end of this month, include a bigger attachment size limit for photographs and files to 25 megabytes, up from 10MB. "The major improvements in design, photo-sharing and social features will help Hong Kong users connect with the people and information that matter most to them," said John Kremer, the vice-president at Yahoo Mail. The Chinese-language Yahoo Hong Kong's mail site has a streamlined design and features the Application Box. This allows users to better manage e-mail folders, personalize their calendar and notepad and add third-party applications, programs created by outside developers approved by Yahoo Mail. Common applications used include photo-hosting sites Flickr and Photobucket and online payments service PayPal. Social-networking links added in the new Yahoo Mail format include Twitter and YouTube. "Yahoo Auctions and Yahoo Movies will be the first batch of our apps to be made available locally," said Alfred Tsoi, the managing director at Yahoo Hong Kong.

Backed by big-name cornerstone investors, the institutional tranche of Wynn Macau's HK$12.6 billion public offering was oversubscribed by up to five times when it started bookbuilding yesterday. The casino operator attracted six high-profile investors who poured US$250 million (HK$1.95 billion) to subscribe for shares with a six-month lock-up period. They include Lifestyle International (1212) managing director Thomas Lau Luen-hung who subscribed for US$50 million worth of shares and Sun Hung Kai Properties (0016) non-executive director Walter Kwok Ping-sheung who is seeking US$20 million worth. Wynn Macau plans to offer 1.25 billion shares at HK$8.52 to HK$10.08 each, which is 29.4 to 34.8 times its estimated earnings per share of 29 HK cents this year. Wynn Macau's net income slumped 34.8 percent to HK$903.7 million for the first half ended June 30 as Macau's gaming industry contracted. Meanwhile, Ausnutria - a producer of pediatric milk formula - plans to float 300 million shares at HK$3.6 to HK$5 apiece.

Pork retailers are under increasing pressure to raise prices as the surge in wholesale prices shows no signs of abating. Two vendors said they paid about 10 percent more for carcasses in the past month, with the price increasing from HK$990 per 100 catties in the summer to HK$1,100 over the past few weeks. Wholesale prices are expected to rise by another 10 to 20 percent, a pork traders' association has warned. The warning came as Agricultural Ministry officials in Beijing said they are aware of increases in the price of pork and eggs over the past three months. Pork prices have registered an increase of 30 percent in the past four months, but are still 16 percent lower than year-ago levels. It is a similar story for eggs. A ministry spokesman said the increase might be related to the National Day celebrations and other seasonal factors. There is no shortage of farm produce, he added. Vendor Chan Chiu-kwan at Sam Po fresh meat shop in Bowrington Road Market, Causeway Bay, said wholesalers blamed the latest 10 percent increase on a fall in the supply of pigs. "I am afraid of losing customers so I have not yet increased the retail price. "But if the situation continues, I may add HK$2 to HK$4 per catty." Chan is now selling pork at HK$28 per catty. Butchers at Shau Kei Wan wet market said pork prices have risen by 10 to 20 percent in the past few weeks. Two stallholders there said the wholesale price for eggs rose 5 to 6 percent to HK$340 for 360 eggs. Shoppers told The Standard they have been buying less pork after noticing the price rise in the past few weeks. A 52-year-old woman said she will buy more fish instead. Pork Traders General Association deputy chairman Hui Wai-kin warned that pork wholesale prices will rise a further 10 to 20 percent this winter. Mainland prices have gone up 20 to 30 percent since the end of July because of a short supply, but demand is unchanged, he added. "Demand for pork will naturally increase in winter, so prices will have space to rise 10 to 20 percent and will not fall during this period." A Food and Health Bureau spokeswoman revealed that average auction prices had increased from HK$918 in June to HK$984 per 100 catty yesterday. The government will continue to monitor the supply and auction price of live pigs and release daily price information to enhance market transparency. But the pork price is market- oriented, the spokeswoman added.

The government has dropped the idea of setting up an independent public-service broadcaster and will announce as early as today that RTHK will remain a government department. The decision - which the administration will brief the Executive Council about today - puts an end to uncertainty about the publicly funded broadcaster's future. Several people familiar with the government's position said RTHK would now be allowed to resume recruiting staff on civil service terms, ending a freeze that has lasted several years. The government set up a committee three years ago to review public-service broadcasting. In 2007 the committee, comprising industry professionals, recommended creating a new, independent public-service broadcaster but said RTHK was not suitable to be turned into such a body. Asked yesterday about RTHK's future, Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan said the government would make an announcement at an appropriate time. A spokeswoman for RTHK said the broadcaster had no knowledge of the expected announcement. Chief Executive Donald Tsang Yam-kuen announced in January last year that the government would postpone the release of a consultation paper on public-service broadcasting, because the issue was "sensitive and complex". Tsang argued at the time that there was no urgency for the review and the government needed more time to consider it. He did not spell out a new timetable for consultation. The 80-year-old station has long been under pressure from Beijing loyalists who have wanted to end its critical reporting of the administration's actions and turn it into a government mouthpiece, while activists have sought to turn the government department into an independent public broadcaster with safeguards on its editorial freedom.

An artist's impression of the National Day fireworks. Anyone unsure which anniversary the People's Republic of China is celebrating on October 1 will have no doubt after seeing Hong Kong's fireworks display to mark the event. After a series of scenes emphasising patriotic themes in bursts of brilliant colour, the Chinese characters for "China 60" will sparkle 60 times over Victoria Harbor. To drive the point home, the show will end with a 60-second crescendo, said the Chinese General Chamber of Commerce, which is sponsoring the event. In all, the HK$3 million show will last 23 minutes and consist of nine acts using 31,888 fireworks. Each act will centre on a theme, such as "the pride of China", "blossoming lotus", "pearl of the Orient" and "Hong Kong spirit". Wilson Mao Wai-shing, in charge of the technical side of the show, said the designers had worked to avoid the common problem of fireworks being obscured by smoke from previous explosions when there was little wind. "We designed this show in a way that would let fireworks explode in different places at different times, rather than everything in the same place." Patriotic songs such as The Silk Road and the Yellow River Concerto will be played - with a synchronised broadcast on RTHK Radio 4 so the audience can hear the music over the explosions. "[The mainland's] economic clout has been picking up without pause," chamber chairman Jonathan Choi Koon-shum said. "Through the show, we hope to show our excitement at witnessing the country's flourishing prosperity (SEHK: 0803, announcements, news) and our gratitude to the country for its continual economic support." He said he hoped the weather would be clear, but if it turned out to be bad the show would be put off to the following night.

A courier delivers documents to the court for final submissions in the Nina Wang probate case yesterday. The judge hearing the probate case over the fortune of late tycoon Nina Wang Kung Yu-sum has questioned why she would have given fung shui master Tony Chan Chun-chuen more than HK$2 billion in cash if she meant to leave him the whole estate. The query was raised by Mr Justice Johnson Lam Man-hon when lawyers for the rival claimants - Chan and the Chinachem Charitable Foundation - began their closing submissions in the Court of First Instance yesterday. Chan, who has said he had an intimate affair with Wang from 1992 until she died of cancer in 2007, claims she made a will on October 16, 2006, leaving him everything, out of love. But the court also heard that Wang had made cash payments of HK$688 million to Chan on three occasions in 2005 and 2006. "If she always intended to give him everything, why would she pay him?" asked Lam, while saying he would remain open-minded until he had concluded the case. Ian Mill QC, for Chan, said the payments were gifts made out of true love, which he added had been belittled by Wang's family with bitterness and personal animosity. He said Wang had wanted to help Chan become a credible and wealthy businessman to pave the way for him to join her Chinachem property empire. Mill also said Wang, who he described as a fighter who wanted to live a long life, had not anticipated she would die of the cancer that killed her. "She knew the problem of probate; she knew a will leaving everything to [Chan] did not mean that he would get possession of it," he said. As the lawyer continued his speech, the judge raised another question about the handling of a will Wang executed in 2002 leaving all her estate to the foundation. Lam said the tycoon had asked an employee, Ng Shung-mo, who was one of the attesting witnesses to the 2006 will, to keep the 2002 will but had not asked him to do so with the latter.

The mayor of Kaohsiung, Taiwan's second-largest city, has found herself in the firing line over the controversial screening of a documentary about Uygur activist Rebiya Kadeer. While the ruling Kuomintang accused Chen Chu yesterday of inflaming cross-strait tensions, the pro-independence camp criticised her for kowtowing to Beijing by pulling the film from the October 16-29 film festival, and showing it today and tomorrow instead. In what appeared to be a compromise, Chen - facing strong protest from the mainland and heavy pressure from local tourism operators - decided to show the controversial documentary for just the two days. There would be four screenings - one for the media and three for the public - free of charge, with a maximum of 115 viewers each time. But that arrangement is unacceptable to Kaohsiung tourism operators, who complained that mainland tourists were cancelling their travel plans to the island. In a joint statement yesterday, they demanded that the city not screen the film. "It is not a matter of dignity but a matter concerning the livings of numerous people who depend on the tourism business," Tseng Fu-teh, chairman of the Kaohsiung Tourism Association, said. He said that with the mainland's "golden week" National Day holiday starting on October 1, operators in Kaohsiung - including more than 200 hotels, 300 travel agencies, tour bus companies, restaurants and commercial centres - needed the business from tourists. Operators in Kaohsiung have recently reported the cancellation of thousands of hotel rooms and other reservations by mainland travel agencies due mainly to the decision to screen the film, titled The 10 Conditions of Love. The Taiwan Affairs Office in Beijing, though yet to mention Chen, had twice protested against the city's decision to show the documentary at the film festival. Beijing has reportedly sought to engage bigwigs of the Democratic Progressive Party, including Chen and former Vice-President Annette Lu Hsiu-lien, to pave the way for more interactions with the DPP. Chen emphasised yesterday that the three public screenings must go ahead as scheduled. "It would hurt the image of the city in upholding freedom and human rights if it stopped screening the film because of the protest from China," she said in a city council meeting. Kuomintang city councillors said Chen was "playing with fire" by showing the documentary following her invitation to the Dalai Lama to visit. "Don't you know that you are stoking cross-strait tension and hurting the local tourism business?" councillor Mei Fu-hsing asked, referring to Beijing's wrath over what it sees as the pro-independence camp in Kaohsiung promoting Tibetan and Uygur independence. But her decision to retract the documentary from the film festival and show it on the sidelines also prompted an uproar from the hardline pro-independence camp. Guts United, Taiwan, said: "She not only betrays the trust of Taiwanese people who support her, but also betrays the freedom and human rights values she has long advocated." It said it would invite Kadeer to visit. DPP lawmaker Huang Wei-che said people in Taiwan had the right to choose what movies they want to watch and show, and Chen "must clearly explain why she made such a decision". Ex-DPP lawmaker Lo Wen-chia, a former aide of convicted ex-president Chen Shui-bian, said he would strive to arrange for the documentary to be shown for five days in Taipei from the start of the mainland's National Day.

Former US vice-presidential nominee Sarah Palin is expected to speak about US foreign policy and the mainland in her first keynote speech outside North America, Hong Kong organisers said on Monday. Palin, mocked during last year’s presidential campaign for her lack of experience in foreign affairs and for her verbal gaffes, is due to address hundreds of financial big-hitters at the CLSA Investors’ Forum on Wednesday. “We have asked her to address US foreign policy, to discuss her views on governance, healthcare, and of course, China,” Jonathan Slone, chief executive officer of the Asia-focused brokerage told reporter. Palin was chosen to speak since she’s a possible Republican candidate in the next US presidential election and because of her influential role in politics, he said. But CLSA, an arm of French bank Credit Agricole, decided to close Palin’s session to the media after the former Alaska governor indicated that she would have to adjust her speech if reporters were present, Slone said. “We are very pleased with her attitude towards us. Sarah could have come here and made a media circus,” he said. “But we said to her, ‘Look, we want you to give the most information to our clients. Do you feel comfortable doing that with the press around?’ “She said, ‘If I do that with the press in the room, I will have to say different things.’” Slone said they decided to close the event to media because the primary objective of the annual forum was to let their clients get hold of as much industry-related information from the speakers as possible. He said they had had many closed-door sessions in previous years for the same reason. Past speakers at the annual CLSA event include former US president Bill Clinton, Clinton’s vice-president Al Gore and ex-Federal Reserve chief Alan Greenspan.

World Health Organization director general Margaret Chan Fung Fu-chun (right) and Secretary for Food and Health Dr York Chow Yat-ngok attend the opening ceremony of the 60th Session of the World Health Organization (WHO) Regional Committee for the Western Pacific at the Hong Kong Academy of Medicine, in Aberdeen. World Health Organization (WHO) director-general Margaret Chan Fung Fu-chun said on Monday the global development of swine flu vaccines was proceeding well. The Hong Kong-born Chan is a former director of the Hong Kong Department of Health and is the first Chinese national to head a major UN agency. Speaking at a regional WHO meeting in Hong Kong, Chan said “The development [of vaccines] is on track. Worldwide there are about 25 companies making vaccines. They are gradually coming out with their production.’’ “Some developing countries are also moving in developing their own vaccines and clearly China is one of these examples,” added Chan. Chan said she expected companies around the world to produce some three billion doses of vaccines within the coming year. She said WHO expected to see an outbreak of swine flu in the northern hemisphere as winter approached. She also warned that high-risk patients, such as the elderly, pregnant women, overweight people or those with asthma would be more vulnerable to the virus, local radio reported. Opening the WHO meeting earlier on Monday, Chief Executive Donald Tsang Yam-kuen said Hong Kong would remain vigilant combating swine flu.

Some Macau casino officials forecast on Monday that this Golden Week holiday could see monthly casino revenues soar to a record high as Beijing started relaxing Macau visa rules. Mainland has quietly begun relaxing restrictions for its citizens from Guangdong travelling to Macau, leading to a strong showing for casinos so far this month and big hopes for October, two sources said on Monday. Alarmed that some residents of Guangdong province were gambling too much in neighboring Macau, mainland last year imposed a new rule limiting them to two trips per year to the former Portuguese enclave. But the authorities began easing up on the rule as early as two months ago, and noticeably loosened the restriction at the start of this month, said top executives at two of the market’s six casino licensees, speaking on condition of anonymity due to the sensitivity of the situation. “The latest version is [they can travel to Macau] once a month out of Guangdong,” said one of the executives. “Gaming revenues for the first two weeks of the month have been good.” The other executive forecast that October – a high travel season during Golden Week holiday at the beginning of the month – could see monthly casino revenues soar to a record high, in part due to the relaxing visa rules.

China: China has become the country with the strongest purchasing power of luxury cars in the world. Many luxury cars are eager to enter the Chinese market. The latest statistics show, the BMW Group's global sales fell 19%, but its sales in China grew 26%. In addition, while the financial crisis causes demand for luxury brands decline in Europe and the United States, the Chinese luxury market is still getting better. At present, China's luxury consumption accounts for 25% of the global market and for the first time it surpassed the United States to become the world's second-largest luxury goods consumer country. Chinese people's enthusiasm in luxury goods even stunned rich people from developed countries. Chinese people need to recognize that we do not have to be proud of such "second in the world". According to the World Luxury Association statistics, in 2007, 13% of China's total population bought luxury goods, which is basically consistent with the structure of the distribution of wealth in China "20% of the population possesses 80% of the wealth". Thus, we should also notice there several million people in China who live on less than 1 dollar a day. The rapid growth of China's consumption of luxury goods may also reflects the further widening gap between China's rich and poor. It is well known that insufficient domestic demand has been the Achilles heel of China's economy. In particular, since the financial crisis last year, China introduced a lot of measures which aim at stimulating domestic demand, but luxury consumption only expand "external demand" of some developed countries, as luxury goods are basically produced by foreign enterprises. Therefore, China's luxury goods consumption "second in the world" may not be a good thing.

Chinese President Hu Jintao (Front, R) is greeted upon his arrival at New York, the United States, on Sept. 21, 2009. Hu Jintao arrived here Monday for a UN climate change summit and other UN meetings. He will also attend a financial summit of the Group of 20 (G20) in Pittsburgh scheduled for Sept. 24-25.

The mainland's wind power turbine industry is headed for a major consolidation, with fewer than 10 out of more than 100 manufacturers likely to survive the shake-out. The warning comes from China High Speed Transmission Equipment Group chairman Hu Yueming, who heads one of the country's largest suppliers of equipment. The State Council said late last month there were signs of overcapacity in the emerging wind power equipment sector and ordered banks not to lend to projects deemed redundant or of low quality. Hu said this is an "entirely correct" policy because the number of turbine makers now exceeded 100, compared with only a handful a few years ago. He added that "even 10 may be too many for China". The country's installed wind power capacity has more than doubled in each of the past four years. But Hu stressed that overcapacity is seen only in the manufacturing of turbines, not in transmission gears, which the company produces for the turbine makers. "There are only a few companies in the transmission gears segment, and these products are still in short supply," he said, adding that transmission gears are one of the most technology-intensive components of a wind turbine. China High Speed supplies about 13 turbine makers, which together account for 98 per cent of the entire market's supply. "A few industry giants will certainly emerge, and in order not to miss the opportunity to supply to them, we have covered more than just the biggest players," said Hu. Fewer than five companies are engaged in making transmission gears used in wind turbines on the mainland, and globally only a few major companies are in the same business, he said. China High Speed posted a 0.7 per cent year-on-year rise in first-half net profit to 254.41 million yuan (HK$288.76 million). Excluding non-recurring gains and losses related to convertible bonds and equity swaps, net profit surged 37.8 per cent to 333.32 million yuan. The company's shares dropped 6 per cent yesterday to HK$16.86. Morgan Stanley, a counterparty of China High Speed's equity swap, issued a research note saying the interim results were 10 to 15 per cent below its forecast on significantly higher than expected interest expenses, fewer wind gearbox shipments and a lower than anticipated increase in profit margin. But an analyst at a Southeast Asian brokerage said shipments were in line with earlier company guidance, adding the management indicated second-half borrowing needs and interest expenses would fall. The analyst and DBS Vickers Securities analyst Dennis Lam both said the fact profit margin rose less than expected despite lower raw material costs was a concern. Price cutting by turbine makers would put pressure on gearbox makers, they said.

China consumers are set to increase their spending as Beijing revs up the market with plans for more jobs and new loans, according to a survey released yesterday by MasterCard Worldwide. More than four in five urban and rural respondents said they expected to spend the same amount or more over the next 12 months compared with the previous year. Urban consumers cited having a steady job and the anticipation of increased income as the key reasons why they planned to raise their spending. "China's households, both urban and rural, are clearly responding to the government's policy initiatives aimed at reviving growth," said Dr Yuwa Hedrick-Wong, an economic adviser for MasterCard in Asia-Pacific. "[It] may well be the beginning of private household spending becoming a more robust driver of economic growth in the coming years." After acting as the world's factory floor for decades, the mainland has looked inward to offset a sharp drop in exports amid the global downturn. Beijing has tried to increase domestic consumption with a four trillion yuan (HK$4.54 trillion) stimulus bill announced last year and more than eight trillion yuan in new bank loans so far this year. A large portion of the spending initiatives have targeted infrastructure projects because they create jobs and provide demand for the domestic materials sector. The survey respondents said they would spend even more if authorities improved the social welfare system so that they did not have to set aside as much of their income for medical and educational expenses. "The impact [would] be huge for both urban and rural households," Hedrick-Wong said. "Chinese households save a heck of a lot because they do not [fully rely] on the public services provided by the government." Guangzhou lagged behind the survey's other two urban centres, Beijing and Shanghai, in terms of future spending forecasts. Only 76 per cent of the southern city's respondents said they planned to spend more or the same over the next 12 months, compared with 86 per cent and 83 per cent for the other two cities respectively. However, last month's data suggests that a national recovery is on track and domestic-led growth is emerging. Retail sales jumped the most since January and industrial production climbed the most in a year. "The highlights are further signs of strengthening private investment and consumer spending, which reinforce our view that the recovery [in the mainland economy] will be sustained," Wensheng Peng, the head of China research at Barclays Capital, wrote in a report last week.

Ten small- and medium-sized companies slated to list on mainland’s planned Nasdaq-style board said Monday they would accept subscriptions for their initial public offerings at the end of the week. The 10 firms, ranging from medical equipment makers to software developers, said they would launch road shows for their share offerings on Monday, according to statements filed with the Shenzhen Stock Exchange. Regulators hope the long-anticipated new board will help fuel the development of start-ups and other companies with high growth potential in the world’s third largest economy, in the way that Wall Street’s Nasdaq has. The 10 companies are among 13 that have so far received approval from the China Securities Regulatory Commission to list on the second board. The agency will hold meetings this week to audit applications by 11 additional companies, the official China Securities Journal reported on Monday. No launch date has officially been set for the market, which will be based in the southern boomtown of Shenzhen in Guangdong province. State media reported earlier that the first batch of companies would debut after the week-long National Day holiday, which ends on October 8.

Military helicopters fly over central Beijing on Monday during rehearsals for the country's 60th National Day celebrations. A grand military parade is planned on October 1 to celebrate the founding of the nation. The planes and helicopters flew in formation over Chang An Avenue, the major boulevard that runs east-west through the city and across the top of Tiananmen Square. Some released streams of red, blue and yellow smoke as they flew low over the city in a rehearsal for the October 1 celebration to mark 60 years of communist rule.

China's Green Dragon Gas said it was planning to move from London’s junior AIM market to a main market listing in either London or Hong Kong after reporting an eight-fold increase in first-half revenue. Chairman and chief executive Randeep Grewal, who has a shareholding of 81 per cent in the business, said Green Dragon, the largest mainland company on AIM, expected to make the move within the next six months. “We’ve got a strong desire to move on to a main board listing. We’re seriously evaluating the main board in London in addition to the main board in Hong Kong,” he said in an interview. The coal bed methane (CBM) explorer increased revenue to US$18.7 million in the six months to June 30 from US$2.4 million the previous year as it benefited from increased gas sales in Beijing, where it expanded into Qihe in Shandong province. “The business is maturing rapidly into the leading CBM play in China,” said Evolution Securities analyst Keith Morris. Grewal said he expected Green Dragon to achieve a similar level of revenue in the second half. “We would like to have the second half at least mirror the first half [revenue], if not better,” he said. Green Dragon’s first-half net loss narrowed to US$11 million from US$12.3 million the year before. The company agreed a joint venture agreement for its upstream gas resources with ConocoPhillips in August, which Evolution’s Morris said “increases industry credibility and provides cash to speed progress further”.

China would make pilot moves to raise hydropower electricity prices in a bid to subsidize residents who made way for the power projects.

U.S. drink, food titans fail to meet China quality standards - Many foreign companies, including PepsiCo and Mead Johnson, from 25 countries have been blacklisted from a monthly report by a State Council watchdog in charge of product quality. Among the companies blacklisted, the most prominent name was PepsiCo, which has its international branch based in New York. Nearly 38 tons of frozen concentrated orange juice were found with excessive yeast.

Contestants pose during the final of the 17th New Silk Road Model Contest in Sanya, south China's Hainan Province, Sept. 20, 2009. Zhong Yangyang won the title of the contest attended by some 50 models on Sunday.

Sept 22, 2009

Hong Kong: China Guangdong Nuclear Power Holding is "going abroad", with plans to build and part-finance the country's first overseas nuclear reactor.

The authorities are considering building a light rail to link the underused Lok Ma Chau Spur Line with the development zone on the Shenzhen River, in an effort to rescue the HK$10 billion rail from being redundant after the new high-speed cross-border express opens in 2015. The plan for the link from Lok Ma Chau station to the Lok Ma Chau Loop - an area of land carved from Shenzhen's territory during flood-control works - comes amid fears that the spur line, opened in 2007, will be left serving only eastern New Territories residents and those who cannot afford to ride the express. The Guangzhou-Shenzhen-Hong Kong Express Rail Link will whisk passengers from West Kowloon to the Futian station in central Shenzhen in just 14 minutes compared with about an hour on existing services. An engineer familiar with the project said the high-speed train would pose a serious challenge to the spur line and the loop's development was seen as a remedy. "The distance between the spur line's station and the loop is about 1.5km," the engineer said. "It is too far to walk, especially on hot summer days, so the authorities are thinking about a point-to-point shuttle service, a small train, to carry people between the two places." The MTR Corp - which inherited the underused line when its operations merged with the KowloonCanton Railway Corporation - says its average daily patronage is about 30,000 compared with earlier projections of 60,000. Plans for the 87-hectare loop, which is still officially part of Shenzhen, but has been under Hong Kong management since the course of the river was changed, have yet to be finalised. But it has been designated a low-density zone for education, research and creative industries. At present it takes passengers using the spur line about 45 minutes from Hung Hom station to the Lok Ma Chau checkpoint, 10 minutes to cross the border and seven minutes on the Shenzhen metro to reach the city center.

Lord Foster and Hong Kong's Rocco Yim are to face off again. Two renowned architects - one from Hong Kong, one British - will face off again next month in the contest to design one of the world's largest arts hubs. London-based Lord Foster, who has impressed the world with his iconic structures, and Rocco Yim Sen-kee, who stresses his feel for the local pulse, are among three architects chosen to present ideas for the West Kowloon Cultural District in a three-month design consultation. Foster, designer of Chek Lap Kok airport, and Yim, designer of the new government headquarters at Tamar, were also rivals in the first West Kowloon design contest in 2002, which Foster won with his since-scrapped "canopy" concept. Yim received an honourable mention. They will be joined by renowned Dutch architect Rem Koohaas, best known in the region for the controversial Central China Television headquarters in Beijing. Foster's team stressed their London experience in stitching together disconnected cultural spots, while Yim spelled out his unique observations of Hongkongers. Foster partner Colin Ward said the firm would seek to create a mental road map for arts-hub visitors rather than an icon. "People will have to know exactly how to get there," he said. "West Kowloon is a disconnected place. The site is cut off from Canton Road."

Mong Kok Kai Fong Association members parade from the Hong Kong Cultural Centre to Mong Kok. Sixty fishing vessels, ferries and fireboats sailed through Victoria Harbor. Celebrations marking the 60th anniversary of the founding of the People's Republic and the forthcoming Hong Kong 2009 East Asian Games were held in several places in the city yesterday. Sixty fishing vessels, ferries and fireboats sailed from Hung Hom Bay to Tung Chung New Development Ferry Pier in the afternoon, passing through Victoria Harbour and western Tsing Yi. Hundreds of onlookers gathered along the Avenue of Stars in Tsim Sha Tsui. A fleet of vehicles, including vintage cars and Harley-Davidson motorcycles, made their way with scores of dragon dancers from Man Tung Road Park in Tung Chung to Tung Chung Park. In Tsim Sha Tsui, about 3,000 artists from 60 performing groups took to Nathan Road in the morning, gathering in the biggest parade seen there in recent years. From the Cultural Centre, the performers, including trumpet players, dragon dancers and sportspeople who were celebrating the coming East Asian Games, made their way through Nathan Road, Haiphong Road and Canton Road as bystanders cheered. Many busy streets were blocked and about 40 bus and minibus timetables were changed to accommodate the parade. Roads were reopened at 7pm. In Sha Tin, dragon dancers led 19 teams of marchers, including freestyle cyclers and people dressed as ethnic minorities, from Sha Tin Sports Ground to Sha Tin Town Hall. Some parents said they had brought their children along to celebrate the anniversary and some said they were there to enjoy the carnival atmosphere.

Three firemen who struck a woman trying to commit suicide in order to rescue her from a high-rise ledge were yesterday described as heroes or brutes by various sections of the community. The case was given a further twist when the Hospital Authority said the woman was in "serious" condition at Union Hospital without explaining her injuries, if any. According to reports, the woman, surnamed Cheung, 40, was punched 10 times by three firemen as they struggled to bring her down from an outside ledge of her Sau Mau Ping Estate building on Saturday. The operation was filmed with footage downloaded onto the website YouTube. In one shot a fireman is seen delivering a blow to Cheung's shoulder and wrapping one arm around her neck. Bystanders can be heard in the background cheering the firemen. When Cheung was halfway back into the building via a window, the firemen were seen delivering more blows. Yesterday, an 11th floor resident surnamed Wong said the firemen's actions were heroic and that they had done a very good job. However, lawmaker James To Kun- sun said they had gone too far. Cheung was said to have climbed out from her sixth-floor flat in Sau Wah House on Saturday afternoon, drinking beer and calling friends to talk about her problems. Somehow she got to the 11th floor of the building by the time firemen, strapped to safety cables, appeared. She climbed down to the floor below before she was cornered by one of the firemen as the other two swooped down to hold her still. In the struggle, she knocked off one of the firemen's hat. Wong said he did not believe the firemen had hit Cheung deliberately. He said he heard no loud screams from her, which he took to indicate no violence had been used. Hong Kong Fire Services Department Staff General Association deputy chairman Chiu Sin-chung defended the firemen, alleging Cheung had tried to unhook the firemen's safety cables, putting the firemen at risk. He said they had to subdue her while trying not to hurt her. He added the firemen, who were bruised during the rescue, had no reason to want to hurt Cheung.

Hong Kong should focus on becoming an international wealth center because of its growing ties within Greater China, says Securities and Futures Commission chairman Eddy Fong Ching.

The Asia Pacific sales of clothing retailer Esprit Holdings (0330) began an uptrend in July, and a strong recovery could arrive by the start of 2010, a senior executive told The Standard. "In the past two or three months, things are already recovering - faster than Europe," said Wolfram Hail, Esprit's president for Asia Pacific."We're quite optimistic." Sales in the Asia Pacific region started improving in July, and August was better than July, Hail said. "I hope that things will further improve, and by [January] they will look much brighter. Will we be back to the heyday of 2007? Maybe not. But there's a lot of disposable income around." Hail noted the global financial crisis hit Asia later than the rest of the world. "Asia tends to be hit harder, but the impact lasts for a shorter period," he said. "Our business did suffer, yes, but it didn't suffer in a really bad way. The markets were very resilient." Esprit's joint venture in the mainland will continue to grow revenue at a double-digit pace this year, said Hail, who aims to increase the proportion of revenue that Esprit earns from the Asia Pacific region to 20 percent from the present 14 percent within three to five years. Currently, Esprit derives more than 85 percent of its total revenues from its European markets.

A reshuffle among Hong Kong's top prosecutors has raised the possibility of the first change in the director of public prosecutions for 12 years.

The 60th anniversary of the founding of the People's Republic is still more than a week away but Hong Kong is already celebrating. About 80 people born in 1949 and children born in October visited the People's Liberation Army's barracks on Stonecutter's Island yesterday under a sweltering sun to mark the day. The visitors later joined some members of the PLA at Hong Kong Disneyland. National Day on October 1 will be celebrated with a fireworks display over Victoria Harbor. But last night the sky above the Tuen Mun waterfront burst into a riot of colour for the area's own display. While many residents of the west New Territories town who converged on the area left happy, other visitors who took up positions at nearby beaches said the commemorative display fell short of expectations. Police estimated 42,000 people were at the waterfront for the show, which lasted 20 minutes, and more people watched from their homes along the shore. Against a clear sky, the display organised by the Tuen Mun District Council and Tuen Mun Committee for National Day Celebrations began at 8pm and the fireworks depicted eight scenes. The show, accompanied by patriotic songs, attracted tourists and locals, the young and old. Two young sisters said the display was dazzling as the sky lit up with funny patterns. But some photographers gathered on nearby Golden Beach complained that the fireworks were too far away from the shore and lacked atmosphere. As well as the military and fireworks celebrations, a mainland actor famous for his impersonations of chairman Mao Zedong is set to arrive in the city next week as part of the celebrations. But rather than the waterfront or a military base, impersonator Gu Xiaoyue will frequent a place more familiar to many in the city: a shopping mall, Metro City in Tseung Kwan O.

While millions in tax revenue is written off each year as a result of expatriates fleeing the city, the experience of one Briton proves that getting on the wrong side of the Inland Revenue Department is not recommended. Bill Heywood, a plumbing and piping contractor, was stopped at Hong Kong International Airport last September when he was leaving the city after a three-week holiday. He was told by immigration officials that he could not leave until he had settled his bill for HK$50,782. He has now been stuck in the city for a year, unable to pay the bill and yet unable to find a job and escape his plight. Taxpayers who leave Hong Kong without paying are estimated to have cost the government more than HK$140 million over the past five fiscal years. In 2008-09, HK$13 million was written off the government books. And following criticism from the Director of Audit that the Inland Revenue Department was losing millions of dollars in tax revenue, procedures have been tightened to secure payments before taxpayers leave and to chase up defaulters. A spokeswoman for the department said a taxpayer's obligation to pay tax would not be relieved through time. And the law does not allow him or her to work to pay off the debt.

Tycoon Stanley Ho Hung-sun is making a good recovery and rumours that his condition is fast deteriorating were not correct, his daughter has said. While the 87-year-old is yet to be released from Hong Kong's Adventist Hospital, Pansy Ho Chiu-king said the casino mogul had embarked on a regime of cycling and eating to make up for the weight he had lost since he was taken to hospital early last month. Pansy Ho, who is managing director of the family holding company Shun Tak Holdings (SEHK: 0242, announcements, news) , also said on Friday that her father had made an "80 per cent recovery". But she said the family did not know when he would be released from hospital. The tycoon is believed to have had brain surgery to remove a blood clot after a fall at home. Ho was first admitted to the Hong Kong Sanatorium and Hospital in Happy Valley before being moved to the Adventist Hospital in Stubbs Road. The news saw shares in Shun Tak Holdings and SJM Holdings fall, sparked by concerns over his plans for succession in his business empire. Ho, who is listed as the director of 169 firms in Hong Kong alone, has three "wives" and 17 children. Many of them play a very hands-on role in his sprawling business empire. Pansy Ho is managing director of shipping, real estate and hotel developer Shun Tak, while Daisy Ho Chiu-fung is deputy managing director and chief financial officer. Ho's fourth wife, Angela Leong On-kei, is also an SJM director.

Passengers might have to pay more to ride on the planned high-speed Hong Kong-to-Guangzhou rail link than on the existing through train, a senior official said.

Shares in mainland developer Poly (Hong Kong) Investments surged as much as 17.2 per cent when it resumed trading yesterday after it unveiled a HK$2.74 billion acquisition plan and introduced China Investment Corp as a long-term investor. Poly (Hong Kong) said in an announcement late on Thursday that its parent would inject six properties into the listed vehicle. It will fund the purchase by issuing 403 million shares to its parent at HK$6.81 each, which represents a discount of 12.8 per cent to its pre-suspension closing price of HK$7.81 on September 11. The assets to be acquired are commercial and residential investment properties in Shanghai, Guangzhou, Shenzhen, Suzhou, Foshan and Hainan with a total gross floor area of 2.14 million square metres. Poly (Hong Kong) said the deal would increase its land bank by 22 per cent to 11.5 million sq metres and its geographical coverage from 12 to 14 mainland cities. At the same time, Poly (Hong Kong) is selling 60 million shares to China Investment Corp, the country's US$200 billion sovereign wealth fund, also at HK$6.81 each apiece, or a total of HK$408.6 million. The shares have a lock-up period of six months, but Poly (Hong Kong) said CIC intended to treat it as a long-term investment. CIC's 2.3 per cent stake marks its first foray into a Hong Kong-listed mainland company. Parent China Poly Group Corp's stake will increase to 58.1 per cent from 51.9 per cent. The asset injection has long been expected by market watchers and analysts believe more acquisitions are in the pipeline as China Poly Group will eventually be merged with mainland-listed Poly Real Estate Group. Poly shares closed at HK$9.02, up 15.5 per cent.

UBS' US$780 million settlement with United States authorities to avoid prosecution for helping Americans cheat on their taxes has opened a Pandora's box for banks worldwide.

China: More than 64 million passengers are expected to pack the mainland's railway network during this year's slightly longer National Day holiday. On October 1, which marks the 60th anniversary of the founding of the People's Republic, a record 6.9 million would board trains as the week-long holiday began, the Ministry of Railways said. Because this year's Mid-Autumn Festival also falls during the period, an extra day has been added to make up for the overlap, making the "golden week" end on October 8. Ministry spokesman Wang Yongping told Xinhua that a task force had been set up to ensure the network's smooth operation amid the passenger surge. The task force would be in service around the clock to carry out duties such as security checks on passengers' luggage. Efforts would be stepped up to prevent fires and explosions in the train stations, Wang added. Security has been tightened significantly in Beijing in the run-up to National Day, as authorities fear any threat would ruin the celebration. In the city's Qianmen shopping area near Tiananmen Square, two people were killed while more than a dozen injured, including a French female tourist, in two attacks over three days last week. Wang said the system expected to carry 9.3 per cent more passengers this year than in the same period last year. To cope, more trains will be put into service, especially in major cities and tourist spots. Train tickets during the golden weeks are often hard to obtain because it is the only time many people can travel home.

China's Liu Xiang races against Terrence Trammell of the US in the men's 110 metre hurdles in Shanghai last night. Trammel won in a photo finish, but Liu, competing for the first time since breaking down at the Beijing Olympics, was a winner with the home crowd.

Liu Xiang acknowledges the crowd last night after the 110m hurdles at the Shanghai Golden Grand Prix. He says he needs more time to regain full fitness.

Plans by Volkswagen Group China to expand its regional sales network may provide some insight into how rural consumption contributes to overall vehicle sales for the country. However, analysts doubt whether such sales are sustainable since many villagers cannot yet afford a car. "We've lost some market share on the mainland this year," said Soh Weiming, an executive vice-president of sales and marketing for Volkswagen Group China. Soh, who was also recently appointed to a new post within Volkswagen Group to head sales for Greater China and Asean, said local brands such as Geely and Chery were Volkswagen's main competitors in second- and third-tier cities. The German company sells mainly its Jetta, Polo, Passat, Lavinda and Audi brand models on the mainland. Beijing announced early this year it would provide subsidies totalling five billion yuan (HK$5.68 billion) to boost car sales in rural districts until the end of December. Villagers can get a subsidy of up to 5,000 yuan to buy a 30,000 to 40,000 yuan car and it is estimated the scheme will help sell one million extra cars in rural areas. "Our country aims to be fully developed by 2020 and the vehicle industry is important as it activates hundreds of related businesses," said Yao Jingyuan, the chief economist of the National Bureau of Statistics. Speaking during a car conference in Tianjin on September 8, Yao said rural areas were one of the important markets that would be developed. However, analysts said many of the villagers who might have benefited from the subsidy programme already owned cars and would replace the old with new ones. For many others, the government's supportive measures would not be significant. Gong Bing, president of the Shanghai-listed motorcycle maker, Jialing Motor in Chongqing, said that 80 per cent of motorcycles in the nation were sold to villagers, because motorcycles are better suited to country roads in rural areas and they are cheaper. There were 27.5 million motorcycles sold in China last year, up 7.24 per cent from 2007. The rural population makes up about 800 million of the country's 1.3 billion people. Some critics said the subsidy programme had failed to capture the attention of prospective buyers because of weak implementation of the scheme by local governments. "I didn't even know there was such a policy because local government officials didn't inform us," said Wu Jinda, a wholesale merchant from the village of Ninghai in Zhejiang. "But anyway, I would not think of driving a new car because I have used my motorcycle without trouble for 15 years." Top industry executives gathered in Tianjin earlier this month to tout the potential of the rural market. But the two-day conference failed to produce consensus on how to sustain rural sales and executives hoped the subsidy programme would be extended for another year. The nation's vehicle sales exceeded one million units for the sixth consecutive month in August. The country may reach sales of 12 million by the end of the year, up from 9.38 million units last year, while analysts estimate that total car sales in the United States will not be more than 11.5 million units this year. General Motors expects its sales on the mainland to rise 40 per cent by the end of the year, thanks to robust sales of its Wuling minivan under the "cars down to the village" policy.

A huge hot-air balloon is raised in Shanghai, east China, Sept. 19, 2009, during a celebration of the 60th anniversary of the founding of the People's Republic of China.

China's major state-owned enterprises (SOEs) under the supervision of the central government reported a 30-percent fall in net profit last year, the country's state assets supervisor said over the weekend.

The Communist Party's anti-graft watchdog yesterday said it would step up supervision of cadres who have children living abroad. It would also require cadres to report the properties, investment and jobs of their children and spouses in a move to clean up the party. The announcement was made as the Central Commission for Discipline Inspection closed its fourth plenum. But analysts said the move was just another weak attempt to clean up government, introduced because of mounting public unhappiness over rampant corruption. The four-day keynote plenary session of the Central Committee ended in Beijing on Friday. To the surprise of political analysts, it did not appoint Vice-President Xi Jinping vice-chairman of the Central Military Commission, but instead repeated its pledge to work to make the internal selection of cadres more transparent. The communique issued by the graft watchdog largely consisted of cliches, but it did include a few details on how the government would try to eliminate corruption. It said the watchdog would clamp down on the sale of official posts. "We should punish cadres who look for seats in the government, officials who buy and sell official posts or involvement in other bribery deals," the communique read. "All those measures should be implemented from the grass roots to top levels throughout our party." The communique also promised to punish senior officials involved in the abuse of power, those who lived degenerate lifestyles and those guilty of commercial crimes. The anti-graft watchdog also promised to investigate corruption that sparked massive protests and major accidents. Hong Kong-based political commentator Johnny Lau Yui-sui said he doubted if the measures would help. "I don't think these kinds of pledges would help the party to deal with corruption and so-called internal political reform," Lau said. "It was because many of our top leaders' children and spouses have been subject to complaints about their involvement in big commercial deals. "I don't find these proposals very exciting. There are pledges at these plenaries year after year." Last year, a Wenzhou official, Yang Xianghong, refused to return from France after an official trip. The party secretary of Lucheng district claimed that he was visiting his daughter and attempts to bring him back failed. He was sacked and his wife was held on corruption charges.

'Sexy' new PLA uniforms set to turn heads at the big parade in Beijing - When members of the People's Liberation Army march down Changan Avenue on October 1, the top brass on the rostrum in Tiananmen Square may struggle to keep their eyes front. The troops will be sporting eye-catching new uniforms that have been praised for being modern, well-tailored, practical - and even sexy. According to the PLA Daily, all armed forces, including the elite strategic missile corps, will be wearing the "07-type" uniforms for the first time at a public display as they are inspected by their commander-in-chief, President Hu Jintao . Introduced in 2007 to mark the PLA's 80th anniversary, the uniforms come in four basic categories and 644 variations. The newspaper lavished praise on their "modern design, harmonious and solemn colours, comfortable and well-tailored sizes, and better fabrics and quality". Ornaments like chest badges, name bars, ribbons and other insignia have been added to the uniform. "Caps with curled brims," the report noted, "have been issued for the first time to present a more charming demeanour for female soldiers". This is all a far cry from the parade to mark the founding of the People's Republic on October 1, 1949. Back then, with fighting against the Kuomintang still raging in the south, troops were a ragtag bunch, unable to scrape together matching kit. Men wore helmets and yellow and green uniforms, while female soldiers put on unflattering yellow dresses. Since then, the Central Military Commission has made four uniform changes - in 1955, 1965, 1987 and 2007. The first formal uniform was introduced in 1955, after the establishment of the 10 marshals and other rankings for the PLA's founding fathers. However, ranking was cancelled in 1965, one year before the Cultural Revolution. The PLA's deep-green uniform became the clothing of choice for Chinese youth from the 1960s to 1980s. But in the Sino-Vietnamese war of 1979, the confusion springing from the lack of visible rank was seen as a contributing factor to the PLA's disastrous performance. The commission reinstated full ranking in 1988, and as China opened its doors to the outside world through the 1980s it allowed designers to learn from Western uniform styles. It adopted camouflage for battledress, and separate ceremonial and service uniforms in 1987. Hong Kong fashion designer William Tang said the uniforms were now close to international standards. "They've learned a lot from Western countries' designs, such as Britain, which reflect bravery by highlighting good proportions in the human figure," he said. Tang said the new designs borrowed from pre-1997 handover Hong Kong police uniforms. "The PLA's new summer uniform is light-olive green with a blue beret, which is very similar to the old summer uniform worn by the police force during the British colonial era," Tang said. "It's a pity the SAR government gave this up to become more united with the mainland police force for political consideration. Fashion designers joked that this made our police officers look more like security guards." Hong Kong-based political commentator Poon Siu-to said the new uniforms were all part of the attempt to improve the public perception of the PLA. "The massive uniform reforms since 1987 reflect economic achievements in the past two decades, during which military budgets have also increased," Poon said. Many analysts believe the uniform changes are part of the PLA's campaign to repair its tarnished image after the 1989 Tiananmen crackdown. Poon said smart uniforms might improve public perception, but the 82-year-old army would require institutional reform to make it a modern combat force.

Shanghai Pudong Development Bank, part-owned by Citigroup, said it is considering selling shares and convertible bonds and may seek an overseas listing to replenish capital depleted by credit growth.

Galaxy chairman Lui Che-woo speaks at a news conference yesterday after the company announced it had returned to profitability. Casino operator Galaxy Entertainment Group (SEHK: 0027) recorded a net profit of HK$1.06 billion in the first half thanks to gains from a debt buyback and cost control, after reporting a loss a year earlier. Earnings before interest, tax, depreciation and amortization (ebitda) surged 91 per cent to HK$507 million for the six months to June, compared with HK$242 million the previous year. Ebitda at Galaxy's StarWorld casino rose 45 per cent to HK$419 million. Revenue dropped 1 per cent to HK$5.34 billion. Revenue from the gaming and entertainment business rose 3 per cent to HK$4.73 billion, but revenue from the construction materials business dropped 24 per cent to HK$608 million. The company generated a one-off gain of HK$819 million from buying back HK$1.94 billion of debt at about 50 US cents in the dollar. Revenue at StarWorld increased 15 per cent to HK$4.03 billion, with HK$3.4 billion from VIP gamblers. Mass gaming revenue dropped 14 per cent to HK$440 million. Turnover of slot machines dropped 8.7 per cent to HK$63 million. Galaxy introduced six more VIP gaming tables at StarWorld in July, while renovation work on the mass gaming floor was completed last month. The company paid HK$1.1 billion in land premiums for the resort development site in Cotai. The remaining HK$1.7 billion will be paid over four years. Phase one of the project was scheduled for completion at the end of this year, but construction has been delayed owing to the global financial crisis. Francis Lui Yiu-tung, the vice-chairman of the group, said yesterday that the facade of phase one would be completed at the end of the year. The company will announce the opening date in the next few months. "The performance of the gaming business has been stable in the first half, better than the analysts' expectations of a 10 per cent fall," said Lui. "The gaming revenue hit a record in August. I think the performance of the gaming business will not be bad in the second half." The occupancy rate of StarWorld Hotel was more than 90 per cent in July and August. He said the hotel had been fully booked for the Golden Week national holiday in early October. No interim dividend was declared. Shares in Galaxy Entertainment Group dropped 5.21 per cent to close at HK$3.46 yesterday. They have more than tripled this year amid expectations that travel curbs on mainlanders visiting Macau will be relaxed.

Mario Sepia, president of the European Economic and Social Committe (EESC), speaks during a press conference about his recent visit to China's Tibet Autonomous Region in Brussels, capital of Belgium on Sept. 18, 2009. The economy in Tibet is booming and the local culture is very strong, Mario Sepi said on Friday.

Conductor Cao Peng directs the rehearsal of Yellow River Cantata in Shanghai, east China, Sept. 18, 2009. The cantata, with participation of more than 22,000 people, will be staged with live broadcasting in 10 provinces and regions on Saturday to commemorate the 70th anniversary of the cantata composed by Xian Xinghai, a famous Chinese composer, and the 60th birthday of the People's Republic of China.

Sept 21, 2009

Hong Kong: Hong Kong was the Asia-Pacific region’s second largest recipient of foreign direct investment (FDI) after the mainland – attracting US$63 billion (HK$488 billion) worth of investment in 2008, a new report released on Friday showed. The latest World Investment Report from the United Nations Conference on Trade and Development (Unctad) also put Hong Kong as the world’s seventh largest recipient of FDI for 2008. Despite the impact of the global financial crisis in the later part of 2008, the latest figure represented a 15.9 per cent increase year-on-year for Hong Kong. While the mainland retain its postion as the top destination of FDI for the Asia-Pacific region year-on-year, it moved up four places to become the world’s third largest FDI recipient in 2008. It attracted US$108.3 billion FDI last year – an increase of 29.7 per cent compared with 2007. Globally, FDI inflows declined 14.1 per cent in 2008 from a historic high of US$1.98 trillion in 2007 to US$1.7 trillion. The report said that the drop in FDI had continued in 2009. Invest Hong Kong director-general of investment promotion Simon Galpin said he was pleased Hong Kong remained an attractive destination for FDI. “However, we recognize that businesses are operating in very tough global economic conditions and that we have to work doubly hard to attract them,” Galpin said.

Retail investors will be able to buy Chinese government bonds worth a total of 2 billion yuan (HK$2.27 billion) - one-third of the amount to be sold in Hong Kong - the Ministry of Finance said yesterday. The sovereign bonds will be divided into three maturity types, said Sun Xiaoxia, the ministry's deputy director- general, at a roadshow briefing with Hong Kong banks. Retail investors will be offered two- and three-year yuan-denominated bonds when subscriptions open on September 28. Institutional investors can buy three- to five-year bonds. The yield is expected to be determined by the end of next week, though people in the industry expect it to be in line with similar sovereign bonds sold in the mainland. Government bonds offered in the mainland market can mature from one to 10 years. The return is 1.8 percent for two-year debt, 2.18 percent for three years and 2.97 percent for five years. Chinese sovereign debts have the same credit rating as that of the central government and so could provide Hong Kong investors with a stable investment tool in yuan, Sun said. The message came in a statement issued by the arrangers - Bank of Communications (3328) and BOC (Hong Kong) (2388). The deputy chief executive of BOCHK, David Wong See-hong, said the split between retail and institutional investors could be adjusted depending on the response. Banks were also briefed about a simplified arrangement that has been introduced for selling Chinese government debt. Retail investors can apply for bonds via internet or phone besides the usual counter operation. The alternatives are to head off problems after controversy over the time required when investors applied for yuan bonds recently. The bonds are the first denominated in yuan to be offered outside the mainland - a move meant to show Beijing's support for Hong Kong as an international financial and debt center.

A Hong Kong court on Friday sentenced a former senior banker at Morgan Stanley to seven years in jail – the heaviest punishment it can impose – in the city’s largest insider dealing case. Du Jun, former managing director of fixed income at Morgan Stanley Asia, was convicted of 10 insider dealing charges over his acquisition of shares worth HK$87 million in Citic Resources (SEHK: 1205). In sentencing, District Court Judge Andrew Chan said: “The scale was unprecedented. This case is the biggest I have come across so far.” Du Jun was also was fined about HK$23 million. It was the maximum sentence Du faced after being convicted last week on nine counts of insider dealing in the shares of Citic Resources before the company’s announcement of an acquisition in 2007. He was also convicted of a tenth related charge for helping his wife to deal in the shares. He reportedly reaped about HK$33 million from his illegal trades. The case marks the 10th conviction of insider trading since it was made a criminal offense in 2003 – part of Hong Kong’s effort to tighten regulation as it seeks to retain its status as a leading financial center. It is also the longest and most heavily contested trial on insider dealing in the territory, according to Hong Kong regulators.

Colorful parades and carnivals going from Tsim Sha Tsui to Tung Chung are planned on Sunday as part of celebrations marking the 60th anniversary of the founding of the People’s Republic of China. Organisers said on Friday these events would also mark this year’s East Asian Games, which will be held in Hong Kong in December. Leung Siu-tong, chairman of an organising committee for the celebrations, said there would be street parades, variety shows and flotillas of boats. “More than 60 vessels – including yachts, fishing boats, dinghies and ferries – will set off from Tsim Sha Tsui on Sunday afternoon and proceed to Tung Chung via Victoria Harbour,” Leung said. He said a fleet of parade cars, accompanied by performers from various district organizations, would also tour around Tung Chung. In other celebrations planned for National Day, a large fireworks exhibition will be held at Victoria Harbor on October 1 at 8pm. The 5th East Asian Games will be held in Hong Kong from December 5 - 13. Over 3,000 elite athletes will compete this year.

Immigration Department officials are trying to trace 500 couples whose suspected bogus marriages were arranged by a syndicate helping mainlanders to settle illegally in Hong Kong. A spokesman said some may already have used their marriage certificates to obtain residency, although it would be difficult to prove the unions were false. In a surprise operation yesterday morning, officers raided 17 sites, including the syndicate's Sham Shui Po base, and arrested 32 people, 23 of whom were Hong Kong residents. Eight of these are believed to be key members of the syndicate. However, the mastermind, also an SAR resident, and several others remain at large. Principal immigration officer (enforcement) Sham Kin-fai said the syndicate advertised its match-making services in newspapers. Women from the mainland were charged HK$35,000 while men got off cheaper, at HK$25,000. Hong Kong residents willing to marry those mainlanders were paid between HK$5,000 and HK$17,000, with the syndicate raking in at least HK$10,000 for each arranged marriage.

Parents push for police - role in school drug war - The government could be set for another U-turn over the controversial drug-test plan for schools as pressure mounts from parents seeking a bigger role for the police. Police involvement was envisaged in the first draft of the voluntary testing plan, but the idea was dropped when legal experts raised questions about possible retribution against students by drug dealers. Now, however, a poll of 719 parents by the Bauhinia Foundation Research Center has found a desire for police to take an active role. Center chairman Anthony Wu Ting-yuk said 66.9 percent of parents thought police should question students who test positive, and 40 percent agreed that results should go to police liaison officers in schools. "I strongly believe police should use all means to trace the source of drugs and keep them away from schools," Wu said. Seventy-one percent of parents polled supported the scheme, with 50 percent claiming their children were also in full agreement. Yet only two thirds of respondents felt the tests would curb the drug problem in schools and just one third had a full understanding of the scheme. More than 90 percent said they should be told if their child tests positive, while 60 percent thought such information could also be given to school principals, teachers and social workers. Wu said the support rate should be even higher now as more details of the scheme were revealed after the August 26-September 5 survey. Despite general support for the drug test, 46 percent of parents felt it would cause conflict between schools and students, and 56 percent feared students would find ways to confuse or negate results. Seventy-five percent said parental consent should be required before a test. In an indication of the situation at present, 10 percent of parents said their children had told them of schoolmates taking drugs. "It's heartbreaking to see teenagers who used to be smart and energetic suffering from permanent brain damage as a result of taking drugs," Wu said.

Hong Kong’s unemployment was unchanged at 5.4 per cent between June and August this year, official data showed on Thursday, as economic uncertainty meant employers remained cautious about hiring. The seasonally adjusted rate has remained the same since the April-June period. The number of jobless increased by around 3,000 to 216,800 in the three months ending August from the May-July period, while the workforce declined by around 6,900 to 3,712,000, according to the Census and Statistics Department. The near-term outlook will depend a lot on the pace of job creation in the economy relative to that in the labour supply, Labor Secretary Matthew Cheung Kin-chung said in a statement.

The Consumer Council said on Thursday it had developed a new price index to monitor food prices at wet markets – a popular place for buying food for many Hong Kong consumers.

Tsoi Yuen Tsuen villagers facing eviction to make way for the high-speed rail link to Guangzhou protest in the Legco chamber yesterday. A group of New Territories villagers whose homes face demolition to make way for a high-speed rail link to Guangzhou were arrested yesterday after repeatedly interrupting a Legislative Council meeting. The arrests came as the transport minister was explaining to legislators how the cost of the Guangzhou-Shenzhen-Hong Kong Express Link had ballooned beyond the original estimate of HK$39.5 billion. The Tsoi Yuen Tsuen residents repeatedly shouted offensive remarks at Secretary for Transport Eva Cheng and disrupted the meeting five times before subcommittee chairwoman Miriam Lau Kin-yee told guards to escort them out. One had to be physically removed. Fifteen people, villagers and conservationists, were arrested for contempt of Legco. They were questioned at Waterfront police station and released on cash bail of HK$100. They must report back tomorrow. Cheng told Legco's railway subcommittee that the original estimate for the link in 2006 had been "a bit conservative". "We thought construction material costs would rise by 15 per cent in the three years to 2009. But it turned out they rose 50 per cent, as that was a period when the whole world was building infrastructure."

More than a quarter of Hong Kong's teenage workers are looking for jobs, the highest level in four years and 50 per cent more than before the collapse of the world economy a year ago.

Setting up a Shaolin Temple in Hong Kong would not be a commercial threat to other Buddhist temples in the city, the head of the Henan monastery said yesterday. Abbot Shi Yongxin said the temple was still waiting for approval for its land application to build a HK$420 million base in the city. "The Shaolin Temple in Hong Kong would not pose any competition to other temples," he said. "Hong Kong is an international city with a big population. There is still room for new temples. "Also, the temple will not only function like a traditional temple for practising Zen Buddhism but also be a place for kung fu lovers and people who want to learn about Shaolin culture."

Food prices in Sai Kung's wet markets are the highest, while those in Eastern District are the lowest, according to the Consumer Council. Shoppers can do a comparison of price levels at wet markets in the 18 districts using the council's new monthly index. "We hope people will be more alert to price differentials in different districts and make wise choices," Ambrose Ho, chairman of the council's publicity and community relations committee, said yesterday. Since last November, the council has been releasing a daily wet market food price index that compares food prices in two markets within the same district. The new monthly index is compiled on top of the information collected for the daily price watch. The survey records prices of 28 food items from four categories - fish, meat, vegetables and fruit - sold in 45 major wet markets. The average food price across all 18 districts in January is set as the benchmark, represented by the number 100. An index higher than 100 means food prices have exceeded January levels. For the three months ending August, for example, Sai Kung and Sha Tin scored about 20 per cent higher than Tai Po and Eastern District. Sai Kung recorded the highest index, 109.6. It was followed by Sha Tin (104.9), Southern District (104.4) and Kwun Tong (102.6). Eastern District (85.3) earns the distinction of being the best place for bargains. Other districts with lower prices are Tai Po (87.5), Wong Tai Sin (89.7) and Tuen Mun (90.8). Food supply, the purchasing power of residents and competition within the district were factors that set price levels at different districts apart, Ho said. A bigger wet market has more stalls and intense competition can lower prices. The monthly index, unlike the daily one, does not indicate price differences among markets in the same district. It compares price levels across all 18 districts, whereas the daily survey shows only four wet markets in two districts at a time. Residents shopping in a Sha Tin wet market said they had noticed for a long time that prices there were higher than in other districts. Although the index revealed that food in Eastern District and Tai Po was cheaper, few consumers were prompted to make the long journey to save a few dollars. However, a couple who live in Choi Hung travelled to a Tai Po wet market to buy fish. "I can save about HK$20," the wife said. The council's survey on wet-market food prices is posted on www.consumer.org.hk/website/ws_en/news/pricewatch/menu.html.

Cashed-up mainlanders are among the super-rich sending luxury property prices in Hong Kong into the stratosphere, with two apartments in Kowloon on the market for a record-breaking HK$300 million. Sun Hung Kai Properties (SEHK: 0016) raised the asking price of two penthouses at the Cullinan by more than 20 per cent to HK$75,000 per square foot as a flood of liquidity from across the border seeks a new home. But the surging property prices have sparked a warning that the luxury market faces a correction if Beijing tightens its monetary policy and turns off the liquidity tap. A sale of the Cullinan apartments at that price would make them the most expensive in the world, according to Victor Lui Ting, an executive director of Sun Hung Kai Real Estate Agency. Interested parties included investors from the mainland and wealthy buyers from Hong Kong and overseas, Lui said. Prospective buyers were either interested in the apartments for investment or for their own or clients' use. The 270-metre twin towers at the newly completed Cullinan are the tallest residential development in Hong Kong. Each penthouse unit has more than 4,000 square feet on the top three floors (the 91st to 93rd) of each tower, an outdoor garden and a swimming pool. The project includes 825 units, with typical floor space ranging from 900 to 2,300 sqft. The record asking price comes a few days after a one-bedroom flat in the Masterpiece luxury development in Tsim Sha Tsui fetched HK$24.5 million or HK$30,025 per square foot, a record for a one-bedroom flat. The city's most expensive flat by value per square foot is a 5,497 sqft unit on the 80th floor of the Arch at Kowloon Station, also developed by SHKP. It was sold for HK$225 million or HK$40,931 per square foot in June last year. Alva To, DTZ's head of consultancy, warned buyers of luxury homes should be cautious as the surge in prices was occurring amid an economic downturn. "The luxury market in Hong Kong, to a certain extent, is now driven by the mainland government's policies," To said. "Once Beijing tightens liquidity, the luxury market could suffer." He added that strong buying in the luxury sector would not have any significant impact on the mass market, which was still supported by actual demand. "Is the [luxury] market healthy? I don't know [the answer]," said To. "The strong inflow of capital from abroad, especially from the mainland, has created a new wave of demand. A group of non-Hong Kong people are particularly interested in extremely expensive properties in the city." Buggle Lau Ka-fai, the chief analyst at property agency Midland Realty, said there had been 812 homes worth at least HK$10 million sold from July to September, 43.7 per cent more than the 565 deals clinched during April to June. Luxury homes in the city had appreciated more than 30 per cent this year, agents said. Commenting on whether the recent buying in the luxury market was a sign of a bubble, Henderson Land Development (SEHK: 0012) chairman Lee Shau-kee yesterday said: "If there are many people becoming rich, I don't think it is crazy." However, he added that the luxury sector would be the first to feel the impact in the event of an economic downturn.

Henderson Land Development chairman Lee Shau-kee has warned investors to remain cautious despite the latest rally in the Hong Kong stock market.

China: The first seven companies applying for listing on the Growth Enterprise Market (GEM), a Nasdaq-alike market in China, have got green lights from the country's securities regulator on Thursday. They are in the fields of software, medical equipment and medicines. They planned to raise 2.27 billion yuan (332.65 million U.S. dollars), from the IPOs, according to China Securities Regulatory Commission (CSRC). "This means the seven enterprises are eligible to list on the market, but they still have some flaws in information issuance, which need to be improved," said Jiang Xinhong, a member of the review commission. The flaws don't hinder the listings, but these enterprises should go through some necessary procedures before getting listed, said the CSRC. The CSRC had received 155 applications for IPOs on the GEM as of Sept. 10, since it started to accept applications of the GEM on July 26.

China's second batch of astronauts selection has included 30 men and 15 women candidates.

Sixteen female jet fighter pilots of the female jet fighter pilots echelon pose for a family photo.

Risks in mainland’s banking sector are growing as banks have pumped out large amounts of credit this year to help the economy, the top banking regulator said in comments published on Friday. Mainland banks extended 8.15 trillion yuan (HK$9.27 trillion) in local currency loans in the first eight months, far exceeding the government target of 5 trillion yuan for the full-year set early this year. The sharpest rise came in the first six months. “This year, as bank loans have increased rapidly, all kinds of risks in the banking industry are picking up,” Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), said in a statement on the agency’s website (www.cbrc.gov.cn ). It marked the most pointed recent warning from the banking regulator about increasing risks due to the explosive rise in lending. Mainland will maintain its “appropriately loose” monetary policy into next year, Su Ning, vice governor of the People’s Bank of China, said on Thursday. Liu also said that banks should get ready for a slew of upcoming changes in international financial regulation standards in terms of capital base, provisions, leverage ratios and executive compensation.

Sales of new cars in Beijing have risen to about 2,000 a day, a trend that will put up to four million vehicles on the streets of the capital by the year’s end, state media said on Friday. About 60,100 cars were sold in August in Beijing – the largest number of auto purchases this year and nearly double the amount of vehicles sold in the same month last year, the China Daily said. Similar monthly sales are expected through to December, with private buyers powering the spree, the paper said, citing Beijing auto dealers. Car purchases in Beijing averaged about 1,200 a day in the first seven months of this year, earlier reports said. If sales remains at 2,000 cars a day, the capital will have a total of four million vehicles on its already jam-packed roads by the end of this year, the paper said – an increase of one million cars in just two years. Beijing has for years been one of the most polluted cities in the world, due in part to the fast-rising number of cars on the roads. The government has implemented several policies to try to curb air pollution, including traffic control measures, moving factories out of the city, and requiring cars and buses to use cleaner fuels. But the China Daily reported that some wealthy people were trying to skirt vehicle controls, which require motorists to keep their cars off the roads one day a week, by buying a second or even a third vehicle.

Forty-five air force pilots have been selected as astronaut candidates, including the first women hopefuls, for a training program less than a year after China completed its first spacewalk. The 30 males and 15 females are part of a program to pick five men and two women astronauts for three more manned missions planned before 2012. The missions are to prepare for the rendezvous and docking tasks required for constructing a space station, Xinhua News Agency reported yesterday. The candidates - aged between 27 and 34 - will undergo a series of rigorous psychological and physical tests as part of the selection process. China announced last year that it would send scientists on future manned missions as demand for technical expertise rises.

China's economy may regain double-digit annual growth in the fourth quarter of this year, potentially bringing tightening closer to the horizon, a senior government economist said on Thursday. Economic data for industrial output, investment and credit in August all surprised on the upside, solidifying a picture of a solid recovery, despite words of caution from Beijing that officials need to remain vigilant on growth. “The Chinese economy is rebounding actively, and it bottomed out in the second quarter. I have a very bullish outlook on the economy in the second half,” said Chen Dongqi, vice-head of the macroeconomic institute under the National Development and Reform Commission (NDRC). Chen told a conference that he saw a double-digit annual rise in gross domestic product in the fourth quarter bringing full-year growth to between 8 per cent and 9 per cent, meaning the government will exceed its target of 8 per cent growth. More specifically, he laid out a set of conditions that he thought could prompt authorities to shift to a tighter monetary policy stance, from the current “appropriately loose” one. Beijing may have to consider tightening monetary policy if annual GDP growth exceeds 9 per cent, consumer inflation exceeds 3 per cent or export growth is above 15 per cent. On the government’s proactive fiscal policy, Chen said there was no need to change direction. He did not specify whether all of those conditions would have to be met at once to prompt tightening, but even such guidance from government economists is rare. While annual GDP growth might be approaching the 9 per cent range, consumer price inflation and export growth are still far away from the ranges Chen mentioned. The consumer price index fell 1.2 per cent in August from a year earlier, easing from a 1.8 per cent drop in July, but many economists expect it to return to positive territory towards the end of this year, partly because of a low base of comparison. Exports fell 23.4 per cent in August from a year earlier, extending a 10-month streak of falls from year-earlier levels, but again many economists expect growth to turn positive either later this year or early next year, in part due to the low base.

Sovereign fund China Investment Corp is reportedly keen to invest in LVMH Moet Hennessy Louis Vuitton. After decades of Made-in-China garments, the mainland's fashion industry is keen to move on from being just a mass manufacturer of clothes - it wants to own Western brands and sell them to the country's 1.3 billion consumers. The right to sell brands of several international fashion labels locally, such as Aquascutum and Pierre Cardin, have been recently acquired by Chinese clothes makers and sellers. And the list of Western brands up for sale is only expected to get longer as retailers continue to reel under the weight of a global recession. "Acquisition opportunities do increase a lot out there, but investment risk also increases when many of these acquisition targets are struggling to survive," said Ryan Tsang, a senior director of rating agency Standard & Poor's. China Dongxiang (SEHK: 3818, announcements, news) (Group), which acquired ownership of Italy's Kappa brand in the mainland and Macau markets in 2006, is on the hunt again for new targets in the United States market, said a source familiar with the situation. "Indeed, now we have too much money but where is the best investment opportunity? There are many opportunities but I only want to make a reasonable investment," Dongxiang chief executive Dennis Qin said at a recent conference. "It's not necessary to be a sportswear brand. We're also interested to look for opportunities in brands that are not purely about sports but related to sports, for example, Ralph Lauren," said Qin, referring to the US clothing brand well known for its Polo logo.

Shares of Dalian Dayang Trands rose 10 per cent for a fourth day in Shanghai to close at 14.67 yuan, their highest since January last year. A little-known Chinese clothes maker is soaring after the world's most famous - and rumpled - investor endorsed its products. Warren Buffett is nobody's idea of a clothes horse or fashion victim. Asked why he dressed in cheap suits, he riposted: "I buy expensive suits. They just look cheap on me." Now Buffett has turned Dalian Dayang Trands into China's best-performing clothing stock after saying he wears the company's suits. Dayang surged the 10 per cent daily limit for a fourth day in Shanghai after the company posted a video on its website of Buffett congratulating it and chairman Li Guilian on its 30th anniversary. The stock closed at 14.67 yuan (HK$16.65), its highest since January last year.

Reports on Thursday said Geely Automobiles is eyeing a stake Opel, whose logo is seen next to a traffic sign in Ruesselsheim, central Germany, and is holding talks with Magna International about a potential partnership. Geely Automobile Holdings (SEHK: 0175) has approached Magna International about a potential partnership on car maker Opel, a source familiar with the matter said on Thursday, marking the mainland automaker’s latest attempt to chase a western brand. Talks between Geely and the Canadian auto parts supplier included the possibility of Geely taking a stake in Opel, but Magna is refraining from any such partnership for now, said the source, who declined to be identified because the talks were private. Geely executives could not be reached immediately for comment. Geely’s gesture to Magna, which came after it publicly admitted its interest in Ford Motor’s Volvo car unit recently, underscores mainland automaker’s growing ambitions to be global players. But industry analysts said the automakers, weak in their home market, will find it challenging to handle overseas auto assets given their limited international exposure. “I think it will be hard for Geely to have a piece of the Opel deal in the first place. Magna’s already got a Russian partner and involvement from a Chinese firm will make it very complicated,” said Li Mengtao, an analyst with Sinolink Securities. “It also makes little sense for Geely if it ends up being a minority shareholder with little access to the technologies it desperately needs.” General Motors’ board has recommended the sale of a majority stake in Opel to a consortium led by Magna International, which include a Russian bank. GM’s chief executive Fritz Henderson said on Wednesday he expects to sign the deal next month. Geely said last week its parent was considering a bid for Volvo with a local government-backed investment firm. Its Hong Kong-traded shares were suspended on Wednesday pending an announcement on a proposed convertible bond issue, which was not related to Volvo, according to its executive director Lawrence Ang. It is unclear whether the bond issue is related to Geely’s possible deal with Magna on Opel.

H&M's Greater China country manager Lex Keijser, seen here in a file photo, said on Thursday the fashion chain has been using Hong Kong as a base to expand in Asia. The firm will open its first store in Korea next year. Swedish fashion giant Hennes & Mauritz (H&M), the world’s No 3 clothing retailer, said on Thursday that it aims to raise its Greater China store count by nearly 30 per cent by year end as part of a broader push into Asia. H&M, which competes with Gap of the United States, Spain’s Inditex and Japan’s Fast Retailing, operator of the Uniqlo casual clothing chain, said opening stores in Hong Kong helped pave the way for the company’s expansion into Asia. “We are using it [Hong Kong] as a platform to operate in Asia, because after mainland China, we also opened in Japan. We will also open in Korea next year,” Lex Keijser, H&M Greater China country manager, said on the sidelines of a new store opening in Hong Kong. “It [the Asia market] could be the newest and biggest market for H&M in future, because there is so much potential if you look at Asia. We’ve just started in Hong Kong, mainland China, Japan and Korea,” Keijser said. “We are still a baby, but a fast-growing baby.” H&M, which has four stores in Japan and is opening its first in Korea next March, aims to raise its Greater China store count by nearly 30 per cent by the end of December to 27 from the current 21. Keijser said he saw huge opportunities in mainland. “We have only 15 stores in a population of 1.3 billion, so there are so many things to do.” The company had 15 stores in mainland and six in Hong Kong, with six more set to open in mainland this year, he said. “As the economy grows in China, we also will grow,” Keijser said. “We will grow where we have possibility … All the major cities in China are a possibility for us,” he said. “We don’t want aggressively open … We want to open in a controlled way.” H&M, which in June signed up luxury shoemaker Jimmy Choo as the latest in a string of high-profile guest designers, has over 1,800 shops in more than 30 countries, with its principal markets in Germany, the United Kingdom and Sweden. “We see huge potential in Taiwan,” Keijser said. “It’s on our wish list, but we don’t know when.” H&M has not yet opened any stores in Taiwan. While foreign brands seek to strengthen their presence in mainland, the fashion industry there is keen to move on from being a mass manufacturer of clothes and wants to own western brands and sell them to mainland consumers. And the list of western brands up for sale is only expected to get longer as clothing makers continue to reel under the weight of a global recession. H&M and Inditex, Europe’s biggest clothing retailer, which owns the Zara chain, have so far weathered the downturn better than mid-market rivals such as Britain’s Marks & Spencer and Next, helped by a focus on low-cost, fast-moving fashions, and geographic spread.

Standard Chartered Bank plans to increase the number of dealers in mainland by about two-thirds in three to four years, as the Asia-focused British lender seeks a bigger role in the country’s fast-growing bond and foreign exchange market, a senior executive said on Thursday. Standard Chartered plans to expand staff in its Shanghai dealing room to 130 from 80 currently, and is seeking regulatory approval to become a bond market maker in the country as well as an underwriter of corporate debt, China head of global markets John Tan said.

Photo taken on Sept. 16, 2009 shows the inauguration ceremony of the new premises of China Science and Technology Museum in Beijing, China. The new premises of China Science and Technology Museum covers an area of 48,000 square meters with a construction scale of 102,000 square meters.

Sept 19 - 20, 2009

Hong Kong: While the government has publicly put a price tag of HK$39.5 billion on the planned high-speed rail line to Guangzhou, its own engineers told it some time ago the actual cost could be over HK$60 billion. Now it is working to bring the cost down to nearer the public figure. They aim to cut it by at least HK$10 billion, to HK$50 billion, before announcing a final deal, expected next month, officials say. Still, the officials say the cost is bound to be higher than HK$39.5 billion because of the rising price of materials, adjustments to the line's route and integrating its construction with that of the West Kowloon arts hub. Legislators are already questioning the worth of the line after an MTR study projected that five years after it begins operating in 2015, nearly 80 per cent of the trains serving Hong Kong will run to and from Shenzhen, rather than Guangzhou. The government has frequently touted the 48 minutes it will take users of the line to reach Guangzhou - though getting to Tianhe in the city centre will take another 45 minutes from the line's terminus at Shibi, an interchange with the mainland's high-speed-rail network. "Do we really have to spend HK$60 billion?," asked Civic Party lawmaker Ronny Tong Ka-wah. "Can't we provide feeder transportation to connect with the mainland's high-speed-rail network, instead of being part of it?" The Legislative Council's railways subcommittee meets today to consider the project. The Executive Council is expected to seek Legco's approval next month for funding for it, with the aim of beginning work this year. A senior transport official said leaving the city out of the national network would be suicidal. "When the government planned to spend HK$5 billion to build the Mass Transit Railway back in 1973, the public raised strong opposition, saying franchised buses were enough to serve their needs. Can you imagine Hong Kong now without the MTR?" An engineer familiar with the project said one reason for the rise in costs was the extensive works needed above the line's terminus in West Kowloon to allow the biggest flexibility for development of the arts hub. The transport official said investing a little more now would allow much greater returns from land sales. Another senior official said it did not matter if 80 per cent of the trains went to and from Shenzhen rather than Guangzhou because the line was never intended to provide only a point-to-point service. Passengers could change trains in Shenzhen for cities such as Xiamen , Fuzhou and Shantou. Lawmakers from other major political parties backed the rail project. Miriam Lau Kin-yee, chairwoman of the subcommittee, said it had gone over the cost issue several years ago and decided it was more important to invest now than to be marginalised.

A meeting between Hong Kong Executive Council convenor Leung Chun-ying and Taiwan's premier, Wu Den-yih, before Wu assumed office has created a political stir. The pro-independence Democratic Progressive Party used the meeting to accuse the new premier and mainland-friendly President Ma Ying-jeou of kowtowing to Beijing. But Wu yesterday dismissed the criticism, saying the two men had met to discuss mudslide prevention. The incident raised questions over the Taiwanese leaders' national loyalty and honesty, DPP spokesman Chao Tien-lin said. "The DPP will consider the September 5 incident the same as Nixon's Watergate if Ma and Wu fail to explain clearly," he said of Wu's meeting with Leung, a possible successor to Donald Tsang Yam-kuen as chief executive in 2012. The meeting took place at the Hong Kong Club on September 5, two days before Ma named Wu cabinet chief, replacing Liu Chao-shiuan, who stepped down to take responsibility for the poor handling of the aftermath of a deadly typhoon. As Leung is a member of the Chinese People's Political Consultative Conference Standing Committee, the DPP portrayed the meeting as Ma seeking Beijing's approval for Wu's appointment. Chao said: "The DPP is highly reluctant to be forced to conclude that by sending Wu to meet Leung in Hong Kong, Ma was seeking approval from Beijing for Wu's appointment, or consulting with or briefing Leung about the upcoming cabinet changes in Taiwan. Ma and Wu must honestly let the public know what exactly has happened." Calling the claim absurd, Taiwanese cabinet spokesman Su Jun-pin said the meeting had nothing to do with seeking mainland approval. "The Republic of China [Taiwan] is sovereignly independent and the accusation that the premier had to report to mainland authorities concerning his appointment is absurd." Su said Wu went to Hong Kong to learn about preventing mudslides. Wu yesterday confirmed the meeting with Leung. "That visit had been arranged well ahead of my being appointed premier, he said, adding that when Leung was invited to visit Taiwan by the Lung Yingtai Foundation on August 14, he had already told Leung he would visit to discuss mudslides. But the DPP said Leung was not an expert on mudslides and that Taiwan had more experience with the problem than Hong Kong. Leung, speaking through an Exco spokeswoman, said he had met Wu as chairman of the Coalition of Professional Services rather than as Exco convenor. A spokesman for the Constitutional and Mainland Affairs Bureau did not respond to questions on whether there was a need to review policies on semi-official meetings between Hong Kong and Taiwanese officials.

A Greenpeace protester hangs from the anchor chain of the Hong Kong-registered ship East Ambition in a protest in New Zealand yesterday.

A slimming and beauty advertisement in North Point. Some women say they have been stung by unfair play in programmes costing as much as HK$60,000. More slimming companies are luring customers into being their "spokeswomen", but some of the women later regret it when they fail to meet weight-loss targets. The women are told that if they meet their weight targets, they will be given the opportunity to become spokeswomen in advertisements. But the customers are required to pay a deposit to show their "determination and sincerity" - and the sum is about the same as the market price of the treatment. If the woman cannot reach a designated weight, she may lose a month's deposit. In the first eight months of this year, the Consumer Council received 31 complaints from women persuaded to become spokeswomen. There were 24 complaints last year. Among them was a woman, with diabetes, who signed a contract in which she paid a deposit of HK$24,800, equivalent to the cost of 46 treatments. To lose more weight to meet the target, she paid an additional HK$7,000 for acupuncture, but missed her first-month target. She said she tried harder, but found the company slowed the progress of her treatments and required her to do less exercise. She decided the company was being dishonest, and reported the case to the council. In another case, in which a spokeswoman succeeded in losing a certain amount of weight, she was required to report back to the centre every month for a year to see whether she was able to maintain the weight loss. If not, the installment for that month was forfeited. The city's consumer watchdog warned that there was no "free lunch" in the commercial world. "Contract terms stress that the effectiveness of a slimming programme depends on co-operation of participants," said the vice-chairman of the council's publicity and community relations committee, Ron Hui Shu-yuen. "It is hard to define whose responsibility it is" when a customer fails to lose weight.

Hutchison Telecommunications (SEHK: 2332) Hong Kong Holdings, which runs both wireless and fixed-line communications services, has signaled a new front in the mobile broadband war in the city. The company's sole equipment supplier, Nokia Siemens Networks, has started a five-year infrastructure expansion program for the company and will overhaul Hutchison Telecommunications' 3 network to allow higher download speeds. It will deploy the high-speed packet access evolution (HSPA+) technology with internet data download speeds of up to 42 megabits per second, double that of rival operator CSL's 21Mbps "Next G" service launched in March. Hutchison Telecommunications, part of Hutchison Whampoa (SEHK: 0013), has committed to buy at least HK$350 million worth of equipment from Nokia Siemens within the first 24 months of their five-year agreement. Daniel Chung, the chief technology officer at Hutchison Telecommunications, said the network upgrade was another "milestone" and significantly boosted its efforts to meet growing demand for mobile data services. Hutchison Telecommunications, which counts more than 1.3 million 3G customers among its mobile subscriber base of about 2.7 million as of June 30, launched Hong Kong's first commercial 3G service in 2004 and extended that to Macau in 2007. Nokia Siemens, a joint venture between Finnish firm Nokia's network business group and the communications division of Germany's Siemens, will install and deliver its most compact mobile base station, the Flexi BST. The base station, which is touted to provide energy savings of up to 70 per cent compared with traditional models, also offers Hutchison Telecommunications increased flexibility and paves the way for even faster wireless data services in future. A simple software upgrade will allow the operator to use the same hardware when deploying the new 4G technology called Long-Term Evolution (LTE), which it is claimed will deliver data transfer speeds of more than 100Mbps. That would allow a user to download 10 MP3 songs in five seconds, instead of minutes typically for 3G. Hutchison Telecommunications and PCCW (SEHK: 0008), the city's biggest telecommunications company, had formed a joint venture that was one of three operators which won in the government auction of the 2.5/2.6-gigahertz spectrum for LTE earlier this year. "With widespread usage of data and mobile internet activities, our solution is ideal for mega-cities like Hong Kong," said Richard Kitts, who heads the dedicated Hutchison customer business team at Nokia Siemens. But CSL, which also won in that spectrum auction, was first to announce early this month that it will soon build Hong Kong's first LTE network with mainland equipment supplier ZTE Corp (SEHK: 0763). CSL chief executive Tarek Robbiati said the carrier had already invested "hundreds of millions of dollars" to build a totally revamped and larger mobile infrastructure, compared with that built by former supplier Nokia Siemens. Robbiati said the ZTE equipment would allow CSL to spend less in developing a 4G network compared with its competitors.

The Lands Department last night issued a written warning to the developer of a private cemetery on an island off Tai Po, demanding that it demolish unauthorized structures built on the site by late this month. But the department was still unable, despite repeated requests, to say whether developing a cemetery on private land on Ma Shi Chau was a violation of land-lease conditions. The warning was the second it has issued to developer Union Lucky Development Limited. It issued the first warning on August 12, regarding the illegal development, the Lands Department revealed last night. It said the land lease did not allow the erection of any structures without prior government approval.

More than 3,000 jewellers will be in Hong Kong next week to sell their wares as signs appear of a revival in luxury spending. Occupying the Wan Chai and airport exhibition venues, the Hong Kong Jewellery and Gem Fair is billed as the biggest fair in the city and the largest of its kind in the world. It will feature one piece valued at US$50 million, said organiser UBM Asia. The number of exhibitors is up 16 per cent on last year, although the number of buyers is expected to be the same, at about 37,000. UBM Asia's president and chief executive, Jime Essink, said he was surprised by the growth, especially since jewellery sales in the United States and Europe had been hit hard by the global downturn. The show will take up all available space at the newly expanded Convention and Exhibition Centre in Wan Chai and eight halls at AsiaWorld-Expo, or a total of 120,000 square metres, up 25 per cent from last year. It is the first show to occupy the entire Convention and Exhibition Centre since its atrium was expanded by almost 20,000 square metres. Although the show can still expand into AsiaWorld-Expo's arena and the mezzanine and meeting rooms at the Wan Chai venue, Essink said getting any bigger would be a problem. "When the economy recovers, the show will also be fully booked. So any plans for venue expansion are welcomed by us," he said. Exhibitors are looking for signs from buyers that consumers are willing to spend on luxury goods. The latest measure of business confidence by the Trade Development Council, its export index, rose to 48.3 out of 100 in the last quarter from 42.9. Although a reading below 50 signifies pessimism, it was the third successive quarterly improvement and the highest single jump in the index in six quarters. The measure of optimism for jewellery jumped to 56 from 36.5. The council's chief economist, Edward Leung Hoi-kwok, said: "The readings for all major markets struck higher in the third quarter, suggesting a sustained and across-the-board improvement in export confidence." A council survey in June of the mainland's middle class found 73 per cent of respondents wanted "a rich material life", while 64 per cent said it was worth paying more for a product or service they liked. Hong Kong brands are considered stylish and mainland consumers were willing to pay 49 per cent more on average for Hong Kong brands compared with their mainland equivalents, the survey found.

Biggest ever jewelry show to surpass US - Hong Kong is set to upstage the United States by hosting the largest ever jewelry fair next week. Some 3,060 exhibitors from 44 countries will be taking part in the Hong Kong Jewellery and Gem Fair, far surpassing the 2,700 in the latest JCK Las Vegas jewelry show held from May 30 to June 2. Jime Essink, president and CEO of event organizers United Business Media Asia, described the upcoming fair as "the biggest ever." The 27th edition of the fair will be held from Monday to Friday at the AsiaWorld Expo near the airport and from September 23 to 27 at the Hong Kong Convention and Exhibition Centre in Wan Chai. The most expensive item to be showcased has a price tag of US$50 million (HK$390 million), according to UBM's director of jewelry fairs Celine Lau Siu-man. Of the exhibitors, more than 42 percent or 1,292 are local, followed by Thailand (301), the mainland (219), Italy (171) and the United States (150). International buyers include both private collectors and renowned jewel retailers and designers who wish to source a variety of jewels of different grades. The exhibitors at AsiaWorld-Expo will showcase raw, unworked diamonds, pearls, gemstones and packaging, while finished items will be displayed at the Wan Chai venue.Essink was tight-lipped about details of security measures for the show. Hong Kong jewelry fairs have always attracted international jewel thieves, notably the 2003 fair when four thefts were reported, including that of 200 diamonds worth HK$7.8 million. Essink did not disclose the total value of the jewels on show this time. He expects the fair to attract buyers from the mainland as he believes China and India will become the biggest jewel markets in the near future, overtaking the shrinking US market. The event is also a key indicator of the recovery of the jewel market that would help traders determine their business strategies for next year. "The September event is to prepare for the seasonal peaks of Christmas and the Lunar New Year." Essink believes Hong Kong remains a "perfect" venue to hold an international jewelry fair as the city is well-known for being safe and its free trade policy makes it a business-friendly place to hold exhibitions. He said mainland cities would need time to create the same free market environment before they can upstage Hong Kong. But the city's major limitation is lack of space and high cost, especially rental and hotels, Essink pointed out. The organizers have also sponsored about 800 buyers from 30 countries to attend the fair - double the figures for the past years. Lau said sponsorship is necessary as the market has not fully recovered yet.

Container throughput at Hong Kong port last month showed a significant improvement for the first time since the start of the financial crisis, but analysts questioned whether the recovery was sustainable. The world's third-busiest container port handled 1.94 million 20-foot equivalent units last month, the highest monthly throughput since October last year, according to the Hong Kong Port Development Council. It represented a 0.3 per cent increase on July, while the year-on-year drop of 10.7 per cent was the narrowest of the past nine months.

The operator of this unnamed 95 square foot foreign exchange store in Cannon Street is paying a monthly rental of HK$169,955.

Cash-strapped Cathay Pacific Airways (0293) is raising HK$1.9 billion by selling a substantial stake in its aircraft maintenance affiliate to parent Swire Pacific (0019).

China: World Trade Organization (WTO) chief Pascal Lamy said Wednesday that he was concerned about the latest move by the Obama administration to restrict import of Chinese-made tyres.

Canada should be ready for a growing inflow of Chinese investment over the next few years. That is one message from a survey released on Tuesday by the Asia Pacific Foundation of Canada.

Beijing is expected to replace its longest-serving religious head with his deputy, who has been heavily involved in negotiations with the Vatican.

Movie posters at a cinema in Beijing yesterday, a day ahead of the opening of The Founding Of A Republic, set between 1945 and 1949. That's the edict from top Communist Party leaders and the State Council to provinces and cities, other than Beijing, which have been planning public celebrations for the 60th anniversary of the founding of the People's Republic of China. Top leaders fear a terrorist attack or social disturbance that would sabotage celebrations on October 1, and also want to avoid appearing extravagant at a time of economic hardship. The ban was imposed in July after the violent clashes between rioting Han Chinese and members of the Uygur ethnic minority in Urumqi , Xinjiang , that officially left 197 people dead and hundreds more injured. However, mainland media have not reported it. Governments in China's regions should not stage big public gatherings or parades to celebrate the anniversary, a circular issued by the government and the party's Central Committee said, according to a party source who was briefed about it. If any government felt it had special grounds for staging such events, they must seek central government approval, the circular said. It specifically banned all "reviews of troops" outside the capital. In the past, provincial, regional and municipal governments have staged celebrations - involving mass gatherings in city parks or big street parades - in milestone years such as those marking the republic's 40th, 45th, 50th and 55th anniversaries. A senior official in charge of publicity in one province said: "As a result [of the circular], several cities in our province have stopped their programmes even though most of them had begun their preparatory works as early as the beginning of this year." Such an official would usually be directly involved in preparations for public celebrations of the sort that authorities had been planning.

The top US military commander for Asia says he is "cautiously optimistic" on forging a conflict-free relationship with China despite Washington's concerns about Beijing's rapid military build-up. The assessment by Admiral Timothy Keating, head of the Hawaii-based US Pacific Command, came despite US intelligence guidelines listing China and Russia as main challengers and warning that Beijing was boosting the nation's cyberwarfare capabilities. Keating, who steps down next month, pointed to the mainland's resumption of military exchanges with the United States and its landmark anti-piracy naval mission off Somalia, where it co-operated informally with US forces. "All of which leads me to be cautiously optimistic about the way ahead with China and even more optimistic than that about the region in its entirety," Keating said on Tuesday at the Centre for Strategic and International Studies, a Washington think tank. The US and ally Japan have led calls for Beijing to be more transparent about its military spending, which has grown by double-digit percentages annually for the past two decades. Keating acknowledged that China was developing "some pretty good capability" in areas ranging from submarines to anti-satellite operations and cyberwarfare. But he said tensions had eased markedly in the past few years. "We want to draw the Chinese out. We want to ask them to manifest their intentions forward for a peaceful rise and harmonious integration," Keating said. But relations could face at least temporary hiccups, he cautioned, if President Barack Obama's administration agreed to sell advanced F-16 fighter jets to Taiwan.

Beijing slams US `Cold War' - China hit out at new US intelligence guidelines which pointed to Beijing as one of Washington's main challengers, accusing the United States of having a "Cold War mentality." "We urge the US side to abandon its Cold War mentality and bias and stop issuing remarks that mislead the American people and harm mutual trust between China and the United States," said foreign ministry spokeswoman Jiang Yu. In a statement posted on the ministry's website, Jiang urged the United States to correct mistakes in the report. The United States released its 2009 National Intelligence Strategy document on Tuesday, in which China's "natural resource-focused diplomacy and military modernization" were pinpointed as factors making it a "global challenge." The report fingered China and Russia as its main challengers in guidelines that highlighted the rising scourge of cyber- war. "A number of nation-states have the ability to challenge US interests in traditional and emerging ways," said the document. "China shares many interests with the United States, but its increasing natural resource-focused diplomacy and military modernization are among the factors making it a complex global challenge." Intelligence director Dennis Blair said his guidelines for the next four years elevate "the importance of the challenges we face in the cyber domain," and singled out China as "very aggressive in the cyberworld." His strategy review, the first since 2005, warned the internet was "neither secure nor resilient" and recommended measures "across the cyber domain to protect critical infrastructure." The Russians also came in for criticism on the cyber threat issue, and the intelligence document noted that Moscow's intentions on the world stage remained unclear. Blair, a former commander of US forces in the Pacific from 1999 to 2002, revealed for the first time the overall cost of intelligence activities. He put the annual figure including military-related intelligence at US$75 billion (HK$585 billion).

The US has listed China as one of the key targets for espionage for the next four years, a significant shift by the Obama administration and one that offers a rare insight into the motives of America's spies. The National Intelligence Strategy produced by new intelligence director Dennis Blair groups China with Iran, North Korea and a resurgent Russia as nations with the ability to "challenge US interests in traditional and emerging ways". The previous National Intelligence Strategy, produced under George W. Bush in 2005, made no mention of any nation and instead focused on the threat of terrorism and the need to integrate American spying efforts. "China shares many interests with the United States, but its increasing natural-resource-focused diplomacy and military modernisation are among the factors making it a complex global challenge," Blair's report states. He also places China at the centre of growing US concerns over threats in cyberspace, noting that it is "very aggressive in the cyber-world". The four nations listed are able to challenge the US through military, espionage and technological means, the document says.

Sept 18, 2009

Hong Kong: Hong Kong managed to hold on to its ranking as the most economically free market in the world, according to the Fraser Institute, but saw its score for maintaining a fair and impartial judiciary drop. The Canadian think tank's latest report, which is based on 2007 data, ranked Hong Kong at No 1 out of 141 economies, with a score of 8.96 out of 10. But in evaluating the impartiality of the city's courts, the Vancouver-based institute gave the city a score of 7.86, its lowest yet. That was down from 8.32 a year earlier. In 1995, the score was 7.93. There is a two-year delay in releasing the institute's report, which relies on third-party economic data. The institute was founded in 1974 and its report is recognized as a leading measure of economic freedom. The courts handled a number of landmark cases in 2007, including ruling that prosecutors would have to prove that suspects found in possession of dangerous drugs knew of the drugs, and convicting the first person in the world for using BitTorrent technology to put pirated movies on the internet. A government spokesman said: "There appears no obvious reason why the rating on this measure has dipped this year, although it is noted that the rating this year is now much the same as in 1995." Singapore was listed second for economic freedom with a score of 8.66. New Zealand, Switzerland, Chile, the United States, Ireland, Australia, Britain and Estonia rounded out the top 10. The overall rankings are based on scores for size of government, legal structure and the security of property rights, access to sound money, which includes the impact of inflation, freedom to trade internationally, and the regulation of credit, labour and business. Hong Kong ranked third for size of government, down one place from a year earlier, although its score of 9.29 was far below the 9.75 it achieved in 1980. The city continued to be first in terms of freedom to trade internationally and improved its rankings to 18th for access to sound money, ninth for the regulation of credit, labor and business, and 15th for its legal structure.

While officials keep stressing the importance of the Guangzhou-Shenzhen-Hong Kong express rail link in connecting to the high-speed national rail network at Shibi, Guangzhou, an internal MTR report shows that nearly 80 per cent of the trains are not intended to stop at Guangzhou but will end in Shenzhen. According to the study on the greater Pearl River Delta's railway development obtained by the Post, only 25 pairs of trains, or about one fifth of the 114 train pairs set to run between Guangzhou and Hong Kong, will stop at the new station in Shibi by 2020 - five years after the HK$39.5 billion link begins to operate. The vast majority of train pairs, 78.95 per cent, will terminate at either Futian station or Longhua station, in Shenzhen. From the link's West Kowloon terminus it takes only 14 minutes to reach Shenzhen city centre in Futian, and 23 minutes to Longhua.

Former chief executive Tung Chee-hwa said on Tuesday that mutual mistrust was hindering any real improvement in the relationship between the mainland and the United States.

Following a revival in the global economy, central banks around the world are facing a dilemma over when to tighten monetary policy, the chief executive of the Hong Kong Monetary Authority said yesterday. A year after the collapse of US investment bank Lehman Brothers, asset prices - especially in the world monetary market - have come back to their pre-crisis levels, despite the economy still being in recovery. "I fear that the monetary market's development will continue to decouple from the economy," Joseph Yam Chi-kwong, the outgoing HKMA chief executive, said. To deal with the financial crisis, governments and central banks have poured trillions of dollars into emergency stimulus measures to safeguard monetary and financial stability. "Governments will need to exit their loose monetary policy and supportive measures, or else asset bubbles will be created again," Yam warned. Governments around the world face a difficult choice, he said. "On the one hand, they do not want to create any asset bubbles; while on the other, the pace of economic recovery may slow down if they exit their loose monetary policy," he said. Hong Kong is in a particularly difficult position as the city follows the United States in formulating financial policy, Yam said. Despite signs of a recovery, Standard Chartered (2888) group chief executive Peter Sands said the global economy is still "in the hospital." "Things are certainly better than we have seen over the past 12 months. Most banks are operating more or less normally and most of the markets are now functioning quite well," he said. However, countries should prepare to tighten control of money supply after pumping in huge amounts of cash in response to the crisis. Hang Lung Properties (0101) chairman Ronnie Chan Chi-chung said the world economy suffers from structural problems and that commercial and investment banking should not be mixed. He also feels the introduction of quarterly reporting of financial results will only serve to promote short-term vision.

Each family of the six casual workers who were killed in Sunday's accident in the International Commerce Centre received HK$1.2 million from Sun Hung Kai Properties yesterday.

HSBC (0005) has expanded its small and medium-sized enterprises loan fund to HK$20 billion - four times its original size in December.

The University Grants Committee is raising the study allowance for some doctorate students to HK$20,000 a month from HK$13,000 in an attempt to draw foreign students destined for top universities in other countries. Up to 135 doctorate students - regardless of their place of origin - will be granted the scholarships if nominated by the city's universities under the 2010-11 Hong Kong PhD Fellowship Scheme. The scheme provides a monthly stipend of HK$20,000 and conference and research- related travel allowance of HK$10,000 per year for up to three years. It is aimed at attracting high-caliber students from overseas and creating cultural diversity in campuses, according to Roland Chin Tai-hong, chairman of the UGC's Research Grants Council. "It is to unite the brightest postgraduate research students with Hong Kong institutions, to nurture the best students, allowing them to excel in their chosen fields with groundbreaking research," he said. The scheme is available only for the seven government-subsidized institutions - Polytechnic, Baptist, City, Lingnan, University of Science and Technology, Chinese University and University of Hong Kong. Shue Yan is excluded because it is a private university and the Institute of Education is not part of the scheme because it is not research-based. Chin said UGC has received 700 applications since online registration opened on September 8. More than 100 of the applicants are from the mainland, another 100 from Pakistan while less than 100 are from India. About 20 were locals. Each university will have a quota of about 90 nominations. The council expects the annual cost of the scheme to be about HK$357,000 per student. The application deadline is December 1. Selection panels will comprise of experts in the relevant areas, including sciences, medicine, engineering and technology, humanities, social sciences and business studies, and announce their grants in March. So far, about half of the 5,000 students doing research in Hong Kong are working toward a PhD, mostly at Hong Kong University, HKUST and Chinese University. Most are from the mainland. The UGC will launch a promotion tour next week of eight countries, including India, Singapore, Vietnam and Bangladesh.

Hong Kong people’s opposition to an independent Taiwan and Tibet remains high, a new survey released on Tuesday shows. The Public Opinion Program (POP) of the University of Hong Kong interviewed 1,002 people between September 7 and 13 by means of a random telephone survey. Of those surveyed, more than 75 per cent were opposed to independence for Taiwan and Tibet. However, only 50 per cent of those surveyed said they had confidence in the unification of the mainland and Taiwan and the applicability of “one country, two systems” to Taiwan. Public Opinion Programme (Pop) director Robert Ting-Yiu Chung noted that in spite of the Dalai Lama, the Tibetan spiritual leader, and Rebiya Kadeer, the exiled leader of Xinjiang’s Uygur minority, Rebiya Kadeer, being in the news lately, the views of those surveyed had not changed significantly from those expressed in the previous survey three months ago.

A one-bedroom flat in a luxury development in Tsim Sha Tsui has fetched a whopping HK$30,025 per sq ft, setting a record in Hong Kong. A Hong Kong businessman who owns a trading firm has paid HK$24.5 million for an 816 sq ft flat on the 56th floor of The Masterpiece for his own use, according to Centaline Property Agency, which concluded the deal. The price is a record for a one-bedroom flat. The useable area of the apartment is just 590 sq ft, similar to flats in mass residential projects. Thomas Chan, Centaline sales director, said the buyer was willing to pay the high price because the flat offered views of Victoria Harbour and was centrally located. In 2007, the average price of one-bedroom flats at The Arch, above Kowloon Station, was HK$17,000 per sq ft. The 64-storey The Masterpiece in Hanoi Road was developed by New World Development and the Urban Renewal Authority. It is the second-tallest residential building in Hong Kong after The Cullinan, above Kowloon Station. The one-bedroom flat is the smallest unit in the project. "The buyer could get a second-hand luxury flat with at least 1,500 sq ft and three bedrooms in Mid-Levels" for the price, said Koh Keng-shing, managing director at Landscope Surveyors and Landscope Realty. Even though average prices at housing estates such as Taikoo Shing are still down from their 1997 peak, property agents said luxury residential prices had already exceeded their 1997 levels. The city's most expensive flat is a 7,088 sq ft unit at Branksome Crest in Mid-Levels, which sold for HK$240 million, or HK$39,786 per sq ft, in December 2007. Flats previously peaked at about HK$20,000 per sq ft in 1997, Koh said. The most expensive residential property in the city is a 3,300 sq ft house at 8 Severn Road on The Peak, which sold for HK$285 million, or HK$56,800 per sq ft, in June last year, making it the most expensive residential dwelling in Hong Kong and also Asia. The new luxury developments in non-traditional luxury residential areas such as Tsim Sha Tsui and Kowloon Station are fetching higher prices than apartments in Mid-Levels and other high-end residential areas. "Those projects have attracted new demand from mainland buyers and local investors, not the local end-users," Tsang said. "Some of the projects are overpriced. It may be risky for the buyers." Tsang had confidence in the market outlook for luxury residential developments in traditional luxury areas as the supply was expected to remain low in the next few years.

Hong Kong's tourism sector will launch more promotions to make up for the loss of Taiwanese visitors resulting from the recent advent of direct transport links across the Taiwan Strait. "Direct cross-strait transport links are a crisis for us but it also brings us opportunities," Terence Wang Man-man, Hong Kong Tourism Board's director in Taiwan, said. "We have lost some businessmen but there are now more seats for families and other travelers to fly to Hong Kong." Board data shows that nearly 1.4 million Taiwanese visited Hong Kong in the first eight months this year, a fall of 10.6 per cent compared to the same period last year. The latest figures were an improvement on the first seven months (January to July) - a 12.8 per cent year-on-year drop - or in the first six months of this year when the year-on-year fall was 13.1 per cent. "The figures indicate that the effects of direct cross-strait transport links are decreasing gradually," board executive director Anthony Lau Chun-hon said, adding that the effects of swine flu on tourism had also decreased. Daily direct flights and direct shipping between the mainland and Taiwan began on December 15 last year. Before, many Taiwanese people had to fly via Hong Kong to travel to and from the mainland. After the mainland, Taiwan was the second-largest source of visitors to Hong Kong and made up almost a tenth of total visitor arrivals. Lau - who was in Taipei participating in the Hong Kong Association of Travel Agents' annual overseas convention at the weekend - said the board would focus on luring overnight visitors, who spent 24 times more than a transit passenger or about HK$5,000 per stay per person. At the convention, speaker Stanley Yen, group president of Landis Hotel and Resort who is known as the "godfather of Taiwan's hospitality industry", said transit travellers represented little economic value. "Now we can decrease the unnecessary traffic, we should upgrade the clientele to the next level, which is to promote `in-depth travelling'... and travel agents need to add value to their products," Yen said. One of the Hong Kong Tourism Board's initiatives to woo more visitors from Taiwan was to line up the island's famous food critics to lead tours to Hong Kong to try the city's food and wine. The board will also join Guangdong and Macau for the first time to participate in the Taipei International Travel Fair next month, to woo Taiwanese visitors to travel to the three places in one trip. Some travel agents in Taiwan have co-operated with airlines by offering free stays in Hong Kong as they travel back from the mainland to Taiwan. "Airlines that don't offer cross-strait direct flights don't charge passengers for staying over in Hong Kong and we also offer a free night in hotel," Pauline Chen Yu-fong, general manager of Skyway Tour Travel Service, said. "The response has been good so far ... the number of clients choosing to travel via Hong Kong has surged by half," Chen said.

Three former senior executives of a Hong Kong-based innovative design company, including an award-winning designer, were charged by the ICAC yesterday with conspiracy to defraud in relation to the company's listing in Singapore and deception involving HK$7.5 million in bank loans. The defendants are Mah Pat, 54, former executive chairman and designer of Daka Designs Limited; Raymond Chow Yiu-man, 56, former chief executive of Daka Designs; and Kevin Leung Kwok-wah, 46, the company's former chief financial controller. Chow and Mah face a joint charge of conspiracy to defraud, while the three of them are charged with another similar offence. Chow alone faces six other charges of conspiracy to defraud. They have been released on Independent Commission Against Corruption bail and will appear in Eastern Court tomorrow morning for mention, and the case will be transferred to the District Court. Mah is a prominent designer and founder of Daka. The company's one-touch automatic can opener won a top award in the US for international design excellence in 2007. Daka was listed as a successful design and innovative company, according to information on the Trade Development Council website. One of the charges alleges that Chow and Mah conspired with another person to defraud Singapore Exchange Limited (SGX), the creditors and potential investors of Daka Designs. They are alleged to have dishonestly caused a transfer of 32 per cent of the shares of Daka Industrial Ltd, owned by Daka Development Ltd, to that person. They are also accused of misrepresenting the financial position of Daka Designs and its subsidiary, Daka Development, in the prospectus of Daka Designs dated July 2, 2004. As a result, the duo allegedly induced SGX to approve the application of Daka Designs for listing in Singapore. Another charge alleges that Chow, Mah and Leung conspired with another person to defraud existing and potential shareholders of Daka Designs and SGX. The three are alleged to have falsified receipts, commercial invoices, delivery notes and accounting records to inflate the turnover and profit figures of another subsidiary of Daka Designs - Briga Group (Macao Commercial Offshore) Co Ltd - to more than HK$8.9 million. They are also alleged to have dishonestly compiled and published documents, including the annual report of Daka Designs, which contained inflated turnover and profit figures of Briga for the financial year ended March 31, 2004. It is alleged that the defendants misled existing and potential shareholders of Daka Designs and SGX over the true financial position of the company, and prevented SGX from taking any action against the company for its failure. The remaining six charges allege that Chow conspired with others to defraud six banks in Hong Kong for loans totalling more than HK$7.5 million.

A council of environmental advisers endorsed the MTR Corporation (SEHK: 0066)'s environmental impact report on the planned cross-border express railway yesterday. But the council imposed on the rail company conditions, including a contingency plan to deal with any water seepage, and planting to compensate for the loss of 5,500 trees. Professor Lam Kin-che, chairman of the Advisory Council on the Environment, said that the council had examined aspects of the report, commissioned by the MTR Corp from a consultant, including on the ecological, visual, noise, underground and waste impacts. One condition attached to their approval, Lam said, was that the MTR Corp, the proponent of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, submit a tree planting and landscaping plan, including for compensatory woodland. The plan is to compensate for 5,500 trees due to be lost in tunnelling. The second condition requires MTR Corp to submit a contingency plan to deal with underground-water seepage. The condition was imposed after the MTR Corp said last month it had no contingency plan for something which was an "impossibility". Council member Edwin Lau Chi-fung, director of the Friends of the Earth, said he still had reservations, as the MTR Corp did not provide adequate data as to the affect on the flow of underground water. The council also required the MTR Corp to ensure that no construction waste would be disposed at Hong Kong landfills, and to prepare a waste management plan. The project will see 9.8 million cubic metres of material transported to Tai Shan in Guangdong, as agreed with mainland authorities. Whether the project gets a permit still depends on Hong Kong's director of environmental protection.

Macau casino operators may have turned a corner in the past two months, but that will not help first-half earnings at Stanley Ho Hung-sun's SJM Holdings, which announces its results tomorrow. The last of Macau's six casino operators to report its results, it is the biggest by market share and enjoys the healthiest balance sheet, but perhaps not the healthiest chairman. Ho, 87, remains in hospital following brain surgery early last month. Analysts expect SJM's first-half revenue to be largely in line with last year, compared with a 12.4 per cent decline in the overall market. SJM's 16 operating casinos captured 30 per cent of Macau's 51.43 billion patacas in gaming revenue for the first six months, which should see the firm report casino revenue of about HK$15 billion for the period. The wild card will be what has happened beneath the top-line figure, as analysts expect cost controls to have boosted profitability. SJM has been steadily closing VIP rooms and tables at its less profitable and in some cases loss-making franchise-style casinos. This had cut the total number of VIP rooms operating under its gaming licence to 40 as of December last year, down from 44 in June and 75 at the end of 2007. The company did not follow rivals in announcing high-profile and across-the-board pay cuts earlier this year. But headcount and payroll are expected to decrease through staff attrition and selective redundancies, partly because of a government campaign against non-resident workers launched in October last year. SJM is tipped to book earnings before interest, tax, depreciation and amortization of HK$1.8 billion this year, up 12.5 per cent from HK$1.6 billion a year earlier, four analysts said in a Bloomberg survey. Still, that may prove conservative if SJM can contain costs and keep its market share for the rest of the year, as Macau's gaming industry began showing signs of a sharp rebound in July. Casino revenue rose 17.2 per cent to 11.27 billion patacas last month - Macau's single biggest monthly takings. Casino revenue this month could grow about 40 per cent from 7.09 billion patacas last year. SJM looks well poised to capitalize on the recovery. With zero gearing, it has the strongest balance sheet among Macau's six casino operators and had HK$5.8 billion cash on hand at the end of last year. After shelving a proposed HK$15 billion acquisition and redevelopment of the old C and Hotel in January, SJM's remaining capital commitments are modest. Its development pipeline includes L'Arc, a franchised casino opening later this month. That will be followed several months later by the HK$1.5 billion, 300-table Oceanus, a mass-market self-owned casino near the ferry terminal. SJM's shares rose 4.46 per cent on Friday to close at a record high of HK$3.98. The stock has risen 135.5 per cent in the year to date and SJM is now valued at 23 times its forecast earnings for this year. While that may sound like a rich premium, it is mild compared with more expensive Macau peers, and analysts remain keen on SJM shares. "While concern over chairman Ho's health may remain a near-term overhang, we believe the stock is undervalued," Goldman Sachs analysts wrote earlier this month.

Bank of East Asia (SEHK: 0023) (BEA), Hong Kong’s fifth-biggest lender, plans to buy a minority stake in Golden Eagle Asset Management Co, seeking to tap rising demand for wealth management services in mainland, two people familiar with the situation said on Tuesday. Initially, BEA’s asset management unit will buy about one tenth of Golden Eagle from an existing shareholder, and may increase its stake in the small mainland fund house at a later stage, one source said. “This is a short cut for BEA to enter China’s fund market,” said Zhang Haochuan, analyst at Z-Ben Advisors. The Shanghai-based fund consultancy, which is not involved in the talks, estimates that the deal may be valued at about 28 million yuan (HK$31.82 million) based on Golden Eagle’s size. BEA and other foreign banks are seeking to broaden their revenue streams in mainland. Rival HSBC Holdings (SEHK: 0005) already owns a mainland fund venture, and in June obtained regulatory approval to start an insurance business in the country. A BEA spokeswoman confirmed that the bank had been in talks with a mainland fund house, but declined to comment further. Golden Eagle spokesman could not be reached for comment.

China Resources (SEHK: 0291) Cement Holdings plans to raise up to US$824 million in a Hong Kong initial public offering to fund expansion, according to a term sheet. The cement company, a unit of state-run China Resources (Holdings) Co, said it planned to sell 1.64 billion new shares in a range of HK$3.20 to HK$3.90 each. The offer had a greenshoe option to sell an additional 245.7 million shares, it said. Trading in the shares is scheduled start on October 6. The company said proceeds from the sale would be used to build cement production lines in Chinese cities including Fengkai, Wuxuan and Tianyang. The IPO is being managed by Credit Suisse and Morgan Stanley.

China: China's move to launch anti-dumping and anti-subsidy probes into imports of U.S. chicken products and vehicles was "based on the facts," Ministry of Commerce Spokesman Yao Jian said Tuesday. When asked if China's investigation was a retaliatory move because of the dispute over tire tariffs imposed earlier by the United States, Yao said at a press conference the investigation was in accordance with the country's anti-dumping and anti-subsidy regulations, and based on facts. China Sunday launched anti-dumping and anti-subsidy investigations into chicken products and an anti-subsidy investigation into automobiles produced in the United States. Yao said the probe followed Chinese manufacturers' and industrial associations' demands for an investigation into U.S. companies' dumping activities and government subsidies. The ministry has received the requests and started evaluations, Yao said. Ma Chuang, vice secretary general of China Animal Agriculture Association, said 17 member companies, along with other domestic companies, handed over the requests to the ministry. The United States is the largest chicken products exporter to China. China imported 407,000 tonnes of chicken from overseas markets in the first half of 2009, with 359,000 tonnes, or about 90 percent from the United States. The U.S. government last Friday imposed special tariffs on tire imports from China. In the next three years, car and light truck tires imported from China will suffer decreasingly punitive tariffs of 35 percent, 30 percent and 25 percent. On Monday, China asked for talks with the U.S. on the tire tariff issue in accordance with the World Trade Organization (WTO) dispute settlement process. Yao said the U.S. decision to impose special tariffs on tire imports from China had brought a negative impact to the two countries' trade relationship. China wanted to have talks and negotiations with the U.S. side on the friction and to practically promote the development of bilateral and multilateral trade relationships, said Yao. He reiterated that China firmly opposed trade protectionism and discouraged the use of trade remedies measures.

Photo taken on Sept. 14, 2009 shows the array of Columns of Ethnic Groups Unity, on the east side of Tian'anmen Square, in Beijing. A total of 56 Columns of Ethnic Groups Unity, one of the landmark decorations for the grand celebration of the 60th anniversary of the founding of People's Republic of China, start to be installed. Each column stands at a height of 13 meters and weighs 26 tons, depicting the vivid figures of each ethnic group's people in festival attirements who are singing merrily and dancing gracefully.

Yahoo’s sale of its stake in mainland’s top e-commerce company Alibaba.com (SEHK: 1688, announcements, news) came as a surprise to Alibaba executives, highlighting a growing strain between the two internet firms and sending Alibaba.com shares down more than 12 per cent on Tuesday. Alibaba was only informed of the sale on Thursday – the day of its 10th anniversary – with the news relayed via a lower level executive, said a source close to the company, who declined to be named given the sensitivity of the issue. “It’s like telling your wife she looks fat on her birthday,” he said. The source said the share sale, worth about US$150 million, reinforced a view in the company that Yahoo did not view Alibaba as a strategic partner, although Yahoo CEO Carol Bartz said last week it viewed the company as a very important investment. Yahoo and Alibaba had a better working relationship under ex-Yahoo chief executive Jerry Yang, who was present at Alibaba’s anniversary celebrations, the source said. “Yahoo Inc is a passive investor in Alibaba Group,” Alibaba.com said in response to a query. Yahoo still holds a 40 per cent stake in unlisted Alibaba Group, which controls about 74 per cent of Alibaba.com. Yahoo said on Monday it would sell its 1 per cent direct holding in Alibaba.com to take advantage of a near quadrupling in Alibaba’s share price this year. Yahoo’s stake sale comes a few days after Jack Ma, Alibaba’s chairman and founder, sold 13 million of his shares, or less than 5 per cent of his total holdings, in the company for US$35 million.

President Hu Jintao will present Beijing’s new plans for tackling global warming at a United Nations summit on climate change later this month, the country’s senior negotiator said on Tuesday.

A more detailed blueprint for the island, Hengqin, that will be jointly developed by Zhuhai and Macau, was revealed by Zhuhai authorities yesterday, targeting a gross domestic product of 56 billion yuan (HK$63.5 billion) by 2020. The scale of that ambition is apparent when it is considered that the bleak 106 sq km island has only 4,000 residents and recorded a meagre GDP of 128 million yuan last year. Mainland authorities had discussed its development a decade ago but it had been delayed because of the difference in political and legal systems. Zhuhai mayor Zhong Shijian said the island had been divided into different areas for development and that the blueprint included one sq km for a new campus of the University of Macau. Authorities said the island, part of the Zhuhai Special Economic Zone, would also pilot co-operation projects with Macau in customs, financial and revenue systems and land management Niu Jing , deputy director of Hengqin's administrative committee, said that an innovation in customs arrangements would allow Macau students and staff to commute via a tunnel without going through immigration checkpoints. "Because the new campus will be operated according to Macau laws, both the university and we expect to make it a self-contained area that is separated from other parts of the island," he said, adding that the project could cost 3 to 5 billion yuan. But Zhuhai authorities refused to say whether Macau would be able to send police to the campus. Other projects on the island include a huge China National Offshore Oil Corp gas terminal; gas-engine generator projects costing 12 billion yuan; and a massive ocean-themed entertainment centre, said to be the largest in Asia. It was last month that the State Council Standing Committee approved Hengqin island to pilot co-operation schemes between Zhuhai and Macau. An expert who jointly drafted the Hengqin blueprint said that only enhancing cross-border co-operation could boost development in Zhuhai and Macau. "Neither Macau nor Zhuhai can be the big brother on the west coast of the Pearl River Delta," the expert was quoted as saying by 21st Century Economic Report.

Employees work at a tyre factory in Hefei, Anhui province on Tuesday. Beijing tried to allay fears of a trade war with Washington over tyre tariffs, saying it will press a World Trade Organisation case against new US duties but wants to avoid harming relations. China unveiled data on Tuesday that showed tyre exports to the United States actually fell in the first half of this year, rebutting Washington’s accusations it had breached its WTO agreements by flooding the US market. Both countries moved to allay concerns of a trade war, but the row over Washington’s decision to impose added duties on tyres made in the mainland showed no signs of abating as Beijing said the US move was sending the wrong message to the rest of the world. “We mainly think that it’s an abuse of safeguard measures,” commerce ministry spokesman Yao Jian told a news conference in Beijing. The tyre duty was the first time Washington has applied special “safeguard” provisions Beijing agreed to before joining the World Trade Organisation (WTO) in 2001. The safeguard can be invoked if a surge in imports hurts US manufacturers. Mainland promptly said it would seek consultations with the United States over the duties, a preliminary step toward seeking a World Trade Organisation ruling on the measures. “It is sending a wrong message to the world under the current situation that the global financial crisis is still spreading,” Yao added. Yao objected to US claims that a surge in imports were harming American industry and jobs, saying that shipments from the mainland had fallen off.

China International Travel Service Corp (Cits) said on Tuesday it would launch a Shanghai stock initial public offering (IPO) this week that is worth about 1.7 billion yuan (HK$1.93 million) to fund expansion, including setting up new tourist agencies. China Travel, the country’s top tourist agency, would start book-building on Wednesday to issue as many as 220 million A shares denominated in yuan, or up to 25 per cent of its expanded capital after the IPO, it said in a prospectus published in the official Shanghai Securities News. Mainland’s stock regulator has pushed a slew of firms to launch IPOs since it resumed approvals in June after a 10-month ban. That comes amid a backdrop of a volatile share market, with the benchmark Shanghai Composite Index having rebounded 13 per cent this month after a 22-per cent slump in August, its second biggest monthly fall in 15 years. The index slumped in August after a 90-per cent jump from the start of this year but has since been lifted by government market-friendly steps, mainly repeated official pledges to support the market. But the push by the China Securities Regulatory Commission of more IPOs into the market despite the index’s volatility betrays the limit of the government’s support to the market, analysts said. Worries persist about an asset price bubble at a time when the world’s third largest economy has just started recovering. Beijing-based China Travel said it needed the A-share issue proceeds for expansion of core businesses, including establishing new tourist agencies both at home and abroad, upgrading service facilities and opening more duty-free shops. It posted a net attributable profit of 221 million yuan for last year, up slightly from 217 million yuan in 2007, on earnings per share (EPS) of 0.34 yuan last year compared with 0.31 yuan in 2007, according to its share issue prospectus. If the company wants to raise 1.7 billion yuan on an issue of 220 million shares, it will have to issue the shares at 7.73 yuan each, according to Reuters calculations. At its maximum issue, the IPO will dilute its EPS to 0.255 for last year, meaning a 7.73 yuan per share issue would put its IPO price at slightly above 30 times its last year earnings on a fully diluted basis – a relatively high price/earnings (PE) ratio for domestic IPOs, according to Reuters. China Securities, a Beijing-based brokerage, was appointed the lead underwriter, China Travel said in the prospectus. China Travel would start consulting investors about pricing the offer on Wednesday and will take institutional subscriptions on September 22 and retail subscriptions on September 23. Up to 20 per cent of the shares on offer will be earmarked for institutions and the rest for retail investors. The company said it hoped to list on the Shanghai Stock Exchange as soon as possible after the IPO, but the prospectus did not give a firm date.

European and American airlines alliance are in talks with Japan Airlines Corp (JAL) for a financial tie-up, reports said on Tuesday. Propsective suitors will be able to expand in Asia by utilising JAL's code-sharing agreements.

Work started on China's fourth space- launch center yesterday as the country gears up for manned flights using a new generation of carrier rockets. The new construction is for the Wenchang Space Satellite Launch Center on Hainan island. It will become the first coastal launch pad when ready in 2013, the Hainan Daily reported. Chang Wanquan, a member of the Central Military Commission, and Chen Qiufa, head of the State Commission for Science, Technology and Industry for National Defence, attended yesterday's groundbreaking ceremony. The Hainan site will accommodate the Long March CZ-5 carrier rocket, which will be able to carry larger payloads and is slated to become the workhorse of China's manned space and space station program. The rocket is expected to make its maiden flight by 2014. China put its first astronaut into space in 2003, the third nation to do so after the Soviet Union and the United States. In September last year, three astronauts - or taikonauts, as they are called - carried out the first space walk by Chinese during a 68-hour voyage on board the Shenzhou VII spacecraft. The Shenzhou program is expected to form the basis for the planned space station.

Sept 17, 2009

Hong Kong: The first keynote speech outside North America by former US vice presidential nominee Sarah Palin will be closed to the media, organizers of the Hong Kong event said on Monday. Palin, mocked during last year’s presidential campaign for her lack of experience in foreign affairs and for her verbal gaffes, is due to give the headline address at the CLSA Investors’ Forum on September 23. The former Alaska governor will address hundreds of chief executives, fund managers and other financial big-hitters from around the world at the Hong Kong forum. The event in general is open to the media. But a spokeswoman for CLSA, one of Asia’s top investment houses, said that Palin’s session with the moneyed audience will take place in private. “Some of our keynote sessions in previous years were also closed to the media. So this is not the first time,” she told AFP, declining to be named. “Palin has not yet confirmed with us the topic of her speech,” the spokeswoman added. Past speakers at the annual CLSA event include former US president Bill Clinton, Clinton’s vice president Al Gore, and ex-Federal Reserve chief Alan Greenspan.

Cathay Pacific (SEHK: 0293) reported on Monday a 3.8 per cent year-on-year increase in passenger numbers in August, supported by improved demand for air travel. Combined passenger figures for the Hong Kong carrier and its affiliate Dragonair rose to 2.21 million last month, the airline said in a statement. For the year to date, the number of passengers carried was down four per cent. Tom Owen, Cathay’s general manager in revenue management, said the figures indicated a strong recovery. “Although the summer peak traffic arrived much later and at a lower yield than normal, we did see a strong recovery in pent-up regional demand for the month with an abating A(H1N1) impact,” he said. “Traffic in the premium cabins, however, remained weak in comparison to previous years throughout August and at materially lower yields.” Owen added that the year-on-year comparisons in August were skewed by high demand on mainland routes during the Beijing Olympics last summer. The combined cargo traffic of the two airlines experienced the lowest year-to-year decline of the year to date, dropping 6.3 per cent to 131,732 tonnes last month, the statement said. Tonnage has fallen 13.1 per cent for the year to date.

China's real estate developer Glorious Property hopes to raise up to US$1.54 billion in a public offering that comes amid a rush of IPOs from domestic property groups. The deal is part of an estimated US$15 billion worth of IPOs coming to Hong Kong in the next few months, as companies seek to list before year-end and take advantage of a stock-market rally. The price range of the Glorious offering is HK$4.00-HK$5.30 per share, with a base offer size of 2.25 billion shares in total, according to a term sheet seen on Monday. If the Glorious Property IPO prices at the top end of the range, it will surpass China Resources (SEHK: 0291) Land to become the second largest mainland property developer listed in Hong Kong by market capitalisation. China Overseas Land (SEHK: 0688) and Investments is the largest mainland property developer listed in Hong Kong with a market cap of HK$19.1 billion. The offering’s roadshow begins this week, with bankers shopping the IPO to institutional investors to gauge demand and determine the ultimate price. A successful IPO would allow Glorious Property to raise cash and pay back investors. Fellow property developer Evergrande also plans to raise an estimated US$1.5 billion, with other mainland real estate companies also in the IPO pipeline. The companies hoped to list last year, but pulled the plans when markets tumbled. Analysts and bankers say that while the opportunity is there, a glut of real estate IPOs may see mixed success, as investors see little difference between the offerings and companies. Getting to market first will be an advantage, they say. “In some sectors, like the Chinese real estate developers, there are a lot of companies coming to market at the same time, making it difficult to differentiate between them,” said Christina Chung, Senior Portfolio Manager with Allianz’s funds unit RCM. “Giving investors, who typically look for differentiation, a lot of choice does not help valuations.” UBS AG, JPMorgan Chase and Deutsche Bank are handling the offering. The final price of the Glorious Property IPO is planned for September 24. Hedge funds and western banks invested in mainland property companies two years ago after a real estate boom sent valuations in the sector soaring and produced some successful IPOs. Such pre-IPO investments were expected to be profitable to investors who thought the credit bubble would last and planned for a quick and easy pay-out after the listing. But the credit bubble burst, and the ensuing financial crisis quashed those hopes, leaving investors with illiquid holdings worth much less than hoped. Now, with mainland lifting a ban on IPOs and the Hong Kong IPO market heating up, companies are rushing to list while the window is open. Mainland property prices in 70 cities rose 2.0 per cent in August from a year earlier, compared with a 1.0 per cent annual rise in July. Glorious Property is expected to begin trading on October 2.

China: China on Monday paid tribute to 100 heroes and models who made outstanding contributions to the founding of New China and 100 others who have inspired the nation in the past 60 years. Top Chinese leaders including President Hu Jintao met with representatives of the heroes and models and relatives of the deceased ones who were here to attend a symposium honoring them. Top legislator Wu Bangguo, Premier Wen Jiabao, top political advisor Jia Qinglin, and other senior leaders including Li Changchun, Xi Jinping, Li Keqiang, He Guoqiang and Zhou Yongkang also met with the delegates. Hu, also general secretary of the Communist Party of China (CPC) Central Committee, greeted the delegates at the Great Hall of the People. He congratulated the representatives on the honor, offered his condolences to the deceased heroes' relatives, and paid homage to all those who have made great contribution to the birth and growth of New China. Li Changchun, member of the Standing Committee of the Communist Party of China Central Committee Political Bureau, attended the symposium and delivered a speech. "The fact that the top leaders met with the delegates and some of their relatives highlights the nation and the Party's care for the heroes," said Li.

Chinese President Hu Jintao will attend a series of UN meetings in New York and the Group of 20 (G20) financial summit in Pittsburgh, the United States, from Sept. 21 to 25, the Chinese Foreign Ministry spokeswoman Jiang Yu announced here Monday. The UN meetings Hu will attend include the UN Climate Change Summit, the 64th annual general debate of the UN General Assembly and the nuclear non-proliferation and disarmament summit of UN Security Council.

Unite against tire tariff hike, exporters urged - "The new tariff may cause 100,000 Chinese tire workers to lose their jobs," said an expert.U.S. President Barack Obama decided to impose punitive tariffs on tyres imported from China. When the U.S. decision takes effect on Sept. 26, car and light truck tyres imported from China will suffer punitive tariffs of 35 percent, 30 percent and 25 percent in the coming three years, respectively. The tyres that imported from China supply the low and middle-end market; the American made tyres provide the high-end market, that do not affect each other.

China on Monday hauled the United States to the World Trade Organisation over what it alleged were unfair tariffs imposed by Washington on tyre imports from mainland. “On September 14, China put forward a formal request for consultations with the United States under the WTO dispute settlement mechanism on the US special safeguard measures against Chinese tyres,” said the embassy in a statement. “China believes that the above-mentioned measure by the United States, which runs counter to relevant WTO rules, is a wrong practice abusing trade remedies,” it added. The White House on Friday imposed punitive duties of an extra 35 per cent on tyres made in mainland amid warnings that a surge in the goods made in mainland had cost more than 5,000 jobs in the United States. Beijing and Washington now have 60 days to hold bilateral consultations on the issue. If it is not resolved at the end of the period, the WTO would rule on it. In Beijing,, a spokesman for the Commerce Ministry, Yao Jian, said the tyre duties announced by Washington on Friday were in “violation of WTO rules”. “China has requested consultations with the United States, which is a legitimate use of its rights as a member of the WTO,” Yao said in a statement on the Ministry’s website (www.mofcom.gov.cn ). Yao’s statement called on other governments to oppose protectionism. Under World Trade Organisation rules, member nations can request such talks as a prelude to seeking a ruling from the organisation. President Barack Obama approved the tariffs on Friday. The White House said Obama acted under a provision in the US-Chinese agreement on Beijing’s WTO membership that allows Washington to slow the rise of mainland imports to allow American industry to adjust. Obama’s order Friday raised tariffs for three years on mainland tyres – by 35 per cent in the first year, 30 per cent in the second and 25 per cent in the third. The United Steelworkers brought the case in April and said more than 5,000 tire workers have lost jobs since 2004 as mainland tires flooded the US market. Beijing said on Sunday it is launching antidumping investigations into imported US auto and chicken products. The Commerce Ministry said it would look into complaints that American auto and chicken products are being dumped into the mainland market or are benefiting from subsidies.

Self-propelled 155mm Howitzers, DF21 medium range ballistic missiles, and DF31 Intercontinental Ballistic Missile making their way to a military parade rehearsal on Sunday, September 6, for the 60th anniversary of the founding of the People's Republic held in Beijing. China's biggest military parade in a decade will show off an army bristling with formidable new capabilities and deliver a potent message to the US and others not to underestimate Beijing’s determination to defend its interests at home and abroad. The military display is expected to be the centrepiece of a vast parade through Beijing on October 1 to celebrate the 60th anniversary of the founding of the People’s Republic. A preview rumbled through the centre of the capital a week ago, giving an excited citizens and foreign military analysts a first glimpse of some cutting-edge weapons. Upgraded intercontinental DF-31 nuclear missiles capable of striking Washington rolled on long-bed trucks along with advanced short-range DF-11 and DF-15 missiles, sea-skimming YJ-83 anti-ship missiles and DH-10 long-range cruise missiles – intended to strike targets in Taiwan and deter the US Navy from coming to the island’s defence. Not seen in the preview but expected to appear in a fly-over above Tiananmen Square are domestically produced J-10 jet fighters. The advanced equipment is the fruit of a 20-year military buildup paid for by annual double-digit percentage increases in defence spending and buoyed by rapid economic growth that has enabled the government to spend lavishly. The leadership’s willingness to put so much equipment on public display reflects its growing faith in the People’s Liberation Army’s capabilities and its belief that the defence muscle will translate into new strength internationally. “The exercise is aimed at not only showing the Chinese people some of the symbols of China’s new great power status, but also showing foreigners that policies based on the presumption of Chinese weakness must be changed,” said Denny Roy, an expert on the Chinese military at Hawaii’s East-West Center. Chief among Beijing’s targets is US support for Taiwan, the self-governing island that the mainland considers its own territory, and the American military’s continued naval and airborne surveillance missions off the Chinese coast, Roy said. Japan, Vietnam and other nations with territorial disputes with Beijing in the South China and East China Seas are also likely audiences for the display of military might. Officially, Beijing says the parade is nothing more than a move to boost patriotism and showcase the PLA’s modernization drive – an explanation that fits with the repeated government line that the military buildup poses no threat to others. Defence spending officially reached US$71 billion this year, though analysts believe the actual figure is much higher. The spending is second to the US in the world, but only a fraction of American defence spending. The parade will “demonstrate the positive image of China as a country seeking peaceful development,” Senior Colonel Guo Zhigang, a deputy commander of the event’s training camp, was quoted as saying by the official China Daily newspaper. Aside from armaments, the parade will feature thousands of goose-stepping troops from the PLA and the People’s Armed Police, a paramilitary force whose mission is to quell domestic unrest, as they did in Tibet last year and Xinjiang this summer. President Hu Jintao is expected to review the assembled marchers, standing in an open-top Red Flag limousine as his predecessors have. Still, the event marks a profound change from past decades when Beijing shrouded its relative military weakness in secrecy. Despite being the world’s largest standing military with 2.3 million members, the PLA was long derided as poorly equipped and inadequately funded. For decades, its plans to invade Taiwan, when Beijing had little air or naval power, were mocked as the “million-man swim.” The paraded armaments will further feed into an ongoing reassessment of Beijing’s military capabilities in Washington and other capitals, which began noticing the more muscular PLA earlier this decade. Aside from the hundreds of tanks, armoured personnel carriers and self-propelled artillery featured in last week’s rehearsal, the plethora of missiles on display represented some of Beijing’s most advanced and potent weaponry, analysts said. The anti-ship cruise and ballistic missiles are capable of striking US Navy aircraft carrier battle groups and bases in the Pacific, said Russell Smith, a former Australian defence attache in Beijing and an analyst with Jane’s. Among the less flashy but significant equipment likely to appear are those that give the PLA the ability to operate far from home, something it has never had before. Expected in the fly-over are Kongjing airborne warning and control planes that gather and send intelligence to forces and Hong-6 bombers and tankers that would allow fighter planes to refuel while in flight for longer-range missions. “Obviously, Taiwan and Japan are going to feel this, and perhaps even US forces in Guam, Okinawa, and perhaps even Hawaii,” said Richard Bitzinger, a senior fellow at Singapore’s Rajaratnam School of International Studies. Foreign nations need not be unduly alarmed by these new capabilities, but should “at least be very, very watchful,” Bitzinger said.

Beijing began the construction of its fourth space launch centre on Monday as the nation gears up for future manned space flights aboard a new generation of carrier rockets, state media reported. A ground-breaking ceremony is held in Wenchang, southernmost China's Hainan Province, Sept. 14, 2009, marking the beginning of construction of a new space launch center in this city. The Wenchang Space Launch Center is designed for launching new-generation rocket-carriers and space vehicles like geo-synchronous (GEO) satellites, polar-orbiting satellites, space stations and deep-space exploration satellites.

Asia-focused brokerage CLSA plans to start offering brokerage services in mainland early next year through its China securities venture, which will be renamed Fortune CLSA, the firm’s China chairman, Wu Changgen, said on Monday. “In the next three to five years we would like to see relatively big growth in all of our three businesses in China – private equity, investment banking and brokerage.” The company’s six-year-old China venture, formerly known as China Euro Securities, obtained the brokerage licence from mainland regulators last June, allowing CLSA to expand businesses beyond underwriting in the country. Hong Kong-based CLSA competes with rivals including Goldman Sachs and Morgan Stanley in expanding businesses in mainland’s fast-growing financial industry. CLSA in August said it would form a private equity venture in mainland, aiming to raise 10 billion yuan (HK$11.35 billion).

PICC (SEHK: 2328) Group, mainland’s top non-life insurer, aims to hold an initial public offering (IPO) as early as next year, the group’s president was quoted by domestic media on Monday as saying. “We have to check whether the preparations are ready, and we have to wait for the right timing, so we have to look at next year,” the website of Caijing magazine quoted Wu Yan, president of the group, as saying. Wu gave no further details on the planned timing of the IPO, and he added that the group had not finalised whether it would float its shares in Hong Kong, Shanghai or both. PICC Group is the parent of PICC Property & Casualty. The group reported total assets of 302.3 billion yuan (HK$343.14 billion) as of July. It will be restructured into a shareholding company soon, with a capital base of 30.6 billion yuan, and it will sell stakes to “strategic investors” before a public listing, Wu was quoted as saying in an interview. The group is currently entirely owned by the central Ministry of Finance.

Sept 16, 2009

Hong Kong: Du Jun, convicted Sept 10th in Hong Kong's biggest insider trading case, was once a rising young investment banker in the city because of his strong mainland background, western education and deep knowledge of bond trading. Little is known about his background and family other than that he was born in Beijing, attended Columbia University in the United States and worked in New York for some years. In 1996, he came to Hong Kong to work at Merrill Lynch as a bond trader. One investment banker who worked with Du said he was smart and a good trader but had a quick temper. Du rarely joined social gatherings and kept a low profile, his former colleague said. The mainland economy was growing rapidly and many firms were engaged in mergers and acquisitions or sought initial public offerings. International investment banks were eager to hire mainlanders who had a western education and could speak fluent English. Du joined Morgan Stanley Asia in 2001 and rose to become managing director of the fixed-income department a few years later at 35. Court documents showed he earned a base salary of HK$1.45 million a year plus bonus, which stood at US$2.3 million in 2006. This means he had total annual income of HK$19.39 million or HK$1.62 million per month in 2006 - the year before his HK$87 million worth of illegal trades based on inside information. Regulatory sources said the highly paid banker had few assets in Hong Kong and only rented a flat where he lived with his wife. He was arrested when he returned to Hong Kong from the mainland to collect a painting and an air purifier. During his 38-day trial, few friends or relatives showed up in court other than his wife, Li Xin. The former banker, who had been on bail, is now in custody awaiting sentencing.

A new disciplinary code being devised for public hospitals will not issue indiscriminate punishments, but encourage the honest reporting of mistakes. Hospital Authority Chief Executive Shane Solomon revealed that the new system - which will also take into acccount the amount of harm a mistake does to patients - is to cover all 53,000 staff at 41 public hospitals and 122 clinics. The introduction of new disciplinary procedures comes after a public outcry following a series of recent hospital blunders, mostly involving registered nurses. "The new system will make them more honest because ... if they know what the criteria are for assessing whether there needs to be staff disciplinary action, they will see that most of what they do they can safely report knowing that they won't be sacked for it," he said. He said staffers who were "negligent and deliberately harmed patients" would face stiffer disciplinary action. "But if it's just part of their normal day-to-day work - yes, we want them to be more careful but these are not grounds by itself for sacking," Solomon said. Earlier this month, the Hospital Authority's top nursing executive Sylvia Fung Yuk-kuen told The Standard that any disciplinary action will depend on the individual circumstances involved in the incidents. She said a "military" culture among nurses - making quick work of their duties without thinking - was behind the blunders. The authority will meet with Secretary for Food and Health York Chow Yat-ngok later this week to discuss the plan. Meanwhile, fewer parents took their toddlers for the catch-up anti- pneumonia vaccination program at Department of Health clinics yesterday in the wake of last Sunday's drug mislabeling blunder. The drug labels of bottles of an anti-fever paracetamol syrup given to some 4,524 toddlers were mixed up. The children had received an anti-pneumonia vaccine at its 29 Maternal and Child Health Centres last Sunday. Auxiliary Medical Services volunteers acted as both inoculators and dispensers. Out of 5,040 babies scheduled to be inoculated yesterday, a total of 4,261 turned up, representing an 84.5 percent turnout rate. The department has hoped at least 90 percent of some 120,000 babies eligible for the program would be immunized. About 500 Auxiliary Medical Services volunteers were deployed yesterday.

Ambulance officers attend to one of the workers who fell 20 floors down a lift shaft at the International Commerce Centre. Six construction workers were killed yesterday in Hong Kong's worst industrial accident in a decade, when a work platform plunged 20 floors down a lift shaft at the International Commerce Centre (ICC) - the city's tallest building. The accident happened at about 1.20pm when the six men, aged between 34 and 47, were collecting construction waste on the 30th floor of the 118-storey harbor front landmark in Austin Road, Tsim Sha Tsui. The platform carrying the men, which is suspected to have been overloaded with construction waste, suddenly fell to the 10th floor, leaving the workers buried in debris. About 80 firefighters and paramedics were sent to the scene but rescue efforts were hampered by the narrow opening to the lift shaft and the mountain of waste inside. Three workers were found shortly after 2pm, and taken to Queen Elizabeth Hospital, where they were declared dead. Two other men were found four hours later and the last one just before 8pm. The three were certified dead at the scene. Tsim Sha Tsui Fire Station commander Lo Kam-wing said rescue work was difficult because of the limited space inside the lift shaft.

Banks hope the Hong Kong Monetary Authority can come up with a more simplified sales procedure for simple investment products, allowing them to be sold in a "green" zone - for deposit clients - rather than in the "red" area for investor clients, similar to the way Chinese sovereign bonds are sold. "Corporate bonds and fixed income products, for example, have a simple structure, steady return and high credit ratings,"said Zoe Lau, senior vice president and head of wealth management and consumer finance of retail banking at CITIC Ka Wah Bank. "We hope there is a possibility that Chinese sovereign bonds will be taken as a reference so that their one-off simplified procedures are applied to these products." If adopted, simple products could also be sold in the "green" zone, saving time and eliminating tedious procedures. Local banks, including CITIC Ka Wah, will begin to physically segregate services for investor clients and deposit clients from October 1, at the latest, as part of measures to boost investor protection following the Lehman minibonds saga. Felix Lau Chi-kan, executive vice president and head of sales and distribution of retail banking at CITIC Ka Wah Bank, said about 60 staff have been hired for the change. Non-interest income at the bank picked up during the first half, with insurance and fixed-income products the growth drivers, said Zoe Lau. In the second quarter, currency- linked and insurance products accounted for 23.5 percent and 36.2 percent of the wealth management business, respectively, from 16.4 percent and 22.3 percent a year ago. However, equity-related and fixed- income products still underperformed, contributing about 35.9 percent and 4.5 percent, respectively, from 54.2 percent and 7 percent a year ago.

The next time someone suggests you meet for a drink "down at the Fong", you may have to hop on a plane. Allan Zeman, the man behind Lan Kwai Fong, is making his second attempt to export Hong Kong's trendiest hangout to the mainland. Zeman is taking his successful mix of restaurants and bars in Central to Chengdu, the fast-rising capital of Sichuan province. The entrepreneur has bought up a small neighbourhood along the Jinjiang River in the heart of the business district, a collection of 19 new buildings at three-stories each. "When the Jinjiang district government secretary for Chengdu approached me to set up a Lan Kwai Fong there, I said no way," Zeman said. "But on my first trip there I was impressed that virtually every restaurant and bar was packed." The blocks are covered by a huge canopy made of the same translucent plastic used in the "Water Cube" aquatics centre in Beijing, and have terraces, gardens, piazzas and roof-top dining. At 43,000 square metres total, the project is roughly 18 times bigger than Lan Kwai Fong in Hong Kong. He declined to say how much he paid but said that it was a good deal. Zeman has tried before to establish his presence on the mainland. His bid to gain a foothold in Shenzhen failed at the 11th hour when he could not secure a licence for the project. He rented space in the Coco Park shopping mall in the Futian district, but it turned out it did not qualify for a food and beverage permit "just when everything was ready to go". But Zeman said he has control in his new venture. "I don't have to deal with any landlord." The decision to invest in Chengdu came after repeated entreaties by the Jinjiang secretary. Zeman at first resisted but eventually decided to take a look and stopped off on his way back from the Olympics in September last year. What he saw impressed him and he began the negotiations when he returned to Hong Kong. He is in the process of signing up tenants and expects to open in March.

Like many place names that have been reappropriated as brands - think SoHo, Times Square or even Xintiandi - the name Lan Kwai Fong can mean different things to different people. For Guangzhou residents fond of crispy roasted pigeon, Lan Kwai Fong is an eatery on colonial Shamian Island that has been serving up the delectable birds along with Southeast Asian fare for more than a decade. Punters in Macau, by contrast, can test their luck on the baccarat tables at the newly renovated and renamed Lan Kwai Fong casino hotel, which opened last month. For others, of course, Lan Kwai Fong refers to the bustling L-shaped lane in Central that is home to some of Hong Kong's more popular, if pricey, bars and restaurants. Indeed, entrepreneur Allan Zeman's new plan to export the Central neighbourhood's energetic atmosphere to the mainland by taking over a stretch of purpose-built riverside low-rises in western Chengdu will also serve to test Lan Kwai Fong's strength as a bankable brand name. Part of the challenge lies in control of the name itself. As early as 2002, several British Virgin Islands companies controlled by Zeman began registering mainland trademarks for combinations of the English and Chinese versions of the Lan Kwai Fong name for a variety of uses ranging from restaurants to housing estate management to a beer brand. But then there is Zhuang Shaohai, of Shantou, who appears to have applied in 2006 to use "Lan Kwai Fong" on handbags and underwear, according to filings in an online database maintained by the Trademark Office of the State Administration for Industry and Commerce. Luo Ming of Guangzhou appears to have secured separate trademark rights in 2003 to "Lan Kwai Fong" shoes, swimwear and other clothing. A company in Chongqing last year applied for rights to use "Lan Kwai Fong" on medicinal beverages, disinfectants and women's sanitary napkins - applications that would perhaps dilute the "energetic and hip" aspects of the lifestyle brand. Zeman, the "Father of Lan Kwai Fong", is undaunted, choosing perhaps to view imitation as flattery. He notes that pretenders to the brand only demonstrate that its value is gaining greater recognition beyond Hong Kong. "Mainland people started copying Lan Kwai Fong, which means it is good," Zeman said. "It is also a good sign that it has become a landmark not just for this city but in other places."

Punters pack the grandstand at Sha Tin Racecourse during race three yesterday. There will be five extra meetings this season. The government had a small win and Jockey Club officials were "cautiously optimistic" on the opening day of the racing season at Sha Tin yesterday. Attendance was down by around 2,000, but it was a sweltering day. Betting turnover more than held its own with last year's "pre-financial-crisis" figure. "Last year, opening day was probably before the crisis hit, so to have a day with that level of betting turnover - even up by a little over HK$2 million - is a result we are very pleased with," club chief executive Winfried Engelbrecht-Bresges said. "As far as the crowd was concerned, I think today was as expected. Our restaurants were all booked out, and those people came. I think the hot weather was a big turn off and to get 49,000 people to come out in these conditions was a pretty good result. The turnover showed that those people who did stay away took advantage of our convenient betting channels instead." The club's share of the HK$833 million turnover yesterday was the same as last year, at HK$38 million. However, the government's take in betting duty was up slightly - from HK$100 million on opening day last year to HK$102 million. "The sporting spectacle of the racing was very good, the atmosphere was good and I'm cautiously optimistic about the season before us," Engelbrecht-Bresges said. "With our five extra meetings this season, I am anticipating an increase of around 3 per cent in our full season turnover and this is a pleasing start." Two of the trainers who regularly feature on the first day of the season, John Moore and Tony Cruz, carved up six of the 10 races between them, but it was Almond Lee Yee-tat who received the afternoon's trophy from Donald Tsang Yam-kuen after Nightlign upstaged the top stables in a thrilling three-way finish to take the HKSAR Chief Executive's Cup. The day kicked off with a lion dance featuring 125 "lions" - symbolic of the 125-year anniversary being celebrated by the Jockey Club this year.

A ribbon is tied around the wrist of a protester during the march to the central government's liaison office. A pro-Beijing heavyweight has promised to take up the case of police brutality by Xinjiang authorities against three Hong Kong journalists covering unrest in the autonomous region. Hundreds of journalists took to the streets yesterday to condemn the Xinjiang government's handling of the case. The protesters demanded that Xinjiang authorities apologize to the three and urged Beijing to step in. Leung Chun-ying, convenor of the Executive Council and a standing committee member of the Chinese People's Political Consultative Conference, said he hoped Beijing would handle seriously the complaints from Hong Kong journalists. Leung said he believed Beijing understood the concerns of Hongkongers and he would raise the issue at a meeting with local CPPCC members this week. He was speaking at a Hong Kong News Executives' Association seminar on the incident yesterday at Baptist University. Several pro-Beijing figures at the seminar also expressed concerns.

Just some of the 25 celebrities called in by Cosmopolitan magazine to design charity T-shirts in support of the Homes for Hope campaign.

China: China launched anti-dumping and anti-subsidies investigations into some automobile and chicken products originally produced in the United States, the Ministry of Commerce announced on Sunday.

U.S. President Barack Obama's decision to impose punitive tariffs on tires imported from China has caused wide disappointment from American industries.

The Supreme People's Procuratorate has widened its national blacklist of people and companies convicted of bribery from those in five economic sectors to complete coverage. The move is aimed at fixing loopholes in the mainland's corruption-prone market system. The blacklist, which has been compiled for the last three years, had, until it was extended on September 1, recorded bribery convictions only against people and companies in the construction, finance, medical care, education and government procurement sectors, the People's Daily reported yesterday. The amendment was intended to up the ante in the war against graft and sound a warning bell to potential bribe-givers, it said.

Nanjing's second tunnel connecting the northern and southern banks of the Yangtze River will be completed in five years, bringing the total number of crossings either over or under China's longest river in Nanjing to seven. But the city planners' dream of building road crossings over the Yangtze River is far from over. China News Service reports that construction of 16 more crossings are planned by 2030. Construction of the second tunnel, to be called the Wei Seventh Road Tunnel, at an estimated cost of 5.2 billion yuan (HK$5.9 billion), would begin later this year, the news agency said yesterday. So far, the city's coffers hold one billion yuan poised to finance the construction, according to the report, but it did not say when the rest of the money would be ready or where it was coming from. It will be a double-deck tunnel, 7.2 kilometres long, and provide eight traffic lanes. It is expected to handle 100,000 vehicles daily on completion in 2014. The report quoted planners as saying it would ease heavy traffic on existing bridges and the Wei Third Road Tunnel. The Nanjing Yangtze River Bridge, completed in 1968, was the first structure to connect Nanjing's north and south banks. It was the first important bridge designed and constructed totally by mainland engineers since the founding of the People's Republic in 1949. The lower deck of the double-deck bridge is used by trains, and the upper deck is for vehicles and pedestrians.

A former worker at a Coca-Cola bottling plant has been arrested as part of a corruption investigation. The detainee worked at Shanghai's Shenmei Beverage and Food, but the company declined to give further details. "We can confirm that a former employee at our Shanghai bottling plant has been detained by the police," Coca-Cola group spokesman Kenth Kaerhoeg said. "Our bottler is actively co-operating with the police investigation in strict compliance with relevant laws and regulations." The Chinese-language National Business Daily reported that the corruption involved about 10 million yuan (HK$11.4 million). Coca-Cola operates 38 bottling plants on the mainland, employing 30,000 people directly. Business grew 19 per cent last year, making it the company's third-largest market. The detention comes after the formal arrest of four employees of Anglo-Australian miner Rio Tinto on suspicion of obtaining commercial secrets and bribery. Stern Hu, a Chinese-born Australian who is the miner's head of iron ore marketing, was one of the group and the move provoked an international outcry. Australian Prime Minister Kevin Rudd warned China it had significant economic interests at stake in detaining Hu and that the world was watching how it handled a case that highlighted the risks of doing business in the world's third-largest economy. But Australia has insisted the case would not harm trade relations with China, its biggest trade partner.

The final tally of people who have had to move to make way for the controversial Three Gorges Dam is about 1.27 million, state media reported yesterday. The final figure, as of the end of June, was given by a dam construction official quoted by Xinhua. Mainland officials had previously said 1.2 million people would have to move from areas now submerged or due to be submerged in central regions for the world's largest hydroelectric project. At the time they did not provide a timetable for the resettlement of the remaining residents.

Agricultural Bank of China, the country's second-largest lender by assets, is speeding up overseas expansion ahead of its planned public listing. Work is under way to upgrade its representative offices in New York, London and Tokyo into branches or subsidiary banks, while three representative offices are to be opened in Seoul, Sydney and Frankfurt. "If everything runs well, we should get the approval [for the three representative offices] from the host countries by the end of this year," said deputy president Yang Kun. "Our target is to build the bank into an internationalized entity covering major global financial markets within five to 10 years." Since late last year, the bank has been restructured from a decades-old wholly state-owned lender handing out loans assigned by the government to a joint-stock holding commercial bank with sound capital and corporate governance. The restructuring began with a US$19 billion capital injection in November that increased the bank's registered capital to 260 billion yuan (HK$296.03 billion) and left the Ministry of Finance and Central Huijin Investment, an arm of the country's sovereign wealth fund, each holding 50 per cent of the stock. The bank has been stepping up operations in neighbouring countries through its outlets dotted along China's borders. It claims the biggest number of outlets in the mainland's major border ports among domestic commercial banks. "By opening representative offices or other operational institutions in neighbouring countries, we can tap a different market in competition with our major rivals in China," said Yang. The bank has also applied to the China Banking Regulatory Commission for launching a company called ABC International Holdings as a vehicle specifically for investment banking business in Hong Kong and expects to be given the nod by early next year. Agricultural Bank already has a branch, a finance company, a brokerage and an insurance company in Hong Kong. Yang said the bank was exploring the possibility of setting up operations in Taiwan following the thawing of relations across the strait, although he admitted it would be a slow process. The bank is also looking at overseas mergers and acquisitions. "There might be some good opportunities right now amid the current global financial crisis, but our focus of overseas expansion is first to do well the part we can control," said Yang. He said the bank had not yet finalised a schedule for its initial public offering, refusing to confirm earlier media reports that it would have a dual listing in Hong Kong and on the mainland before next year.

Sept 15, 2009

Hong Kong: Local brokerage houses lent out a record HK$97.5 billion in margin financing yesterday, as frenzied hopeful Hong Kong investors jumped aboard the revived initial public offering bandwagon. The hot ticket was China National Pharmaceutical, known as Sinopharm, which opened its retail book in its bid to raise US$1 billion (HK$7.8 billion) on the Hong Kong bourse. If Sinopharm can price its shares at the top of its indicative range at HK$16, the retail tranche could be already 110 times oversubscribed. Based on Hong Kong listing rules, if a public offering is 50 times oversubscribed, it triggers a clawback mechanism in which the retail allotment can be expanded to 35 percent from 10 percent of total shares. Bank and brokerages are scrambling to satisfy demand for margin financing for Sinopharm's retail offering, with some institutions stretched far beyond their quotas, according to local media reports. BOC International has received more than HK$30 billion in margin financing orders, using up its quota. Phillip Securities, which received HK$8 billion worth of orders, and Everbright Securities, which received HK$6 billion, said they do not plan to set aside extra quota for Sinopharm. Tanrich Securities said it is considering lending more for the IPO. Today, Hong Kong's largest public offering this year, Metallurgical Corp of China, will open its retail tranche to local investors to further test the SAR's post-financial- crisis IPO demand. MCC, which has already secured five cornerstone investors, is targeting to raise HK$17.9 billion in A and H-share dual listings. The H-shares will be priced at between HK$6.16 and HK$6.81 apiece. The company sold the Shanghai portion of its IPO at the top end of its indicative price range - selling 3.5 billion A-shares at 5.42 yuan (HK$6.15) apiece, Reuters reported. Several lenders are offering attractive interest rates for margin financing for Sinopharm and MCC. Hang Seng Bank (0011) is providing loans at interest as low as 1.15 percent for online customers, while Dah Sing Bank is offering rates as low as 1.28 percent, and Hongkong and Shanghai Banking Corp 1.88 percent for online clients. MCC said yesterday it will use 45 percent of its proceeds to fund overseas construction projects. Meanwhile, Lilang International's IPO was also warmly received, with its institutional tranche three times oversubscribed.

Police are not taking action against speeding motorists on large sections of the city's roads because of confusion over the law. The confusion means thousands of drivers booked for speeding over the past several years could potentially challenge their speeding fines and the deduction of points on their licenses because the speed limits on the roads were higher than police thought, officers say. This confusion has arisen because of an apparent conflict between road traffic laws which allow the Commissioner for Transport to vary speed limits in Hong Kong by publishing them in the Government Gazette, and a separate notice which names 65 roads on which limits can only be changed by legislation, police and lawmakers say.

One hundred first-aiders mark World First Aid Day by demonstrating resuscitation using portable defibrillators. The event was organised by the Red Cross to promote first aid and highlight the need for more defibrillators to be installed at venues around Hong Kong. Ambulanceman Albert Law Chi-hung has a job that he has always loved, and he wants many more people to learn the first-aid skills he has. Law was one 100 of first-aid specialists who gathered at the apm shopping mall in Kowloon Bay yesterday to stage Hong Kong's first mass demonstration of resuscitation using automated external defibrillators. The event was organized by the Hong Kong Red Cross to promote first-aid knowledge and skills in the community and highlight the need for more defibrillators to be installed around the city. There was much public discussion about the lack of defibrillators in public places. The government has said it will study the feasibility of installing them in government buildings and public facilities over the next two years.

The vacation season is drawing to a close, bringing international executives back from their home countries. For those looking for lodgings again, the flagship project of VCC Land, V Serviced Apartments is offering luxury and true diversity at its premises on Yee Wo Street. V Causeway Bay lives up to its unconventional brand name with a wide range of choices in its more than 133 serviced apartments, which are available in sizes from 230 to 1,600 square feet. The interior design is contemporary, each apartment having a distinctive character. With a wide choice of styles and layouts - around 40 in total - this Causeway Bay property also features four penthouses, three of which have their very own internal access to a rooftop garden that comes with outdoor cooking equipment and is perfect for entertaining guests. A rare luxury in the heart of a thriving district, these open spaces offer dynamic views of the vibrant city while serving as an urban retreat from the hustle and bustle of your daily life. Each apartment comes with home entertainment systems, a fully-fitted kitchen that includes fresh herbs and professional cookware, an in-room safe, complimentary branded toiletries and cleverly-concealed storage spaces. Towel warmers, down pillows and slippers are some added comforts. V Living, a privilege and rewards program for residents, provides access to some of the city's top restaurants, spas and fitness centers, while V Full Service includes daily housekeeping and dry-cleaning service. Nestled within a plethora of shopping malls, eateries and cinemas, the property is a mere three-minute walk to the MTR station and an easy connection with the rest of this vibrant city.

China: China's anti-graft chief He Guoqiang on Friday urged officials to carry out a thrifty style in life and work, as the country's campaign to curb "official luxury" started to pay off. He, secretary of the Central Commission for Discipline Inspection of the Communist Party of China (CPC), made the remarks at a meeting on the practices of the policies on keeping a thrifty style and curbing sightseeing abroad on public money. "The central authorities' decision on curbing officials' using public money to sightsee abroad is a necessary step for our country to cope with the global economic crisis and a long-term strategic policy to draw the Party closer to the people," said He. Statistics show that in the first six months of this year, departments of the central Party organs and government departments saved a total of 597 million yuan (87.3 million U.S. dollars) from overseas trips, vehicle purchase and business reception. Local government organizations saved 15.2 billion yuan. He, also a member of the Standing Committee of the Political Bureau of the CPC Central Committee, urged Party and government organizations at all levels to "stoutly" check and manage any luxury cases that violated laws and disciplines and punish whoever is involved.

Wu Bangguo (R), chairman of the Standing Committee of China's National People's Congress, meets with Governor of Alaska Sean Parnell, in Anchorage, Alaska of the United States, on Sept. 12, 2009.

The third ARJ 21-700 jet lands safely at a airport in Shanghai, east China, on Sept. 12, 2009. The third ARJ21-700 jet, China's self-developed regional jet, had its first trial flight successfully on Saturday in Shanghai. ARJ-21, short for "Advanced Regional Jet for the 21st Century," features safety and low price. The first homegrown ARJ-21 jet, with 90 seats, rolled off the production line in Shanghai Aircraft Manufacturing Factory on Dec. 21, 2007.

Liu Xiang, China's 110m-hurdle world champion and Olympic gold medal winner clears a hurdle during a training session in Shanghai, east China, on June 30, 2009. As Sun Haiping, Liu's coach said during today's press conference, the hurdler is recovering well from his ankle injury but he is not a hundred percent fit for competition. The former 110m hurdles record holder pulled out of the Beijing Olympics last year due to an injury and has not been in competition since then.

China's Minister of Commerce Chen Deming said the U.S. decision to impose special protectionist tariffs on tire imports from China was grave trade protectionism and sent a wrong signal to the world.

Sept 14, 2009

Hong Kong: The price of illegal drugs has gone up, a senior customs officer said yesterday, the result of disruptions to supply caused by several big seizures. Cocaine costs about 20 per cent more on the street this summer than it did in April, with a gram now going for a little more than HK$900, figures show. The price of heroin was also up slightly, from HK$607 a gram in June to HK$652 in July. The higher prices indicated there was a shortage of illegal drugs on the market, Donald Wong Sui-cheung, superintendent of customs' drug investigation bureau, said. Customs seized 401.5kg of illegal drugs at checkpoints in the first eight months of the year, a 176 per cent increase over the figure for the same period last year. Wong said ketamine was about 40 per cent more expensive and was less pure. Ketamine was HK$114 a gram in July. "The drug shortage was the result of customs and police stepping up enforcement and making more seizures this year," he said. In the latest operation, customs arrested a 27-year-old and seized 15kg of cocaine and 374 grams of crack cocaine with a combined street value of HK$14.3 million at his hotel room in Sha Tin around 11.30pm on Thursday. Wong believes the consignment was intended for local consumption. Its origin had yet to be determined. Customs redeployed manpower at checkpoints and increased the number of sniffer dogs from 34 to 45 this year. Plain-clothes officers were also disguising themselves as travelers and mingling with visitors at control points in an effort to collect information. At the same time, police have conducted 100 drug-related raids in the past two months, with 149 people arrested and drugs valued at HK$1.34 million seized. In the first seven months of this year, 730 people aged 16 to 20 were arrested for serious drugs offences, an increase of 10.4 per cent over the same period last year. More than 90 per cent of the cases involved ketamine.

James Lau says the global financial turmoil has underscored the importance of the HKMC's function. The Hong Kong Mortgage Corp is unlikely to consider going public at this time because its objective is not to maximize profit, and that may not attract investor interest, according to its chief executive James Lau. "We are a risk management tool," Lau said yesterday, adding the firm was even more committed to promoting the city's financial stability after the global financial turmoil. He said HKMC in the past had not ruled out going public at an appropriate time. But he added: "There won't be too many buyers if we are not aiming at profit maximization." So the probability that the company would consider listing is low at the moment. Set up by the government in 1997 at the height of the property bubble, the HKMC buys mortgage loans from banks to be repackaged as mortgage-backed securities. The aim is to reduce banks' exposure to property. But the firm has been criticized in recent years for buying non-mortgage and overseas assets, with some critics suggesting it should close down. Lau defended the company, saying it expanded its business mainly to maintain its financial capability so that it could fulfil its objectives, particularly when there was pressure on financial stability. He said the global financial turmoil showed the importance of HKMC's function. He noted, for example, that many banks were facing liquidity pressure but there were no potential buyers. However, the HKMC last year continued to buy mortgage assets from banks, helping them ease liquidity pressures. "Financial stability might be affected if [there were no buyers and banks] were forced to fire-sale their assets," he said. The HKMC unveiled record after-tax profit of HK$464 million for the first half, up 39 per cent year on year, because of significant loan purchases at the peak of the global financial crisis late last year and favorable interest rate conditions this year. However, the company's outstanding loan portfolio fell 7 per cent to HK$47.2 billion in the first half from the end of last year, even though it bought HK$5.2 billion in mortgage assets during the period. Kenny Fox Tsz-chun, the agency's senior vice-president, said the rundown of the portfolio was partly due to the robust property market.

Attendance at Hong Kong Disneyland this year is expected to edge up slightly to about 4.5 million, its second-highest so far, despite the global downturn and swine flu fears, according to sources familiar with the theme park's operation. Since the park opened four years ago, the number of visitors has see-sawed, reaching about 5.2 million in the first year, then dropping to 4.17 million before rebounding to 4.48 million in 2007-08. From last October to May, 3.13 million people visited. But summer attendance, especially from the mainland, suffered because of fears of human swine flu. "Attendance will probably be flat or up a little compared with last year," the sources said. "Even though we're still making a loss, we managed to improve our finances." Disney's financial period runs from October to September. At rival Ocean Park, attendance fell about 5 per cent this year compared with last - from 5.03 million to about 4.78 million - but it was still the third-best year in its history. According to the Hong Kong Tourism Board, the number of visitors to the city fell 13.4 per cent year on year in May, 15 per cent in June and 12.2 per cent in July. The number of mainland visitors was down 9.6 per cent in May, 11.6 per cent in June and 13.7 per cent in July. Details about Hong Kong Disneyland's performance, including attendance, revenue, and costs and expenses, will be announced annually from the current financial year under a deal with the government to add more attractions. However, the figures must first be filed with the US Securities and Exchange Commission, meaning they will not be publicly disclosed until about five or six months later. Expanding the Disney park is essential to boost attendance and the bottom line. Disney is especially keen to improve the return on its investment, since the amount of management fees it can collect is now linked to the park's performance. Under the expansion deal negotiated with the government, the formula for its base management fee was changed from 2 per cent of gross revenue to 6.5 per cent of earnings before interest, taxes, depreciation, and amortization, or ebitda. The changes are significant. In the park's second year, for example, total revenue reached HK$2.36 billion, allowing Disney to collect a base management fee of 2 per cent, or about HK$47.28 million. Had the new formula been in place then, Disney would have received nothing, as ebitda amounted to a deficit of HK$272 million. After deducting depreciation and interest expenses, the theme park recorded a net loss of more than HK$1.51 billion in the second year of operation, according to confidential documents. Revenue is derived from selling tickets, food, merchandise and other goods and services. Disney can still benefit handsomely from a loss-making park as long as people spend money on food and merchandise, which is the revenue source it derives most of its royalties from. In the third and fourth years of operations, Disney agreed to waive its management fees and defer royalties in a bid to shore up finances. Although the park will have to resume paying these fees from next month, the sources said the deferred royalties may not need to be paid if certain conditions are not met. A HK$3.63 billion expansion will add three new themed areas, for a total of seven "lands", and see the area of the park increase by about 23 per cent. To facilitate the expansion, Disney will inject new funds while the government will use previous loans to the park to buy more of its shares. The changes will lower the government's stake from 57 per cent to 53.43 per cent and increase Disney's holding from 43 per cent to 46.56 per cent by the end of this month.

More than a hundred bicycles remained illegally parked near Cheung Chau ferry pier yesterday after a clearance by government officers. The action was taken after various departments received reports that the bikes had blocked ambulances and fire engines on their way to emergencies. But only 18 were removed in the joint exercise by the Home Affairs Department, Lands Department, Food and Environmental Hygiene Department and the police. According to regulations, owners must be given a day's notice before the removal of their bikes, a Home Affairs Department spokeswoman said. Lands Department officers had stuck warning notices on bicycles in the public pier area between Shing Cheong Lane and Man Shun Lane on Wednesday and most owners had removed their bicycles in time. Others continued to park illegally but their bikes could not be dealt with because they had not been issued the warning notice. The spokeswoman said owners could not claim back their confiscated bikes. Cycling is a way of life on the island and most families own one or more bikes. Residents said illegal parking would not be solved unless more public parking spaces were provided. About 300 bikes were removed in an earlier governmental action, but it had not solved the problem. An official parking area should be drawn up next to the pier, said Marisa Yip, who has lived on the island for 14 years. "When there is no official space, people park their bicycles disorderly," Yip said, suggesting that a line be drawn in the pedestrian area and cyclists not be allowed to park beyond that. Islands District councillor Lee Kwai-chun said she had proposed a similar idea but had not received a positive response from the Transport Department. She had suggested a line be drawn on the road to indicate where cyclists should park. Lee was told there was no precedent for the suggestion and no legal basis for prosecuting people who parked beyond the line. Elderly residents said the increasing number of bikes was a danger. An 88-year-old man said he had been hit by cyclists three times. And a 75-year-old said: "Bicycles move fast but old people don't have keen eyes."

One of Hong Kong's main pro-Beijing newspapers has joined the chorus of those urging authorities in Xinjiang to come clean about the beating last week of three journalists from the city. A signed commentary in the Ta Kung Pao daily urged authorities in the far-western region to clarify its "fabricated" and "groundless" accusation that the three Hong Kong journalists had incited protesters. The article questioned what grounds the authorities had for making the accusation. The commentary, which carried the pseudonym Kwan Chiu, is believed to reflect the newspaper's position and was written after discussion among its senior editors. On Friday last week, TVB (SEHK: 0511) senior reporter Lam Tsz-ho, his cameraman Lau Wing-chuen and Now TV cameraman Lam Chun-wai were tied up, handcuffed and beaten by police while covering protests in the Xinjiang regional capital, Urumqi , over reports of people attacking others with hypodermic syringes. On Tuesday, Hou Hanmin , director of the Xinjiang Information Office, accused the three journalists of inciting protesters. Yesterday's commentary said: "All sensible people should know that it is a fabricated accusation. Hong Kong reporters are only outsiders there [Urumqi]. How can they incite people to cause trouble?" The accusation has angered many Hong Kong journalists and attracted criticism from across the political spectrum. The Hong Kong Journalists Association has called a protest march tomorrow to the central government's liaison office. Journalism professors have called on their students to join the march to show support for press freedom. Professor Clement So York-kee, director of Chinese University's journalism school, said his colleagues had passed the message to their students about tomorrow's march, which will start from Western police station at 1pm. The University of Hong Kong students' union also criticised the Xinjiang authorities, saying it "strongly condemned" them for abusing their power by beating the reporters and for their subsequent "fabrication" of details of the events. Professor Ying Chan, director of the university's Journalism and Media Studies Centre, said although the situation was serious she would not urge students to take to the streets. "We have to put things into perspective. Journalists are being shot dead in Afghanistan," she said. She urged journalism students to exercise their "independent judgment" on the incidents. Chinese University's journalism school is polling people about what they think of the Xinjiang authorities' account of the event. The findings will be released at a News Executives Association seminar tomorrow. Meanwhile, Secretary for Security Ambrose Lee Siu-kwong, who was on a visit to Guangzhou, said he had conveyed the concerns of Hong Kong people and journalists to officials of the Ministry of Public Security in Beijing. With the 60th anniversary of the founding of the People's Republic less than three weeks away, Lee said authorities in Hong Kong would be on alert against any possible acts of terrorism by Xinjiang separatists.

It's a first for Henry Tang Ying-yen. In a Cable TV interview, he injected a single word - "first" - that put a question mark to his frequent demurrals on the question of whether he intends to seek selection as Hong Kong's next chief executive. Tang's departure from his usual response to questions about 2012 - that he will just "get the job done" - wasn't the only signal he gave about his intentions. The chief secretary used another interview, on RTHK, to break his silence about the man many see as his chief rival for the job - Leung Chun-ying, the Executive Council's convenor. For the first time, too, he laid out the qualities he thought were required of someone aspiring to succeed Donald Tsang Yam-kuen. In the process Tang, a businessman from a family with a close connection to Beijing, got in a dig at his rival for the top post. He said an aspiring chief executive needed the "general support" of the business sector - something Leung is perceived to lack despite his long stint in the real estate trade. (The other qualities Tang cited were patriotism and the ability to defend Hong Kong's core values and people's livelihoods in the context of the "one country, two systems" formula.) Ma Ngok, a political scientist at Chinese University, said any explicit attack by Tang on his rival at this stage would be counterproductive. Tang has been keeping as low a profile as the second most senior member of the Hong Kong government can - at a time when Leung has been seeking to elevate his. While Leung has stopped short of saying he intends to run, he has stepped up his public appearances and the frequency of his comments on public affairs. His image took a blow last month when a long-standing allegation that he was a Communist Party member resurfaced; he quickly denied the charge. Yesterday Tang described Leung as "very capable", but said it was for the voters to decide whether he was capable of becoming chief executive. Tang added that he had full confidence in the Election Committee - the 800-member electoral college that picks the city's leader. RTHK asked Tang whether he thought his 32 percentage point lead over Leung in a recent opinion poll gave him an advantage. "I will not speculate, but everyone must do their duty. The people will judge whether any particular person has or has not done his duty, and whether he has done it well," he said. "I will get the job done and if I do it well, people will identify with my efforts." On Cable TV he said: "My goal now is to get the job done in the remaining term first."

Mainlanders who have worked in Hong Kong for a year as well as members of their family who are living in the city will be allowed to travel to Taiwan from next month, the director general of the island's Tourism Bureau says. Currently, mainlanders in the city may visit Taiwan only after living here for at least four years. The relaxed rule would benefit about 300,000 mainlanders in Hong Kong, the bureau's chief, Janice Lai Seh-jen, said. "We expect the scheme can start from October" after the Executive Yuan and the Mainland Affairs Council gave their approval, Lai said before a dinner in Taipei with members of the Hong Kong Association of Travel Agents. Association chairman Michael Wu Siu-ieng welcomed the change, as the trade believed it would create more business opportunities. "It is an untapped market," Wu said. "With the current regulation, there is no way we can organise any tours for these people. But now we can." He believed the scheme could cover 450,000 people and that the trade had begun preparations for these potential customers. Taiwanese destinations sought out by mainlanders were different to Hongkongers' choices. "Mainlanders love to visit traditional sightseeing spots such as the National Chiang Kai-shek Memorial Hall and the Palace Museum," Wu said, while Hong Kong people preferred to explore new places since most of them had been to Taiwan before. He estimated that group tour prices for mainlanders in the city would range from HK$3,000 to HK$4,000 per person. Taiwan has been opening up to mainlanders as part of efforts to improve cross-strait relations and increase the island's tourism revenue. Up to 3,000 mainlanders a day are now allowed to visit Taiwan, but they must travel in groups and only day trips are permitted.

As head of the financial regulator's enforcement division, Mark Steward has for the past three years been the driving force behind a crackdown against those involved in illicit deals. But with less than two weeks left on his contract, there is a deal of his own that remains in doubt. The Securities and Futures Commission executive director is still waiting to find out whether the government will give him a new term. Last week, Steward raised concerns about his future by revealing he was still in negotiations with the government over a new contract. His current one ends on September 24, and his work visa is also due to expire. "There is an issue of principle which needs to be ironed out. It is not about money," he said after making a speech at a Hong Kong Securities Institute function on September 3. His comments, first reported in Ming Pao, have fuelled speculation that the government is under pressure to either replace or clip the wings of the man who is widely credited with the adoption of a hardline approach by the SFC against those who breach market rules. Steward has recently been at the forefront of a series of high-profile cases. These include a string of insider dealing convictions and jail terms, a legal challenge that scuppered PCCW (SEHK: 0008)'s privatisation plan on grounds of vote-rigging, and the striking of a deal with banks to get money back for investors in Lehman Brothers minibonds. Some brokers say Steward may have been too aggressive in his pursuit of market miscreants, leading to complaints about his crusading style. Others say the contract negotiations are over pay, with some suggesting he wants a pay rise. One broker said he had heard that Steward wanted an increase of 25 per cent. Contacted last night, Steward said this suggestion was "completely false". A spokesman from the Financial Services and the Treasury Bureau said it would not comment on individual appointments. All executive directors of the SFC need to be appointed by the financial secretary. Steward was praised this week by SFC chief executive Martin Wheatley, who described him as a man with "ability and creative ideas" who had found new ways of using the regulators' powers under the law to crack down on offenders. The latest example was the conviction on Thursday of former Morgan Stanley Asia managing director Du Jun for insider dealing involving HK$87 million. The legislator for the financial services sector, Chim Pui-chung, said Steward had done a great job so it would be good if he stayed on. "It depends on whether the SFC would fight for a pay rise for him. A pay rise is always an important issue to debate in a contract renewal," Chim said. Steward's contract is not the only one due to expire. The term of SFC chairman Eddy Fong finishes at the end of this month. Financial Secretary John Tsang Chun-wah has not announced whether he will stay on.

Madhu Rao, executive director and chief financial officer of Shangri-La Asia, says demand is improving at its flagship Hong Kong hotels. Luxury hotelier Shangri-La Asia (SEHK: 0069, announcements, news) , which saw interim operating profit before non-operating items fall 92 per cent to US$12.9 million, says revived stock market and business activities lifted demand at its Hong Kong flagships. Executive director Madhu Rao said yesterday a larger number of initial public offerings and business conferences had filled more ballrooms at the Island Shangri-La hotel in Admiralty and the Kowloon Shangri-La hotel in Tsim Sha Tsui. A combined 62 per cent of guest rooms have been taken since July, marginally higher than the 57 per cent occupancy in the first six months when the global financial crisis and swine flu took a heavy toll on corporate and leisure travel, he said. "The two hotels had some marginal improvement, but they are heading to pick-up this month and next," Rao said. "The situation in the second half will be better." He added that a growing stream of mainland visitors, which made up 32 per cent of the two hotels' revenue against 22 per cent previously, helped fill a shortfall of visitors from the United States and Europe. The average room rate of the two Shangri-La hotels in Hong Kong dropped 16.83 per cent to US$252 in the first six months on lower occupancy, leading to a 50.32 per cent decline in after-tax profit to US$15.5 million. Their yield fell 36 per cent to US$138. The group's net profit was halved to US$67.3 million as a previous exchange gain of US$49.9 million was not repeated in the first half. It was also dragged down by a US$24.8 million provision in relation to a mixed-use development in New York after the group and its partner decided to "close down the project and walk away" under the difficult economic conditions, Rao said. "We will take a management approach in overseas market, but our priority remains in China," he said. Visa restrictions on foreign visitors, stiff competition especially in Beijing and Shanghai and higher depreciation charges at newly opened hotels left the mainland portfolio with a loss of US$6.3 million in the first half, compared with a US$65.3 million after-tax profit previously. Shangri-La hotels opened in Wenzhou and Ningbo in the first half, and two additional hotels will be ready by the end of this year. Earnings per share were halved to 18.13 HK cents. The interim dividend was cut 57 per cent to six HK cents a share. Shares in Shangri-La Asia jumped 24 HK cents, or 1.87 per cent, to HK$13.02 yesterday before the results announcement. Shangri-La is part of Kerry Group, which through the SCMP Group, publishes the South China Morning Post (SEHK: 0583).

Two of the buildings at the heart of one of Hong Kong's biggest entertainment hubs are destined for the wrecker's ball. California Entertainment Building and California Tower, the 12-storey buildings where businessman Allan Zeman began opening the bars and restaurants that transformed Lan Kwai Fong 26 years ago, will be torn down next year. In their place will come a single 24-storey tower featuring outdoor terraces, rooftop gardens and an extra 40,000 sq ft of commercial and office space. "Lan Kwai Fong has to transform itself. People look for new things and have lots of places they can choose to spend," said Zeman, who is known as "the Father of Lan Kwai Fong". "If you stick with the old model, you will die." Zeman hasn't decided when work will start, nor has he put a price on it - though he hinted it would cost under HK$1 billion. He intends the new building to open in 2012. Popular restaurants such as California, Indochine 1929 and Thai Lemongrass will be relocated - though Zeman did not say whether all the buildings' bars and restaurants would be found new homes for the two years the work will take. Once the new building opens, the old favorites will return, but there will be new ones too. Zeman hopes the new building's ambience, including higher ceilings, will attract fine-dining restaurants. He plans to invite some big-name restaurant groups to Hong Kong. Drinkers were taking the news in their stride last night. "There may be construction, but I have been coming here for so long that I won't go out and find another place," a man who has been a regular customer of C bar for a decade said. Another man, who said he had been going to Lan Kwai Fong for 14 years, also said the reconstruction would not deter him. "This is Hong Kong. There is always something new going on," he said. A bar manager was taking a positive view too. Samuel Sitling, general manager of Sugardolls, said: "The bar business only operates at night and the construction will only take place during the day." He also welcomed the prospect of change in Lan Kwai Fong. "It is hard to have an accurate estimation with the limited information available. But I believe if the California Entertainment Building and California Tower are torn down, we will all benefit. There are too many bars here now. If there are less of them, it may be good for us." He agreed the dust that might be thrown up during construction would have little impact on the bars that remain. A fellow bar manager was non-committal about what might happen. Matthew Brown, general manager of Bulldog's Bar and Grill, said he had only heard about the redevelopment recently. "There is no detail and no one knows how big the [new building] will be," Brown said. He could not predict what impact the redevelopment might have on business at Bulldog's. "Next year will still be OK, as the football World Cup will be on. But the year after, I really have no idea." Lan Kwai Fong has been such a draw - coach-loads of mainland tourists visit it nightly - that entertainment spots have sprouted along adjoining streets such as Wo On Lane and Wyndham Street. Competition from nearby restaurants, and the impact of the financial crisis and July's ban on smoking in all bars and restaurants, are behind the decision to redevelop. "After the financial tsunami, we have seen substantially fewer investment bankers, and business has dropped by 12 per cent to 15 per cent," Zeman said. "In the past couple of months, we saw business travellers and mainland tourists return, though they are more conscious about how they spend." In recent years, too, the IFC mall, with its luxury shops and high-end restaurants, has drawn some shoppers and diners away from The Landmark mall and Lan Kwai Fong. "The new building will keep the character, but will be more inviting, user-friendly," Zeman said. "The vibe is that people should feel warm and intimate." The recent strength of the Hang Seng Index and a rash of initial public offerings has brought some of the feel-good factor back to Central. Investment banker Louis Tse Ming-kwong, whose office is 100 metres from Lan Kwai Fong, said: "The higher the index moves, the better my mood and the bigger the chance of finding me eating and drinking in Lan Kwai Fong. "Last week, I came down for a few rounds after the market closed to gossip with stockbrokers." He said the redevelopment would be good for Hongkongers - who liked new things - and for tourists.

Hong Kong Customs smashed a drug storage and distribution centre in Sha Tin on Thursday night and seized 15 kilograms of cocaine and 374 grams of crack cocaine valued at HK$14.3 million,. the Customs and Excise Department said on Friday. Customs officers have arrested a 27-year-old man and he was charged with two counts of trafficking dangerous drugs. He will appear in Fanling Court on Saturday morning, local media reported. A customs spokeswoman said the arrests occurred after a month-long investigation. “Officers of the Customs Drug Investigation Bureau identified a drug trafficking syndicate which used a hotel room to store and distribute drugs.” About 11.30pm on Thursday night, officers mounted an operation at a hotel in Sha Tin and intercepted a man coming out of a room,” he said. Officers found a small quantity of crack cocaine, a smokable form of cocaine, in the 27-year-old's possession. “A search of the hotel room led to a further seizure of 15 kg of cocaine, 330 grams of crack cocaine and a batch of packing paraphernalia inside a travelling case and a safe,” he added. The customs officers will continue to trace the source of the drugs. The spokeswoman said they were investigating whether some of the drugs were distributed among local schools. They did not rule out further arrests. Under the Dangerous Drugs Ordinance, drug trafficking is a serious offence. The maximum penalty is life imprisonment and a fine of HK$5 million.

Hong Kong pop star singer Joey Yung Cho-Yee sings new songs from her latest Chinese lyrics album, on her solo vocal concert of the Hainan Fans Club rendezvous, in Haikou, south China's Hainan Province, Sept. 10, 2009.

Las Vegas casino operator Wynn Resorts plans to raise up to US$1 billion by listing its Macau assets on the Hong Kong stock exchange, two sources with direct knowledge of the deal said on Friday. The listed unit, Wynn Macau Ltd, will sell 20 per cent of its enlarged share capital, said a source who declined to be identified. The tentative listing date for the IPO is set for October 9, the source added. Hong Kong’s stock regulator on Thursday approved Wynn’s application to launch its initial public offering in Hong Kong, according to a second source. US casino operators, grappling with high debt levels and a sluggish economy back home, are hoping to boost valuations through a spinoff abroad. Wynn’s rival Las Vegas Sands, which has filed an application for a possible listing on the Hong Kong stock exchange, could raise US$1 billion to US$2 billion through the sale of a minority stake in its Macau operations at the end of November or early December. The IPOs, which come at a time when Hong Kong’s stocks are rallying, will give investors a stake in Macau, the world’s biggest gambling market. The former Portuguese colony raked in record gambling revenues in August. Wynn’s offering in Hong Kong could go down better with investors than the Sands listing due its lower debt levels and strong brand name, analysts say. Wynn, which had shelved its plans to list its Macau assets late last year amid the stock market plunge, will kick off its roadshow for the deal on September 21. The shares could be priced on October 2, the source said. JP Morgan, UBS AG and Morgan Stanley have been designated to handle Wynn’s Hong Kong listing.

Former President Chen Shui-bian is seen behind barbed-wire at the Tucheng Detention Center in Taipei County, Taiwan, on Friday. In a sign of protest, Chen refused to attend court on Friday when his verdict was announced in his high-profile corruption trial. A Taiwan court imposed a life sentence on former President Chen Shui-bian after convicting him of corruption on Friday, marking a watershed event in the island’s turbulent political history. Chen’s wife Wu Shu-chen was also convicted of corruption and received life in prison, said court spokesman Huang Chun-ming. The verdicts came as hundreds Chen supporters demonstrated outside a downtown Taipei court, holding flags and banners saying “free him” and “Chen’s innocent.” The three-judge Taipei District Court panel found the 58-year-old Chen guilty on multiple corruption counts, said Huang. Chen was charged with embezzling US$3.15 million during his 2000-last year presidency from a special presidential fund, receiving bribes worth at least US$9 million in connection with a government land deal, laundering some of the money through Swiss bank accounts, and forging documents. Chen chose not to attend Friday’s proceedings. He has been confined to a suburban Taipei jail since late December, after prosecutors convinced judges not to free him following his indictment. Chen’s legal travails have galvanized this island of 23 million people, which held its first direct presidential election in 1996, less than a decade after it began dismantling four-decades of strict, one-party rule. Most Taiwanese were convinced that Chen was guilty of at least some of the charges against him, though some of his supporters believed his anti-Beijing views played a role in his prosecution, and that he was unfairly confined to jail during his trial. Critics point to a decision to change the three-judge Taipei District Court panel trying Chen after it originally freed him on his own recognisance following his indictment last December. The new judges accepted the prosecutors’ argument that he constituted a flight risk, and that if freed, he could collude with alleged coconspirators. President Ma Ying-jeou and senior Justice Ministry officials have repeatedly rejected charges of unfairness, saying that Chen’s prosecution represents a validation of the democratic principle that no man – regardless of his rank – stands above the law in Taiwan. Chen, Taiwan’s first non-Nationalist Party leader since Chiang Kai-shek fled to the island after losing the Chinese civil war to Mao Zedong’s Communists in 1949, rode to power in 2000 on a promise to clean up decades of Nationalist corruption and to deepen Taiwan’s drive towards independence. But he quickly fell foul of the Nationalists’ majority in the legislature and his alleged tendency to play fast and loose with accepted procedures, including his lax management of a special presidential fund intended to promote Taiwan’s overseas interests. Complicating matters was Beijing’s outright hostility, based on Chen’s pro-independence views, and his tense relations with the US, Taiwan’s most important foreign partner. Washington saw Chen’s support for independence as raising the possibility of a war with Beijing, and pressured him to desist – with only limited success. After leaving office, Chen’s anti-Beijing policies were quickly jettisoned by Ma, who has made improved relations with Beijing the hallmark of his administration.

China: China said on Friday it was on track to achieve its target of eight per cent economic growth this year as a new flood of data suggested that massive stimulus spending was paying off.

China strongly opposes a U.S. decision made Friday night to impose special protectionist tariffs on tire imports from China, Ministry of Commerce (MOC) spokesman Yao Jian said Saturday. Yao said China has held negotiations with the U.S. over the case but the U.S. still sticks to this decision, which is serious trade protectionism, with which China is strongly dissatisfied. The Ministry said the U.S. had violated the WTO rule by this decision, and also its relevant commitments made on the G-20 financial summit. Yao said China would reserve all rights to take responsive actions to firmly protect the interests of Chinese companies. According to a Los Angeles Times report Saturday, within 15 days, the U.S. would add a duty of 35 percent in the first year, 30 percent in the second and 25 percent in the third on passenger vehicle and light-truck tires from China. The report said the decision came after the U.S. International Trade Commission determined that a surge of Chinese-made tires had disrupted the domestic market and cost thousands of jobs in the U.S. The Ministry said on its website Saturday the U.S. lacked bases for the case because tire products exported to the U.S. from China had actually declined 16 percent in the first of this year, compared to the same period last year. China's tire exports to U.S. in 2008 only rose 2.2 percent from 2007. It said the business situation of the U.S. tire producers has shown no apparent changes after the entry of Chinese products. There exists no direct competition between China's tire products and the U.S.-made ones as China's tires mainly go for the U.S. maintenance market. Leaders from around the globe have reached consensus to oppose trade protectionism since the outbreak of the financial crisis. But the tire case, lacking factual bases, is an abuse of protectionist measures. It not only hurts the interests of China, but also those of the U.S., the Ministry said. It would also send a wrong signal to the world ahead of the upcoming Group of 20 nations in Pittsburgh Sept. 24-25, and could trigger a chain reaction of trade protectionist measures that will slow world economic recovery, according to the website statement. Although U.S. President Barack Obama's ruling on the tire case was said to be based on law by the U.S. government, it is seen as a resolution under political pressure at home. According to a report by the Associated Press (AP) Saturday, China will be a major presence at the G-20 Pittsburgh meeting, and the U.S. will take the stance of supporting free trade.

Yu Lia-chun, a retired hospital orderly in Hong Kong, never heard of Lehman Brothers before she got a call last September from her banker. "He said: 'Did you hear the news? So-called experienced investors who poured millions into minibonds soured by the collapse of Wall Street giant Lehman Brothers a year ago want conditions barring them from a compensation deal to be lifted, Democrat lawmaker Kam Nai-wai said after a meeting with the Hong Kong Monetary Authority yesterday. Kam accompanied 11 investors to meet Raymond Li Ling-cheung, the authority's executive director, on how to compensate minibond holders deemed experienced and other "special cases". Kam said the authority would give these complaint cases priority if a settlement could not be reached with the banks. But Li said the terms of the minibond compensation deal could not be changed. Under the arrangement announced earlier by the Securities and Futures Commission, about 2,000 minibond investors defined as either professional or experienced are excluded from the compensation deal. The commission defines professional investors as those with a portfolio worth more than HK$8 million and at least two years of investment experience. Experienced investors are defined as those who, in the three years before their first purchase of minibonds, executed at least five transactions involving leveraged products, structured products or both. Minibonds are not corporate bonds but high-risk, credit-linked derivatives. They are marketed as a proxy investment in well-known companies. The Legislative Council subcommittee investigating the minibond debacle is seeking details from the commission about how the compensation deal was struck. A commission spokesman declined to comment. Dr Raymond Ho Chung-tai, chairman of the Legco subcommittee, said the authority's outgoing chief, Joseph Yam Chi-kwong, could still be called to testify as a witness after he stepped down next month. Lehman's bankruptcy in September last year rendered minibonds credit-linked to the US investment banking giant virtually worthless and forced regulators in Hong Kong to take action against banks and brokers that sold them. An offer by 16 banks to repurchase the minibonds from roughly 25,000 affected investors had been accepted by 19,576 of them as of Wednesday, the Monetary Authority said - an acceptance rate of 78.3 per cent. Some 204 have rejected the offer so far. The deal allows investors to sell back their Lehman Brothers minibonds for up to 70 per cent of their principal investment. The authority has received 21,660 complaints about the products.

Containers are seen at Waigaoqiao Container Port in Shanghai in this file picture. Data released on Friday showed container throughput in August was down 11 per cent from a year earlier in Shenzhen, and down 15 per cent in Shanghai. China's exports languished in August, contracting 23 per cent, increasing the onus on Beijing’s massive stimulus spending to drive an economic recovery. Customs data released on Friday show August’s exports were worth US$103.7 billion compared with US$134.9 billion in the same month a year earlier. Imports fell 17 per cent to US$88 billion, while the overall trade surplus plunged 45 per cent from a year earlier to US$15.7 billion, but rose from the month before, the report said. The figures were worse than most economists’ forecasts. Mainland’s trade has been battered by the global downturn but Beijing’s 4 trillion yuan (HK$4.5 trillion) stimulus program has helped to insulate the world’s third-largest economy by fuelling industrial demand through heavy spending on building new highways and other public works. Economic growth accelerated to 7.9 per cent over a year earlier in the latest quarter, up from 6.1 per cent the previous quarter, though is still far short of the 10 per cent-plus growth rates of recent years. The government aims for 8 per cent economic growth this year. Although surveys show purchasing orders are beginning to rebound, trade has stabilized at a relatively low level, says JP Morgan chairwoman for China equities, Jing Ulrich. “As the economies of China’s major trading partners gradually strengthen, the export slump should gradually ease,” she said in a report on Friday. In January-August, mainland’s total trade with the EU fell nearly 21 per cent, while its total trade with the US dropped 16.4 per cent and its trade with Japan slipped 22 per cent, the government said. Exports of almost all major industrial products saw double-digit declines, according to the customs data. Mainland’s imports have also remained anaemic, even more so now that they are no longer inflated by the massive stockpiling of commodities seen earlier this year. Container throughput in August was lackluster at mainland’s biggest ports – down 11 per cent from a year earlier in Shenzhen, and down 15 per cent in Shanghai, Ulrich said.

Hotels on Beijing’s main avenue, the site of the National Day parade next month, have been told to close for four days as part of a huge security crackdown, local media said on Friday. At least five hotels will close down for four days, while others have been ordered not to use guest rooms that overlook Chang’an Jie, the street that cuts through the heart of the capital, the Beijing News reported. Beijing is planning a military parade, mass song-and-dance performances, and fireworks on October 1 to mark 60 years since revolutionary leader Mao Zedong proclaimed the founding of Communist China in 1949 at Tiananmen Square. According to the report, some hotels have informed guests booking in advance that the building will be under temporary government control for two days from September 30, and that their activities could be restricted. The move is part of a larger security clampdown, with thousands of police deployed in Beijing, close monitoring of vehicles coming in and out of the city, and security checks in key sites such as the subway system.

Wu Bangguo, Chairman of the National People's Congress, in Washington on Wednesday to discuss trade issues with the Obama administration. Wu, on Thursday, indicated Beijing's intention to seek domestic growth to emerge from the global recession. China will continue to boost domestic demand and seek growth driven more by consumption to play its part in bringing about global economic recovery, Beijing’s top lawmaker said on Thursday. Wu Bangguo, chairman of the Standing Committee of the National People’s Congress, said a joint response to the international financial crisis should be the priority project for the two countries. “We should increase communication and coordination on macroeconomic and financial policies, and promote trade and investment liberalisation and facilitation in earnest,” he told an audience of business leaders in Washington. Beijing “will expedite the shift from investment- and export-driven economic growth to growth propelled by consumption, investment and export working in concert,” he said. US and other Western leaders have been urging the mainland to rely less on exports to fuel its economy and Beijing pledged to rebalance its growth model during high-level bilateral talks this summer. Bubbling below the surface of the US-China Strategic and Economic Dialogue, a bilateral forum the Obama administration and Beijing launched in July, was a set of trade disputes over tires and steel tubes. Wu did not directly address those trade disputes. But he said Beijing and Washington should “properly handle economic and trade frictions between the two sides.” The US Commerce Department on Wednesday imposed preliminary duties ranging from 10.90 per cent to 30.69 per cent on US$2.6 billion of steel pipe from the mainland used to transport oil. Meanwhile, President Barack Obama must decide by September 17 whether to curb tire imports in response to petitions under a law that allows the US and other WTO members to restrict imports from the mainland in response to a surge that is harming or threatening to harm US industry. The September 17 deadline comes one week before Obama will host other G20 country leaders for a summit in Pittsburgh aimed at reviving world economic growth and holding the line against trade protectionism. Secretary of State Hillary Clinton, speaking before Wu addressed the US Chamber of Commerce, also called for bilateral cooperation across a range of issues, from climate change, financial instability, and nuclear proliferation risks from North Korea and Iran. “Our respective priorities and policies have a global impact and therefore we have a responsibility to ourselves and others to work as effectively as we can meet the threats and seize the opportunities of the 21st century,” she said. Obama, who will meet Hu Jintao at the G20 summit in Pittsburgh and visit Beijing in November, has made improving ties with the mainland a “central goal,” Clinton said.

Wind power could meet electricity demands in the mainland until 2030 and cut its carbon dioxide emissions by 30 per cent, US and Chinese researchers said on Thursday. The mainland already is the world’s chief emitter of carbon dioxide, a leading so-called greenhouse gas implicated by scientists in global climate change. The country currently generates 792.5 gigawatts of electricity per year, mostly through coal-fired power plants, and that output is expected to grow by 10 per cent per year, a team from Harvard University in Massachusetts and Tsinghua University in Beijing reported in the journal Science. “China is bringing on several coal-fired power plants a week,” Michael McElroy of Harvard’s School of Engineering and Applied Sciences said in a statement. “By publicizing the opportunity for a different way to go, we will hope to have a positive influence,” he added. About 80 per cent of electricity generated in the mainland comes from coal. Wind energy accounts for just 0.4 per cent of its total current electricity supply, but the country is quickly adding capacity, trailing only the US, Germany and Spain in existing wind farms, the scientists said. To study the potential of wind energy in the mainland, the team used data from Nasa as well as global meteorological data collected from surface observations, aircraft, balloons, ships, buoys and satellites worldwide. They found that a network of wind turbines operating at as little as 20 per cent of their rated capacity could provide more than seven times the current electricity consumption. To meet its growing energy demand with coal-fired plants, Beijing could potentially increase the country’s carbon dioxide output to 3.5 gigatons a year, the scientists said. The team calculates that the switch to wind power would cost around US$900 billion dollars at current prices over the same 20-year period. “This would require a major investment of resources and could be accomplished only on the basis of a carefully designed long-range plan for the Chinese power sector,” the team wrote.

China's new lending in yuan rose to 410.4 billion yuan (60.02 billion U.S. dollars) in August from July's 355.9 billion yuan, but still a sharp decrease from 1.53 trillion yuan in June, the central bank said Friday.

Sept 12 - 13, 2009

Hong Kong: Japanese hosiery company, NAIGAICo., Ltd, Wednesday announced the opening of its first independent retail outlet in Hong Kong. NAIGAI's new retail outlet in Hong Kong will offer an array of high-quality and trendy hosiery consisting of both the company's signature labels as well as a few licensed international brands. The new establishment in the city is a strategic step in the company's plan to launch full-scale retail operations in Asia. NAIGAI will use Hong Kong as the base to develop, support and oversee its regional business. The company first established its business presence in Hong Kong in 1986 mainly to source, wholesale and retail hosiery products for ladies, men and children to third party retailers or through consignment counters. President of Naigai Apparel (HK) Ltd Kenji Imaizumi said the new establishment is NAIGAI's first independent retail outlet and hosiery specialty store in Hong Kong. If business goes well, they will open more stores in the city. "We believe Hong Kong is the ideal distribution hub to support our retail business in Asia," he added. NAIGAI has plans for rapid expansion overseas. In addition to the retail outlet in Hong Kong, it will open four outlets in Chinese Mainland in the fall this year. Founded in 1920, NAIGAI Co., Ltd is a Japanese listed company specializing in high-quality, comfortable and fashionable hosiery. In addition to its Hong Kong subsidiary, Naigai Apparel (HK) Ltd, the parent company also has overseas offices in Shanghai, Qingdao, China's Taiwan and Thailand.

The West Kowloon Cultural District promises an art museum, theatres and other cultural and artistic "hardware", but what about the "software"? Worried that Hong Kong neglects less visible forces underpinning the arts, the Home Affairs Bureau has already planned Creative October, featuring more than 40 programs with 200 activities, to get things moving. And now the government, with Chief Executive Donald Tsang Yam-kuen having identified culture and the arts as one of six economic pillars, has set up a group to drive the project forwards. A committee aims to break down the walls between government departments and co-ordinate initiatives to nurture cultural "software" and creative industries. The Steering Committee on Culture and Creativity will be co-chaired by Permanent Secretary for Home Affairs Carrie Yau Tsang Ka-lai and Permanent Secretary for Commerce and Economic Development (Communications and Technology) Duncan Pescod. Yau said establishing the committee was the result of public demand. "The media and the cultural sectors constantly remind us not to forget about cultural software development and cultivation of audiences for the future arts hub," she said. Departments and bureaus would be better able to foster cultural and creative industries when working together. Other members on the committee come from the Education Bureau, which aims to boost arts education among youngsters; the Home Affairs Department, which will co-ordinate district events; the Leisure and Cultural Services Department, which is the government's main presenter of artistic and cultural events; and CreateHK, which promotes creative industries and administers the HK$300 million CreateSmart Initiative funding scheme. Yau yesterday also pushed the Creative October campaign, which hopes to boost the city's cultural life. The Tourism Board and the government's overseas offices will help promote the campaign internationally. She hoped that Creative October could be an annual event. Fending off criticism that it was too similar to the Arts Festival, Yau said that next month's event focused more on community and young artists, as well as the audience.

Tung Chee-hwa speaks yesterday to students at the Federation of Youth Groups in North Point. Former chief executive Tung Chee-hwa says human rights development on the mainland has taken "great strides", given the state of the country 60 years ago. He says he often tells visitors "I make no apologies" on this issue. Tung harked back to the days of old Shanghai, into which he was born in 1937, overrun by foreign powers and on the verge of Japanese occupation. The average lifespan was 35 and 20 per cent of infants died at birth. "China, regarding democracy, rule of law and human rights - in these 60 years - has taken great strides of achievement," he said. "I'm very confident that when the new China celebrates its 100th year - in 40 years' time - she will definitely have become a modern, stable, democratic, civilized, harmonious country." Tung was speaking to more than 400 students during a forum yesterday organized by the Federation of Youth Groups to celebrate the 60th anniversary of the People's Republic of China. His comments came amid increasing scrutiny of the mainland over its human rights records in Tibet and Xinjiang , and over its treatment of dissidents, activist lawyers and journalists. While it is the 60th year since the founding of the PRC, it is also the 20th year after the Tiananmen crackdown, the 10th year since the outlawing of the Falun Gong as an "evil cult", and the 40th year since the Dalai Lama went into exile. Indeed, the bulk of students' questions were directed at Tung's high praise of democratic and human rights developments on the mainland. He cited the National People's Congress as "a democratic realization". "The path trodden by China towards democracy is different to that of other countries. But that does not mean we don't have democracy," he said. "We are walking along this path, step by step, day by day." He said the most basic human right was the right to live. "Sixty years ago, what human right was there? You couldn't even feed yourself," he said, noting the great economic growth since. In 1959 before the Dalai Lama went into exile, he said, Tibet's population was one million because the average age at death was 30 years, while now it was three million with an average lifespan of 60. Where only 2 or 3 per cent received education in Tibet, now the figure was more than 90 per cent, he said. "If you look at it this way, we have developed in great strides. "These democracy and human rights questions - look at the other countries, what did they do in the first 60 years? Have they developed as much as us? Often I tell my foreign friends, I make no apologies for that."

Li & Fung, the biggest supplier of clothes and toys to Wal-Mart Stores and Target Corp, is seeing a "more positive buzz" in the US economy and has been getting "pretty strong" re-orders from retailers. "We're starting to see a little bit of a creep-up in spending," president Bruce Rockowitz said. "Definitely, the mid-tier retailers and the discount retailers are performing pretty well." Li & Fung last month said first-half profit rose 13 per cent to HK$1.4 billion, beating analyst estimates, on cost-cutting. Li & Fung's market value has more than doubled this year as it accelerates efforts to add customers, buys smaller rivals and signs outsourcing deals amid the global recession. "The rate of decline that's taking place is slowing, and it's a question of have we bottomed and are we going up," said John Rowsell, a managing director at Man Group. "Consumers are still somewhat dampened and I still am pretty hesitant about the US economy." US unemployment rose to 9.7 per cent last month, a quarter-century high, according to Labour Department data released last week. The job-openings rate fell to 1.8 per cent in July from 1.9 per cent the previous month, with 2.4 million positions available, the Bureau of Labor Statistics said. Consumer spending accounts for about 70 per cent of the economy. Li & Fung, the Hang Seng Index's best performer in the past month, rose as much as 7.8 per cent to HK$31 in Hong Kong trading. The stock has more than doubled this year, beating the index's 47 per cent climb. Li & Fung, also a supplier to Inditex's Zara and Marks & Spencer Group, seeks to spur sales through outsourcing deals and acquisitions, Rockowitz said. "Some major retailers are looking to move to us, and have moved to us, their complete supply chain because they see that they can get better prices, quicker delivery," he said. The company is also seeking potential acquisitions in the US and Europe and is "in a position to buy", Rockowitz said, without identifying any targets. "The pipeline is pretty full. We see a lot of great opportunity in the US," he said. "We're seeing in Britain, Germany, quite a few acquisitions that we're working on today." The company last month announced an outsourcing agreement with Talbots, a US women's clothing chain with 586 stores nationwide.

Suspension of the scheme was meant to help local homebuyers but mainland buyers have been active in the housing market in recent months, agents say. Wealthy mainlanders continue to boost Macau's property sales, despite the popular belief that they had stopped arriving since the suspension of the city's investment migration scheme two years ago. In fact, the suspension did not affect those who, by April 3, 2007, had entered onto a waiting list for submitting applications. Thus 1,429 cases were approved in 2007 and 1,852 were approved last year, figures from the Macau government's Trade and Investment Promotion Institute show. The latest official data shows that the government approved 1,185 applications under the scheme in the first half of this year, up 13.8 per cent on the same period last year. If the same number of cases were approved in the second half, the number for the whole year would hit a four-year high. The scheme, which requires investment of one million patacas in property and 500,000 patacas in deposits, was halted by Chief Executive Edmund Ho Hau-wah to cool off the property market. Its suspension took effect on April 4, 2007. Critics said the scheme had pushed up housing prices and caused developers to focus on building luxury flats, ignoring the needs of Macau's lower-income earners. Ho said on April 3, 2007, that the indefinite suspension of the scheme would help local homebuyers. In 2006, when the city was in the middle of a casino boom, 2,119 cases were approved. Mainlanders, more than 90 per cent of applicants, are required to hold a non-Chinese passport before applying - theoretically, one cannot immigrate within one country. The cost of buying a passport, often from a small African or island nation, was usually between 40,000 and 50,000 patacas, plus an agent's commission of 10,000 patacas. That Chinese citizens buy African passports to emigrate from China is believed to be an embarrassment for Beijing, and the cash outflow affects closed capital accounts. Economist and gaming analyst Professor Zeng Zhonglu said the suspension's impact had been weakened by a pile-up of applications that could continue to be approved. "It's similar to the freeze on casino development that doesn't affect applications already filed," Zeng of the Macau Polytechnic Institute said. In April last year, Macau imposed a freeze on its gaming industry. The government stopped granting land for casino use, but land applications already filed by casino developers were unaffected. Rico Kwok Chiu-lung, executive director of Centaline Property Agency in Macau, said mainland buyers had been active in the city's housing market in the past few months. "The market is rebounding on the easing of the travel curbs on mainlanders visiting Macau, the abundant liquidity and the recovery of the casino industry," he said. Kwok said the prices of luxury flats last month had risen about 10 per cent from the second quarter, although they were still far off the peak levels reached in March last year. Flats at La Cite, a new complex near the future bridge to Hong Kong and Zhuhai, fetched about 2,600 patacas per square foot last month, compared with about 2,400 patacas in May and about 3,500 patacas in March last year. But political commentator Professor Larry So Man-yum said the suspension of the scheme helped cool off the property market in 2007, although piled-up applications could still be processed. "It scared off a large number of potential buyers who could have further inflated a property bubble," said So, who teaches public administration at Macau Polytechnic Institute. A spokeswoman for the Trade and Investment Promotion Institute declined to say how many applications were still on file pending approval. Ho in April 2007 said about 4,000 cases might still be approved despite the suspension. Taking into account that 763 cases were approved in the second half of 2007, 1,852 were approved last year and 1,185 were approved in the first half of this year, about 3,800 of the 4,000 cases have probably been approved. It means the inflow of mainland cash under the scheme may dry up. Some developers have called for officials to revive the scheme to boost the housing market.

China: Taiwan said yesterday it expected to sign a financial services agreement with the mainland soon, but no timetable had been set and tough issues such as investing in each other's banks remained unresolved. Taiwan and the mainland have agreed to open their financial markets to each other as part of an improving relationship between the formal political rivals since Taiwan's president, Ma Ying-jeou, took office last year. A memorandum of understanding (MOU) is expected to be signed this year aimed at allowing banks to open branches and buy stakes in each other. The signing of the MOU could come sooner rather than later following this week's reshuffle of the island's cabinet. "We have been hoping to sign the MOU as soon as possible, and it is likely that it can happen any time," Lu Ting-chieh, chief secretary of the island's Financial Supervisory Commission, said. "But how the wording will be worked out so that it is acceptable by both sides is something we are not sure about." Financial shares jumped more than 6 per cent in opening trade on the Taiwan stock market yesterday, to hit their highest level since early June, on hopes the MOU would be signed shortly. Among the biggest gainers, Fubon Financial and Cathay Financial went up by the 7 per cent limit in early trade, but pared gains later in the session. Fubon is Taiwan's first financial holding firm to invest in a mainland city lender, via its Hong Kong unit, Fubon Bank (Hong Kong) (SEHK: 0636). Cathay, the island's top financial holding firm and parent of its biggest life insurer, has operated a joint venture on the mainland. The gains in financial shares might be unsustainable, since major issues lie in allowing banks on both sides to invest in each other, some analysts said. "It [the MOU] will be the first official document that shows both financial regulators recognize each other," said an analyst at a European securities house. "What really matters is the issue of market access. Once Taiwan banks can open branches on the mainland and invest in Chinese rivals, that would be the time they can really generate earnings in China." Taiwan replaced 11 ministers in a cabinet reshuffle on Wednesday prompted by criticism of the government's response to a deadly typhoon last month.

Premier Wen Jiabao opens the economic forum in Dalian. Premier Wen Jiabao said yesterday that China would not change its economic stimulus policy since the country was at a critical stage in the process of recovery. Speaking at a meeting with World Bank president Robert Zoellick, the premier pledged that his government would continue to pursue proactive fiscal and moderately easy monetary policies. "We will not change the direction of our policy," Wen said. The world economy was showing signs of stabilizing, but an all-round recovery would be a slow, difficult and complicated process, he said. It would require long-term, concerted efforts, Wen told the World Economic Forum in Dalian , a coastal city in the northeastern province of Liaoning. His comments came as former central bank adviser Li Yang warned at the same meeting that China's economic stimulus measures were losing steam. He called on the government to open the door wider for private investment in case the recovery grinds to a halt midway through. "The expansionary policies are losing their power to sustain further economic growth," he said. Li, once the academic member of the monetary policy committee of the People's Bank of China, said some of the funds from the stimulus package were leaking out of the real economy and into speculation in the stock and real estate markets, undermining the intended effect of the expansionary policies enacted since the end of last year. Beijing announced in November an ambitious 4 trillion yuan (HK$4.5 trillion) stimulus package for this year and next, planning to tolerate a record fiscal deficit of 950 billion yuan this year, a nine-fold increase from the previous year. Beijing also pushed state-controlled banks to loosen their lending scrutiny and inject ample liquidity into the market to avert an economic slump. But a waning fiscal capacity, together with an increase in the number of bank loan defaults and the looming threat of inflation, are forcing Beijing to slow down its expansionary pace. For the first half of this year, China's national fiscal revenue dropped 2.4 per cent year on year to 3.4 trillion yuan. But expenditures rose 26.3 per cent to 2.89 trillion yuan. Meanwhile, new loans from commercial banks came to 7.37 trillion yuan by July, estimated to hit 11 trillion for the year - far higher than the 5 trillion yuan target set at the beginning of the year. Rising grain and pork prices across the country over the past three months have fanned fears of a return of inflation next year. Levin Zhu, president and chief executive of China International Capital Corporation, echoed Li's advice. "In the short run, big sums of government investment look useful in keeping the economic output at an acceptable level, but this will cover up some long-term and chronic problems in the end," Zhu, son of former premier Zhu Rongji, said.

Wu Bangguo (L), chairman of the Standing Committee of China's National People's Congress, meets with U.S. President Barack Obama at the White House in Washington, the United States, Sept. 10, 2009. Visiting top Chinese legislator Wu Bangguo on Thursday met with U.S. President Barack Obama at the White House on bilateral relations and international and regional issues of common concern. Wu, chairman of the Standing Committee of China's National People's Congress, was the first top Chinese legislator that has visited the United States during the past two decades. Before meeting with Obama, Wu met U.S. Vice President Joe Biden at the White House. Wu will hold talks with U.S. Secretary of State Hillary Clinton later in the day. On Wednesday, Wu met U.S. House of Representatives Speaker Nancy Pelosi, telling her that his visit aimed to promote further growth of the China-U.S. relationship, which is, in his words, one of the most important, dynamic and promising bilateral ties in the world. Wu is here on a week-long official goodwill visit to the United States, the final leg of his three-nation tour to the Americas which also took him to Cuba and the Bahamas.

China Merchants Holdings (International) chairman Fu Yuning says ports must provide more value-added services to lure shipping lines. China Merchants Holdings (SEHK: 0144) (International), the leading mainland port operator, reported earnings fell 14 per cent in the first six months, but its chairman said the worst was over for world trade, and mainland ports would resume growth as soon as the first half of next year. "The past 12 months was the worst hit to mainland exports in the past 20 years, and I believe we have passed the trough," Fu Yuning told a press conference yesterday. The company had an interim net profit of HK$1.73 billion. Owing to its heavy exposure to the terminals in Shenzhen and Shanghai, the hardest hit ocean-bounded ports on the mainland, China Merchants' throughput dropped 19 per cent to 20.35 million 20-foot equivalent units (teu) in the first half. This was higher than the average 11 per cent decline nationwide. Operating profit of port operations also fell 19 per cent year on year, to HK$2.64 billion. Earnings per share slid 15 per cent to 71.3 HK cents. An interim dividend of 25 HK cents per share was declared. Western Shenzhen port, which contributes about half of the company's port earnings, handled 4.23 million teu, 27.9 per cent less than a year earlier. That was because nearly 40 per cent of cargo handled in the port is for the Asia-Europe trade. Shanghai International Port Group, in which the company owns a 26.5 per cent stake, handled 15.5 per cent fewer containers. However, some green shoots were seen in mainland export volume. Western Shenzhen saw 8 per cent month-on-month growth in container boxes last month, following an 11 per cent month-on-month gain in July. Bulk cargo posted 3 per cent year-on-year growth in July and last month, Fu said. The third quarter is the traditional peak season for shipping, as retailers start restocking for the Thanksgiving and Christmas holidays. Since the economic crisis started in the third quarter last year, the low-base effect would substantially narrow the drop in container throughput on the mainland in the second half, he said. Container throughput would recover strongly during the rest of the year, since freight forwarders said their business had recovered to 90 per cent of the level in the same period last year, a recent Deutsche Bank report said. The securities firm raised its forecast for 2010 export growth to 10 per cent from the previous 7 per cent. However, container shipping lines were combining services among themselves, which idled some vessels, resulting in fewer port calls, Fu said. That meant container operators would have to provide more value-added services to lure the shipping lines to call at their ports.

A controversial bridge in Jiangsu province that city chiefs say marks the boundary between the country's north and south has won central government recognition. The bridge in Huaian , built at a cost of 4.2 million yuan (HK$4.8 million), features walk-through red and blue spheres to represent the different climatic zones of the south and north. It has been adopted by the State Bureau of Surveying and Mapping as a symbol of the separation of the country into two halves, the Yangtze Evening News said. Officials expect the new landmark to attract tourists, but geographers and people in the online community criticise it as a waste of money and resources. Professor Yao Shimou , of the Nanjing Institute of Geography and Limnology under the Chinese Academy of Sciences, believes such a geographical division cannot be represented by a single structure. "The geographic and climatological differences between south and north China cover a much broader area, and they gradually change from one climate to another. There's no one city that could represent it," Yao was quoted by Xinhua as saying. Traditionally, the Qinling Mountains and Huai River have been regarded as the natural boundary between south and north, but the river flows through the provinces of Shaanxi , Henan and Anhui as well as Jiangsu. And most geographers argue that you cannot draw a straight line dividing north from south. More than 93 per cent of the 156,900 people who took part in an online poll conducted by Web portal Sohu.com opposed construction of the bridge, saying that it was a waste of public money and would widen the gap between the relatively rich southeastern coastal region and the struggling north. Xun Delin , a Huaian official who first advocated the bridge, said the city was an ideal place for such a landmark because it is traversed by the Huai River, has a prolonged relationship with the river and is one of the few cities on the river with long historical traditions. Lu Bingcan , the city's chief civil engineer, denied the project was wasteful. They were renovating an old bridge, and people who walked through the spheres could experience visually the change from one climatic zone to another. Plans for the landmark in Jiangsu have been under verbal assault since local authorities revealed them two years ago. Two other cities - Xinyang in Henan and Bangbu in Anhui - say they should be the location of a north-south boundary marker. In Bangbu, officials designated a sculpture as a boundary marker. Many mainland cities have been criticised for wasting public funds on unnecessary and extravagant construction projects to drive up gross domestic product, and many have been linked to waste and corruption.

Sept 11, 2009

Hong Kong: Hong Kong remains the world's third-most business-friendly place, but the city has been urged to improve its lengthy property registration process, which trails those of many developed economies. The World Bank and International Finance Corporation's (IFC) Doing Business 2010 report, which surveyed 183 economies from June last year to May, rated Hong Kong after Singapore and New Zealand in terms of ease of doing business. The annual research ranked economies according to 10 indicators which tracked the procedures, time and cost companies faced in meeting business regulations. These include requirements related to starting and operating a business, trading across borders and closing businesses. Hong Kong has vastly improved its handling of construction permits, rising from 20th place last year to the world's easiest place to obtain a construction permit this year. This came after it merged eight procedures into one and cut the process by 52 days. It rated second in terms of trading across borders, and third in enforcing contracts, protecting investors and paying taxes, the report said. Geoffrey Walton, the IFC's business line leader on the investment climate in East Asia and the Pacific, said Hong Kong had created a friendlier business environment despite the financial crisis. "Hong Kong has shown that top reformers of business regulations keep streamlining their procedures, even during hard times," Walton said. But he said it could improve property registration, the city's weakest area, which ranked 75th this year. "There is a huge room for improvement in this area," he said. Businesses face five procedures and it takes 45 days to secure rights to property, compared with just three processes and five days in Singapore. A Land Registry spokeswoman said the government needed only four days for processing, while the rest involved solicitors carrying out other procedures. "We will continue to explore ways to improve the property registration mechanism ... We have been working to replace the current [deeds] registration system with a more effective system of title registration," she said. Another government spokeswoman said Hong Kong remained one of the most attractive places in which to do business. The top 10 economies remain the same as last year, apart from Britain changing places with Demark in jumping from sixth to fifth. Singapore has topped the list for the fourth year in succession, with seven of 10 indicators ahead of Hong Kong. The mainland dropped three places to 89th, while the Central African Republic came last. Hong Kong ranked third last year and fourth in the previous report.

Former Morgan Stanley's Du Jun, seen here appearing at Wanchai District Court earlier this year, on Thursday was convicted of insider dealing over a large mainland overseas acquisition. A Hong Kong court on Thursday convicted a former senior banker at Morgan Stanley of insider dealing over a large mainland overseas acquisition, in the city’s highest-profile market misconduct case. Du Jun, former managing director of the fixed income department of Morgan Stanley Asia, was found guilty of using inside information to trade Citic Resources (SEHK: 1205) shares, an arm of mainland’s largest investment conglomerate Citic Group. “I am satisfied that the prosecution has been able to prove each and every element of the offence of the Securities and Futures Ordinance to the required criminal standard,” District Court Judge Andrew Chan Hing-wai told Du. “I convict you of all of them.” Du was remanded in custody after being convicted of nine counts of insider dealing and one of advising another person to deal in shares of a listed company prior to the announcement of an acquisition deal. He had pleaded not guilty to all the charges. The Securities and Futures Commission has alleged that Du was part of a team in Morgan Stanley advising Citic Resources on a bond offering used to finance a US$1 billion acquisition of an oilfield in Kazakhstan. The regulator said that over nine occasions the banker spent a total of HK$86 million to acquire 26.7 million shares in Citic Resources prior to a company announcement in May 2007 it would buy the oilfield. The announcement also included the company’s issuance of US$1billion dollar bonds to finance the deal, and another oilfield acquisition in mainland, as part of its strategy to turn from a metal into an oil producer. Du also advised his wife Li Xin, who has not been charged, to deal in Citic Resources shares around the time. The company’s share price rose by 13.86 per cent to HK$4.19 between April 30, 2007 – the last time Du bought the shares – and the day of the announcement. The case is the largest insider dealing prosecution mounted by the SFC since the Hong Kong government made the act a criminal offence in 2003. The regulator had previously secured nine criminal convictions on insider dealing prosecutions – including three prison sentences – from July last year, as it launched a sweeping crackdown on market misconduct. The court will hear Du’s mitigation on Friday before sentencing him.

One of many notices attached to bicycles parked along the waterfront at the Cheung Chau ferry pier yesterday. Owners are warned to remove their bicycles by tomorrow. The sight of bicycles chained to railings at the Cheung Chau ferry pier may be gone for good, despite residents' protests, after officials clear the area tomorrow. The mass clearance is needed, government officials say, as the unattended bikes have reached the point of blocking ambulances and fire engines on their way to emergencies. They say the problem is accentuated during weekends when visitors from the city turn up in droves. "The paramedics had to get off the ambulance and push the bicycles aside in order to move along," Islands district councillor Lee Kwai-chun said. "It could be dangerous if the rescue mission is delayed because of this." The Fire Services Department said there were no official records of rescue services being delayed on the island. "But we don't know if such delays really did not happen," a department spokesman said. The joint-department effort, co-ordinated by the Home Affairs Department's Islands district office, began yesterday with Lands Department staff sticking notices on all bicycles parked along San Hing Praya Street, in the section between Man Shun and Shing Cheong lanes. The notices urged owners to take away their vehicles by tomorrow and said the government would remove those that remained unattended. The Lands Department said it did not know how many bicycles were now parked by the waterfront. Lee said that residents, especially those living on the northern and southern ends of the island, preferred cycling to the pier rather than taking the 20- to 30-minute walk, and conveniently parked their bikes along the waterfront. She said many had left their bikes unattended for half a month, and the situation had worsened. After the clearance, she said, bicycle parking would no longer be allowed along that stretch of San Hing Praya Street. Bikes would have to be parked farther away, she said. Residents said some of the bicycles had already been removed for National Day and East Asian Games promotional items such as mascots and banners. Some welcomed the move, but others were not pleased. "If you really want to clear the road, then you might as well get rid of other things such as holiday-home promotional counters," Kwok Cheuk-kin said. The local resident added that the scheme was unfair and inconvenienced islanders.

Hong Kong's top graft buster has suggested that universities rethink billing arrangements for private medical patients and only allow waiving of the portion of fees they pay which are owed to the university's doctors. Under current arrangements, the Hospital Authority takes 25 per cent of revenue earned from private patients and the medical school and the doctor involved share equally the remaining 75 per cent. Commissioner of Independent Commission Against Corruption Timothy Tong Hin-ming's suggestions came after the former University of Hong Kong medical school dean, Lam Shiu-kum, was jailed for 25 months for inducing his private patients at the university to pay more than HK$4 million to his company. In July 2007 the University of Hong Kong was criticized in an independent audit report commissioned by the Hospital Authority over loopholes in billing procedures which allowed professional fee waivers for private patients at Queen Mary Hospital, the university's teaching hospital. The report said bill-paying procedures made it difficult to detect if doctors had pocketed part of the bill. The independent auditor found three major weaknesses in the private patient billing system at public hospitals: incomplete billing cycles, poor fees and charging policies and practices, and unclear professional fee waiver arrangements. Tong said yesterday that waiving a university's part of a bill for a private case should be up to the university, and allowing a university doctor to request waiving of that part of a bill was an "improper" arrangement. Clear guidelines on who could apply for the waiver should be implemented. A University of Hong Kong medical school spokeswoman yesterday said the faculty agreed with the graft buster's suggestions. The university had reviewed its relevant procedures in August 2007. Sixteen recommendations had been adopted by the Hong Kong University Council on January 2008, which included setting up guidelines on waivers. Qualifying waiver situations listed included health care professionals and their immediate family members, university employees and their immediate family members, and those closely associated with the university provided a clear justifications was given.

Sportswear retailer Peak Sport Products plans to raise up to US$246 million in a Hong Kong initial public offering to fund marketing, according to a term sheet. Peak Sport plans to sell 419.58 million new shares at a range of HK$3.55-HK$4.55 each. The retailer has a greenshoe option to sell 62.94 million more shares, which could bring the IPO size to US$283 million. Pricing of the IPO is expected on September 22 in Hong Kong and on September 21 in the US Trading in the shares is scheduled to start on September 29. Credit Suisse is the sole arranger of the deal.

Advertising design graduate Tam Ka-ming is now an assistant in Ricacorp Property Agency. Hong Kong's property roller coaster is on a roll once again, and the number of people being lured into the sector by the prospect of earning easy commissions as licensed estate agents hit a record high last month. "The property agency industry is one of the few sectors of the economy that is expanding," said Shih Wing-ching, the chairman of Centaline Holdings, the owner of one of the city's biggest real estate firms, Centaline Property Agency. But dreams of making quick commissions by selling property can quickly turn into nightmares, some old hands warn. "It is difficult to survive in this industry. Only half of the new property agents are likely to survive for a year, because of the long working hours and high pressure," said Willy Liu Wai-keung, a managing director at Ricacorp Properties. Along with its rivals Midland Realty, Ricacorp Properties and Hong Kong Property, Centaline responded late last year to the slump in housing demand that followed the outbreak of the global financial crisis by shutting down branches and laying off staff. But the sector has been back in growth mode since March this year as concerns over the crisis began to ease and housing demand recovered. "Since March we have opened 10 branches and taken on 250 new agents," said Liu. Ricacorp had cut its branch network from 120 to just 78 after the outbreak of the financial crisis but has expanded its network to 88 outlets and a staff of 1,200. "We aim to have 100 branches and a staff of 1,400 agents by the end of this year," said Liu.

Cheung Kong (Holdings) (0001) will kick off a roadshow in Fujian to attract mainland buyers for the luxury Mid-Levels project Conduit 18 after the National Day golden week holiday. The developer has been entrusted by an American pension fund which bought the land to sell the 32-unit building, built by Cheung Kong for the fund. "We believe these homes can command higher prices from mainlanders," said sales manager Iris Cho Kau-ming. "Those who buy 16 homes or more will be entitled to name the building in Chinese." While the developer has not disclosed a target price range, Cho said it will take into consideration the selling prices of a similar project nearby. Henderson Land (0012) expects to sell standard flats in its upmarket 39 Conduit Road from HK$30,000 to HK$35,000 per square feet, while duplex units will command more than HK$45,000 psf. With an expected rental of at least HK$50 psf, Cho believes Conduit 18 will attract a number of investors, including those working for various international organizations, as the building is close to Central and easily accessible by the Mid- Levels escalator. There are 30 standard three-bedroom flats of 1,250 sq ft each. The ground-floor units come with a 600 sq ft garden. Two 1,900 sq ft duplex apartments - each with a 230 sq ft terrace - are located at the top. Construction is nearing completion and occupation is expected to begin from next year.

China: China on Thursday condemned a US decision to slap tariffs on steel pipes from the mainland, as US President Barack Obama mulled whether to also curb tyre imports from the Asian giant. The twin disputes are a litmus test for Obama’s trade policy with Beijing, and are coming to the forefront ahead of his highly anticipated first presidential visit to mainland set for November. In July, Obama laid out his vision of “co-operation, not confrontation” between Washington and Beijing, saying the relationship would “shape the 21st century” – but the thorny trade issues could throw a spanner in the works. The US Commerce Department said on Wednesday it had made a preliminary decision to impose duties of as much as 31 per cent on mainland carbon or alloy tubular steel products used in oil and gas wells, following claims they were backed by unfair subsidies. That announcement drew a quick and angry response from Beijing. “China is highly concerned over this matter. We strongly oppose such trade protectionist moves,” a commerce ministry spokeswoman said. The spokeswoman declined to comment on what action Beijing would take, if any, in response to the US move, saying the ministry could make an additional statement later in the day. From 2006 to last year, US imports of such pipes – officially known as oil country tubular goods (OCTG) – from mainland increased 203 per cent by volume, the statement said. They were valued at US$2.6 billion last year. The Commerce Department launched a probe into the case after complaints from various US industry groups and unions, including the United States Steel Corporation, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union. “As a result of this preliminary determination, Commerce will instruct US Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates,” the department said. It will issue a “final determination” on the issue in November, it said. “This is the largest countervailing duty and dumping case filed against China, based on the value of trade,” a lawyer representing a mainland company involved in the case, said. The decision came as Obama faces pressure to slap punitive duties on mainland tyre imports – and save jobs at home as the world’s largest economy tries to recover from a brutal recession. The quasi-judicial US International Trade Commission has proposed tariffs of up to 55 per cent on passenger and light truck tyres from mainland based on a petition led by the United Steelworkers Union that tyre imports had tripled since 2004, forcing plant shutdowns and the loss of 5,100 jobs. The office of the US Trade Representative held a public hearing on the proposal and submitted its recommendation to Obama last week. Obama is required to make his decision by September 17, ahead of hosting President Hu Jintao at the G20 summit in the US city of Pittsburgh on September 24-25. If Obama rejects the tyre proposal, he will disappoint unions and some leaders in his Democratic party. But if he embraces the plan, he will anger mainland as the two countries try to build a new relationship. The American Coalition for Free Trade in Tyres, which represents the tyre distribution and retail sectors, has said thousands of American jobs – as many as 25,000 – would be at risk if Obama accepts the tariff recommendation. The United States has been grappling with a ballooning trade deficit with mainland amid allegations that Beijing has been manipulating its currency to make its exports more competitive.

More than 20 officials and mine managers have been fired, suspended or arrested after accidents in two mines in Henan left 56 dead and another 36 missing with little hope of survival.

A worker labors at a wind turbines farm site in Shangyi, Hebei on Tuesday. A report said on Thursday that mainland potentially could be a US$1 trillion a year market for environmentally sustainable green technologies. China's potentially could be a US$500 billion to US$1 trillion a year market for environmentally sustainable “green technologies”, a group of businesses and experts said in a report on Thursday that urges governments to ease the way for such initiatives. The report by the China Greentech Initiative, a group of more than 80 leading technology companies, non-governmental organizations and policy advisers, pinpointed opportunities from 300 potential green technology options for mainland, spanning energy, water, buildings, transportation and industry. But government support is key, said Richard Gledhill, global leader of Climate Change & Carbon Market Services in London for PricewaterhouseCoopers, a consultancy that helped head the research. According to the US International Energy Agency, holding climate change to just a 2 degrees Celsius increase over the next two decades will require $9 trillion in extra spending, he said. “The private sector has a key role to play in delivering the required investment at the scale required to avoid dangerous climate change. But it will only do this if there is a clear, long-term policy framework to underpin prospects of a reasonable return,” Gledhill said. The project defined greentech as technologies, products and services that benefit users as much or more than conventional alternatives, while limiting the impact on the natural environment and promoting efficient and sustainable use of energy, water and other resources. While such changes are needed worldwide, mainland’s rapid growth and dizzyingly fast urbanization are contributing to a building boom that has created more than twice the floor space as in the US. About 18 million people migrate from rural areas to the cities each year, so that by about 2050 mainland will have more than 200 cities with populations of more than 1 million people, the report said. Such growth will require huge increases in use of energy, water and materials that will force the country to adopt new, environmentally friendly technologies, it said. Both mainland and foreign companies will find new opportunities, though they still face challenges, particularly in overcoming barriers to transfer of technologies and preventing piracy of intellectual property such as patents. “We need to find new business models to accelerate investment since so much of the technology is owned by universities rather than businesses,” Gledhill told a recent conference in Shanghai on green technology.

It is learned from Beijing travel agencies that residents' traveling enthusiasm has been all time high. The majority of outbound travel groups have been booked. Travel agents say that in the next few weeks, the domestic tour groups booking will witness a growth spurt. The latest report released by China Tourism Academy shows that, taking factors such as longer vacation time into account, it is expected during this year's National Day week, the number of domestic tourists will be more than 200 million, up 13%. Tourism incomes will surpass1000 billion yuan, up 25%. As vacation increased by one day, per capita tourist spending is expected to grow from 448 yuan in 2008 to 500 yuan or so during the holiday week. The latest survey conducted by Ctrip.com also shows that more than 60% of respondents said they plan to travel during the National Day week, and this ratio was the highest in recent years. Experts said that China's economic development is becoming stabilized and better, and people are willing to spend more in tourism. In particular, this time the National Day holiday is expanded to 8 days, and has themes such as 60th anniversary of PRC, Mid-Autumn Festival, World Expo, the Asian Games and many other themes, consumers' desire for travel that has been accumulated for a long time will be released, and leads to large-scale holiday tourism consumption climax. Deputy Director of China National Tourism Administration Du Jiang has pointed out that the added value of China's tourism accounts for 4% of GDP, and more than 110industries are tourism-related. Tourism consumption contributed over 90% to residential sector, and more than 80% to civil aviation and railway passenger transport industry, more than 50% to cultural and entertainment sector and more than 40% to the catering industry and commodities. According to the World Tourism Organization estimates, when tourism revenues increased by 1 yuan, it will stimulate growth of 4.3 yuan in related industries. In addition, the tourism consumption and tourism development can provide relief to the employment problem. At present, China's tourism industry employed more than 10 million people, and about 60 million people are working in tourism-related industries, with an annual increase of 50 million people employed.

Metallurgical Corp of China (MCC) priced its Shanghai IPO at the top end of an indicated range, a move that could raise as much as US$5 billion in the world’s second-largest public offering this year, three sources briefed on the pricing result said on Thursday. MCC will sell 3.5 billion A shares, or 21 per cent of its expanded capital, at 5.42 yuan (HK$6.16) each, ahead of a dual listing in Shanghai and Hong Kong, said the sources who declined to be identified. The company has been offering the A shares at a price range of between 5 yuan and 5.42 yuan in Shanghai and up to 2.87 billion H-shares in Hong Kong at HK$6.16 to HK$6.81, according to a sales document. If both A and H-shares are priced at the top of the range, the company could raise as much as US$5.3 billion, below China State Construction Engineering Corp’s US$7.3 billion IPO in July. MCC is one of a slew of firms that the China Securities Regulatory Commission has pushed into the market since the regulator resumed IPOs in June after a 10-momth suspension. The benchmark Shanghai Composite Index ended 0.7 per cent lower at 2,924.883 on Thursday, after falling 22 per cent in August – the second-biggest monthly loss in 15 years. MCC has said it needs funds to develop overseas projects including a copper mine project in Afghanistan. It also needs funds for technical upgrades, equipment purchases, property development and supplemental working capital. MCC’s Shanghai IPO was priced around 42 times its last year earnings. That is slightly more expensive than the average price/earnings ratio of 39 for mainland’s 15 listed construction and engineering firms, according to Reuters Research. The average PE ratio of Shanghai’s A shares is about 25 times against last year earnings, which is already almost double Hong Kong’s 16 times, despite the A-share market’s recent slump. Citic Securities was the IPO’s sole lead underwriter, MCC has said.

China Overseas Land & Investment (SEHK: 0688) on Thursday agreed to pay 7 billion yuan (HK$7.95 billion) for a plot of land in Shanghai in the country’s biggest land transaction this year, underscoring developers’ optimism toward mainland’s property market. China Overseas outbid rivals including Greentown China Holdings (SEHK: 3900) during an auction for the 312,600-square-metre parcel of land, which will be used for residential development. Mainland developers have stepped up buying land for new projects after real estate prices jumped more than 30 per cent in certain hot markets during the first half as surging loans and government stimulus boosted transactions. Real estate investment rose 14.7 per cent during the first eight months, while property prices in 70 major cities rose 2 per cent in August from a year earlier, extending an upward trend. China Overseas, controlled by the country’s biggest home builder China State Construction Engineering Corp, last month raised its sales target for this year by 23 per cent, after reporting a 31.8 per cent jump in first-half earnings. The developer aims to sell 4.3 million square meters of property this year, compared with a previous target of 3.5 million square meters, chairman Kong Qingping said on August 17.

Marvell Technology Group, the main chip supplier for TD-SCDMA handsets on China Mobile (SEHK: 0941, announcements, news) 's 3G network, is expanding aggressively its mainland operations to enter more wireless consumer electronics market segments. The US-based semiconductor firm has invested about US$400 million over two years to develop in Shanghai the PXA920 chipset, which was launched yesterday, for a new range of affordable and feature-packed TD-SCDMA smartphones, according to Marvell chairman and chief executive Sehat Sutardja. There are plans to increase the number of Marvell staff at its mainland research and development campus next year to about 1,000 from nearly 700, supporting efforts to put the highly integrated processor inside mobile broadband-ready laptop computers, e-book readers, digital photo frames, video set-top boxes and televisions. "We're just starting out in this [wireless chip] sector, but we expect to capture about 25 per cent of the [global] market within three to five years," Sutardja said. Marvell has stiff competition, including Qualcomm, ST-Ericsson, Texas Instruments, Broadcom and Taiwan-based MediaTek. But Sutardja, who co-founded Marvell in 1995 with Shanghai-born wife Dai Weili and his brother Pantas, is betting the company's strong expertise in developing high-performance, single-chip solutions that power mobile telephones, like Research In Motion's BlackBerry, and networking equipment, such as those from Huawei Technologies and ZTE Corp (SEHK: 0763), will keep it ahead of rivals. Marvell, which had US$3 billion in revenue in its last financial year, has also been sharpening its focus on the mainland for more than a decade, initially building close ties with Shenzhen-based Huawei and ZTE. About 24 months ago, "China Mobile faced a headache in being the only operator in the world to deploy an unproven TD-SCDMA, particularly in the lack of compelling handsets", said Duncan Clark, the chairman at telecommunications advisory firm BDA China. Dai said it was Marvell which swiftly delivered on its commitment to develop a TD-SCDMA chipset for smartphones running the Google-developed Android operating system for China Mobile. The world's largest mobile network operator introduced the first batch of its OPhones last week. "We believe the PXA920 solution will help us realize China Mobile's vision of sub-1,000 yuan TD-SCDMA OPhones," said Bill Huang, the general manager at China Mobile Research Institute.

On the eve of the deadline for the submission of tenders for the HK$700 million contract to supply the SAR with a vaccine against the pandemic swine flu (H1N1) virus, doubts have emerged about the efficacy and safety of one of the leading bidders. The vaccine from China's Nasdaq-listed Sinovac Biotech (also known in China as Beijing Kexing Bioproducts), is the only one that has not been trialed in the West but is the first in the world to be registered by its own regulatory agency, the State Food and Drug Administration. The Department of Health's scientific committees are expected to meet and decide on the winning bid next week. The original tender was canceled late last month after the government claimed none of the bidders met its requirements. Director of Health Lam Ping-yan told The Standard that his delegation's visit to Sinovac on Tuesday was "a fact-finding trip" designed to understand more about the new vaccine. But a leading flu expert, who asked not to be named, said: "The first one to make a swine flu vaccine is not necessarily the best one." He questioned why Sinovac used a one-shot dose which would only be good for up to three months. David Hui Sui-cheong, a specialist in respiratory medicine at the Chinese University of Hong Kong, said yesterday the most worrying aspect of the swine flu vaccine is the potential side effect of Guillaine Barre nervous disease. A 1976 mass inoculation in the US against a swine flu outbreak led to 500 developing the disease, with several deaths. "For any new vaccine for a brand new virus, you would wait six months to see if there are any side effects. "But if you are running short of time, you have to make a decision: it takes at least three months after injection for any nervous disease or any unusual side effects to emerge," Hui said. Infectious disease specialist Lo Wing-lok said: "We should worry about the system of drug regulations in the mainland."

China will continue to apply its policy mix of massive government spending and loose money because its economic recovery remains fragile, Premier Wen Jiabao said yesterday. Wen's insistence on caution and policy consistency has been the refrain of Chinese leaders in recent months, even as data from car sales to housing starts suggest that the world's third-largest economy is well on the road to high- speed growth. His one deviation from the script was to flag inflation as a risk, despite the fact the country is still experiencing deflation. "We should fully implement and continuously improve policies and discover and resolve new problems in a timely manner," Wen told a meeting of the World Economic Forum in Dalian. "We should be alert and prevent all potential risks, including inflation," he said. China's consumer prices have fallen for six straight months, but economists think the pace of decline may have bottomed out, setting the stage for a potential rebound in inflation, fuelled by a record surge of bank lending in the first half of this year. On the question of China tightening monetary policy or reining in government spending, however, Wen made clear that Beijing would stay the course on its expansionary, stimulative path for now. "The foundations of China's economic recovery are not stable, not solidified and unbalanced," he said. "The top priority of our work is to maintain stable and quick economic growth, so we will unswervingly stick to a relatively loose monetary policy and an active fiscal policy." New evidence of strength in China's property sector, vital to the country's economic health, was furnished yesterday, with investment growth accelerating sharply and prices and sales continuing to rise in August, the National Bureau of Statistics said. Investment in the property sector rose 14.7 percent in January through August compared with a year earlier, picking up from 11.6 percent annual growth in the first seven months. Lin Songli, an economist with Guosen Securities in Beijing, said strong property investment, encouraged by strong sales, would likely replace government spending this quarter to become the key driver of economic growth. "Direct government spending may ease a little bit, and property investment will take the lead," Lin said, adding property probably contributed the majority of growth in capital spending in August.

China plans to spend nearly US$300 billion (HK$2.34 trillion) on 42 high- speed railway lines by 2012 as part of efforts to spur growth amid the global downturn.

Sept 10, 2009

Hong Kong: Hong Kong, along with two other Asia-Pacific economies – Singapore and New Zealand – were ranked by the World Bank on Tuesday as one of the easiest places to do business over the past year, when most of the region’s economies carried out regulatory reforms in the face of a global economic crisis. The International Financial Corporation (IFC), the World Bank’s private sector lending arm, said Indonesia was the most active reformer in East Asia and the Pacific, where 17 of 24 economies pursued regulatory reform. “In a record year for regulatory reform worldwide, most economies in East Asia and the Pacific strengthened business regulations, making them more efficient to help increase opportunities for local firms,” said the annual report. Singapore, New Zealand and Hong Kong held the top three spots in the global ease of doing business rankings this year as well. This year’s 15 top-ranked economies also included Thailand at 12, and Japan, at 15, the IFC said. Indonesia cut the time required to start a business by 16 days and the time to transfer a property by 17 days, climbing to 122 from 129 in the rankings, said the report, Doing Business next year: Reforming through Difficult Times. The ranking, now in its seventh year, is based on analysis of regulations of business start-up and operations, trading across borders, paying taxes, and closing a business. Singapore, which has topped the table for the past four years, continued to make its economy more efficient by introducing online services to ease business start-up, construction permits, and property transfers, it said. Hong Kong also stream-lined procedures for construction permits, business start-ups and property transfers, said the IFC. Malaysia, ranked 23rd worldwide, eased business start-up procedures, cut company incorporation charges and corporate fees and made it easier to enforce contracts in courts by increasing staff and setting stricter deadlines, it said. Taiwan, 46th in the world, eased business start-up by abolishing minimum paid-in capital requirements, introducing time limits on various procedures. Taipei made it possible to file and pay taxes on-line, it said. Penelope Brook, acting vice-president for financial and private sector development at the World Bank Group, said the reforms would position firms in the regions to respond quickly to economic recovery. “The quality of business regulation helps determine how easy it is for troubled firms to survive difficult times, how fast local entrepreneurs will start investing again and how quickly new business can get started,” she said in a statement.

Hotelier Marriott International said on Wednesday it sees a strong Asia market and had signed 21 hotel and resort management contracts in the Asia Pacific region. The hotels with a total of about 7,000 rooms are scheduled to open through the end of 2013, expanding Marriott’s Asia-Pacific Portfolio to 154 hotels offering 51,500 rooms in 18 countries by the end of 2013, it said in a statement. Marriott, which operates chains including the Ritz Carlton, Renaissance and Marriott, and other hotel operators have been hard-hit by a global economic slowdown and the H1N1 flu virus, with companies and tourists cutting back on trips and retreats. “It was tough at the end of last year. But we do see a strong Asia market out there today,” said Ed Fuller, president & managing director, Marriot Lodging International. Asia, as a whole, is a far-faster-paced area than other regions, and the region will grow significantly in leisure and business travel, he told reporters. “It has come back in volume. We continue to see mainland China travelling growing,” he said. Fuller said mainland is currently the third-largest travelling public in the world and will be the first in 3-4 years.

The world's first 150-dollar denomination banknote will be issued by one of Hong Kong's three note-issuing banks to celebrate its 150-year history in the city. Standard Chartered Bank yesterday announced that it would offer one million of the commemorative charity banknotes for public sale from today. "It's a creative tribute to the dynamic people in this wonderful city," group chief executive Peter Sands said yesterday. Designed by graphic designer Henry Steiner, the front of the banknote features a satellite image of Victoria Harbour taken last year. The front, tinted mainly in blue and green, also shows the bank's headquarters on the left of the note. The reverse shows portraits of eight Hongkongers from different eras and walks of life at The Peak, overlooking Victoria Harbour and "admiring the success of Hong Kong", Benjamin Hung Pi-cheng, the bank's chief executive in Hong Kong, said. Dated January 1, 2009, the note is legal tender and security features are the same as the bank's 2003 banknote series. Nearly 740,000 banknotes will go on sale from October 1, at HK$280 each, at the Convention and Exhibition Centre in Wan Chai and its selected branches. Other special editions of the banknotes will be opened for application from today. There will be 10,000 sets of "four-in-one uncut" banknotes, to be sold at HK$1,888, while "35-in-one uncut" notes will cost HK$18,888, with 6,000 sets to go on sale. Another 100 banknotes with lucky serial numbers such as 888888 or 666666 will be opened for public bidding at a minimum of HK$3,000. The public can also apply to buy a note with a self-selected serial number for HK$888. The bank will hold draws if there are any oversubscriptions. Application forms are available at its branches and website. Proceeds from the sale will go to the bank's 150th Anniversary Community Foundation to support local community projects and charities such as the Community Chest and Tung Wah Group of Hospitals. Legislative Council financial affairs panel member Tanya Chan said she was concerned that the public would mix up the commemorative banknote with the current HK$20 notes as they were both blue. She asked the government to make public the procedure by which it approved the issuing of the banknote. Raymond So Wai-man, associate professor at the Chinese University's department of finance, said he did not expect anyone would use the note as it would be sold for more than its face value. The Monetary Authority said the decision on the issue of commemorative notes was made by the financial secretary on the merits of each case. "The commemorative issue [is] not for general circulation," a spokesman said. "The HKMA set terms and conditions including that the sale should be conducted in an open, fair and transparent manner. It should not be for profit and all net proceeds should be used for charities in Hong Kong." Although it will be the world's first 150-dollar note, Ocean Gold Coins shop supervisor Alsa Wong Yuk-lun did not think its price was likely to appreciate much. "It has a commemorative value but its price will not jump a lot in the short run," Wong said.

Himalayan bronzes on show yesterday at a preview for the International Art and Antiques Fair to be held from October 3 to 6. Hong Kong's economy is showing signs that it is emerging from the global downturn, but Financial Secretary John Tsang Chun-wah yesterday stopped short of predicting how fast or what shape the recovery would take. "Although it is too early to predict the pace or shape of recovery from the global financial crisis, recent economic data indicates economies including Hong Kong are emerging from severe recession, and they are, dare I say, preparing for take-off," Tsang said at the Asian Aerospace International Expo and Congress. His comments appeared to contradict those of outgoing Monetary Authority chief executive Joseph Yam Chi-kwong, who had said recovery of the local economy might be "L-shaped". This suggested a return to fiscal health was still a long way off. Second-quarter gross domestic product rose 3.3 per cent from the first quarter and shrank by a better-than-expected 3.8 per cent from a year ago. The official full-year forecast was revised to a drop of between 3.5 and 4.5 per cent from a decline of 5.5 to 6.5 per cent. The improvement was reflected in the labor market as companies grew more confident that they would need to swell their ranks. A survey by recruiting firm Manpower found 11 per cent of the 815 employers said they planned to hire more staff in the fourth quarter of this year. The survey's net employment outlook indicator shows that the services, financial and trading sectors are the most optimistic about hiring and points to early signs that the economy is starting to rebound. The manufacturing, transport and utilities sectors are expecting the largest staff reductions. The findings show that 3 per cent more employers plan to hire more staff than those looking to shed jobs in the fourth quarter. This is an improvement of 6 percentage points from the third quarter but is down 11 percentage points from a year ago. But the Census and Statistics Department reported a slowdown in the amount of cargo handled by Hong Kong's ports. In the second quarter, the port cargo volume fell 9 per cent year on year to 61.7 million tons. Of this amount, inbound port cargo shrank 6 per cent to 35.7 million tons and outbound cargo dropped 13 per cent to 26 million tons. For the year's first half, the drop in port cargo volume was 13 per cent year on year to 113.9 million tons. Hopes for a more promising outlook have attracted more antiques dealers to this year's International Art and Antiques Fair, which will take place between October 3 and 6. Fair founder and director Andy Hei said the total number of exhibitors was about the same as last year's 52, but there had been a 10 per cent increase in the number of antiques exhibitors and a drop in those focusing on contemporary art. Hei said the financial crisis had not hurt the Chinese antique art market as much as the contemporary market because most antique art was bought by mainland buyers, who were still buying despite the economic downturn. Local artists had also benefited from the crisis, Hong Kong artist Man Fung-yi said. Man, who will be showing more than 10 pieces at the fair, said many collectors had switched to less expensive work by Hong Kong artists when the bubble for contemporary mainland art burst last year. She said artists should be encouraged to participate in more international fairs to increase their exposure.

The row between Xinjiang authorities and Hong Kong media continued to escalate yesterday, with mainland officials defending the beating of three Hong Kong journalists in Urumqi last week.

China: Luxury sports car maker Koenigsegg said on Wednesday that mainland’s BAIC would take a stake in the group to help finance its purchase of Saab Automobile from General Motors. Koenigsegg said in a statement that the memorandum of understanding signed with Beijing Automotive Industry Holding (BAIC) would see the mainland firm take a minority stake in Koenigsegg Group, which in turn would own 100 per cent of Saab. “This is an important step on the road toward a new Saab. We have a well prepared business plan, an important partnership and we are ready to proceed without state financing,” Koenigsegg chief executive Christian von Koenigsegg said in the statement. Koenigsegg, backed by US and Norwegian investors, struck a deal earlier this year with GM to buy the Detroit automaker’s loss-making Saab Automobile business, but questions remained regarding the financing of the deal. BAIC, ranked fifth in mainland, dropped out of bidding for Opel in July and had been tipped by some as a possible bidder for Ford-owned Volvo Cars.

Premier Wen Jiabao praised Japan's incoming Prime Minister Yukio Hatoyama, pictured in Tokyo on Wednesday, and his Democratic Party of Japan for their policies toward the mainland in a statement released by Xinhua. Premier Wen Jiabao praised the incoming Japanese government’s policies towards his country on Wednesday, urging the two big Asian economies to work together to counter the global financial crisis. The Japanese Democratic Party swept the long-dominant Liberal Democratic Party (LDP) from power in an election late last month and has vowed to bolster economic performance and seek better ties with the country’s neighbors. Democrat leader, Yukio Hatoyama, virtually assured of becoming prime minister, has also pledged not to visit the Yasukuni shrine to war dead while Japanese leaders convicted as war criminals are honoured there. Many Asian nations see the Tokyo shrine as an offensive symbol of past military aggression. Beijing has welcomed these steps and Premier Wen’s comments, reported by the official Xinhua news agency, underscored hopes for smoother relations built on economic foundations. “China appreciates the Japanese Democratic Party’s positive attitude towards relations with China, and is willing to strengthen communication and cooperation with Japan’s new cabinet,” Xinhua quoted Wen as saying. Wen made the remarks to a visiting Japanese business group, and he stressed potential for economic ties. “No country or region can, on its own, shake off the effects of the international financial crisis,” he said, according to the China News Service, a smaller official agency. “China and Japan are major economies, each is an important trade partner for the other, and so there is all the more reason for us to join hands in responding to the challenge.” Japan and the mainland are respectively the world’s second and third largest economies and both appear eager to focus on building mutual trade and trust and downplaying frictions over wartime history, military policy and sea boundaries. Bilateral trade grew to US$266.4 billion last year, a rise of 12.5 per cent on 2007, making the mainland Japan’s top two-way trade partner, according to Japanese statistics. But the global economic slowdown has dented trade, worth US$99.7 billion in the first six months of this year, a fall of 23.1 per cent compared with the same period last year, according to customs numbers. Wen said Beijing and Tokyo “must strengthen macro-economic policy coordination” and cooperate against trade protectionism, the China News Service reported. On Tuesday, China said it would host the new Japanese prime minister at a trilateral summit later in the year with South Korea. Hatoyama is set to be voted in as Japanese Prime Minister by parliament on September 16. Under the LDP, Japan’s ties with the mainland veered between icy hostility and wary reconciliation. Relations sank to their chilliest in decades under Junichiro Koizumi, who during his mandate from 2001 to 2006 repeatedly visited the Yasukuni Shrine. Koizumi’s LDP successors stayed away from Yasukuni and relations with Beijing warmed. But analysts suggest that even under the new government, relations will not be free of friction. The renewed goodwill has served to contain, rather than resolve, a dispute over natural gas beds under seas between the two countries, and Japan is likely to remain wary of Beijing’s continued modernization of its military.

China Investment Corp (CIC), mainland’s US$200 billion sovereign wealth fund, is eyeing investment opportunities in infrastructure, green energy and other forms of innovative energy transmission, a senior CIC executive said on Wednesday. CIC, which lost big on its ill-timed 2007 Morgan Stanley and Blackstone investments, has in recent months diversified its strategy and shifted toward investments in natural resources and other sectors. The price gap between buyers and sellers is narrowing for infrastructure assets, but assets are still not cheaply priced, Zhou Yuan, CIC’s head of special investments department, said at an infrastructure conference in Hong Kong. Zhou’s department oversees direct investments abroad for the fund. He declined to say how much CIC is willing to spend on infrastructure deals. CIC’s role is often misperceived outside of the country, Zhou said, adding that the sovereign wealth fund planned to be a “very small player” in global infrastructure, and it sees opportunities in India, Mongolia, and Pakistan. CIC aims to take minority equity stakes in global infrastructure projects, Zhou said on the sidelines of the conference. The fund is focusing on high-yield infrastructure assets, he added. CIC’s US$200 billion fund is part of mainland’s roughly US$2 trillion of foreign exchange reserves. The fund also plans to invest up to US$2 billion in US mortgages as it eyes a property market rebound, two people with direct knowledge of the matter said last month.

Beijing has started trials of a pension scheme that it hopes will eventually cover the country’s 800 million farmers, a senior government official said on Wednesday.

Sept 9, 2009

Hong Kong: The central finance ministry will issue 6 billion yuan (HK$6.8 billion) in yuan-denominated bonds in Hong Kong, its first such issue and a key step in the gradual internationalization of the mainland currency. The finance ministry said in a statement on its website on Tuesday that the bond issue, scheduled for September 28, would provide a pricing benchmark for other yuan bonds issued in Hong Kong, encouraging mainland firms to raise funds in the territory’s debt market. Beijing’s first-ever sovereign issuance in Hong Kong is a drop in the ocean compared to its planned 950 billion yuan of treasury bonds this year, but it is significant for other reasons. “The issuance marks a very important step in internationalizing the yuan by establishing a benchmark yield curve in Hong Kong to create an offshore yuan market for pricing yuan interest rates,” said Shi Lei, an analyst at Bank of China in Beijing. The move is also crucial to Beijing’s slow and carefully managed transformation of the yuan into a currency widely used beyond its borders. Mainland has made little secret of its plan to make Hong Kong the main offshore centre for yuan trading. Premier Wen Jiabao said in April that the finance ministry would consider issuing bonds there to spur the development of the yuan debt market. “The government’s Hong Kong yuan bond issue is the latest sign of its intention to internationalize the yuan,” said Haitong Securities chief economist Chen Lu in Shanghai. “But the move to make the yuan into a regional currency and then an international currency will take a long time, years at least.” Five state-owned mainland banks, including Bank of China and China Construction Bank (SEHK: 0939), have issued yuan bonds in Hong Kong since 2007, when the government began allowing such deals. Earlier this year, HSBC (SEHK: 0005) became the first foreign bank to issue yuan bonds in Hong Kong. Beijing has also launched a pilot program, centered on Hong Kong, for companies to settle trade in yuan. The largest of mainland’s bilateral currency swaps introduced over the past year was its 200 billion yuan agreement with Hong Kong. “They have always encouraged issuance of yuan bonds here in Hong Kong. It also signifies government support for Hong Kong as the offshore renminbi centre,” Zhi Ming Zhang, an HSBC analyst in Hong Kong.

The HK$19.55 billion IPO of Metallurgical Corp of China has whetted the investment appetite of billionaire developers, with representatives of Cheung Kong (0001) appearing at an investors' presentation yesterday. Cheung Kong deputy managing director Edmond Ip Tak- chuen, who was seen at the event, said Cheung Kong, controlled by Li Ka-shing, "will think about" subscribing for MCC shares. Henderson Land Development (0012) chairman Lee Shau-kee, New World Development (0017) chairman Cheng Yu-tung, Chinese Estates (0127) chairman Joseph Lau Luen-hung and Sun Hung Kai Properties (0016) non-executive director Walter Kwok Ping- sheung are also interested in the initial public offering, sources revealed earlier. According to a preliminary offering circular, MCC attracted five cornerstone investors - including subsidiaries of the Bank of China (3988) and CITIC Pacific (0267) - which will spend HK$1.94 billion on share subscriptions. MCC will raise up to HK$41 billion through dual listings in China and Hong Kong. Its offering in the SAR is set to kick off tomorrow. MCC plans to sell 2.871 billion H shares at between HK$6.16 and HK$6.81 - surpassing China Zhongwang (1333) which raised over HK$9 billion in May, at that time the biggest IPO deal in Hong Kong this year. Separately, China Lilang - which owns China's top menswear fashion brand Lilanz - is seeking to raise as much as HK$1.2 billion by floating 300 million shares at HK$3.2 to HK$4 apiece. Modern Media, which will make its trading debut tomorrow, has set its offer price at HK$1.29, the middle of its indicative range of between HK$1.15 and HK$1.41, market sources said. Its public tranche was oversubscribed 119 times. And Yingde Gases has been given the green light to resume its flotation plan to raise US$300 million (HK$2.34 billion).

A Hong Kong court on Tuesday extended an order freezing US$214 million of assets owned by one of richest men in mainland amid an ongoing corruption probe in mainland China.

Hong Kong’s economy was slowly recovering from the global recession, Financial Secretary John Tsang Chun-wah said on Tuesday at the opening of the Asian Aerospace International Expo and Congress.

The results of an international English test released Tuesday revealed that more than 80 percent of the city's graduating college students have effective command of the language. The University Grants Committee of Hong Kong (UGC) Tuesday announced the results of the International English Language Testing System (IELTS) taken by final year students of UGC-funded undergraduate degree programs under the 2008/09 Common English Proficiency Assessment Scheme (CEPAS). Almost 11,800 final year students, or about 71 percent of all full-time and part-time undergraduate final year students, participated in CEPAS in 2008/09. The average overall score was 6.69 on a nine-point scale. About87 percent of the students obtained a score in the 6.0 to 7.5 range, which means they are "competent" or "good" users. Among the four modules of the system, students, on average, did better in "reading" and "listening", scoring overall 7.34 and 7.15respectively. The average scores in "speaking" and "writing" were 6.04 and 5.97 respectively. The CEPAS results provide useful reference for the eight UGC- funded institutions in formulating their English language enhancement strategies and programs. It also provides a common framework for assessing and documenting graduating students' English proficiency. IELTS has been adopted by UGC as the Common English Proficiency Assessment since 2002/03.

Civic Party leader Audrey Eu after the pan-democrats' "reform summit" yesterday. A rival politician said they risked antagonizing Beijing and delaying universal suffrage. Pan-democrats yesterday continued to exert pressure on the administration for a comprehensive constitutional reform package by publicizing their own reform model for full universal suffrage. The unveiling of election models after a "reform summit" yesterday follows the Civic Party's proposed "three-stage plan" to fight for universal suffrage unveiled on Sunday. Under the proposal for the chief executive elections - which the pan-democrats say can be implemented in 2012 or 2017 - the current 800-member Election Committee would become the nominating committee with the addition of the 400 directly elected district councillors. To be eligible, candidates would have to obtain nominations from at least 50 members of the nominating committee, or 100,000 registered voters. Registered voters would then choose between the eligible candidates and elect a chief executive through universal suffrage. In the election of legislative councillors, which they say can be implemented in 2012 or 2020, the functional constituencies would be abolished. Half of the legislature would be returned through geographical constituencies in a simple, majority voting system. The rest would be returned by a proportional representation system in which all of Hong Kong would form a single constituency. Currently, all 3.3 million registered voters can vote for the 30 geographical constituency lawmakers, but only 230,000 can vote in the functional constituencies. The option of allowing chief executive candidates to obtain 100,000 nominations from registered voters is new. The Association for Democracy and People's Livelihood qualified its support subject to further consultation with its members on this point. The chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, Tam Yiu-chung, said this feature may not conform with the Basic Law since it undermined the need for a nominating committee. The government is due to begin consultations on constitutional reform later this year, but a spokesman reiterated yesterday that the exercise would be confined to democratizing the elections in 2012; election models for possible full universal suffrage in 2017 and 2020 would be dealt with by the next administration. Pan-democrats are threatening to vote down any proposal that merely reforms the 2012 elections without indicating how universal suffrage will be implemented thereafter. An official close to the constitutional reform decision makers said the government viewed the pan-democrats' latest proposals as "part of the bargaining process", but warned that any proposals that ruled out compromise would be counterproductive to further negotiations. Civic Party leader Audrey Eu Yuet-mee said the key topic was the ultimate goal of universal suffrage, and not how the 2012 elections could be reformed. "Our position is that if you tell us the road map to full universal suffrage, what happens in 2012 [as a transition] is totally negotiable." Meanwhile, independent lawmaker Cyd Ho Sau-lan will chair a working group of pan-democrats to discuss the Civic Party's three-stage plan, which involves striving for a comprehensive public consultation on constitutional reform. If that fails, one pan-democratic lawmaker from each of the five geographical constituencies will resign, to trigger by-elections that will measure public support for a road map to universal suffrage. If Chief Executive Donald Tsang Yam-kuen still refuses to respond to public sentiment, all 23 lawmakers in the camp will resign on July 1, 2011. Veteran Democrat Martin Lee Chu-ming said the by-elections would create an atmosphere conducive to democratic development. "At least the by-elections will give the public a chance to take part. Striving for democracy is something the people should take part in, not just the pan-democrats." Before it could commit itself to this proposal, Lee said, the Democrats would have to follow party procedure in which he played little part, but he was happy to see the proposal generate a more unified response. Veteran politician Allen Lee Peng-fei also praised the Civic Party's proposal. "This has taken into account the opinion of all parties, and if you ask the public, they will say this a very reasonable approach," he said. A politician close to the central government leadership said any plans by pan-democrats to raise the stakes on constitutional reform would antagonize Beijing. "The more the pan-democrats push for a radical plan, the more counterproductive it will be," he said. Government loyalists must also give their support to any reform proposal in Legco for it to be passed. "The end result will only be no universal suffrage in 2017."

Ready or not, Hong Kong will soon hear more about the promise of fourth-generation (4G) mobile-telephone services over the next few months as its proponents increase trials in the city.

Taiwan's premier quit yesterday over the government's handling of last month's deadly typhoon as the Beijing-friendly administration struggled to end its worst crisis since taking power. Liu Chao-shiuan's surprise announcement ended weeks of speculation about the political fallout from Typhoon Morakot, which was the worst to hit Taiwan in half a century and killed over 600 people. "Someone has to take political responsibility," Liu said at a hastily called press conference. Later yesterday, a spokesman for President Ma Ying-jeou said the chief secretary of Taiwan's ruling party had been named as new premier. "The president decided to appoint Wu Den-yih, the secretary-general of the Kuomintang party, as the new premier," Wang Yu-chi said. Liu's resignation comes after severe public criticism of the way the government tackled the typhoon. Anger over the government's response to the crisis has proved its toughest challenge since taking power 15 months ago. Ma in particular has been under intense pressure, and it was expected that high-ranking members of his Cabinet would have to resign. Ma's approval rating fell to a record low 16 percent in a poll conducted by the TVBS news channel in mid-August. This compares with a 41 percent approval rating in June last year, one month after he was sworn in. "Liu's resignation may meet a widespread demand among the public, but at the same time this surprise move indicates the pressure on Ma has been huge," said Lo Chih-cheng, a political scientist at Taipei's Soochow University. Cabinet members will all formally resign on Thursday in a procedural move to pave the way for a reshuffle, Liu said. "I have finished my mission at this stage," said Liu, a 66-year-old former academic and transport minister, known for his mild professorial manner. "Up to 90 percent of those affected by the typhoon have received relief payments and 92 percent of the homeless have been allowed into military barracks or other official facilities," he said. Typhoon Morakot hit the island early last month, bringing powerful winds and torrential rain that left at least 614 people dead and 75 missing. "I should have done better," Liu said in a characteristic soft-spoken voice. Taiwan's new premier, 61-year-old Wu, is a political veteran respected for his eloquence. "If Taipei is the brain of Taiwan, then Kaohsiung is its heart," he said while mayor of Kaohsiung in the 1990s. Despite his talent for soundbites, Wu's time as Kaohsiung mayor got lackluster marks, and he was criticized for not doing enough to make it a more liveable city. A more general problem is Wu's lack of experience in finance, argued Lo of Soochow University. "Since the new Cabinet will not be economy-oriented, I doubt if it has the capacity to lead Taiwan through the crisis," he said.

China: University graduates looking for work in Hangzhou will be given “job-hunting maps” showing which companies are hiring and how to find them, state media reported on Tuesday.

Wu Bangguo (C, front), chairman of the Standing Committee of China's National People's Congress, the country's top legislature, visits a solar power company in Phoenix of Arizona State, the United States of America, Sept. 7, 2009. Wu urges high-tech, clean energy cooperation between China, U.S. Top Chinese legislator Wu Bangguo is urging more cooperation between China and the United States in the fields of high-technology and clean energy. "The Chinese and U.S. economies are highly complementary in nature, and they share a solid basis for economic and trade cooperation," Wu said during visits Monday and Sunday to Honeywell International, a company that specializes in aerospace and automation technology, and First Solar Inc., one of the world's fastest growing manufacturers of solar modules. China and the United States, Wu said, also face the common tasks of adjusting their economic structures, which has brought challenges as well as opportunities for their economic and trade links. Wu, chairman of the Standing Committee of the Chinese National People's Congress, expressed hope that clean energy and high-tech cooperation could become new growth engines for China-U.S. bilateral trade. China, Wu said, is focused on adjusting its economic structure, promoting industrial upgrades and changing its development mode in connection with its sci-tech innovation capacity. Despite the world financial crisis, Honeywell maintained sound cooperation with Chinese enterprises due to continued growth in China, said David M. Cote, chairman and CEO of Honeywell International. Auto-control technology, aerospace and automotive products, and special materials in which Honeywell specializes could be helpful to China's economic structure adjustment, Cote said. Cote pledged to press ahead with Honeywell's development plans in China and forge closer ties with Chinese businesses. While touring First Solar, Wu said the Chinese government is seeking a legislature guarantee for the development of renewable energy. The legislator suggested joint research and development, pilot projects, and expanding mutual investment as ways to increase both countries' solar energy capacity. First Solar CEO Mike Ahearn said Wu's visit could bolster cooperation on solutions for accelerating the pace of renewable energy adoption. "If the U.S. and China work together and strongly support solar growth, we believe we can reduce the costs of solar electricity to 'grid parity' - where it is competitive with traditional energy sources - and create the blueprint for accelerated mass scale deployment of solar power worldwide to mitigate climate change," Ahearn said in a statement. Wu arrived in Arizona on Sunday on the final leg of a three-nation North American tour. He was to visit Washington on Tuesday and was expected to meet with President Barack Obama, Vice President Joe Biden, Secretary of State Hillary Clinton and House Speaker Nancy Pelosi.

Wu Bangguo (R), chairman of the Standing Committee of China's National People's Congress, the country's top legislature, shakes hands with Arizona Governor Jan Brewer in Phoenix of Arizona state, the United States, Sept. 6, 2009.

As leader of the western Xinjiang territory for 15 years, Wang Lequan is the closest China has to a regional strongman. So it is little wonder a recent purge of lower-ranking officials over a spate of bloody unrest has done nothing to clip his authority, underscoring both the extent of his power and China's sensitivity over any changes in the leadership of this strategic, conflict-ridden territory. Angry protesters poured into the streets of the regional capital Urumqi last week, demanding the removal of Wang and other officials over ethnic rioting in July and a string of unnerving needle attacks blamed by the government on Muslim separatists. Officials say five people died in the protests and 21 have been detained on suspicion of stabbing people with needles. Paramilitary forces are maintaining a strong presence on Urumqi's streets but there is no sign of new protests of the sort that had called for Wang's ouster and forced him to address demonstrators outside his office last Thursday. At the weekend, the protesters won a partial victory with the firing of Urumqi's Communist Party Secretary Li Zhi and Xinjiang's regional police chief. Wang, 64 - renowned for his tough, salty talk on the need to crush terrorism, religious extremism, and separatism - escaped without so much as a reprimand. "Wang Lequan is too big," said an Urumqi beverage seller, Chen, who would give only his surname for fear of official reprisals. "There is nothing you can do." If anything, last week's protests may have strengthened Wang's position because Beijing will always favor a muscular approach toward ethnic unrest, even if that just aggravates the tensions, said Michael Davis, a professor of law at the Chinese University of Hong Kong. "The government has shown that every time this problem flares, rather than reconsider the problem, they crack down, and the hardliners take a dominant position," Davis said. Residents told reporters they were basically satisfied with the dismissals and wanted a return to normalcy - although they repeated demands for a speedy end to the needle attacks and prosecution of suspects in the July riots that killed 197 people. A close ally of President Hu Jintao, Wang has led Xinjiang since 1994 - an unprecedented term in modern Chinese politics. He has consolidated his hold on power by combining a hard line toward the Uygur ethnic group with an unremitting drive to develop the region's economy and mineral wealth. Meanwhile, Urumqi has spelled out potential punishments for spreading rumors after the unrest. A notice from the law-and-order authorities said: "Those who deliberately concoct and spread false information about innocent members of the public being stabbed with needles" could be tried and sentenced to up to five years in jail. This followed a warning that anyone found guilty of injecting others with dangerous substances could face a long prison term or even death.

A model of China's biggest commercial plane C919 jumbo jet, which was unveiled at the Asian Aerospace International Expo in Hong Kong on Tuesday. The single-aisle jetliner has as many as 200 seats and Beijing hopes it could boost the country's fledgling aviation industry. China's showcased its newest and biggest commercial plane on Tuesday – a jetliner with as many as 200 seats that could boost the country’s fledgling aviation industry to compete with western rivals like Boeing and Airbus. The single-aisle C919 plane is scheduled to take its maiden voyage in 2014 before being delivered to buyers after 2016, according to Wang Wenbin, an official with the plane’s manufacturer, state-backed Commercial Aircraft Corp of China. Work on the prototype began last week, he said. A large mockup of the jet was on display on Tuesday at an Asian air show in Hong Kong. The project is a major first step by mainland toward developing homegrown planes, along with the research and technology capabilities, for its fast-growing domestic market rather than relying on foreign companies. It would also pave the way for expansion into the international market. Because the country’s nascent commercial aerospace industry still lacks expertise, the C919 initially will be outfitted with engines and other parts from foreign companies. Major suppliers have yet to be announced. “The civil aviation industry is just starting to boom,” said Wang, Comac’s assistant general manager. “Although we have … experience on civil aircraft manufacturing, we still have a long way to go in comparison with those aviation industry superpowers such as the USA.” The C919 is designed for short- to medium-range hauls and can seat as many as 200 depending on the configuration. According to state media, the first 9 in the jet’s name was chosen because it suggests eternity in Chinese culture, with the 19 referring to 190 seats the plane might accommodate. Also in development by Shanghai-based Comac is a 70 to 110-seat ARJ-21 passenger jet, designed for the local market. Last year, General Electric Commercial Aviation Services signed a deal to order 25 of ARJ-21s. GE is supplying the engines for the project.

Yan Zi (R) of China whispers to her partner Zheng Jie during the women's doubles third round match against Daniela Hantuchova of Slovakia and Ai Sugiyama of Japan at the U.S. Open tennis tournament in New York, Sept. 7, 2009.

Health Minister Chen Zhu announced on Tuesday that vaccination against HINI influenza will first be given to participants in the 60th anniversary National Day celebrations, like these soldiers rehearsing their highly choreographed parade in Tiananmen Square on October 1.

A coal mine blast has killed 35 in central Henan province and left another 44 miners trapped, official sources have revealed.

Tourism in Xinjiang is back to where it was before the deadly July 5 riot in Urumqi , Xinhuanet reports. Regional tourism bureau director Inamu Nisteen said yesterday at a tourism conference held in Xiamen , Fujian , that Xinjiang was welcoming 3,000 to 6,000 visitors a day. The increase comes following the introduction of nine policies to revive the industry. According to official figures, Xinjiang welcomed 9.85 million visitors from inside and outside the country in the first half of the year.

Parliamentary chief Wu Bangguo's visit to the United States, the first by such a senior legislator in 20 years, is a sign of the depth of engagement between the world's two most influential nations, analysts say. At the invitation of the US Congress' House Speaker Nancy Pelosi, Wu arrived at Phoenix, Arizona, on Sunday to begin his official visit on the final leg of his three-nation Americas tour. Wan Li , former chairman of the Standing Committee of the National People' s Congress, visited the US in May 1989, weeks before the PLA was deployed to crack down on the student-led pro-democracy movement in Tiananmen Square on June 4. Wan cut short his visit to Canada following his US tour and returned to Beijing because of the crisis. Wu said in a written statement released upon his arrival in the US: "My visit to the United States is the first by a Chinese top legislator in the past 20 years." Wu had earlier visited Cuba and the Bahamas. Guo Xiangang , a senior research fellow with the China Institute of International Studies, said: "Only with a regular exchange of visits between their parliamentary leaders could the relationship between China and the US be described as a fully normalized one and one with full-scale engagement." Guo said Wu's visit highlighted the normalization of relations between the two legislatures following Pelosi's visit to China in May. Wu is scheduled to arrive in Washington today and hold talks with Pelosi, as well as meet US President Barack Obama, Vice-President Joe Biden and Secretary of State Hillary Rodham Clinton. Guo said Wu's visit also underlined the fast improvements in relations since the Obama administration took office this year, as "the US has shifted its focus to common interests with China instead of differences on the diplomatic agenda". Professor Jin Canrong , deputy dean of the school of international studies at Renmin University, said the recent exchange of top legislators highlighted Beijing's increasing recognition of the significance of dealing with the US Congress and its leaders. Jin said: "Compared with the ballooning government-to-government ties, exchanges between the two countries' legislative bodies have lagged far behind, which makes the US Congress the largest uncertain element in Sino-US relations." The professor said Wu's visit would help build person-to-person ties among lawmaking bodies. "On a personal level, the high-level officials of both legislatures have strengthened their relations ... they understand each other's perspective better," Jin said of relations between Wu and Pelosi.

A total of 858,300 passenger cars were sold in the mainland last month, figures released on Tuesday showed, an increase of 90 per cent from a year earlier. China's passenger cars sales in August rose 90.18 per cent from a year earlier, the China Association of Automobile Manufacturers said on Tuesday, paving the way for record sales for the full year. Industry analysts attributed the continued strength in auto sales in August largely to Beijing’s stimulus measures, including aggressive cuts in sales tax for small cars and rebates for buyers in rural areas, implemented in the beginning of the year. A total of 858,300 passenger cars were sold in August, compared with 451,300 units sold a year earlier and 832,600 units sold in July, data from the official auto association showed. Overall vehicle sales, from trucks to buses, surged 81.68 per cent in August to 1.14 million units from a year earlier, the association said, after gaining 63.57 per cent in July. Moreover, a 6.24 per cent fall in car sales in August last year due to weakening consumer confidence amid a slowing economy, also played a role in inflating the year-on-year growth rates of last month, analysts said. “Other than an extraordinary weak H2 last year, resumed consumer confidence is the only reason that explains the explosive car sales in China since April,” said Qin Xuwen, an industry analyst with Orient Securities. “There is no sign that the momentum is losing steam.” Growth in mainland’s car sales slowed to single-digits last year as a slowing economy and a devastating earthquake in Sichuan province dented automobile demand. The market began to recover in February this year on improved consumer sentiment thanks to the government’s policy support. Analysts said improved sentiment may also push up car sales, which overtook the US as the world’s biggest automaker in January, to record levels for the full year. In the first eight months, a total of 6.23 million passenger cars were sold in the country, almost matching 6.76 million units sold in the whole of last year. Overall vehicle sales rose 29.18 per cent to 8.33 units, or 89 per cent of last year’s total of 9.38 million units, according to official data. Rising confidence has also given General Motors, which recently emerged from bankruptcy, a shot in the arm. Its vehicle sales in mainland, its second-largest market, jumped 112.7 per cent to 152,365 units in August, with year-to-date sales rising 49.6 per cent to 1.11 million units. Kevin Wale, president and managing director for GM’s China operations said he expected a more than 40 per cent increase in the US automakers’ sales in the country this year, doubling a forecast he made in July. Mainland’s biggest automaker SAIC Motor Corp also gained market share after reporting 23.7 per cent growth in vehicle sales in the first half. Many other industry players, including Daimler AG’s Mercedes-Benz unit to the country’s biggest SUV maker Great Wall Motor Co, have also expressed optimism for the second half.

China will push ahead to open its services sector to foreigners and gradually reduce limits on the equity stakes they can take in their mainland ventures, Commerce Minister Chen Deming said on Tuesday. Foreign business groups say limits on access to industries ranging from logistics to insurance are among their top concerns about doing business in mainland. Many are also frustrated about rules that cap the equity stakes they may hold in their joint ventures, which in most cases limit them to below a majority stake. “We will actively and steadily push ahead with the opening of the services sector, and gradually reduce the equity stake restrictions on foreign investment,” Chen told a forum in the coastal city of Xiamen. Chen also reiterated that Beijing was planning to allow foreign firms to list on mainland stock exchanges, but did not give details or a timeframe. He said mainland would encourage foreign investment in clean energy and for foreign firms to invest more in the relatively underdeveloped central and western parts of the country. The European Union Chamber of Commerce in China said in a statement that it welcomed Chen’s remarks. In its recent position paper on doing business in mainland, the EU chamber called for a new round of opening up and reform, highlighting the liberalisation of the services sector as a key step. “The European Chamber believes that such measures are needed to create a more efficient, fair and customer-oriented market environment for all businesses and consumers in China. The development of the service sector will also lead to a more balanced sustainable economy,” it said. “The European Chamber is therefore encouraged by Minister Chen’s comments, and hopes to see these translated into concrete and feasible measures with specific timelines in the near future.”

Sept 8, 2009

Hong Kong: The greying of the city's population will begin in earnest next year when 93,000 baby boomers turn 60, prompting debate on the need for a comprehensive population policy that reviews Hong Kong's retirement age, pension arrangements and immigration guidelines. The government has warned that an ageing population might drain the city's resources. Financial Secretary John Tsang Chun-wah said in his budget that "an ageing population will lower our standard of living and undermine economic vitality and competitiveness". Spending on social security for the elderly would increase by more than 140 per cent to HK$31.8 billion in 2033. He said the city must be prepared. The latest projections by the Census and Statistics Department show the number of people aged between 60 and 64, when many retire, will jump by 40,000 next year, the biggest increase ever. "This is due to the fact that hundreds of thousands of migrants from the mainland surged into Hong Kong in 1949 and the city's baby boom began in 1950. Now they are retiring," Commissioner for Census and Statistics Fung Hing-wang said. The department last month announced that the city's population had exceeded seven million. Its projections show that the elderly population will grow quickly from now into the 2020s. From 2014, more than 100,000 people will reach 60 each year and the trend will peak in 2023, when 135,500 will hit 60. The six-digit growth will last until 2029 and by 2036 the population will reach 8.6 million - with nearly one-third aged 60 or above. This means a dwindling number of people of working age, typically taken as those 15 to 64, who will have to care for more people 65 or older. The department expects the proportion of the population of working age will fall from 75 per cent to 62 per cent by 2036.

Dairy Farm's Tim Chalk says the 7 Café in Tong Chong Street, Quarry Bay, is the first of many. The first shots have been fired in a Hong Kong fish ball war that is pitting the city's traditional street-food vendors against the world's most ubiquitous convenience chain. The front line in this culinary battle is busy Tong Chong Street in Quarry Bay, where last month a new 7-Eleven shop started selling laksa, fish balls, egg tarts and milk tea from a large kitchen counter. The retailer, which has almost 1,000 shops in Hong Kong, is expected to roll out more such counters across the city as it vies for a slice of a market that for generations has been dominated by small street traders. Curried fish balls, siu mai, milk tea and pineapple buns are Hong Kong cultural icons for the armies of hungry office workers and labourers who grab them on the street to munch on their way to work. Whether they take to a version served up by a global retail giant, though, remains to be seen. The 7-Eleven version, dubbed 7 Cafe, is apparently off to a good start, with sales of up to 600 cups of milk tea a day at a promotional price of HK$3 on Tong Chong Street. That is about one-third of the price charged by nearby food vendors. Tong Chong Street is packed with office workers and schoolchildren on most days. "We were surprised by the popularity of some products - for example, the milk tea ran out on the second day," said Tim Chalk, commercial director for Hong Kong and Macau at Dairy Farm, which owns the 7-Eleven franchise locally. "It is a worldwide trend for convenience stores to move to hot food-on-the-go." But nearby street food vendors are unimpressed by the quality of the fare served up by 7-Eleven, even though it has hired an executive chef from a five-star hotel to ensure the food is safe and tasty. Ming Kee, a street-food counter that has been selling breakfast, lunch and afternoon tea on Tong Chong Street for 18 years, concedes that it has sold fewer breakfasts and milk tea lately, but does not think 7 Cafe poses a threat. "Do you think 600 cups of milk tea is a lot?" Ming Kee owner Wong Ming-sang asked. "When Hoixe Cake Shop started selling milk tea two years ago, it sold 1,000 cups a day." Hoixe, a franchised bakery, was shut down last month and its site is now occupied by 7 Cafe. "Although [7 Cafe] has opened, our business has returned to normal," Wong said. From IFC in Central to public housing estates in Tin Shui Wai, fish balls, siu mai, meat balls, milk tea, egg tarts and pineapple buns are part of the city's daily fare and are popular with people of all ages. With a menu spanning breakfast, lunch and afternoon tea, the 7 Cafe is also competing against arch-rival Circle K, Cafe de Coral (SEHK: 0341), McDonald's and other food vendors in the Tong Chong Street neighborhood. Chalk said the HK$3 milk tea deal would be extended to the end of this month. But Wong said Ming Kee had no intention of cutting prices as that would mean lowering quality. "Price is not the only factor," said Wong, who sells milk tea for HK$9 a cup. "We use Holland's Black and White Cow milk, which is the most expensive evaporated milk in Hong Kong. [7 Cafe] uses Nestle, which is cheaper." Competition from 7-Eleven comes at a bad time for the city's street-food vendors. Wong and the other food vendors on Tong Chong Street are chasing fewer white-collar customers from nearby Taikoo Place, the complex of office towers owned by Swire Properties. The city's unemployment hovered at a four-year peak of 5.4 per cent last month, but economists widely expect the worst is yet to come. Wong and his family owned their premises, so they were faring relatively better than vendors who faced rising rents. The Wongs also own the 300-square-foot shop occupied by the Circle K convenience store, which is in between 7 Cafe and their own food counter. The operator of the Circle K chain, Convenience Retail Asia, declined to comment on 7 Cafe's impact on its business. Circle K sells milk tea, toast and pizza on a made-to-order basis. Circle K, which signed a six-year lease two years ago, faced a 9.75 per cent increase in rent next year as part of its contract, Wong said. Chalk said 7-Eleven's reason for choosing Tong Chong Street was mainly because of its busy traffic of white-collar workers. Despite the stiffer competition, the owner of Chinese dumpling shop King of Siu Mai, next door to 7 Cafe is undaunted. "Consumers are curious about new things, but the curiosity normally lasts for three days and our customers come back," King of Siu Mai owner, Ah Ming, said, pointing to the crowd of customers in front of her shop. Thomas Wong, a regular customer at King of Siu Mai, said 7 Cafe provided a choice, but he would stick with his favourite dumpling store. The store has sold fish balls, siu mai and meat balls for more than 10 years on Tong Chong Street. "I have been coming here [King of Siu Mai] for years, and have no intention of trying out [7 Cafe]," he said. Retail competition has become so punishing in Hong Kong that the 7 Cafe is even "cannibalising" the customers of the 7-Eleven store immediately next door. Chalk said sales at the 7-Eleven had dropped 5 per cent since the new store was opened. The two stores offered different products, Chalk said. While the buzz that 7 Cafe created on Tong Chong Street has died down, other bustling areas of the city are set to feel its impact soon. Chalk said the Tong Chong Street 7 Cafe was the first of many in the pipeline. Dairy Farm, which owns half of the 945 7-Eleven stores around the city (the rest are franchised), plans to convert the group's stores into 7 Cafes. Future 7 Cafes, which would occupy 1,000 square foot of space, would be located in high-traffic locations, including Causeway Bay, Central, Admiralty and housing estates. Chalk would not say how many were planned.

Metallurgical Corp of China (MCC) will sell up to HK$19.55 billion worth of H-shares in a Hong Kong initial public offering, making it the territory’s biggest IPO so far this year.

Fund manager Anthony Bolton says Chinese companies are more attractive than Western ones. It is as if last year's horrors in the investment banking sector never happened. In Hong Kong, banks that avoided the worst of the credit crunch, including Barclays, Morgan Stanley, Credit Suisse and Standard Chartered, are on a hiring spree. Even Royal Bank of Scotland, which is now 70 per cent owned by the British government and is dismantling its high street banking business in Asia, is searching for new investment bankers in Hong Kong and on the mainland. After retrenching in China last year, the global banks have decided that the Hong Kong Stock Exchange and the mainland economy will remain buoyant for years to come. They are hiring in response to global money managers' enthusiasm for shares in Chinese companies. Since January, foreign investors have been piling cash into China because they reckon the region's businesses will grow fast while economic recovery in the West will be sluggish. "In the West, there is probably going to be a long period of slow growth. Against this backdrop, faster-growing Chinese companies are attractive," said Anthony Bolton, the highly respected investments president at fund manager Fidelity International. Barclays is hunting for stock-market traders and bankers who can advise companies raising money via Hong Kong initial public offerings. "We have expanded and are expanding our investment banking sector coverage teams," said Robert Morrice, Barclays' Asia-Pacific chief executive. "And we are adding specifically to support the build-out of the equities business, adding people in trading and sales." RBS, which has just scooped US$550 million selling its high street businesses in Hong Kong, Taiwan, Indonesia and Singapore to Australia's ANZ, wants to build up its minute investment banking business on the mainland. RBS has approached several high-profile Chinese bankers about joining the new team, according to two sources briefed on the plans. A source familiar with Morgan Stanley's hiring plans said the Wall Street bank was hiring selectively across the board in Hong Kong. Morgan Stanley is searching for mid-level bankers to add weight to its equity capital markets team, which advises companies on initial public offerings and share placements. The bank is also searching for financiers to join its team advising mining companies on deals. Hedge funds, many of whom retrenched from Hong Kong and the mainland last year, are also hiring again. But not all these organisations will find it easy to get new staff. According to Bob Huthart, the Hong Kong-based managing director of investment banking headhunter Huthart, many bankers are leaving their jobs voluntarily after becoming disillusioned with their industry and the role it played in last year's economic meltdown. "The banks are all short-handed and business is good in Asia for them, but the workload has been heavy and we anticipate that many will leave the business and look for a career with a more balanced lifestyle," he said. "There is a high level of disillusionment with banking and finance since the recession. So we will see even more demand from banks to replace people."

China: China's top 500 companies outperformed their US counterparts for the first time last year, a survey conducted by a business group has revealed, as the financial crisis wreaked havoc in the United States. Net profits at the nation’s highest-performing firms totalled US$171 billion last year, compared to US$99 billion for the US firms, according to the survey by the China Enterprise Confederation (CEC). The business group has compiled a list of mainland’s top 500 companies, similar to the Fortune 500, since 2002. The mainland firms saw their profits fall by 13.2 per cent last year compared to the previous year, according to the survey posted on the CEC’s website – still a better performance than the Fortune 500’s 85 per cent drop in profits. The company that topped the list was state-owned giant Sinopec (SEHK: 0386), the largest oil refiner in Asia, with revenue of 1.5 trillion yuan (HK$1.70 billion) last year, according to the survey, which was posted at the weekend. The Industrial and Commercial Bank of China (SEHK: 1398), the country’s biggest lender, ranked fourth on the list with a turnover of 490 billion yuan. CEC vice-president Wang Jiming said the performance of mainland’s top 500 last year showed the financial crisis had less of an impact on the Asian nation’s firms than on their US and global counterparts. But he added it did not signal any substantial improvement in overall competitiveness. “Chinese enterprises enjoy a good policy and domestic market environment,” he was quoted as saying on the website. “But compared to big global companies, they … still lag behind in resource allocation, innovation, international presence, business models and corporate culture.”

Head of the China Banking Regulatory Commission, Liu Mingkang, said on Sunday in Basel, Switzerland that current levels of loan growth in mainland is 'very reasonable' and should prove to be more stable in the second half of this year. The pace of loan growth in mainland is easing and should prove to be more stable in the second half of this year, head of the China Banking Regulatory Commission (CBRC), Liu Mingkang, said overnight on Sunday. Speaking to reporters on the sidelines of the G10 central bank governor meeting in the Swiss city of Basel, Liu also described current levels of loan growth as “very reasonable” and “still quite good”. “[In] the second half of this year, I think the speed [of loan growth] will be more stable,” he said. Record first-half lending in the world’s third-largest economy had stirred fears that loans may be finding their way into asset market speculation and could lead to the formation of asset price bubbles. But a subsequent clampdown helped spur a sudden reversal in the mainland stock market, where the benchmark Shanghai Composite Index tumbled more than 20 per cent over the past month, after a 90 per cent rally from the start of the year. Banks lent 356 billion yuan (HK$405.34 billion) in July and are expected to have made even fewer loans in August, down from a monthly average of 1.23 trillion yuan in the first half. The slowdown in lending in July from the breakneck pace of the first half has prompted worries that the mainland economy could lose steam. Banking sources had said that mainland banks overall extended about 320 billion yuan in new loans in August, the lowest monthly total this year, according to preliminary data from the CBRC. Liu suggested that the easier pace of loan growth had positive implications for credit risks as levels of nonperforming loans were falling. “We have [seen] nonperforming loans reduced and the ratio automatically reduced as well, though we had expansion of loans for the first half of this year,” he said. The banking regulator was continuing to watch risks associated with loan growth “very closely”, Liu said.

A new department will be set up under the central bank to oversee the recently developed pilot scheme to use the yuan for trade settlement between Hong Kong and a handful of selected mainland cities, according to a government economist who has been briefed on the plan. The Second Monetary Policy Department would also be expected to deal with a wide range of business issues concerning the yuan's use in international trade, investment, currency swap programmes with other countries and foreign aid, the economist said. The new department, with People's Bank of China vice-governor Hu Xiaolian at the helm to oversee monetary policy, is a key part of Beijing's long-term strategy to internationalise the yuan as China pushes to gain a bigger say in the world's currency system. The Second Monetary Policy Department is designed to be distinguished from the current Monetary Policy Department, which has focused on the yuan's domestic use and proposes monetary policy to the central bank's leaders. "The most urgent task for the new department is to deal with the fast increasing use of the yuan to settle Chinese firms' trade with Hong Kong, Macau and some countries in the region, as well as some African nations," the economist said. In July, the State Council announced that Hu had been replaced as director general of the State Administration of Foreign Exchange by Yi Gang , another central bank vice-governor. Although monetary policy is ultimately decided by the State Council, analysts said the reshuffle of institutions and personnel had implications for foreign exchange management and the country's efforts to pave the way for the wider use of the yuan. Also, Vice-Premier Wang Qishan was put in charge of a task force to make the yuan a currency for international trade. Hu had been appointed to head the task force's research team. Analysts said Hu's expertise in foreign exchange would be valuable to the yuan's internationalisation. Professor Yi Xuanrong , a financial expert with the Chinese Academy of Social Sciences, said it was necessary for the central bank to set up a new department to increase yuan business overseas and putting it under Hu would strengthen it. The world financial meltdown has encouraged officials to speed up the currency programme. China sees an erosion in US influence worldwide, stoking hopes for the yuan to become a major world currency. The yuan is not convertible for purely financial purposes, so it cannot yet be a reserve currency, but China has started to carve out a bigger international role for it. Last December, the State Council allowed the yuan to be used to settle trade transactions between Hong Kong and Macau and partners in Guangdong and the Yangtze River Delta. Then in April, exporters and importers in Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan were permitted to use the yuan in deals with Hong Kong.

Sept 7, 2009 Labor Day USA

Hong Kong: Hong Kong shares jumped 2.8 per cent on Friday to post their biggest single-day gain in six weeks, after mainland hiked the limit for stock investments by foreign funds in a show of support for the market. Beijing announced new draft rules on Friday on inbound portfolio investments, increasing the amount individual institutions can invest in the country’s stock markets to US$1 billion from US$800 million. The changes will make it possible for large investors to channel more portfolio investments into mainland’s capital markets and come after a 23 per cent slide in Shanghai shares in August amid growing concerns about a drop in bank lending. The move is expected to have a limited impact with the overall investment quota of US$30 billion kept intact but is seen as more of a symbolic gesture to bolster investors confidence. “These Chinese regulators have a vested interest in not pushing the market too low and they also have a vested interest in avoiding a property bubble,” said Andrew Sullivan, a sales trader with MainFirst Securities. “So if you look at the range of announcements that have been coming out in recent weeks, you’ll see that the government is tweaking things here and there to figure out what will work best for it. That’s fairly typical of China.” The benchmark Hang Seng Index finished 556.94 points higher at 20,318.62. The gauge rose 1.1 per cent on the week, snapping a two-week losing streak. Turnover jumped to HK$75.7 billion, its highest in a month after languishing around HK$50 billion for the past few sessions while there were nearly three times as many gaining stocks as decliners. Some analysts also attributed the afternoon’s sharp rally to short covering ahead of the HSI quarterly re-weighting that will come into effect on September 7. The China Enterprises Index, which represents top locally listed mainland stocks, was up 2.9 per cent at 11,760.55 led by a 3.6 per cent rally in China Construction Bank (SEHK: 0939). Consumer sector-focused China Resources Enterprise (SEHK: 0291) jumped 5.2 per cent to HK$19.56 after posting a smaller-than-expected fall in first-half profit due to a strong showing by its beverage unit. Leading consumer products exporter Li & Fung (SEHK: 0494) vaulted 8 per cent following strong US retail sales data.

Hong Kong on Thursday recorded 492 new cases of human swine flu, its highest number in a single day, and its sixth death from the virus.

This has turned out to be a golden summer for Hong Kong films on the mainland. Three local productions - Overheard, On His Majesty's Secret Service and McDull Kung Fu Ding Ding Dong - have already taken in 254 million yuan (HK$268 million) at the box office in the month following their mainland release in late July, says ENT Group, an entertainment consulting firm. "Each movie appeals to audiences for different reasons. But in general it's the [greater] sophistication of Hong Kong films that attracts people to the cinemas," said Howie Yu Shaoyi, film editor of the Southern Metropolis daily. McDull Kung Fu Ding Ding Dong, the latest in the McDull franchise, took about 70.6 million yuan in ticket sales up to August 23. It follows the adventures of Hong Kong's favorite cartoon piglet as he explores opportunities north of the border, just as many Hongkongers have done. Overheard, which grossed 86.6 million yuan, is a thriller about three police officers who use insider information, gleaned from surveillance of businessmen being investigated for commercial fraud, to dabble in stocks themselves. Co-directed by Alan Mak Siu-fai and Felix Chong Man-keung, who collaborated on Infernal Affairs, the film also stars some of Hong Kong's top leading men - Sean Lau Ching-wan, Daniel Wu Yin-cho and Louis Koo Tin-lok. However, On His Majesty's Secret Service, a costume comedy from veteran director Wong Jing, is the most successful of the three. More akin in spirit to Get Smart than the James Bond series, the movie is set in ancient China and centers on the efforts by a bumbling member of the emperor's secret service bodyguards to prove himself. Starring Louis Koo and Taiwanese actress Barbie Hsu Hsi-yuan, the slapstick production clearly appeals to mainlanders - it has already earned 96.7 million yuan at the box office. "People who go to see this film make up the mainstream audience. Big stars and silly laughter are what they want," Yu says. The strong ticket sales are in line with last year's showing, when Hong Kong-mainland co-productions led the box office for Chinese-language productions. Red Cliff (I), a costume epic by John Woo Yu-sum, took 320 million yuan, followed by Painted Skin, director Gordon Chan Ka-seung's adaptation of a classic supernatural tale (239 million yuan), and Stephen Chow Sing-chi's sci-fi comedy CJ 7 (202 million yuan). Most mainland directors, who grew up under the communist ethos of film as propaganda, have not been able to make entertaining commercial productions, says Reeve Wong Oi-nam, a Hongkonger working in Guangzhou as marketing director for a mainland cinema chain. "It was only in recent years that a handful of directors such as Feng Xiaogang, Zhang Yimou and Chen Kaige have succeeded in making commercial films," Wong says. "By comparison, their star power, portrayals of complex human nature and contemporary city life, make Hong Kong films more appealing to mainland audiences." A Beijing cinemagoer who went to see Overheard seems to bear out this observation. "Hong Kong films are much stronger than mainland productions," says the viewer, who was attracted by the plot built around stock market fraud - a subject mainland directors have not been able to tackle so far. "The director and cast are attractive; even if they used mainland actors, I don't think they would make much difference to the film. It is very Hong Kong," she says. But while mainland audiences regard Overheard as a distinctively Hong Kong creation, what they get to see is a version tailored to the censors' requirement for portrayals of a more righteous society. In the movie, policeman Ah Chun (Lau Ching-wan) is torn between loyalty to colleagues and his sense of duty as an officer, but eventually turns himself in to the Independent Commission Against Corruption (ICAC) after he and his team overhear a plot to kill a business executive involved in manipulating share prices. However, Chun's ambivalent response to an ICAC request to safeguard an incriminating video clip that his partners wanted to destroy was edited out of the mainland edition. His reply - "Once we start cheating, we have to cheat to the end" - appeared in the Hong Kong edition but was deemed too negative to be shown to mainland audiences. "The alteration was made to satisfy officials' requirement that films must be positive. In this case, I don't think the changes would have much impact on a mainland audience," Wong says. But other Hong Kong films have done badly after being forced to alter their script to meet mainland criteria, he says, referring to Lady Cop and Papa Crook, which was also directed by the pair behind Overheard. In order to pass the censors, the film had to be re-edited to show police officers in a more positive light, delaying its release on the mainland by nearly six months. However, this result failed to please either audiences or critics across the border. Although some changes are politically driven, Hong Kong films have also had to make adjustments to cater to mainland tastes, especially for audiences in northern provinces, Wong says. "Ip Man's popularity in the south and Forever Enthralled's in the north says a lot on the difference in taste between audiences," Wong says. Ip Man tells the story of Yip Man, the Foshan native and renowned kung fu master who taught Bruce Lee. Forever Enthralled is a biopic of Peking opera legend Mei Lanfang. Films that sell in Hong Kong also tend do well in Guangdong because of the Cantonese connection, but Hong Kong directors must inject more mainland "flavor" before their productions can appeal to northern audiences. Since smaller productions do not usually make such adjustments, Wong says, his company does not bother releasing small-budget Hong Kong films outside Guangdong. Cinema operators and critics attribute McDull's buoyant box office to its family orientation - the audience is mostly made up of parents taking their children to watch an animated feature. But they also point to an easily overlooked factor - government support. Yu says McDull's success on the mainland is inseparable from its distributor, the powerful Shanghai Media and Entertainment Group, which operates radio and television stations as well as satellite television in the city. "Because of its distributor, they were able to boost it with administrative support, which is equivalent to government promotion." So-called administrative support means productions are cleared for release at a time when they will not compete directly with major foreign imports - for instance, during "golden weeks" around Labour Day in May or the National Day holidays in October, which are often reserved for mainland or Hong Kong co-productions. The Shanghai market alone brought the new McDull film 20 million yuan at the box office, far more than the HK$2.4 million it has earned in Hong Kong in 19 days. Noting that three foreign productions, Terminators (II) , Harry Potter and the Order of the Phoenix, and Ice Age 3, took in more than 737 million yuan in early July, nearly triple the amount earned by the three Hong Kong productions that followed, Wong says: "[Administrative support] helps with the box office but, of course, the films themselves must be good." Because mainland cinema operators are showing the same mix of films, they tend to differentiate themselves through the frequency of screenings (owners buy more copies of films they think will do well) and by offering more luxurious venues. As a result, cinema tickets have become increasingly expensive, with prices in major cities ranging from 60 to 100 yuan, depending on the screening time and whether they are foreign or local productions. Rising ticket costs have not deterred cinemagoers: the number of cinemas on the mainland nearly doubled over the past nine years. In 2000 there about 900 with 2,000 screens across the country, but the number has now risen to 1,545 cinemas with 4,097 screens.

Taiwan will drop for the first time in 17 years its annual bid to join the United Nations (UN) as island President Ma Ying-jeou seeks peace with the mainland.

Operators are flexible in their chartering options as Chinese private jetsetters do not want to attract the unwanted attention of the authorities. In a discrete corner of the Chek Lap Kok airport away from the masses in economy class stands the Hong Kong Business Aviation Center. The luxury private jets arriving and departing in ever increasing numbers at the centre are likely to have on board newly minted mainland billionaires or visiting rock stars. They all have a few things in common: they have plenty of cash and want to travel discreetly, at high speed and in comfort. Aircraft movements at the centre had quadrupled from 981 take-offs in 2000 to 4,025 last year. With tailor-made six-star menus, leather seats and leg room that makes first class look cramped, this type of travel does not come cheap. The price tag of even the cheapest business jet starts at about US$6 million. A jet charter at Asia Jet, a subsidiary of Michael Kadoorie's Metrojet, starts at a base rate of US$5,900 per hour. Add airport tax and landing fees and a round trip for 10 to Beijing can cost almost US$5,800 per person. But driven by rising wealth in China, private jet travel in this region is set to overtake the oil-rich Middle East in the not too distant future. The mainland has two private aviation airports - in Shenzhen and Beijing - and is opening its first business jet port next year at Shanghai's Honqiao International Airport at a cost of US$11.6 million. The facility will be open in time for the World Expo. "For many years, Asia promised to be a big market, but it never happened," said Mike Walsh, the vice-president of Asia Jet. "I think the watershed moment was the Beijing Olympics, when there were lots of jet movements for the opening and closing ceremonies, carrying VIPs and celebrities. Seeing is believing, and I think the Chinese authorities saw how impressive these jets were." Scott Plumb, the chief commercial officer at VistaJet, says the company is "very optimistic" about private chartering in Asia. "Like every business, we suffered during the last nine to 12 months from a slower economy, but since June our phones have been ringing off the hook." Despite their fat wallets, private Chinese jetsetters are proceeding with caution because of concerns such a blatant display of wealth will attract the unwanted attention of the authorities. This is forcing operators to be more flexible in their chartering options. "Asian entrepreneurs haven't been hit by the crisis as badly because they didn't leverage as much," said Diana Chou Kee-man, the managing director of brokerage Sino Private Aviation. "But there's a lot of implication for ownership. Wealthy private entrepreneurs are being investigated now and they don't want to be perceived as having lavish lifestyles, so many stay away from buying aircraft." But she says by nature the Chinese love to bargain and even though they are price-conscious, they prefer a large aircraft because of the comfort and prestige. As the market for private jet travel grows, many charter operators have begun to lure customers with flexible programs. Asia Jet's card programme, launched in March, allows clients paying a US$100,000 deposit to have priority access to its fleet. At the moment, Walsh says the company accepts ad hoc requests from the general public for charters, but that by the end of the year, the fleet will only be available to "members only". "This is because of the availability factor of the planes. At the moment there's a downturn so it's not a problem getting a flight," he said. Securing members is also a key part of Asia Jet's business model. With the hefty cost comes service that is a world away from the "chicken or fish" fare of economy class. The Asia Jet programme has a bespoke service offering everything for the client including booking preferred hotels, arranging drivers, and stocking the plane with his favourite newspaper from anywhere in the world. At VistaJet, which caters for long-haul-travel customers, can choose between buying a pre-determined number of travel hours or buying trips on a demand-only basis, or a combination of both. Typically, customers buy 100 hours of travel for use over a three to five-year period, Plumb said. "When they buy such a program they're partnering with us only," he said. "They're using our plane as if it's their own. Chartering is a really easy way to step into private travel for the first time and people like the flexibility." Swiss-headquartered Tag Aviation, another luxury operator that competes with Asia Jet, does not have a membership programme but instead tailors one-off travel requests. "They just need to tell us what is the itinerary of the trip and we will provide an inclusive price quotation specifically for the trip, with various sizes and a range of aircraft to choose from," said Jolie Howard, the director of business development at Tag Aviation Asia. "The catering arrangement is provided according to the client's request." Commercial carriers, from Air China (SEHK: 0753) to Qatar Airways, are now trying to muscle into the private jet market by launching executive services. But Walsh said most of these companies have only one jet. Plumb said many of them failed because of the high barriers to entry. "A lot of flag carriers tried this in North America before [the September 11, 2001 terrorist attacks], but they stopped because it's such a capital-intensive business. Planes are expensive," Plumb said. "We compete to some extent but we think there is enough demand to go around." As well as offering luxury comfort, private jet travel offers another valuable commodity: time. A commercial flight to Beijing, for instance, can take at least six hours if one includes waiting time at the airport. On a private jet, the time spent door to door is about three hours. "A lot of times when our clients travel on private planes, they are still working. Holding meetings, business discussions. They don't waste time on the plane," Walsh said. "If there's one thing that's finite in life, it's time." For Howard, another benefit is privacy. "Our clients ride privately because they don't want to be seen or known," she said. "People can conduct high-level meetings on board without fear of information leakage." Private jets are not just for the suits. Walsh said 35 per cent of Asia Jet's business was leisure-related, typically conducted by "wags", or wives and girlfriends. "They might use their husband's jet to take their girlfriends for shopping or property hunting trips," he said.

China: Google confirmed on Friday the departure of its China head Lee Kai-Fu, and appointed John Liu, to take over Lee’s business and operational responsibilities. Liu currently heads Google’s sales team in the Greater China region. Google also appointed Boon-Lock Yeo to take over the engineering responsibilities for Google China. “Kai-Fu has made an enormous contribution to Google over the last four years, helping dramatically to improve the quality and range of services that we offer in China,” said Alan Eustace, Google’s senior vice president for engineering, in a statement. Google said Lee will leave in mid-September to start a new venture firm in Beijing. His departure comes at a period when Google is slowly chipping away at Baidu’s dominant search lead in mainland, the world’s largest internet market by users, while battling Beijing regulators who want Google to censor its searches. According to Analysys International, Baidu held 61.6 per cent of mainland’s search market in the second quarter while Google held 29 per cent. Lee joined Google in 2005 to develop the firm’s operations in the country. Prior to Google, he was at Microsoft where he founded a research center. Lee holds a doctorate in Computer Science from Carnegie Mellon University and a Bachelor’s degree in Computer Science with highest honours from Columbia University, according to his biodata from the Google website.

A rescue ship sprinkles water to control the fire on a passenger ship after a "collision" during a maritime rescue exercise in the East China Sea, on Sept. 4, 2009. China's maritime rescue services staged their biggest ever exercise in the East China Sea Friday to test the country's maritime rescue capabilities and security for the Shanghai World Expo in 2010.

A six-year-old girl has become a media darling on her first day of school by expressing her aspiration to become a “corrupt official” when she grows up, state media said on Friday. The young student stated her aspirations in a televised interview that was posted on a southern website, leading bloggers to describe her comments as “a reflection of social reality,” the Southern Metropolis Daily reported. “When I grow up I want to be an official,” said the girl, whose face was blurred to protect her identity. “What kind of official?” the interviewer asked. “A corrupt official because corrupt officials have a lot of things,” she replied. Numerous other children appearing in the video were asked the same question, with many saying they wanted to become teachers, while others said they were not sure what they wanted to be when they grew up. Many chat room users praised the child for her “realistic” outlook on life, while others expressed cynicism over rampant corruption in the mainland. “Socialism has issued a new version of ‘The Emperor’s New Clothes’,” said one posting. “The ugliness of life has already tainted the children – how are we ever going to educate the next generation?” another posting said. President Hu Jintao has repeatedly warned that corruption is one of the greatest threats to the legitimacy of Party rule.

When archaeologists dug up evidence of a 1,000-year-old Tang-Song dynasty street in the middle of Chengdu two years ago - complete with house walls, a Buddhist temple and other relics - it was cause for celebration. Except that is for Wharf (Holdings) (SEHK: 0004), the developer. In 2007, Wharf paid a record 7.24 billion yuan (HK$8.21 billion) for the 53,850 square meter site - more or less the same size as Harbor City in Tsim Sha Tsui. But for two years it has been stymied in its plan to build a new mega shopping/luxury living complex. The conflicting interests of development and historic preservation are still being sorted out. The land bought by Wharf is in Chengdu's most expensive downtown area, Hongxing Road, today's business centre. The 7.24 billion yuan bid was the third-highest on the mainland. Wharf planned to spend HK$10 billion on its flagship development, comparable to Harbour City and Times Square. The 4.72 million sq ft complex, named Chengdu IFC, would comprise a mega mall, top-grade office space, a five-star hotel and luxury homes. The first phase, the mega retail complex and one office tower, is now scheduled to be completed by the first half of 2013, two years behind schedule. In October 2007, the Chengdu Municipal Institute of Archaeology began a site investigation before Wharf started the foundation work. After more than a year of exploration, it found Tang and Song dynasty remains - 22 houses, a brick road, precious bowls, dishes, a stone statue of Buddha and a sophisticated sewage system - all showing a well planned city. Only one-sixth of the historical site is on Wharf land, but archaeologists say it contains some of the most precious artifacts. Wang Wei, an archaeologist at Sichuan University's Archaeological Experiment Centre, said Chengdu was an important commercial city during the Tang and Song dynasties. One of China's oldest cities, Chengdu was for some time the home of the poet Li Bai , and the first city to adopt the widespread use of paper money. Mainland officials recently trumpeted the find as one of the top 10 archaeological discoveries in the nation last year. Some mainland archaeologists are pressing for the preservation of the relics at all costs. But from a business perspective, rising construction costs and the difficulty of blending an historic site into a new development would require drastic revisions in design, involving lengthy delays. The immediate suspension of construction raised concerns that Wharf would use the discovery as an excuse to abandon the investment. After all, the shockingly high land price paid already made it difficult to make a profit. In terms of accommodation value - the cost of the land per square foot of total developed floor area - the 16,500 yuan per square meter was far higher than current transaction prices of 10,000 yuan per square metre for luxury apartments. Eight years ago, tycoon Stanley Ho Hung-sun returned a site to the Guangzhou government after the remains of a Qin dynasty shipyard were found, according to Christopher Law, director at the Hong Kong-based architectural firm Oval Partnership. Oval is not involved in the Wharf project but has been working with several archaeologically sensitive developments. However, the Chengdu government was eager to transform the city into China's western Wall Street and was reluctant to let Wharf walk away from the land-sale agreement. It is unclear whether Wharf has paid the 7.24 billion yuan in full. A Wharf spokeswoman said only: "The installment will be paid according to schedule." At first, the Chengdu government offered an easy compromise. It would keep some of the pottery remains and a Buddha statue head for research purposes, according to sources close to the project. It would return the land to the developer to proceed with the landmark development. But that plan changed drastically when the State Administration of Cultural Heritage stepped in and insisted on the need to preserve all the relics by declaring it a top 10 heritage discovery of 2008. However, since this body has no budget to compensate for losses from deferring the project, the developer lobbied the Chengdu government to sweeten the deal. After lengthy negotiations, the government decided to preserve the most historically valuable discoveries and asked Wharf to build a museum. "Delays cost money and [Wharf] stands to dig deeper in its pocket," Law, the architect, said. "But it will not be more than 15 per cent of the original budget." Housing the antiquities could be difficult. "But Hong Kong developers' mentality is to maximise the profit of every square foot," Law said. "They should see the relics as an asset. It is rare for an upmarket shopping mall and hotel on the mainland to also feature Tang and Song dynasty artefacts." A Wharf spokeswoman refused to disclose details about the development plan, but said: "The design will be integrated with the discovery of the relics." Foundation work is scheduled to begin in the fourth quarter of this year.

China reaffirms importance of ties with Colombia - Chinese Vice President Xi Jinping (R) meets with Colombian Foreign Minister Jaime Bermudez in Beijing, capital of China, Sept. 4, 2009.

The former justice bureau chief who fell in the Chongqing organized-crime investigation apparently had his own version of Fort Knox. Besides eight luxury properties, authorities had seized gold bars and cash worth 38 million yuan (HK$43.2 million), state media reported. The total value of the seizures were estimated at 100 million yuan. Wen Qiang was detained last month for investigation on suspicion of giving protection to criminal gangs after the municipality launched a high-profile crackdown on rampant crime. More than 1,500 suspects have been detained so far. The report by the Chengdu Economic Daily on Wednesday marked the first time Chongqing authorities had given details of Wen's alleged offences since he was placed under investigation by the Communist Party on August 7. "Authorities have found a huge number of gold bars and banknotes, including Chinese and foreign currencies, valued at some 38 million yuan from Wen's residence," the newspaper reported. Among the eight properties that investigators found under Wen's name was a lavish 30 million yuan villa given by a land resources official and a developer as a bribe, the report said. "It has been widely circulated among the public that Wen gained the 13 square kilometers of land in a national forest park in Wulong county for free from a land-resources official there," the report said. "A real estate developer built the two-building villa for him for free." Investigators also discovered three villas and four other properties valued at about 30 million yuan. Since the crackdown started, Chongqing police have arrested many billionaires and gang bosses involved in illegal businesses such as casinos, loan-sharking and extortion. They were believed to have paid huge sums to Wen for protection during the past decade. State media said Wen had shrugged off widespread criticism of his behavior since 2000, but an investigation into his actions had not begun until recently. He was Chongqing's deputy police bureau chief for 16 years until last year.

China Oceanwide Holdings Group, a private investment firm, said on Friday it has bought 29 per cent of Legend Holdings, the parent of the world’s No 4 PC maker, Lenovo, for 2.76 billion.

Beijing will use yuan, not dollars, to buy up to US$50 billion in International Monetary Fund-issued bonds, according to an agreement between the People’s Bank of China and the IMF.

Female soldiers take part in an exercise for the military parade at an airport of People's Liberation Army in Beijing, capital of China, on Sept. 3, 2009. Soldiers are busy doing exercises to prepare for the scheduled military parade at the Tian'anmen square in Beijing to celebrate the 60th anniversary of founding of the People's Republic of China on Oct. 1.

Zheng Jie of China returns a shot to Alize Cornet of France during the women's singles second round match at the U.S. Open tennis championship in New York Sept. 3, 2009. Zheng beat Alize Cornet with 2-1 to step in the third round.

Sept 4 - 6, 2009

Hong Kong: The government said on Thursday it had started recruiting for the position of chairman of the Equal Opportunities Commission (EOC). The candidate will succeed the current chairman Raymond Tang Yee-Bong, whose term of office expires on January 11, 2010. Applicants must be permanent Hong Kong residents and have at least 15 years experience in public administration or private sector management. “He or she should also have experience in managing a sizeable public or private organisation and a strong commitment to promoting equal opportunities,” a spokesman said. The government has engaged a consultant to carry out the recruitment. A selection board will recommend the most suitable candidate to Chief Executive Donald Tsang Yam-kuen. All applications should be submitted to Amrop China at Suites 3203-4, Shell Tower, Times Square, 1 Matheson Road, Causeway Bay, Hong Kong on or before September 24. The EOC is an independent statutory body established under the Sex Discrimination Ordinance.

The former Dean of the University of Hong Kong’s medical school, Lam Shiu-kum, was sentenced to 25 months in jail in Wan Chai District Court on Thursday for misconduct in public office.

Soon the coffee and the duty-free handbags will not be the only expensive buys at Hong Kong International Airport. The city's version of Fort Knox has opened at Chek Lap Kok and is preparing to receive Hong Kong's gold reserves. The 340 square metre depositary has double security doors and bulletproof steel walls, according to a person who has visited the facility. Hong Kong was a leading gold trading centre in the 1980s but had fallen behind New York, Tokyo and London in recent years, partly because it had no facility to store the precious metal. Its physical reserves of gold are kept in London, the biggest bullion market in the world. The Hong Kong Monetary Authority will ship them back from there before the year is out. It would not say yesterday how the gold would be moved. Chim Pui-chung, who as legislator for financial services represents gold traders, estimated about half of the HKMA gold reserve was physical gold, with about 2,000 gold bars valued at about HK$250 million. Financial Secretary John Tsang Chun-wah said the depositary, which opened yesterday, would help the government's efforts to enhance Hong Kong's role as a trading hub for gold. Raymond Lai Wing-cheung, the Airport Authority's finance director, said it would lobby other central banks in the region to put their physical gold reserves in the depositary. He would not say whether the mainland would deposit some of its 1,054 tonnes of reserves in the city. The mainland has the biggest gold reserves. They have grown by 76 per cent in the past five years. Last year, it produced 282 tonnes of gold. Besides central banks, Lai said commodities exchanges, banks, precious metal refineries and issuers of exchange traded funds would be its clients. It was also in talks with Shanghai's gold exchange. Value Partners (SEHK: 0806) chairman and chief executive Cheah Cheng Hye said the fund company planned to launch an exchange-traded gold fund and would use Hong Kong instead of London to keep the gold assets backing up the fund. "There is no cost advantage in using the Hong Kong depositary services but it is much more convenient than London," Cheah said. Hong Kong Mercantile Exchange, which is seeking a licence from the Securities and Futures Commission to launch a gold contract in the fourth quarter of this year, yesterday signed an agreement for all its members to use the depositary for gold storage and settlement of physical gold contracts.

Thirty lawmakers will pay a three-day visit to Sichuan province this month to check on earthquake reconstruction projects funded by the Hong Kong government. It will be the legislature's second visit since the quake in May last year. The long-awaited trip was finally approved by the Sichuan provincial government, which yesterday replied to a Legislative Council's request for half of the 60-member legislature to make the trip. When Legco passed the latest allocation of HK$3 billion in quake aid in early July, pan-democrats demanded the government arrange a trip to the province to see how the money was being spent. Legco president Tsang Yok-sing, who will lead the delegation, said details of the trip were still being decided but he hoped lawmakers could see the latest reconstruction projects. In its invitation, the Sichuan government proposed hosting all members of the development panel, and the chairman and deputy chairmen of six committees - finance, the house committee, education, health services, home affairs and welfare. Of the 30 legislators invited to visit between September 24 and 26, five of the 12 pan-democrats do not have home-return permits. The radical League of Social Democrats' Leung Kwok-hung, who was barred from last July's trip to Sichuan at the last minute, is excluded from this year's trip, as he does not hold one of the selected positions. But Leung's party colleague Albert Chan Wai-yip is invited as the chairman of the welfare services panel and a member of the development panel, which has been following progress on reconstruction projects. Albert Ho Chun-yan, a member of the development panel, welcomed the province's positive response but said the delegation should be open to all legislators. Ho, who does not have a home-return permit, has a prior engagement and will not be going. Asked if the invitation had excluded some democrats and whether the provincial government had made a fair selection, Tsang said: "They have reasons for choosing some panels and members. Those who are closely involved in reconstruction projects are invited." The province said it had limited the number to 30 because of its busy reconstruction programme and limited ability to receive visitors. The other four lawmakers without home-return permits are the Democratic Party's Lee Wing-tat, James To Kun-sun and Emily Lau Wai-hing, and independent Cyd Ho Sau-lan. A government spokesman hailed the invitation and said it understood the need to limit the number. "We hope that the visit will help members understand further the latest development of the HKSAR's reconstruction support work in Sichuan," a spokesman said. Legco allocated HK$2 billion in July last year and HK$4 billion in February. A further HK$3 billion passed two months ago takes the total to HK$9 billion, while the Hong Kong Jockey Club has given HK$1 billion.

Macau casino revenue soared 17.2 per cent from a year earlier to 11.27 billion patacas last month - the city's single biggest monthly takings ever. It was Macau's second consecutive month of year-on-year growth and suggested the world's largest casino market is back on track following a 12.4 per cent decline in revenue during the first six months of the year. Macau's bumper August winnings were slightly more than triple the Las Vegas Strip's US$471.25 million in average monthly casino revenue during the 12 months to June. Last month was Macau's best since January last year, when casino revenue surged to 10.34 billion patacas on the back of a credit-fuelled bubble in the VIP gaming segment, according to preliminary data reported by Portuguese news agency Lusa. The August figure was 17.8 per cent higher than the previous month, and was 33 per cent more than Macau's 8.48 billion patacas in average monthly winnings during the 12 months to July. Analysts expect data for the coming months will further signal a strong return to growth, partly because of a "low-base effect", given the slump late last year. Morgan Stanley analyst Praveen Choudhary expects this month's casino revenue will grow 40 per cent from the trough of 7.09 billion patacas a year earlier. However, a number of catalysts over the coming months could continue to boost organic growth. The head of the local travel industry council has said that Guangdong could begin easing visa restrictions on mainlanders visiting Macau possibly as soon as this month. This would likely be a significant boost to mass-market casino revenue. Tourist arrivals fell 11.9 per cent in the first seven months of the year while mainland visitor arrivals plunged 17.6 per cent. But anecdotal evidence of longer waits at Macau's main immigration checkpoints in recent weeks suggests the crowds are returning. October's eight-day Golden Week holiday to mark China's 60th National Day should also boost strong traffic to Macau, JP Morgan analyst Billy Ng wrote in a research note. He expects improving casino revenue and other macro data for the rest of the year as regional economies extend their recovery and swine flu fears subside. The credit-driven VIP gaming segment, by contrast, was not significantly impacted by the visa restrictions. Instead, wagering volumes and casino winnings from high rollers had slumped since late last year because of a credit crunch among the junket agents who bring players to Macau, lend them money for gambling and collect debts. But starting from July, when VIP wagering volumes exceeded HK$200 million for the first time this year, the crunch appears to have ended. Some analysts have linked the rebound in the VIP segment to a first-half surge in mainland bank lending tied to Beijing's four trillion yuan (HK$4.54 trillion) stimulus package.

Modern Media Holdings' retail offering was more than 100 times oversubscribed, sources said yesterday, as punters continue to chase quick profits from Hong Kong's red-hot new listings. Among those rushing to snap up the shares were Shanghai billionaire Guo Guangchang, who subscribed through the parent company of Fosun International (0656), and Shen Guojun, founder of Intime Department Store (Group) (1833), the sources said. Action superstar Jet Li subscribed for an unspecified amount of shares during the retail offering, which closed yesterday, the sources added. The actor's charity, the Jet Li One Foundation, has previously organized fundraising events in cooperation with Modern Media titles. The Guangzhou-based media company is likely to price its shares at the high end of the indicative range of HK$1.15 to HK$1.41. Modern Media is seeking to raise up to HK$141 million by offering 100 million shares. Meanwhile, five local brokerages have reserved a total of HK$39 billion in margin financing for three listing hopefuls scheduled to kick off their retail offerings next week. Metallurgical Corp of China, a state- owned resources and construction firm, is looking to raise HK$17.9 billion next week from the Hong Kong portion of its dual A- and H-share offering. Drug distributor China National Pharmaceutical Group, known as Sinopharm, will try to raise HK$7.8 billion next week, while Chinese menswear retailer Lilanz is looking to tap the market for HK$1.5 billion. Mainland wind power producer Xinjiang Goldwind Science & Technology Co yesterday became the first company listed on Shenzhen's Small and Medium Enterprise Board to announce plans for a Hong Kong listing. Goldwind said in a Shenzhen stock exchange announcement it plans to issue new shares in a Hong Kong mainboard listing of not more than 15 percent of its enlarged share capital. The proceeds of the listing, which could raise up to HK$8.7 billion, will be used to fund three wind power projects, it said. Goldwind said the Hong Kong offering would be completed within one year after it gets shareholder approval.

Hong Kong's first government bond sale in five years has received an overwhelming response as ample liquidity and a low rate environment have driven money to sovereign bonds as a safe haven. The HK$3.5 billion in two-year government bonds - which went up for auction yesterday - have attracted orders up to 6.45 times, or HK$22.575 billion worth of subscription. However, the average yield was at 0.59 percent, much lower than the market expected, according to information from the Hong Kong Monetary Authority. Financial Secretary John Tsang Chun-wah said the auction result reflects strong demand for public debt instruments and would help Hong Kong to further strengthen its position as an international financial center. Market participants said financial institutions are flooded with liquidity and are seeking safe places to invest. Well- graded sovereign bonds that have ratings parallel to the exchange fund notes have become the favored choice in recent days. The average yield of the first batch of government bonds was only 4.8 basis points higher than the exchange fund notes which yesterday closed at 0.542 percent. This strayed from the 1.21 percent two-year interest rate swap yield. The low yield fixed yesterday reflects that Hong Kong banking system is flooding with liquidity and "financial institutions and end investors as a whole believe the rate will stay low," said Clement Ho, director and chief investment officer at Hang Seng Investment. "Financial institutions, after the Lehman saga, have tightened their requirements on credit standards," he said. Tommy Huang, DBS Hong Kong senior vice president of treasury and markets, said: "The recent fall of the stock markets, which dragged treasury yields down by 14 basis points in a week, was one of the reasons the bond yield set below market expectation."

China: China plans to issue new rules to allow foreign companies to set up local units in the form of a locally registered partnership, in a landmark move to attract investment, a legal document seen by Reuters showed on Thursday. The new rules are expected to mainly affect foreign investment, law and accounting firms. But foreign companies that want to form local partnerships must seek approval from the central Ministry of Commerce, the document said. Beijing has historically viewed private equity funds as speculators though its attitude toward foreign investors has changed in recent years, partly as the government sought to maintain fast economic growth and create more local jobs. Foreign investment firms such as US buyout giant Carlyle Group, for example, can now only register in mainland as a representative office of its parent company or as an advisory service provider, rather than as a partnership company. The regulations offer a new path for foreign firms to do business in the country. One benefit of the new rules is that foreign private equity firms can more easily raise local yuan funds to invest in local enterprises in the name of its local partnership, lawyers said. But some private equity firms briefed on the new rules are disappointed that foreign partnerships still require approval from the mainland authorities, industry sources said. The sources declined to be identified due to the sensitive nature of the matter. Currently, mainland companies and mainlanders who want to set up a partnership, need only submit tax and commercial registrations at the local government level, which can often be completed in a matter of weeks.

Experts look set to approve domestically developed human swine flu vaccines that manufacturers say can protect people against the H1N1 virus with only one dose - an encouraging development for health officials racing to prepare for an expected spike in cases this winter. Many health authorities are assuming two doses of vaccine will be necessary while they await the results of trials by drug makers around the world to determine the appropriate dosage. "Everybody is desperately hoping that one will do because then that's much easier to administer," said Jodie McVernon, a vaccine expert at the University of Melbourne, who has not seen the Chinese test results but who is involved in Australian trials of swine flu vaccines for young children. China's State Food and Drug Administration will make a decision this week on approving two vaccines that completed clinical trials last month and passed reviews by panels of about 40 experts. Four other vaccines are still being reviewed. Vaccine makers Sinovac Biotech and Hualan Biological Engineering said that clinical trials showed their products to be effective in single doses when used on people aged three to 60 years. More than 3,000 people have taken part in the trials. Sinovac points to its capacity to produce up to 30 million doses of swine flu vaccine in a year, while Hualan said it can make 160 million doses. The United States expects to announce in about two weeks the initial results from tests of its vaccine, which is the same type as the Sinovac version, said Anthony Fauci, a doctor with the US National Institutes of Health. "From what I've seen and heard of the data it looks encouraging," Fauci said of Sinovac's trials. "This is very good news. Let's hope the material that we're using has similar results."

Villagers seize sewage plant as evidence in pollution row - Villagers Quanzhou, Fujian, claimed a temporary victory against a wastewater treatment plant which they believe to be the source of local pollution problems.

Wrangling over the troubled global economy, climate change and security hot spots will test sometimes unsteady Sino-US relations the rest of this year, Washington's new ambassador to Beijing said yesterday. A week and a half into his post, Jon Huntsman said global, big-picture issues were coming to define relations between Washington and Beijing. At the top of US President Barack Obama's instructions to him, he said, were shoring up the world economy, dealing with regional security problems such as Iran and Pakistan, and securing an agreement on reducing greenhouse gas emissions to pave the way for a new global warming treaty. Both governments will have ample opportunity to air their positions, from attendance by President Hu Jintao at a summit of big economies in Pittsburgh this month to Obama's planned Beijing visit in November and meetings of officials in between, Huntsman said. Friction looms on trade disputes, including a White House decision on whether to impose punitive tariffs on surging imports of Chinese tyres. "We'll put to the test the durability of the US-China relationship over the coming months," he said. "We don't always have interests that precisely converge, but I think increasingly the relationship recognises that if the two parties aren't going to get serious about solutions then there likely won't be solutions any time soon." The assessment underscores the Obama administration's emerging strategy in dealing with a suddenly powerful China: respecting Beijing's newly influential position and encouraging the often prickly communist government to assume responsible leadership on global issues. Huntsman - Republican governor of Utah before being named ambassador by Obama, a Democrat - described relations as more broadly based than at any time since diplomatic ties resumed 30 years ago. For much of that time, the 49-year-old ambassador has been personally involved with China. A Putonghua speaker from his days as a Mormon missionary in Taiwan, he has also served as a deputy US trade representative and ambassador to Singapore. One of his seven children, a 10-year-old adopted from the eastern city of Yangzhou, was excited to be back in China, he said. "She has grown up in the United States but also recognises what it means to be Chinese." In meetings with Hu last week and Foreign Minister Yang Jiechi yesterday, Huntsman said he sensed a willingness to deal with disputes frankly and ensure disagreements did not undermine overall ties. "There's a desire to engage in forthright conversation," Huntsman said. "I think that's a sign of a mature relationship." But when he raised human rights last week with the Sichuan governor, he said he was rebuffed. Building up fragile relations between the US and Chinese militaries, and restarting the on-again, off-again dialogue on human rights, were among the benchmarks the ambassador has set as key tasks. His ties with China go beyond his official biography. When he was 11 in 1971 visiting his father, who was an aide in the White House, he said he carried national security adviser Henry Kissinger's briefcase to his waiting car when he left on a secret visit to Beijing that restarted relations. "I asked him where he was going. He said, `Please don't tell anyone. I'm going to China'," Huntsman said.

China's total telecom revenue reached 1.4 trillion yuan (HK$1.59 trillion) in the first seven months of the year, a 12.2 per cent rise over last year.

Country Garden Holdings yesterday became the first Chinese company to tap the junk-bond market since the outbreak of the financial crisis, raising US$300 million from a five-year, high-yield bond issue, according to investors and fund managers. The developer hired JP Morgan as sole book runner on the transaction, which opened for investors on Tuesday and closed yesterday. The order book amounted to US$800 million, helping to tighten the price of the bond at a yield of 11.75 per cent, the low end of the indicative yield price that went as high as 12 per cent, people close to the transaction said. Guangzhou-based Country Garden had set up a number of one-on-one interviews with more than 60 potential clients since last week to secure enough orders for the bond issuance and received a modest response from professional investors. "Hedge funds and money investors are the biggest buyers with around a 45 per cent contribution, while insurance companies, private clients and commercial banks took on the remainder," according to a person familiar with the bond issuance. "The deal was completed within two days, compared to the usual practice of at least one to two weeks, reflecting that investor interest has been returning to good quality issuers," the source added. Apart from Country Garden, developer Henderson Land Development (SEHK: 0012) was also said to soon be tapping the international bond market for at least US$500 million. However, its bonds are likely to be investment grade. The developer met more than 20 investors yesterday in order to collect opinions about a proposed bond issue, according to a fund manager who attended the meeting. "That's a non-deal meeting but everybody knows they want to raise new funds through a bond issuance," said the fund manager. The net proceeds from the bond issue will be used to fund the repayment in full of the company's US$35 million revolving loan facility with Citic Ka Wah Bank. Part of the proceeds will also fund existing and new property projects, including construction costs and land premiums, and for general working capital. "The response is not bad if the bond is fully subscribed given the uncertain environment," said David Ng, the head of regional property research at Royal Bank of Scotland. The stock market has reacted negatively amid rising concerns over the central government's move to tighten monetary policy, Ng said. Moody's Investors Service yesterday assigned a rating of Ba3 to the bonds with a negative outlook, while Standard & Poor's assigned a BB issue rating on CreditWatch with negative implications. "Country Garden's Ba3 corporate family rating reflects its large size and extensive experience in suburban property development in Guangdong province," said Peter Choy, a Moody's vice-president and senior credit officer. "In addition, its low land costs and pricing flexibility have also resulted in stable sales performance through the down cycle. The proposed bond issuance will also improve its near-term liquidity profile." The outlook reflects Moody's expectation that Country Garden is still struggling to establish a track record with projects outside Guangdong. Higher ratings are unlikely in the near term given the negative outlook.

Wu Bangguo (L), chairman of the Standing Committee of China's National People's Congress, meets with President of the Council of State of Cuba Raul Castro Ruz in Havana, capital of Cuba, on Sept. 2, 2009.

Sept 3, 2009

Hong Kong: Senior US scientist Professor Tony Chan Fan-cheong became president of the Hong Kong University of Science and Technology yesterday, and echoed the views of his predecessor, Paul Chu Ching-wu, that the city would invest more in technology. The 57-year-old born in the city said he was honoured and excited at the posting and that the day marked a very emotional homecoming. He said in his welcoming speech it was almost impossible to fill the shoes of his predecessors, Chu and Professor Woo Chia-wei, who had put the university on the world map. He knew he could count on the support of his vice-presidents, deans, faculty members and staff to drive the university to great heights of achievement. "Together as a team we will continue to build it into an institution that we and future generations can be proud of," he said. World attention was focused on China for its immense market and cheap labour, and its inspiration, talent and innovation. Hong Kong was in a unique position to take part in this spectacular growth, spearhead the "knowledge revolution" and nurture new talent, he said. "What other place in the world offers more exciting opportunities for growth and change than Hong Kong? And what other place to try out new ideas than this university?" Two years ago, a mainland research student at the university committed suicide, and it was dubbed the "University of Stress and Tension". Chan said he hoped to turn it around to become the "University of Success and Triumph". He has a background in mathematics, computer science and engineering. He was assistant director of the US National Science Foundation, overseeing the mathematical and physical sciences directorate, and managing about HK$10 billion in annual research funding - about five times that of HKUST. He was also dean of physical sciences at the University of California, Los Angeles. Chan received his primary and secondary education in Hong Kong, before furthering his studies in the US. He received his bachelor's and master's degrees in engineering from the California Institute of Technology and his PhD in computer science from Stanford University.

Hong Kong’s first post handover Chief Justice Andrew Li Kwok-nang announced on Wednesday that he planned to take early retirement on September 1 next year. “My early retirement will be conducive to orderly succession planning in the judiciary in the coming years,” he said. “By August 31, next year, I would have completed 13 years service as Chief Justice and I consider it is appropriate for there to be a change in the leadership of the judiciary after such a period,” he said. “I am looking forward to spending more time with my family and pursuing personal interests,” said Li, who did not elaborate further. Li, 60, said his term had originally been scheduled to end by December 2013. He said he had written to Chief Executive Donald Tsang Yam-kuen to give notice of his early retirement. Li said the greatest honour for him was being the first post-handover chief justice. He said he had “absolute confidence” in Hong Kong’s independent judiciary. Chief Executive Donald Tsang Yam Kuen said he had accepted Li’s early retirement, but had still tried to persuade him to stay. Tsang praised Li for his contribution to the city’s legal system. “I have asked the judiciary to activate the procedures to fill the vacancy... in accordance with the Basic Law and other relevant legal provisions,” Tsang said. “I trust that Chief Justice Li will work closely with the Judicial Officers Recommendation Commission in the next few months to prepare for the selection of his successor,” he added. Li was appointed as a deputy-high court judge in 1991 and became an at-large member of the Executive Council in 1992, when Chris Patten was governor. He presided over some important rulings, including the right-of-abode case, which was overturned by the standing committee of the National People’s Congress a decade ago. Li told reporters on Wednesday the case was “a very challenging episode”.

China: Guangzhou has sent a warning to cadres seeking to flout the one-child policy by having a second child in Hong Kong by sacking two district officials. City family planning officials met on Monday to formulate new ways to ensure the policy was strictly adhered to - particularly among cadres themselves - given Guangzhou's proximity to Hong Kong. The two officials were from Tianhe district , but their names and positions were not revealed. While the meeting was primarily aimed at restricting second children, officials also outlined incentives for parents to have their allocated child. Urban residents would be given 150 yuan (HK$170) per month after the birth of their child, while rural residents would receive 80 yuan per month, which would rise until it was in line with the urban subsidy. Easing travel visa restrictions in recent years have prompted well-off couples in Guangdong to give birth to their second child in Hong Kong. The only requirement for mainland couples is to book a hospital bed in the first 28 weeks of the mother's pregnancy. This is to ensure local women receive priority and avoid straining the health system. The penalty for Guangzhou couples who have a second child is between 150,000 and 300,000 yuan. Couples could escape the penalty if the child was born in Hong Kong. But they would have to pay extra for education and health care. At the meeting, Chen Xiaodan , deputy head of Yuexiu district, admitted many couples had a second child in Hong Kong, the Guangzhou Daily reported. Professor Zhou Xiaozheng , a prominent sociologist at Beijing's Renmin University, criticised ongoing attempts to prevent people from having a second child. "Guangzhou people are quick to come up with solutions and it is also easy for them to visit Hong Kong. The practice [of giving birth in Hong Kong] hasn't spread to northern China," he said. "I'm sure [sacking the two cadres] would be effective in stopping officials from going to Hong Kong to have their second child... But it is not going to stop regular couples. "The one-child policy is absurd because it violates basic human rights, and it reinforces the country's ageing population." In July, Shanghai became the first mainland city to encourage couples to have a second child after concerns over its demographic make-up.

File picture of an actor clad in a Batman costume greeting locals after the opening of the Warner Bros studio store in Shanghai> A report on Wednesday said cash-strapped Hollywood studios are looking to China and India for finance. Disney’s US$4 billion purchase of Iron Man moviemaker Marvel Entertainment signals a possible wave of media industry consolidation, but the cash to do deals may come from India or China, not Hollywood or Wall Street. Even before Walt Disney and Marvel Entertainment made their announcement on Monday, Hollywood watchers said Indian firm Reliance ADA Group’s recent US$325 million investment in Steven Spielberg’s DreamWorks movie studio was a sign that opportunity exists for similar deals. As the recession took hold in late 2007, Hollywood saw financing from US hedge funds and banks dry up, and experts say Indian and Chinese firms are now in a better position to invest. For its part, Hollywood needs overseas cash to continue expanding globally where growth opportunities are strongest. “If you have capital to invest, you can probably cut a better deal now than any time in the last ten years,” said Larry Gerbrandt, principal at consultancy Media Valuation Partners. “A lot of Indian and Chinese companies have excess capital these days and Hollywood, aside from the fact there’s a certain glamour factor, those [Indian and Chinese] markets also need content, so there’s interesting deals to be made.” Sky Moore, an attorney who worked with Reliance as it put together the DreamWorks financing package, said a bigger deal could be in the offing within two years. “I think the bigger move is buying a studio, and I don’t know if it will be [a company from] India or China, but I think somebody is going to buy a studio,” Moore said. The Disney/Marvel deal fuelled speculation DreamWorks Animation SKG, maker of the Shrek movies and a separate company from DreamWorks Studios, could be next on the acquisition target list because of its solid position in the marketplace and focus on the lucrative family market. Moore and Gerbrandt also named Metro-Goldwyn-Mayer as a potential acquisition target, although they said they had no specific information of any deal in the works. Rumors of MGM’s potential sale have surfaced for years. The storied Hollywood studio faces looming payments on US$3.7 billion of debt from a 2005 buyout of the firm, and earlier this week it replaced its CEO and hired a turnaround expert. Chinese film studios are strengthening ties with their peers across the Pacific. The Huayi group, which Morgan Stanley called “China’s Warner Bros for tomorrow”, has said it is seeking capital to expand and has developed movies with Hollywood majors such as Sony Pictures. Its larger rival, The China Film Group, is reportedly keen on developing projects in the United States as well. India’s expanding reach into Hollywood has included Reliance’s purchase of about 50 US theatres and Indian entertainment company UTV’s investment of tens of millions of dollars over the last three years in several movies, including The Happening and The Namesake, Moore said. “It’s not about bringing Bollywood to Hollywood, it’s about mainstream worldwide English-language entertainment,” he said. Hollywood studios have also made big investments in India. Warner Bros, a division of Time Warner Inc, has signed multi-picture deals with Indian companies People Tree Films and Ocher Studios. Twentieth Century Fox, a division of News Corp, has started a joint venture with Asian broadcaster Star to create films for India under the name Fox Star Studios. Foreign investment in Hollywood is nothing new, of course. In the 1990s, German tax credits spurred production of US movies, and before that Japan’s Sony in 1989 bought Columbia Pictures. Sony also has a stake in MGM. David Molner, managing director of Screen Capital International, a media and entertainment financing firm, said that absent foreign investment, Hollywood could simply have to endure a slowdown due to lack of capital. “Either the Asians lead the pack or we have a lull,” he said. “Mostly because they’re probably going to be the fastest out of the blocks as the economy recovers.”

A lab worker check chicken eggs that are being used to develop H1N1 flu vaccine at Shanghai Institute of Biological Products. Reports say mainland will soon approve domestically developed swine flu vaccines that manufacturers say can protect people against the virus with only one dose. China will soon approve domestically developed swine flu vaccines that manufacturers say can protect people against the virus with only one dose, an encouraging development for health officials racing to prepare for an expected spike in cases this winter. Many health authorities are assuming two doses of vaccine are necessary while they await the results of trials by drug makers around the world to determine the appropriate dosage. “Everybody is desperately hoping that one will do because then that’s much easier to administer,” said Jodie McVernon, a vaccine expert at the University of Melbourne, who has not seen the trial results from the mainland but who is involved in Australian trials of swine flu vaccines for young children. The State Food and Drug Administration said on its website it will make a decision this week on approving two vaccines that completed clinical trials last month and passed reviews by panels of about 40 experts. Four other vaccines are being reviewed, it said. The vaccine makers, Sinovac Biotech and Hualan Biological Engineering, said the clinical trials show their products are effective in single doses when used on people aged three to 60 years. More than 3,000 people participated in the trials. Sinovac says it has the capacity to produce up to 30 million doses of swine flu vaccine in a year while Hualan said it can make 160 million doses. In about two weeks, the US expects to announce initial test results from its vaccine, which is the same type as the Sinovac version, said Dr Anthony Fauci of the US National Institutes of Health. “From what I’ve seen and heard of the data it looks encouraging,” Fauci said of Sinovac’s clinical trials. “This is very good news. Let’s hope the material that we’re using has similar results.” Stockpiling vaccines is mainland’s latest move in its aggressive approach to contain the spread of swine flu in the country. It has quarantined travelers on suspicion of contact with infected people and ordered schools to test students’ temperatures. The Health Ministry says around 3,700 cases of swine flu have been confirmed on the mainland – none fatal. Mainland aims to have enough swine flu vaccine for 5 per cent of the public by the end of the year, and although health officials have not released detailed vaccination plans, they have said health workers, public service workers and students are priority groups.

China companies joining the line for share offerings in Hong Kong continued to grow on Wednesday with two more firms eyeing IPO in the territory. Reports said that industrial gas provider Yingde Gases and wind power producer Xinjiang Goldwind Science & Technology were joining the already crowded group of firms readying their initial public offerings. Xinjiang-based wind power producer Goldwind Science & Technology plans to float shares worth about US$1 billion on Hong Kong’s main board, with an eye toward expansion, according to a company statement on Wednesday and Reuters. Goldwind will issue shares of no more than 15 per cent of its enlarged equity capital after the Hong Kong share offer to overseas institutions, corporate and individual investors, it said in a filing to the Shenzhen Stock Exchange. Goldwind now has total capital of 1.4 billion outstanding shares. Calculating from the base, the company could issue up to 242 million shares in Hong Kong. The company said it could also exercise a 15 per cent over-allotment option in case of strong demand, and that could bring its total Hong Kong issue to as much as 278 million shares. Based on Tuesday’s close of 27.57 yuan (HK$31.33) for Goldwind’s yuan-denominated A shares listed in Shenzhen, its Hong Kong offer could raise a maximum 7.66 billion yuan, though A shares listed in the mainland often enjoy premiums against H shares for the same companies listed in Hong Kong. Goldwind is the first company listed in Shenzhen’s Small and Medium Enterprise Board that has unveiled a plan to go public in Hong Kong, state media said. The Hong Kong offer would be completed within one year after gaining shareholders’ approval, Goldwind said in the statement, without giving a specific timetable. Proceeds would be used to fund three wind power projects in the country and supplement the firm’s working capital, it added. Yingde Gases plans to raise up to US$300 million in an initial public offering in Hong Kong, competing with other listing hopefuls, a newspaper report said on Wednesday. A stock exchange hearing on the listing of Yingde Gases will be held on Thursday and trading in the shares could start by the end of September, Hong Kong Economic Times reported, citing market sources. Morgan Stanley and Goldman Sachs are handling the deal, the report said, giving no further listing details. Headquartered in Shanghai, Yingde Gases specialises in the construction, production and operation of industrial gas plants and also invests in them. According to its website, it delivers liquid gases and services to a range of industries including iron and steel, chemical and petrochemical and energy. ( http://www.yingdegas.com/english/index.html)

China's State Council, the Cabinet, announced Wednesday a plan to push forward a pay for merit pay system in health units and other public-sector organizations to stimulate workers' enthusiasm.

Wu Bangguo (L), chairman of the Standing Committee of China's National People's Congress, is welcomed upon his arrival at the airport of Havana, Cuba, Sep. 1, 2009. China's top legislator Wu Bangguo arrived in Havana on Tuesday afternoon for an official visit to Cuba at the invitation of President of the Cuban National Assembly of People's Power (CNAPP) Ricardo Alarcon de Quesada. In a written statement released at the airport upon his arrival, Wu, chairman of the Standing Committee of China's National People's Congress, highlighted the rapid growth of the China-Cuba relations, noting that the growing bilateral cooperation has already brought concrete benefit to the two peoples.

Sept 2, 2009

Hong Kong: The total value of retail sales fell 5.5 per cent year-on-year in July to HK$22.8 billion, new statistics released on Tuesday showed.

Founders of defunct Oasis Hong Kong Airlines were declared bankrupt by a High Court judge yesterday over multimillion-dollar debts owed to three creditors.

Bank of East Asia (SEHK: 0023) said yesterday it plans to hire 120 new employees, becoming the latest lender to add to its ranks on the expectation of a stronger economy in the second half. HSBC (SEHK: 0005) last month used recruitment events to look for 100 new staff for its personal wealth management business, while Standard Chartered Bank (Hong Kong) is recruiting 100 new employees. The moves come after more than 1,000 bank staff in Hong Kong lost their jobs in the past 12 months because of the financial crisis. Adrian Li Man-kiu, a deputy chief executive of BEA, said the sale of investment products had fallen off after the collapse of the Lehman Brothers minibonds, but that the sale of unit trusts had picked up in the past two months. "We are optimistic [about the economy] for the second half," he said. On Saturday, the bank will hold a recruitment day at BEA Tower in Kwun Tong. Meanwhile, tighter regulatory requirements on the sale of investment products have led to a longer sale process - another reason the bank needs to hire more staff. Banks are required by regulators to make more detailed risk presentations to customers, record sales activities and even separate their traditional banking services and sale of investment products. The new rules are designed to avoid a repeat of the controversy over the sale of Lehman Brothers-linked minibonds. Li said the bank did not lay off any employees last year but had natural attrition of about 100 people. Its staff currently number about 4,000. Kenny Tang Sing-hing, the head of research at Redford Securities, said both the stock and property markets rebounded this year and the economy was not as bad as expected. All this will prompt more demand for loans and investments in the second half, which will lead banks to hire. Li hoped the bank's retail earnings, which fell in the first half, would rebound in the second. Meanwhile, he also expected the bank to see high single-digit loan growth in the second half of the year given the improved economy. The bank will look at expanding via mergers and acquisitions and had considered buying the Hong Kong card business of America International Group but was unsuccessful. Meanwhile, Guoco Group (SEHK: 0053) increased its stake in BEA to 7.02 per cent from 6.95 per cent on August 27, according to a filing with the Hong Kong stock exchange. "We welcome anyone buying a stake in BEA," Li said. He did not comment on whether the Li family would insist on holding more than 20 per cent in the bank to secure its position as the largest shareholder. BEA rose 4 per cent yesterday to close at HK$26.

China: SHSBC (SEHK: 0005) ’s China Purchasing Managers’ Index (PMI) rose in August to a 16-month high of 55.1, from 52.8 in July, as a jump in both output and new orders offered further evidence that the recovery in industry is gaining traction. It was the fifth month in a row that the index, compiled by British research firm Markit and formerly sponsored by Hong Kong brokerage CLSA, has been above 50. A reading above that level indicates expansion in the manufacturing sector; a figure below 50 indicates contraction. Production surged, with the seasonally adjusted output sub-index leaping to 58.4 from 54.6 in July, a reading that has been surpassed only once in the history of the survey – in the inaugural PMI report issued in April 2004. Demand was strong both at home and abroad. The new orders sub-index rose to near a series high and the new export orders sub-index hit a 26-month high, implying external demand is stabilizing or even starting to recover. The rise in the index showed the strong momentum behind mainland’s recovery, Qu Hongbin, chief China economist with HSBC in Hong Kong, said. “With the construction works being implemented at full speed to generate demand for industrial goods, domestic demand has been substantially lifted,” he said. The strong result is likely to reinforce confidence in a recovery driven largely by the 4 trillion yuan (HK$4.5 trillion) government stimulus program and ultra-loose monetary policy. Doubts about the solidity of the rebound emerged following July economic figures that, while strong, were less robust than expected, and were stoked by worries the central bank would pull hard on the reins of credit following record first-half lending. “The Chinese manufacturing sector is likely to see further improvements in the coming months, adding fuel to overall growth recovery,” said Qu. The PMI has risen by nearly 13 index points since the start of the year and compares with a low of 40.9 hit in November last year.

PetroChina (SEHK: 0857) is set to pay C$1.9 billion (HK$13.43 billion) for a 60 per cent stake in two planned Canadian oil sands projects, mainland’s biggest investment yet in one of the world’s largest untapped oil regions. PetroChina, the world’s most valuable oil company, has signed an initial agreement to take majority control of the proposed MacKay River and Dover oil sands projects owned by Canada’s closely held Athabasca Oil Sands Corp (AOSC) properties that could eventually produce as much as 500,000 barrels per day, the Canadian company said overnight on Monday. “They obviously see a lot of upside,” Sveinung Svarte. AOSC’s chief executive, said in an interview. PetroChina’s international arm will also provide some financing for AOSC, which controls about 1.3 million acres of oil sands properties in the Canadian province of Alberta. “PetroChina is probably looking to lock in a sizeable position in the oil sands,” said Chris Feltin, an analyst at Tristone Capital. “But it’s going to take a long time to develop Athabasca’s projects.”

United States investment bank Morgan Stanley has agreed to sell its Shanghai serviced apartment block Shama Xujiahui for about 780 million yuan (HK$885.3 million) in the latest sign that international funds are cashing in on the Hong Kong and mainland market recovery. Morgan Stanley Real Estate, a unit of the bank, is completing the sale of the 219-unit Shama Xujiahui in the financial hub to a local investor, a person familiar with the deal said. That translates to a return to Morgan Stanley of between 29,000 yuan and 30,000 yuan per square metre, against a cost of 24,000 yuan per square metre listed in the sales document, said a person who had shown interest in the project and read the bidding document. Morgan Stanley bought the property in early 2007 when market sentiment was strong, but given the holding period, the company had not made much money from the deal, the person said. The sale comes shortly after the investment bank sold an office block, the Exchange, at 1486 West Nanjing Road in the core business area of Shanghai. Recent activity showed that foreign funds were ready to sell projects in which they invested three to five years ago, said Albert Lau, the managing director of property consultants Savills Shanghai. The funds were taking advantage of the improvement in market sentiment this year, as well as the increase in liquidity, Lau said. He expected more international funds to take profits in the months ahead to release capital that they could invest in other markets. Grosvenor Group, a London property investment group, has sold almost all of its 28 duplex units in Lakeville Regency by strata title at an average price of 100,000 yuan per square metre, according to Lau. The fund bought the assets from Shui On Land (SEHK: 0272) in September 2007. Macquarie Global Property Advisors, a private equity real estate fund management company of the Macquarie financial services group, is selling its retail and office spaces at Grand Millennium Plaza in Sheung Wan. Eleven floors have so far been sold. Goldman Sachs is also rumoured to be in talks to sell its office building in Beijing, also known as the Exchange, to Bank of China, one of the Big Four state-owned banks, for more than 900 million yuan. According to the marketing brochure for the Shama Xujiahui, the serviced apartment block comprises 219 flats with one to three bedrooms and duplex layouts, and an in-house fitness centre. The rent is about 195 yuan per square metre and the occupancy rate is about 65 per cent. The property attracted a number of offers from investors in Hong Kong, the mainland and international funds, but mainland investors bid the most aggressively.

Chinese Premier Wen Jiabao (R) meets with World Bank President Robert Zoellick in Beijing on Sept. 1, 2009. Chinese Premier Wen Jiabao said here Tuesday China would not change the orientation of its stimulating economic policy as the country is at a critical stage in the recovery of the economy. Wen said, when meeting with World Bank President Robert Zoellick, that China's government would continue to pursue proactive fiscal and moderately easy monetary policies. "We will not change the orientation of our policy," Wen said. Wen said China would fully implement and continue to enhance and perfect policy in response to the international financial crisis to achieve the goals of economic and social development.

The Oprah Winfrey Show added Chen Luyu to its list of famous co-hosts from around the world when the two talk show queens hooked up via satellite for the first time on Aug 26. "I was on Oprah's talk show because the world is focusing on China," says Chen, who was the first Asian host invited by Winfrey. "The cooperation enables Western audiences to know more about China. And I think that Chinese talk shows can be as vibrant as any other country." Chen took Winfrey and her US audience on a tour through her office, studio and dressing room as well as offering a special guided tour around Beijing's famous Houhai area and the capital's popular 798 art district. Winfrey was surprised about Chen's most memorable interviews including HIV victims and lesbian couples. "Chinese people have a wide understanding about Western countries, but it is not the other way around, which causes misunderstanding," Chen says. "I have interviewed more than 3,000 guests who come from various classes and working backgrounds. They tell their stories and my audience shows great respect." "I am curious and ask some tough questions. But I tend to be protective of my guests. If they don't want to answer those questions, that's fine." Known as "China's Oprah", the 39-year-old TV personality decided to model her show, A Date With Luyu, on the Winfrey's iconic show after visiting the US more than a decade ago. "It is flattering to be called China's Oprah, which means people say 'you are really good'," she says. Over the past 10 years of being a public face in a rapidly changing China, she has gone from interviewing celebrities to talking with people from all walks of life. Her guests share their story with a live audience of 300 and a viewing audience of more than 60 million every day. "It has become more than a show," Chen says. "Chinese audiences tend to be shy. I cannot expect my viewers to act like those on Oprah's show, who would shout and scream," she says. "But Chinese audiences can respond to the interviewees' stories and show me their smiles and tears." Chen's daily chat show is on Phoenix satellite television station, the first foreign-funded station to be beamed into the mainland. Winfrey was surprised by Chen's high ratings and expressed a desire to visit China and be a guest on Chen's talk show.

After years struggling to recruit top talent, the People's Liberation Army stands to gain from a gloomy job market by welcoming a huge influx of university graduates to its ranks. Quoting statistics from the Ministry of Education and the PLA's General Staff Headquarters, an army department in charge of recruitment, Xinhua reported that the PLA had signed up a record 120,000 fresh graduates this year. The world's largest fighting force, with 2.3 million personnel, has had a hard time recruiting enough young talent to turn it into a knowledge-based, hi-tech army. Now thanks to a weak job market in the wake of the global crisis, jobless graduates are lining up to join the force, which promises stable jobs and career opportunities. As a result of a rapid expansion of mainland universities in the late 1990s, a record 6.1 million college students graduated this year on top of 1 million jobless graduates from the previous year, according to official statistics. Statistics from the Ministry of Human Resources and Labor showed that 45 per cent of fresh graduates had a job by the end of May. In the same month, the PLA and the Ministry of Education launched the recruitment plan. Xiong Bingqi , a professor with Shanghai Jiaotong University, said job creation was one of the main aims in the plan. "It also means a large pool of college graduate recruits boosts the overall quality of army personnel," Xiong said. The PLA witnessed three waves of recruitment of intellectuals and college students in its 82-year history - in the 1930s, after the founding of the People's Republic in 1949, and in the 1980s. But overall it has been unable to shake its reputation as an unskilled, peasant army. The number of graduates recruited this year was 60 times the number in 2001. Professor Gong Fangbin , a proponent of graduate recruitment from the National Defense University, noted that the transformation of university from a place for the privileged elite to somewhere more widely accessible presented an opportunity for the army, Xinhua reported. "Even more important, the mass recruitment will cultivate a sense of responsibility among the general public and university students will also have a duty to safeguard national interests and shoulder the responsibility of national defense." To woo more college graduates, the central government promised to give students a tuition refund of up to 6,000 yuan a year and other preferential policies such as fast-track promotion within the army's complex rank structure. Wei Zhen , who manages Beijing Polytechnic College's career centre, said the package was attractive during a tough time in the job market, but some technicalities had hampered enthusiasm. She said while students graduated in July, they had to wait until December before army recruitment opened and they could find out if they were qualified. "Some students might be put off signing up because of the uncertainty, while others may get better offers before recruitment opened," Wei said. Wei explained that the 120,000 college students who signed up might have received some sort of assurance from the army, but they still had to wait until December to actually join. Only eight students from Wei's college signed up, but she hoped the government could overhaul the scheme to open the recruitment six months before students graduated instead of six months after.

Sept 1, 2009

Hong Kong: Undersecretary for Health Gabriel Leung on Monday warned of more swine flu outbreaks as the new school term begins on Tuesday and urged the people to remain vigilant.

Hong Kong handbag maker Vincent Chan made his first sale to a mainland customer less than 15 minutes after his store opened at a new Hong Kong-themed shopping zone that made its debut in the Sogo department store in Wuhan, Hubei, last week. Minutes later, Mr Chan sold two shiny clutch handbags, each for about 800 yuan (HK$908), to two nannies, who he said boasted that they now possessed the "modern and good foreign stuff with personality". The nannies were among some 30 shoppers queuing outside Sogo long before the store opened for business at 9.30am on Friday. They were welcomed by Mr Chan, who is among a group of 26 Hong Kong retailers at the venue. They are all pinning their hopes for improved sales and profit margins on the robust-yet-competitive mainland consumer market by selling their products in the 16,000 square foot shopping zone, called Ziti. "It was an encouraging start. The spenders here are very fashion-conscious and they are more concerned with style than price," said Mr Chan, general manager of Role Model Handbag and Accessories, which produces handbags in Guangzhou and Dongguan for export to Europe. "We have tried many ways to get into some mainland shopping malls but to no avail." He said Role Model had been in talks with Sogo for about a year, but had gone nowhere until he joined forces with a group of Hong Kong exporters in May. Ziti took about three months from planning to make its debut in Wuhan. It is a product of the recently founded Hong Kong Brand for China Market Association, an alliance of 40 Hong Kong exporters who have been hit hard by the global consumer slump and are seeking alternative markets. Ziti is eyeing the high spending power of young female shoppers, according to the mastermind of the venture, Andy Lee Chi-hung. The group pools together mid- to high-end Hong Kong brands ranging from apparel and accessories to shoes, and sells the products in designated areas of department stores in mainland cities. Mr Lee, chairman of the association, said the alliance represented a first effort at solidarity among Hong Kong exporters. "Exporters are specialists in designing and manufacturing products and meeting requirements of consumers in Europe and the United States," he said. "But retailing in the mainland market could present them with headaches. "The mainland market is too big to conquer for an exporter fighting with just his own hands." He said prospective mainland customers would frequently express an interest in placing orders with a Hong Kong manufacturer. They would suggest the business should be discussed over expensive lunches and dinners. Then they vanished after dining on expensive wines, shark's fin and abalone. The Ziti venture stemmed from a Hong Kong Trade Development Council-led trade symposium in Wuhan in May. During the trip, dozens of Hong Kong exporters and exhibitors were stunned by the craze local shoppers had for Hong Kong fashion and food. Mr Lee built connections with some of the mainland's leading department stores while setting up a 40-outlet fashion chain for the teenage brand Cocolulu over the past five years. He said the Ziti business model would be repeated in other cities. Following its opening in Wuhan on Friday and the Buffalo City shopping mall in Nanjing on Saturday, Ziti will open in Heping Plaza in Dalian and the Tianyi shopping centre in Ningbo in the next four weeks. Other openings, including Beijing, Shanghai and Guangzhou, are planned later in the year. Children's shoe maker Onlen Fairyland (HK) was a worried observer last year as shoe makers in the Yangtze River Delta folded one after another after the European Union imposed a 16.5 per cent anti-dumping duty on Chinese shoes. The deepening recession in the United States, higher costs, and tightened labor legislation served to make the challenge even greater. "We were really frightened by the chill in the shoe industry last year," the group's business promotion director Iris Lam said. "Now we are selling in Wuhan for the first time, but we feel comfortable because we are not battling alone and have a low chance of getting bruised." Onlen secured a good deal, she said. Sogo took about a 20 per cent share of profit from sales, which was lower than the industry's average of 30 per cent. In addition, it paid the bill for renovating the retail area. However, Mr Lee warned that the scheme was not meant to be a dumping ground for exporters' idle inventory.

The Chai Wan Factory Estate in Kut Shing Street, Chai Wan. Sites such as these may be converted to offer working space for artists. Chief Executive Donald Tsang Yam-kuen is expected to announce steps in his policy address to speed up the reuse of old industrial buildings in districts like Kwai Chung and Tsuen Wan to boost the development of creative industries. It is one of the measures being considered to develop the arts into one of the six new economic "pillars" to diversify the city's economy. A government official said that in his October 14 address the chief executive was likely to unveil a series of measures to help convert more rundown or underused industrial buildings to affordable working space for artists. "Underutilised industrial buildings in districts such as Kwai Chung and Tsuen Wan are possible sites for conversions," the official said. Another official said the measures would apply to both government and privately owned factories. The Housing Authority manages eight government factory estates in Kwai Chung, Kowloon Bay, Cheung Sha Wan, Chai Wan, Tuen Mun and Fo Tan, providing a total of 9,300 units. The Development Bureau is studying possible incentives to encourage the conversion and redevelopment of the buildings, including lowering the land premium. It might also lower the threshold at which the sale of a building can be forced, from 90 per cent ownership to 80 per cent. A nine-storey industrial building in Shek Kip Mei was transformed into the Jockey Club Creative Arts Centre last September to provide affordable working space for the city's artists. The project, the first of its kind in Hong Kong, was supported by the Baptist University and the club. The Planning Department is conducting a survey to look at the vacancy rate and possible uses of industrial buildings. The survey, which is scheduled to be completed in October, covers more than 80,000 units in various districts. A senior town planner said some projects, such as those setting up design centres and multimedia studios, were already allowed in existing industrial buildings in Tsuen Wan East and Chai Wan Kok without the need to gain Town Planning Board approval. The planner said the study's preliminary findings showed that some industrial buildings were still in use and converting them would take effort and care. "For example, industrial operations might pose fire risks to artists and other occupants if they are all in the same building. Sudden change of land use will also bring extra traffic to the district," the planner said. The other five pillars identified by the government-appointed Task Force on Economic Challenges are education, medical services, environmental industry, innovation and technology, as well as food safety and product testing.

Shui On Land chief financial officer Daniel Wan (left), chairman Vincent Lo and managing director of projects Louis Wong at the briefing. Shui On Land (SEHK: 0272) said yesterday it had imposed a three-year freeze on staffing and operating expenses and cut its dividend by 85 per cent after the developer registered a decline in its interim net profit. For the first six months to June, Shui On said net earnings dropped 45 per cent to 718 million yuan from a year earlier because of lower property sales and the absence of sales of equity interest in individual projects to strategic partners. Excluding the effect of a revaluation on investment properties, underlying interim profit plunged 91 per cent to 95 million yuan. The Hong Kong-based developer, which focuses on mainland real estate, reduced its interim dividend to 1 HK cent from 7 HK cents a year earlier. Chairman Vincent Lo Hong-sui said a study was conducted to examine the impact of the global economic downturn on the company and how Shui On's performance compared with its rivals. "Our operating expenses, such as head-office staff and management costs, are above the industry average," he said. Without disclosing any data, he said: "Ours are at an embarrassingly high level." The firm had 38 departments, said Mr Lo, referring to its complex corporate structure coupled with above-average salary packages. "But we do not have any retrenchment plan," he said. "Staff with good performance will still receive a pay rise." Cost controls could be achieved through cutting air travel and conducting more video conferencing. The bulk purchase of building materials could achieve economies of scale and lower development costs without sacrificing quality, Mr Lo said. The developer would also increase its annual production capacity of flats to one million square meters from 260,000 square meters last year, he said. "It does not make sense for us to build 200,000 sqmeters a year for a firm with a land bank of 13 million sqmeters," Mr Lo said. According to a survey of 20 mainland developers, he said Shui On's average selling price was 24,000 yuan per sqmetre, compared with between 3,000 yuan and 12,000 yuan being generated by others. Although Mr Lo, 61, has no plans to retire, he said he hoped to appoint a chief executive in two years through internal promotion, to share his workload. So far, the firm has generated three billion yuan in revenue from the sale of 280 units at Casa Lakeville. "It will be booked within this year," he said. Chief financial officer Daniel Wan Yim-keung said capital expenditure for this year would be two billion yuan and 3.7 billion yuan next year. Shares in Shui On Land fell 5.87 per cent to HK$4.49.

Thousands of past and present cleaners may be losing up to HK$10 million in retirement benefits because many employers chose to stay with the Occupational Retirement Schemes Ordinance when the Mandatory Provident Fund system was introduced in 2000, a union has claimed.

Bank of East Asia (0023) may be able to make its debut in the Shanghai stock market in the second half next year if it lists as a China unit spinoff, according to a senior executive. "It [the spinoff] could be regarded as a domestic unit listing and procedures would be much simpler," BEA deputy chief executive Brian Li Man-bun told a media briefing. The SAR's fifth-largest lender is still considering either a group listing or a China unit spinoff, Li said. However, he admitted a BEA China spinoff would benefit long-term capital- raising as the lender's mainland business is showing the fastest growth. In the first half, BEA China - incorporated in 2007 - contributed 40 percent of the group's pre-tax profit and about 35 percent of the loan portfolio. Li, who heads the China business, said he sees BEA China growing aggressively and that its loan growth could surpass those of its Hong Kong units and contribute more than 50 percent to the loan portfolio. But he gave no timeframe. In order to grow the mainland business, BEA China would expand its branches up to 100 by the end of 2010. It now has 71 branches and hopes to have 80 by the end of this year. Rising funding costs and a conservative lending policy in the first half saw slowing loan growth at the bank's China unit while pre-tax profit was down 13.1 percent from a year ago to HK$731 million. But Li said BEA's mainland lending has picked up since the second quarter through a diversified portfolio. "Full-year loan growth could be 5 to10 percent more than 2008," he said. To build its fee-income base, BEA is in talks with a mainland asset management firm and hopes to reach agreement on a possible joint venture this year, Li said. He said BEA has been eyeing possible acquisitions of mainland commercial banks but there are no targets yet. Li said the bank's overall business is picking up, as net interest margin was stabilizing in both the Hong Kong and China markets and the bank is boosting earnings to reduce the high cost-to- income ratio. "Business in the second half could recover and return to normal. We also aim to bring return on equity back to the 12-14 percent level in two years."

Air links between Taiwan and the mainland will get a dramatic boost today, more than doubling in number, unaffected by a controversial visit to the island by the Dalai Lama, a senior aviation official said in Taipei.

The Hong Kong Special Administrative Region government Monday announced that a deficit of 35.2 billion HK dollars (4.5 billion U.S. dollars) was recorded in the first four months of this fiscal year. The Financial Services and the Treasury Bureau of Hong Kong Monday said the government expenditure for the April to July period was 89.6 billion HK dollars with revenue of 54.4 billion HK dollars, resulting in the above deficit. While fiscal reserves stood at 459.2 billion HK dollars as at July 31. The deficit was mainly because some major types of revenue, like salaries and profits tax, are received towards the end of a financial year.

Hong Kong actor Fui-On Shing, 54, died of nasopharyngeal carcinoma at 23:45 Thursday evening, five years after being diagnosed with the disease. Shing reportedly spent his last minutes with his family and friends in Hong Kong Baptist Hospital, where several close friends in the entertainment industry, including Alan Tam, Eric Tsang, and Nick Cheung, also accompanied him, according to sina.com. In 2004, Shing was diagnosed with terminal stage nasopharyngeal and told he had only four months to live. But with his optimistic character, Shing prolonged his life by four years and seemingly created a miracle. Two years ago, he even shot two more films, namely "The Detective" and "Crazy Money & Funny Men." Shing, well-known among many Chinese born in the 1970s and 1980s, started his show biz career 31 years ago and often played the roles of gang leaders as he was usually described as a tall, muscular man. He was mainly known for supporting roles and had only held one leading role in his entire career in the movie "The Blue Jean Monster." Shing performed in more than 350 films and 600 soap operas episodes.

China: Positive changes have taken place in China's economy since early this year, especially in the second quarter, as the central government's stimulus package gradually begins to pay off. We have foreseen a clear and strong recovery. If the recovery can be sustained and strengthened, the world's third largest economy can grow at 8 percent or more for the full year. It should be pointed out, however, that the economic upswing is not yet solid or balanced. The recovery is unstable because investment in the real economy just began to pick up without full confidence; and the current increase in consumer spending, propped up by government policies, will be affected as the combined impact of unemployment and relative income decline looms large. The recovery is not balanced as is evident from the slow recovery of the export-oriented industries in southeastern coastal areas in contrast to the fast growth in infrastructure construction and related industries. Large State-owned enterprises and major projects financed or supported by the government enjoy abundant capital. But the majority of small- and medium-sized enterprises have difficulty in getting bank loans. The pattern of the recovery so far is not sustainable. Huge government fiscal investment cannot last long. The large amount of credit issued since the end of last year is an expedient measure and cannot be carried on. We should make energetic efforts to maintain stability and sustain the economic upturn, with emphasis not only on "quick" recovery but also on "sound" growth. Therefore, the following three concerns should be carefully addressed. The first is the relationship between investment growth and consumption increase. In recent months, although consumption kept growing with a good momentum, investment growth has played a leading role in the rebound process. From January to July, urban fixed-asset investments increased by 32.9 percent - a record high in recent years. We have realized the necessity for improving the consumption rate, which is a "slow variable" involving a series of structural and institutional changes. When the economy's downtrend stopped, the negative impact of excessive growth of investment stood exposed. Because measures to expand consumption will not take instant effect, we need to strive further to readjust the investment structure and channel government investment to the consumer demand, which, in turn, can contribute more to speeding up economic growth. The second concern is to coordinate the relationship between expanding domestic demand and stabilizing external markets. Expanding domestic demand is a long-term basic principle with which we have persisted. This crisis exposed our high reliance on external demand and severe impact of such reliance on our real economy. The rising savings rate and a corresponding decline in consumption rate in the US are structural factors that will diminish our external demand in future. So it is imperative to continue to boost domestic consumption as a long-term strategy, which would cushion the impact of plunging exports. Making good use of two markets and two resources is also a long-term principle we must adhere to, irrespective of the impact of the crisis. Strategic planning and arrangements should be established in order to adapt to the post-crisis international environment, make good use of external resources and markets, accelerate economic restructuring, transition and upgrading, and substantially improve international competitiveness of national products, industry and the overall economy. In the short term, a stable and rising external demand will play an important role in reducing uncertainty and excessive reliance on investment growth in the current recovery. The third concern is how to reach the targeted growth rate while creating enough jobs and ensuring social stability. In fighting the international financial crisis, we should give top priority to ensure economic growth, considering that a fall in growth rate would probably lead to closure of numerous firms, massive unemployment and social instability. The problem may worsen in the absence of a sound social security system in China. It is vital to achieve a certain level of economic growth. What's more important is to create enough jobs, ensure social stability and protect the environment. It should be noted that maintaining a steady and fast economic growth does not necessarily bring enough employment opportunities. Not many jobs will be created if more funds and resources are poured into capital-intensive industries, big businesses, and major projects or even some bubble-creating asset fields involving less labor demand. Therefore, more capital should be encouraged to flow into small- and medium-sized enterprises in the real economy where it can promote more employment and greater social stability. Excerpts from a lecture to the Standing Committee of the National People's Congress by the author, who is Vice-President and Senior Research Fellow, Development Research Center of the State Council.

Beijing said on Monday it has resolved tensions with Russia over the closure of a Moscow market that hurt thousands of mainland traders, saying merchants have retrieved most of their goods. The two sides also agreed to cooperate in regulating informal “gray market” trade, said Sun Yongfu, director the Ministry of Commerce’s Europe division. “It is basically resolved,” Sun said at a news conference. Police shut down the 300-hectare Cherkizovsky market on June 29 in connection with a smuggling investigation. Russian officials said the market was a hub for smuggling and criminal activity.

Myanmar refugees are seen around tents set up at a temporary refugee camp in Nansan in Yunnan province on Monday. The number of refugees crossing into China to escape fighting in Myanmar fell to a trickle on Monday as government forces appeared to have defeated an ethnic militia. Refugees who fled from Myanmar into the mainland after deadly clashes between junta forces and ethnic rebels said on Monday they were afraid to go home, despite media reports that the fighting had stopped. Officials in Yunnan province said at the weekend that 37,000 refugees had streamed across the border from the former Burma following the violence in Kokang, a mainly ethnic Chinese region of Myanmar’s Shan state. Eight rebel fighters and 26 security forces were killed in the clashes in Myanmar’s remote northeast, state media there reported late on Sunday, saying the unrest had ended. Two Chinese nationals were also killed, officials here said. But refugees interviewed by reporters in the town of Nansan, on the Chinese side of the border, said they remained unconvinced by the junta’s claims that calm had been restored in Kokang, a town of about 150,000. “They were shooting ordinary people. I saw it myself. We don’t believe what they say. We are afraid to go back,” said Li Jun, a 24-year-old farmer who lives with his parents in Kokang. “They say they will not shoot again but they will shoot.” Rows of blue tents have been set up in Nansan, nestled in rugged and lush mountains, to accommodate the refugees. Beijing has provided them with food and medical care – but has warned Myanmar to resolve the conflict quickly. Refugees were also being housed in several nearly half-finished buildings. A nearby car park was filled with cars bearing Kokang licence plates. Reporters were not allowed into the camp guarded by armed police, but were able to interview refugees outside the facility. The Xinhua news agency, citing Yunnan provincial police chief Meng Sutie, said more than 13,000 refugees were receiving government aid, while the rest were staying with friends and relatives. Kokang’s ethnic Chinese retain close ties with their kin across the porous border. State media here also reported that refugees had begun returning home on Sunday. A reporter witnessed small groups heading back through a border crossing on Monday, as well as the occasional person heading out of Myanmar. A Chinese clothing shop owner, who gave only his surname Chen, said he left Kokang with his wife amid the fighting. “We have heard that our stores were being looted and that they are attacking the Chinese stores. We don’t know what happened to our store,” he told reporters. His wife added: “We are afraid to go back.” A reporter for the Global Times an English-language state daily in the mainland, who crossed the border into Kokang at the weekend also reported Chinese-owned restaurants and stores had been looted. “We hope that Myanmar could ensure the security of the lives and property of Chinese citizens in Myanmar,” Meng was quoted by Xinhua as saying. Beijing is one of the few allies of Myanmar’s isolated junta, which is under US and EU sanctions. The mainland provides the ruling generals with military hardware and is a major consumer of the country’s vast natural resources. Few details have emerged about the clashes, which violated a 20-year ceasefire and prompted fears of a civil war. Ethnic Kokang army leader Peng Jiasheng said in an interview at the weekend with the Global Times that he had not surrendered, and regretted signing a peace deal with the junta. “The central government has broken its promises,” Peng told the newspaper. The Washington-based US Campaign for Burma said about 7,000 troops remained in Kokang and were in control of the area. The rights group also reported that 700 rebels had surrendered in China, but that could not be confirmed. Yao Fu, a 46-year-old doctor who opened a hospital in Kokang about 10 years ago, described the situation in the town last week as “very desperate”. “The Burma army had come in and started to fire on rebels... The Burmese military also was attacking Chinese businesses,” Yao said. “I’m a Chinese citizen, I’m a patriot, and I love my country. We want to know what’s going on.”

Vice-Premier Wang Qishan has been put in charge of a task force to make the yuan a currency for international trade, an experiment in which Hong Kong is expected to play a crucial role, according to a government economist. People's Bank of China vice-governor Hu Xiaolian has been appointed to head the task force's research team, said the economist, who has been briefed on the plan. The task force will include officials from six central agencies - the central bank, the ministries of finance and commerce, the China Banking Regulatory Commission, the General Administration of Customs and the General Administration of Taxation. "While Wang will be overseeing the program, Hu will become the point man in leading a research team to come up with proposals on the yuan's internationalization," the economist said. Mr Wang, whose portfolio is in foreign trade and finance, is also the Chinese point man in the Sino-US Strategic and Economic Dialogue with US Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy Geithner, making him the top man in China's economic relations with foreign nations. In a recent reshuffle, the State Council announced that Ms Hu, a vice-governor who had been the director general of the State Administration of Foreign Exchange since 2005, was released from the foreign exchange job. It was taken over by Yi Gang, another central bank vice-governor. The reshuffle was designed to enable Ms Hu to concentrate on the ambitious currency program. The new portfolio puts Ms Hu in charge of monetary policy concerning China's push to gain a bigger say in the world's currency system, including a recent pilot scheme to use the yuan for trade settlement with some countries, the economist said. Yi Xuanrong - a financial expert with the Chinese Academy of Social Sciences - said the leadership had decided the time had come "to establish a task force and research teams on the topic, though it might take time for its realization". "The program will also include measures to help Hong Kong develop as an offshore centre for the yuan, which is desired by both the central government and Hong Kong." The recession has encouraged Chinese officials to speed up the currency program. As the downturn erodes US influence, China is losing faith in the dollar and sees the time coming for the yuan to become a major world currency. The yuan is not convertible for purely financial purposes, ruling it out as a reserve currency for now, but China has started to carve out a bigger international role for it. Central bank governor Zhou Xiaochuan caused a stir at the London G20 summit in April by calling for the creation of a non-sovereign currency to replace the US dollar as the international reserve currency. Debate is heating up among policymakers about China's exposure to dollar-denominated assets as a result of the massive growth of its foreign exchange reserves, now at more than US$2 trillion. In the first stage, Beijing aims to push the yuan's evolution into a regional currency, with Hong Kong developing as an offshore centre. Last December, the State Council said Hong Kong and Macau would be permitted to use the yuan to settle transactions with partners in Guangdong and the Yangtze River Delta under a pilot scheme. In April, the council allowed exporters and importers in Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan to use the yuan in deals with Hong Kong traders. At present, trade between Hong Kong and mainland companies is cleared in Hong Kong using US dollars. Last year, trade between the two sides totaled US$203 billion. China is also expanding trade in yuan with some Asian and African countries, and in the past year, Beijing has signed currency swap agreements totaling more than US$100 billion with several countries that now hold part of their reserves in yuan. More are in the pipeline.

Farewell My Concubine director Chen Kaige, Crouching Tiger, Hidden Dragon star Zhang Ziyi and director John Woo were among the people honored at the government-organized Huabiao Film Awards in Beijing. Veteran action stars Jackie Chan and Jet Li and actor Chow Yun-fat also attended the biennial awards ceremony held by the State Administration of Radio, Film and Television on Saturday. This year's ceremony was especially star-studded because the booming mainland market is becoming increasingly lucrative to actors and directors from Hong Kong and Taiwan. Chen was named outstanding director along with Feng Xiaogang. Chen was honored for his biopic of late Peking Opera star Mei Lanfang, Forever Enthralled. Feng won for his war movie Assembly. Chen struck a patriotic note in his acceptance speech, shooting down recent speculation that he had become an American citizen. "I don't plan to become a foreign citizen, and I have never done so. I will work hard to spread Chinese culture as a Chinese national. This is called not forgetting your identity," Chen said. Zhang shared best actress honours with Fan Zhibo for her performance in Forever Enthralled. Fan won for the drama Emergency. Zhang Hanyu shared his best actor award for Assembly with Guo Jinglin, who starred in a biography of rice scientist Yuan Longping. Woo received the prize for best ethnic Chinese director from outside the mainland. The Hong Kong native returned from Hollywood to make the US$80 million, two-part Chinese-language historical epic Red Cliff. Hong Kong action star Donnie Yen was named best actor outside the mainland for playing Bruce Lee's kung fu master, Ip Man. Taiwan's Shu Qi won best actress outside the mainland for her role in Feng's romantic comedy If You Are the One.

Top Chinese legislator Wu Bangguo left Beijing Monday afternoon, kicking off his official good-will visits to Cuba, the Bahamas and the United States from Aug. 31 to Sept. 12.

 *News information are obtained via various sources deemed reliable, but not guaranteed

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