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Dec 30, 2009
Profits at mainland industrial companies returned to growth in January through November, ending a year of declines and offering clear evidence of a stronger recovery for the country's businesses. Industrial profit nationwide rose 7.8 percent in the first 11 months from a year earlier, the National Bureau of Statistics said yesterday. That marked a dramatic turnaround from a fall of 10.6 percent in the first eight months of the year, the last time the NBS conducted a nationwide survey. The NBS releases nationwide year-to-date profit data for February, May, August and November. Economists attributed the rise largely to a low base of comparison in the final months of 2008, when the world's third-largest economy was hit hard by the global financial crisis. "But we cannot ignore that the sequential growth rate has also picked up since April," said Gao Shanwen, chief economist at Essence Securities in Beijing. The energy and natural resources sectors, including power, steel and nonferrous metals, saw strong improvement on recovering demand and prices, chiming with other indicators to suggest that the economy's recovery is gaining momentum. Premier Wen Jiabao gave a cautious outlook for the domestic economy in 2010, saying Sunday it was too early to wind down the government's stimulus policies but that officials needed to be attentive to surging property prices and incipient inflation. Private mainland companies, and foreign-invested companies, saw the biggest profit rebound. Profit at private companies rose 17.4 percent from a year earlier compared with a rise of 6.6 percent in January through August. Dec 29, 2009
China and Hong Kong authorities are working on the possibility of setting up a mechanism to help Hong Kong individual investors win exemption from the 10 percent dividend tax requirement which took effect in January last year, sources said. Hong Kong Exchanges and Clearing (0388), the Hong Kong government and the State Administration of Taxation are among those discussing a new reporting system to waive the dividend tax for such investors who buy H shares and red chips, according to Sing Tao Daily, sister publication of The Standard. Individual investors in Hong Kong can be exempted from the tax if they prove and declare their shareholdings are solely personal investments, the sources said. The system under discussion was to set up a mechanism for individual investors to declare their holdings position and winning tax exemption once the declaration is confirmed by the mainland. According to mainland tax law, most Hong Kong investors are classified as non- individual investors and have to pay the dividend tax, as they hold their stocks in the form of nominee accounts through banks or brokerage firms. The State Administration of Taxation announced in 2008 that it would tax each enterprise and institutional investor 10 percent of their dividend income from Chinese stockholdings as part of Beijing's annual income. According to the statement, only individual investors can be exempted. The 10 percent dividend tax would be collected by the firm on behalf of their corporate and institutional shareholders. H-share companies started collecting the dividend tax in September 2008 while red chips began doing so in May. Secretive Swiss commodities trading company Glencore International may list in Hong Kong if it goes ahead with an initial public offering. Glencore, the largest commodities trading company in the world, recently completed a US$2.2 billion sale of bonds to institutional investors which are convertible into equity in the event of an initial public offering. Analysts say this, together with the type of investors, clearly indicates the company is contemplating a listing, and there has been speculation in British and Australian press that London would be the most likely venue but that Hong Kong is also an option. That would be a huge boost for the Hong Kong stock market and would encourage other resources companies to consider listing here. Should it seek an offering, the bonds would convert into Glencore stock, valuing the company at US$35 billion. Glencore owns 9.7 per cent of Russian aluminium company Rusal, which has been given conditional approval to list on the Hong Kong exchange, although the Securities and Futures Commission considers it "too complex" for retail investors and too risky for their participation. Glencore executives have no doubt been watching Rusal's progress through Hong Kong's listing process particularly as it is bigger and more complex than Rusal. The Glencore bonds have been bought by private equity firms First Reserve, BlackRock and Government of Singapore Investment Corp. Hong Kong-listed Zijin Mining Group (SEHK: 2899), China's third-largest copper producer, will buy US$200 million of the bonds subject to Beijing's approval. Glencore trades a huge variety of raw materials and owns energy and mining assets around the world. One of its key assets is a 34.5 per cent stake in coal mining company Xstrata. In addition it owns zinc mines in Peru and Kazakhstan, coal mines in South Africa, and smelts copper in the Philippines. It was founded in 1974 by billionaire commodities trader Marc Rich and was known as Marc Rich & Co. When he sold the company to management in 1994, it was renamed Glencore. Rich acquired notoriety in 1983 when he was indicted in the United States for tax evasion as well as illegally trading with Iran. He was pardoned by president Bill Clinton when he left office in 2001. Glencore chief executive Ivan Glasenberg managed Glencore International's Hong Kong and Beijing offices in 1989-90. For many years the company was a notoriously secretive organisation but is gradually becoming more open. This year it published earnings details on its website showing that turnover for fiscal 2008 was US$152.2 billion. Revenue for the first half of this year was US$45.2 billion compared with US$86.2 billion for the comparable period last year. Net income was more than halved, falling to US$1.1 billion from US$2.6 billion. Net debt fell to US$10.4 billion in the first half of 2009 from US$11.5 billion last year. The company has not said what it intends to do with the funds from its bond sale but analysts say the new funding would cover the cost of repurchasing the Prodeco coal mine, which it transferred to Xstrata last year.
China is likely to overtake Germany as the world’s largest exporter this year, despite a sharp fall in shipments as the global downturn took its toll, a high-ranking trade official has said. The country’s share of global trade is expected to exceed 9 per cent this year, up from 8.86 per cent last year, vice-commerce minister Zhong Shan said at a forum here on Sunday. “China will probably surpass Germany to become the largest exporting country,” he said, according to a statement posted on the ministry’s website. However, this year was a tough year for the Asian giant with full-year exports predicted to decline by 16 per cent on-year, Zhong added – the biggest decline in at least three decades, according to available ministry data. He blamed the drop on “severely weak international demand” and “rising trade protectionism”, adding the value of trade disputes brought against mainland in terms of potential losses doubled this year to US$12 billion. The country will face an “even more complicated foreign trade situation and more arduous tasks” next year given ongoing uncertainties in international demand and the stability of the yuan’s exchange rate, Zhong said. China’s trade is “big but not strong”, and the country must adjust its trade structure and beef up product quality and competitiveness to “realise … improvement in quality from an expansion in quantity”, he said. In the first 11 months of the year, the country’s exports were down by 18.8 per cent from the same period last year to 1.07 trillion dollars, official figures showed.
China Mobile (SEHK: 0941), the world’s biggest phone company by subscribers, said on Monday its deputy chairman is under investigation for unspecified offences, adding to a string of scandals at major state-owned companies in the mainland. Zhang Chunjiang is being investigated “due to suspected serious personal violations”, the company said in a statement issued through the Hong Kong stock exchange, where its shares are traded. It gave no details. A series of executives at major state-owned companies have been targeted for investigation of corruption and other offences that are fuelling public anger. Thousands of government and Communist Party figures are punished every year for corruption, and some are executed, but authorities have given no indication whether the problem is abating. In July, the former chairman of Sinopec (SEHK: 0386), mainland’s second-biggest oil company, was convicted of taking 196 million yuan (HK$221 million) in bribes. The following month, the former boss of the company that runs airports in Beijing and other mainland cities was put to death for taking bribes. Zhang is secretary of the party committee for China Mobile’s parent company, which gives him greater influence over the company than his corporate post. Such committees can dictate overall strategy for state-owned companies. Zhang joined China Mobile in May last year after serving as chairman of China Netcom (SEHK: 0906), a fixed-line carrier that was merged with another phone company in an industry overhaul last year. He also is a former director of the telecoms department of the ministry that oversees the industry. China Mobile reported a profit of 83.9 billion yuan for the first nine months of this year but said earnings growth was slowing due to competition. The company says it has 518 million mobile accounts. China needed to maintain a "moderately loose" monetary policy to boost economic growth despite early signs of inflation, Premier Wen Jiabao told state media yesterday. "Maintaining stable and relatively quick economic growth remains the most important task in our economic policy," he said. "Ending our economic stimulus policies too early could spoil all that has been achieved and even worsen the situation." Wen also reiterated his stance against allowing the yuan to appreciate against foreign currencies, saying it was important to maintain a stable exchange rate. The premier made the comments in a vidcast interview with Xinhua, during which he responded to questions the official news agency said had been posted by internet users. In the one-hour, 45-minute interview, Wen talked of his concerns about the economic situation over the past year and warned that it was still too early to say whether China had escaped the impact of the global financial crisis. Low international demand continued to have an effect on exports, he said, citing the export of Christmas gifts from Zhejiang province , down 28 per cent from previous years. Wen called on mainlanders to "stay strong to the last" on the "uneven road ahead". The mainland should "anticipate that inflation could occur", but he pledged to maintain the Consumer Price Index at a "reasonable" level to avoid accentuating the problems created by the "unfairly large" income gap. Wen said managing inflationary trends "creates a positive external environment for the economy, while at the same time protecting the interests of the people". He said he would continue to reject foreign demands that the yuan be allowed to gain in value, saying its stability was "conducive to international society". "I have said this to foreign friends before, I say on the one hand you demand for the renminbi to gain in value, on the other hand you use trade protectionism of all descriptions, the essence of which is really intended to control China's development," he said. "This could be an important topic we will have to deal with in our external economic policy next year." He did not specify which countries he was referring to, but the US and the European Union have repeatedly called on Beijing to relax its currency restrictions to allow a revaluation of the yuan. Wen's comments also closely reflected statements he made in Nanjing last month at a summit with EU leaders. However, Wen stressed the importance of building a positive relationship with other countries, which he said relied on three principles: trust, responsibility and co-operation. Back on the domestic front, the premier also announced a series of steps the central government proposed to prevent the property market from overheating. "This year the property market has experienced a relatively swift recovery," Wen said. "In fact in order to ensure that the property market can enter a healthy track, we first of all need to be clear about what the government needs to do and what the market needs to do."
Dec 28, 2009
One ticket won the first prize of HK$5 million in last night's draw. The winning numbers were 6, 17, 21, 27, 36 and 42. The extra number was 23. One ticket took the second prize of HK$1,051,600. Third prize paid HK$32,605.
A former HSBC senior executive has been jailed for a year and eight months for accepting a bribe equivalent to HK$468,000 from a client to approve loans totaling US$10 million (HK$78 million). The Hospital Authority should be more flexible with the special drugs on its drug list, a thalassaemia patients' group urged yesterday. Prescription guidelines allow patients to have special drugs only when they develop severe side effects from general drugs, Thalassaemia Association vice-chairwoman Sandy Wong Hang-yue said. Dr Ha Shau-yin, of the Children's Thalassaemia Foundation, said budget constraints had stopped doctors from prescribing a new drug that might work better. There are 378 patients with the blood disorder in Hong Kong. They need transfusions every month, but this can cause heart and liver failure. Most are given Desferal, a kind of iron-removing drug, through a pump for at least 10 hours, five or six times a week. Another drug - Ferriprox, taken orally - might lower immunity. Ha said more patients should be given Deferasirox, which claims fewer side effects. Up to September, only 12 had been prescribed the drug. Wong said most families could not afford Deferasirox, at HK$20,000 a month, five times more than Desferal and Ferriprox. It had been provided free as the first-choice drug in many countries, including Canada. Secretary for Food and Health York Chow Yat-ngok said this month that it was not listed as a general drug because its efficacy was not better than the other drugs, and that it might cause side effects in the liver. A Vietnamese court sentenced two Hong Kong and three mainland men to death by firing squad for trafficking nearly 8 tons of hashish in one of the country’s biggest drug hauls ever, state media reported on Saturday. The hashish – with a street value of US$90 million (HK$698 million) – was seized from two containers full of jeans on a ship that arrived in the northern port city of Hai Phong in April last year, the Tuoi Tre [Youth] newspaper reported. A Hong Kong-based ring planned to transport the drugs from Vietnam to China, it said. A court in the northern province of Quang Ninh, which borders China, sentenced the five men on Friday after a four-day trial. Vietnam has some of the world’s toughest drug laws. About 100 people are executed by firing squad each year, many for committing drug-related offences. The court ordered the hashish to be destroyed. More than US$180,000 and 19,758 pairs of jeans were confiscated, the newspaper said. Sentenced to death were Lu Mingcheng, 52, and Wan Huilan, 42, both from Guangdong province; Chan Kwok Kwong, 52, and Ngan Chiu Kuen, 42, both from Hong Kong; and Ieong Chi Kai, 52, from Macau.
China has earmarked 716.1 billion yuan (104.8 billion U.S. dollars) from the central budget this year for agriculture, rural areas and farmers, the Ministry of Finance said Friday in a statement. The weight of private enterprises in the overall economy is on the rise and that of State-owned enterprises (SOEs) on the decline, Ma Jiantang, minister of the National Bureau of Statistics, said on Friday. The number of private firms rose by 81.4 percent from 2004 to 2008 to reach 3.6 million and SOEs dropped by 20 percent to 143,000, Ma said at a press conference where China's second economic census results were released. China has made great efforts over the past 30 years to restructure its economy. It has gradually raised the proportion of private enterprises after the market-oriented reform began in the early 1980s. As a result, the private sector has contributed an ever-growing value to the country's GDP and provided most of the jobs. But in recent years, some major acquisitions have seen SOEs buying into private companies, sparking concern that the State may be strengthening its control over the private sector. Ma said the census figures do not suggest SOEs are buying into private enterprises. In terms of asset value, SOEs saw their proportion in the nation's total drop by 8.1 percentage points from 2004 to 2008 to 23 percent. In contrast, private enterprises' assets rose by 3.3 percentage points to 12.3 percent.
China health authorities have started treating severely infected swine flu patients with blood plasma donated by survivors - a therapy not yet proven to work but one that has shown potential to save lives. In many parts of China, government-run blood collection stations have been harvesting plasma from people who have high levels of swine flu-fighting antibodies in their blood, because they recently recovered from or were vaccinated against the virus. The plasma is being stored in preparation for transfusions for severely or critically ill patients. The treatment is based on the principle that transferring antibodies, the immune system’s search-and-destroy force, can help a patient fight the virus and recover faster. Because the approach is still being evaluated for safety and effectiveness, the World Health Organization has not recommended it. Any therapy involving blood transfusions risks introducing new infections of blood-borne diseases such as HIV, hepatitis and syphilis. Some patients could also develop allergic reactions. Evidence from cases of bird flu and the 2002-03 severe acute respiratory syndrome outbreak have shown promising results using plasma from recovered patients. Plasma therapy is also used to treat hepatitis B, rabies, and other infectious diseases. Concerns about resistance to antiviral drugs like Tamiflu have also driven interest in additional therapies, particularly in pandemic situations where hospital intensive care units come under strain from severe cases. It is not clear how many Chinese have received the treatment. Media in recent weeks have reported at least 10 patients have been treated this way, including a baby and a pregnant woman. Some health experts support China’s approach. Microbiologist Guan Yi of the University of Hong Kong co-authored a paper in the New England Journal of Medicine in 2007 about a bird flu patient who recovered quickly after being treated this way. “I think it’s a good strategy,” Guan said. In severe cases, the virus penetrates deep into the lungs and replicates in great amounts, which Tamiflu is ineffective in limiting, he said. “The best way to treat the severe patients is with neutralized antibodies, which are only found in people who have accepted vaccination or in convalescent plasma,” said Guan. Dr Xu Zhenqiu, who has used the therapy, said plasma treatment offers some hope. “It provides us with an alternative treatment when saving patients, which gives us more hope of saving lives,” Xu said in a telephone interview. The health ministry was cautious in stating its position on the therapy, saying more research was required. Other experts are not fully convinced of the treatment’s effectiveness. “I think it needs careful study,” said Dr. Frederick Hayden, a virus expert at the University of Virginia and a World Health Organization flu consultant. “I think it’s a very potentially important intervention, but there is insufficient information... to make a routine recommendation for care in seriously ill patients.” Mainland health authorities have appealed for donations of plasma and hundreds, if not thousands, of people have already done so, according to news reports. Blood supply safety is a perennial concern in China, where worries still persist despite strengthened controls in recent years on blood collection centers. China also banned blood sales in 2003 after it was discovered unclean blood-buying businesses had passed the HIV/Aids virus to thousands of people in the 1990s. Guan said though he supports China’s treatment strategy, he has urged the government to strictly regulate plasma donations. “My concern is they have no standard protocol. Different regions and different hospitals may be screening the blood differently,” he said. “I urge them to standardize the whole procedure.”
Chinese internet firms are eyeing more spin-off offerings after raising almost US$1.5 billion this year as they bank on strong foreign interest in high-growth mainland plays. Chinese spin-offs have prospered on the back of successful flotation such as Changyou's, but pricing issues and corporate governance remain key concerns for investors. Tencent Holdings (SEHK: 0700), China's largest internet firm, NetEase.com, the country's third-largest online games operator, and software developer Kingsoft (SEHK: 3888) Corp could be prime candidates to spin off business units, analysts said. "I see the trend continuing because, especially for gaming companies due to the intense competition on the ground, they need more resources to compete against one another," said Guo Chenggang, an analyst at JLM Pacific Epoch. Tencent and Kingsoft both denied any spin-off listing plans, while NetEase declined comment. The United States listing market has cooled since new issues began to pick up around mid-year, but market strategists expect demand to remain robust, although more selective, for China plays. "It's similar to the late 1990s when people felt like IPOs were almost uncashed lottery tickets. It turned out not to be true but for a while people would invest in anything," said Bill Buhr, a listing strategist at research house Morningstar. "Based on how well some of these early Chinese IPOs did, there might have been a little bit of that same thought process." Other firms to spin off units this year include CDC Corp, which listed CDC Software; Sina Corp's joint-venture listing of China Real Estate Information; and Shanda Interactive Entertainment's US$1 billion spin-off of online games unit Shanda Games.
Dec 26 - 27, 2009
For angry investors, the nightmare triggered by the collapse of US investment giant Lehman Brothers last year may be finally over after two banks offered to pay 80 HK cents for every dollar of their investment. The deal, which applies to 529 customers who bought a total of HK$264 million of Lehman equity-linked notes from Dah Sing (SEHK: 0440) Bank and Mevas Bank, is seen as paving the way for all affected customers to receive the same payout. The deal also has important implications for investors of other affected investment products, like Constellation Notes sold by DBS Bank, and Octave Notes, sold by 17 banks and designed by Morgan Stanley. So far, only investors of Lehman-related minibonds have been partially compensated. In a joint statement, the two banks said eligible customers who bought certain equity index-linked fixed coupon principal protected notes issued by Lehman would be offered 80 per cent of their original investment to settle their claims. This amounts to compensation of HK$211.2 million. Customers who have already settled with the banks will also enjoy the same terms at an estimated "topping-up" cost of HK$72 million. The two banks have already settled with 462, or 87 per cent, of the 529 customers. In these cases, the payouts ranged between 40 per cent and 85 per cent of their investment, Philip Khan, vice-chairman of the Alliance of Lehman Products Victims, said. The banks first started selling these notes on August 5 last year, six weeks before Lehman went bankrupt. Under the agreement, the banks do not admit any liability. The settlement offer was reluctantly accepted by many investors. Alison Hui Cho-wai, a housewife who was sold HK$500,000 of the notes by Dah Sing, said the compensation was marginally acceptable. The bank was remiss in selling the note to her just three weeks before Lehman collapsed and refused to let her cancel her order as rumours swirled of Lehman's demise, she said. "Selling the note is basically asking people to lend money to Lehman, which I would not do if I knew this was the case. I assumed the note had an underlying asset but the bank never mentioned to me that this was not the case. They just highlighted the point that the note's principal was protected," Hui said. Such notes allow investors to recoup their original investment after holding it to maturity, with additional returns depending on the performance of certain stocks during the period of time the note is held. However, since Lehman, which issued the notes, filed for bankruptcy and was unable to repay the principal amount, the notes became worthless. Other banks that sold the notes stopped short of endorsing the compensation offer. Standard Chartered Bank and Citibank, which sold such notes to more than 3,200 customers, declined to comment on the offer from Dah Sing and Mevas. "We do not offer across-the-board compensation. We will continue to handle each case on its individual merits, which may include a settlement to affected clients if we find evidence that we fell short of our standards," a Citibank spokesman said. Citibank said it stopped selling these notes in the middle of June last year, while such products were not available at Standard Chartered by the time Dah Sing and Mevas offered them. Choi Yiu-kwan, the outgoing deputy chief executive of the Monetary Authority, said the terms agreed with Dah Sing and Mevas did not necessarily mean similar deals would be struck with other banks. "This deal was brokered with the two banks. You cannot say that all other customers who bought these notes on or after August 5 last year will be offered the same terms to settle their claims. The circumstances of every sale by each bank are different," Choi said. Hong Kong investors lost billions of dollars on minibonds guaranteed by Lehman when the bank went bankrupt in September last year. Minibonds are not corporate bonds, but are high-risk, credit-linked derivatives. They are marketed as a proxy investment in well-known companies. Since the unprecedented debacle, disciplinary action has only been taken in one non-minibond case. The Monetary Authority says it has received about 21,800 Lehman-related complaints. About 16,700 cases have been dealt with or settled. Investigations into the remaining 5,000 or so cases are expected to be completed by March, Choi said. A total of 765 Lehman-related non-minibond complaints are currently under disciplinary consideration. A total of 334 non-minibond cases have been referred to the Securities and Futures Commission for action. So far, 24,419 of the 24,688 investors have agreed to settle their claims. The offer by 16 banks to repurchase soured minibonds from about 25,000 investors meant those who accepted the terms would recoup between 60 per cent and 70 per cent of their initial investments. Cheung Kong (Holdings) (SEHK: 0001), Sino Land and other major developers seeking to replenish their land bank may pay up to HK$13 billion in next week's auction of two luxury residential waterfront sites in the New Territories, analysts say. The two parcels of the same size in Tai Po will be auctioned on Monday. Each covers 2.09 hectares, the largest sites to be offered since September 2007, according to Lands Department records. Hong Kong is trying to ease a shortage in land supply and homes that has fuelled price increases of up to 30 per cent this year, sparking a public outcry over housing costs and prompting the Hong Kong Monetary Authority to warn the city might face "sharp corrections" in asset prices should fund flows reverse. "If you are running very low on inventories and aren't sure when the next site will be drawn, you'd want to seize on this auction and lock in the project," said Paul Louie, an analyst at Nomura Holdings. The two sites could fetch up to HK$6.5 billion each, said Alnwick Chan Chi-hing, an executive director at Knight Frank. Sino Land was the frontrunner to win the auction since the developer already owned three sites nearby, Louie said. Henderson Land Development (SEHK: 0012) was interested in bidding, spokesman Bonnie Ngan said, as are New World Development and KWah International Holdings. The auction was triggered in November when the Lands Department accepted a minimum bid of HK$7.208 billion or HK$4,995 per square foot for the plots, which were on the government's list of available sites. "These are choice waterfront sites, and given the low-density requirements, it should draw many builders to auction for it," said Alvin Lam Tsz-pun, an executive director at Midland Surveyors. The sites each have a gross floor area of 720,757 square feet. Lam forecasts the sites to be auctioned for a combined HK$11 billion, or HK$7,631 per square foot. Louie and James Cheung, a director at Centaline Surveyors, estimated the land could fetch HK$11.4 billion.
Shanghai's top transport official yesterday struggled to explain a subway collision and a series of breakdowns in the system that brought hours of traffic chaos to the city on Tuesday. Sun Jianping, director of the Shanghai Municipal Transport and Port Authority, admitted that the response from emergency services and transport officials was insufficient despite regular drills to prepare for just such a situation. The local media have demanded to know why passengers had to wait for three hours to be freed from one of the damaged trains, why there was an apparent lack of co-operation between government departments and why other travellers were given only minimal information about the disruption. Several newspapers also said the incident had raised doubts over the city's preparedness to cope with emergencies ahead of the Shanghai World Expo, which is to open in May. The No 1 metro line - the oldest and one of the busiest in Shanghai - was shut down for nearly eight hours on Tuesday morning after two trains collided at about 7am. The incident happened when one train carrying passengers hit an empty one shortly after the system came back online after a power glitch an hour earlier. No one was injured in the collision, but service on the line was suspended until 12.15pm. Service was suspended for about an hour on two more occasions that day, caused by another power fault at 1pm and a minor fire at 8.40pm. It was the most severe disruption the network has experienced in its 16-year history. Sun said he was personally taking control of an investigation into the affair and promised full disclosure of its findings.
Dec 25, 2009
China internet firms are eyeing more spin-off offerings after raising nearly US$1.5 billion this year as they bank on strong foreign interest in high growth mainland plays. Mainland spin-offs have prospered on the back of successful IPOs such as Changyou’s, but pricing issues and corporate governance remain key concerns for investors. Tencent Holdings (SEHK: 0700), mainland’s largest internet firm, NetEase.com, the third-largest online games operator in the country, and software developer Kingsoft (SEHK: 3888) could be prime candidates to spin-off some business units, analysts said. “I see the trend continuing because, especially for gaming companies due to the intense competition on the ground, they need more resources to compete against one another,” said Guo Chenggang, Shanghai-based analyst at research firm JLM Pacific Epoch. Tencent and Kingsoft both denied any spin-off listing plans were in the works, while NetEase declined comment.
US auto giant Ford and Zhejiang Geely Holding have struck a deal on Ford’s sale of Swedish brand Volvo to the mainland carmaker, Swedish television reported on Wednesday, quoting a union leader. An announcement about the deal will be made later on Wednesday, the television reported. The fine print of the deal can take some more time to finalise, the report said. Earlier a source had said Ford and Geely have addressed most of the big issues in the pending sale, paving the way for the biggest acquisition of a foreign automaker by a mainland company. “There could be something in as soon as the next few hours,” said the source, who asked not to be named due to the sensitivity of the situation. Both sides expect a sale of the Swedish auto brand to close early in the new year, sources told on Tuesday. The deal is estimated to cost US$1.8 billion. Shares of Zhejiang Geely’s Hong Kong-listed Geely Automobile (SEHK: 0175) rose 7.6 per cent, beating a 1.1 per cent gain on the broader Hang Seng index on Wednesday, on optimism that the Volvo acquisition would be wrapped up soon. An acquisition would have no immediate profit impact on the listed Geely, but investors hope the company could eventually leverage Volvo’s technology to upgrade its cars. Zhejiang Geely, named by Ford as preferred bidder for Volvo, said in November it had reached an agreement with Ford on intellectual property (IP) rights involving Volvo, addressing what had been a key stumbling block in the acquisition process. But the sources said one of the outstanding issues in recent discussions has been how to treat the intellectual property that Ford would transfer in a Volvo sale. A Ford spokesman declined to comment on the possible statement or give a timeline for the negotiations. “We have nothing further to add at present save that Geely is our preferred bidder and we are working towards an agreement with Geely that is in the best interests of all parties,” John Gardiner wrote in an email. At least three major mainland banks have agreed to extend loans to Zhejiang Geely, including Bank of China, China Construction Bank (SEHK: 0939) Corp and Export-Import Bank of China, sources have said.
Beijing hits back after EU extends shoe taxes - Beijing said on Wednesday it would impose penalties on metal fasteners – such as bolts and nails – imported from the European Union (EU), in apparent retaliation to the EU’s extension of taxes on shoes manufactured on the mainland. The preliminary ruling will require importers of carbon steel fasteners from the 27 EU nations to pay a deposit from Monday, the commerce ministry said in a statement on its website. “[The ministry] finds that the European Union dumped carbon steel fasteners in China and China’s domestic carbon steel fastener industry suffered material damages,” the ministry said. Importers will have to pay a deposit based on the difference – up to 24.6 per cent – between the normal value of the fasteners and the cut price, the ministry said. Dumping occurs when a foreign company sells a product in another market at less than normal value. The anti-dumping measures were imposed after the EU decided on Tuesday to extend punitive taxes on imports of Chinese and Vietnamese leather shoes – first introduced more than three years ago – by a further 15 months. The measures, designed to protect European leather manufacturers from below-cost Asian competition, carry import duties of 16.5 per cent levied on shoes manufactured on the mainland with leather uppers and 10 per cent on shoes from Vietnam. Commerce ministry spokesman Yao Jian said Beijing was “strongly dissatisfied” with the decision and will launch a complaint at the World Trade Organization (WTO), in a statement posted on the ministry’s website on Tuesday. “The Chinese government... will appeal to the WTO dispute settlement mechanism and take measures accordingly to seriously protect the legitimate interests of the Chinese industry,” Yao said. European products “do not compete directly with Chinese products and it is meaningless to continue to impose anti-dumping measures against China,” Yao said. Bigger manufacturers that make their shoes in Asia such as Diesel, Adidas and Puma, fought against the renewal of the shoe tariffs. In a statement, the European Footwear Alliance, which speaks for brands including Diesel, ECCO, Levi’s, Timberland, Rockport and Hush Puppies, said the decision “lays to rest any lingering notion that the European Union still intends to fight protectionism.” It said the EU’s “opaque trade policy will result in payment of anti-dumping duties well in excess of one billion euros (HK$12 billion) for European footwear businesses, which will ultimately be paid for by EU consumers.” Figures from the European Commission show that Chinese and Vietnamese shoes make up 30 per cent of the EU footwear market.
Sovereign wealth fund China Investment Corp (CIC) may get a $200 billion capital injection by the first quarter of next year, after approvals from the relevant authorities, according to sources familiar with the fund. Dec 24, 2009
Hong Kong banks have been improving each quarter since the beginning of the year but whether any of them will slip into the red like last year depends on fourth-quarter results, according to the Hong Kong Monetary Authority. While the pre-tax operating profit of retail banks dropped 9.7 percent in the first three quarters compared with last year, HKMA deputy chief executive Choi Yiu-kwan holds that some banks will turn in "pretty good" profit growth this year. "The fourth quarter in 2008 was extremely awful" for banks, Choi said. "Looking at the entire year, banks' performance has been improving quarter by quarter this year." But he added some banks will do less well than others. "Some banks have shown better results so far in the fourth quarter compared with last year," he said, adding that only when key fourth-quarter results are in can it be seen whether any lender ends the year in the red. In February Choi had warned that the operating environment for banks was difficult. He said yesterday that lenders will have to retain quality liquidity in case of market unrest, as the Basel Committee on Banking Supervision noted that the interbank market in the West almost came to a halt after the financial crisis. Choi said the capital adequacy ratio of 16.6 percent at the end of September was "very healthy," adding that the committee believes Tier 1 capital should include more common equities and reserves as an effective loss buffer. "Only after the economy has recovered will the rule be effective. Also, banks in need will be given considerable time to raise money," Choi said. Asked about the Hong Kong dollar's recent slide, leading to capital outflows, Choi said the magnitude is not large. He urged the public to pay attention to a potential reversion in capital flow. "If there is a change in flow direction, some assets would be sold and their prices would fall."
Marine police seized a large quantity of computer and electronics equipment in an anti-smuggling operation in Sai Kung late on Monday. The goods, worth about HK$12 million, were to be smuggled from Hong Kong to the mainland. Police seized the suspected smuggled products during an operation in Sai Kung on Monday night, a police spokesman said. At about 11.55pm on Monday, officers of the Marine Police and customs officers spotted eight men loading the smuggled goods from a lorry onto two speedboats using a wooden boardwalk near Wong Chuk Wan Village in Sai Kung. Marine police gave chase to the men after they boarded a speedboat and made their escape by sea. No one was arrested during the operation. A total of 69 boxes containing mobile phones, digital cameras, DVD recorders and a large quantity of computer parts were found on the lorry. The total value of the cargo was estimated at HK$12.3 million, the spokesman said. The case is now being followed up by the Customs and Excise Department.
China's GDP per capita is expected to climb to 4,000 U.S. dollars by the end of next year, according to the 2010 social blue book issued Monday. According to Li Peilin, director of the Sociology Institute of the Chinese Academy of Social Sciences, which compiled the book, GDP per capita has been growing rapidly in recent years. "From 1978 to 2000, GDP per capita in China increased from $400 to $800, which took 20 years. When we set the goal in 2000 to build up a well-off society by 2020, the forecast was to double the GDP per capita within 20 years, jumping to more than $3,000 in 2020," he said. The report, Society of China: Analysis and Forecast 2010, said rapid economic growth, decline in the new population and appreciation of the renminbi contributed to the acceleration of the growth rate. The GDP per capita refers to the average value of goods produced per person in a given country. GDP per capita exceeded $1,000 in 2003 and jumped to $3,000 in 2008, so it will approach $4,000 next year, achieving the target ahead of time. "A $4,000 GDP per capita means an increased strength of domestic capital, which will help the employment of migrant workers and college students," Chen Yan, chief writer at Economy magazine, told the Global Times Monday. The blue book also pointed out that the annual income of urban residents could increase by 10 percent this year but rural residents' income will only increase by 6 percent to 7 percent. "The income of people in rural areas reduced under the influence of financial crisis in 2009. The income gap between urban and rural residents will widen," Li said. During the first three quarters, the employment situation remained stable, with 8.15 million more people in urban areas getting jobs. The number is expected to reach 11 million this year. There are 9.15 million registered unemployed urban residents, with an unemployment rate of 4.3 percent. Thanks to government efforts, college graduates' employment rate reached 74 percent by September 1 but the average salary for graduates fell. However, nearly 83 percent of the population said they were optimistic about the employment situation in 2010 and the confidence index jumped by 1.3 percent compared with last year, according to a survey conducted recently by Beijing-based China Mainland Marketing Research Company.
A spat between London and Beijing over claims that China had “hijacked” the Copenhagen summit was given further fuel on Tuesday. Claims by Britain’s climate change minister Ed Miliband that Beijing had blocked a deal at the Copenhagen summit were aimed at “escaping obligations and fomenting discord” among developing countries, the foreign ministry said. Ministry spokeswoman Jiang Yu told state news agency Xinhua that Beijing refuted claims made by Miliband in an article published in Monday’s Guardian newspaper. Miliband wrote that the mainland vetoed attempts to give legal force to the accord reached at the UN climate summit in the Danish capital. It also blocked an agreement on reductions in global emissions, he said. “We did not get an agreement on 50 per cent reductions in global emissions by 2050 or on 80 per cent reductions by developed countries,” Miliband wrote. “Both were vetoed by China, despite the support of a coalition of developed [nations] and the vast majority of developing countries.” He added: “The last two weeks at times have presented a farcical picture to the public. We cannot again allow negotiations on real points of substance to be hijacked in this way.” But the foreign ministry in Beijing slammed the comments made “by an individual British politician.” “Such an attack was made in order to shirk the obligations of developed countries to their developing counterparts and [to] foment discord among developing countries,” Xinhua reported Jiang as saying. “But the attempt was doomed to fail.” “We urge them to correct mistakes, fulfill their obligations to developing countries in an earnest way, and stay away from activities that hinder the international community’s co-operation in coping with climate change,” she said. “China had made arduous efforts to push forward the progress of the talks, and contributed to safeguarding the rights of developing countries, which was obvious to all and undoubtable,” she said. The conference had “yielded fruit, reached broad consensus and won support from developing nations” she added The summit set a commitment to limit global warming to two degrees Celsius, but did not spell out the important global emissions targets for 2020 or 2050 that are the key to holding down temperatures. It also promised US$100 billion for poor nations that risk bearing the brunt of the global warming fallout, but has not given a fixed plan to make payments.
The local authorities in Beijing raised the price of water on Tuesday to help fight a worsening water shortage after nine years of drought. The authorities said the water price for residential use will go up eight per cent, an increase that follows a jump of almost 50 per cent in the price of water for non-residential use last month, according to the state-run Xinhua News Agency. “The gap between water supply and demand is quite obvious,” said a statement posted on Monday on the Beijing Municipal Commission of Development and Reform. It said Beijing has seen below average precipitation for nine out of the past 10 years. Work is already taking place on a massive project to divert billions of tons of water from its central, southern and western regions through pipes and canals to Beijing and other fast-growing northern cities. Experts, however, say even that will not be enough to meet water needs and will cause environmental damage. Authorities in mid-October started resettling 330,000 people to make way for the project, which will move water along three routes. The estimated US$62 billion water diversion scheme could be nearly three times as expensive as the country’s Three Gorges Dam, the world’s largest hydroelectric project. The central route, due for completion by 2014, is expected to supply about a quarter of Beijing’s water. Xinhua said the per capita water supply in Beijing is only 300 cubic meters, though the internationally recognised warning level is 1,000, according to government data. Xinhua said other cities that have already raised water prices or plan to do so include Shanghai, Tianjin, Shenyang, Guangzhou, Nanjing and Chongqing. Of those, Tianjin and Shenyang are in the north.
Sinochem, mainland’s No 4 oil firm, cut its proposed bid for Australian agrochemicals maker Nufarm by 7.7 per cent to US$2.3 billion on Tuesday, risking losing its prey and putting its global expansion plans in doubt. The revised offer values Nufarm at A$12 a share, down from A$13, and comes after state-owned Sinochem failed to meet an initial deadline for a binding agreement. The two companies had extended talks to Wednesday. Sinochem, which is seeking a wider footprint and would gain from Nufarm’s global distribution network that includes Asia, South America and Europe, made its initial offer in September, but a series of profit downgrades at Nufarm has clouded the process. Trading in Nufarm shares, 11 per cent-owned by managing director Doug Rathbone, was halted to help the firm consider the lower offer and seek clarification on the terms. Some analysts said Nufarm would accept the lower offer given the length of time the company has been in play. “My feeling is he would probably take the A$12 offer. I think he [Rathbone] is more likely to accept because this is the second takeover offer,” said Tom Elliott, a fund manager with MM&E Capital, which does not own Nufarm shares. “He’s clearly a seller and has indicated as much. As a result, he probably would have no choice but to accept the offer on the table.” Nufarm chairman Kerry Hoggard said the company was disappointed Sinochem had not been able to proceed with an acquisition on the basis that was previously agreed, adding Nufarm’s board would not back a proposal that undervalues the business. “The business already had several profit downgrades over the past 12 months and I guess during the period of due diligence, things have gone slightly worse than better,” Elliott noted. Beijing-based Sinochem did not return calls seeking comment. Nufarm shares never traded above Sinochem’s initial offer price, reflecting the market’s concerns about the deal, which is also subject to regulatory approvals. “We’re disappointed they’ve reduced it, but we will wait and see what the company recommends,” said Ross Barker, managing director of Nufarm shareholder Australian Foundation Investment Co. “We like our investment in Nufarm and we are not very keen sellers.” Earlier this month, Nufarm said it would not accept anything less than A$13 a share. In the short term, Nufarm shares could slide to as low as A$8.50 each if the deal falls apart, analysts say. And the firm’s credit rating could also be under threat, pushing up its funding costs. But takeover speculation is unlikely to die down, with some analysts expecting farm chemicals makers MA Industries and United Phosphorous to cast an eye over Nufarm. Nufarm last traded at A$10.56. “Rathbone has been working pretty hard to get a buyer and the two Chinese companies are probably his best chances,” Elliott added. In 2007, Nufarm was approached by China National Chemical Corp (ChemChina), which led a A$3 billion approach with two US private equity firms, but they failed to come up with a formal offer. Nufarm is being advised by UBS, while Royal Bank of Scotland is advising Sinochem.
Dec 23, 2009
A training course that helps Hong Kong tour guides prepare for a qualifying exam on the mainland will be launched here, after only a handful of candidates passed the first two tests. The qualification exam, which began this year under the fifth supplement of the Closer Economic Partnership Arrangement signed last year, is held twice a year, and allows Hongkongers who pass to operate as tour guides in Guangdong. Only one in 11 Hong Kong candidates who sat for the exam in March passed. In September, only three - including two who retook the exam - out of 28 Hongkongers passed. This works out to a pass rate of about 10 per cent for Hong Kong candidates, compared to the overall average pass rate of 30 per cent. "It's a difficult test, and Hong Kong people failed it because they were not prepared for it," James Zheng Yongyi, deputy director of the Guangdong Provincial Tourism Service Centre, said. "They don't understand the examination, which asks a lot of questions about the history of some places ... and they have to answer the questions in Putonghua." He said those who passed the Guangdong exam could seek to qualify for work in other regions by taking local tests. Those who planned to lead groups of foreign visitors - which paid better than catering to Putonghua-speaking tourists - could also take a language test. The preparatory course will run over 12 lessons, starting next month. It is jointly organized by the centre, the Travel Industry Council and the Vocational Training Centre. Enrolment for the HK$4,000 course starts today. Dr Leung Hip-hung, the senior assistant executive director of the Vocational Training Centre, said instructors from the mainland would teach the course. Michael Wu Siu-ieng, chairman of the Hong Kong Association of Travel Agents, said Hong Kong tour guides would boost their career by getting the qualification and would also provide better services for tourists.
Finance Committee chairwoman Emily Lau Wai-hing has denied she conspired with pan-democrats to delay the approval of the HK$66.9 billion funding for the Guangzhou-Hong Kong- Shenzhen Express Link at a key meeting last week. Responding to media questions yesterday, Lau said she had no idea that pan-democrats would suddenly table several motions causing the meeting to be adjourned, leaving no time to discuss the funding. "I have not conspired with them. I wasn't notified before the meeting and I didn't attend the pan-democrats meeting," Lau said. So far, the government has not called for a special Finance Committee session before the next scheduled meeting on January 8. Civic Party lawmaker Ronny Tong Ka-wah and League of Social Democrats' "Long Hair" Leung Kwok-hung were among those who moved the motions. "No one from the government has lodged any complaint so far," Lau said. "After the meeting, a lawmaker from the pro- establishment camp even came to me and said I have done my job properly. I believe it means I did it in a fair manner." Although she admitted the funding delay has become a cause for public concern, Lau said the move by the pan-democrats was allowed under the chamber's rules of procedure. Pan-democrats had challenged the position of pro-establishment lawmakers Raymond Ho Chung- tai and Abraham Shek Lai-him, both accused of having a conflict of interest over the multi-billion dollar project. Asked if lawmakers need to declare their interest before voting, Lau said they should decide after seeking legal advice. Lawmakers are allowed to vote if they only have indirect monetary gain from a project and have declared their interest. Lau warned that legislators have to bear the consequences if they failed to declare and their vote is later challenged by legal means. Hong Kong’s central bank said on Monday it was not worried about an outflow of capital, attributing outflows this month to repatriation of money raised in stock market listings and year-end demand for the US dollar. Fund outflows have pushed the Hong Kong dollar to its lowest level since March. “The capital raised from recent IPOs was channelled out of Hong Kong,” Y K Choi, deputy chief executive of the Hong Kong Monetary Authority, told a media briefing. Year-end demand by companies for US dollars was also putting downward pressure on the Hong Kong dollar, Choi said. The currency has weakened this month after trading at the top of its pegged trading band to the US dollar in recent months. On Friday, it hit 7.7585 to the US dollar in New York trade, its lowest level since March 5 although it is still in the upper half of its trading band which is fixed at 7.75 to 7.85 to the US dollar. The currency hit the topside of its band repeatedly this year, forcing massive intervention by the HKMA to keep the trading band intact, as the city attracted a record HK$640 billion in fund inflows between October last year and November this year. Much of that money was headed to the stock and property markets on the view that Hong Kong interest rates, tied to US rates because of the city’s currency peg with the US dollar, would stay very low for some time and because the city was expected to benefit from mainland’s economic rebound.
China will treat talks on a binding global climate change pact next year as a struggle over the “right to develop”, an official in Beijing said, signaling more contentious deal-making will follow the Copenhagen summit. The rancorous meeting ended on Saturday with a bare-boned agreement that “noted” a broad accord struck at the last moment between the US and the big developing countries – China, India, Brazil and South Africa. China, the world’s biggest emitter of greenhouse gases from human activities and its biggest developing economy, was at the heart of the talks, and bared some its growing global assertiveness in the grinding late-night sessions. Talks on a binding treaty are to extend throughout next year. A Chinese Foreign Ministry official, Yi Xianliang, indicated in comments published on Monday that his government anticipated more strife over how to mesh its economic and emissions growth with a binding pact to cut greenhouse gas levels. “The diplomatic and political wrangling over climate change that is opening up will be focused on the right to develop and space to develop,” Yi said, in comments cited by the official People’s Daily. Yi said the negotiations that culminated in Copenhagen showed “conflicts were increasingly sharp and the crux of disputes was steadily involving each country’s core interests”. Since the summit, some Chinese officials have offered an upbeat view of the results, with its chief negotiator, Xie Zhenhua, saying he was “happy” with the deal. But China faces disputes on how its domestic vows to curb greenhouse-gas growth may be brought under international oversight, and how much financial and technological help it and other big developing countries will get from wealthy economies. “The agreement reached was better than total collapse,” said Wang Ke, a climate change policy expert at Renmin University who was in Copenhagen to observe the talks. “But China and other developing counties will feel the negotiations to come will be equally tough as we get into the details... The funding commitments from the developed countries are still vague, and technology transfer issues were barely mentioned [in the Copenhagen accord].” The accord held out the prospect of US$100 billion in annual aid from 2020 for developing nations but did not specify where this money would come from. China has said it should have the formal right to such aid, even if the most vulnerable countries are first in line to receive it. British Environment Minister Ed Miliband, in an article published on Monday, accused China and other developing nations of blocking agreement on a potential pact, including a goal to cut global greenhouse gas emissions in half by 2050. Rich nations also say China’s efforts to slow greenhouse gas growth, such as closing dirty power plants, should be subject to international verification to assure wary voters and lawmakers that Beijing is keeping its word. China has said such checks would violate its sovereignty and UN-treaty rules saying developing countries do not shoulder the internationally binding emissions targets that developed countries must accept. Yi said wealthy nations had failed to spell out their commitments to help poor countries cope with global warming. “With the international financial crisis and other factors getting mixed in, the developed countries retreated from their stances and positions, and then sought to shift the blame to developing countries, especially the big emerging powers,” the People’s Daily quoted him as saying.
Japan’s exports rose by the most in seven years in November as mainland led growth in demand from Asia, reducing worries that the Japanese economy will fall into another recession next year. Strong growth in mainland and the rest of Asia is set to continue to support exports next year, economists say, and that will likely be enough to compensate for weak domestic demand. “I’d say the recovery in exports so far this year has been close to the best scenario we had thought of at the beginning of the year,” said Junko Nishioka, chief economist at RBS Securities in Tokyo. “Given that exports are growing solidly despite the yen’s rise last month, we don’t need to be overly pessimistic about growth. The economy will perhaps slow down early next year but a recession is unlikely.” Exports rose 4.9 per cent in November from the previous month, seasonally adjusted figures showed, increasing for the fourth straight month to the best level since November 2002. The pace of decline for exports compared to the same month a year earlier also slowed substantially from October. Compared with a year ago, Japan’s exports fell 6.2 per cent in November, less than the median market forecast for a 6.5 per cent decline and slower than a 23.2 per cent annual decline the previous month, the data showed. Exports to mainland rose 7.8 per cent from a year earlier, up for the first time in 14 months, with such products as chemical compounds, auto parts and resins contributing to growth. As a result, exports to Asia, which account for more than half of Japan’s total exports, rose 4.7 per cent from a year earlier, also posting the first annual rise since September last year.
China National Petroleum Corp (CNPC), the country's biggest oil and gas producer, announced on Monday it has signed an agreement with Myanmar's Energy Ministry to receive exclusive rights to build and operate the China-Myanmar crude oil pipeline. The deal has granted operating concession of the pipeline to the CNPC controlled South-East Asia Crude Oil Pipeline Ltd., said CNPC. The pipeline company will also enjoy tax concessions and customs clearance rights, said a report on the CNPC website. CNPC to build, run China-Myanmar oil pipeline CNPC begins work on oil port in Myanmar. The agreement stipulates the Myanmar government should guarantee the company's ownership and exclusive operating rights, as well as the safety of the pipeline. In June, CNPC and the Myanmar government signed a memorandum of understanding, agreeing that CNPC would be responsible for the design, construction, and operation of the pipeline, the statement said. The 771-kilometer pipeline, extending from Maday island, in western Myanmar, to Ruili, in the southwestern Chinese province of Yunnan, is expected to carry 12 million tonnes of oil a year initially. CNPC in late October started construction of a port in western Myanmar as part of the China-Myanmar Crude Pipeline project, said the company.
Dec 22, 2009
A planned central government regulation would give governments - not developers - the central role of initiating housing demolition projects, apparently heeding increasing public discontent over the rising number of forced evictions. The Legal Affairs Office under the State Council, the nation's cabinet, is spearheading efforts to draw up a new regulation on the acquisition of homes and redevelopment compensation to replace the controversial housing demolition regulation introduced in 2001. The office did not specify a time frame for the new regulation to go public for wider consultation, but it would seek to restrict the role of developers in demolition, according to Peking University law professor Jiang Mingan. Jiang, invited to a State Council symposium on Wednesday regarding the drafting of the new regulation, said that to specifically hold governments to account over housing demolitions would mean that developers could not begin demolition work without agreeing compensation. He noted that the new regulation would also try to clarify what constitutes "the public interest" - the excuse regional governments often use to forge ahead with home demolitions in collusion with developers while offering little or no compensation due to loopholes in the housing demolition regulation. Photos of a Chengdu woman setting herself on fire after she failed to stop forced demolition work on November 13 once again put the regulation under the spotlight. Mainland media reports said the woman, Tang Fuzhen , had spent more than 7 million yuan (HK$7.94 million) on a three-storey garment factory warehouse, but the district government agreed to pay only 2.17 million yuan because it claimed the building was illegal. In another incident that captured national attention, Huang Jianying went shopping at a supermarket in Guangzhou on Wednesday morning and returned to find her home demolished. Huang said the developers announced their intention to redevelop the land for the upgrade of a nearby waterway only three months ago. No agreement on compensation had been reached. Violent confrontations over forced evictions in the past few months have prompted five Peking University professors, including Jiang, to write an open letter to Beijing calling for the housing demolition regulation to be scrapped. The professors added that developers must not be allowed to use violence and the disruption of electricity, water and cooking gas services to force evictions. But many academics fear the planned regulation could face resistance from local governments, which have relied heavily on the property market in their pursuit of economic growth. Peking University professor Wang Xixin, another signatory of the open letter who was at the State Council symposium, said that he would expect the draft regulation to go public very soon because of the heightened discontent over existing housing demolition rules. However, he said local governments were likely to hold out over key points. Dec 21, 2009
A futuristic new Macau landmark partially designed by architect I.M. Pei will open early next year. President Hu Jintao yesterday officiated at a ceremony purported to be the opening of the Science Centre. But the complex, which took nine years and more than 300 million patacas to design and build, has not opened to the public. A tilted cone, a dome and a low three-dimensional rhomboid distinguish the complex from a jungle of glittering casino buildings. I.M. Pei was involved in the project's early conceptual stage, said his son, Sandi Pei Li-chung, a partner in New York-based Pei Partnership Architects. The firm was responsible for designing most of the complex. "He was involved in affirming the basic geometries of the project, mostly on the external form and materials," Sandi Pei said of his father. The centre is on a 44,500 square metre parcel of reclaimed land off the southeastern shore of the Macau Peninsula, across from the Cultural Centre. Much of the complex is covered in shimmering metal, giving it a distinctive presence. It features 6,500 square metres of exhibition galleries around a skylit central atrium within an asymmetrical conical form. There is a 150-seat planetarium, a 500-seat hall in the low 3-D rhomboid and a ground-floor children's zone with natural light. An external viewing platform accessible by escalators takes full advantage of the complex's prime waterfront location. Visitors can enjoy a view of the water and the city from the 26-metre-high platform. The complex has 23,000 square metres of gross floor area. Sandi Pei said the conical form would offer an exciting spatial experience to visitors, and the museum would promote scientific knowledge among the public. Galleries are organised as trays reached by a spiral ramp that ascends within the cone. "It can prevent people from having `museum fatigue'," he said. The designing began in February 2001 when little of what is now Macau's skyline existed. "Macau today is a riot of new buildings," Sandi Pei said. "That all happened since we began work on the Science Centre." Groundbreaking started in October 2006, shortly before the Ao Man-long corruption scandal broke. Ao, the former public works minister, took bribes from Tong Lei Engineering and Construction over the tendering of the right to build the center. Graft investigations forced work on the centre to be suspended in 2007 and last year. Despite being "sandwiched" between Beijing and the people of Hong Kong, the chief executive says he is sleeping well because he has done his bit for democracy. In an interview with Cable TV, Donald Tsang Yam-kuen denied he had breached his election promise of "going all out" to resolve the universal suffrage question in his second term in office. "I have been sleeping very well because I feel that I have already done my part and have fulfilled my duty," he said. Although he has been attacked for failing to explain how the chief executive and all members of the Legislative Council will ultimately be elected, Tsang claimed credit for Beijing's "timetable" allowing universal suffrage to be introduced for the 2017 chief executive election. The chief executive, he lamented, would always be "sandwiched" between being loyal to Beijing and being accountable to the Hong Kong people. He said his low popularity rating, up slightly but still below 50 points according to a University of Hong Kong survey, was satisfactory. "I am already lucky with this sort of support rating after four years in office, right?" Referring to the incident in which Wong Yuk-man, chairman of the League of Social Democrats, threw a bunch of bananas at him in Legco last year, Tsang joked that next time he would use the picture of Mother Teresa he always kept in his pocket to ward them off. "I can promise you this: I won't throw them back, and I won't eat the bananas either." Zhongwang Holdings, the mainland aluminium producer battling accusations it misstated sales data when it listed on the Hong Kong stock market, has delayed publishing an independent inquiry into the matter. The firm's shares fell 5.5 per cent yesterday, to HK$5.81. They have dropped 20 per cent since Monday. The company hired Ernst & Young to review its sales figures early last month and told investors in a November 10 conference call that the study would take five weeks. The five weeks were up on Tuesday. In September, mainland newspaper the China Economic Observer claimed in a report, which it later retracted, that none of the top 10 customers named in Zhongwang's prospectus for its initial public offering bought from the company last year. After missing the self-imposed deadline to make Ernst & Young's findings public, Zhongwang executives have now briefed analysts that Ernst & Young will not be able to complete the audit for another two to three weeks, an analyst and one of the firm's investors confirmed. "The length of time still needed to complete the audit is a huge concern. I am out of the stock now," a foreign fund manager who bought into the IPO said. Zhongwang declined to comment, as did Ernst & Young and UBS, the lead investment bank on the company's IPO. In May, the aluminium extrusion firm raised HK$9.8 billion in its HK$7-a-share Hong Kong initial public offering. Chairman Liu Zhongtian's 71 per cent stake in the company was worth HK$26.52 billion at the time of the IPO. The fall in the stock's price this week has wiped HK$5.41 billion off the value of Liu's shareholding. Liu, a low-profile company boss who is little-known within the aluminium industry, could not be reached for comment.
Workers at Television Broadcasts (SEHK: 0511) (TVB) have threatened "radical action" if management continues to ignore demands for a 5 per cent pay rise and an extra increase for about 200 people working in the props unit. The TVB Staff Association accused the company of delaying tactics and warned that employees' patience was running out. Citing TVB's annual reports, the association said the broadcaster had made more than HK$5 billion since 2005 but staff had seen only nominal pay rises in that time. "While the company is making a profit every year, we are only given a rise of HK$200 to HK$300 a month. It is flatly unfair," said Lau Shun-on, chairman of the 900-member association. "We are not trying to be greedy. But we employees have contributed to the company's success and we want our fair share of rewards." To cut costs, TVB has sacked more than 270 workers in three rounds of mass layoffs in the past year.
One is a city-state in the Arabian desert where they build islands in the sea; the other is a boom city on the shores of a picturesque lake on mainland China's east coast, famous for producing tea. On the face of it, Hangzhou and Dubai don't have much in common. But that didn't deter officials in Zhejiang's capital from attempting to mirror the growth machine in the desert. Local party secretary Wang Guoping saw "shocking similarities" between the two cities and set out to use Dubai's breakneck pace of growth as a blueprint for his own city's real estate explosion. Since Dubai's dramatic fall from grace - in the full glare of the global business media - Wang and other local officials mu st be regretting the sycophantic praise they heaped upon it during the boom years. Dubai has had to be bailed out by its richer neighbour, Abu Dhabi, to the tune of US$10 billion, after its leading conglomerate Dubai World defaulted on a US$3.5 billion debt payment late last month. The roller coaster of property speculation in the tiny state appears to have ground to a halt, with a judder that reverberated in markets around the world. It's fair to say the furniture in Hangzhou city hall wobbled as well. Mainland media have reported unnamed municipal officials as saying the talk of comparisons is now officially toast. Since 2007, the city had been boasting of its close links to Dubai - they are even connected by direct flights - and its desire to build itself into a Chinese replica. In May last year, the Hangzhou government sent a 100-strong team to the desert kingdom, keen to learn the secrets of the Dubai miracle and hoping to bring home a genie of their own. Returning from that trip, Wang was fired up about the potential for growth. Dubai was Hangzhou's model and a "yardstick" to measure development against. "We must study Dubai closely, wholeheartedly learn Dubai's open-mindedness, its rejection of pride and refusal to be satisfied," he said. Perhaps giddy from the desert sun, Wang said Hangzhou would raise its targets to push its per capita gross domestic product to beyond US$10,000 this year and more than double that figure by 2015. His timing for such predictions wasn't exactly the best, given the global financial storm brewing on the horizon. The official figures for 2008 show the city's GDP was 478 billion yuan (HK$542 billion), up 11 per cent on the previous year. That works out as 59,763 yuan for each of the city's 8 million residents - still a long way short of the magic number. Elsewhere in the world, 11 per cent would be an incredible rate of growth; in Hangzhou it was the smallest increase in several years and the first time the measurement has threatened to drop into single digits in 18 years. More worryingly for the city government, the year-on-year increase for the first quarter of this year - the most recently published - was 3.4 per cent. It's easy to see why the city is no longer so keen to stress its likeness.Even Xinhua has been reporting that the bursting of the Dubai property bubble - prices there halved in the blink of an estate agent's eye - has "sounded the alarm bell" for mainland real estate speculators. An opinion piece in China Daily yesterday also dealt with the "lessons" the Dubai tumble offered for the mainland. Hangzhou may not have been building man-made islands in its famous West Lake attraction, but the city has been throwing up property developments like there was no tomorrow. After a slow start to the year, house sales in Hangzhou went through the roof in September and October - registering year-on-year increases of more than 400 per cent for both new and second-hand apartments. Property commentators are already starting to ask whether the "West Lake bubble" might be about to pop, too. Of course, Hangzhou was not alone in being dazzled by the Dubai dream. Governments around the world were fascinated by the oil-rich emirate's vision of rapidly restructuring its economy for a post-hydrocarbon era, and its ability to draw external investment by the truckload in the process. What makes Hangzhou unusual is the slavish enthusiasm the municipal government showed for transporting a development model lock, stock and crude oil barrel direct from the sand dunes - and the apparent lack of objective scrutiny the plan was subjected to. The tale is typical of the top-down, slogan-driven mindset of Chinese officialdom. Once senior officials buy into an idea, the whole party machine grabs the ball and runs with it. No one pauses to question why or whether the idea is a good one or not; if they do they do not dare speak up about it. In describing the "shocking" similarities between Dubai and Hangzhou, party secretary Wang stated that both cities "reside on water and live on resources". Perhaps it might have been prudent for his advisers to point out those are not exactly unique similarities. Ah, the luxury of hindsight.
Dec 20, 2009
China has stiffened rules for purchases of government land by individuals and property developers, including demanding down payment of at least half the transaction price, as it seeks to cool real estate speculation. Full payment for the land must also be completed within a year after the transaction, although this can be extended to two years under certain circumstances, the finance ministry said on its website. An industry official quoted by the official Shanghai Securities News on Friday said rules on down payments and subsequent instalments varied across regions in the country, although down payments generally ranged from 20 to 30 per cent. Rising property prices, fuelled by an unprecedented boom in bank lending in the first half of this year, have aroused fears about broader inflation in mainland. Mainland’s main property price index rose 5.7 per cent in November from a year earlier, while increases have been far steeper in some cities. To dissuade house flipping for quick profits, the State Council said earlier this month that individuals would have to own their homes for five years, up from the previous minimum of two years, to receive a tax exemption on their sale. The government also vowed to use tools, including land-use policies and taxation, to control property price hikes.
Guangzhou is emerging as a battle ground between developers and residents, with a building rush for the 2010 Asian Games stirring protests that echo nationwide tensions over land. Taiwan and China will discuss a free trade pact at formal talks next week amid protests planned by the island’s opposition parties wary of deeper engagement with Beijing. Guangdong will spend 72.6 billion yuan (HK$82.3 billion) to transform sleepy Hengqin Island off Macau from a bleak outpost with a gross domestic product of just 128 million yuan last year into a key base for cross-delta co-operation. A new town will be built on the 86 square kilometre island, with a theme park, multi-functional power station and business district. Guangdong party boss Wang Yang and governor Huang Huahua officiated at a ceremony on Wednesday to launch Hengqin's Communist Party office. Hengqin now has sub-provincial administrative status, joining the ranks of Pudong New Area in Shanghai and Binhai New Area in Tianjin. More details of key projects in Hengqin were unveiled by officials as they launched the party office. A 12 billion yuan power station will be built by China Power (SEHK: 2380) Investment on a 360,000 square metre site on the island's northwest. To be ready in 2012, it will provide electricity, heating, gas and drinking water. A 10 billion yuan theme park will be built by Guangzhou-based Chimelong Group, which runs a safari park in Panyu district. The first phase of the 400,000 square metre park could be ready by early 2012. The park may feature pandas, as Guangdong authorities listed "experience in raising and exhibiting giant pandas and koalas" among prerequisites for bidding when they tendered the right to build the park last year. Part of a 38 billion yuan business district, known as Shizimen (Cross Gate), will be built on a 3.5 square kilometre site in the north of Hengqin. This will feature convention and exhibition centres, office towers and five-star hotels. In another project, the University of Macau will be moved to Hengqin and a cross-harbour tunnel will link the university's future campus with Macau's Cotai Strip. The island, part of the Zhuhai Special Economic Zone, will also pilot co-operation projects with Macau in customs, financial and revenue systems, and land management. Macau's policymakers and developers have long been eyeing Hengqin to ease the pressure of population growth. The former Portuguese enclave has arguably the world's highest population density, with 541,200 residents sharing just 29 square kilometers of land. Just a few hundred metres from Cotai, Hengqin is three times the size of Macau, but has fewer than 7,000 residents. Dec 19, 2009
Hong Kong's latest jobless rate edged down for the third consecutive month to 5.1 percent on measures to stimulate economic recovery, bucking the market consensus that it would remain unchanged. Figures released by the Census and Statistics Department show the seasonally adjusted unemployment rate fell from 5.2 percent in August- October to 5.1 percent in September-November. Bank of East Asia (0023) chief economist Paul Tang Sai-on and Hang Seng Bank (0011) senior economist Irina Fan Yuen-yee noted that the improvement in the August-October rate was actually the result of a shrinking labor force, but that total employment actually rose by about 9,300 this time. "We can see from the November figures that companies are confident enough to create new posts," Fan said. "Only because of this do we think the labor market is well positioned to improve." Tang believes the increase in the underemployment rate from 2.4 to 2.5 percent is of little concern as employers on the whole are willing to recruit. Secretary for Labour and Welfare Matthew Cheung Kin-chung said the improvements are largely due to the construction sector, where unemployment shrank seven months in a row to 7.6 percent. "With construction commencing on the Hong Kong-Zhuhai-Macau Bridge and Disneyland expanding, the employment situation in the construction sector can be expected to show steady growth," Cheung said. Tang said statistics show the mainland manufacturing sector is picking up, which in turn will benefit local exports. The trading and logistics industries employ 25 percent of the local workforce and they have improved significantly, Fan said, adding that industries related to stocks, properties and tourism are also expanding. Tang expects the SAR to see bright job prospects in the first half, but the second half will depend on the sustainability of the US recovery. Hang Seng Bank revised its average unemployment estimate for next year down from 5.3 to 4.8 percent. Goldman Sachs economists predict the unemployment rate will eventually fall to 4.5 percent next year. They forecast GDP growth to recover from minus 3 percent this year to 5.8 percent in 2010. Hang Seng's growth estimate for next year is 3.5 percent - still below the trend of 5 percent in the past.
China has told participants at UN climate change negotiations it sees no possibility of achieving an operational accord to tackle global warming this week, an official involved in the talks said on Thursday. Dozens of heads of state are descending on the Danish capital to address the conference, hoping to sign a new pact to curb greenhouse gas emissions on Friday. The official, who asked not to be identified, told reporters the Chinese had instead suggested issuing “a short political declaration of some sort,” but it was not clear what that declaration would say. The official said negotiations were continuing in an attempt to reach a breakthrough that would allow a more meaningful agreement to be signed. US President Barack Obama has called for an “operational accord” – essentially a political agreement with teeth that can get countries working to cut or curb their greenhouse gas emissions while a more formal and binding treaty is hammered out next year. Some ministers warned that slow, often stalled talks during the December 7-18 summit meant it was staring at failure. “We may not get there on the substance. It is quite possible we’ll fail on the substance. But at least let’s give it a try,” said Britain’s energy and climate minister Ed Miliband. “At the moment the problem is we’re not giving it a try.” Developed and developing nations are at odds over who should cut emissions, how deep the cuts should be and how much funding should be provided to poor countries to help them shift to greener growth and adapt to a warmer world. Roughly 120 heads of state and government are expected to show up in Copenhagen in the next two days, with Obama planning to arrive on Friday morning. Speakers are lined up to address the summit until the small hours of the morning, including political heavyweights such as Iranian President Mahmoud Ahmadinejad, Germany’s Chancellor Angela Merkel, Brazilian President Luiz Inacio Lula de Silva and French President Nicolas Sarkozy. But rather than an ironed-out final document, leaders will find draft texts littered with incomplete choices, exposing long-running rifts between rich and poor countries on how to split the cost of fighting climate change. Denmark said it was trying to simplify several complex draft negotiating texts to help the leaders agree upon a deal. But developing nations rejected Denmark’s effort to select small negotiating groups to storm through the laboured draft texts, saying the process had to be fully inclusive. China told Denmark on Wednesday night it was siding with developing nations and argued it was not empowered to change the process by delegating to the small negotiating groups. While the overall picture appears bleak, there has been some progress in areas critical to reaching a deal. Africa dramatically scaled back its expectations for climate aid from rich nations, and Japan pledged about US$11 billion in public funds to 2012 to help poor countries adapt to a warmer world and cut their emissions. Talks on a UN-backed system to pay poorer nations to curb deforestation have advanced, and the US pledged US$1 billion in short-term funds to conserve tropical forests. A major sticking point between the world’s top emitters, the US and China, has been the question of how they will prove they are sticking to emission-curbing plans. Earlier, China had signaled it might find a way to end the stand-off, dropping previous hardline language and suggesting “national communications” on emissions that the Kyoto Protocol already requires of developing nations could hold a solution. “The convention has a very clear stipulation as to the operation of a national communication system,” Chinese delegate Su Wei said. “It will not be difficult for us to find a solution to this problem [verification], as long as we adhere to the principles of the convention, it is not a crucial problem,” he said.
Dec 18, 2009
China Pacific Insurance (Group) Co, the country’s third-largest life insurer, raised US$3.1 billion in the world’s seventh-largest IPO this year, when it priced its Hong Kong initial public offering near the middle of an indicated range, a source familiar with the deal said on Wednesday. Shanghai-listed China Pacific, part-owned by US private equity firm Carlyle Group, sold 861.3 million shares, or 10.2 per cent of its enlarged share capital, at HK$28.0 each, compared with a range of HK$26.8 to HK$30.1, the source said. At the offering price, China Pacific Insurance is valued at about 1.8 times next year basis embedded value estimated by bookrunners. By comparison, China Life (SEHK: 2628), mainland’s No 1 life insurer traded at 2.87 times forecast next year embedded value, while No 2 life insurer Ping An traded at 3.71 times forecast next year embedded value, according to a UBS research report. China Pacific Insurance’s Hong Kong share offering price has about 5 per cent discount to its Shanghai-based shares, which ended on Tuesday at 26.03 yuan (HK$29.50). Its Shanghai-based shares have gained 134 per cent this year, outperforming the Shanghai Composite Index’s 80 per cent rise. The insurer has also signed up five cornerstone investors, including Allianz, Mitsui Sumitomo, for a combined US$395 million worth of shares, with a commitment not to sell their investments for six months. Carlyle is committed to holding its shares for at least one year. China Pacific Insurance’s trading debut set for December 23, under the symbol “2601”. China International Capital Corp (CICC), Credit Suisse, Goldman Sachs and UBS are handling the deal. Mainland’s life insurance market has seen an increase in recent years, thanks in part to Beijing’s focus on health care and the rapid economic growth in the world’s third-biggest economy.
Limited new supply and a recovery in shipping volumes have helped boost leasing interest in a warehouse and distribution centre in Hong Kong planned by Australian property developer and fund manager Goodman Group. "We have seen strong demand from customers who want to move to new facilities," said Philip Pearce, Goodman's managing director for Greater China. The Sydney-based group says two multinational logistics operators have already pre-leased and committed to lease about half the total space on offer in the development. Rents are also starting to climb again after an 8 per cent decline over the past year. The centre, called Interlink, is being built in Tsing Yi and will offer a total leasable area of 2.4 million square feet. Investment cost is estimated at A$430 million (HK$3.04 billion) and the centre is expected to be completed by January 2012. The project is owned by Goodman Interlink, a joint venture between the Goodman Group and Goodman Hong Kong Logistics Fund, which is one of the largest industrial landlords in the city. "Hong Kong's supply characteristics are unique. There's been very little new supply in the logistics sector in the last decade," said Pearce. "There's a real need for warehouse space, especially now that the Hong Kong government is planning to redevelop a lot of the existing space," he said, referring to plans outlined in this year's policy address from Chief Executive Donald Tsang Yam-kuen to "revitalise" about 1,000 industrial buildings to promote a knowledge-based economy. UPS, the world's largest package delivery firm, said earlier that its shipping volumes had recovered to beyond 2007 levels and that some shipping lines were starting to raise rates. "There are still some seasonal effects, but this recovery is sustainable," said Kris Inglis, the director of developments and planning in Asia for UPS. "There are good, strong fundamentals for these developments." The group said it would build a portfolio of logistics assets on the mainland worth up to US$700 million over the next five years. China Investment Corp, the mainland's sovereign wealth fund, has an 8 per cent stake in the group. The company does not see the logistics and distribution industry on the mainland as a threat to Hong Kong, as the city remains a transshipment hub, while Chinese ports focus on exports. Hong Kong's status as a free port with no import taxes will also continue to give it a strong edge over mainland rivals, the firm says. "The 'hard costs' in Hong Kong are higher. But other costs, like those involving regulatory issues, make Hong Kong more efficient. There is also a substantial population base here that needs servicing. Hong Kong and China actually complement each other nicely in the distribution of goods," said Pearce.
Vice President Xi Jinping was wrapping up a three-day Japan visit on Wednesday with a trip to a former heavy industry centre that has cut down on pollution and developed a robotics sector. Xi, who is expected to succeed Hu Jintao as president in 2012, was due to visit the southwestern city of Kitakyushu before travelling to South Korea on a regional tour that will also take him to Cambodia and Myanmar. His trip to Japan came as the two Asian neighbours seek to strengthen a relationship that has often been troubled. Xi met Foreign Minister Katsuya Okada in Tokyo on Wednesday before leaving for his final stop in Japan, Kitakyushu city in Fukuoka prefecture. Okada told him that “Kitakyushu was once called ‘the city of iron’ but it has overcome the problem of pollution and is a good model case.” Officials there were scheduled to brief Xi on the city’s environmental policies and to show him Yaskawa Electric Corporation, a leading developer and manufacturer of industrial robots. China, expected soon to overtake Japan as the world’s number two economy, struggles with large-scale pollution from its heavy industry, coal plants and cars and is now the world’s biggest greenhouse gas emitter. During his meeting with Okada, Xi thanked him for “the thorough preparation for my visit” and said that “in the audience with His Imperial Majesty yesterday, I was able to have a friendly talk with him.” The meeting with the emperor sparked a bitter domestic row in Japan after the prime minister’s office asked the Imperial Household Agency to skip a usual rule that requires such meetings to be requested a month in advance. Conservative opposition politicians accused the centre-left government of bending the rules to kowtow to rising giant China. Ichiro Ozawa, a heavyweight in the ruling Democratic Party who reportedly pushed for the meeting with the emperor, has openly feuded with a palace official who complained about the heavy government pressure. Tokyo police have since boosted security for Ozawa and Prime Minister Yukio Hatoyama to prevent possible attacks by right-wing nationalists who have accused them of disloyalty and disrespect for the emperor, Jiji Press reported. China’s Standardization Administration body said on Wednesday it has suspended some requirements that could have restricted the use and production of electric bicycles in the country.
The Taiwan-listed shares of Tingyi (SEHK: 0322) Holdings, the company behind instant noodle brand Master Kong, were limit up on their first trading day, on optimism the company would benefit from mainland’s solid economic growth. Tingyi’s Taiwan depositary receipts had climbed 7 per cent, beating the main index’s 0.5 per cent slide in early trade. “China will still post 8-10 per cent economic growth in the medium- to long-term,” said Robert Hsieh, an executive of Shin Kong Asset Management. He said Tingyi’s TDRs would likely rise 14 per cent over the next two days. Tingyi, the top-selling noodle brand in mainland, said on Tuesday it was aiming to allocate nearly 90 per cent more in capital spending for next year to cash in on growing demand. The company said it would spend around US$100 million next year to expand its noodle business on the mainland, where it expects 10-12 per cent growth in overall noodle sales next year. Tingyi, which competes with Taiwan’s Uni-President Enterprises, Coca-Cola and mainland’s Wahaha, a partner of France’s Danone, controls more than 50 per cent of mainland’s instant noodle market in value terms, and about 49 per cent of its ready-to-drink tea market, a survey by AC Nielsen showed.
Dec 17, 2009
The number of secondary schools teaching in English in Hong Kong will almost double in September when the changes to language instruction policy take effect, according to school profiles released by the government yesterday. Taking advantage of the latest changes in language policy, 16 schools which are now teaching in Chinese will switch to teaching entirely in English. Another 80 schools will adopt a mixed approach - using Chinese for humanities subjects but using English for science subjects. Seven schools will do the opposite by switching at least some classes from English to Chinese. This means 199 schools, or nearly half of the 402 secondary schools in Hong Kong, will be teaching fully or mainly in English. This is the second turnaround of the medium of instruction adopted in local schools. The government adopted the mother-tongue policy in 1998 when all but selected secondary schools were ordered to switch their medium of instruction to Chinese. At present, 110 schools teach entirely in English.
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The froth is coming off Hong Kong's property market, with bidding at the biggest
government land auction in two years failing to reach the high prices forecast
by analysts. Two residential sites on the Tai Po waterfront were sold yesterday
at the low end of market expectations, a signal that developers believe property
prices are close to their peak. Average residential property prices in Hong Kong
have risen 28 per cent this year, according to property benchmark Centa-City
Index, raising fears of a property bubble. Sino Land acquired both sites in the
auction, one for HK$5.15 billion and the other for HK$5.25 billion. The second
site was bought jointly with K Wah International, which owns a 15 per cent
stake. The total land price of HK$10.4 billion has been called a perfect
Christmas present for Sino Land, being 16 per cent less than the most bullish
expectation of HK$12.4 billion. It was the second-biggest government land
auction is terms of land size and lump sum. The Hang Seng Index fell 36.78
points, or 0.17 per cent, to 21,739.39 after the auction, following gains of as
much as 222 points in the morning. Sino Land already has a strong presence in
the Tai Po area. A consortium led by Sino Land snapped up three other sites in
the area with K Wah International, Nan Fung Development and USI Holdings in
2007. The auction was the last in which sites will be exempt from new
restrictions on developers' use of so-called "green features" to inflate floor
areas. However, that was not enough to attract developers. Nicholas Brooke,
chairman of Professional Property Services, said bidding was affected by the
debate on green features as well as by the holding of the auction in the middle
of the holiday season. The opening bid for the first site, Tai Po Town Lot 200,
was HK$3.64 billion by New World Development. The auction got off to a slow
start, with the auctioneer forced to wait at least one minute for each new bid.
The plot eventually attracted seven bidders. Cheung Kong (Holdings) (SEHK: 0001)
joined in at HK$4.55 billion but withdrew after the price exceeded HK$4.9
billion. Nan Fung Development also withdrew after a bid of HK$5 billion. Sino
Land won the site with the 32nd bid. Bidding for the second site, Tai Po Town
Lot 201, was slightly more aggressive. It attracted 10 bidders, with the
consortium led by Sino Land acquiring the plot after the 34th bid. The average
land price of the sites is HK$7,214 per square foot, 29 per cent higher than the
average price of the three sites in the area acquired by Sino Land in 2007.
After the auction, Sino Land chairman Robert Ng Chee Siong said the company
planned to develop luxury apartments and houses on the sites. Brooke described
the outcome of the land auction as a reality check for the property market. "We
saw cautious bidding by the developers, which shows they have stepped back," he
said. "[Developers] can't just keep bidding for sites and assume prices will
continue to rise 20 to 30 per cent per annum. They believe prices will be pretty
flat in 2010. "The land prices are realistic. Market expectations will be more
conservative for 2010." Charles Chan Chui-kwok, managing director at Savills
Valuation and Professional Services, was disappointed with the result.
"Developers were cautious and this shows they believe that property prices are
close to the peak," he said. The two sites, next to the Science Park in Tai Po,
cover an area of 4.185 hectares, which could provide a total gross floor area of
1.44 million sq ft. 
Sino Land wins tactical battle to
consolidate its Tai Po sites - Developer's well-planned bidding secures 2 plots
for HK$10.4b. To the uninitiated, it may look like a group of grown men and
women waving table tennis paddles, but a government land auction is a
sophisticated tactical battle. Yesterday, that battle was won by Sino Land
chairman Robert Ng Chee Siong when his company bought two sites in Tai Po for
HK$10.4 billion, the low end of the market's consensus forecast. The first
residential site under the hammer was a 2.09-hectare plot that sold for HK$5.15
billion. Sino Land's 85 per cent joint venture also picked up an adjacent
residential site of the same size for HK$5.25 billion. The remaining 15 per cent
of that plot is owned by K Wah International Holdings. After the auction, Ng was
obviously happy that other bidders had not driven prices too high, and thanked
the other developers "for giving face". However, UOB Kay Hian property analyst
Sylvia Wong has another explanation for the lack of aggressive bidding. Wong
said Sino Land - along with its consortium comprising K Wah, Nan Fung
Development and USI - bought three nearby sites in 2007, meaning it was more
interested in consolidating properties in the area. While the government
auctioneer emphasised the fierce bidding at yesterday's auction - the first site
attracted seven bidders and the second 10 - a closer look reveals that some
bidders were formed by the same group of developers. 
One of Hong Kong's gold medal winners at the 2006 Doha Asian Games was yesterday
charged with bribing his way into the event after being suspended from
competition for failing a drugs test. Chan Yun-to, 43, is accused of conspiring
to offer US$10,000 (HK$78,000) in bribes to the secretary-general of the Asian
Bodybuilding and Fitness Federation, Paul Chua. In return, the official "was
said to have shortened or lifted the period of suspension of participating in
any bodybuilding competition imposed on Chan," enabling him to participate, the
Independent Commission Against Corruption said. Chan won the men's 75-kilogram
class at the Games. The ICAC yesterday also laid three additional charges
against Hong Kong China Bodybuilding and Fitness Association chairman Simon Chan
Siu-man, 39. In August, he was charged with one count of conspiracy for an agent
to accept an advantage and one of fraud in connection with the Doha incident.
Two of the additional charges involve conspiracy for an agent to accept an
advantage and the third is conspiracy to defraud. One of the bribery charges
alleges that between January and December 2006, Simon Chan and Chan Yun-to
conspired together with Chua and an association coach for Chua to accept
US$10,000 from Chan Yun-to. Another bribery charge alleges Simon Chan of having
conspired together with Chua, the association coach, and an unnamed bodybuilder
between January 2006 and May 2009 for Chua to accept between HK$100,000 and
HK$200,000 from the athlete for the same reason. ICAC inquiries revealed that
Chan Yun-to and the unnamed athlete were banned from any bodybuilding
competition for two years and life respectively because they had failed doping
tests in October 2005 after competing in an event held in South Korea. The
remaining conspiracy charge alleges that between April 2007 and May 2009, Simon
Chan conspired together with the unnamed athlete to defraud the Hong Kong Sports
Institute by falsely representing that the athlete was a full-time athlete and
that his occupation was a part- time personal trainer. Owing to the alleged
false representation, the institute was led to approve an elite training grant
of HK$600,000 for the athlete. The defendants have been released on bail by the
graftbusting body, pending their appearance at Eastern Magistrates' Court on
Thursday.
Exports surpassed HK$240.7 billion in November as shipments of Christmas goods
fuelled a rebound from October's 13.1 per cent decline. Hong Kong's exports last
month recorded their first year-on-year growth since the global financial crisis
started to bite late last year, but businesses are cautious on the short-term
outlook. The latest figures released by the Census and Statistics Department
yesterday showed exports last month surpassed HK$240.7 billion, rising 1.3 per
cent from November last year. This is a strong rebound from the 13.1 per cent
year-on-year decline in October and the first year-on-year rise since October
last year. "November is the peak period for exporting Christmas goods,"
Federation of Hong Kong Industries deputy chairman Stanley Lau Chin-ho said.
"Even though exports only rose slightly, the figures at least show the situation
began stabilising during the peak season." He said electronics, toys, apparel
and other non-luxury goods continued to perform better. The value of re-exports
increased 1.9 per cent from a year ago to more than HK$228.5 billion, the data
shows, while domestic exports plummeted almost 20 per cent to HK$5.5 billion.
Exports to Asia grew 8 per cent. Strong increases were posted for exports to
Vietnam, which surged 37.2 per cent, and Taiwan, up 18.3 per cent. The data also
shows the export of electrical machinery, equipment and appliances remained the
strongest at HK$64.3 million, up 8.4 per cent over the year. Imports increased
6.5 per cent to HK$254.8 billion. Lau expects positive year-on-year growth this
month and next because of a low base of comparison, but he warns the market will
be quieter after the festive season. "It doesn't mean export figures will then
rally," he said. "The export market has not yet fully recovered and it's still
subject to worries about governments retreating from the market, for example."
Compared with October, total exports dropped 2.8 per cent. For the first 11
months of this year, exports shrank 14.3 per cent from a year ago while imports
dropped 13.3 per cent. A trade deficit of almost HK$190 billion was recorded for
the period. A government spokesman said Asian markets continued to fare better
than the United States and Europe, adding the slow recovery in the global
economy should help trade in the coming months, lifting Hong Kong in the
process. However, global economic prospects were still subject to "considerable
uncertainties", he said, and the external trading environment "could remain
challenging". 
Hong Kong will move a step closer to
becoming an offshore centre for yuan business under a proposal to be studied by
Beijing to allow mainland people and firms to use the currency for foreign
direct investments in the city. This was among suggestions raised by Premier Wen
Jiabao during a meeting with Chief Executive Donald Tsang Yam-kuen in Beijing.
If it goes ahead, it would help consolidate the city's status as an
international financial centre and a testing ground for mainland financial
reform. Quoting Wen, Tsang said the mainland would also explore the viability of
using yuan for trade and project financing in Hong Kong, and would continue to
strengthen the development of the yuan debentures business in the city.
Co-operation between the securities markets in Hong Kong and Shanghai will also
be promoted. A proposal would be put forward for the introduction of Hong Kong
Exchange-traded funds (ETF) and China depositary receipts (CDRs) in Shanghai,
the chief executive said. ETFs are an investment product backed by a portfolio
of stocks in a particular market. Their units trade on the stock exchange like
other stocks. CDRs, which are similar to American depository receipts, now list
on the Shanghai or Shenzhen stock exchanges. The proposal would allow overseas
firms and red chips - mainland companies registered in Hong Kong - to raise
funds by allowing mainland investors to trade these shares. A senior government
official said last night it would be a breakthrough if the central government
allowed mainlanders to make foreign direct investments in Hong Kong. "This means
mainland firms can buy things here with yuan without changing it to Hong Kong
dollars or other currency. There will be more yuan available in Hong Kong and
this will help Hong Kong to be a yuan offshore centre," the official said.
Another senior official said: "The central government has indicated that
whatever mainland financial reform can be tested in Hong Kong will be tested in
Hong Kong." The city has been allowed to have cross-border business settled in
yuan since July and the transactions amounted to about 490 million yuan (HK$556
million) by the end of last month. There are also 57 billion yuan of deposits in
Hong Kong. The People's Bank of China said last week in a statement, issued
jointly with the banking, insurance and securities regulators, that the mainland
would extend the areas where a trial of cross-border yuan settlements is being
conducted. It would also increase the number of companies allowed to settle
cross-border trade in yuan. Peter Wong Tung-shun, an executive director at HSBC
(SEHK: 0005, announcements, news) Asia Pacific, said Hong Kong would benefit if
mainlanders were allowed to use yuan to make direct investment in the city. He
said the move could also facilitate the development of other yuan products, such
as yuan bonds, as investors would look for different kinds of investments. Billy
Mak Sui-choi, an associate professor at Baptist University, said it would be
important for Hong Kong if the mainland allowed more use of yuan in the city.
"It will facilitate Hong Kong's development as a yuan offshore centre," Mak
said, adding that there needed to be enough yuan in the city before it could
become a yuan offshore center. 
Workers at Two IFC prepare for
the New Year's Eve fireworks show, which will see HK$3 million worth of
fireworks let off from 10 buildings on Hong Kong Island, in a display designed
to resemble a dancing dragon. Organized by the Tourism Board, the 4-1/2 minute
show will feature 9,800 fireworks launched from 48 firing points.
Hong Kong is welcoming the New Year with
a pyrotechnics display that offers more bang for the same bucks. The Hong Kong
Tourism Board said yesterday 9,000 charges will be set off in a display that
will last the first 4 minutes of 2010. That is 3,000 more than the show to
welcome this year, but for the same HK$3 million cost. The highlight of the show
will be a 2.2-kilometer dragon, whose head will sit atop the 88-story Two IFC
and whose body will stretch across nine other skyscrapers and end at the Sun
Hung Kai Centre in Wan Chai. Pyrotechnic firing points are being set up on top
of landmarks such as Two IFC, HSBC headquarters and Central Plaza. Pyro Magic
Production chief executive Wilson Mao Wai-shing said the northern facade of Two
IFC will be used for the first time and firing points will be increased from 36
to 48. He said the display will give the audience a more vivid experience since
the facade faces Victoria Harbor. Twenty sets of powerful searchlights on two
sides of Two IFC will enhance the effect. "Installing the firing points at the
northern facade was tricky as it is windy there and subject to weather
conditions, but we accept the challenge," Mao said. Mao said the cost will
remain the same because some of the LED lights used in the 2009 show will be
reused while the organizers are using experience from the last show to cut
costs. The display will begin promptly at the end of the countdown. LED lights
on Two IFC will tick off the seconds to midnight for a crowd that is expected to
be 400,000 strong. The Transport Department said special traffic and transport
arrangements will be implemented in phases on New Year's Eve for the harbor
countdown and others in Times Square, the Causeway Bay typhoon shelter and Lan
Kwai Fong. For the Two IFC countdown, road closures may be implemented at the
Rumsey Street flyover, Man Kwong Street, Man Po Street, Man Fai Street, Man Chiu
Street, Man Cheung Street, Finance Street and a section of Man Yiu Street.
Central Piers 7 and 8 will be closed from noon. In the Times Square area,
sections of Russell Street and Matheson Street will be closed from 5pm. From
6pm, Percival Street, Lee Garden Road, Pak Sha Road, Kai Chiu Road, Yun Ping
Road, Jardine's Bazaar and other roads in the vicinity of Times Square, such as
Yiu Wah Street and Tang Lung Street, will also be closed. Depending on crowds in
the Paterson Street shopping area, Sugar Street, Great George Street, and
Kingston Street will be closed from 6pm. 
China*: China
Central Television, the mainland's state broadcaster, has launched an internet
television network as the authorities wake up to the power of the internet in
shaping public opinion. China Network Television (CNTV) was up and running
yesterday, in an initiative described by CCTV president Jiao Li as a step
forward in building a new media platform." The launch of CNTV was an important
initiative to seize the high ground of the new media and to strengthen
capability in international communications," added Jiao. CNTV offers internet
users 24-hour live news, sports and entertainment programs as well as
video-on-demand and file-sharing. CNTV will add another five channels in the
second half of next month to provide films, drama and documentaries. The
venture, said to have cost CCTV 200 million yuan (HK$227 million), came after
Xinhua launched a CNN-style news network last month, and the launch of an
internet-based television channel by Golden Eagle Broadcasting System, which
owns Hunan Satellite TV, the mainland's most successful regional network. The
aggressive expansion of official media outlets was seen by many to be a result
of an ideological shift among senior state officials prompted by protests over
the country's human rights records and its handling of Tibet during the
international leg of the Olympic torch relay in 2008. The central government
reportedly earmarked 45 billion yuan earlier this year for the expansion of
major official media outlets including Xinhua, CCTV and People's Daily in a push
for greater international reach. Professor Huang Yu of Hong Kong Baptist
University said CNTV was part of an official campaign to harness the so-called
soft power of the country to match its rising economic clout. Huang said that
the aggressive internet-based campaign was also aimed at creating a favourable
media atmosphere ahead of another sensitive year in which top officials are
expected to jostle for position in the upcoming leadership reshuffle. The
professor said there was no doubt that the central government had the resources
to spend on media expansion, however he said that tighter censorship,
particularly of news, could hamper official media outlets' ability to compete
with firms such as CNN. CNTV said yesterday that it had set up mirror sites in
five overseas cities, including Los Angles and Moscow, to allow faster access.
Professor Yu Guomin , a media expert at Renmin University, said that the
internet television network would allow a greater level of interaction than
traditional media. But the professor said the station should do more than simply
transfer existing content to a new platform. "The introduction of internet
television should serve as a new media platform where new ways of content
generation should be trialled under new rules, including a new set of censorship
criteria," he said. The professor said the new service would provide CCTV with a
chance to raise its international profile. "But [its success] will hinge upon
whether CCTV can bring itself in line with the current trend of media
development, including the application of much-relaxed online censorship." The
station is at 
Despite their often-strained ties, China and India are jointly creating a new
kind of Silk Road - one built with high-speed, fibre-optic communications
systems - through a narrow Himalayan mountain pass that connects the two
countries. Tata Communications, India's biggest telecommunications company, and
fixed-line network giant China Telecom Corp (SEHK: 0728) are poised to launch
the second direct terrestrial communications link between the neighbouring
economies. The first terrestrial fibre-optic connection over the same Himalayan
route was opened in August by China Telecom and Reliance Communications, which
operates India's most extensive fibre-optic infrastructure and the world's
largest private undersea cable system. The land links are expected to help boost
bilateral trade, which rose 34 per cent year on year to US$51.8 billion last
year. More importantly, it could become a symbol of rapprochement between the
two countries, whose armies fought a border war over the Himalayas in 1962. "The
India-China terrestrial cable connection will go a long way in meeting the
business needs of the world's two fastest-emerging economies," said Byron
Clatterbuck, a senior vice-president for global transmission services at Tata
Communications. Clatterbuck said planning and construction of the link began
about two years ago after Beijing and New Delhi reopened the Nathu La pass in
June 2006 through a series of trade agreements. The pass had been sealed since
the 1962 conflict. Nathu La, at an altitude of 4,310 metres, links the Tibetan
border town of Yadong to the city of Siliguri in the Darjeeling district in the
Indian state of West Bengal. The Tata and Reliance fibre-optic cable systems
with China Telecom are designed to deliver high-speed and high-capacity
connection to both countries' key cities and rural areas. Previously, the only
available option for high-bandwidth network connection between the mainland and
India was through a submarine cable system through Hong Kong or Singapore. The
disruption to communications services in the Asia-Pacific because of recent
typhoons and earthquakes has clearly exposed the risk of depending solely on
those undersea routes. "The new terrestrial India-China route expands the
options we provide our customers, who require diverse connectivity between China
and India and a way to bring more capacity from India to Asia and Asia to
Europe," said Clatterbuck. The Tata-China Telecom terrestrial system is 500
kilometres long with 24 fibers inside the cable, according to Clatterbuck. He
said one fibre-optic link would initially be available at 10 gigabits per second
transmission capacity. "At a 10Gbps speed, a user can transfer a 1.5-gigabyte
movie in less than two seconds between India and China," he said. The
Reliance-China Telecom cable, which has an initial capacity of 20Gbps, stretched
about 250 kilometers from the border pass to India. The length on the mainland
carrier's side is not known. While their carriers are strengthening the digital
bonds between the two countries, tensions on the trade front remain. In
September, reports of India's plan to restrict the sale and use of Chinese-made
telecommunications equipment in the country because of security concerns again
tested the two countries' economic ties.
A little knowledge and thorough
testing are all that is needed when buying a second-hand car to get the safest
deal, says one buyer. In a country where what car you drive often reflects your
social status, Zhong Yuebing, a twenty something used-car owner, is still a bit
of an anomaly. Zhong, a Shanghainese who works at a car consulting firm as a
support and training specialist, thinks his second-hand Volkswagen Bora
functions well enough. Originally priced at 180,000 yuan (HK$204,350), the
five-year-old Bora cost him 80,000 yuan. Zhong says a second-hand car is not a
bad choice for him until he can save enough for a 400,000-yuan high-end new car
like an Audi A6. New cars are still the vehicle of choice on the mainland with
that sector growing 40 per cent this year. The country is expected to record
sales of 13 million new cars this year, up from 9.38 million last year. It is
the only vehicle market to show growth in the global economic crisis and has
surpassed the United States as the biggest market. However, among recent
university graduates, middle-income families and businessmen or officials who
want to keep a low profile, the second-hand car market has become more
attractive and is growing at about 10 per cent a year. Used-car sales figures
nationwide are not available, but Guangzhou may serve as a proxy. Sun Mingxia is
the general manager of Guangzhou's largest used-car market - Baolijie - on a
40,000 square meter lot in the southern part of the city and home to about 200
used-car dealers. Sun says about two million new cars were sold in the city last
year, compared with about 100,000 used cars. A boom in used cars usually comes
after the peak sales of new cars. "Especially now, there are some car owners who
want to catch up with the latest models," she said. "They will dump their cars
after owning them only for a short time." Analysts say the second-hand car
market can take about five years to scale up and will begin improving in large
part because China recorded robust new-car sales recently. "The new-car market
was not yet big enough five years ago, so the second-hand market couldn't be
developed" because of a lack of supply, said car analyst Chen Qiaoning at ABN
Amro Teda Fund. "But the market is starting to emerge now as some people will
change their cars after buying in 2002 or 2003." Scattered along the road
outside Baolijie are dozens of individual second-hand car collectors. Called qiu
che, which means begging for a car, these collectors buy used cars from owners
and sell them to dealers. Before 2002, the second-hand market was fragmented and
unregulated. All sales were individual transactions between buyers and sellers.
But then Beijing started to regulate the market, saying second-hand car sellers
should register with the State Administration for Industry and Commerce. Buyers
and sellers were asked to follow a specific contract designed by the government
when doing transactions. Dealers in Baolijie provide a one-year warranty to
consumers under which car owners can get their vehicles repaired free if
problems occur. "It's taking time for the market to mature," said Sun. "But
honestly, the situation now is that good-quality second-hand car supply is much
slower than demand." But despite the high turnover, she said it was not always
easy to get a good second-hand car because the quality was often poor. In the
north, sub-zero weather in Beijing has kept consumers away from the second-hand
car market, but dealers say they expect sales to improve by the Lunar New Year
in February. "We got four Audi A6s from Huaxia Bank at an auction," said dealer
Li Qiang in Beijing. "These cars are welcomed by some businessmen who need to
drive a good car but don't want to bother about always having the latest
models." There are no qiu che in Beijing. Instead, larger auctioneers have set
up shop near the Yayuncun second-hand market in the northern part of the city.
They buy from individuals and turn around and auction the cars to nearby
dealers. A second-hand Audi A6 can go for 198,000 yuan, about half the price of
the new model. For most buyers, a car is pure pragmatism, a daily necessity and
not for showing off. Zhong, who bought the used Bora, shares a similar
perspective. "I think a car is mainly used for daily transport," he said. "It's
not necessary to drive a new car. I used my 80,000 yuan budget to buy a
Volkswagen Bora. All we need to do is to familiarise ourselves with the
mechanics of the second-hand car. Testing it thoroughly before buying is the
safest way to own one of these cars." But Zhong is not immune to the
considerations of status. He said his Bora provided "more value for money than
buying a new Hyundai brand car". In terms of brand reputation and functionality,
Zhong believes Volkswagen is higher up the status ladder than Hyundai. 
FamilyMart, Japan's third-largest
convenience store chain, has unveiled an aggressive expansion campaign in China
next year, which is expected to heat up the already white-hot competition
between local and foreign retailers. FamilyMart president Junji Ueda said
yesterday its net store increase on the mainland was likely to be much bigger in
the next financial year than the 130 new stores expected to open by the end of
this fiscal year in February. FamilyMart has about 7,600 stores in Japan and
7,900 overseas, including more than 4,000 in South Korea, about 300 on the
mainland and others in Taiwan and Thailand. It opened its first store in Vietnam
last week. Despite its robust growth and attractive prospects, securing a bigger
slice of the mainland market may prove challenging. FamilyMart will not only
compete against convenience chains such as 7-Eleven, Circle K and China Resource
Enterprises' Vanguard, but will also have to contend with international retail
giants seeking to cash in on the market. In August last year, British retailer
Tesco introduced its convenience store brand Express in Shanghai, while American
supermarket operator Wal-Mart Stores has set up six Smart Choice outlets in the
residential communities of Shenzhen since April this year, saying this would be
its first step to open 1,000 outlets in the country within five years. However,
home-grown convenience store chains are also emerging one after another and
taking a significant share of the market. Shanghai, for example, has about 4,300
convenience stores, 90 per cent of which are run by local operators. FamilyMart
has launched its development plan to step up expansion overseas at a time when
Japan's consumption market faces weak growth prospects because of its ageing
population. Korea will be another target, with 400 to 500 new stores planned
there in the next financial year. While its Asian expansion has been strong, the
retailer's US business has been struggling as it has yet to find a viable
business model. It has about 10 stores in the country. Ueda said the chain had
started moving its stores to city-centre areas, where it expects more customer
traffic, and would wait a year to see how this worked before making a decision
on its future. "In the next year, we will decide the next step [for the US
business] from the following options - to make further expansion, freeze at the
current size or pull out," he said.
Chinese President Hu Jintao (R)
meets with Donald Tsang Yam-Kuen, chief executive of the Hong Kong Special
Administrative Region (SAR), in Beijing, capital of China, on Dec. 28, 2009.
Tsang is in Beijing to report on his work to the central government. Chinese
President Hu Jintao met with Donald Tsang Yam-Kuen, chief executive of the Hong
Kong Special Administrative Region (SAR) in Beijing on Monday afternoon. Tsang
is in Beijing to report on his work to the central government. He also met with
Chinese Premier Wen Jiabao earlier on Monday. 
Chairman of Sino Land Robert Ng Chee Siong leaves after bidding for a site in
Tai Po, during a land auction at Queen Elizabeth Stadium in Wan Chai. The Hong
Kong government on Monday auctioned off two plots of land in the New Territories
well above the open bid prices - but below the market consensus of HK$5.45
billion. One plot of land went to Sino Land for HK$5.15 billion, more than 40
per cent above the open bid of HK$3.6 billion, but below the market consensus of
HK$5.45 billion. A second piece of land - also in Tai Po - which also received
an open bid of HK$3.6 billion, went for HK$5.25 billion to Mid-sized developer K
Wah International. The first major government land auction in two years comes
amid worries that final price tag will fan a property bubble. Hong Kong shares
erased early gains and edged down 0.12 per cent after the results of the auction
came in under market expectations. Property stocks turned lower after the
auction, with Cheung Kong (SEHK: 0001) sliding 0.36 per cent, New World
Development easing 0.38 per cent and Sun Hung Kai Properties (SEHK: 0016)
shedding 0.79 per cent by late afternoon.
Passengers go through security
checks at Detroit airport after the failed attempt to blow up a plane
approaching the city. Air travellers to the United States have been hit with
more onboard restrictions - and possible delays - as airlines tighten security
following the failed attempt to blow up a plane over the US. During the final
hour before landing, passengers are now not allowed to keep anything on their
laps, not even blankets or pillows, and must remain seated. All hand luggage
must be stored in overhead compartments. The use of the inflight satellite
phones and the internet is banned throughout flights. Before boarding,
passengers must now also undergo a second security screening at the gate, where
they will be frisked and have their carry-on baggage and personal property
inspected again. The extra measures, which apply to all flights to the US, came
into force in response to a formal request from Washington after the attempted
attack on Christmas Day. 
CLP Holdings chief executive officer
Andrew Brandler says the collapse of the talks in Copenhagen on climate change
was a "real shame" and a big disappointment. The chief of Hong Kong's largest
power supplier says the failed Copenhagen climate talks will lead to increased
risks and uncertainties in clean-energy development in Asia. CLP Holdings (SEHK:
0002) chief executive officer Andrew Brandler said the collapse of the talks was
a "real shame" and big disappointment. CLP had no immediate plans to change its
business strategy, carbon targets or commitment to renewable energy, as it is
carefully watching post-Copenhagen developments. The company's belief in nuclear
power as an option to decarbonise power generation has also not been shaken, and
its sights are set on new reactors in Guangdong to boost a carbon-free
electricity supply to the region, including Hong Kong. Brandler said the outcome
of Copenhagen was unexpected, given the good foundations that had been laid
since the Bali round of talks in 2007. "I felt there was a good prospect that a
clear way forward would have been established for between 2012 and 2020, and
some ideas on global emission by 2050. "The fact that the whole thing collapsed,
I think, is bewildering, and people are still trying to get their minds around
what it means." While a war of words had broken out on who was to be blamed for
the failure, CLP, as a major power supplier in Asia, is on the alert for the
increased risks and uncertainties over national policy changes. These changes
could mean a lot to power suppliers, whose investments could cost billions of
dollars and last up to 30 years in a single project. It was particularly so for
CLP, which not only has extensive power investments across Asia, it is the
largest external renewable-energy investor in China and India. "Without a global
framework, the degree of uncertainties of national plans is heightened,"
Brandler said. He said there had been big expansions of national plans in the
past two years in China, which had tripled its wind-power capacity. India has
similar plans, while Thailand, too, offers favourable policies on renewable
energy. And the expansion contributed to CLP's fast-growing renewable-energy
portfolio. Comprising 1 per cent of its total generation in 2004, it now stands
at more than 10 per cent - 1,300 megawatts (excluding nuclear-generated power).
Whether the positive momentum will continue, Brandler believes China and India
will move ahead with their plans regardless of the Copenhagen outcome. He said a
global climate accord was "too important not to happen", though there was a risk
that it might end up like the World Trade Organization, with negotiations
inching forward and countries looking at their own interests rather than a wider
deal. He said future talk could be more efficient under the framework of the
Group of 20. In the midst of this fluidity of any future climate regime,
Brandler said CLP would continue to meet the targets of a 75 per cent cut in
carbon intensity by 2050 and having one-fifth of its power generated from
renewable and nuclear sources by 2020. The group would also continue to look for
new opportunities in renewable-energy projects, including the marginally
financially viable ones that qualified for the Clean Development Mechanism (CDM).
Under the mechanism, industrialized nations can buy carbon credits from
emission-reduction projects in developing countries to meet their binding
targets. The group would also take advantage of a new rule to allow Hong
Kong-registered companies to engage in fully owned mainland CDM projects. In the
past, only mainland firms qualified. However, Brandler hoped the mechanism could
be reformed to have more clarity and certainty on carbon prices, which were open
to manipulations. The mechanism should also be expanded to include low- or
zero-carbon sources such as nuclear power. Brandler said it was wrong to exclude
nuclear power, the only technology that could deliver firm base load power
without any carbon emission. Seeing nuclear power as a necessity to meet energy
needs reliably while delivering environmental benefits such as clean air, he
said the use of nuclear power was more a matter of public acceptance than
anything else. "What is the bigger evil? Catastrophic global warming or
proliferation of nuclear power stations?" he asked. "We have been operating very
safely ... and a lot of debate around nuclear is very emotional, not entirely
rational." In contrast to the 1980s, when a million people signed a petition to
oppose the construction of China's first large-scale commercial nuclear power
station 50 kilometers northeast of Hong Kong in Daya Bay, Shenzhen, he said the
city had now become quite "relaxed and rational" about it. He attributed the
underlying public acceptance to operational transparency and the safety record
of the power station, which accounts for about a third of CLP's power supply in
Hong Kong. CLP now owns 25 per cent stakes in two reactors in the Daya Bay
nuclear power station - which has six reactors - under a joint venture with its
mainland partner. With a total of 1,968MW in capacity, up to 70 per cent of the
power generated by the two units has been sold to Hong Kong since 1994. It is
estimated that about 7.5 million tons of carbon otherwise emitted by
coal-burning could be avoided every year. This year, the mainland authority also
agreed to extend the cross-border nuclear power supply by 20 more years beyond
2014 at no less than the current volume. Studies are also being undertaken by
CLP's mainland partner, China Guangdong Nuclear Power Holding Company, on the
technical feasibility of constructing a seventh and eighth reactor at Daya Bay.
Brandler said nuclear power, though more expensive now, could also be favourably
compared to gas-fired generation, since it was less subject to price volatility.
CLP Power in Hong Kong has one-third of its power generated by gas-burning, and
it will receive new gas supplies from the mainland via a pipeline originating in
Central Asia and a new liquefied-gas terminal to be built in Shekou, Shenzhen.
The new gas supply is needed to replace the depleting Hainan gas reserve and
expand use of cleaner fuel to improve air quality. Brandler said talks on gas
pricing had not yet started, but he expected that the price would not be purely
driven by market forces, as it would also involve both the central and Hong Kong
governments. As to the future of the existing 4,100MW coal-fired generation
units operated by CLP Power, he said it would be cheaper in the long term to
re-engineer them into gas-fired. But he said coal might still be needed for
meeting peak load demands. Coal constitutes 40 per cent of CLP Power's total
power generation. On whether Hong Kong should set a target on carbon reduction,
Brandler said such a target would be a gimmick unless it had specific policy
goals. "It is easier for the government to tell us, say, to phase out coal by
2020. If you say Hong Kong should reduce emissions by 10 per cent, who is going
to do it?" he said.
The financial crisis is not over
yet - that is the stark warning from Premier Wen Jiabao. Beijing still has much
work to do to sustain economic growth, Wen told Xinhua News Agency yesterday. He
also cautioned about asset price bubbles - especially in the property sector -
saying the problem will be one of the central government's main tasks next year.
"The property sector made a fast recovery this year, but at the same time home
prices have risen too quickly in certain areas and cities, making Beijing highly
concerned." Measures will be taken to cool down the overheated property market.
They include taxes and differentiated interest rates to combat speculation. The
government will crack down on developers who hoard land in the hope of bigger
profits, said Wen, adding it will expand the development of low-cost housing
with preferential policies. He said the mainland economy has stabilized but
sounded a cautionary note. "It's recovering but we are not sure if it's
sustainable. Many companies are still suffering and economic growth is still
unbalanced." Wen emphasized that Beijing's efforts in the past year have been
effective and are in the right direction. But he admitted the government could
have done better, "for example, if bank lending were more balanced, better
structured and on a smaller scale." He added: "We adjusted the policy in the
second half of the year to tackle the situation." Wen said it is too early to
exit from stimulus plans because the economy still lacks momentum and needs
support. "If we pull out too early all the previous efforts would have been in
vain." Wen said there are no signs of inflation because the producer price index
is still in negative territory and the consumer price index has just turned
positive. But this year's exceptional money supply growth may stoke inflationary
expectations. He reiterated that China will not bow to calls from trading
partners for a faster yuan appreciation. "Demanding a stronger yuan while at the
same time adopting trade protectionism is meant to arrest China's development."
China developers will find it
increasingly difficult to secure financing through initial public offerings,
according to property experts. "Property developers have to get financing
through IPOs for continual development, as they are not allowed to buy land with
bank loans," said Cinda International property analyst Christina Ngai. But
Adrian Ngan, a CCB International Securities department executive director, said
developers should lower their expectations. "Listing candidates keen to raise
funds may have to price their IPOs at a single-digit price-earnings multiple in
order to attract investors," Ngan said, adding that listed developers trade at
between 10 and 20 times their forecast 2009 earnings. "Some listing candidates
may prefer to wait until the market can offer an attractive valuation, otherwise
they have to compromise," said Ngai. Turning to the mainland property market,
Ngai expects developers to cut selling prices to boost sales next year, provided
that loan growth shrinks because of official mortgage controls. However, CLSA
analyst Nicole Wong said the actual effect of any government measure is hard to
predict because of the policy itself and market fluidity. Beijing will not
successfully curb property prices unless it can sort out its relationship with
local governments, according to both Wu Xiaoling, deputy director of the
National People's Congress Finance and Economy Commission, and Ren Zhiqian,
president of Beijing Huayuan Group. Wu said there has to be better symmetry in
administrative and financial rights between the central and regional
governments. Ren said the central government appears to lack effective policy
and management restrictions on local governments. "The Ministry of Land and
Resources has repeatedly issued restrictions to regional governments on the size
of saleable land," Ren said. "But the Guangzhou government still resisted and
sold the mammoth Guangzhou Asian Games Town site in its entirety for 25.5
billion yuan" (HK$28.96 billion).
Exercising a public flotation in
the United States is the latest trend in China's budget hotel industry. Spurred
up by the domestic consumption stimulus program launched by the Chinese
government and a commitment to boost the tourism industry, China's budget hotel
operators have never been hungrier than now for raising money to meet an
aggressive expansion plan. And for them, the US stock market is a good choice.
In late November of 2009, Guangzhou-based 7 Days Inn, the third largest budget
hotel group nationwide by network, successfully made its debut on the New York
Stock Exchange, raising $111 million. It was the second budget hotel group to
list in the United States, following Shanghai-based Home Inn, which was listed
in 2006 on the NASDAQ. The listing by 7 Days Inn is just a beginning, and it is
expected to spur a wave of initial public offerings (IPOs) in the US by the
industry. Hanting Inn, another leading budget hotel, is awaiting a listing at
the NASDAQ, said industrial insiders. Early in 2008, high-level executives from
Green Tree Inn said the company was mulling over an IPO, either on the New York
Stock Exchange or the NASDAQ. Right time for listing "The time is ripe for
Chinese budget hotels to go to the stock market. The earlier the better," said
Alex Zheng, CEO of 7 Days Group. The 7 Days Inn initiated its IPO preparation in
late 2007 but the move was delayed by the global financial crisis. However,
observers say this was a good thing for the company. "We planned to list on the
NASDAQ but now we are becoming strong enough to list on the main board after a
year of expansion and improvement," said Zheng. The listing of 7 Days Inn is
typical of moves within the sector. "Many IPOs were grounded because of the
global economic disaster. As the economic recovery for China is under way, the
companies are naturally re-launching their IPO plans," said David Sun, chief
executive officer of Home Inn. Budget hotels set for big expansion - In
addition, their aggressive expansion plans are also forcing the budget hotels to
grab as much money as they can. Sun said Home Inn will have another 200 hotels
under operation in 2010, from the current 600-odd properties. The chairman of
Green Tree Inn said the portfolio of the brand will rise to 600 next year from
400 now. Zheng, from 7 Days Inn, told China Business Weekly that the company
expected to surpass Home Inn and lead the local budget hotel market within five
years. "We expect to have 1,800 hotels nationwide then," he said. The expansion
means handsome investment. "A budget hotel on average requires the injection of
6 to 7 million yuan so an additional 100 hotels will cost us as much as 600 to
700 million yuan," said Sun. After the global economic doldrums struck,
"overseas venture capital or equities, which were active during the past few
years in the budget hotel sector, became quiet and are still waiting for better
times", Li Xinjian, a professor from the School of Tourism Management at Beijing
International Studies University. "An IPO is a quick way to get money for these
leading brands." Apart from the Shanghai-based Jinjiang Inn, which listed
domestically on the Shanghai Stock Exchange, many budget hotels are planning to
go for listings in the US. "Listing overseas consumes more time, energy and
effort but, if successful, it is a signal of how qualified you are and helps
raise funds in a faster and more efficient way," said Sun. Zheng, from 7 Days
Inn, agreed. "Listing in the US will benefit us more in the long term by
improving corporate governance and management," he said. The listings of Chinese
budget hotels are also invigorating the US stock market. "We were surprised to
be warmly welcomed by the investors there," said Zheng. On the first trading
day, shares of the 7 Days Inn grew by 13.64 percent to $12.5, and Home Inn, the
first US-listed budget hotel operator, has witnessed a share rise of nearly 64
percent to $36.18 from the opening price in 2006 of $22. "We are not concerned
about the price. When the network of the 7 Days Inn becomes larger, the price is
bound to pick up," said Zheng. During the past few years, the local budget hotel
sector has been a hot spot for overseas venture capital and investors. In 2003,
Home Inn raised funds from IDG Capital Partners and Sycamore Ventures, which
paved the way for its massive expansion. The 7 Days Inn has received three
rounds of injections from a slew of big names including Warburg Pincus, Deutsche
Bank and Merrill Lynch. Expansion, ripe time - The first budget hotel appeared
in 1997, with Jinjiang Inn launching in Shanghai. But the industry did not take
off until 2003 when a slew of brands were established amid a spree of
expansionism. According to the China Budget Hotel Website, Chinese budget hotels
have increased to 2,800 in 2009 from 23 back in 2000 and the room number has
surged to 313,000, up from 3,236 nine years ago. "The industry is maturing, and
another wave of expansion is coming," said Sun. While the high-end hotel sector
was badly hurt by the economic recession and is expected to suffer for quite a
time, budget hotels have hardly been affected. "To be frank, we have felt little
negative impact," said Zheng. During the period from 2007 to 2009, the 7 Days
Inn's occupancy rate remained at close to "90 percent". "The figure surprised
the American investors, but it's true," said Zheng. As the corporate financial
report showed, during the third quarter, Home Inn's revenues grew by 37.9
percent from a year earlier to 727 million yuan, and the performance was "much
higher than expectation". The company also announced the occupancy rate on
average reached 97 percent during the third quarter in 2009, 11 percentage
higher compared with the previous year. "The last quarter of 2008 and the first
quarter of 2009 were a bit of hard, but everything has turned good since then,"
said Sun. The growth momentum for budget hotels will be "sustained", given that
business for the high-end hotels including the five- and four-star hotels is
"expected to be sluggish for quite a period", said Li. "Many travelers will be
flowing into the budget hotels from the high-end, thanks to the shrinking
corporate budget," he added. During the central government's economic working
conference held in early December, President Hu Jintao said the exports would
continue to make grim reading because there were no signs that the developed
nations and China's trading partners would recover quickly. He also emphasized
that the government would make all efforts to stimulate domestic demand for
stabilizing the economic growth. Further, the State Council in December released
guidelines on promoting the tourism industry, outlining measures to improve the
infrastructure and relevant products and services, and also boost
tourism-related spending. According to estimates in the guidelines, by 2015, the
number of domestic travelers will grow by 10 percent annually, and the number of
inbound travelers will grow by 8 percent a year. Expenditure on tourism will
account for 10 percent of Chinese people's outgoings. "Expansion and development
will be the key words for the budget hotel industry," said Sun. Looking ahead,
Sun said Home Inn will focus on the second- and third-tier cities around China.
"We are confident about these areas. More and more Chinese in smaller cities
will be able to afford to travel around, encouraged by the government's policy,"
he said. The guidelines on tourism also pointed out the government additionally
encourages qualified companies in the industry to grow bigger and stronger
through mergers and acquisitions. "There will be more deals in the coming
years," predicted Li. "Chinese consumers will be more critical about the service
and products as the industry improves. As the Chinese saying goes, 'The fittest
will survive'." 
Archaeologists have unearthed a large
third-century tomb which they say could be that of Cao Cao, the legendary
politician and general famous throughout East Asia for his Machiavellian
tactics. The tomb, in Xigaoxue village near the ancient city of Anyang, in Henan,
has an epitaph and inscription that appear to refer to Cao Cao, China Central
Television said. A Chinese proverb, "speak of Cao Cao and he appears," is the
equivalent of "speak of the devil" in English. Cao Cao was the final chancellor
of the Eastern Han dynasty, who went on to form his own state during the
political turmoil of the Three Kingdoms period. He died in 220 AD in Luoyang,
the capital of the Eastern Han dynasty, and was posthumously named Emperor of
the Wei state that he founded. In Chinese lore, a number of anecdotes tell of
Cao Cao's ruthlessness, cunning, and military and political acumen. The tomb
contains the body of a man in his 60s, corresponding to Cao Cao's age at his
death, and two women.
A factory in Fujian produces flooring
made of bamboo. It is the poor man's timber, but it could help protect the earth
from climate change. Bamboo, a building material used for thousands of years, is
gaining attention for its potential to arrest the runaway destruction of forests
due to its almost miraculous replenishment rate. Enthusiasts foresee vast
forests of the world's largest grass replacing timber - saving trees and helping
arrest the release of carbon dioxide through "reckless" deforestation. It has
even piqued the interest of Hong Kong's industrialists. The Federation of Hong
Kong Industries signed a memorandum of co-operation in October with the State
Forestry Administration's International Network for Bamboo and Rattan, and its
International Centre for Bamboo and Rattan. Under the pact, the federation
pledged to help the mainland formulate national and international standards for
bamboo processing and products ranging from furniture to food, building
materials, paper and even clothing. It also vowed to take the lead in speeding
up the modernisation of the bamboo industry, which is not yet technologically
sophisticated enough for large-scale production. The federation has called on
its members to look for investment opportunities on the mainland to turn the
versatile and abundant plant into manufactured products for export. The
federation's Martin Tam Tin-fong, who keenly supports the promotion of bamboo,
used the term "movement" to describe efforts being made worldwide to realize the
plant's potential. "It can become a revolution through which timber will
gradually be replaced," said Tam, who is the federation's mainland affairs and
building materials committee chairman, and has visited a number of mainland
bamboo forests. "The increasing price of timber and the reckless deforestation
will inevitably prompt others to look for alternative materials, and bamboo is
clearly an answer to that," he said. Bamboo accounted for just 1 per cent of the
world's forests and boosting its coverage would make a significant contribution
to reducing the release of carbon dioxide caused by deforestation, Tam said.
Bamboo could also grow extremely fast, with some species growing one meter a
day. It could also reach full height in just four months, he said. Since bamboo
declines after reaching maturity, harvesting is regarded as a necessary measure
to allow new shoots to grow. William Yu Yuen-ping, head of WWF Hong Kong's
climate program, said while bamboo was definitely a potential solution, its
future would depend on the economics of replacing timber. However, bamboo might
still face problems when competing with conventional materials. Not only are its
size and texture different from timber, it is too often perceived as being fit
only for handicraft-making, and sophisticated manufacturing on an industrial
scale is uncommon. With more than 400 species and 4.2 million hectares of bamboo
forest, Tam said China should be well positioned to lead the "movement". Last
year, the average per hectare yield of bamboo on the mainland hit 25 tonnes, a
third of the world's production. But the lack of co-operation among local bamboo
growing regions has prevented the formulation of a unified and credible product
standard that would give consumers confidence, Tam added. Another issue was
cultural bias against the material. "It is often regarded as a poor man's timber
and this perception is deep-rooted in Chinese culture. That is something that
has to be reversed if bamboo is to gain more importance." Professor Lam Yanta,
from Polytechnic University's School of Design, has written several research
papers on the use of bamboo and agrees that image could be one problem facing
the wider application of bamboo. But he said many designers steered clear of
bamboo not because they were biased, but because they did not know enough about
its uses. Lam said that the first step in modernising the bamboo industry should
be ensuring the plants were properly grown and harvested to avoid soil erosion
and environmental degradation. "It might grow fast, but it should not be abused.
There should be good management practice in place for bamboo cultivation," he
said. Lam said the design, manufacture and disposal of bamboo products should
also be taken into account to prevent toxins or extra waste being generated in
the production and consumption processes. 
Some 25 Chinese sailors held aboard a mainland ship off Somalia could be freed
as early as today after an airdrop of up to US$4 million to the pirates who
hijacked the vessel more than two months ago. Amid cheers and celebrations, the
pirates were last night seen counting bundles of cash on the deck of the De Xin
Hai, which has been anchored off the pirate stronghold of Hobyo on Somalia's
east coast since the middle of October.
A disgraced official stripped of his
position over the Sanlu tainted-milk scandal has been picked to help head a
national anti-pornography commission, mainland media reported yesterday. Li
Changjiang's return to party politics comes just 15 months after he resigned as
head of the General Administration of Quality Supervision, Inspection and
Quarantine (AQSIQ) over his role in the toxic baby-formula scandal. Six infants
died and nearly 300,000 fell ill after consuming toxic milk products. News of
Li's appointment as deputy chairman of the working group on combatting online
pornography came after he made a two-day visit to Jiangsu. The province's
official paper, the Xinhua Daily, reported that Li met local officials on
Thursday and Friday to discuss their work in rooting out online pornography and
clamping down on the distribution of indecent material by mobile phone. The date
of his appointment was not reported. At 65, Li is at the normal retirement age
for officials, making his selection for the semi-official post all the more
unusual. Li, the highest-ranking cadre brought down by the tainted-milk saga, is
not the first official punished to have been quietly brought back into the fold,
a common practice in mainland politics. There was public outcry in May when the
AQSIQ said that Bao Junkai , the former deputy director of food-production
supervision who lost his job over the milk affair, had been appointed deputy
head of its science and technology department. Bao had previously been given a
key post in Anhui. The tainted-milk affair was the mainland's biggest
food-safety scandal in recent memory. Two people were executed in Hebei last
month for trading in the milk, while former Sanlu chairwoman Tian Wenhua was
given a life sentence in January. Three other high-ranking executives are
spending five to 15 years behind bars for their roles. At least 22 mainland
dairy companies, including Sanlu, Yili and Mengniu, were confirmed to have been
adding melamine to their products for many years. Melamine, which is usually
used to manufacture plastics, was added to milk to boost its nitrogen content
and make it appear to be richer in protein. It caused kidney stones in infants.
However, parents seeking retribution from Sanlu over the loss of their children
were dismayed last month when a Hebei court completed bankruptcy proceedings for
the company - meaning it will not make compensation payments. Xinhua reported
that an official statement released when Li resigned said: "Since products from
numerous dairy companies are found to have contained melamine, [it is obvious]
AQSIQ has negligence in supervision. As the leader of the administration, Li
Changjiang should take the chief responsibility."
A
Mary Kay sales director (left) helps a customer, one of the 28,000 women at the
Hangzhou event. About 28,000 young women crowded into the Dragon Sports Arena
here for a three-day gathering in September hosted by Mary Kay Cosmetics. The
goal was to pump up the crowd, and the song-and-dance troupe, the video
testimonials about transformed lives and the awarding of the signature pink
Cadillac to a top earner had the desired effect. "I love the corporate culture
of Mary Kay," said Zhang Xiaoying, 19, from Guizhou, one of the country's
poorest regions, as she and several colleagues dabbed on make-up during a break
in the event. "This company teaches you to aspire to a higher level." Zhang
earns very little in her new job. But the promise of future rewards is what has
persuaded her and about 200,000 other women to become "beauty consultants", or
independent sales agents, for Mary Kay on the mainland. Avon and Amway, two
other United States firms that use independent representatives, have even larger
sales forces here. Avon says it recruits up to 50,000 women a month and now has
one million agents. As China's economic boom unfolds, door-to-door sales and
what is known as direct selling is sweeping the country, breathing new life into
old US brands and creating hundreds of thousands of jobs, often for
disadvantaged or poorly educated young women. However, that growth has not come
without controversy. Many direct sellers in China have been accused of operating
sophisticated pyramid schemes and other sales swindles. (In one widely
publicised case a few years ago, people were conned into buying stakes in ant
farms.) Even US companies operating in China have been accused of manipulating
and misleading sales recruits. "They recruit people in a deceptive way, like you
can become super-rich in a month," says Chen Defa, the chairman of the Chinese
Academy of Direct Selling Management. Because of such concerns, China banned
direct selling in 1998, saying that it was often used as a cover for "evil
cults, secret societies and lawless and superstitious activities". Big
direct-selling companies disputed those claims, saying regulators simply
misunderstood their business model. In 2006, after heavy lobbying from US firms,
China lifted its ban. And since then, direct selling, with some modifications,
has flourished, growing into an US$8 billion industry that now markets products
as diverse as health supplements, cosmetics, toothpaste and dishwashing liquid.
"Direct sellers see unlimited opportunities here," says Kent Kedl, an analyst at
Technomics, a market research firm. "They see the combination of entrepreneurial
sellers and adventuresome consumers." Companies engaged in direct selling are
succeeding in China by using many of the same techniques that worked elsewhere,
analysts say. They often recruit young women and motivate them to sell
aggressively, particularly to friends and family members. Companies also use
multi-level marketing programmes that reward workers for recruiting other sales
agents. Revenue in China for Mary Kay has doubled to US$600 million in the past
three years. "We're going to grow another 20 per cent this year," says Paul Mak,
the head of Mary Kay China. "People haven't stopped buying cosmetics." The
company's message of female empowerment and femininity seems to resonate in
China, a country where young women have few opportunities to start their own
businesses. "The direct-selling industry has quite a low entrance threshold,"
says Wang Yi, who teaches at the Beijing Business Management College. Like other
direct sellers, Mary Kay has expanded in China - one of the 35 countries where
it operates, generating total revenue of US$2.6 billion last year - by working
hard to recruit new representatives. It operates with a kind of missionary zeal,
analysts say, pushing sales agent to invite friends and family members to
make-up classes and seminars that quickly evolve into small communities of women
who follow the sales gospel of Mary Kay. Many Mary Kay sales agents say that
before joining the company they held low-paying jobs as secretaries, cashiers
and rural school teachers. Many were also looking for a new focus in their
lives. "Because my husband is a businessman, and he is busy, we talked less and
less," says Lu Laidi, a Mary Kay sales director. "I felt my life was boring. I
stayed home and barely dressed up." While many Mary Kay sales representatives
say they earn very little, those who follow the company's sales and recruiting
strategies can become wealthy. One sales director, Jin Yan, said that after 12
years at Mary Kay, she earned nearly US$400,000 last year. She now drives a pink
Chevrolet, a reward from the company. "If you work hard and teach classes, you
can do it," she says. But not everyone succeeds. Shang Qun, 29, a sales agent in
eastern Jiangsu province, said she was pressured to meet unrealistic sales goals
and to deliver dozens of names of potential clients to the company during her
first months of selling. "Mary Kay has many direct-selling refugees," she says.
"They claim Mary Kay can make you big money, but their pockets are empty."
Crayton Webb, a Mary Kay spokesman, defended the firm. "Mary Kay is extremely
careful in communicating to members of the independent sales force that their
success is up to them," he said. "There are no guarantees, and that they should
invest in their business carefully." Many other agents agreed, saying Mary Kay
had helped them earn a good living, and also transformed their lives. Meanwhile,
Zhang said that just one year ago she was a cashier in Shenzhen when a friend
introduced her to Mary Kay. Today, she is paid just US$200 a month, not much
more than she got as a cashier. But, she says, it is a start.
Kay Collingwood takes in Ping Chau,
the first stop in a re-enactment of the wartime escape from Hong Kong by her
late husband and 67 other servicemen. Sitting on a pile of rocks on Ping Chau,
Kay Collingwood looked out across the beach where her husband, Lieutenant John
Collingwood, and 67 other servicemen landed at the start of their escape from
Hong Kong following its fall to the Japanese army in 1941. It was a chilly and
windy Boxing Day, and seven years to the day since her husband's death.
Collingwood, 89, was not feeling too well after her long journey from London,
but she was happy to be the oldest member of the party retracing the steps of
the wartime great escape, 68 years to the day since the start of a journey that,
for many, would end in Burma (now Myanmar). "It is wonderful to remember what
these men did. It was a tremendous escape, and they were lucky not to be
caught," Collingwood said of the servicemen who made their getaway under the
leadership of Admiral Chan Chak. "It is very interesting that people from all
over the world have come [for the re-enactment]." After months of preparation by
the Hong Kong Escape Re-enactment Organization, nearly 70 descendants of the
escapees began retracing the first leg of their flight, from Hong Kong to
Waichow (present-day Huizhou ). Ping Chau was the initial stop in a four-day
journey for the party, whose youngest member is just two years old. The escape
68 years ago began on the night Hong Kong fell. Under the noses and guns of the
invaders, 72 servicemen set out from Ap Lei Chau for the mainland aboard five
motor torpedo boats. The party was down to 68 by the time they stopped at the
island on the way to Nanao , where they made landfall and began a four-day trek
to Waichow. The re-enactment follows the escape route as closely as possible.
They spent last night, and will spend tonight, in Nanao, and reach Huizhou
tomorrow. They return to Hong Kong on Tuesday. The trip is not the only event
the organization has staged to mark the servicemen's escape. On Christmas Eve an
exhibition, Escape from Hong Kong: The Road to Waichow, was unveiled at the Hong
Kong Museum of Coastal Defense in Shau Kei Wan; it will run for two years. On
Christmas Day the re-enactment party dined aboard the Jumbo floating restaurant
in Aberdeen, where Admiral Chan was shot during the escape. Collingwood said her
husband never talked much about the escape. Still, she did recall a few things
he told her about the dramatic break-out. "My husband said the Chinese were so
kind to them," said Collingwood, who turns 90 in July. "Sometimes they had no
food, but the Chinese people fed them even though they only had little food. He
made some Chinese friends." The escape not only kept Lieutenant Collingwood
alive, it also ignited his desire for love and starting his own family. He
returned home on Christmas Day, 1942, and a week later, at a New Year's Eve
party, met Kay, then a war nurse. "He was desperate to get married. After that
escape, he wanted a home and a family," Collingwood recalled with a smile. Six
months later they were married, and barely nine months after that had the first
of four children. They went on to have 12 grandchildren and 14
great-grandchildren. To Collingwood, the re-enactment is a wonderful way to
honour her husband and fellow escapees. To nine-year-old Nick Hawley, who
travelled from Melbourne to Hong Kong for the event, it is a rare opportunity to
learn more about his grandfather, Ted Ross, at the time chief assistant to the
head of the British Ministry of Information in the city. "It's interesting ...
feeling what it was like to be in the war ... I can learn more about grandfather
and other men in the war. It is important for us," said Nick, who made the trip
with 12 other family members. On Ping Chau the group looked for a plaque on
which Chan's landing was recorded. However, it couldn't be found, said Alison
McEwan, daughter of escapee Colin McEwan. Chan's grandchildren Andrew, 41, and
Aaron, 39, flew from the United States for the re-enactment. Proud and moved,
they vowed to keep the tradition going and pass it on to future generations.
Chan's son Donald, president of the re-enactment organisation, said the event
was important not only to commemorate their ancestors but also the Sino-British
friendship that blossomed during the war. "We hope for a bigger event two years
from now for the 70th anniversary," he said. 
Promotion girls from Sony Computer Entertainment get into the holiday spirit
ahead of today's opening of the Asia Game Show. Games enthusiasts began to line
up outside the Convention and Exhibition Centre almost 60 hours before the Asia
Game Show was due to open this morning. For the first time the show is being
combined with the Hong Kong Online Game Show, where exhibitors release
limited-edition items and visitors can try out new games. At the head of the
queue were four 16-year-old schoolboys waiting to buy one of the 10
limited-edition Gundam boxed sets worldwide with a price tag of HK$988. Gabriel
Chan said the group had arrived at midnight on Monday. "It is the first time I
have come so early to wait," said Chan, adding that his parents did not mind him
sleeping on the streets for three nights. Steven Chan, a shop owner who sells
video games in Kwun Tong, was next in line, waiting to buy a boxed set
containing several models of giant robots, props and collectible cards. He said
one Gundam model had been auctioned in Diamond Hill in September for HK$7,500,
and he hoped to place the boxed set in his shop to attract customers if he
succeeded in buying it. Soccer fans also camped out overnight for a ball signed
by Argentinian and Barcelona star Lionel Messi, which will be given to the first
buyer of the Sony PlayStation game Winning Eleven 2010. The second purchaser
will receive a soccer shirt signed by Spain and Liverpool striker Fernando
Torres. Joseph Yeung, 17, had been standing in line with two friends since 1am
yesterday. Asked whether he had ever slept on the streets, he said: "No. People
who walk past judge us. It is not very comfortable without a bed in cold
weather." Organizers are expecting much better sales than last year, partly
because of the recovering economy. Sony Computer Entertainment Hong Kong, one of
the main exhibitors, is also targeting mainland visitors who are likely to be
big spenders because of the exchange rate. James Akio Hong, general manager of
the company's marketing division, said there was an express queue for mainland
visitors. The company has arranged bus services for 112 registered mainland
visitors between Shenzhen and the convention centre. He expected mainland
visitors who could not buy the games and consoles across the border to
contribute to 30 per cent of total sales.
The vice-chairman of China Mobile (SEHK:
0941) is being probed for corruption by the Communist Party's top anti- graft
watchdog, Xinhua reported yesterday. Zhang Chunjiang was being investigated for
a "serious disciplinary breach" by the party's Central Commission for Discipline
Inspection but the news agency did not elaborate. Rainie Lei, a Hong Kong-based
spokeswoman for China Mobile, said the probe was related to personal matters and
would not affect the company's operations. She refused to give further details.
The company planned to issue a statement "for further clarification", she said.
The announcement came as a surprise to many because Zhang made his last public
appearance as recently as December 17 in an event promoting "civilized" mobile
phone text messages, an event that was part of Beijing's crackdown on material
deemed indecent or vulgar. Zhang also made high-profile public remarks on
curbing pornographic text messages earlier this month. China Mobile is the
world's largest mobile phone carrier by market value. Zhang, 51, is a
heavyweight in the mainland's telecoms industry. He was appointed party
secretary and deputy general manager of China Mobile in May last year. Before
that, he was chairman of China Netcom Group (SEHK: 0906). When appointed party
boss and general manager of China Netcom in 2003, Zhang was the youngest senior
executive in the country's telecoms sector. The industry has credited Zhang for
contributing to the restructuring of China Tietong. He also worked on merging
Netcom, China Jitong and 10 provincial operations of the original China Telecom
(SEHK: 0728) Group to form the China Netcom Group in the north. He was deputy
minister in the former Ministry of Information Industry from 2000 to 2003 and
his interpersonal skills have contributed to the mergers, earlier reports said.
Zhang started his career as deputy director of the telecoms bureau in Liaoning
province in 1993. Some internet postings on mainland websites speculated that
Zhang's downfall was linked to insider trading.
Exploration work in the eastern region of north China's Hebei Province shows
potential iron ore reserves in this area is estimated to top 10 billion tons,
the China Metallurgical Geology Bureau (CMGB) said Saturday. A total of 3.44
billion tons of iron ore has been verified in five mines in the province, said
Yan Xueyi, director with the CMGB. The discovery of this deposit would largely
ease the shortfall in China's domestic iron ore supplies and contribute to a
sound and sustainable development of the country's steel industry, according to
Yan. China imported 443.56 million tons of iron ore in 2008, bringing the
country's reliance on imported iron ore to around 50 percent. The country's
steel mills suffered an unfavorable position during the annual iron ore pricing
talks as overseas miners allied to ask for a higher price. 
Kids give Christmas gifts to
their foreign teacher in a kindergarten in east China's Jiangsu Province on
December 22nd.
Canada's Minister of Finance Jim Flaherty said China, with the world's largest
currency reserves of US$2.3 trillion, might be poised to buy Canadian dollars as
it sought to shield its reserves against the US dollar's decline. "It does not
surprise me that China and Russia would take greater positions in the Canadian
dollar than they have previously," Flaherty said. "I would expect countries
looking around the world to invest in market currencies that are reliable." The
US dollar has declined against all but one of the 16 most-active currencies this
year, prompting major reserve-holding countries such as Russia and China to
express concern about their US dollar-denominated investments. Russia last month
said it would add Canadian dollars to its reserves to lower its dependence on
the US currency. The Bank of Canada has warned "persistent strength" in the
currency is a main risk for the economy, potentially acting as a significant
drag on growth. Canada's currency has gained 15 per cent this year against the
US dollar. Chinese purchases of Canadian dollars would also cement growing
economic links between the two largest trading partners of the United States.
Premier Wen Jiabao said in March that the nation was worried about the safety of
its investment in US debt, as a weakening dollar eroded the value of its
reserves. China's currency regulator said earlier this month it would improve
its utilisation of foreign exchange reserves. PetroChina (SEHK: 0857), the
country's largest oil company, this year bought its first stake in the Canadian
oil sands, paying C$1.9 billion (HK$13.93 billion) for 60 per cent of a project
run by Athabasca Oil Sands Corp. Teck Resources, Canada's biggest base metals
producer, sold a 17 per cent stake to China's sovereign wealth fund for C$1.74
billion in July. Prime Minister Stephen Harper, seeking to cut dependence on the
US, travelled to China earlier this month to secure Asia's second-biggest
economy as a customer for oil, natural gas, uranium and other commodities. "We
know that China has been interested in things in Canada, whether it's the bond
market or the oil sands or oil companies," said David Watt, a senior currency
strategist at RBC Capital Markets. "They've been sniffing around in the past. We
know they've been interested." Watt said an amount equal to 2 per cent of Asian
reserves would mean about C$100 billion of currency flows into Canada. "It would
certainly be a positive backdrop for the currency," Watt said. One Canadian
dollar purchases 94.58 US cents. Canada's currency will appreciate to parity
with the US dollar by the middle of next year, Bank of Nova Scotia predicts. The
median estimate of 38 analysts is for the currency to strengthen to C$1.04 in
that period. The currency last traded on a one-for-one basis in July last year.
The Canadian dollar has gained in part as investors bet an accelerating economic
recovery will prompt the central bank to raise interest rates sooner than in the
US. Canada also sits on the largest pool of oil reserves outside the Middle East
and is a major exporter of other commodities such as gold. A Canadian commodity
price index compiled by the Bank of Canada has advanced more than 20 per cent
this year. Canada also had the lowest debt levels among the Group of Seven
nations, making its currency a relatively safer investment, Flaherty said.
The
high-speed Wuhan-Guangzhou railway opened on Saturday. The rail link will be one
of the world's longest high-speed railways, and one of the world's fastest with
an average speed of about 217 miles per hour (350km/h).
Competition between airlines and
rail operators will further hot up on Saturday thanks to the launch of China's
longest high-speed train link between Wuhan and Guangzhou. The line stretches
more than 1,000 km and will slash the travel time from Wuhan, Hubei province, to
Guangzhou in Guangdong from 10 hours to just three. Tickets for the service -
which also stops at Changsha, capital of Hunan - went on sale at new stations in
the three cities last weekend, with prices ranging from 780 yuan ($110) for
first class to 490 yuan for second class, said a joint document released by the
National Development and Reform Commission and the Ministry of Railways. The
link, on which trains will reach a top speed of 350 km/h, is expected to pose a
real threat to airlines running flights linking the cities. "High-speed rail has
three advantages over air travel: it is more convenient, more punctual and has a
better safety record. This could help erode the airlines' market shares," said
Si Xianmin, chairman of China Southern Airlines, the largest domestic airline by
fleet size. From today's launch, 38 out of China Southern Airlines' 160-plus
domestic flights will compete with high-speed train links, he said. A similar
service opened on April 1 between Wuhan and Hefei, Anhui province, had already
grabbed half of the passengers traveling from Wuhan to Shanghai, said Si. The
Shijiazhuang to Taiyuan link, also opened on April 1, caused sales for China
Eastern Airlines' Beijing to Taiyuan flight to slump 36 percent the following
day, while private Spring Airlines reduced its Shanghai to Zhengzhou flights due
to competition from the Shanghai bullet trains, Beijing News reported. To deal
with this threat, China Southern Airlines last week unveiled several counter
measures, including cutting ticket prices from Wuhan to Guangzhou by almost half
for advanced purchases. The company also signed a deal with airports in Wuhan
and Changsha to give priority to flights to Guangzhou to ensure punctuality. If
railway chiefs over-cut the number of low-cost tickets on slower trains, as they
did when the country's first high-speed link opened between Beijing and Tianjin
last year, the airlines could win more passengers with cheap offers, said Zhao
Jian, professor with Beijing Jiaotong University. "But whichever side wins,
passengers will be the ultimate winner," he said. Wu Wenhua, a researcher with
the National Development and Reform Commission's comprehensive transport
institute, said developing high-speed rail networks is in line with the demand
for high-efficiency, low-emissions transport. China plans to have high-speed
rail services running between 70 percent of key cities by 2020, which would
cover more than 80 percent of the airline network. About 16,000 km of railway
for 350-km/h trains will be built on the mainland in the next 10 years,
according to a blueprint by the Ministry of Railways. By 2012, work will be
completed on 42 high-speed links covering 13,000 km, the blueprint showed.
When A-Power Energy Generation Systems
secured a deal to supply turbines for a United States wind farm project in
October, the little-known Chinese firm had an ace up its sleeve to help it
clinch the deal. A-Power was armed with US$1.5 billion in financing from
state-run Chinese banks to fund the 600-megawatt project in Texas. While global
peers have limited access to cheap state loans, Chinese renewable energy firms
are getting a boost from Beijing as they win clean-technology projects around
the world. Much of that is through low-interest loans from big state banks. This
support is giving China's renewable energy firms an edge over Asian rivals such
as India's Suzlon Energy, Japan Wind Development and Australia's Infigen Energy,
as well as heavyweights such as German polysilicon firm Wacker Chemie and Danish
firm Vestas Wind. "I don't think A-Power could have done this deal without
access to cheap financing," said Jacob Kirkregaard, a research fellow at the
Peterson Institute for International Economics. "China is clearly the big kid on
the block ... that's not something many Asian countries can emulate." Shares of
A-Power, which only entered the wind business last year, hit a 15-month high
last Friday after it said it would supply wind turbines for the Texas project.
Such deals are unfolding as the mainland aggressively develops its renewable
energy sector and as its companies play catch-up with bigger, global peers
including German solar cell producer Q-Cells and Spanish wind farm operator
Iberdrola, which have built up solid track records, also with help from more
than a decade of government subsidies. Most of China's alternative-energy
makers, including solar firms Yingli Green Energy Holding and Suntech Power
Holdings, and wind machinery maker China High Speed Transmission Equipment
Group, already have access to low-interest financing from state-run banks to
fund their growth and client purchases. Interest rates on loans for wind power
generator China Longyuan Power Group Corp, for example, were 10 per cent below
the prevailing benchmark rate set by the People's Bank of China, said Morgan
Stanley in a report. "Chinese banks are motivated by the mandate from the
government to develop renewable energy as a national priority," said Zhao Feng
at BTM Consult, which specialises in renewable energy. "In Europe, the banks,
when they offer loans, tend to assess the project and look at it more closely
from a risk perspective." State-backed financing is a common policy tool for
governments globally trying to support industries they want to develop. China
also provides similar strong support for its energy firms for overseas
acquisitions and its telecommunications equipment makers as they try to expand
abroad. Beijing's support comes as Chinese players attempt to create new markets
as the cost of developing renewable energy falls and competition intensifies for
projects at home. The US$300 billion sovereign wealth fund, China Investment
Corp, is also helping to bolster the industry. In past months, the fund has
pumped about US$1.1 billion into the sector, buying stakes in solar firm GCL-Poly
Energy Holdings, the world's No 3 polysilicon company by capacity, and Longyuan.
European fashion retailers are
accelerating business expansion in China thanks to the nation's increasing
number of fashion-conscious consumers. Two companies that opened new outlets in
China at a rapid pace this year included Sweden's H&M and Spain's Zara, both
retailers of clothing and accessories for adults and youth. H&M is ending this
year with a total of 13 new stores, raising the company portfolio in China to 27
outlets, while Zara, opened 33 new stores in China, winding down the year with
60 in total. "In China, new store openings have more than doubled due to strong
domestic consumption, which has not been affected by the global financial
downturn," said Wu Shuang, public relations manager of H&M China. Globally, H&M
store openings are up between 10 percent and 15 percent in 2009, said Wu. "More
H&M stores will be set up in China next year, especially in the second-tier
cities," he said. H&M, Europe's second largest fast-fashion retailer, entered
the Hong Kong and Shanghai markets in 2007 and later expanded its business to
second-tier cities like Hangzhou and Ningbo of Zhejiang province. Back in
August, H&M sales in Spain, the US and France were down 11 percent over July
sales, the fourth consecutive monthly drop. In 2008, average sales revenue at
H&M stores in the Chinese mainland and Hong Kong was up 23 percent to 59 million
yuan, while globally average store sales was 48 million yuan. "We are expecting
favorable sales volume in China this year," said Wu, while declining to
elaborate further. Strong sales numbers were also recorded at Zara, the leading
fast-fashion retailer in Europe. "The Chinese market is attractive with its
soaring consumer spending power," a Zara promotion executive said on condition
of anonymity. Chinese consumers can expect to see more Zara 'fast fashion'
stores in the future," he said. Fast fashion is a term used to describe fashion
trends that are manufactured quickly in smaller batches to keep inventories down
and allow mainstream consumers to take advantage of current clothing styles at
lower prices. This type of quick manufacturing methodology is preferred by large
retailers like H&M, Forever 21 and Zara, according to online apparel industry
directory, Apparel Search. This access to the latest clothing styles is popular
with white-collar consumers in China. "I have been waiting for 30 minutes to try
on several pieces of clothing, but the wait doesn't matter. I love to get
everything here, and the prices are acceptable," said Liu Dan, a woman in her
20s shopping at one of Zara's Beijing stores. Liu, who works in the public
relations department at an international company, said she is also a regular
patron of H&M in Beijing. Both H&M and Zara stores are often crowded with local
consumers, especially on the weekends. 
Top broadcaster TVB and four major record
companies are singing from two different sheets in a battle over royalties. And
television viewers could be big losers too in the fight over copyright fees,
with some of Hong Kong's most popular singers missing from TVB;s holiday shows
after talks broke down yesterday. In a bid to resolve the deadlock, TVB filed a
writ with the Copyright Tribunal. Hong Kongs top free-to-air broadcaster also
said it will not play the songs of about 50 singers including Kelly Chen Wai-lum
and Jay Chou Chieh-lun until an agreement is reached. "There has been very
little progress despite weeks of active negotiations. We will stop playing their
songs to show respect for copyrights," TVB general manager Stephen Chan Chi-wan
said. Should the dispute remain unsettled over the next couple of weeks, it is
likely top draws such as Kay Tse On-kei, Eason Chan Yik-shun and Hins Cheung
King-hin will miss the TVB Jade Solid Gold Top 10 Awards next month. A handful
of singers from the EEG stable such as Joey Yung Cho-yee and Leo Ku Kui-kei
could sweep the awards. A deadline on a fees deal set by the Hong Kong Record
Industry Alliance a group formed by the four labels this year comes into play
today. The alliance, which includes Universal Music Hong Kong, Sony Music,
Warner Music Hong Kong and EMI Hong Kong, offered TVB a plan under which
copyright fees would be pegged to the stations annual advertising revenue. The
deal differs from a previous one under the International Federation of
Phonographic Industry Hong Kong, which the record companies left. Under the
plan, the fee percentage will grow from 0.12 percent for this year to 0.4
percent for 2012, or a rise from HK$2.9 million to HK$9.6 million per year. The
alliance said the plan is close to international practice. However, Chan said
the calculation should be reasonable and modified to cater to Hong Kongs market
environment. TVB has repeatedly told the alliance it cannot accept its demand
and that this was reaffirmed in a letter sent on Monday, Chan said. TVB filed a
writ with the Copyright Tribunal on the same day considering it is better for
the court to handle the dispute, he said. He hopes a deal can be reached before
the award show on January 16. The alliance declined to comment on TVBs
statement. Not to be outdone, the other industry group, the IFPI, announced
yesterday it has renewed its contract with TVB. IFPI chairman Ng Yu said the
federation represents more than 90 percent of local record labels and the terms
of the new deal are very reasonable. Meanwhile, TVB production division
controller (non-drama) Lo Lai- chuen said the station intends to telecast the
award shows of the three local radio stations. He hopes those getting on stage
will finish their songs though the four record labels have expressed
reservations, citing possible copyright violations. 
TVB general manager Stephen Chan (left)
and IFPI HK chairman Ng Yu (right), backed by performers (from left) Raymond
Lam, Leo Ku, Vincy Chan and Kate Tsui Tsz-Shan, applaud the copyright deal
between the broadcaster and recording industry group.
It's a shop `til you drop Christmas as
Hongkongers shrug off economic worries for the festive season and malls predict
a double-digit rise in turnover. Stores are so busy that some are opening late
while the tills keep jingling. Harbour City in Tsim Sha Tsui has extended its
operating hours to 10pm and the arrangement will continue until December 31. It
will host a street party on Canton Road tonight and on New Years Eve. Around
300,000 people are expected to stroll through the area each night, and Harbour
City is predicting a 10 percent increase in business over the holiday period.
Far from keeping people at home, the lower temperatures have proved to be a
boon. The cold weather has helped to play a crucial role in promoting the
Christmas atmosphere. People can put on their winter woollies and dress up for
parties, said Hong Kong Bar and Club Association vice chairman Chin Chun-wing.
Chin said the surprising success of the recent Halloween promotions has given
the industry a boost in confidence. Many bars have been reserved for student or
corporate gatherings and association members are expecting at least a 10 percent
increase in turnover during the Christmas weekend. However, Chin said most bars
will keep the price of drinks at a reasonable level so as not to kill off the
recovering momentum. The Mira hotel in Tsim Sha Tsui is offering a Christmas
buffet dinner with price tags of HK$738 and HK$838 per guest depending on the
time of entry. Although the bill may reach more than HK$900 with the 10 percent
service charge, it has been fully booked for more than a week. Even the Chinese
restaurants in our group have received satisfactory bookings. Some corporations
have already held Christmas dinners for employees or clients, spending on
average 10 to 15 percent more than they did last year, said a spokeswoman for
the Miramar Group. Karaoke chain California Red managing director Anthony Lock
Kwok-on said key branches in Mong Kok, Causeway Bay and Tsim Sha Tsui have
received strong bookings for overnight sessions. Our business has profited from
the festive mood since last week. Guests are ordering more drinks and food, and
we expect a 5 to 10 percent increase in turnover all the way through January 1,
Lock said. The cash registers at travel agents are ringing in a Merry Christmas,
too. Sunflower Travel assistant general manager Anthony Chan Hung-cheong said
the headcount for Christmas travelers is up 5 percent on last year and he
expects the trend to get even stronger for the Lunar New Year. Japan and Korea
remain the most popular destinations. It is getting colder, and travelers want
to go to places where they can enjoy winter activities such as skiing or soaking
in hot springs, Chan said. 
The Bank of China (3988) has become the
first lender to undertake more than 1 billion yuan (HK$1.13 billion) in
cross-border yuan trade settlements. Transactions carried out by the BOC's
mainland branches hit 1.1 billion yuan by Monday. The rise in the value of
cross- border yuan settlements was dramatic because at the end of October the
figure stood at only 60 million yuan. The 120 transactions over the past six
months involved more than 40 domestic and foreign enterprises. One trade between
its Shanghai branch and a large-scale company for a yuan credit of 214 million
yuan on December 3 was the biggest single recorded deal so far. China's central
bank gave foreign lenders the go-ahead to offer trade finance to local firms
settling cross-border deals in yuan in July. Cross-border yuan trade settlements
now apply to a number of countries including Singapore, Thailand and Russia.
Meanwhile, the system may be expanded to the whole country, according to a joint
statement issued by the central bank and the banking, insurance and securities
regulators, Bloomberg reported. However, no timetable has yet been given.
Currently, only 365 firms in Shanghai and Guangdong province may use yuan in
cross-border trade settlements with Hong Kong, Macau and some foreign countries.
Donald Tsang speaks at the
groundbreaking ceremony for the Kai Tak cruise terminal. Construction work on
the long-awaited Kai Tak cruise terminal finally began yesterday, after the site
lay vacant for more than a decade. Speaking at the groundbreaking ceremony for
the terminal's site formation work, Chief Executive Donald Tsang Yam-kuen said
the government was building the terminal at "full pace" in view of the
tremendous potential of the cruise industry in the Asia-Pacific region. "After
the first berth commences operation in 2013, the new terminal will be able to
berth the world's largest and most advanced cruise vessels," he said. "It will
provide high-quality infrastructure for the long-term development of the cruise
industry in Hong Kong and in the region." The second berth will be available in
2014 for medium-sized cruise vessels and will begin to accommodate mega-cruise
ships after underwater gas mains are relocated. With Ocean Terminal in Tsim Sha
Tsui, Hong Kong will have a total of four berths for different types and sizes
of vessels. The HK$2.3 billion site formation work involves the construction of
berthing facilities, including the building of a sloping sea wall of 1,100
metres and an apron area to berth cruise vessels of different sizes and
capacities. It also involves the dredging of 1.38 million cubic metres of
sediment. The government is assessing tenders for the design-and-build contract
for the terminal building, for which construction is expected to begin next year
and be completed in 2014/15. "We are hoping to get our proposal to the
Legislative Council for funding support [of this contract] in the middle of next
year," Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan said.
Late last year, the government abandoned tendering and decided to build the
cruise terminal by itself, after its failure to find a suitable candidate in two
rounds of tendering. The administration will fund, design and build the cruise
terminal, and lease it to an operator while retaining ownership of the site and
terminal. Situated at the tip of the old Kai Tak airport runway, the new
terminal will form part of the 320- hectare Kai Tak project that was first drawn
up 10 years ago. The current scheme, approved in 2007, will be developed in
three phases and include public housing flats, schools, a government office
building, a hospital and railway link. The whole project will be completed in
2021. The chief executive said the government would strengthen liaison with the
cruise market and neighbouring ports, improve service standards and enhance the
competitiveness of Hong Kong in the regional cruise market. 
Manufacturers across the border are shipping the wildly popular Zhu Zhu Pets air
freight to United States retailers desperate for the fluffy robotic hamsters,
which have become this year's hottest Christmas gift for children. Workers at
six toy factories in Shenzhen and Guangzhou are working overtime to fill orders.
More than 11 million Zhu Zhu Pets have been sold in the US since the fuzzy
electronic hamsters were introduced in May, and demand is high for the holidays.
Just days ahead of Christmas, factories were still busy shipping orders valued
at US$100 million from retailers in the US and Europe. Some buyers even asked
that their orders be delivered by air, regardless of the cost, to ensure their
store shelves were filled for Christmas shoppers. "Sales are just insane," said
Russell Hornsby, chief executive officer of Missouri-based toy company Cepia and
creator of Zhu Zhu Pets. Given the huge demand and relatively short supply, some
retailers such as Wal-Mart and Target are rationing the toys, with sales limited
to one per customer a day. Many shops have simply run out of stock. The
palm-sized electronic rodents can squeak, chatter and move around on the ground
and have their own accessories, such as houses, tunnels, cars and, of course,
hamster wheels. "They appear real to kids," Hornsby said. "And at the same time,
you don't have to feed or clean them." The retail price of a Zhu Zhu Pets
hamster ranges from US$8 to US$10 (HK$62 to HK$77). But on online shopping sites
like eBay, the price has soared to US$30 or more because of the short supply.
Michael Chen, a Cepia manager in charge of toy production and shipping on the
mainland, said major retailers placed Christmas orders two to three months ago.
All the goods were delivered before November 20, following the industry's normal
timetable for the holiday season. "However, the market feedback went far beyond
everyone's expectations. They have had to place a second or third batch of
orders," he said. "Some retailers know they are very likely to lose money
delivering the goods by air. Yet they insisted on doing so because they believe
shoppers would not visit their stores unless the hamsters are on the shelves."
While Zhu Zhu Pets were launched at the Hong Kong Toys and Games Fair almost a
year ago, children in the city will have to wait until early next year to get
one. Spurred by the success of Zhu Zhu Pets, Hornsby said it planned to launch
another kind of electronic rodent, called Kung Zhu, next year.
Chen Yunlin, chairman of the Association
for Relations Across the Taiwan Strait, gets into a car for a tour of Taichung.
Taiwan will further open up to investment from across the strait after
complaints by mainland businesspeople about heavy restrictions set by the
island. The decision was announced yesterday during an investment seminar
attended by top mainland envoy Chen Yunlin and 17 mainland business leaders
whose combined assets exceed one trillion yuan (HK$1.13 trillion).
Ford Motor chief executive Alan Mulally
says Geely Holding Group is the preferred buyer for Volvo. Ford Motor has agreed
on most of the terms of a deal to sell its Volvo passenger car unit to China's
Geely Holding Group. The United States car-making giant said in a statement
yesterday a definitive agreement with Geely for the Swedish unit's takeover
would be signed in the first quarter of next year. Both parties plan to complete
the deal in the second quarter, subject to regulatory approval. The announcement
did not disclose the amount of Geely's offer. People familiar with the agreement
said Zhejiang-based Geely planned to spend about US$2 billion to buy the Volvo
brand. The amount would be less than one-third of Ford's purchase price of
US$6.5 billion in 1999. Mainland media reported earlier that Geely had the
support of Bank of China, China Construction Bank (SEHK: 0939, announcements,
news) Corp and Export-Import Bank of China for its acquisition plan. Geely
declined to comment. Shares of its Hong Kong-listed subsidiary rose 7.3 per cent
to HK$3.98 on news of the possible completion of the deal. Ford, under chief
executive Alan Mulally, named Geely as its preferred bidder for Volvo on October
28 after putting the Swedish brand on the block a year ago. It is trying to shed
its overseas luxury brands and focus on its namesake division. Geely chairman Li
Shufu earlier had flown to Sweden to meet labour unions, which are a powerful
force in the global vehicle industry. Li once described Volvo as a mysterious
woman who always covered her face with a veil and was not easy to master.
Analysts have questioned whether an economy carmaker such as Geely has the
ability to manage Volvo in part because of its strong unions and its loss-making
records. Geely took over Australian transmissions maker DSI Holding, Ford's
parts supplier, for A$54.6 million (HK$370.39 million) in June. Li, who started
by making cheap motorcycles for villagers, believes high-technology cars can
strengthen Chinese vehicle brands in the international market. In an unusual
move, the Ministry of Commerce said publicly days ago that it would support
Geely's Volvo purchase. By contrast, privately owned Sichuan Tengzhong Heavy
Industrial Machinery's acquisition of General Motors' Hummer has not yet
received government approval, even though a definitive agreement was signed in
October. Chinese carmakers, trying to gear up their technology, have seized the
opportunity to acquire overseas assets as prices depreciated during the global
economic crisis. Beijing Automotive Industry Holding, the fifth-largest carmaker
on the mainland, disclosed yesterday that it paid US$200 million for Saab's
power-train technology and tooling for its 9-3 small car and 9-5 medium-sized
car. The carmaker, a joint-venture partner of Germany's Daimler, will spend 33
billion yuan (HK$37.47 billion) on research and development, especially on
producing engines. General manager Wang Dazong said Beijing Auto would open a
plant to build its own brand of engines in Beijing in 2011. It plans to sell
100,000 units of domestic-brand passenger vehicles annually in two years.
A consortium paid a record 25.5
billion yuan for a huge site in Guangzhou on Monday, but Lai Fung says it was
within market expectations. Lai Fung Holdings, which focuses on mainland
property development, is playing down the risk of an asset bubble in Guangzhou
despite seeing a large site in the city fetch a record sum this week. Executive
director Julius Lau Shu-yan said the accommodation value of 5,810 yuan
(HK$6,598) per square metre paid by a consortium on Monday was within market
expectations. "It was a huge lump sum because the site covers a huge area," he
said after Lai Sun Group's annual general meeting yesterday. On Monday, a
consortium comprising Guangzhou R&F Properties, Agile Property Holdings (SEHK:
3383) and Country Garden Holdings paid 25.5 billion yuan for the site in Panyu,
a satellite city in Guangzhou. The site will provide a gross floor area of 4.38
million sqmetres. Prices in some mainland cities have surged in recent months
and property consultant Knight Frank said recently that home prices in Shanghai
were up 25 per cent from early this year. Lai Fung focuses on Guangzhou and
Shanghai and Lau said he did not see any sign of a property bubble in either
city. Over the next two years, he said the developer planned to release one
million square feet of residential area for sale. Despite government attempts to
cool an overheated real estate sector, he said the firm had no plans to lower
asking prices for upcoming projects. Lai Fung's land cost was relatively low
because it was acquired many years ago, said Lau. The company has a land bank of
more than 15 million sqft, largely in Guangzhou, Zhongshan and Shanghai. "It
will be sufficient for development over the next three years," he said. Lau said
all the firm's projects had started construction, except Haizhu Plaza in
Guangzhou, which was still resettling affected residents. He played down the
impact of Beijing's announcement that land purchases now required a down payment
of at least 50 per cent of the total price, saying all its land had been fully
paid for. "Only sites in the rural area will allow the purchase of land by
instalments. Otherwise, land sold in the major cities has to be fully paid for
within 30 days," he said. Chief executive Lester Lam Hau-yin said the company
would not engage in a bidding war with other land-hungry developers. "We will
look for other alternatives such as teaming up with other developers as part of
our expansion," said Lam. In Hong Kong, Lau said the group had no plan to scale
down its investment in the city despite the soaring cost of land. 
Nearly 6,000 people got a human swine flu (H1N1) jab on day two of a mass
vaccination program. The Department of Health said 5,976 people were given the
jab at public clinics during the 24 hours ending at 1pm yesterday. It brings the
total number of vaccinations to 7,504. People aged 65 and over have received a
total of 3,322 jabs over the two days, followed by 1,248 people under 65 years
with chronic illness; 943 children aged between six months and under six years;
and 415 health care workers. There have been no reports of serious side-
effects. Health authorities have been hoping for a big response to the
vaccination plan to help stem a second wave of H1N1 during the winter months. So
far, 49 people have died from swine flu out of 34,000 confirmed with the
infection. The department also said it is investigating a private doctor in a
case involving improper vaccination reimbursement claims. The doctor is enrolled
in the department's vaccination subsidy scheme. The matter was referred to
police and the private doctor removed from the list of participating doctors in
the subsidy scheme. The department did not say whether the subsidy scheme
involved the human swine flu vaccine. It is also running subsidy schemes for
seasonal flu and pneumococcal vaccines for the elderly and children to get
vaccinated at subsidized rates. From Monday, people of high- risk groups can get
the human swine flu vaccine at private doctors' clinics under a HK$129 per shot
subsidy. About 500 doctors have signed up for the scheme. Hong Kong hopes to
inoculate about two million deemed at risk of catching swine flu over the next
few months.
Chief Executive
Donald Tsang Yam-kuen officiates at the ground-breaking ceremony for the
construction of the new Kai Tak cruise terminal on Wednesday morning. The Kai
Tak Cruise Terminal will further enhance Hong Kong's status as a premier
regional cruise hub in Asia, Chief Executive Donald Tsang Yam-kuen said on
Wednesday morning. Speaking after officiating at the ground-breaking ceremony
for the construction of the development, Tsang said the terminal will be able to
handle the world’s largest cruise liners. “After the completion of the new
cruise terminal, together with Ocean Terminal in Tsim Sha Tsui, Hong Kong will
have a total of four berths for cruise vessels. These terminal facilities can
berth cruise vessels of different types and sizes and will provide high-quality
infrastructure for the long-term development of the cruise industry in Hong Kong
and in the region,” Tsang said. The chief executive said the government will
continue to strengthen its liaison with the cruise market and neighboring ports,
so as to enhance the competitiveness of Hong Kong in the regional market. Kai
Tak cruise terminal will be constructed on the former site of Kai Tak airport,
with the first berth scheduled to be ready by mid-2013. The second berth will be
available in 2014 to hold medium-sized cruise vessels and will begin to
accommodate very large cruise vessels after the relocation of submarine gas
mains supply. The government plans to spend HK$7.2 billion to fund, design and
build the cruise terminal, and plans to lease it to a cruise operator. The
completion date has been delayed to 2013 due to re-tendering. 
Hong Kong's environment minister has sprung to China's defense after British
leaders, including Prime Minister Gordon Brown, blamed Beijing for the
disappointing outcome of the Copenhagen climate summit. Edward Yau Tang-wah,
secretary for the environment, who took part in the talks as a member of the
Chinese delegation, said China had been positive, proactive and progressive
throughout. "China has been more honorable than many others and it has acted
responsibly," said Yau, who ended his one-week trip to the Danish capital
yesterday. Yau was the most senior Hong Kong official to join Chinese
negotiators in international climate talks since 2003 when the Kyoto Protocol
was extended by Beijing to Hong Kong. His comments came after senior British
officials accused China of vetoing a possible deal during the talks, which could
have included a deep cut in global emissions, and emissions from developed
countries. Yau said China had tried to engage in discussions with different
groups at the conference and had even offered a voluntary carbon intensity
reduction target before the talks. Carbon intensity is the amount of carbon by
weight emitted per unit of energy consumed. He also defended the outcome of the
talks, the 12-point Copenhagen Accord. "Even if it is not an accord that
everyone is satisfied with, this is not something that makes perfect the enemy
of the good," Yau said. Yau said the climate talks began with rifts between the
different parties, and a sense of distrust in many of the lengthy and difficult
debates, which were often marred by disputes over procedural matters. "Doubts
were often raised over who chaired the conference, what texts were used and
drafted by whom, resulting in many disputes ... it all boiled down to the
question of mutual distrust," Yau said. "The chairman of the conference was
changed three times ... and it seemed there were too many leaders but too few
negotiators." As for the implications of the talks on Hong Kong, Yau said the
city would not slow down its efforts to tackle climate change, but the
government was reviewing how to co-ordinate with the mainland on target-setting.
The mainland has voluntarily proposed to cut carbon intensity by 45 per cent
below the 2005 level by 2020. "We should not take stock of what has been done,
but focus on what more can be done," Yau said, adding that a Hong Kong climate
change study would be completed next year.
Shares of China Pacific Insurance
(Group) Co, the country’s third-largest life insurer, rose 1 per cent on their
debut in Hong Kong after the Carlyle Group-backed company raised US$3.1 billion
in the world’s seventh-largest IPO this year. The listing came just after
Shanghai produced another huge IPO of its own, with China CNR Corp, one of the
country’s two big train makers, raising 13.9 billion yuan (HK$15.76 billion)
after pricing its A-share offering at the top of an indicated range. The IPO is
China’s fourth-largest this year. The two offerings are likely to be the last of
the major IPOs to hit the Hong Kong and Shanghai stock exchanges this year,
after six months of heavy, globe-leading activity. A small Hong Kong listing,
Huayu Expressway Group, closed at HK$1.29, just above its HK$1.28 IPO price.
China Pacific Insurance is not only a big IPO for Hong Kong, but marks one of
The Carlyle Group’s most successful investments. After putting around US$800
million into the mainland insurer for a roughly 17 per cent stake, the
Washington D C-based private equity firm could see that stake rise to around
US$4.8 billion on paper. “Its Shanghai A-shares have been trading poorly in the
past month, so its Hong Kong H-shares should match that performance,” said
Jackson Wong, investment manager at Tanrich Securities. China Pacific
Insurance’s offer price was about a 6 per cent premium to its Shanghai-listed
shares. The first day trading was in line with predictions after the stock had
fallen 0.7 per cent in the pre-trading grey market on Tuesday. Shares of China
Pacific ended at HK$28.3, compared with the IPO price of HK$28, which was
slightly below the middle of its indicative range. The company is also listed in
Shanghai. Mainland’s life insurers have traded at a premium to their developed
market peers, because of high growth expectations. China Pacific Insurance’s
offer price represents a multiple of about 1.8 times forecast next year embedded
value, compared with China Life (SEHK: 2628, announcements, news) Insurance’s
2.9 times and Ping An Insurance (SEHK: 2318)’s 3.7 times, according to a UBS
research report. This is at a premium to European peers’ average 1.2 times price
to embedded value. Asia is home to just a handful of big listed insurers, led by
China Life and Ping An – the world’s two most valuable life insurers – and
Taiwan’s Cathay Financial Holdings. China International Capital Corp, Credit
Suisse, Goldman Sachs and UBS were handling the deal.
BAIC Chairman Xu Heyi said on Wednesday that his company will immediately start
integrating Saab technology into its vehicles with an aim to sell 100,000
self-developed passenger vehicles in 2011. Beijing Automotive Industry Holding
Corp (BAIC), mainland’s fifth-largest automaker, will launch an aggressive
campaign to develop its brand both at home and overseas, after buying car
designs from General Motors’ Saab unit. BAIC said it will invest 33 billion yuan
(HK$37 billion) in vehicle R&D over three years, after paying US$200 million for
the Saab technology, including the rights to three overall vehicle platforms and
two engine technologies. “Someone has commented that the purchase of Saab’s
intellectual property can help cut short the development time for Beijing Auto’s
own-brand passenger vehicles by 4-5 years,” BAIC chairman Xu Heyi told reporters
on Wednesday. “We basically agree with the view.” The car maker plans to
immediately start integrating Saab technology into its vehicles with an aim to
sell 100,000 self-developed passenger vehicles in 2011, Xu said. Construction of
a production facility with annual capacity of 150,000 passenger vehicles will be
complete in 2011, he added. The sales target is a bit aggressive, said Tan
Kunyuan, an analyst at Changjiang Securities. “It will take at least a year for
the market to recognise the brand and BAIC probably would need to modify the
appearance of Saab cars to fit with Chinese market demand.” Mainland overtook
the United States this year as the world’s largest auto market, as sales soared
after Beijing rolled out a series of incentives designed to stimulate consumer
spending during the global downturn. However, there is still a significant
technology gap between domestic mainland automakers and their global rivals,
which has left mainland companies looking for acquisitions of overseas
technology and designs as the global auto industry restructures. Homegrown car
maker Zhejiang Geely Holding Group, parent of Geely Auto (SEHK: 0175), is in
talks to buy Ford Motor’s Volvo unit, and Sichuan Tengzhong Heavy Industrial
Machinery is buying GM’ Hummer brand. Xu said BAIC posted net profit of 6
billion yuan on revenue of 116 billion yuan for this year, selling 1.24 million
vehicles. The Beijing-based automaker is in production partnership with Daimler
and Hyundai Motor, with most of their joint output for sale in the domestic
market. BAIC, which has a 20 billion yuan line of credit from Bank of China, is
also making plans for an initial public offering, Xu said, though he declined to
give details, including where the company would list. Morgan Stanley advised
BAIC on the Saab deal, but it was unclear whether the investment bank is also
involved in the IPO plan. BAIC – which hastily arranged the Saab purchase after
a group led by Swedish sports car maker Koenigsegg pulled out from a deal to buy
all of Saab – said it was buying technology such as manufacturing blueprints and
the management systems that will let it continuously develop and produce high
quality vehicles. Besides exporting its vehicles directly, BAIC also plans to
set up joint ventures overseas to facilitate sales, Xu said. The company will
roll out two new models of its own-brand vehicles next year and will develop new
energy cars in tandem with the new models of its self-developed vehicles. The
Saab acquisition includes the intellectual property for Saab’s 9-5 and 9-3
sedans and some equipment to make them, leaving the fate of the Swedish-based
automaker up in the air. Luxury car maker Spyker was in talks to buy Saab from
GM, but those negotiations broke down last week with GM saying it would close
down the Swedish automaker. But Russia-backed Spyker came back this week and
said it was still interested in a deal for Saab.
Copyright piracy in mainland remains at “unacceptably high levels”, causing
“serious harm” to American businesses, the top US trade official said in an
annual report to Congress on Tuesday. US Trade Representative Ron Kirk said in
the mandatory report on mainland’s compliance with its World Trade Organization
accession obligations that Beijing was not taking adequate steps to enforce
intellectual property rights laws. He said enforcement of mainland’s copyright
protection “remains a significant challenge”. The report cited other “priority”
trade issues such as industrial policies, trading rights and distribution
services, agriculture and services, but indicated piracy is a key issue where
mainland has made little progress. “Despite repeated anti-piracy campaigns in
China and an increasing number of civil IPR (intellectual property rights) cases
in Chinese courts, counterfeiting and piracy remain at unacceptably high levels
and continue to cause serious harm to US businesses across many sectors of the
economy,” the 121-page report said. The US copyright industries estimate that
losses last year due to piracy were about US$3.5 billion for the music recording
and software industries alone, it said. “These figures indicate little or no
overall improvement over the previous year.” Mainland is among nations in the
annual intellectual property rights blacklist of the US Trade Representative’s
office. Mainland acceded to the World Trade Organization eight years ago. The
terms of its accession called for mainland to implement numerous specific
commitments over time. All of mainland’s key commitments should have been phased
in three years ago. Kirk’s report said that while mainland had put in place laws
aimed at protecting intellectual property rights as required by the WTO
Agreement on Trade-Related Aspects of Intellectual Property Rights or the TRIPS
Agreement, “some critical reforms are still needed in a few areas”. It cited
further improvement of measures for copyright protection on the internet
following the country’s accession to the World Intellectual Property Rights
Organization (WIPO) Internet treaties, and correction of “continuing
deficiencies” in mainland’s criminal IPR enforcement measures. The United States
obtained a favorable ruling about a year ago from a WTO panel in a case
challenging deficiencies in mainland’s legal regime for protecting and enforcing
copyrights and trademarks. Specifically, in a case in which 12 other WTO members
had joined in as third parties, a WTO panel found as inconsistent mainland’s
denial of copyright protection to works that do not meet mainland’s content
review standards as well as the country’s handling of border enforcement
seizures of counterfeit goods. The panel also clarified important legal
standards relating to mainland’s criminal enforcement of copyrights and
trademarks. Neither side appealed the panel’s decision, and Beijing subsequently
agreed to bring the measures at issue into compliance by March next year, Kirk’s
report said.
Tourists take photos in
a park during the Harbin Ice Lantern Festival in China's ice city Harbin,
northeast China's Heilongjiang Province, on December 20, 2009. Authorized by
Walt Disney Company, organizer of this year's festival is allowed to use Disney
characters.
An
employee handles Nufarm chemical products at a warehouse in Melbourne. Shares of
Nufarm were traded below the revised offer in Sydney yesterday. Sinochem Corp,
China's largest chemical trader, lowered its offer by 7.7 percent to A$2.6
billion ($2.3 billion) for Nufarm Ltd, whose full-year profit declined to a
five-year low. The State-owned company proposes to pay A$12 a share for
Australia's largest farm-chemical supplier, Melbourne-based Nufarm said
yesterday. It's seeking more information on the new offer from Sinochem, which
bid A$13 in September. The proposal is China's second attempt in as many years
to buy the Australian company for its global distribution network for pesticides
and herbicides. Shares of Nufarm, which reported a 42 percent profit drop in
September after cutting its forecast three times during the year, were traded
below the revised offer, a signal that investors don't expect a rival bid.
"After three downgrades, Sinochem is in the driving seat in terms of pricing,"
said Hugh Dive, who helps manage about $3 billion at Investors Mutual Ltd. "If
they walk away, Nufarm should trade down to A$9 as management credibility would
be viewed by the investment community as severely stretched." Nufarm shares
closed yesterday at A$10.56. The stock, halted from trading in Sydney, is down
12 percent since the initial accord with Sinochem was announced on Sept 28. "Sinochem
has not yet clarified the terms and conditions that pertain to the revised
price," Nufarm said in the statement. "The Nufarm board will seek clarification
from Sinochem in relation to conditions, which relate to the revised price
before announcing whether it is prepared to recommend its support to Nufarm
shareholders." Sinochem spokesman Hu Hongjun didn't return a call to his Beijing
office. China National Chemical Corp, backed by buyout fund Blackstone Group LP,
ended talks to buy Nufarm in December 2007 after a study of its accounts,
without giving reasons. The official period in which Sinochem could study its
finances had ended, Nufarm said on Nov 19. The Australian company is a
"complicated company operating in a challenging environment," Sinochem said on
Dec 1 after Nufarm said they wouldn't meet their Dec 3 deadline to complete an
initial deal. 
People's Bank of China adviser Joseph
Yam says the mainland will catch up with the United States and European
economies in 20 years. Former Hong Kong Monetary Authority chief executive
Joseph Yam Chi-kwong says it could take 20 years for the yuan to become an
international currency. Yam, who retired from the HKMA in October as the world's
highest-paid central banker, was speaking for the first time as a key adviser to
the People's Bank of China after being appointed executive vice-president of the
China Society for Finance and Banking, a research institute and think tank.
Addressing a banking forum in Beijing yesterday, he said the ailing global
monetary system was now supported by two injured legs, namely the US dollar and
the euro. "A third leg is necessarily needed" to support the system, he said.
"The yuan should have its own role to play." He said the size of China's economy
would catch up with those of the United States and Europe in 20 years, making
the yuan on par with their currencies in terms of international profile. In the
meantime, the yuan would play a bigger role in the global monetary system,
emerging as an alternative to the dollar and the euro. Yam's remarks echoed PBOC
governor Zhou Xiaochuan's calls in May for creating an international reserve
currency to replace the dollar as China seeks to wield its financial strength
worldwide in the wake of the greenback's weakness. It is understood Beijing
hopes Yam can help the mainland enhance the efficiency of its policymaking in
the finance sector and at the same time point the right direction for the
banking system. Yam headed the HKMA, the de facto central bank in Hong Kong,
from its establishment in 1993. Pang Yingli, a professor of finance at Shanghai
Jiao Tong University, said: "By saying 20 years, it may not necessarily take
that long. Yet, Yam's remarks show that it will be a long road for the yuan to
become an international reserve currency." China has the world's largest foreign
exchange reserves of US$2.3 trillion. As of October, the country held almost
US$800 billion of US Treasury bonds. Beijing is expected to make the yuan fully
convertible before 2020 to reinforce its efforts to build Shanghai into an
international financial center. Yam told reporters on the sidelines of the forum
that his new role would help strengthen the financial relationship between Hong
Kong and the mainland, promoting the globalization of the yuan. He added that he
was not being paid for the advisory job. He earned HK$11.9 million in his last
year as HKMA chief. Separately, Jiang Jianqing, the chairman of Industrial and
Commercial Bank of China (SEHK: 1398), the mainland's largest lender, told the
forum that Beijing should give more foreign exchange to commercial banks,
allowing them to offer more foreign exchange loans to companies seeking
expansion overseas. He said the move could help China make better use of the
massive foreign exchange reserves while easing excessive liquidity on the
domestic markets. "If we can take a step forward on this, Chinese companies will
take a leap forward in overseas expansion," Jiang said. He said the
globalisation of the yuan could be achieved through the internationalization of
Chinese firms if they had more operations worldwide. TX Investment Consulting
analyst Wang Yifeng said: "It will be a good way to boost Chinese banks'
performance. More mainland firms will speed up overseas investments if the move
is implemented."
Homeowners pin their hopes on the
wishing tree in Lam Tsuen in Tai Po of gaining indirectly from high prices at
the auction of two public sites in the district next Monday. Hong Kong home
sales surged last week as end-users and investors raced to close deals ahead of
an expected strong outcome at the auction next Monday of two prime waterfront
sites in Tai Po. "Transaction volumes in the secondary market jumped 50 per cent
from a week earlier," said Patrick Chow Moon-kit, a research head at Ricacorp
Properties, who attributed the surge to optimistic market forecasts that the
first major land sale in two years could set a new record land price in Tai Po
and boost home prices. Surveyors and property consultants expect the two
adjacent 2.1-hectare sites in Pak Shek Kok to fetch between HK$10.4 billion and
HK$12.4 billion. That would translate into an accommodation value of between
HK$7,000 and HK$9,000 per square foot, assuming the construction on each site of
low-density residential blocks offering a total gross floor area of 720,757
square feet. Paul Louie, the regional head of property research at investment
house Nomura, forecast that winning bidders would need to price their projects
at about HK$8,000 per square foot just to break even on their development costs.
"And if owners at Robinson Road in Mid-Levels see the prospect of prices in Tai
Po rising to this level, they are likely to immediately raise their asking
prices to HK$9,000 per square foot. So the outcome of the land auction will be
used as a new benchmark for the Hong Kong residential market, since we have had
no big land sale since 2007," said Louie. Against this background, property
agents said sales volumes and prices in the New Territories, particularly in Sha
Tin and Tai Po, recorded faster growth than all other areas last week.
"Transactions in Hong Lok Yuen in Tai Po are becoming more active, with 10 deals
concluded last week, compared with just two to three per week before the
announcement of the land auction," said Chow. In Hong Lok Yuen, prices surged 10
per cent to HK$7,200 per square foot from HK$6,500 per square foot in October -
a month before the two sites were triggered for auction. Some investors were
using the sharp rise in prices to "flip" their luxury flats for a quick profit,
said Raymond Chan, the sales director at Midland Realty's Sha Tin and Tai Po
branch, while others were buying into the market in the hope of making a quick
return. One investor bought three flats at Royal Ascot in Sha Tin for a combined
HK$30 million last week, he said, while another pocketed a gain of HK$3 million
from reselling a 3,240 square foot house in Constellation Cove in Tai Po for
HK$31 million last week after he bought the house last month. "It shows buyers
are willing to pay a bigger premium even though sellers are aggressive in
raising prices," said Chan. Adrian Wong, a sales director at Centaline Property
Agency's New Territories East branch, said transaction volumes in luxury
residential units in Tai Po were up 30 per cent this month compared with last
month. Homes in Deerhill Bay, a completed luxury residential development close
to the two sites up for auction, were sold for HK$6,500 per square foot and
HK$8,000 per square foot, while a house in the development recently changed
hands for HK$13,000 per square foot. "Some owners have revised their asking
prices upwards by 5 per cent or withdrawn them awaiting the outcome of the land
auction," said Wong. Meanwhile, some end-users are taking a wait-and-see
attitude, as they are unsure whether prices will continue to rise. Ernest Kong,
who has been looking to buy a flat for the last three years, leases a 700 sq ft
unit in Tseung Kwan O for HK$8,000. "I had intended to buy a unit by the
year-end, but prices rose faster than my expectations," he said. Kong is
searching for a unit in the same area at a budget of HK$2.5 million and hopes
that even if the two sites in Tai Po fetch stronger than expected prices, this
will have little impact on his target market, since he is not looking for a
luxury flat. Alice Lam, who lives in a 700 sq ft unit in Tai Po that is more
than 20 years old, said her flat's value had so far not been affected by
expectations of a positive outcome at next week's auction.
From left to right, Teddy Chan, Peter Chan, Huang Jianxin, Lau Wai-keung and Yu
Dong with their new movie Bodyguards and Assassins' cast on the set. Hong Kong
director Teddy Chan set out to make a film costing 68 million HK dollars(8.8
million U.S. dollars) in 1999 and insisted one third of the money be used to
create a set replicating old Hong Kong. He had no idea the film would take him
10 years to complete. "Bodyguards and Assassins" centers on eight Hong Kong
heroes, including a beggar, a gambler and a vendor. They protected Dr Sun
Yat-sen from an assassination attempt in 1906, when he was leading the movement
to overthrow the Qing Dynasty (1644-1911). What Chan has experienced over the
past decade is a tale no less dramatic than the film's storyline. He was struck
by depression, the death of a family member and frequent frustrations in
building the set. Even so, with the help of many others, he eventually completed
the movie. "The shooting of the film was what it was all about - many anonymous
heroes working for the same goal," he says. Three Hong Kong directors
co-directed the film with Chan. Each of them led a team to ensure the film was
shown on Dec 18, which producer Peter Chan had named long before as the release
date. One week before Christmas and two weeks before the New Year is believed to
be the optimum time to screen a movie in China. But Shanghai's spring rains
delayed filming for a month. Additionally, the movie gathers more than 10 A-list
actors from the mainland and Hong Kong, all of whom had full schedules. A
desperate Teddy Chan called his friends to help out. Lau Wai-keung, director of
the smash hit "Infernal Affairs", arrived in Shanghai the day after being called
and immediately started directing a team. Producer Peter Chan and action
designer Tung Wei directed the two other teams. Yu Dong, head of Polybona Film
Distribution Company and one of the film's investors, wanted to credit Lau and
the other co-directors as co-producers, but they refused, saying they just
wanted to help out. "It's like the film is more than just a film, but something
about Hong Kong filmmakers' self-esteem," Yu says. "It has become an event in
the Hong Kong film industry. Everybody knows how hard (Teddy) Chan has worked to
pursue this dream. So when we discovered it was once again being held up it was
almost like an obligation to help out." When he first raised the idea 10 years
ago, many thought Teddy Chan was crazy. The sum of $8.8 million was twice the
revenue of the highest-grossing film that year in Hong Kong. 
The shopping area district of
Causeway Bay was the scene of the latest acid attack which left six people
injured on December 12. Police are offering a reward of HK$300,000 for
information about the acid attack that took place in Causeway Bay on December
12, a spokesman said on Tuesday. The police offered the reward 10 days after the
acid attack in Causeway Bay, where a plastic bottle full of a corrosive liquid
had been thrown from a building at 541-543 Lockhart Road into a pedestrian area
behind Sogo department store at about 10.07pm. Six people, including one man and
five women aged from 18 to 27, were burnt in the attack. They were all taken to
hospital. After the attack, police officers stepped up patrols along rooftops of
unguarded buildings in the immediate area and around Causeway Bay. Police are
still investigating the case and no one has been arrested so far. Councillors of
Wan Chai district met with police to discuss where and when surveillance cameras
should be set up within the district. “Police have classified the case as
throwing corrosive fluid with intent to do grievous bodily harm and the case is
still under active investigation by the Regional Crime Unit of Hong Kong Island.
“We appeal to anyone who has information on the case to contact any police
station, or the investigating officers on 6643 7068,” the spokesman said. He
said if the public have any information about the case, they can also send
details to General Post Office Box No 999, by fax on 2200 4518 or by e-mail to
The People's Bank of China has recruited
former Hong Kong Monetary Authority chief Joseph Yam Chi-kwong - once the
world's highest paid central banker - to be an executive vice-president of an
advisory body to the central bank. It is not known whether Yam, who retired from
the authority in October, will be paid for the job. Yam, who will make a
20-minute speech at a banking forum in Beijing today, is listed on the schedule
as executive vice-president of the China Society for Finance and Banking. The
society is a research institute and think tank under the People's Bank of China.
The bank's governor, Zhou Xiaochuan, who will also speak at the forum, is the
society's president. Yam, who had been head of the monetary authority since 1993
when it was established, earned HK$11.9 million last year, compared with US
Federal Reserve chairman Ben Bernanke's US$191,300 (HK$1.48 million). Yam was
known as the highest-paid central banker in the world. "Pay won't be a problem,
since it's not difficult for the central government to match the lavish perks
Yam got in Hong Kong," said He Fuqiang, a director at Beijing ZHY Money & Bond
Market Investment Consulting Center. "On the other hand, Yam wouldn't be looking
for money if he decided to take the job." He said the job might not necessarily
be full time. Other retired senior officials from the central bank are also with
the banking society. Wu Xiaoling, a former deputy PBOC governor, is now a
vice-president of the institute. Yam, 61, becomes the first Hong Kong resident
to take a senior post at the central bank. There had been speculation that he
would join it as a senior adviser. In November, Yam said he would not consider
taking up full-time work until March or April. Anthony Neoh, former Hong Kong
Securities and Futures Commission (SFC) chairman, became a senior adviser for
the China Securities Regulatory Commission (CSRC) in 1998, taking a symbolic one
yuan a year in salary. Laura Cha Shih May-lung, former deputy chairman of the
SFC, was vice-chairman of the CSRC between 2001 and 2004.
Hollywood-based Chinese director John Woo
will receive a lifetime achievement award at next year's Venice International
Film Festival, organizers announced on Monday. Woo will pick up the Golden Lion
for Lifetime Achievement during the 67th Venice festival, which is scheduled to
run in Venice from September 1-11, 2010. "The acknowledgment recognizes a
filmmaker who in recent decades, with his revolutionary conception of staging
and editing, has renewed action movies to the core," the festival's Website
says. Born in 1946 and raised in Hong Kong, Woo is the director of such
Hollywood hits as "Mission: Impossible 2" and "Face/Off". Last year, Woo
returned to China with the ancient war epic "Red Cliff", released in two
segments. The first installment opened in Chinese theaters in July 2008 and took
only one month to set a new box-office record for domestic films. Woo is
currently working on a new Chinese-language action movie called "Jianyu Jianghu"
or literally, "the rain of swords in the martial-arts world," starring Michelle
Yeoh, Jung Woo-Sung and Wang Xueqi. 
Chinese traditional custom:
Taste dumplings on Winter Solstice - The Winter Solstice Festival, a traditional
day for eating dumplings in China, arrived on Tuesday. People around China will
eat various flavored dumplings on this day. 
Workers make dumplings at a supermarket in Yinchuan City, capital of northwest
China's Ningxia Hui Autonomous Region, on December 21. Dumplings are traditional
delicacy in north China for Winter Solstice Day, which means the season's
coldest days are imminent. People traditionally also go tomb sweeping on Winter
Solstice Day, which falls on December 22 this year.
Technicians repair a damaged
subway train after a power system breakdown and a subsequent collision of two
trains in Shanghai December 22, 2009. A pivotal subway line in Shanghai was shut
down early Tuesday for system failure and a subsequent collision of two trains.
It was the most expensive
matchmaking party ever held in Beijing. There were 21 single billionaires, 22
single women and an admission fee of 100,000 yuan. Love has a price. But this
much? That is the central question of a heated debate taking place among Chinese
netizens on whether these moneyed romantics have gone too far. The party took
place on Sunday night in Beijing Jun Wang Fu, a luxury hotel near Chaoyang Park
known for its Qing Dynasty-style decor. The 22 single women were selected in
several ways. Some were registered members of a matchmaking website called
Golden Bachelor, which organized the party. Others won a beauty pageant
sponsored by Golden Bachelor. The remainder were scouted by Golden Bachelor
employees, known as "love hunters," from Chinese cities. For the last two
categories, tickets were free. "Every girl has the right to pursue happiness,"
said a 22-year-old surnamed Dai who is studying at an arts university in Nanjing.
"I just want to avoid the problems I may be forced to face before falling in
love." "I came to this party in Beijing for free," she said. "I do feel precious
about this chance to meet many successful and mature men." A bachelor surnamed
Zhang said the 100,000 yuan price tag is worth it, if it leads to true love. The
40-year-old graduate from a university in the United Kingdom owns a financial
software firm in Shanghai. "When we are branded as billionaires or powerful men,
we are forced to stay in very high societal positions, which makes it difficult
to find true love," Zhang told the Beijing Morning Post. Golden Bachelor
promised free membership for a year if the Chinese singletons failed to find
love at the party. "It's not the first time we organized such a high-end
matchmaking party, but it is the first time we have held such a party in
Beijing," said Xiao Pu, market director of the Shanghai-based Golden Bachelor.
Half of the 21 bachelors who attended the party were from Beijing while others
came from different provinces, including Guangdong, said Xiao. She estimates 80
percent of those who attended the matchmaking party found a date. The youngest
bachelor was 26 and the oldest 46, said Xiao. Most work in financial investment
fields and drive luxury cars, like a Ferrari or a Porsche, she said. A number of
the single women graduated from art school, according to Xiao. "Most young
ladies are very concerned about the party," said Xiao. "Some of them arrived at
the hotel one day in advance and hired cosmeticians to do makeup for them."
Aside from trying to lure in men with their beauty, the bachelorettes also tried
to capture lonely men's hearts in a Golden Bachelor talent showcase. Some sang.
Others danced. A few cooked Chinese food. And then there was the so-called
"wedding dress show". All 22 of the women decked themselves out in big white
gowns and then paraded in front of the bachelors. Those who were not invited,
say they are disgusted by the party. "The girls are materialistic," said Guan
Mengyun, a 30-year-old bachelor living in Beijing. "Marriage should not be
determined by money." More than a thousand comments have been posted on Chinese
web portal Sohu.com. The majority are critical. "Such marriage can't last for a
lifetime," said a netizen identified as "ZG-BDSMSO". "If the man goes bankrupt
one day, the woman will probably leave him." 
SAVING ENERGY: Workers install
LED lights on the horn-shaped Sunny Valleys building in Shanghai on December 4,
2009. Energy-saving equipment has been deployed during the construction of the
Shanghai Expo buildings. After Shanghai's success in co-hosting an
environmentally friendly Olympics last year with Beijing, China's eastern
metropolis is setting another high bar of ecological responsibility for its 2010
World Expo. As the stage for next year's Expo, the city is preparing to impress
with an improved environment and 5.28-square-km garden that features green
pavilions. The Shanghai Municipal Government recently made a promise that air
quality over the course of the six-month Expo will be rated as good 95 percent
of the time.
Cambodian King Norodom Sihamoni
(R) meets with visiting Chinese Vice President Xi Jinping in Phnom Penh, capital
of Cambodia, Dec. 22, 2009. Chinese Vice President Xi Jinping met Cambodian King
Norodom Sihamoni here on Tuesday to discuss bilateral relations. Xi said China
attached great importance to bilateral relations with Cambodia and was willing
to enhance cooperation with the country, in a bid to push the Sino-Cambodia
comprehensive cooperative partnership forward. Cambodia had always firmly
supported China on issues relating to its core and major interests, and was a
good neighbor, friend and partner to China, Xi said. It was the Chinese and
Cambodian peoples' wish to further cement and develop the friendly cooperative
relations, which served the fundamental interests of both countries, and was
conducive to regional peace, stability and prosperity, Xi noted. Sihamoni said
China and Cambodia currently enjoyed a good relationship and had close
cooperation in many fields. He believed Xi's visit would further promote
friendship and cooperation between the two nations. 
Chairman of Taiwan's Straits Exchange Foundation Chiang Pin-kung, right, shakes
hands with his counterpart Chen Yunlin, chairman of China's Association for
Relations Across the Taiwan Strait, on the second day of cross strait
negotiations in Taichung, Taiwan on Tuesday, Chen and his Taiwanese hosts are
expected to sign three minor economic accords, and discuss a free-trade deal.
Top envoys from Taiwan and China signed joint agreements on Tuesday as they met
behind rings of barbed wire shielding them from anti-Beijing protesters who set
ablaze a Chinese flag. The talks between Chen Yunlin, the mainland’s top Taiwan
negotiator, and Taiwanese counterpart Chiang Pin-kung, have triggered
demonstrations on the island by people angry about closer ties with their giant
neighbor. The deals signed Tuesday – on food quarantine, industrial standards
and employment of fishermen --bring to 12 the number of pacts inked by the two
former arch-foes since China-friendly President Ma Ying-jeou assumed power in
Taiwan in May last year. “The trend is irreversible,” Chen said during the talks
in the central Taiwan city of Taichung. “Over the past year, we’ve accomplished
a lot of work that we hadn’t been able to achieve in the previous 10, 20, or
even 60 years.” A handful of anti-China protesters had gathered outside the
hotel hosting the talks, voicing concern about a planned trade pact they argued
would draw Taiwan closer to China, with no obvious benefits in return. One of
them burned a Chinese flag, in full view of police deployed in large numbers to
prevent a repeat of events during Chen’s last visit in late last year, when
violent clashes erupted with demonstrators. “Taiwan has never been a part of
China,” said protester Tsai Ting-kui. “We want the global community to
understand the Taiwan people don’t support the course chosen by Ma Ying-jeou.”
Taiwan, a society of 23 million, has developed into a vibrant democracy since it
split from China at the end of a civil war in 1949. But it is now deeply divided
over how to handle ties with the mainland, which looms as an ever larger
presence across a narrow strait and has never given up its hope of
reunification, even if it must go to war to achieve it. President Ma is pushing
a sweeping trade pact with China which he says will help create jobs on the
recession-hit island. However, the opposition warns that the pact, on the agenda
in Taichung, will contribute to eroding the de facto independence the island has
established over the last 60 years, and say it will not help employment. “Of
course some people have voiced their concerns about the possible negative
impacts the agreement may have on Taiwan’s economy,” Chen said. The two sides
had planned to sign altogether four agreements Tuesday, but one of them,
regarding double taxation, was dropped off the agenda at the last moment. “We
feel we would need more time to iron out technical issues,” said Chiang, the
Taiwanese negotiator. Since Chen’s arrival in Taichung Monday, he has been a
lightning rod for various groups with a grievance against China, including
Tibetan activists. About 500 members of the Falungong spiritual movement, which
China has banned as an “evil cult” for the past decade, staged an overnight
sit-in near the talks venue. “We want our voice to be heard by Chen and taken
back to the mainland. Chen is the representative of the evil Chinese communist
party,” said Theresa Chu, a spokeswoman for the Taiwanese Falungong. “The
Taiwanese authorities have not raised China’s human rights issues. At this
point, we feel very disappointed.” In an unusual gesture Monday, Chen said he
respected Taiwan people’s right to protest his presence, following a day which
saw several tens of thousands take to the streets, but his critics were not
impressed. “They have cracked down on human rights lawyers. They don’t even
bother about their own people, so how can they pretend they’ll give special
favourable treatment to the people of Taiwan? I think that’s just a lie,” said
Tsai. 
A file picture showing a poster advertising the Hollywood blockbuster 2012 at a
theatre in Beijing. Overnight on Monday, World Trade Organization rejected
mainland’s appeal against a ruling that orders Beijing to free up distribution
of US films, music and print. The central Ministry of Commerce on Tuesday said
it regretted the loss of Beijing's appeal against a World Trade Organization
ruling that its import monopolies violated trade commitments. Beijing had
appealed the WTO ruling against import monopolies on books, film and audio
entertainment, saying that it should have the right to control imports that
might harm public morals. A WTO panel overnight on Monday upheld a ruling in a
case brought by Washington that mainland was obstructing trade by forcing
foreign suppliers to distribute movies, music and books through state-owned
companies. The ruling allowed Beijing to continue reviewing products for
objectionable content. Its decision cannot be appealed. The US complaint had
argued that mainland should not impose monopolies on imports of products that
are authorized for sale, or are widely available in pirated form. “After China
entered the WTO, market entrance for published material has been in compliance
with its WTO commitment,” read the online statement from commerce ministry
spokesman Yao Jian. “Foreign published materials, films and audiovisual
equipment have flowed smoothly into the Chinese market. “China regrets the
appeal panel ruling. China believes that cultural goods combine commercial and
cultural value, and should be managed in a different way than other products.”
On Monday, US Trade Representative Ron Kirk called the panel’s ruling a “big
win” for the United States and US filmmakers, recording companies and book
publishers frustrated by widespread piracy in mainland and their difficulty
selling legitimate products. “We expect China to respond promptly to these
findings and bring its measures into compliance,” he said. Some industry
executives regarded mainland’s appeal as a way to gain experience with the WTO
appeal process, in line with its increased use of WTO complaints to keep foreign
markets open to mainland goods. Beijing on Monday made an initial effort to
bring a WTO case against US safeguard duties on tyre exports from mainland, but
was blocked by the US. Currently, legal cultural or entertainment imports into
mainland are limited to a few state-owned firms. If mainland opens import
rights, that would benefit private domestic distributors and independent
retailers, as well as foreign firms hoping to gain access to the mainland
market. Beijing is expected to set up a more formal import approval system for
cultural products, to replace its current practice of informally communicating
bans to the monopoly importers, before allowing new entrants to import. The WTO
ruling did not address mainland’s quota of 20 foreign films per year, one of
Hollywood’s main gripes.
Mainland should give a chunk of its bulging foreign currency reserves to its
commercial banks so that they have more financing power to support firms going
abroad, the head of the country’s largest bank said on Tuesday. Jiang Jianqing,
chairman of the Industrial and Commercial Bank of China (SEHK: 1398), said that
borrowers of the foreign exchange could repay the loans in yuan, thereby mopping
up some of the cash sloshing about the domestic economy. “If we could make a
small step forward, Chinese companies would take a big step in going abroad,” he
told a forum in Beijing organized by a research institution under the central
bank. His comments suggested that a debate could be heating up about how to make
best use of mainland's US$2.3 trillion in forex reserves, which have started to
swell again in recent months on the back of the country’s trade surplus and
capital inflows. Jiang did not say what the state-owned banks would give in
return for being allocated a bigger portion of mainland’s forex reserves, the
world’s largest such stockpile. The country’s sovereign wealth fund is already
the biggest shareholder in the country’s major banks via its domestic investment
unit, having amassed these stakes when it capitalized the banks earlier this
decade. An unprecedented lending surge over the past year has left mainland
banks looking for ways to replenish their capital cushions, with a regulator
saying this week that they might collectively need to raise as much as 500
billion yuan (HK$567 billion). Jiang did not say whether his proposal was
intended as a new round of forex-backed re-capitalization for the banks. But in
calling for a bigger piece of the country’s foreign currency reserves,
commercial banks might find themselves competing with other state-backed
agencies. Local media have reported that China Investment Corp, the country’s
sovereign wealth fund which was founded with US$200 billion of the forex
holdings in 2007, has asked for an additional US$200 billion. And the State
Administration of Foreign Exchange, which oversees the forex reserves, recently
made a high-profile hire of a fund manager from US bond investor Pimco, a move
seen as a sign that it planned to become more aggressive itself in investing the
reserves.
A child holds a placard saying "Do
not burn garbage, we need to recycle" in a protest against the building of a
garbage incineration plant in Guangzhou, capital of Guangdong province, on Dec
20. In an attempt to stop people from protesting garbage incinerators, officials
here are maintaining that no death and cancer cases are directly related to
burning trash in this way, officials said. "It is a rumor that the number of
death or cancer cases rised after the garbage incinerator in Likeng was put into
operation three years ago," said Su Zequn, vice-mayor of Guangzhou. Su was
responding to opposition from the public to the building of two more planned
incinerators in the city's Panyu and Huadu districts. "We have to let the public
be aware that burning trash in advanced and environmentally friendly facilities
is an ideal option for the city to deal with the rising amount of garbage," Su
said. Local residents' resistance has succeeded in blocking the government's
plan to build a major garbage incinerator in this southern city's densely
populated Panyu district. In a public meeting with at least 56 resident
representatives on Sunday, Tan Yinghua, the district's Party secretary, said the
garbage project planned in Huijiang village had been suspended due to a wide
range of protests from residents nearby in the process of environmental
assessment. "Experts have stopped writing the environmental assessment report
and all bidding processes have been halted," Tan said. "We need to draw up a new
comprehensive plan for garbage treatment." Local authorities said earlier that
the Panyu project would not be started until 2012 after a thorough debate among
experts, government officials and residents and environmental assessments. "All
decisions would be made after thorough discussion with residents," Tan said.
More than 1,000 local residents protested at the Guangzhou government office
buildings to oppose construction of the Panyu project, which was initiated early
in 2002. Earlier reports said villagers near the Likeng plant, the country's
largest garbage treatment project of its kind, confirmed more than 50 deaths
from cancer after its operation. 
Choi Yiu-kwan, the outgoing deputy chief
executive of the HKMA, urges lenders to be vigilant on risk management. The
banking environment will remain difficult next year even though financial
markets are stabilising, says Choi Yiu-kwan, the outgoing deputy chief executive
of the Hong Kong Monetary Authority. Choi, who will retire at the end of this
month, expects retail banks to post pre-tax profit growth this year, saying
quarterly profits were improving, compared with a sharp decline in the fourth
quarter of last year. Banking confidence was hit late last year after the
collapse of Lehman Brothers Holdings in September. Banks' loan-loss provisions
were not as severe as expected and while asset quality had deteriorated
slightly, it was still better than the levels seen in previous crises, Choi said
yesterday. "Some banks will notch up profit growth and others will find their
profits under pressure," he said. But Choi was still cautious on the banking
outlook for next year, saying it was difficult to tell when central banks would
withdraw "quantitative easing strategies", which have increased liquidity to
help banks. He also warned that the withdrawal of quantitative easing in the
future would push interest rates higher. More than HK$640 billion flowed into
Hong Kong between October last year and last month, and some has found its way
into the stock and property markets. However, Choi warned that those inflows
could reverse, triggering volatility. A weakening Hong Kong dollar has raised
fears that a massive capital outflow will cause asset markets to slump. Choi
said the reason the local currency had weakened was that initial public offering
proceeds had been swapped into other currencies and some corporates also had
year-end demand for US dollars, putting pressure on the local unit. However, he
urged banks to be vigilant in risk management, monitor the possible impact of a
sudden fund outflow or interest rate volatility and maintain adequate levels of
capital and liquidity. He also warned investors to be aware of the uncertain
market environment when making investment decisions and said homebuyers should
consider the impact on their loan repayments if interest rates rose to normal
levels. Choi said some lenders might need to raise capital to comply with new
international rules. The Basel Committee, an international standard-setting
body, is expected to ask banks to raise the quality of their tier-1 capital
base, which measures a bank's ability to absorb sudden losses. "I do not think
it will present a major problem to banks in Hong Kong," he said, adding that the
banks maintained high capital adequacy ratios. Choi joined the HKMA in 1993
after working for the Office of the Commissioner of Banking since 1974. He will
be succeeded by Arthur Yuen on January 1.
Luxury retailer Emperor Watch &
Jewellery pays monthly rental of HK$1.4 million for the 1,212 sqft shop at 6-8
Canton Road. A high-street shop in Tsim Sha Tsui has been sold for HK$695,544
(US$90,333) per square foot, setting a new record in the city. Emperor
International Holdings paid HK$843 (US$109.5 million) million for the 1,212
square foot shop at 6-8 Canton Road. "The acquisition was prompted by the
investment value of the location and a basic need for the shop," said a source
close to the company. The unit is leased to luxury retailer Emperor Watch &
Jewellery, a sister company of Emperor International, at a monthly rental of
HK$1.4 million. Both companies are controlled by Albert Yeung Sau-shing's
privately run Emperor Group. The deal broke the record made by Ricky Yeung, a
brother of Albert Yeung, who bought a shop at Star House, also in Tsim Sha Tsui,
for HK$60 million or HK$450,000 per square foot in May. "Canton Road is a prime
location for local shoppers, mainland and overseas tourists," the source said.
"The west of the street is either controlled by Wharf (Holdings) (SEHK: 0004) or
Sino Land. "The developer feels it is a good opportunity to establish a foothold
there." Emperor International also owns the 800 sqft shop at 4 Canton Road,
which is also leased to Emperor Watch. According to Lawrence Wong at property
agent Sheraton Valuers, the original owner - a local enterprise - bought 6
Canton Road in 1986 for HK$5.3 million. No 8 was bought for HK$32.3 million in
1994. "It is unknown if this is now the most expensive shop in the world, but
obviously it's a record in the city," said Wong. With such a price tag, the
rental yield was as low as about 2 per cent, he said. "It is seen as expensive
at this moment, but there is rental growth potential in the area," the source
close to the buyer said. Agents said retail tenants were paying high rents for
shops because of the high turnover of business on the street. For example, an
operator of a money-changing business from a 95 sqft store in Cannon Street pays
a Hong Kong record rent of HK$1,789 per square foot a month. That amounts to a
monthly rental of HK$169,955. Capital values of retail shops on Canton Road have
risen about 20 per cent this year. This is above the average growth of 14.8 per
cent, according to international property consultant Jones Lang LaSalle. In a
survey released this month, property consultancy CB Richard Ellis said Hong Kong
ranked as the world's second-most expensive retail location, with average rents
at the end of the third quarter this year at US$976 per square foot a year. New
York remained the most expensive with average rents of US$1,640 per square foot
a year. According to Jones Lang LaSalle, the second half saw a restoration of
consumer confidence, triggered by a gradual economic recovery and the wealth
effect brought by rallies in the stock and property markets. The tourism market
has also been improving with the year-on-year growth of arrivals on the rise for
three consecutive months. The property consultant was confident about the retail
property market outlook. The gradual economic recovery will continue to help
improve labor market conditions and further strengthen consumer confidence.
Arrivals of long-haul visitors might remain low, but the refined policies of the
mainland's individual visitation scheme would ensure sustained growth in tourist
arrivals for Hong Kong, it said.
The fake 100 yuan note (bottom) and a genuine note. A counterfeit banknote
smaller than a normal note was withdrawn from a Bank of China cash machine at
University station last week. Yesterday a businessman surnamed Yu said one of
the 100 yuan (HK$114) banknotes, among 15 he withdrew from the automated teller
machine (ATM), was a suspected fake, smaller, thinner and smoother compared with
a real one. "Previously I thought it was very safe to withdraw money from cash
machines, but now I have lost confidence in the yuan withdrawn from ATMs, and
found citizens' rights are not protected in such a case," Yu said. Frequently
travelling to the mainland, Yu has withdrawn yuan from cash machines in Hong
Kong before his departure in the past three years. This is the first time he has
found counterfeit yuan in one. He withdrew the banknotes at a machine at the
station on his way to Lo Wu at 9am last Thursday, Yu said. Three hours
afterwards, Yu arrived in Dongguan, Guangzhou, and gave one of the notes to a
driver. "The driver told me that the 100 yuan note was a fake one, and I
realised that it was physically smaller," Yu said. Yu decided to keep the 100
yuan notes he had remaining and the ATM receipt, and reported to Hong Kong
police at Lo Wu station when he returned to Hong Kong last Friday. An officer
told him that the suspected counterfeit note would be confiscated, so instead Yu
took it to BOC (SEHK: 3988). However, bank staff in Kwai Tsing Road branch
suggested only that Yu report the case to police and could not guarantee that
the bank would compensate him. A BOC spokesman sqaid yesterday he had no comment
on the individual case, but said the bank reported to the Commercial Crime
Bureau in suspected counterfeit-note cases, according to standard procedures.
BOC has 470 cash machines in the city, and 420 provide yuan. BOC machines do not
provide cash-deposit-taking services in the city. BOC stressed that all
banknotes put in cash machines went through strict examination procedures.
Police figures revealed that 3,071 counterfeit 100 yuan notes were seized in the
first half of this year, and 8,569 counterfeit 100 yuan notes were seized last
year. 
Seal copyright deal or lose stars, labels
warn TVB - Broadcaster risks losing monopoly on Canto-pop scene. Television
Broadcasts (SEHK: 0511)' long-time monopoly on the local pop scene is at risk of
collapse as four major record labels representing some 40 pop singers -
including Jacky Cheung Hok-yau and Eason Chan Yik-shun - threaten to bar the
stars from appearing on TVB shows unless the broadcaster settles a copyright
fees dispute with them before Christmas. The labels - Universal Music Hong Kong
(which includes Cinepoly, Go East and What's Music), Sony Music, Warner Music
Hong Kong and EMI Hong Kong - revealed their plan yesterday, detailing the
dispute between TVB and the Hong Kong Recording Industry Alliance. The HKRIA was
formed last year by the labels after they quit the International Federation of
Phonographic Industry Hong Kong (IFPI). The dispute arose after the HKRIA
decided to calculate copyright fees in a way different from that used in the
IFPI days. An industry veteran said TVB used to pay less than HK$5 million a
year in copyright fees, but the HKRIA is asking for more than double that under
the new calculation. HKRIA chief executive officer Ronnay Botejue said the
association began negotiating with TVB on the fees a year ago but TVB could not
agree on how to calculate them. Botejue said the HKRIA proposed charging
copyright fees based on TVB's advertising revenue. According to international
standards, he said, the charge could be between 0.13 per cent and 1.2 per cent
of advertising revenue, and 0.6 per cent was a medium percentage adopted in
Southeast Asia. Botejue refused to comment on whether the HKRIA was asking for
too much compared with the IFPI days, but he said the value of music had been
underestimated according to many foreign court cases. With the implementation of
digital broadcasting, TVB was using more music on its new high-definition
channels, he said. The proposed annual licence would cover unlimited use of a
range of music formats. Initially, the HKRIA planned to charge 0.45 per cent of
TVB's advertising revenue in 2008 - meaning HK$10.8 million from HK$2.4 billion
in advertising. But the negotiation did not move forward. On November 30, the
HKRIA proposed lowering the percentage to 0.12 per cent for 2009 (HK$2.9
million), with the percentage to increase each year - to 0.2 per cent for 2010
(HK$4.8 million), 0.3 per cent for 2011 (HK$7.2 million) and 0.4 per cent for
2012 (HK$9.6 million). "We hope to at least settle the music licence for 2009
and 2010 first," said Botejue, adding that the association had also been in
talks with other broadcasters, from terrestrial to pay TV and radio, and the
negotiations had been positive. Botejue said a letter was sent to TVB last week
but the association had not received a reply. "We hope to get an answer by
December 24," he said. "But TVB can refer the case to the copyright tribunal if
they think our proposed fees are not acceptable." Top management of the four
labels said their singers would not appear on TVB until a deal was finalised,
and that they were exploring opportunities for stars to appear on other
stations, including TVB arch rival ATV, as well as Cable TV and Now TV. Many pop
singers have contracts with TVB restricting their appearances on other TV
stations. Singers tied to the four labels were missing from Saturday's third
season of Jade Solid Gold's Best Selection. "Our artists simply can't show up on
TVB before an agreement is finalised," Universal Music senior vice-president
Duncan Wong Kim-to said. His label's singers would probably not appear on the
Jade Solid Gold Top 10 Music Awards in January even if winners. "If they are
going only to receive an award and cannot perform, it's not fair to TVB either."
TVB's production division controller (non-drama production), Ho Lai-chuen, said
the HKRIA letter had been passed to lawyers and that as long as singers did not
breach their contracts with TVB, they could appear on other TV stations. ATV
said it welcomed any collaboration with singers from the four labels.
Shanghai aims to launch an
international board next year for foreign companies, which could boost the
number of listings the bourse attracts. Ernst & Young says Shanghai will edge
ahead of Hong Kong in initial public offerings next year. The consulting firm
says HK$370 billion in funds will be raised by listings on the Hong Kong stock
exchange next year but the Shanghai exchange is expected to draw in at least
HK$380 billion. Hong Kong investors will see more mainland listings, especially
from the retail, consumer products and industrial sectors, and larger deals will
come from the property and financial sectors. Shanghai would also attract
financial and industrial listing candidates, the Ernst & Young report said.
Agricultural Bank of China is to raise up to 200 billion yuan (HK$227.1 billion)
in an initial share sale next year, according to Li Fuan, the head of the
banking innovation department at the China Banking Regulatory Commission, who
was quoted in a mainland newspaper. The Shanghai exchange could outperform the
Hong Kong market because the mainland has had ample liquidity since the China
Securities Regulatory Commission lifted a ban on listings in March. Ernst &
Young also said corporate earnings on the mainland had been less affected by the
global financial crisis, allowing companies to raise more capital. Mainland
newspapers have already suggested that Shanghai, which aims to launch an
international board next year for foreign companies, will overtake Hong Kong
next year as a listing market. Beijing said earlier this year it would permit
foreign firms to list in Shanghai and use the yuan for trade settlement on a
trial basis. Paul Go, a managing partner at Ernst & Young, said investors could
expect more mainland companies to raise funds in Hong Kong and on the mainland
simultaneously. He also expected more mainland developers to seek listings in
Hong Kong. But he said the Cayman Islands might still be the top choice for
incorporation, given that the Hong Kong exchange had just added British Virgin
Islands, where many mainland companies are registered, as an acceptable overseas
jurisdiction. The Hong Kong exchange is the winner globally this year, with
HK$246 billion raised through 64 flotations after fund-raising activities picked
up in the past quarter. The nine new listings this year on the Shanghai exchange
raised 118 billion yuan, and globally the bourse was third after the New York
Stock Exchange. The largest offering this year was Banco Santander's Brazilian
unit, listed both on the New York exchange and the Sao Paulo bourse, which
raised US$7.52 billion. Mainland companies continue to do well when it comes to
raising capital through flotations. The second-largest offering globally this
year was China State Construction Engineering Corp, raising US$7.35 billion from
a listing in Shanghai. 
Las Vegas Sands, the world’s No 2
casino operator by market capitalisation, said it could complete all its planned
five projects on Macau’s Cotai strip within five years, hugely expanding its
presence in the world’s biggest gambling market. The bullish forecast,
characteristic of chief executive officer Sheldon Adelson, took some analysts by
surprise, as shares in Sands China, the company’s Macau unit, fell 4.1 per cent.
The firm – which raised US$2.5 billion from the listing of its Macau unit, Sands
China, in late November – plans to build five properties on the Cotai strip, a
swathe of reclaimed land some Macau developers have touted as the next Las Vegas
strip. Those properties, including two that are halfway through construction,
would complement two existing casinos in Macau, one of which is the Venetian
Macau, the world’s largest casino. “We could finish all the properties easily
within five years,” Adelson said in an interview on CNBC. “We could have a total
of 14 brands.” But Aaron Fischer, CLSA’s head of Asian consumer and gaming, said
he was surprised by Adelson’s bullish forecast. “It’s quite aggressive,” he
said. “Five years is a bit earlier than I thought, but it’s a good thing.” Sands
has said it expects to open phase one of the two halfway-completed projects,
sites five and six, on the Cotai strip in June 2011. The firm was forced to
suspend construction of the projects, which are estimated to cost about US$2.6
billion, due to the global financial crisis. The firm also plans to develop
three more parcels of land on the Cotai strip. Sands has said it expects its
Cotai strip developments to contain over 20,000 hotel rooms, over 1.6 million
square feet of meetings and convention space, and over 2 million square feet of
retail malls, upon completion. Sands competes in Macau with Wynn Macau, Galaxy
Entertainment Group (SEHK: 0027), SJM Holdings, Melco Crown Entertainment and
MGM Mirage. Separately, Adelson said the firm’s US$5.5 billion Singapore casino
resort, which was originally set to open by the end of this year but later got
pushed to end-March next year, could open around the new timeframe. “We are on
track till the end of March,” he said. “However, we have some rain delays … If
we are a little late, it’ll be weeks, not months.” The Singapore project, the
Marina Bay Sands, which was originally expected to cost around US$3.2 billion,
has also suffered massive cost overruns. 
CHP Controller Dr Thomas Tsang watches a
young child receive a free swine flu vaccination at Western Student Health
Service Centre on Monday. Five high-risk groups of citizens were eligible to
receive free swine flu vaccination starting from Monday – but there was only a
moderate response to the program, the Centre for Health Protection (CHP) said on
Monday. After visiting Chai Wan Health Centre to observe the turn-out from
high-risk groups to the human swine flu vaccination programme, controller of the
Centre for Health Protection Thomas Tsang Ho-fai appealed to parents to bring
their children in to be vaccinated. “The number is still below what we can
handle. The maximum capacity at our student health centres is about 6,000 per
day." He said the centre had received only about 400 bookings from parents by
Monday morning. “But we see signs that the number of bookings are increasing, so
we hope that this trend will continue,” Tsang said. About two million people
belonging to five high-risk groups – healthcare workers, chronic patients and
pregnant women, children aged six months to six years, the elderly, pig farmers
and slaughterhouse workers – have been urged to receive free swine flu shots
from government clinics. Yuen Kwok-yung, Head of Microbiology at the University
of Hong Kong, on Monday called on the high-risk people to be vaccinated.
“Seasonal influenza virus causes upper-respiratory viral infections, but human
swine flu sufferers can have both upper- and lower-respiratory viral infections
– and the effects can be very serious. “In some cases, patients' lung tissue can
be seriously damaged, while others can suffer acute myocarditis and blood vessel
blockages,” he told local media. Yuen said the best way to prevent human swine
flu infections was to receive the vaccination, and not to rely on antivirus
drugs that might not be effective. People in lower risk groups who have joined
the human swine influenza vaccination subsidy scheme can receive vaccinations
starting next Monday. The government will subsidize each dose by HK$129.
The fraught climate change talks in Copenhagen have shown that the concept of a
"G2" that would see China and the United States ruling global affairs in
co-operation is far from reality, analysts say. The accord reached last week in
Denmark after marathon negotiations has been widely criticized as a failure, and
much of that ire has been directed at China and the US, the world's two largest
carbon polluters. The global powers sparred often at the talks, failing to agree
on several key issues, including how to verify that emerging economies such as
China fulfil their pledges to crack down on greenhouse gas emissions. "If there
is proof times four that there is no G2, it's the Copenhagen conference,"
Jean-Pierre Cabestan, professor of political science at Hong Kong Baptist
University, said. "Nothing can be done without the others." Shi Yinhong, a
political expert at Renmin University, agreed. "I think that on the one hand,
China's position and importance have increased much more, and consultation
between the US and China was quite important," he said. "But on the other hand,
if you talk about G2 in Copenhagen, you can see G2 confrontation on some very
important issues, so I don't think that the G2 is a correct concept." The idea
of a special US-China relationship has been floated in American academic circles
since 2006. But analysts said the Copenhagen talks had highlighted the fact that
the two sides remain far apart on a number of issues. Russell Leigh Moses, a
Beijing-based analyst, said the verification of emissions cuts was a key
sticking point in Sino-US relations. "There's still anxiety that the United
States is out to contain China," he said. "It also has to do with domestic
consequences - how do you tell local governments that not only are you going to
be overseen by Beijing in terms of economic growth ... but you're also going to
be overseen by other countries?" Beyond that, the Copenhagen summit also
illustrated that China was still trying to work out what role it wanted to play
in the world, Moses said. "Do you want to be a G2, a G8, do you want to be the
only superpower in the world?" For Shi, the conflicts signalled the beginning of
a difficult period for relations between the two nations. "If we consider the
Sino-American conflicts in Copenhagen, the potential new arms sales to Taiwan
and [US President Barack] Obama's potential meeting with the Dalai Lama,
relations will have more difficulties in the next few months." Commercial ties
have been frayed in recent months, with the capitals trading accusations of
unfair practices. Another potential irritant could be the trial this week of
dissident Liu Xiaobo on subversion charges - Washington has already urged
Beijing to free him and end harassment of political prisoners. "Relations will
remain difficult," Cabestan said. "Obama's visit to China was a bit of a waste
of time - it ... masked important differences."
Top mainland envoy Chen
Yunlin (second right) is greeted by Chiang Pin-kung, Straits Exchange Foundation
chairman, at the start of a visit to Taiwan in Taichung yesterday during which
the two sides will discuss a free-trade pact. Their wives embrace alongside.
Chairman of Taiwan's Straits
Exchange Foundation, Chiang Pin-kung, left, shakes hands with his counterpart
Chen Yunlin, chairman of China's Association for Relations Across the Taiwan
Strait, as he arrives for five days of negotiations in Taichung, central Taiwan,
on Monday. China's senior envoy to Taiwan told his hosts on Monday that Beijing
wants to "move down the road of peace," a day after tens of thousands of
Taiwanese demonstrators blasted the government for its pro-Beijing policies.
Chen Yunlin’s statement in the central city of Taichung came amid heavy
security, with police preventing several hundred protesters from besieging his
hotel. The protesters view Chen as the spearhead for the Beijing’s proclaimed
policy of uniting Taiwan with the mainland. Chen arrived in Taichung on Monday
to discuss a wide-ranging free-trade agreement with Taiwanese officials, part of
Taiwanese President Ma Ying-jeou’s push to link the island’s economy ever closer
to the mainland. Four minor economic accords are also on the agenda. Since
assuming office in May last year, Ma has eased tensions across the
160-kilometre-wide Taiwan Strait to their lowest level in 60 years, turning his
back on predecessor Chen Shui-Bian’s pro-independence policies amid a welter of
business-boosting initiatives. They include launching regular air and sea links
between the sides and ending across-the-board restrictions on Chinese investment
in Taiwan. Shortly after his arrival, Chen acknowledged the progress the sides
had already made, and said he hopes that further gains can be made. “History has
proved and will prove that the two sides of the strait are marching ahead on the
right path,” he said. “We want to move down the road of peace.” Chen spoke a day
after tens of thousands of opposition demonstrators marched through the streets
of Taichung to protest Ma’s policies. The main opposition Democratic Progressive
Party (DPP) believes the president’s approach sets the stage for an eventual
Chinese takeover of the island – a charge Ma vehemently denies. The DPP says
Ma’s intended trade deal – formally known as the Economic Cooperation Framework
Agreement, or ECFA – will flood the island with cheap Chinese products,
prompting massive job losses. “Our president has turned blind to the possibility
that jobs will be lost” after signing the ECFA with China, DPP Chairwoman Tsai
Ing-wen told protesters on Sunday. As recently as five months ago, most of the
Taiwanese public accepted Ma’s argument that closer economic ties would aid
Taiwanese prosperity (SEHK: 0803) – even allowing for the global economic
downturn. But Ma’s mishandling of the response to a devastating typhoon in
August began to dent his popularity, as did more recent errors of judgment
involving secret negotiations on the removal of a ban on some US beef imports.
Earlier this month, Ma’s Nationalists lead the DPP by only two percentage points
in local elections – a far cry from the 17-point margin that Ma enjoyed over his
DPP rival in the presidential poll last year.
Chinese Vice Premier Li Keqiang (R) and visiting French Prime Minister Francois
Fillon attend the launch of Taishan nuclear power plant in Beijing, capital of
China, Dec. 21, 2009. Li Keqiang and Fillon commenced the construction of
Taishan nuclear power plant here Monday, a Sino-French joint project in south
China's Guangdong Province. 
Lawson, Japan’s second-largest
convenience store chain, said on Monday it aims to boost its store numbers in
mainland by 10 times in five to 10 years as it seeks growth outside its
saturated home market. “We assume there will be about 30,000 convenience stores
in China in five to 10 years. We want to be a player with a 10 per cent share,”
Takeshi Niinami, the company’s president said at a media reception. The company,
which currently has about 300 outlets in Shanghai, said it plans to expand into
other areas of mainland, such as the country’s inland and northeastern regions.
Lawson and its rivals are planning to speed their expansion in mainland and
other Asian markets as they face weak growth prospects at home, where more than
40,000 convenience stores are vying for survival as the population ages. Lawson
has about 9,600 stores in Japan. Seven & I Holdings, which runs the industry
leading Seven-Eleven chain, has said it plans to increase the number of its
convenience stores in mainland by more than five times to 500 locations over the
next three years. Lawson’s Niinami said the company is also considering opening
stores in Vietnam and India, where it has already been approached by local
businesses for possible partnerships. 
Jane Sieberts, visiting from Los
Angeles on business, examines a Fendi handbag at Bloomingdale's in New York. The
luxury Italian fashion house wants to turn all 15 stores in China into upscale
versions of its high-end flagship in Shanghai's Henglong Square. Luxury Italian
fashion house Fendi recently opened a newly refurbished flagship store in
Shanghai rendered in black and honey travertine marble juxtaposed with
hand-carved fiberglass panels in white. Now the fashion house wants to turn all
15 of its stores in China into luxurious copies of its flagship store. LVMH
purchased Fendi in 2001 and, after a few rough years, the Roman fashion house
has a new design concept and a renewed contract for head designer Karl
Lagerfeld. Since taking the top job at Fendi in 2003, CEO Michael Burke has
brought clarity and confidence to the formerly family-run business. Designer
Karl Lagerfeld, who had threatened to leave the house when his contract expired,
said that Burke "got ready in six months what the others couldn't do in four
years". Burke said he wants to transform Fendi's 15 stores in China into bigger
ones versus the idea of opening more stores. "We will invest more in turning old
stores into flagship-style stores in the next five years rather than opening up
new stores, because you need to keep Fendi really in the high end. The Fendi
model will be more luxurious, limited and exclusive," he said. "China is
extremely complicated, but everything is possible," Burke said. Burke said he is
proud that Fendi was the first internationally known luxury house to stage a
fashion show on the Great Wall in the autumn of 2007. "You didn't know how
difficult it would be, and if you had known how difficult it was, you would
never have done that," he said. "Karl said we wouldn't be able to do it, but we
made it. China is a place where you can dream," he said. 
Chinese Premier Wen Jiabao (5th L) holds
talks with visiting French Prime Minister Francois Fillon (4th R) at the Great
Hall of the People in Beijing, capital of China, Dec. 21, 2009. China and France
signed Monday two agreements on aviation cooperation during French Prime
Minister Francois Fillon's China visit. According to the deals, the aerospace
giant CFM International is to build an assembly line in China to supply engines
to the Commercial Aircraft Corporation of China for the country's home-grown
jetliner C919. The two countries altogether signed 12 deals on bilateral
cooperation after talks between Chinese Premier Wen Jiabao and Fillon. The other
deals covered cooperation in such areas as nuclear energy utilization, culture
and water resource utilization.
Photo taken on Dec. 13, 2009 shows
the White House Theater in Branson, Missouri, the United States. China Heaven
Creation officially took over the White House Theater on Monday. 
Universal suffrage was not included in
the declaration China signed with Britain 25 years ago because there was no
pressure from the Hong Kong people at the time to do so, the British consul
general says. But the provisions laid down in the Basic Law for universal
suffrage "very strongly respond" to the people's aspirations, Andrew Seaton
said. The Joint Declaration reached its 25th year last Saturday, with key
diplomats hailing Hong Kong's current prosperity (SEHK: 0803, announcements,
news) as a testament to what can be achieved through diplomacy. But the
declaration has also come under scrutiny in recent months in the debate over
political reform. Politicians are looking for a definitive answer as to the
legal instrument that mandates the election of the Legislative Council through
universal suffrage. Seaton said the declaration did not contain any provisions
for universal suffrage but states that the chief executive shall be "selected by
election or through consultations" while the legislature "shall be constituted
by elections". Seaton said that, nevertheless, the Basic Law now properly
reflected the people's aspirations: "Without doubt, one of the ways in which
Hong Kong has evolved is in much greater popular pressure for an adherence to a
much greater democratic process. It seems to me that the prospect of democracy
has come much more strongly onto the map in Hong Kong in the last 25 years," he
said. "The provisions laid down in the Basic Law for universal suffrage very
strongly respond to aspirations of people in Hong Kong and the sense in the
community that it is ready to move on to a universal suffrage system. "But 25
years ago, I'm not sure that there was quite that same public pressure for that.
I don't think there was the same pressure in society at that point," he said.
Seaton said the anniversary was a good opportunity to reflect on how much Hong
Kong and the mainland had developed. "If those involved in the negotiating and
the signing of the Joint Declaration could have looked forward to their
handiwork, and seen Hong Kong as it is now, they would rightly feel that that
was a very, very positive outcome." Sir Richard Evans, the British ambassador in
Beijing between 1984 and 1988, had no doubts that the Joint Declaration would be
judged favourably. "It has worked operationally in almost all respects. It has
removed a shadow from Sino-British relations. And it continues to show the world
what diplomacy can do," he said. David Wilson, then the head of the British side
of the working group engaged in drafting the 1984 Sino-British Joint
Declaration, who went on to become a Hong Kong governor, hailed it as a
"far-sighted resolution of a unique historical problem", that had "stood the
test of time remarkably well".
Cargo throughput at Hong Kong
International Airport climbed to 344,000 tons last month - up 16.4 percent
year-on-year - as both exports and imports continued to improve. Exports posted
year-on-year growth of 23 percent last month, while imports rose 21 percent. But
transshipments dropped 6 percent, with traffic to and from Europe, Taiwan, and
Australasia showing double-digit declines. Passenger volume and aircraft
movements fell by 0.4 percent and 5.2 percent to 3.8 million and 23,515,
respectively, last month. Transfer/transit traffic registered a decrease of 12
percent, a reflection of the growing number of Taiwanese passengers taking
scheduled direct flights when traveling across the Taiwan Strait. Despite these
declines, Stanley Hui Hon-chung, chief executive of the Airport Authority Hong
Kong, said the numbers still indicated progress has been made. "Stronger demand
for air travel and better market sentiment are driving airlines to reinstate
their previously suspended capacity and routes," Hui said. "We have also seen
new airlines launching new services and routes to Hong Kong, such as Air Pacific
in early December, following the signing of the air services agreement between
Hong Kong and Fiji." For the first 11 months, the airport handled 42 million
passengers and three million tonnes of cargo, down 5.8 percent and 10.8 percent
from the same period a year ago. 
HSBC
Holdings (0005) is eyeing floating a 5 billion (HK$62.68 billion) share offer in
Shanghai as early as in March, according to a British newspaper. An unidentified
bank official confirmed the London-based lender is planning to list in Shanghai,
but gave no details, The Observer reported. HSBC is said to have appointed two
mainland investment banks - China CITIC Securities, and China International
Capital Corp - to advise it on the listing, and is set to add Goldman Sachs. It
is widely believed the Shanghai international board will become operational in
the first half of next year, when overseas corporations may start listing in the
A-share market. The London newspaper reported the China Securities Regulatory
Commission will change its laws in January to allow foreign and non-mainland
companies to list in Shanghai. Peter Wong Tung-shun, HSBC general manager and
Asia Pacific chief executive-to-be, told Sing Tao Daily, sister publication of
The Standard that preparation work for the Shanghai listing has been ongoing,
but the final timetable will depend on the regulator's decision. Wong said the
flotation will help boost the bank's image and investor base. HSBC sees Greater
China as a key market, and Wong said it will put extra effort into catching up
with mainland rivals in various forms of internet banking. It aims to open 20
branches and sub- branches in the mainland next year, raising the number of
outlets to at least 115. Its rural bank network will reach Chongqing and Dalian
this year, and three to four more branches are expected nationwide in 2010. On
the global front, the British bank will sell HSBC Insurance Brokers Ltd, a risk
intermediary and risk advisory services provider, for 135 million to New
York-based Marsh & McLennan Companies, Reuters reported. The acquisition is
expected to close in the first quarter of next year. Marsh & McLennan, the
second largest global insurance broker by assets, said it has also formed a
partnership with HSBC that will give HIBL preferred access to provide insurance
broking and risk management services to the bank's corporate and private
clients. 
Tycoon Li Ka-shing's grandson
arrived in Hong Kong with his mother, the first time seven-month-old Ethan Li
Cheung-chi has been in the city. Actress-singer Isabella Leong Lok-sze and her
San Francisco-born son travelled to Hong Kong on Richard Li Tzar-kai's private
plane three weeks ago, the Chinese- language press has reported. Leong's
publicist, Michelle Loo, confirmed they were in the city. Richard Li said:
"Thank you all for the regards. We would like to wish everyone peace and
happiness in this festive season. I'm hoping you would let us have our peace and
privacy as well." A photo of Leong and Ethan, said to have been taken after they
arrived, was also received. It was reported that the mother and son had wanted
to travel to Hong Kong in July to celebrate Li Ka-shing's 81st birthday, but
cancelled because of concerns over swine flu. Leong is from a single-parent
family and grew up in Macau. She reportedly met Richard Li during the filming of
The Mummy: Tomb of the Dragon Emperor, while Li was visiting a friend, Leong's
co-star Michelle Yeoh Choo Kheng, on set. Last year, Leong began a legal battle
with her former management company, Emperor Entertainment Group, to whom she
became contracted when she was 12. 
The Chinachem Group is
quitting its Tsim Sha Tsui headquarters on Wednesday, leaving behind the place
where a romance between late billionaire Nina Wang Kung Yu-sum and fung shui
master Tony Chan Chun-chuen allegedly began. And Wang's younger brother, Dr Kung
Yan-sum, who has been leading a fight against Chan's claims to the Chinachem
fortune, is closing his clinic near Tsuen Wan on Christmas Eve, according to a
notice posted there recently. It is uncertain whether Kung, who could not be
reached yesterday, is doing this to devote more time to the company's business.
Chinachem, a privately held property group, is moving to its complex, the Nina
Tower in Tsuen Wan, which former group chairwoman Wang built as a landmark for
the city. The Chinachem camp has said that the giant Nina Tower is "the proof of
love" between Wang and her husband, Teddy Wang Teh-huei, the company founder,
who was kidnapped in 1990 and later declared legally dead. The two moves on the
side of the Chinachem camp come before the judgment in the probate case is
expected to be handed down, probably after Christmas. The Chinachem Golden
Plaza, at Mody Road, Tsim Sha Tsui, the group's headquarters since 1988, is
where Chan said he started a relationship with Wang, whose will is the centre of
the dispute. Chan based his claim on a supposed 15-year affair with Wang and a
purported 2006 will leaving him the Chinachem empire, but the Chinachem
Charitable Foundation, led by Kung, said that will was a forgery or an invalid "fung
shui will". According to Chan's evidence, the Tsim Sha Tsui office was where he
had secret rendezvous with Wang, gave her massages, took millions of HK dollars
as presents, and where he collected the 2006 will. Chan declined to comment
yesterday. A notice in lifts inside the Tsim Sha Tsui building reads: "The group
will temporarily suspend service on Dec 23 and resume it at Nina Tower 2 on Dec
28, occupying the 35th to 38th floors." The new complex has double the space of
the Tsim Sha Tsui block. It holds offices, a mall and a hotel. The taller,
88-storey tower, originally called the Teddy Tower, is linked to a shorter one
by a footbridge. They are now simply called Nina Tower 1 and Nina Tower 2.
Reports have said that the two top floors of the Tsim Sha Tsui building, where
Wang used to live and her husband used to work, would be left as is and would
not be leased out.
Casino tycoon Stanley Ho Hung-sun
Sunday made his first outing since his admission to hospital four months ago,
attending a ceremony for the 10th anniversary of Macau's handover, where he had
a five-minute chat with President Hu Jintao. Dressed in a suit and wearing a
mask over his mouth, the white-haired 88-year-old, in a wheelchair, was escorted
by his family and medical staff as he left the Hong Kong Sanatorium and Hospital
in Happy Valley to take a ferry ride to Macau at around 6am. Accompanied by son
Lawrence Ho Yau-lung and his third and fourth wives - Chan Un Chan (also known
as Chan Yuen-chun) and Angela Leong On-kei, Ho arrived at the Macau Dome before
the 10am ceremony. Ho and his family left at noon to return to the Hong Kong
hospital. During the ceremony, Leong and medical staff constantly talked to Ho
and he listened attentively when Hu made his speech. His wife, Leong, carefully
removed a scarf covering his hands as he applauded Hu's speech. After the
ceremony, Hu had a chat with Ho, who is undergoing speech therapy, a person
close to the family said. Hu praised the casino magnate as patriotic. Ho replied
that Macau's future development relied on support from the motherland. Speaking
to reporters in Hong Kong after the Macau trip, Ho's other wife Chan said Hu
also wished her husband a speedy recovery. "His health is quite good and he was
very happy and excited to meet President Hu today. They shook hands and chatted
for about five minutes. The president wished him to get well soon," Chan said.
"We have to push him [in a wheelchair], as he cannot walk for too long. The trip
might be a bit tiring for him. We are still not sure when he can go home and it
all depends on the doctors' decisions. Meeting the president might give him some
encouragement to recover soon." In August, the casino tycoon was admitted to the
intensive care unit after surgery to remove a blood clot on the brain. Ho was
first admitted to Hong Kong Adventist Hospital in Happy Valley where he had
operations. Ho's presence at yesterday's ceremony was vital, as he has a finger
in almost every business pie in Macau and has, at times, accounted for half of
its economy. His empire includes 19 casinos, the two tallest Macau buildings,
horse and dog-racing tracks, a jetfoil fleet, a helicopter service, five hotels
and department stores, all in the 29 sq km former Portuguese enclave.
The highway connecting Tsing Yi and
Sha Tin is now fully open to traffic, after Stonecutters Bridge entered service
yesterday.The HK$3.7 billion bridge, an alternative route cutting journey times
between the airport and the northeastern New Territories, was opened together
with Nam Wan Tunnel at Tsing Yi. Both are toll-free. The opening of the bridge
and tunnel, forming the section that spans the Rambler Channel separating Tsing
Yi and western Kowloon, completes the Tsing Sha Highway. Another section of the
highway, linking Sha Tin to Cheung Sha Wan in western Kowloon, was opened in
March. That section comprises three tunnels and altogether charges drivers HK$8
for all types of vehicles. The Tsing Sha Highway was built to provide more
options for travelling around Sha Tin, western Kowloon and Lantau. With the
bridge in service, the journey time between Sha Tin and the airport is expected
to be reduced to 35 minutes. Four Citybus airport routes, which start from
Island South, Island East and Kowloon East, are expected to save five to 10
minutes by taking the bridge instead of another highway via Kwai Chung. The
world's second-longest cable-stayed bridge, it ran HK$1 billion over budget. Yiu
Ka-chun, vice-chairman of Sha Tin District Council's traffic and transport
committee, said there were only two bus routes now using the toll-charging
tunnels of the highway. "Few Sha Tin residents benefit from the new highway,"
Yiu said. "It seems private car and truck drivers are the main users. Bus
companies should be encouraged to use the tunnels." The new highway will also
provide a more direct route between the airport and container terminals Nos 8
and 9 at Stonecutters Island and Tsing Yi. Philip Pearce, managing director for
Greater China of industrial- property group Goodman Asia, said demand and rental
rates for warehouse and distribution centres in Tsing Yi would rise
significantly. He said a new warehouse built there by his company had attracted
two logistics operators to pre-lease half of the space.
The joint venture aims to expand
the Monitise Mobile Money service to the mainland by 2011 in partnership with
banks and China Mobile. Privately held First Eastern Investment Group is setting
up a joint venture with British firm Monitise, whose backers include Standard
Chartered Bank and Visa, to offer secure mobile banking and payment services
across the Asia-Pacific. Hong Kong-based First Eastern, which has invested in
more than 100 projects on the mainland and in various markets in Asia, is
negotiating with most of the city's commercial banks to roll out the Monitise
Mobile Money network by the first half of next year, according to chairman
Victor Chu. "This will be a fantastic growth opportunity," said Chu, describing
Monitise as "a proven mobile banking and payments platform" with more than 1.3
million registered customers in Britain and the United States. After opening in
Hong Kong, the plan is to expand the service to the mainland by 2011. Chu said
the country's biggest banks and China Mobile (SEHK: 0941, announcements, news) ,
the world's largest mobile-telephone network operator, with more than 500
million subscribers, would be targeted as key partners. London-listed Monitise,
which allows customers of multiple banks and cellular network operators to
conduct banking and payment transactions directly from their mobile phones, is
supported by partners such as Visa, Standard Chartered, HSBC (SEHK: 0005s),
Royal Bank of Scotland, Lloyds TSB, Vodafone, Orange, T-Mobile and 3UK. "After
years of hard work building the platform for Mobile Money, it is good to see it
come of age and begin to reach out to the mass market globally," said Alastair
Lukies, the chief executive of Monitise. First Eastern has agreed to subscribe
for £5 million (HK$62.87 million) in new ordinary shares in Monitise. It will
subscribe for a further £2.5 million once their 50-50 joint-venture deal is
completed in April. Chu said Monitise Mobile Money had the potential of becoming
a dominant standard for mobile banking and payments services in Asia, where
desktop-computing-based online banking services are more developed. Total mobile
users in the region are forecast to exceed two billion by the end of this year.
Banks and telecommunications service providers in the Asia-Pacific are
struggling to find the most appropriate business model to balance the revenue
requirements of the multiple parties involved against the needs and expectations
of consumers, according to Abhishek Kumar, a senior analyst at Financial
Insights, part of market research firm International Data Corp. "With the city's
mobile broadband infrastructure and greater availability of internet-ready
smartphones, we welcome the development of full-function mobile banking, because
consumers will become more engaged with our services," said Stephen Chau Kam-kun,
the chief technology officer at mobile network operator SmarTone-Vodafone. Chau
said mobile banking adoption and applications remained underdeveloped in Hong
Kong, despite the efforts by some banks to extend their desktop online banking
systems through handsets. A spokesman for Bank of East Asia (SEHK: 0023)
confirmed yesterday that current mobile banking functions remained limited, with
applications being set up first through desktop-based internet banking systems.
Juniper Research has predicted the number of mobile banking users worldwide will
reach more than 150 million by 2011.
Macau has done very well out of
the gambling industry but its time for the city to diversify its economy. That
was the message from President Hu Jintao yesterday in a ceremony marking the
10th anniversary of Macau's handover. Hu, who swore in new Chief Executive
Fernando Chui Sai-on, said Beijing wants Macau the world's top gaming spot to
lessen its dependence on the casino business. The city's leaders "should utilize
fully the series of measures that the central government has already adopted to
support Macau," Hu said. Macau should be "strengthening and improving the
management of the gambling sector," diversifying the economy, lifting living
standards and improving the educational system, he added. Chui, in a speech
after being sworn in, said: Over the next five years, we shall actively develop
the appropriate diversification of the economy. The 52-year-old chief executive,
who takes over from Edmund Ho Hau- wah, said his administration will step up
oversight of the gaming sector. While we strengthen the regulation of the
gambling industry, we will also support the advancement and transformation of
the convention, logistics, cultural and traditional industries. Since 1999,
Macau, which has 31 casinos, has overtaken Las Vegas and Atlantic City combined
in terms of casino revenues. The president called on the new administration to
uphold four pillars work for the people, unity, and an efficient and clean
government. On Macaus passing of Article 23 state security legislation a
controversial issue in Hong Kong Hu said this fully reflects the strong sense of
responsibility of the government, Legislative Assembly and people of all circles
of the Macau SAR to safeguard national security and interests. Hu also praised
the previous administration for overcoming the Asian financial crisis, SARS and
the recent global economic downturn. Chui, the sole candidate who won the chief
executive post with 282 votes from the 300-strong election committee in July,
vowed to put the peoples interests first as well as to learn from past
experience and to honor innovation. We will firmly adhere to the people-
oriented concept of governance, and will inherit and innovate. We will fully
take into consideration the public opinions collected during the election
campaign and achieve joint advancements with the public, he said. Chui, a former
culture minister, also pledged to keep the government clean and accountable. Hu,
who arrived in Macau on Saturday, also inspected the Macau garrison of the
Peoples Liberation Army on Taipa and laid the cornerstone of the University of
Macaus new campus on Hengqin Island before returning to the mainland.
Lloyd's of London chairman Peter Levene
says with the amount of infrastructure planned in China, the opportunities in
tunnel, rail, bridge and aviation insurance will be huge. Lloyd's of London
plans to expand into the big-ticket general insurance market on the mainland to
tap business opportunities in the world's fastest-growing economy. Chairman
Peter Levene said the 300-year-old insurer would apply for a general insurance
license on the mainland, where it has conducted a reinsurance business for some
years, to expand its business scope. "We do not plan to offer auto or household
insurance products," Levene said during a visit to Hong Kong last week. "Lloyd's
is a leader in the special insurance market. We want to cover the big-ticket
items, such as insurance cover for tunnels, bridges, high-speed railway projects
and the aviation sector." Lloyd's began running its business from a coffee shop,
opened by Edward Lloyd in 1688, frequented by merchants, ship owners and
captains. The company's structure differs from other insurance firms. It works
like a market in which member syndicates insure everything from satellites,
infrastructure projects and buildings to aircraft against damage caused by
natural catastrophes or terrorist attacks. Lloyd's is based in London but has
developed a large business in the United States. "It took 150 years for us to
build our business in the US," Levene said. "We hope that the China market will
be as big as the US one day, although I do not know how long it will take." At
present, Lloyd's operates in Hong Kong with a general insurance license,
offering property, marine and liability cover. Last year, it underwrote US$150.9
million in insurance from Hong Kong, up 18.8 per cent on 2007. In China,
however, the company has only a reinsurance license in Shanghai, which means it
can sign deals with mainland insurance companies to offer them a reinsurance
service to buy into their policy risk portfolio and share the compensation
payouts when policyholders make claims. Although not allowed to offer direct
insurance products to mainland customers, Levene said Lloyd's was in talks with
the authorities to apply for a general insurance license. "Since China is
developing many infrastructure projects, the opportunities are huge," he said.
While many bank and insurance companies have been hit hard by the financial
crisis, Levene said Lloyd's had coped well, as it had learned from mistakes made
in the 1980s, when an over-aggressive strategy and a lack of risk management
control led to a wave of claims, which took the firm to the brink of collapse in
the early 1990s. Levene said Lloyd's had since brought in stiffer rules to
control risk and adopted a very conservative investment strategy that aimed to
hold a lot of cash in reserves while not investing in exotic products. "Holding
cash may be a boring investment, but it helps Lloyd's through financial crises
when markets drop dramatically," he said. "We are very conservative, and this
has proved to be a wise decision." The lack of a big hurricane or natural
disaster this year also resulted in a smaller number of claims, which buoyed
Lloyd's performance. "We cannot tell what may happen next year. But we have
adopted a very conservative pricing strategy to prepare for any hurricanes to
come," Levene said. Natural catastrophes are a leading source of claims for
general insurers and have prompted Lloyd's and other insurers to become more
active in lobbying on environmental protection matters. "We do not know exactly
how to prevent climate change or hurricanes to come. But if everybody does
something to protect our environment, it will make a big difference," Levene
said.
Alan Tsoi, principal, Deloitte Touche Tohmatsu - Partnership rules hailed as a
lure for foreign funds. Tax breaks now available to China investment funds that
are structured as partnerships offer a "breakthrough" that could unlock a flood
of new capital into the mainland, financial consultancy Deloitte Touche Tohmatsu
forecasts. On December 2, the State Council formally issued long-awaited
measures for foreign enterprises and individuals to establish partnerships in
China. The country is allowing for the first time foreign firms and individuals
to form partnerships - structures that could substantially reduce income tax
rates. "In the past, foreign firms couldn't form partnerships in China. Now
foreign partnerships will be allowed to invest in China," said Deloitte
principal Alan Tsoi Shu-yan. "This is a major breakthrough. It offers foreign
investors a new investment opportunity that will increase China's foreign direct
investment. We have many foreign clients who have great interest in forming
partnerships in China." The new rules will apply from March 1 next year. At
present, foreign firms operating in China, whether as joint ventures or wholly
owned foreign enterprises, are not allowed to form partnerships but must be
registered as companies. Corporate income is taxed at a rate of 25 per cent, and
a further withholding tax of 10 per cent is applied to distributed profits -
reduced to 5 per cent for Hong Kong shareholders if their ownership in the
company is greater than 25 per cent. A partnership is a business operation in
which partners share in profits and losses and is often a favoured structure
because partnerships in many countries such as the United States and Britain
generally do not incur taxes on profits before they are distributed to the
partners. The new measures allow partnerships to be established by two or more
foreign enterprises or individuals, or by foreign enterprises or individuals and
Chinese enterprises or individuals. There will be no minimum capital
requirement. Many of Deloitte's foreign clients that had expressed interest in
forming partnerships were financial companies and investment funds wanting to
set up local-currency funds in China, said Tsoi. "This will open the door for
them to enter China with [yuan] funds." If foreign funds set up joint ventures
and wholly foreign-owned enterprises in China, they would have to pay corporate
income tax of 25 per cent, which represents a deterrent since taxes are too high
and returns too low. "But this new law will attract more foreign funds to
China," said Tsoi. Under the new measures, partners would still have to pay
income tax, but at a reduced rate not yet determined, said Tsoi, who estimates
the tax rate at 10 to 20 per cent. Under a law enacted in 2006, Chinese firms
are allowed to form partnerships, but until now foreign firms could not do so.
"The measures are the most significant development in this area since the
Partnership Law [which allows domestic partnerships in China] was introduced in
2006," said a Deloitte paper by Tsoi and his colleagues. Such partnerships are
not allowed by law in Hong Kong, said Tsoi, and in this sense China is now more
advanced than Hong Kong. Partnerships are allowed in Britain and the US, where
they attract zero income tax. Hong Kong-registered companies have to pay a
corporate income tax rate of 16.5 per cent, while the maximum US corporate
income tax rate is 35 per cent. "The new law is not 100 per cent perfect. There
are a lot of areas with room for improvement," Tsoi said, noting that it is not
clear on the repatriation of profits to foreign partners.
French Prime Minister Francois Fillon
arrived in Beijing yesterday for a visit aimed at pushing forward relations with
China following a year-long rift over Tibet. In an indication that relations are
now back on track, Fillon will meet Premier Wen Jiabao during his three-day
stay, and also hold talks with President Hu Jintao. Fillon is accompanied by
Finance Minister Christine Lagarde and around 20 chief executives. Nuclear
cooperation will be high on the agenda. Energy firm EDF and nuclear group Areva
will sign two joint ventures with state-owned China Guangdong Nuclear Power Co
to launch "the operational phase" of the construction in southern China of two
nuclear reactors. Safran, the French aerospace and defense industries group,
along with US firm General Electric, is expected to win a contract to equip the
C919 - the future Chinese competitor to the Airbus A320 and the Boeing 737 -
with engines. The contract is thought to be worth billions of euros.
Offering state-of-the-art
simulators, City Links Golf Lounge allows customers to play golf regardless of
the weather outside. It is Hong Kong's first and only indoor golf lounge. The
constant transient nature of Hong Kong has seen many recognised establishments
close over the years only for new hi-tech concepts to appear in their place as
the move for more new and innovative businesses continues. No trade here is
immune to it, and it is the local golf industry that has recently been feeling
the negative and positive effects of change. One of Hong Kong's most popular
golfing venues, City Golf Club, will close its doors for the last time at the
end of the month unless a last-ditch stay of execution until Lunar New Year
proves successful. Located along Hong Kong's waterfront and with a stunning view
of Victoria Harbour, for the past 10 years City Golf Club in Wui Cheung Road,
Kowloon, has enjoyed huge patronage from Hong Kong's golfers. The club has a
driving range with more than 200 bays on four tee-off levels, plus an 80-seat
Thai restaurant. Its days have been numbered, however, since it was confirmed
that the club received notice from the Lands Department stating that its
premises must be vacated and repossessed to make way for construction of the
Guangzhou-Shenzhen-Hong Kong express rail link, one of the 10 major
infrastructure projects championed by the government. It was thought that work
on the railway would not begin in earnest until next year and that members would
therefore continue to enjoy the benefits of the club - until an announcement was
made last week that it would close at the end of the month. Club owner Stanley
Pong is in negotiations with the government for a short extension of the closure
date. Pong said his loyalty was to his staff of 80 to 100 and it was his hope
that the club would remain open until Lunar New Year. "It's a delicate
situation, but I would hope that the club will stay open and my staff remain
employed up until Chinese New Year. No one wants to see them lose their jobs
before this if possible," he said. "It's the sentiment that matters. On the
second day of Chinese New Year, City Golf Club hosts its annual charity day, and
it would be a fitting way for the place to close after that." Members of the
Happy Golf Society - one of the many local clubs that use City Golf Club - have
initiated a petition and signature campaign to urge the government to delay the
land repossession for as long as possible so that members and the public can
continue to make the most of the facilities. Within a week, more than 3,000
people had signed. Meanwhile, the City Links Golf Lounge is a new business
looking to break into the lucrative local golf market. Its business model is to
take all the hard work out of the game by creating an environment where you can
play a round and the only distance you'll really have to travel is to get
another drink from the bar. On the 10th floor of The Centrium, in Wyndham
Street, Central, City Links is Hong Kong's first and only indoor golf lounge,
with four state-of-the-art Full Swing Golf simulators and a lounge bar and cafe.
Never mind the hassle of travel, dress code and clubs, in Hong Kong convenience
is the name of the game, and here you can play a round of golf no matter what
the weather. Packages start at HK$750 a month. "Golf is a very popular sport in
Hong Kong. However, it's difficult, expensive and inconvenient to play - when
you add in the transportation time, it can take an entire day to get a round
in," said one of the owners, Anoop Chaudhry. "So we're trying to offer a venue
in the heart of Central where people can come and play extremely realistic golf
in air-conditioned comfort, regardless of the weather outside." The simulators
are the same that US golfer Mark Wilson - winner of the 2007 Honda Classic -
practices on when not playing on the US PGA Tour. Other simulator owners include
American tycoon Donald Trump and basketball legend Michael Jordan.
An artist's impression of the Xuma
Beach Resort. Its futuristic design made it look more like a scene from a Star
Trek film than a world-class resort and spa in the heart of Sai Kung. But it was
a legal dispute between the developer and the designer that destroyed the
project, not an attack by the Klingons. The Xuma Beach Resort and Spa would have
been valued at more than US$420 million when complete, according to a report by
international valuation experts Cushman and Wakefield issued to the developer,
Hinton Enterprises, which includes former government chief architect Paul Yiu
Yuen-on among its partners. But Hinton pulled out of the deal. A legal dispute
between the developer and its design consultant, Storm Associates Hong Kong,
part of the Storm Signature Developments Group (Storm), has been under way since
Storm's lawyers filed a writ against Hinton in the High Court on May 5. It is a
case of what might have been, as Storm's original plan was certainly out of this
world. The visitor's adventure would have begun with the journey to the resort,
accessible only by helicopter, seaplane or boat. What greeted the visitor from
there on was like something from another dimension. "Prior to arriving at the
resort's drop-off point, guests will be in no doubt that they are completely
elsewhere, as the view of the site, with its curvilinear, sculpted forms nestled
warmly into the landscape, is both a strange and almost alien one," Storm's
original proposal says. "Each [guest] cannot fail to notice that the design ...
completes and enhances the resort's integrated alien `culture' appeal, hence ...
the message now received by all of the resort's guests is a clear one - you have
now left normality behind." The reality was more sobering, however, as Hinton
withdrew because of "many unforeseen circumstances with land titles and related
ownership acquisition processes". This was rejected by Storm, which claims in
the writ that not only had an oral agreement been breached, but that "despite
numerous requests and demands, Hinton had refused and/or failed to execute a
formal written agreement in respect of the project". Storm is also seeking legal
redress for more than 4,200 hours of design work on the 180,000 square metre
resort - and damages for misrepresentation. Hinton, run by Yiu and his partner
Terry Hung Shing-yin, had been acquiring land in the Tan Ka Wan area of Sai
Kung. Confident of assembling a complete plot, it brought Storm on board in
October 2007 to come up with a concept design and commercial model for a
comprehensive, seven-star beach resort and spa similar to those in Phuket.
Malcolm Copson, Storm's group chief executive, was adamant that the massive
futuristic development would have been a success. "The inspiration for my
designs comes from anything and everything around me. I am not an architect but
I am a qualified engineer with a seriously good imagination, which is why I
describe myself as an `imagineer'. The designs may look completely alien to
some, but I assure you they can be built," Copson said. Hung refused to be drawn
on the matter, saying: "I can't make any comment on this as it is still going
through the courts. It may be some time before we get a verdict and, until that
time, I have nothing to say." 
Chinese President Hu Jintao(R)
shakes hands with Donald Tsang Yam-kuen, chief executive of the Hong Kong
Special Administrative Region (SAR) in Macao SAR in south China on Dec. 19,
2009. Chinese President Hu Jintao stressed Sunday that "the great motherland is
always a strong back-up force for the prosperity and stability in Hong Kong and
Macao."
Chinese President Hu Jintao (R)
administers as Fernando Chui Sai On (L) is sworn in as the Macao Special
Administrative Region (SAR) Chief Executive in Macao SAR of south China on Dec.
20, 2009.
The wrecked car at the Causeway Bay
entrance to the Cross-Harbour Tunnel yesterday. It will stay in place until
March as part of a campaign to deter drink-drivers. A wrecked car is the latest
shock tactic used by the police to warn people not to drink and drive at
Christmas. The mangled vehicle was put on display yesterday at the entrance to
the Cross-Harbour Tunnel in Causeway Bay, providing a stark reminder to drivers
of the dangers of getting behind the wheel after taking a tipple. A huge bottle
embedded in the car reads: "If you drink, don't drive!" The vehicle, wrecked in
an accident, will be displayed until March 15. "This serves as a reminder to the
public, especially drivers, that the possible result of drink-driving will be a
fatal accident and unforgettable remorse," said Yu Kam-kee, of the Road Safety
Campaign Committee. Superintendent Shirley Chu Ming-po of traffic branch
headquarters said the wreck would attract attention. Although the display was
shocking, it would not block the view of drivers or distract them, and traffic
in the tunnel was usually slow. Police figures certainly suggest that people
need reminding. Eighty people were arrested for drink-driving from December 18
to January 4 in 2006-07. This soared to 136 in 2008-09. The number of accidents
caused by people driving under the influence of alcohol increased from three to
seven over this period. Officers will step up enforcement action, including
random breath testing, over Christmas and New Year. Messages warning against
drink-driving will be shown on video walls at shopping hot spots such as Times
Square, Harbour City and various others over the period. There has been some
good news in the battle against drink-driving. The introduction of random breath
tests has proved to be successful in keeping drivers sober. Up to yesterday,
36,226 drivers had been tested since the introduction of random breath tests in
February. Some 249 drivers had been arrested, making up about a quarter of the
total arrests for drink-driving. The number of accidents related to
drink-driving has dropped 61.2 per cent since the introduction of the random
tests. From February to November, there were 221 such accidents, compared with
570 for the same period last year. The chairwoman of the General Insurance
Council, Agnes Choi, said some drivers had misunderstood clauses in their
insurance policies and thought they would still get payouts for crashing their
cars even if they were drunk. "Motor insurance policies exclude the insurers'
responsibility to provide indemnity when the liability arises from the vehicle
being used by the driver who is under the influence of alcohol," she said. David
Leung Siu-cheong, chairman of the Taxi Operators Association, said he was
already used to seeing displays of wrecked cars. They were first put into use
after the opening of Tuen Mun Road in the 1970s and over the years they had been
placed at traffic black spots and beside the road at various spots. But the
practice had not been used for several years. "It's not creative but it may be
effective on new drivers," he said. The chairman of the Motor Transport Workers
General Union, Pang Kong-cheung, remembered there used to be a similar display
at the Tai Lam Tunnel. "It was effective as a reminder for drivers," he said.
Leung and Pang said the wrecked cars had not distracted drivers in the past and
they did not expect any problems with the new display.
Michael Wu expects mainland property
prices to moderate next year, saying Beijing will not allow an unlimited
acceleration.. After making waves with some major investments in Hong Kong's
luxury property sector, mainlanders are moving down market, buying more than 200
units in a new residential project in Tseung Kwan O.
Chinese President Hu Jintao delivers an
important speech at the evening dinner held by the Macao Special Administrative
Region (SAR) government in Macao SAR in south China on Dec. 19, 2009. President
Hu: central gov't firmly committed to "one country, two systems". President Hu
reiterated that the central government will remain firmly committed to the
principles of "one country, two systems" and "Macao people governing Macao" with
a high degree of autonomy.
Chinese President Hu Jintao (R front)
shakes hands with principal officials from Macao Special Administrative Region (SAR)'s
executive, legislative and judicial arms in Macao SAR, south China, on Dec. 19,
2009. 
Jay Chou (L) and Chiling Lin
participate in a press conference in Shenzhen, south China's Guangdong Province,
Dec. 19, 2009, to promote the new film "The Treasure Hunter", which started
showing on Dec. 9.
Barack Obama makes a point during a
meeting with leaders, that included Wen Jiabao, in haggling over a climate
accord in Copenhagen. Chaos and farce reigned at the birth of the climate accord
agreed by a clique of leaders, with statesmen going missing, critics crying foul
and hacks stampeding on vain hunts for US President Barack Obama. Fatigue
fermented a feverish cocktail of human emotion as Obama claimed to have staved
off a default in the dying hours of global-warming talks in Copenhagen. It was a
stunning turnaround, as earlier, when the summit went into extra time, the whole
project was on the verge of collapse, US officials said. Australian Prime
Minister Kevin Rudd added: "There was a grave risk that these negotiations would
collapse altogether." While Obama's team clearly had an interest in spinning the
climax of the talks to the young US president's advantage, they revealed a
succession of events more apt to a French farce than a major world summit.
Frustrated at deadlock in the talks, largely over China's refusal to accept a
transparency regime to monitor developing states' emissions, Obama apparently
vowed to have "one more run at getting this done". Desperate for a
foreign-policy win, Obama drew the line when a comparatively minor Chinese
official, Yu Qingtai, an expert on climate change, showed up at a meeting
instead of Premier Wen Jiabao. "I don't want to mess around with this any more.
I want to just talk with Premier Wen," a senior aide quoted Obama as saying.
Obama also decided he wanted to speak to leaders of major developing powers seen
in China's camp. So he sent his team to find Indian Prime Minister Dr Manmohan
Singh, Brazilian President Luiz Inacio "Lula" da Silva and South African
President Jacob Zuma. One problem: US aides were told that Singh was already at
the airport, probably believing the talks were finished. "The South Africans
[hear] that at this point the Brazilians are unclear about meeting without the
Indians, the Indians are at the airport, and Zuma at that point says: `Well, if
they're not coming, I can't do this,'" the US official said. Soon, Wen's team
said they were ready to meet Obama. Obama's team headed off to scope out the
room in the cavernous Bella Centre where the talks were taking place, but could
not get in, and the reason soon became clear. "We've now figured out why we
can't get into that room: because that room has Wen, Lula, Singh and Zuma," the
official said. "They're all having a meeting." Obama, headed straight in. "Mr
Premier, are you ready to see me? Are you ready? Mr Premier, are you ready to
see me? Are you ready?" Obama cried. US officials insisted the president did not
barge in uninvited on the surprise meeting, but was merely showing up on time
for his talks with Wen. "We weren't crashing a meeting - we were going for our
bilateral meeting ... we found the other people there." At this point a
near-scuffle broke out after Chinese cameramen made a rush for a shot of all the
leaders together. "My people" have to get into the room "or we're leaving",
White House spokesman Robert Gibbs said in an unusual role as defender of the US
press. Shell-shocked delegates were left to digest implications of the
non-binding deal in an all-night session. Danish Prime Minister Lars Rasmussen
was in the chair, but at times the talks descended into total incoherence. "The
United States abstained, then I passed the floor to Nicaragua," Rasmussen said,
confused by a breakdown of the session. "Nicaragua abstained ... who wants to
speak?"
The expressions say it all as Barack Obama
and Wen Jiabao address the summit. climate talks letdown looms - Nations bicker
as clock ticks on warming pact. The US was seething that Wen had earlier snubbed
Obama. The chances of reaching a binding global agreement to cool the planet
were fading rapidly in the final hours of the two-week Copenhagen climate-change
summit despite the presence of more than 120 world leaders. Developed and
developing countries blamed each other for the continuing deadlock over
financial help for poorer nations to combat climate change and international
monitoring of countries' actions to cut emissions. Neither camp offered any new
concessions yesterday, and a new draft agreement dropped mention of achieving by
next year a legally binding treaty to supplement the Kyoto Protocol, which runs
out in 2012. 
Puer, better known for its tea, exported
7,927 tons of coffee beans in 2007, accounting for more than 40 per cent of
China's coffee exports. Tea or coffee? A question asked millions of times each
day but in Yunnan's Puer prefecture, the ancient heartland of tea production in
China, the answer has more to do with business than personal taste. For farmers
such as 24-year-old Li Chunxue, the choice was clear. Li and his parents decided
last year to convert nearly all their 7.28 hectares of land to coffee, leaving a
small proportion for rice, vegetables and just enough tea for the family's own
consumption. "I have no preference on what to plant or what not to plant. I
plant whatever makes money," said Li, who only drinks tea. "Our tea leaves are
of high quality but we get only seven yuan (HK$7.95) a kilogram. Coffee we can
sell for about 18 or 19 yuan. So we chopped down all our orange trees and plenty
of tea bushes last year. We need more land for coffee." Most of the other 2,000
farmers in Manxieba, 18 kilometers south of Puer where Li lives, are also
planting coffee in a region where tea cultivation began during the Han dynasty
(206BC to 220AD). Farmers in the neighboring Nandaohe area and around the nearby
city of Xishuang Banna are also diversifying. This is a sharp departure from
tradition for growers from a region that has seen the name Puer become an
internationally renowned brand for premium tea. It has long been popular in
Guangdong and Hong Kong where it is known in Cantonese as "polay" tea and prized
as an aid to digestion. Devotees also believe it can help with weight loss or
even prevent or cure cancer. For centuries, chains of pack horses hauled the
leaves in densely packed bricks over dizzying, slippery trails to the outside
world. Before the opening of modern trade routes, the first destination was
Tibet, then on to India and beyond. The Chinese authorities recently
acknowledged the importance of this historic trade route, Chama Gudao, or
Ancient Tea-Horse Road. While tea is still Puer's dominant export, in Manxieba
and Nandaohe, the two areas with most coffee plantations, it is now common to
see the two crops grown side by side. There is also plenty of newly cleared
farmland that farmers say will be planted with coffee. For a region steeped in
outward trade, it was the winds of globalization that brought a new flavour to
this tea-drinking kingdom. "It all began with Nestle," said Deng Jianhuo, a
director of Beigui Coffee, one of the first companies to start planting coffee
in Puer. "Nestle came. It said this place is suitable for growing coffee, high
quality coffee. It signed a co-operation agreement with the government. So our
company was set up to work with Nestle." Deng said the company bought abandoned
mountain tracts and rented land from farmers to plant coffee. He added the
majority of the mainland's coffee plantation were in Puer and the rest in
neighboring Xishaung Banna and Hainan Island. In 1991, the Swiss food giant
opened a joint-venture factory in Dongguan to produce its signature Nescafe
instant coffee and began steps to source coffee locally. Initially, the
development of coffee plantations in the country was slow and the multinational
had to rely on imports. However, output has accelerated in recent years with
some 80,000 farmers now growing coffee in Yunnan. From only 1,000 tons in 1988,
the annual yield of green beans has now reached 30,000 tons. Nestle is still a
major buyer. It accounts for 4,000 tons of production and since 1997 it has been
able to source all Arabica coffee it needs locally.
Business links of sacked Shandong chief exposed - CPPCC role under scrutiny amid
string of graft scandals. The sacked head of the Shandong branch of the Chinese
People's Political Consultative Conference was involved in some of the biggest
scandals in the province, and his departure prompted calls for a review of the
role the advisory body plays. The vultures had been circling around Sun Shuyi
for several years due to allegations of dodgy business dealings and the dramatic
downfall of his deputy. Sun, 64, was the third provincial CPPCC chairman to be
sacked this year, following Chen Shaoji of Guangdong and Guizhou's Huang Yao. A
CPPCC official told the 21st Century Business Herald that Sun had been "acting
strangely" for more than a year. His daily routine used to be consistent, but
his schedule suddenly changed. This prompted speculation he was under
investigation by graft authorities. Sun disappeared from public view in
mid-October. His name no longer appeared in the media and he did not attend any
meetings. The announcement of his sacking by the Shandong CPPCC this week did
not provide any details. Sun's subordinate, Duan Yihe , was executed in
September 2007 after he killed his mistress with a car bomb. The mistress had
threatened to reveal his corruption unless he divorced his wife. Sun and Duan
were extremely close. They were both from Shanghe, a rural county east of Dezhou
city. When Sun was party secretary of Jinan , the provincial capital, Duan was
deputy. Together they built up a powerful political and business network, which
was severely damaged by Duan's arrest. Sun's fall is also believed to be linked
to the arrest of Gao Yuankun, the president of the province's biggest private
business, Linuo Group, and the exile of Gong Yinwen, an official turned
businessman who organised a 4 billion yuan (HK$4.5 billion) pyramid scheme. Gao
was deputy chairman of Jinan's CPPCC. His arrest was linked to a land-buying
scandal in 2002 that saw Linuo Group buy a huge chunk of land in Jinan's hi-tech
zone at a price well below market value. Gong used to be Sun's subordinate. He
resigned in 1992 and started selling health care products. He was frequently
praised in the official newspapers controlled by Sun. Hong Kong-based
commentator Johnny Lau Yui-siu said the CPPCC chairmanship was traditionally
reserved for veteran party leaders who still had substantial political influence
in a region. The CPPCC was supposed to be an advisory body and watchdog.
However, an influx of businessmen meant it had become a place for the rich to do
deals, Lau said. Apart from the three CPPCC provincial chairmen, two deputy
chairmen of CPPCC provincial committees, Sun Shanwu of Henan and Pang Jiayu of
Shaanxi were also sacked this year. "The central government usually turns a
blind eye. But once a scandal causes strong social repercussions and hurts the
core interests of the party, the leadership will knock down the related CPPCC
head without mercy," Lau said. "CPPCC membership is not elected, the government
appoints the delegates. Many businessmen buy seats to gain an official
background and connections."
The former editor of Caijing magazine, Hu Shuli , took her first steps into the
world of education yesterday, but talk of her new media venture still dominated.
Hu, 56, formally started her appointment as dean of the School of Communication
and Design at Guangzhou's Sun Yat-sen University yesterday morning. In the
afternoon she met faculty staff, before giving a speech to hundreds of students.
Hu would not comment on plans for a new magazine, saying she was not ready to
answer. She also would not go into specifics about what sort of classes she
would be teaching. A former Caijing reporter who came to support her old boss in
Guangzhou said the new magazine, Caixin, would probably be launched early next
year. Another person familiar with the situation said it would be ready to go to
press next month. Hu will be a founder of the magazine but might not be the
editor-in-chief. Hu's departure from China's most successful business magazine
has been a talking point for months. About 200 Caijing staff left the magazine
early last month after Hu's resignation, and since then Hu's next steps and the
identity of potential investors have been closely followed in mainland media
circles. Addressing the students yesterday, Hu said new media and its
integration with the traditional print industry would be a major focus for her.
"I would like to work closely with all of you to create a first-class centre of
new media training," she said, adding that the internet had dramatically changed
the media landscape. A former Caijing department head revealed her new venture
would include a multimedia platform in addition to a printed magazine. Last
week, she started a group blog for the university in conjunction with former
Caijing colleagues. Hu said her first year in education would be spent learning
the ropes. Her priorities would be recruiting more talented staff for the school
and helping students find jobs. She said the main factor that attracted her to
the school was a common belief in the importance of seeking the truth. "Seeking
the truth is the bottom line but also the highest goal. It is easy to say but
hard to implement and even harder to insist upon in the long term," she said.
Hu's departure from Caijing was widely attributed to disagreements over the
future of the magazine and control of advertising revenues. But there has also
been speculation that its owner, the Stock Exchange Executive Council, was under
pressure from propaganda authorities, and room for Hu's outspoken coverage was
narrowing. Students greeted Hu warmly and applauded several times during her
speech. But some also worried about how much time their high-profile dean could
devote to them. A postgraduate student surnamed Lou said: "We know she is a
little idealistic, but as a dean she must help us find jobs, help teachers
increase income, help the school improve its reputation. How can she handle all
this?"
China Telecom is playing catch-up in
the mobile-telephone market, as rival China Mobile signed up with Research In
Motion in 2006. China Telecom Corp (SEHK: 0728) will start offering the
BlackBerry smartphone to its 50 million mobile subscribers next year, according
to Jim Balsillie, a co-chief executive of handset maker Research In Motion. The
deal makes China Telecom the second carrier-partner to offer the BlackBerry on
the mainland after China Mobile (SEHK: 0941, announcements, news) , which has
more than 500 million subscribers, signed up with Research in Motion in 2006.
"We have a lot of work to do," said Balsillie. "To further support our efforts
in China, the company is also exploring opportunities to manufacture and conduct
research and development activities in the country. "We will provide more
details on the relationship [with China Telecom] and the launch plans in the
coming months." A spokesman for China Telecom, the country's biggest fixed-line
operator, said the companies were now "working on practical arrangements". The
BlackBerry deal means China Telecom will have a competitive smartphone brand for
its fledgling 3G mobile broadband service. The 3G services of larger domestic
mobile network rivals China Unicom (SEHK: 0762) and China Mobile have as their
flagship handsets, respectively, Apple's iPhone and the OPhone. China Mobile's
portfolio of low-cost OPhone 3G handsets, made by companies such as Lenovo (SEHK:
0992) Mobile Communications Technology and Dell, is based on the operator's
modified version of the Google-developed Android operating system. China
Telecom, which posted a 33.9 per cent fall in net profit to 11.4 billion yuan
(HK$12.95 billion) for the first three quarters of the year, is the latecomer to
the mainland's mobile-telephone network sector. The operator started offering
cellular network services in October last year after acquiring the smaller of
China Unicom's two mobile-telephone units, in line with the government-led
revamp of the country's telecommunications industry. That industry restructuring
has repositioned China Mobile, China Telecom and China Unicom as integrated
fixed and wireless network operators. Research in Motion, which has sold more
than 75 million BlackBerry units worldwide as of last month, secured a
distribution agreement last week with Digital China Holdings, the mainland's
largest information technology services provider. "Business partnerships are an
important aspect of Research in Motion's strategy, and Digital China's extensive
knowledge and market presence will further expand the opportunity for us in
China," Balsillie said. "We're moving forward with our plans to more
aggressively target this region."
Shoeshiners (From left to right) Lau
Wing-ming, Audrey Eu Yuet-mee, Tanya Chan and Yeung Siu-ying drink fruit juice
Theatre Lane to celebrate receiving their hawker licenses. Eight elderly shoe
shiners – who have been working in Central’s Theatre Lane for over a decade –
have officially obtained operating licenses to continue their trade under a
declaration due to become law on Friday, a government spokesman announced.
Officers from the Food and Environmental Hygiene Department (FEHD) have
spray-painted areas where the shoe shiners are permitted to work. The new
licences were issued after a controversial incident earlier this year. Four shoe
shiners working in Theatre Lane were arrested and fined by the FEHD during a
crackdown on illegal hawking in May. The officers also claimed the shoe shiners
were obstructing the road. In recent years, shoe shiners have been fined or had
their brushes and polish confiscated because of unlicensed work. But these
actions aroused concern among the public and legislators – who regard the work
as legitimate. Two of the shoe shiners on Friday said they were happy to receive
licences and continue working in Theatre Lane. “I am just worried the government
won’t issue any new licenses after I retire,” Yeung Siu-ying told local media.
Another also expressed concern about the future of the trade in Hong Kong and
said he hoped the government could change the specifications of the licenses and
allow them to transfer their hawker licenses to new shoe shiners in future,
local media reported. The Hawker (Permitted Places) Declaration specifies areas
where shoe shiners can operate, including the Theatre Lane area in Central. The
declaration allows shoe shiners to work on part of the footbridge in front of
the east entrance of the Murray Road multi-storey car park building; the
southern side of an unnamed lane connecting Pedder Street and Theatre Lane; and
at the space in front of 1-7 Theatre Lane. The government stopped issuing new
hawker licences in the 1970s. Most of the original licensed shoe shiners have
died or retired.
Packets and vials of the new herbal
remedy on display. China researchers have developed a new type of herbal remedy
that can slay the H1N1 virus, Beijing municipal authorities say. Dr Wang Chen,
president of Chaoyang Hospital, said yesterday that the formula could reduce the
average length of swine-flu-related fever from 26 to 16 hours and cut the use of
antibiotics by more than 70 per cent. The formula is taken as a tea. The remedy
showed positive effects on more than 95 per cent of patients, based on more than
200 clinical trials in nearly 30 hospitals in the capital. Yang Jibin,
vice-president of global research and development for BD Medical, a US
medical-supplies company, said evidence of its effectiveness was robust. "Modern
science may not be able to fully explain the mechanisms of herbal medicine yet,
but it cannot ignore the formula's almost instant effect on H1N1-induced
symptoms such as fever and respiratory inflammation," he said. "It is
impressive. "It is good news for patients in China and, say, Africa, where
medical costs are a big burden. Herbal treatment will be more economical than
Tamiflu" - the existing remedy. Researchers in a government-funded project
developed a special formula of herbal tea and gave it to H1N1-infected mice.
Plasma scanning showed that the alkaloid of the herbs entered the virus protein.
Dr Huang Luqi, deputy director of the Academy of Chinese Medical Science and a
lead scientist in the study, said the formula, Jinhua Qinggan (Golden Flower
that Cures Flu), took a different approach to the virus than Tamiflu. "Unlike
Tamiflu, which attacks the H strains, the formula bombards the N strains," Huang
said. "Clinical trials show that it works." The H strain is the part of the
virus that binds to the receptor cell, while the N strain initiates the
infection. Dr Cris Tunon, senior programme management officer at WHO China, was
happy to see the country taking steps to counter swine flu and said the formula
could be a very important development. But the World Health Organisation was not
ready to endorse it. "The WHO has a very rigid evaluation standard based on
evidence. I have been given a summary of clinical trial results today, but we
need to see more, especially peer reviews," Tunon said. Zhao Jing, director of
the Beijing Traditional Chinese Medicine Bureau, said the city government spent
10 million yuan (HK$11.3 million) on the project. The government mobilised the
best doctors of traditional Chinese medicine to work with modern medical-science
researchers in Beijing. They came up with the herbal formula that draws from
thousands years of medical wisdom and tested it with the most stringent modern
clinical trials. Fang Laiying, director of Beijing Municipal Health Bureau, said
a drug based on the formula was expected to be released next month. Patients
could get it in hospitals in Beijing with a doctor's prescription.
A Hong Kong arm of China Travel Service
is holding talks with a city government in Henan to form a joint venture aimed
at turning Shaolin Monastery into a money-spinning mega brand. However, a
statement issued by the Dengfeng city government yesterday said, "no formal
contract has been inked yet", and that the monastery itself would not be part of
the joint venture's assets. The monastery's controversial leader, Abbot Shi
Yongxin, was reportedly kept in the dark about the negotiations. On December 9,
Dengfeng Mayor Zheng Fulin chaired a meeting discussing the establishment of a
joint venture between tour operator China National Travel Service (HK) Group
Corp and Mount Song Shaolin Cultural Tourism.According to a report in The
Beijing News quoting minutes of the meeting, the rights to collect entrance
revenues for Shaolin Monastery and scenic spots on Mount Song were valued at 49
million yuan (HK$56 million), and the Dengfeng government would get 49 per cent
of the joint venture. The local government appears to be selling it cheap - last
year the monastery took 100 million yuan in revenue from ticket sales alone.
Dengfeng's attempts to cash in on the site have prompted widespread criticism on
the mainland. Shaolin Monastery is considered a bit of national heritage that
should not enrich a particular group - let alone be traded like a commodity.
Shaolin Monastery is the 1,500-year-old birthplace of Chinese kung fu and Zen
Buddhism. It has developed into both a popular tourist destination and a brand
for businesses ranging from film production to medicinal products. Its monks are
often sent on world tours. A key player in its rise is the abbot. Shi has earned
notoriety for charging businessmen 200,000 yuan in exchange for blessings and
accepting a luxury SUV worth 1 million yuan from the local government as a
reward for his contributions to the local economy. But the abbot, in an
interview with Hunan Satellite TV last April, denied rumours he would list the
monastery, saying it housed invaluable cultural heritage. Dengfeng city
government yesterday denied they would include in the listing 16 spots listed as
national- and provincial-level cultural relics for preservation. "Sixteen
cultural relics of national and provincial levels in the area, including the
Shaolin Temple, will not be managed by the new joint venture," it said. However,
the government did not say whether other parts of the area round about, or other
Shaolin-related scenic spots, would be listed. The city also denied suggestions
it was selling national assets cheap. The government said no formal agreement
had been reached. A spokesman for the Hong Kong company said the co-operation
plan would be announced today. A spokesman at Shaolin Monastery refused to
comment on the matter yesterday. "I don't want to comment on this," he said. "[I
fear] it might affect our relationship with the local government." However, a
senior manager at Shaolin Monastery Culture Promotion Ltd, the monastery's
branch in Beijing, revealed that the municipal government had not sought Shi's
opinion before informing them about the listing plan a few days ago. "Shaolin
has been a spiritual home for the people for over a thousand years," he said.
"How can you trade it on the stock market? That is no different than selling
your soul for money." He added that the local government's move had breached
national law in protecting religious sites. "But our voice is weak compared with
the government's strong ambition," he said. Both the State Administration for
Religious Affairs and the Buddhist Association of China said they were not aware
of the matter. 
Premier Wen Jiabao arrives at
the plenary session of the UN Climate Summit in Copenhagen on Friday. 
Soho China CEO Zhang Xin, seen here with chairman Pan Shiyi (left) in this file
photo, on Friday warned that mainland is facing a serious property bubble,
especially in second-tier cities. china is already facing a serious property
bubble, especially in second-tier cities, and the government must tighten bank
lending to prevent it from swelling to dangerous proportions, a top developer
said on Friday. The warning by Zhang Xin, chief executive officer of SOHO China
(SEHK: 0410), chimes with the views of many analysts who believe that soaring
mainland property prices are unsustainable. But it puts her at odds with other
real estate bosses, who say that the hot market is justified by fundamental
demand. The government has vowed that it will crack down on speculative
investment in housing, but Zhang said it will need to act more decisively than
it has done so far to head off the burgeoning risks. “The government needs to
realise how serious the asset bubble is,” Zhang said. “It cannot control the
asset bubble by just saying a few words. The most fundamental solution is to
tighten credit.” Beijing earlier this month pledged to use a range of tools
including land-use policies and taxation to curb excessive property price rises
in some cities. However, a host of property stimulus measures, such as discounts
on mortgage rates, that were adopted during the global financial crisis are
still in place, and bank lending is set to remain relatively loose next year
after surging to record heights this year. “There is a bubble in every city.
It’s better in Beijing and Shanghai because at least there is real demand,” she
said, while adding that both of these leading mainland cities had higher vacancy
rates than London or New York in office and retail space. The picture is much
worse in second-tier cities, where supply far outstrips owner-occupier demand
and many buildings remain empty, she said. When property transactions dried up
last year in the midst of the financial crisis, Beijing stepped in to spur
buying activity and instructed banks to open their credit taps. Housing prices
dipped only briefly and have rebounded strongly in recent months, climbing
beyond their pre-crisis levels. Mainland’s main nationwide property price index
rose 5.7 per cent in November from a year earlier. “When one gets fat, you need
to cut weight. But this is like you haven’t started losing weight yet and food
is coming again,” Zhang said. More than 1.6 trillion yuan, or about one-sixth of
mainland’s new loans, went to the property sector in the first 11 months,
including mortgage loans to home buyers and lending to developers. Zhang said
that if mainland’s monetary stance remained accommodative throughout next year,
property prices would continue to trend upward. Under such conditions, SOHO
would step up efforts to sell more next year than this year’s contracted sales
income of 13 billion yuan (HK$14.74 billion), she said. Currently, SOHO has
space worth more than 50 billion yuan available for sale. Zhang said that SOHO
feels little urgency to acquire more land or property next year, having paid a
combined 8.8 billion yuan in the second half to buy a land lot and an office
building in Beijing and another office complex in Shanghai.
China CNR Corp, one of the country’s two
big train makers, plans to raise as much as 13.9 billion yuan (HK$15.76 billion)
in an initial public offering in Shanghai, after it set a higher-than expected
IPO price range. CNR, which competes with China South Locomotive & Rolling Stock
Corp, will sell 2.5 billion yuan-denominated A shares at 5.00 yuan to 5.56 yuan
each, to raise 12.5 billion to 13.9 billion yuan, the company said in a
statement to the Shanghai Stock Exchange on Friday. Shenyin & Wanguo Securities
Co had forecast a price range of 4.25 to 5.1 yuan per share, representing 25 to
30 times estimated next year earnings, while Guotai Junan Securities Co had
predicted a range of 4.4 to 4.6 yuan. CNR joins other mainland firms in a rush
to tap buoyant stock markets this year in the mainland and Hong Kong while the
country’s regulators are speeding up IPO approvals to boost equity supply as
part of an effort to prevent asset price bubbles. China Shipbuilding Industry Co
started trading in Shanghai on Wednesday after raising US$2.2 billion in
mainland’s third-largest IPO this year, while China Pacific Insurance raised
US$3.1 billion in a new stock offer in Hong Kong on the same day. Mainland and
Hong Kong account for seven of the 10 largest global IPOs so far this year.
Concerns over swelling supplies of new shares have curbed gains in recent weeks
in the mainland’s benchmark Shanghai Composite Index, which is up 75 per cent
this year but has faltered whenever it rises near its November highs despite
optimism about the economic recovery and corporate earnings. CNR, which also
competes with foreign manufacturers such as France’s Alstom and Canada’s
Bombardier to supply trains for the world’s fastest-growing major railway
market, has said it needed 6.44 billion yuan to upgrade its technology. The
company said 40 per cent of the new shares would be offered to institutional
investors while the remaining 60 per cent would be allotted to the retail
portion. CNR has hired China International Capital Corp (CICC), Huatai
Securities and Huarong Securities to help arrange the IPO.
Vice Minister of Foreign Affairs He Yafei talks at a briefing at the climate
summit in Copenhagen on Thursday. China said on Thursday a US pledge to mobilise
US$100 billion a year in climate funds was a "good step", and signalled Beijing
was seeking compromise with Washington on its demand for checks on Chinese
emissions curbs. But Vice Foreign Minister He Yafei, bearing a message from
Premier Wen Jiabao, warned that the UN-led negotiations in Copenhagen were at a
critical stage and could be wrecked if the 193 countries taking part didn’t pull
together. The December 7-18 summit is officially due to wrap up a new deal to
tackle global warming on Friday, but rifts between rich and poor nations over
everything from funding to which draft deal should be on the table, have made
for agonisingly slow progress. US Secretary of State Hillary Clinton tried to
break the deadlock on Thursday with a pledge to help mobilise the US$100 billion
a year by 2020 to assist poor nations shift to greener growth and adapt to a
warmer world. He, who had previously said finance was China’s top concern at the
talks, said the move was positive. “I think the financial issue is very
important. Whatever initiative these countries will announce is a good step,” He
told reporters when asked about the US announcement. He also suggested that
China was working towards a deal on controls of its emissions curbing efforts
that would satisfy US concerns. Another official earlier said the two countries
were having regular and productive bilateral meetings. “In terms of mitigation
actions [emissions curbs], we can also consider, international exchange,
dialogue and cooperation that is not intrusive and does not infringe upon our
sovereignty,” He said.
Hong Kong's transportation
system, immigration staff and tourist attractions are rated as top class by
visitors. Hotels are fourth on the tourist satisfaction index, followed by
restaurants and retail stores. This was revealed by a Hong Kong Polytechnic
University survey of 3,000 visitors, who gave the city an average rating of
72.65 out of 100. Chair professor and director of the university's School of
Hotel and Tourism Management, Kaye Chon Kye-sung, described the figure as
"satisfactory." Transportation facilities got 77.79 points while immigration
officers scored a handsome 74.27, a touch more than the tourist attractions,
which received 74.26. Hotels came in at 71.67, while restaurants and retail
shops brought up the rear with 69.44 and 68.85 respectively. Tourists from North
America were the most impressed by Hong Kong, giving it the highest points of
78.43. Those from Australia, New Zealand and the Pacific region rated the city
at 76.22 while visitors from Europe, Africa and the Middle East awarded it
75.04. Mainlanders rated us at 74.32. However, the SAR was less of a hit with
tourists from Taiwan, Macau, Japan and South Korea, with scores ranging from
66.27 to 66.33, though the Japanese and Koreans did give the hotels higher marks
than the Europeans. School of Hotel and Tourism Management associate director
Song Haiyan said the high ratings from Europeans and Americans may have come
because they were charmed by the local transportation system, which is nothing
unusual for most Asians. However, Song said language training in the service
industries must be improved, and warned that the high turnover rate of frontline
staff in some service-sensitive industries could lead to inconsistent standards.
The scoring method for the retail sector drew some criticism, with Hong Kong
Retail Management Association chairwoman Caroline Mak Sui-king saying the sector
provides a wide range of high- and low-end shopping choices and it was unfair to
grade them together. Hong Kong Federation of Restaurants and Related Trades
chairman Lock Kwok-on said the low rating for his sector was a warning to
improve employees' language training.
Chief Executive Donald Tsang Yam-kuen
receives an injection against swine flu at a local clinic on Thursday. Tsang was
trying to encourage people susceptible to the disease to get themselves
immunized.
Hit by a weak wholesale market in Europe and lacklustre retail growth, Esprit
group is looking to mainland as its most important growth engine in the coming
months. Fashion retailer Esprit Holdings (SEHK: 0330) will buy the 51 per cent
stake it does not already own in a retail joint venture with China Resources
Enterprise (SEHK: 0291) for HK$3.88 billion, the companies said on Thursday. The
deal will see Esprit take full control of the 10-year-old venture as it embarks
on an expansion drive in mainland. For China Resources, selling the stake will
allow it to focus on its core businesses, which includes supermarkets, beer
production, food processing and food distribution. The mainland conglomerate
said in a joint statement that it would record a HK$3.2 billion gain from sale
of the stake. Trading in shares of Esprit and China Resources Enterprise were
suspended earlier on Thursday. Shares of China Resources Enterprise have more
than doubled so far this year prior while Esprit shares have gained 16.6 per
cent, compared with a 50 per cent rise in the Hang Seng Index as of Wednesday’s
close. Esprit, whose competitors include Hennes & Mauritz and GAP, has been hit
by a weak wholesaling environment in Europe and lacklustre retail growth. The
fashion group said mainland presented great strategic value and would be one of
its most important growth engines. The world’s No 7 fashion group by market
value said earlier this month that it would cut the number of new stores planned
for the current fiscal year to 50, from an earlier target of 60-80, as consumers
were still very conservative. Esprit said it aimed to open more stores in
mainland. The joint venture, Tactical Solutions Incorporated, has 1,112 outlets
in 171 mainland cities, comprising 345 self-operated stores and 767 franchise
stores as of June 30, this year. It distributes “Esprit” and “Red Earth”
trademarks products. “The transaction will further facilitate Esprit to continue
its expansion in the PRC,” Esprit said in the statement. In November, China
Resources Enterprise said it may consider spinning off of its beer and
supermarket businesses but that no timetable had been set. Beijing-backed China
Resources operates supermarkets, processes meat, and produces its Snow-brand
beer with SABMiller in the world’s fastest growing major economy. It posted a 55
per cent rise in profit to HK$1.04 billion for the July-September quarter as
sales grew. UBS is the financial adviser for Esprit and Goldman Sachs is the
adviser for China Resources Enterprise.
The row between Taiwanese snack tycoon
Tsai Eng-meng and Payson Cha Mou-sing, two of ATV's largest shareholders, has
deepened with the tycoon saying he feels there has been a breach of trust. The
dispute emerged after the two accused each other of "bad faith" over the
investments, following the acquisition by Tsai of a stake in ATV earlier this
year. "I fully trusted him when I first signed the agreement with him," said
Tsai, speaking for the first time to the media in Taipei yesterday about the
row. "And it seems to me now that there could be traps in the deal," he added.
Tsai, chairman of Want Wang China Holdings, was referring to the issuing of 50
million convertible bonds approved by the ATV board on October 17, for which the
selling price was just 28 HK cents each, instead of HK$1.37 in the agreement.
Tsai said he had been asked three times to provide a total of HK$150 million in
funding through the issuing of convertible bonds, for which he had to pay
HK$1.38 each in line with the agreement. The October 17 approval came just a day
after Tsai told the ATV board he had nominated a Hong Kong person to represent
him on the board. Tsai said that Cha always took along a lawyer when meeting him
and said behind his back he did not like something Tsai had done. "Maybe I
should bring a lawyer along every time I meet Cha in future," he said. Tsai said
he had high respect but felt he did not get the same respect in return, which he
found disappointing. He said he had not encountered similar problems while
buying the Taipei-based China Times media group. Tsai said he had agreed to
invest because he had confidence in ATV's future despite its deficit. While he
had no plan to take over the management of the broadcaster, he could provide
some proposals to help ATV, including getting more clients from Guangdong for TV
commercials, which he believed was one way to help increase the station's
income. On allegations that he had offered to provide HK$1 billion in funding
for ATV, Tsai said he had never said that verbally or in print. An ATV spokesman
declined to comment last night and stressed the station's operation has not been
affected. The Cha family also declined to comment. But a senior ATV staff member
said: "This is the most serious in-fighting among the shareholders I have ever
seen here." The latest development comes after the South China Morning Post (SEHK:
0583) reported on two letters from Tsai to Cha, in which the Taiwanese tycoon
accused his fellow shareholder of "bad faith" and being "ridiculous" over
unspecified allegations about proposals that he pour additional money into ATV.
He wrote that as a minority investor without control and no ability to gain
control it was "simply not realistic" for him to provide a "disproportionate
level of additional funding" for ATV, when no other shareholders intended to
provide extra money.
A
special group of children broke from their routine this week to take part in an
engaging art project at Citywalk mall in Tsuen Wan. The project, called "Take a
Break with ART", is an extension of the Sino Group's award-winning effort "Art
in Hong Kong", a programme that brings art to Hongkongers inside various Sino
properties. The latest project is housed in a Citywalk shop on the upper ground
floor, numbered UG 45a and b. Artists from the Hong Kong Society of Illustrators
have painted the shop's walls, and created objects, around the theme "Take a
break". There are depictions of take a break to shop, take a break for coffee
time, take a break to be a sloth, take a break to feel the world. There's even
take a break to fly over the city. The exhibit - which lasts until early
February - is not just focused on individual work or the illustrators'
impressive joint mural. From time to time, the Sino Group invites the public to
join the artists for art jam sessions, interactive art demonstrations for the
curious and the creative. An art jam session "is a community art activity", said
Nikki Ng, group general manager of the Sino Group. "It is an art process that
involves professional artists and community members in a collaborative creative
process resulting in collective experience and public expression." On Sunday,
the Sino Group invited children of Stand by U, and some parents, to attend two
sessions. Stand by U is a mentoring and counselling programme for children who
live with a parent or parents suffering from mental illness. The programme was
created by the Baptist Oi Kwan Social Service group, which is an Operation Santa
Claus 2009 beneficiary. "Sino Group has been a long-standing supporter of this
annual charity campaign," Ng said. "All Operation Santa Claus campaigns are
heavily community-focused and are making a direct and noticeable impact with
specific projects. We are delighted to be a supporter for another year." On
Sunday, the Stand by U participants learned how to make window stickers under
the guidance of illustrators. The guests drew pictures on plain paper with
pencils and markers, placed a clear adhesive sheet over their works and traced
their expressive efforts on to them. Afterwards, the group cut around their
images on the adhesive sheet, peeled away the backing and stuck their work on
the shop's front glass window. Their drawings joined the illustrations of some
of the city's most talented artists. The art jam was "a good opportunity for
them [parents and children] to have an opportunity to draw together," said
Cosette Chan Lee-ting, a Stand by U case worker. Some "parents who suffer mental
illness ... like to stay at home, and they seldom have any activities with their
children". "This kind of activity provides chances for the parents to ...
improve their relationships," Chan said. And for children, "they also have the
chance to spend time with other children. It may help their social skills and
it's also a good opportunity to have some fun." Chan said Stand by U was still
looking for bilingual volunteers to help mentor children or chaperone group
outings. 
Over the 10 years since
Macao's return to the People's Republic of China in 1999, the former Portuguese
colony has witnessed nothing less than an economic miracle. Macao's gross
domestic product (GDP) tripled during that period and reached MOP171.87 billion
($21.48 billion) in 2008, growing at an average rate of nearly 15 percent per
year. The 2008 per-capita GDP of Macao, which lies west of the Pearl River and
is China's second special administrative region on the southeast coast of the
country, stood at $39,036, a figure that ranks it second in Asia behind only
Japan. With government coffers expanding from growing tax revenues collected
from the gaming industry, the social welfare system in the region, which is home
to 549,200 residents, has also improved dramatically in recent years. Beginning
in the fall of 2007, the Macao Special Administrative Region (SAR) Government
began offering 15 years of free education from kindergarten to senior high
school. The Macao SAR Government initiated a "wealth share" handout program in
2008 to allow the public to benefit from its strong budget surplus. Under the
program, residents were given MOP5,000 ($625) per person in 2008 and MOP6,000
($750) per person in 2009. In both years, non-permanent residents received half
of that sum. In October, Macao announced a plan to open individual retirement
accounts in the central savings regime for the residents of Macao. The
government immediately injected MOP3.3 billion ($412.5 million) into the new
system, which amounted to MOP10,000 ($1,250) per account. The money was
allocated from the MOP25.1 billion ($3.14 billion) budget surplus recorded in
2008. Money in the accounts for all residents 22 years old and higher can be
withdrawn once the beneficiary reaches the age of 65. The government calls this
measure a new form of retirement social security for Macao's residents. Speaking
at the Legislative Assembly in his final official meeting with the local
parliament on November 19, Macao's Chief Executive of 10 years, Edmund Ho Hau
Wah, said he estimated that 2009 would see a surplus of more than MOP10 billion
($1.25 billion), according to the Macao News Agency. "Next year, the government
will continue to implement measures for exemption and reduction of taxes that it
has adopted over the last few years, with the aim of helping companies and
citizens to face the pressures and difficulties resulting from the international
financial crisis," he said. Celebrations of the 10th anniversary of Macao's
return to its motherland included a December 4 seminar in Beijing on the 10th
anniversary of the implementation of the Basic Law of the Macao Special
Administrative Region, where China's top legislator, Wu Bangguo, delivered a
speech reviewing progress made in Macao over the past decade. On December 11, a
photo exhibition on Macao's achievements in the last 10 years opened at
Beijing's Capital Museum.
New World Development (0017) plans to invest US$1 billion (HK$7.8 billion) to
open seven art malls - shopping centers that feature art pieces - in the
mainland over the next five to seven years, said executive director Adrian Cheng
Chi-kong. The developer plans to expand the concept of art malls, after opening
the first one, K11, yesterday in Hong Kong. The next K11 will open in Wuhan
around June and another one will open in Shanghai in 2011, said Cheng. Cheng
expects measures by the mainland to cool the property market to have only a
slight impact on NWD's mainland property unit, New World China Land (0917). NWD
executive director Stewart Leung Chi-kin believes Beijing may rein in mortgage
loans. On Hong Kong property prices, Leung said a rise of 10 percent more is
still acceptable. NWD invested HK$3 billion in K11 in Hong Kong, Cheng said. The
occupancy rate is 80 percent. The general retail area in the mall has been
leased at more than HK$250 a square foot, while food and beverage rents are
between HK$50 and HK$80 psf. Average spending per customer is forecast at
HK$1,700 to HK$1,800, Cheng said, adding that 65 percent of the shops are brands
coming to Hong Kong for the first time. The art mall displays 32 sets of art -
13 sets were bought by NWD for HK$20 million and the rest are for sale. The
340,000-square-foot six-story mall features a 36-meter wide giant curved wall
that doubles as a projection screen, a 11.8-meter high waterfall and maple
trees. The mall is connected to the Hyatt Regency Hong Kong, Tsim Sha Tsui and
residential project The Masterpiece. 
Chinese Premier Wen Jiabao (3rd,
R) poses for a group photo with President of the Maldvies Mohammed Nasheed (3rd,
L), Bangladeshi Prime Minister Sheikh Hasina (2nd, L), Ethiopian Prime Minister
Meles Zenawi (2nd, R), Grenadian Prime Minister Tillman Thomas (1st, R) and
Sudanese Presidential Assistant Nafie Ali Nafie (1st, L) ahead of their meeting
in Copenhagen, capital of Denmark, on Dec. 17, 2009. 
Representatives watch
as Shao Ning(2nd R), vice minister in charge of the State-owned Assets
Supervision and Administration Commission (SASAC), and Li Changyin(R), board
chairman of China Shipbuilding Industry Corp, ring a gong during the ceremony of
China Shipbuilding Industry (601989.SH) at Shanghai Stock Exchange in Shanghai,
east China, Dec. 16, 2009.
South Korean President Lee
Myung-bak and Vice President Xi Jinping shake hands before trade talks at the
presidential Blue House in Seoul on Thursday. The man seen as the next leader of
China on Thursday called for talks with South Korea on a free trade deal, saying
a pact between the Asian economic powers and rivals would benefit both
countries. If a pact goes forward, it could leave the region’s biggest economy,
Japan, out in the cold, but the increasingly overlapping interests of the South
Korean and Chinese economies make reaching a deal difficult. The three countries
account for about one-sixth of the global economy. “Reaching a free trade deal
between China and South Korea meets the interests of both countries,” Vice
President Xi Jinping was quoted as saying in a meeting with South Korean
President Lee Myung-bak by Lee’s office. South Korea and China have been jointly
studying a trade deal for years but policymakers in Seoul are wary of a backlash
coming from the politically powerful farm lobby who would face stiff competition
from cheap Chinese products. China is South Korea’s biggest export market led by
steel and electronic products. Two-way trade of US$168 billion (HK$1.3 trillion)
last year is expected to double by 2013 if they implement a free trade deal,
according to a joint study. South Korea’s exports to China in November rose 54.7
per cent from a year ago, the South’s finance ministry said this month. South
Korea has seen its leading position in sectors such as shipbuilding and steel
eroded by Chinese manufacturers who have relied on cheap labour and steadily
improved technology to grab greater global market share. But in a setback for a
major Chinese business, a South Korean court approved a tough restructuring plan
to help revive struggling Ssangyong that had been opposed by Shanghai-based SAIC
Motors, its majority owner. The plan involves a sharp write-down of SAIC’s
investment in Ssangyong, which lags other domestic brands by a wide margin and
is seen needing a massive amount of funding for a still slim chance of a
turnaround, in a stark reminder of how overseas forays can go wrong. South
Korea, which has depended heavily on exports to fuel growth, has struck major
free trade pacts in recent years, ratifying a deal with India last month and
signing another with the European Union in October. A deal with the United
States reached in 2007 has yet to be ratified by the assemblies of both
countries, with some US lawmakers calling for a revision of its provisions on
autos. Xi, 56, is tipped to succeed Hu Jintao as Communist Party chief and
president in 2012 and 2013 respectively. His Asian tour, which also included
Japan, follows a trip across Western Europe in October and appears to be another
step in burnishing his diplomatic credentials. 
China plans to invest more than three
trillion yuan (HK$3.4 trillion) in environmental protection over five years from
2011, state media said on Thursday, as the country battles widespread pollution.
Wu Xiaoqing, deputy head of the environmental protection ministry, said a third
of the overall investment would go towards the operating costs of pollution
control facilities, the official People’s Daily newspaper said. The investment
period refers to the nation’s next five-year economic development plan, which
begins in 2011. The comments came as negotiators at crunch talks in Copenhagen
were racing against time to broker a deal to combat climate change beyond 2012.
China, the world’s biggest carbon polluter, has pledged to reduce carbon
emissions per unit of gross domestic product by 40 to 45 per cent by 2020 based
on 2005 levels. However, experts say its emissions could still double given
economic growth projections. Heavy pollution is widespread in the mainland,
which relies on coal for 70 per cent of its fast-growing energy needs and is
home to countless coal-burning power plants. Rapid industrialization in recent
decades, prioritization of economic growth over environmental protection and
soaring sales of cars and other pollution sources have all contributed to the
problem.
Chairman of Brilliance China Automative Holdings Limited Wu Xiaoan, seen here in
a file photo, said on Thursday that sales and profit growth for their joint
venture with BMW to exceed 20 per cent next year. Brilliance China (SEHK: 1114)
Automotive said on Thursday it was in talks with Toyota Motor, the world’s top
car maker, on technology co-operation and the possibility of forming a joint
venture for minivan production. Brilliance, the country’s eighth-largest car
maker and a joint venture partner of BMW, has a long term relationship with
Toyota that has been transferring technology know-how on minivan production to
the mainland company. “We are exploring the possibility of making new minivan
products together, which could involve equity cooperation, such as setting up a
joint venture,” Chairman Wu Xiaoan told reporters after a shareholder meeting.
Shareholders gave a green light for Brilliance to sell its loss-making Zhonghua
sedan manufacturing business to its parent, Huachen Automotive Group Holdings,
for up to 550 million yuan (HK$624 million). “Brilliance will focus its
resources on the BMW joint venture and minivan production to make the firm more
profitable,” Wu said. Brilliance posted a net loss of 386 million yuan in the
first half of this year due to hefty losses from Zhonghua versus a profit of 283
million yuan the previous year. BMW Brilliance contributed a net profit of 116
million yuan during the period, up 6 per cent. Huachen is also in talks with
Daimler AG’s Mercedes-Benz unit on possible co-operation, such as using Benz’s
production facilities in mainland to develop new models of special purpose
vehicles for the company, Huachen chairman Qi Yumin said. Brilliance is
confident about domestic car market and expects sales and profit growth for its
joint venture with BMW to exceed 20 per cent next year, Wu said. Mainland
continues to support the auto market by extending its stimulus policies,
including tax incentives, and residents’ savings remain high, so auto sales
should rise next year although the growth will be lower than about 41 per cent
this year, said Qi, who is also Brilliance’s CEO. “We expect China’s auto sales
growth about 15-20 per cent next year,” he said. Sales of its joint venture with
BMW reached 41,372 cars in the year to November and it is expected to sell more
than 43,000 this year. It posted a 25 per cent sales growth in the first half
and the growth in the second half will be higher than that. “The profit in the
second half will be significantly higher,” Wu said. The company manufactures BMW
3 Series and 5 Series sedans at a plant in Shenyang. Brilliance also planned to
boost production of minivans to 100,000 next year, up 25 per cent from this
year, and would export 16,000 of them versus just 5,000 this year, Qi said.
Production of Zhonghua sedans will rise about 66 per cent to 200,000 next year,
he added. Shares of Brilliance eased 0.9 per cent at noon, in line with a 0.7
per cent loss in the broader market.
Regulatory departments are
strengthening their supervision over financial institutions to prevent an
incomprehensible financial scenario from unfolding: the failure of the Chinese
banking system, an event which would overshadow the collapse of Lehman Brothers
Inc. in the United States in 2008. Because the robust Chinese economic
development has been a major foundation for renewed confidence worldwide, if
Chinese banks—which experienced the least turmoil during the financial
crisis—were to encounter serious problems, the world could once again be thrown
into an economic abyss. Recently, the China Banking Regulatory Commission (CBRC)
and the central bank publicized a number of policies guiding the capital
adequacy ratio of commercial banks to ensure the banking sector run safely and
smoothly. Inadequate capital is considered the biggest threat to the banking
industry, supervisory authorities said. In order to cushion the blow from the
financial crisis and secure sufficient liquidity, banks began shoveling money
liberally into the market. In the first 10 months of this year, newly added
renminbi-denominated loans stood at 8.92 trillion yuan ($1.31 trillion), the
equivalent of roughly one third of the China's gross domestic product in 2008.
The generosity of the banks' monetary measures resulted in a drop of 1 to 3
percentage points in their capital adequacy ratio, leaving small and
medium-sized commercial banks under even greater pressure than the larger
financial institutions. In the December 1 issue of China Finance magazine, Vice
Minister of the CBRC Wang Zhaoxing outlined the CBRC's increase in the minimum
capital adequacy ratio from 8 percent to 10 percent for small and medium-sized
banks and 11 percent for larger banks. The CBRC also expanded the non-performing
loans provisioning coverage ratio from 100 percent to a more encompassing 150
percent. Wang said increases in the two ratios were meant to encourage the banks
to turn profits into concrete assets and provisioning coverage to cope with
unexpected losses, allowing the banking industry in its entirety to operate
soundly. Despite the CBRC guidelines, many banks are on the verge of falling
below the threshold. According to third quarter reports from the three major
listed banks, capital adequacy ratios had amounted to 11.63 percent by September
30 for the Bank of China, 12.6 percent for the Industrial and Commercial Bank of
China and 12.11 percent for China Construction Bank.
Hong Kong’s quasi-government trade
body on Wednesday forecast the territory’s exports will rise five per cent next
year, recovering from a decline this year but below trend growth as global
demand is expected to pick up slowly. The Hong Kong Trade Development Council
forecast that exports this year - down 15.8 per cent by value in the first 10
months from a year earlier - would drop 12 per cent. A year ago, it forecast
only a six per cent decline in shipments this year. More than 50 per cent of the
territory’s merchandise exports are electronic goods. As a regional trading hub
and re-export centre for goods passing to and from the mainland, Hong Kong has
been hard hit by the global recession in the past year, although the trade
council said it expected exports to return to growth by year-end. Recovery next
year will be below average annual export growth of 7.9 per cent in the decade
through last year. The trade council forecast that imports next year would rise
6 per cent, picking up after an expected 10 per cent decline this year.
Text messages are so quick
and easy to send and read that most people do not think twice about using them -
but they can carry a sting in their tail. Ask the man who was hit with a
HK$10,000 bill after signing up for a "free" friend-seeking service. Or the one
who registered his phone number for a "free" lucky draw but who ended up with a
HK$70 bill for text messages sent to him. These examples were cited by the
Consumer Council yesterday as it warned about the traps of services that can
produce rude shocks when subscribers receive their phone bills. "People may have
authorised the receiving of paid messages without realising it," the head of the
council's publicity and community relations committee, Ambrose Ho, said. Short
messaging services fall under the Unsolicited Electronic Messages Ordinance,
introduced in 2007 to crack down on junk calls and messages, but the regulator,
the Office of the Telecommunications Authority, said the complaints mentioned by
the Consumer Council would have to be considered case by case. One of the traps
is an offer of services such as personality tests, IQ tests, friend matching and
ringtones advertised as free on websites. But many who sign up do not notice
conditions that state they will be sent costly text messages after they leave
their mobile-phone numbers online. Whether the recipients reply to or ignore the
messages, they can be charged for them, the council says. In the first 11 months
of this year, the watchdog received 470 complaints about disputes over such
charges. One came from a man who signed up for a friend-finding service after
receiving a message that he could send texts to potential friends free of
charge. He used the service frequently, running up a HK$10,000 bill before
realising he was being charged HK$5 per message. After complaining to the
council, he still had to pay HK$8,000 to the content provider. Another
complainant registered his mobile-phone number online for a free lucky draw. He
received several IQ questions every few days through text messages, which he
deleted without responding to them - until he saw the HK$70 charge on his bill.
He then checked the lucky-draw webpage and noticed there was a clause at the
bottom that said he was charged HK$5 for every SMS sent to him. Another
complainant said his son had received messages advertising Java game downloads
and was charged HK$75 for five messages in a month even though he did not
download any games. The council said many information providers advertised their
services as free to tempt users into leaving their personal details. But they
might only provide, say, the first three messages free and charge for later
ones. One provider sent 80 text messages to a user in an hour and charged HK$5
for each of them. Another sent 700 messages in two days and charged HK$2,128.
Mobile-service provider PCCW (SEHK: 0008) said it provided a platform for
communication between content providers and users. When any discrepancies arose
regarding pay-text messages, users should deal with content providers directly,
a spokeswoman said. Ofta said mobile-phone users should think twice before
responding to marketing messages. They should read the service terms before
confirming a subscription and check mobile-phone bills for irregular charges. If
in doubt, they should contact phone service providers or content providers
immediately.
China's climate change ambassador Yu Qingtai speaks at a press conference at the
UN Climate Summit in Copenhagen on Tuesday. China on Wednesday reiterated its
opposition to the idea of "carbon tariffs" being imposed on goods made in the
developing world, calling it an unfair trade restriction that hurts poor
countries. The idea for such tariffs has been floated in the United States and
Europe as a way of penalizing imports from countries that do not have statutory
curbs on greenhouse gas emissions, such as China. “China firmly opposes carbon
tariffs,” commerce ministry spokesman Yao Jian told reporters. He said such
tariffs “restrict trade and economic development.” He added they “ignore the
fact that developed and developing nations are in different stages of
development and should take on different historical responsibilities and
liabilities.” China is among the leading developing-country voices insisting
that rich nations bear “historical responsibility” for emissions of greenhouse
gases that cause climate change and should shoulder the burden of reducing such
emissions. The issue has led to a contentious atmosphere at global talks in the
Danish capital Copenhagen on how to address climate change. Some richer nations
argue their industries are being punished by tough domestic environmental laws,
which encourage the shift of polluting industries to countries with less
stringent controls. 
A worker moves tyres at a factory
in Hangzhou, in Zhejiang province in this file picture. On Wednesday, Beijing
slashed import duty on natural rubber to boost tyre production as car market in
the country zoomed ahead. China will cut import tariffs on rubber next year,
helping domestic tyre makers who enjoyed increasing demand from rocketing car
production in the country but got embroiled in a US trade dispute this year. The
import tax on natural rubber will fall 23 per cent to 2,000 yuan (HK$2,267) per
tonne, while the tax on higher-value rubber smoked sheet will fall 38 per cent
to 1,600 yuan per tonne, the Ministry of Finance said on Wednesday. Both were
previously taxed at 2,600 yuan, or a much less commonly used flat 20 per cent,
which remains unchanged. The tax cut will help reduce costs for mainland buyers
and traders said it could spur imports by mainland, the world’s largest consumer
of rubber. “We might import more in the coming months, but we will first
calculate our cost, considering the demand and natural rubber prices in the
global market,” Sheng Liang, a trader with Qingdao International Rubber Exchange
Market, said. “But we still see stable market demand, and as the import tax for
rubber smoked sheet was revised down so much, we might consider buying more
smoked sheet,” Sheng added. Traders in Thailand said the move should support
physical rubber prices and prevent them from falling significantly over the year
end period when supply is expected to rise due to favourable weather in what is
the world’s biggest rubber producer. “That would help support physical prices
and futures prices as well,” said a trader at Thailand Hat Yai rubber center. A
Singapore-based trader said the tax cut would help support tyremakers to produce
and export more, and is expected to keep demand for natural rubber buoyant next
year. “I think the Chinese government wants to support the tyre industry. They
are sending a message to the market that they will import more rubber next
year,” he said. The benchmark rubber contract in Shanghai Commodity Exchange
rose by 3.3 per cent on Wedneday. The most active rubber contract on Tokyo
Commodity Exchange, currently May 2010, rose to a one-week high, up 4 per cent.
One southeast Asian dealer said the tariff change meant natural rubber imports
would enjoy relatively lower costs than synthetic rubber. Imports of synthetic
rubber, which is cheaper than natural rubber, jumped 17 per cent in the first 11
months of this year compared to the same months of last year, while shipments of
natural rubber slowed 2.8 per cent, according to data from mainland’s customs
office. Mainland imported 1.53 million tonnes of natural rubber and 1.34 million
tonnes of synthetic rubber between January and November. The same dealer said
mainland’s own rubber producers would see the policy change as a weakening of
the protection of their industry. But two local rubber traders said they had
hoped for a bigger cut in the tariff. The import duty for natural emulsion
remained at 720 yuan per ton, or a flat rate of 10 per cent.
Consumers using mainland credit
cards, including those from Hong Kong, could be jailed if they default on credit
card debts to mainland banks three months after receiving the second warning
notice, the nation's top judiciary body has ruled. The exact liabilities of Hong
Kong card holders depend on the contract they sign with the mainland issuer. All
credit cards issued on the mainland are subject to local laws. Cards issued by
mainland banks in Hong Kong are subject to Hong Kong law unless it is otherwise
stated in the contract, legal experts say. "If mainland law applies, a Hong Kong
card holder who defaults on payment could also be subject to this criminal
charge," Chinese University of Political Science and Law commercial law
professor Li Shuguang said. While mainland law states malicious overdraft could
be a criminal offence, yesterday was the first time the judiciary authorities
had clarified the regulation. The Supreme People's Court and the Supreme
People's Procuratorate have jointly issued a judicial explanation, saying that
card holders would face charges if they fail to pay the settlement three months
after receiving the second notice letter from banks.
The location of Beijing Four
Seasons helped the apartments sell at prices ranging from 60,000 yuan to 94,000
yuan per square metre. Apartments in a luxury Beijing project that had lain
semi-finished and abandoned for almost a decade before construction resumed
under new ownership two years ago have been sold to Hong Kong buyers at
near-record prices. Despite its clouded history, the project's relaunch at a
sales function in Hong Kong's Four Seasons Hotel in Central lured savvy Hong
Kong property investors such as Sun Hung Kai Properties (SEHK: 0016)
vice-chairmen Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, Sino Land
chairman Robert Ng Chee Siong and Great Eagle Holdings (SEHK: 0041) chairman Lo
Ka-shui. While it is not known if any of these property magnates are buyers,
sole marketing agent Centaline (China) Property Consultants says about 30 Hong
Kong investors have reserved apartments in Beijing Four Seasons Private
Apartments on Xiaoliangmaqiao Avenue in the city's upmarket "Lufthansa district"
for as much as 94,000 yuan (HK$106,708) per square metre. The prices are almost
four times higher than the last transaction values in the development recorded
by the Beijing Housing Authority. But official data does not include transaction
dates and the developer Evergreen says these deals were made in early 2000 with
the first developer. Now, the project is almost complete and set for occupation
in November next year.
Construction starts for the
foundation of the No. 2 unit of the first phase of the Sanmen Nuclear Power
Plant in Zhejiang Province on December 15. The Sanmen plant is the world's first
nuclear plant using the AP1000 technologies, a type of third generation nuclear
power reactor introduced by United States-based Westinghouse company. The Sanmen
plant will be built in three phases, which will include two units each with a
generating capacity of 1.25 million kilowatts. The first unit will be put into
operation in 2013, and the second is scheduled to come into operation in 2014.
The facility will eventually have six such units. The first phase attracted an
investment of more than 40 billion yuan ($5.86 billion)
Asset bubbles are the leading risk to
financial stability in Asia ahead of inflation, Hong Kong Monetary Authority
chief executive Norman Chan Tak-lam said, as Beijing warned it is ready to use
all tools at its disposal to control property prices. "I am not saying inflation
is not a concern for Asia, but I believe it is more important to address the
risk of asset bubble formation and the associated harm," Chan said at the
"Economic Summit 2010" organized by radio station Metro Finance FM 104. He said
more than HK$640 billion had flowed in since October last year, helping drive up
home prices for 10 consecutive months. With the mainland property market also
having picked up significantly, Premier Wen Jiabao vowed yesterday to clamp down
on "excessively fast housing price surges in some cities." The State Council
said it will step up market monitoring and thwart speculation, as well as
increase the supply of mass residential homes and support the purchase of homes
by owner-occupiers. It is the second time in two weeks that Beijing has imposed
property curbs. Echoing Beijing, Chan said he believes it is necessary to take
effective measures at an early stage. Even though it is difficult to identify an
asset bubble before it materializes, he holds that authorities should not fear
misjudgment - because once formed, asset bubbles would be difficult to contain.
"It is obvious that if there is a bottleneck or an imbalance in the supply of
land, we have to deal with it," Chan said. But he believes that luxury rentals
have not surged along with selling prices because investors, including those in
the mainland, are optimistic about the outlook. He advised banks to have good
risk management and warned individuals and companies against over-borrowing at
low rates. Centaline Mortgage Broker managing director Ivy Wong Mei-fung expects
total loans for next year to hit a post-1997 record high, growing 10 percent to
reach HK$220 billion. Financial Secretary John Tsang Chun- wah said he is
hopeful unemployment will also go down like in the last quarter.
This design sketch shows the man-made
island of east tunnel of Hong Kong-Zhuhai-Macao bridge. China began construction
of the world's longest cross-sea bridge linking its southern economic hub
Guangdong Province to Hong Kong and Macao on Dec. 15, 2009. The Y-shaped Hong
Kong-Zhuhai-Macao bridge will have a total length of almost 50 km, of which
about 35 km will be built over the sea.
Chinese Vice Premier Li Keqiang
(3rd R, front) is seen on his way to a construction site after attending the
inauguration ceremony of Hong Kong-Zhuhai-Macao bridge, the world's longest
cross-sea bridge, in Zhuhai, south China's Guangdong Province, on Dec. 15, 2009.
Police officers post notices in the residential blocks to remind the public to
strengthen security in buildings and rooftops in Wan Chai on Tuesday. Police
officers were investigating "high-risk buildings" in Causeway Bay and Wan Chai
as part of their investigation into last Saturday's acid attack, Deputy District
Commander (Wan Chai) Au Yueng Chiu-kong said on Tuesday. “There are many
buildings in the area. We have to identify high-risk buildings so police
officers can focus on them,” he said. These include old buildings, and buildings
without security guards and gates. Police believe such buildings could be more
easily accessed by an acid attacker. Au Yueng said more officers had now been
sent to both districts. They have been checking rooftops of buildings, as well
as patrolling at ground level. “We have also assessed the risk posed by
different buildings in Wan Chai and Causeway Bay,” he said. Au Yueng said
officers had been distributing leaflets to remind residents and shop owners to
be more vigilant about security. In other developments, the Hong Kong Island and
West Kowloon regional crime units were investigating whether the attack in
Causeway Bay was linked to earlier ones in Mong Kok. These have occurred since
December last year. A police spokesman urged anyone with information to contact
the Regional Crime Unit, Hong Kong Island, on tel: 6643-7068. Hong Kong’s latest
acid attack occurred about 10.10pm last Saturday in Causeway Bay. A plastic
bottle containing corrosive acid was thrown from a building at No 541-543
Lockhart Road into a pedestrian area behind Sogo department store. Six people,
including one man and five women aged from 18 to 27, received burns in the
attack. They were taken to hospital. Four of them have since been discharged.
Two were seriously injured and remain in hospital in a stable condition. On
Saturday, police found a paper bag containing another bottle of corrosive acid
on a staircase. They believe the attacker left this behind. The case has been
classified as throwing a corrosive fluid with intent to cause grievous bodily
harm.
The relationship between two of
ATV's largest shareholders, Payson Cha Mou-sing and Taiwanese snack food tycoon
Tsai Eng-meng, was severely strained months before Linus Cheung Wing-lam's
resignation as the troubled broadcaster's chairman last week. As far back as
October, Tsai was accusing Cha of "bad faith" and being "ridiculous" over
allegations by Cha surrounding proposals for Tsai to pump up to HK$1 billion of
extra money into ATV. This has come to light in two letters from Tsai to Cha
dated mid-October, seen by the South China Morning Post (SEHK: 0583). Both
appear to be responses to earlier letters by Cha. Tsai wrote that he reserved
his legal rights against Cha over allegations in a letter, which he did not
spell out but said were "groundless", "offensive" and "defamatory". In the first
letter, dated October 17 and copied to all board members, Tsai wrote that he
never promised additional funding of HK$1 billion for ATV as suggested by Cha,
saying that providing extra money was an option, not an obligation. Tsai said in
the letter that he had an indirect economic interest of only 47.58 per cent of
ATV, through B shares he owned thro