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Jan 29, 2010
The US consulate has taken an interest in the pan-democrats' by-elections plan, according to a League of Social Democrats official. "I have the feeling that their biggest concern was whether we would win or lose the seats," league vice-chairman Andrew To Kwan-hang said yesterday of his meeting with consul for political affairs Benjamin Weber, which he said took place two or three months ago. The consul did not offer any support, and the league would reject it even if he did offer any, To said. "In return, I also asked him how the United States viewed our referendum. He said his country had democracy and that `Hong Kong has enough smart people to deal with it'," To said. Weber asked for a meeting with league chairman Wong Yuk-man - in whose office the meeting with To was held. A meeting between the two has not been arranged since the talks. To said Weber was the only diplomat to approach the league about the resignations plan. "It was the first time I had official talks with the US consulate. They had never approached us before ... I think they have regular contacts with the Civic Party and the Democratic Party, but not the League of Social Democrats," To said. Without confirming or denying the meeting, a spokesman for the consulate said: "In pursuit of our official duties, consulate general officials routinely meet with leading government and non-government figures across the full range of political views, including academics, journalists, businesspeople, politicians and NGO leaders." Civic Party vice-chairman Alan Leong Kah-kit, one of the five legislators to resign yesterday, said he was not aware of any consulate asking his party about the campaign. He said lawmakers regularly gathered with guests from different countries and discussed issues of concern. Liberal Party executive committee member Michael Tien Puk-sun - who had expressed his intention to contest the by-elections the resignations will trigger but will not do so now after his party's decision not to contest the polls - said no foreign consulate had approached his party regarding the by-elections. "I am not surprised that the US consulate is interested in this matter. It has always been interested in Hong Kong and China politics," said Tien, a National People's Congress deputy.
The Hospital Authority revealed for the first time that it needs 600 nurses, but the nurses union said the figure was arbitrary and would not solve the manpower shortage.
China sought to head off concerns about curbs on Google phone technology on Wednesday, as US business groups urged Washington to tackle "alarming" measures against foreign high-tech companies in China. Google’s threat to quit China this month over hacking and US criticism of China’s internet censorship has irritated ties between the two economic giants, already hurt by disagreements over currency exchange, trade and US arms sales to Taiwan. In soothing words for investors, a mainland official said Beijing would not seek to stand in the way of Google’s Android mobile phone platform in the mainland market. The spokesman for China’s Ministry of Industry and Information Technology, Zhu Hongren, was responding to a question about whether use of the Android application in China would be affected by the Internet giant’s complaints against China. “I think there should be no limit on the use of any system as long as it complies with regulations in China, it has sound negotiations and co-operation with telecom operators and obeys relevant rules and requirement,” Zhu told a news conference. “The Chinese telecommunication market is an open market.” The ministry oversees China’s mobile telephone sector. Zhu’s remarks appeared to underscore that the Chinese government does not want to scare investors by directly attacking Google, and is instead directing its ire at the US government, which state-run newspapers have accused of “politicising” the dispute. Two weeks ago, Google threatened to shut its Chinese Google.cn portal and pull back from China, citing problems of censorship and a hacking attack from within the country. It is still filtering sensitive content on Google.cn. The Obama administration backed Google’s criticisms. Last Thursday US Secretary of State Hillary Clinton urged China to drop Internet censorship and investigate the hacking. US business groups have fired their own broadside at China, calling on top US officials to pressure Beijing on moves to keep out foreign high-tech companies. The appeal, in a letter to top US officials including Clinton, comes as China formulates regulations for policies meant to encourage domestic industry to ascend the value chain. Foreign industry fears that incentives for government purchasers to prioritise domestically developed products could lose them valuable contracts. “For several years, the Chinese government has been implementing indigenous innovation policies aimed at carving out markets for national champions and increasing the locally owned and developed intellectual property of innovative products,” the business groups said, according to a text made public by the Business Software alliance. “We are increasingly alarmed by the means China is using to achieve these goals.” Signatories urged the Obama administration to make the issue a top priority and work with the business community and foreign governments to develop a “strong, fully co-ordinated response to the Chinese government.” A showdown between Google and the Chinese government could possibly hurt mobile phone makers who had bet on the Android system to increase sales in the world’s biggest mobile market. Motorola has bet its turnaround on Google’s mobile software and China. Phones running on Android, an open-software platform for mobile applications, are also being developed by several Chinese firms, including ZTE (SEHK: 0763) Corporation and Huawei. Last week, Google postponed the launch of two mobile phones in China that use its Android platform. After first fending off criticisms from Google and Washington, Chinese officials and state-run media have launched toughly-worded warnings to the Obama administration that have the hallmarks of a concerted counter-campaign. The People’s Daily, the main mouthpiece of China’s ruling Communist Party, said on Wednesday that the Google dispute had added to strains that have created a rocky start for China-US relations this year. “All of this means that Sino-US relations face severe challenges,” said the paper. It said the worries included US arms sales to Taiwan, trade, and speculation that President Barack Obama may meet exiled Tibetan leader the Dalai Lama. “If these issues are mishandled, they will have a powerful destructive effect on Sino-US relations, and may even affect the broader development of relations.” Greece is wooing mainland to buy up to €25 billion (HK$274 billion) of its bonds in its efforts to avert one of Europe’s biggest debt crises, two newspaper reported on Wednesday.
Jan 28, 2010
New mortgage loans approved in Hong Kong in December fell 6.2 per cent from November for a sixth consecutive month-on-month decline, but were up 132.1 per cent from a year earlier, data from the Hong Kong Monetary Authority (HKMA) showed. Month-on-month figures, however, are not seasonally adjusted. New loans approved in December totalled HK$24.2 billion, compared with HK$25.8 billion in the previous month, the HKMA said. Approvals for loans for new property decreased 3.1 per cent, while loan demand for mortgages on existing property dropped by 4.1 per cent. Approvals for refinancing loans declined by 14.6 per cent. The number of new mortgage applications rose 6.59 per cent to 15,368 from the previous month’s 14,418, the statistics showed. The value of new mortgage loans drawn down was HK$19.7 billion, down 5.8 per cent from the previous month.
China banks extended 1.45 trillion yuan (HK$1.65 trillion) in new local currency loans in the first 19 days of the year, as they scrambled to front-load lending before policy tightening shuts the door on them, the 21st Century Business Herald reported on Tuesday. If the reported figure is accurate, it would suggest that officials are still finding it difficult to rein in credit issuance despite taking increasingly assertive actions to clamp down on banks. People’s Bank of China’s vice-governor Su Ning was the latest to remind banks that their actions are under the microscope, calling on them to avoid big swings in lending, the official Financial News reported on Tuesday. “Banks must master their lending rhythm, ensuring that loans are balanced and avoiding abnormal volatility at the end of the month or the end of the quarter,” Su was quoted as saying, a nearly word-for-word reiteration of previous central bank statements. Sources said last week that banks had lent 1.1 trillion yuan in the first half of January. The central bank raised reserve requirements on January 18, locking up about 300 billion yuan that banks would otherwise have been able to lend, and had also instructed some banks to restrict their lending. Regulators have called on banks to report their lending figures on a daily basis in order to allow them to closely monitor loan growth, the newspaper quoted a bank executive as saying.
China has already reduced emissions of major pollutants by 10 per cent below 2005 levels, meeting its target a year ahead of schedule, Xinhua news agency said on Monday. The tug of war between government and residents over controversial incinerator projects in Guangdong is showing no signs of easing, with protests in two cities in the past two days. Changjia Group, a mainland developer with a focus on high-end residential projects in Shanghai, plans to raise between US$500 million and US$600 million via its Hong Kong listing in March, sources familiar with the situation said on Tuesday. Changjia, headquartered in Shanghai, has hired Swiss bank UBS and US bank Citigroup to jointly handle its initial public offering of shares, said the sources.
Jan 27, 2010
Hong Kong deficit may swell to $28b - The government is expected to record a deficit of HK$28.21 billion in the 2010-11 fiscal year as it splurges on economic relief and infrastructure projects, according to KPMG partner Jennifer Wong.
Former ATV chief executive Feng Xiaoping was yesterday ordered by the High Court to pay debts of HK$300 million to Bank of China and to surrender properties he used as guarantees for loans.
Beijing denied any state involvement in cyber attacks on Google and accused the United States of "double standards" as a row over internet freedom intensified. The central government fired off its latest salvo after the White House said President Barack Obama was "troubled" by Google's statements it had been attacked by China-based hackers. The internet giant has threatened to abandon its Chinese search engine. The "accusation that the Chinese government participated in any cyber attack, either in an explicit or inexplicit way, is groundless and aims to denigrate China," a government spokesman said. "China's policy on internet safety is transparent and consistent," he added, saying the country is itself the "biggest victim" of hacking. Separately, Microsoft chairman Bill Gates said the internet needs to thrive in China as an engine of free speech and described official censorship by Beijing as "very limited."
Jan 26, 2010
New Horizon Capital, whose co-founders include Wen Yunsong, son of Premier Wen Jiabao, aims to raise a US$1 billion private equity fund for investment in domestic industry leaders ready to make initial public share offerings. This would be the third and largest private equity fund for New Horizon Capital, which had about US$500 million under management since it was established in 2007, according to sources with direct knowledge of the matter. New Horizon Capital recently completed raising between US$600 million and US$700 million for its latest fund by the “first-closing” period, with capital commitments from investors including Japan’s Softbank Corp and Singapore’s state investor Temasek Holdings, the sources said. New Horizon Capital started pitching the fund as early as 2008. It encountered fundraising difficulties as a result of the financial crisis, and so suspended the fund until early last year, the sources said. “That was very tough time, but now people are willing to pour money into the fund again since China is still the focus worldwide,” said a source. Softbank, run by influential Japanese business tycoon Masayoshi Son, and Temasek Holdings were long-time investors since the firm launched its first fund in 2007, the source said. The sources declined to be identified because of the sensitive nature of Wen’s family background. A representative for New Horizon Capital could not be immediately reached for comment. Wen Yunsong, also known as Winston Wen, helped form New Horizon Capital in 2005, a few years after graduating with an MBA from Kellogg School of Management at Northwestern University in the United States and returning to mainland, according to the sources close to Wen. Between graduation and the launch of New Horizon Capital, Wen founded a telecommunications equipment maker whose key clients included large banks and securities firms, according to media reports. Wen later sold the company. Beijing, which has historically viewed private equity firms as speculators, is becoming more welcoming of foreign private equity funds to boost investment in the country, thereby creating more jobs, viewed by the government as a key issue in maintaining social stability. Despite Wen’s background, New Horizon Capital is considered a foreign fund because of its legal structure and the foreign sources of its dollar capital. New Horizon Capital’s first fund was launched in 2007. Soon afterwards, Wen and his management team, which includes long-time friends from Wen’s days in the United States, made some quick investments in privately-held mainland enterprises with the potential to become market leaders. “They have a very stable team … They were school-mates or old friends. They know each other very well,” said another of the sources. More recently, New Horizon Capital bought a large stake in Shenzhen-listed wind power producer Xinjiang Goldwind Science & Technology Co, a leading wind power equipment maker in the country. Goldwind is seeking to raise US$1.5 billion via a Hong Kong listing this year, it was reported last week.
Plans by US President Barack Obama to curb risk-taking by banks are unlikely to adversely affect Asia's risk-averse financial institutions, analysts say.
China last year overtook Japan to become the world's second largest diamond market behind the United States, with trade on the Shanghai diamond exchange rising 16.4 percent to more than US$1.5 billion (HK$11.7 billion).
The Taliban have freed four Afghans abducted in the north earlier this month along with two Chinese engineers, who remain in militant custody, a police official said on Monday. Hundreds of protesters in Guangdong donned masks to protest a planned incinerator plant, the latest grassroots initiative to target polluting projects in the region.
The World Bank said on Monday recent moves by mainland to clamp down on rampant lending were the “best way” to tackle the problem of rising inflation and the threat of asset bubbles. SAIC Motor Corp, mainland’s biggest automaker, plans to sell its UK-made MG cars in Europe at the end of the year as it moves to revive the British vintage brand it took over three years ago. SAIC, which has had initial success selling its own-brand cars domestically, has joined the rush of mainland automakers, including Geely Automobile Holdings (SEHK: 0175), hoping to make a name globally.
Jan 25, 2010
Cheung Kong (Holdings) (SEHK: 0001) has outbid seven developers to win a small residential site in Sham Shui Po, underscoring the demand for urban sites. The developer outbid rivals including Sun Hung Kai Properties (SEHK: 0016) and Henderson Land Development (SEHK: 0012) for the 36,000 sq ft Urban Renewal Authority (URA) site at the junction of Lai Chi Kok Road, Kweilin Street and Yee Kuk Street. It can build three residential blocks with about 390 units, including 60 with facilities for the elderly. "Strong interest is expected as urban sites are always sought after," said Pang Shui-kee, the managing director of surveyor SK Pang. He estimated that the total investment cost would be HK$1.45 billion, or HK$4,500 per sq ft. Janny Chan, an assistant sales director at Midland Realty in West Kowloon, said new projects in the area were going for HK$4,800 to HK$5,200 per sq ft as Sham Shui Po was popular with first-time buyers. Home prices in Sham Shui Po have jumped as much as 30 per cent over the past 12 months, Chan said. "Prices for some 20-year-old units have increased to HK$1.3 million from HK$1 million early last year." According to the tender document, the winning bidder has to share profits with the URA once the project's turnover reaches HK$2.2 billion, the proportion of profit to be shared ranging from 20 per cent to 50 per cent.
Jan 23 - 24, 2010
Owners who refuse to have their buildings inspected by the government may face a HK$50,000 fine and a year in jail. Under new proposals, buildings 30 years or older must be inspected every 10 years while those 10 years and above face window safety tests every five. To ensure compliance, the Buildings Department will issue inspection orders to owners of around 2,000 premises every year, the Development Bureau said. There will be also be a fixed penalty of HK$1,500 for those who refuse to have their windows inspected. Repeat offenders will be subject to a maximum fine of HK$25,000 and three months' imprisonment. Director of Buildings Au Choi-kai said about 15,000 buildings will be subject to mandatory inspection while the windows of 30,000 others will come in for closer scrutiny. A bill on the mandatory scheme will be gazetted today and submitted to the Legislative Council on February 3. To encourage compliance, the Housing Society will provide subsidies to owners of buildings for their first inspections. However, Secretary for Development Carrie Lam Cheng Yuet-ngor said the government has no plans to introduce a means test. She said such tests would not be cost- effective since the cost of inspections will be just HK$400 to HK$2,400 per home depending on building size. To ensure public money is appropriately spent, government subsidies will not cover luxury blocks. But even then, about 80 percent of buildings will enjoy subsidies, Lam said. It will take seven to 10 years to complete the inspection of all buildings under the proposed scheme. Lam hopes the scheme will take effect in the fourth quarter of next year, provided the Legislative Council passes the bill. The government will also table another bill to lower the threshold of compulsory land-sale applications from 90 percent to 80 percent for buildings that are 50 years old or older. "Our purpose is not to speed up the pace of tearing down buildings," Lam said. "However, we are trying to lift the barriers as some buildings are already badly dilapidated but developers cannot move [in] because of the current threshold." Much-required redevelopment will help rejuvenate these areas and improve residents' living environment. The details of the bill were arrived at after a thorough public consultation, Lam said. `We initially planned the policy to cover buildings 40 years and older but we eventually made it 50 years after hearing public views."
Standard Chartered’s private equity unit, mainland conglomerate Fosun Group and three other bidders are vying to buy two mainland retailers and other assets from investment firm Global Mart in a deal expected to fetch about 500 million yuan (HK$568 million), people familiar with the matter said. Global Mart, founded in 2005 by several Australian investors targeting mainland’s retail sector, is selling its 80 per cent stake in Joindoor Hypermarket and 100 per cent of Whacko supermarket as part of an effort to repay US$75 million in debt, the sources said. Both retailers are based in central Hunan province. Global Mart could not immediately be reached for comment, while Fosun and Standard Chartered declined to comment. An investor relations official at Your-Mart, which the sources said was also among the competing bidders, said she was not aware of such a bid plan. Proceeds from the sale would be used to repay creditors and note holders including Australian investment firm Keybridge Capital and Philippine conglomerate JG Summit Holdings, the sources added. Buying Joindoor and Whacko would give investors a strong foothold in central and western areas of mainland, as the central government boosts domestic consumption to counter a slump in exports and bolster economic growth. South Korea’s No 2 retailer Lotte Shopping, which last October agreed to acquire mainland supermarket operator Times, also looked into the deal but has walked away, one of the sources said. Lotte could not be reached immediately for comment. Your-Mart, which in 2006 sold 80 per cent of Joindoor Hypermarket to Global Mart for 150 million yuan, is now joining the bid to buy the stake back after raising money from an initial public offering last year, one of the sources said. Global Mart has invested about US$100 million in mainland, the source said, as it sought to benefit from the country’s rapid economic growth and rising consumption, although some of its investments have run into difficulty. In 2005, it bought supermarket chain Seastar from XiAn Seastar Modern-Tech Co, but it shut the business down last year following legal disputes with the mainland seller over price and debt issues, according to stock exchange filings by XiAn Seastar and local media reports. Foreign investors are also finding mainland’s retail market increasingly competitive as global giants including Wal-Mart Stores, Carrefour and Tesco expand aggressively in the world’s third-largest economy. Joindoor, founded in 2000, is a household name in Hunan and one of the biggest supermarket chains in the province, generating about 1.5 billion yuan of sales annually. Fosun, mainland’s biggest non-state conglomerate with businesses ranging from steel to real estate and retailing, already owns stakes in retailers Shanghai Yuyuan Tourist Mart Co and Shanghai Friendship Group. It plans to expand investment in consumer-related businesses over the next few years, chief executive Liang Xinjun said in November. Standard Chartered’s private equity unit joined the bidding recently, having started due diligence, one of the sources said.
Jan 22, 2010
Swire Properties will continue looking for investment opportunities to expand its presence on the mainland even as Beijing imposes tougher measures to deal with a property bubble. The Hong Kong Diploma of Secondary Education Examination - two years away from becoming part of the SAR's scholastic system - is on its way to being accepted and backed by authorities in Britain, the United States and Australia. Hong Kong is now seeking support for the diploma from Canada. The diploma will set standards for the first time in 2012, replacing the Hong Kong Certificate of Education Examination and Hong Kong Advanced Level Examination. Secretary for Education Michael Suen Ming-yeung said yesterday that Britain's accreditation agency, the National Recognition Information Centre, has evaluated the diploma at Hong Kong's request and found the pass level required is "relatively higher" than its GCE A-Level. It also matches the Advance Placement level in the United States and High School Certificate in Australia. Suen also said that Britain's Universities and Colleges Admission Service found the diploma to be as good as the International Baccalaureate. While the diploma is attaining recognition, Suen added: "The enrollment standard will depend on each institution or university. The student will be accepted according to their capability." The government will discuss accreditation with Canada authorities in March. The Education Bureau introduced a mock examination to evaluate 70,000 students in 2007. About 60 percent attained Level 2 in five subjects, while 20,000 had "3-3-2-2" scores - Level 3 for Chinese language and English language and Level 2 for mathematics and liberal studies. "I want to stress that the HKDSE cannot compare directly with the HKCEE and the HKALE," Suen said. "In addition, the new system takes only six years to complete, compared with five and seven years for the previous exam system." Under the new system, each level will reflect a student's ability. Education officials are still in discussions with the Civil Service Bureau about the recruitment requirement level. The Education Bureau will help make videos to introduce the new system to prospective employers. Permanent Secretary for Education Raymond Wong Hung-chiu said private universities will determine their own enrollment requirement, but he revealed that some agreed to refer to the "3,3,2,2" standard. Secretary General for Hong Kong Examinations and Assessment Authority Francis Cheung Wing-ming said students can apply for universities in the UK directly with HKDSE results. Local universities will announce the minimum requirements for subjects by next year.
A sharp fall in mainland home sales this month could herald a short-term downward correction in deals and prices this year, according to agents and analysts. Jan 21, 2010
Jan 20, 2010
Finnish engineering group Wartsila said it would cut 1,400 jobs and move production to China to boost competitiveness as it enters a challenging year. The company also said on Tuesday, its sales for last year rose 14 per cent, with underlying profitability improving versus a year ago, sending its shares 10 per cent higher in early trading. “The world has dramatically changed in a short period of time. China has become a strong maritime centre and its growth will continue,” Wartsila chief executive Ole Johansson said in a statement. “Competition in the market will intensify. By developing our manufacturing footprint and our businesses for the future key markets Wartsila will further improve its competitiveness and service to our customers in the tightening markets,” he said. The company said some 570 jobs would be slashed in the Netherlands as it planned to close plants in Drunen and Zwolle, while in Finland it plans to close down its plant in Vaasa. Wartsila forecast its net sales for the current year to be 10-20 lower versus last year, with an operating margin before non-recurring items of around 9-10 per cent, at the upper end of the firm’s long-term range.
Beijing said on Tuesday it was making an all-out effort to rescue two Chinese engineers kidnapped in Afghanistan, and seeking to verify reports that they were seized by the Taliban.
Jan 19, 2010
Orient Overseas (International) (SEHK: 0316) (OOIL) has sold US$2.2 billion in mainland property to Singapore’s CapitaLand as the loss-making Hong Kong company seeks to raise cash and focus on its core shipping business. The sale of residential, hotel, and retail properties in mainland will generate a lump sum of cash for OOIL which posted a net loss in the first half of last year, badly hit by the global economic crisis. CapitaLand, which raised US$1.8 billion from the listing of its CapitaMalls shopping malls unit in November, has been increasing its footprint in mainland. “This proposed acquisition is timely and an excellent strategic fit for CapitaLand,” Richard Hu, chairman of CapitaLand, said in a statement on Monday. “It also fits into our stated goal of growing our assets size in China from the present 28 per cent of total assets to 45 per cent over the next five years as we remain very confident of the long term future of the country.” The US$2.2 billion deal includes the portfolio value of the seven sites of approximately US$2 billion and cash within the business of about US$262 million, CapitaLand said. The deal with CapitaLand, Southeast Asia’s largest property developer, is expected to be completed by the end of the first quarter with the approval of OOIL shareholders, CapitaLand said. Trading in shares of OOIL, a Hong Kong-based container ship operator, and CapitaLand, were suspended on Monday pending announcements, the companies said. On Friday, OOIL’s stock ended at HK$5.15, while CapitaLand shares closed at S$4.28 (HK$23.86). OOIL posted a net loss of US$231.9 million in the first half of last year versus a net profit of US$158.3 million in the year earlier period. The loss came as the global economy was still suffering through the financial crisis, taking a major toll on shipping companies that rely heavily on trade. OOIL, which is controlled by the family of former Hong Kong chief executive Tung Chee-hwa, made a US$5.1 million loss from its properties in the first six months of last year against a US$5.9 million gain a year earlier. The company had 1.4 million square metres of total gross floor area under development at the end of 2008 with the focus on cities like Shanghai, Beijing and Tianjin. OOIL also holds a stake in Beijing Oriental Plaza, which comprises a retail mall, office towers, service apartments and a five-star hotel, and Wall Street Plaza, in New York City’s financial district but those assets were not included in the deal.
Three agreements leading to closer cooperation between Taiwan and the mainland in banking, insurance and securities came into effect over the weekend. The three memorandums of understanding, which were signed in November, are the latest steps in rapidly improving ties across the strait after Ma Ying- jeou became Taiwan's president in May 2008. Taiwan's Financial Supervisory Commission said the MOUs followed pressure from the island's finance industry for greater access to the mainland market. With the MOUs, "Taiwan's financial industry can not only serve Taiwanese companies in the mainland but also tap the mainland market," the commission said. Taiwan businesses have channeled about US$150 billion (HK$1.17 trillion) into China since Taipei eased an investment ban in the early 1990s. China took US$83.7 billion of the island's total exports in 2009, or 41 percent of the island's overseas sales. The MOUs provide for thresholds and preferential policies for both sides to enter each other's financial markets.
The 2010 IPO market will also begin with the strong performance of Chinese companies - two out of five companies scheduled to make their IPO debuts this week are from China, according to Renaissance Capital, a Connecticut-based market research firm.
Jan 18, 2010
A proposed United States act that would require banks in Hong Kong and around the world to identify their American customers could be passed into law as soon as Congress reconvenes this week following a holiday break. Already approved by Congress, one of the provisions of the Tax Extenders Act of 2009 is that non-American banks and trusts will be charged a 30 per cent withholding tax on income earned from US financial assets if they fail to disclose the nationality of their account holders. Two leading US senators have pledged to resume discussion on the act "as quickly as possible in the new year". The act now awaits a vote in the Senate.
Taobao, the operator of China's leading internet shopping portal, will invest 10 million yuan (HK$11.36 million) a year to expand its new business - an online store for retail software applications. The company said this would help fund efforts of small independent software developers to build programs for its eponymous App Store, at app.taobao.com, which was launched yesterday. Wang Wenbin, the vice-president of the Taobao Open Platform fund, said the online store would serve "as an incubator of innovative technology" for the online merchants and consumers who use the mainland's fastest-growing online retailer. Privately held Taobao, a unit of e-commerce giant Alibaba (SEHK: 1688) Group, provides the most comprehensive product offering on the mainland online market and had served more than 170 million registered users as of the end of last month. A report from Goldman Sachs said the firm's high-turnover categories included garments, household products, mobile phones, consumer electronics and cosmetics. Wang said the new App Store would offer programs across a range of categories, including applications for sellers and buyers, tools to extend Taobao.com's community sites, tools for product recommendation and mobile-phone applications. Last month, Taobao teamed up with network operator China Telecom Corp (SEHK: 0728) and handset makers TCL (SEHK: 1070) Communication Technology Holdings and Lenovo (SEHK: 0992) Mobile Communications Technology to launch handsets custom-designed for e-commerce. Wang said software developers would be able to generate revenue from their applications through subscription fees, commissions or advertising. Goldman Sachs, which valued Taobao at US$8.7 billion, estimated the company had 80 per cent of the mainland consumer retail e-commerce market. By next year, Taobao's gross merchandise volume is expected to hit 400 billion yuan.
Jan 16 - 17, 2010
Friday's debate by the Legislative Council's Finance Committee on funding for the HK$67-billion high-speed rail link to Guangzhou ended without a vote. By the time meeting adjourned at about 9:30pm, 10 lawmakers were still waiting for their chance to raise their concerns and questions. The debate will resume in Legco tomorrow at 9am on Saturday. Government-friendly lawmakers were unhappy with the way that Finance Committee chairwoman Emily Lau Wai-hing handled the meeting. Independent legislator Chim Pui-chung accused Lau of helping her allies in the democratic camp to delay the meeting. Lawmaker Paul Tse Wai-chun who represents the tourism sector, also exchanged angry words with Civic Party lawmakers, calling them “actors” and criticizing the quality of their questions.
New World Department Store China will open as many as six stores on the mainland this year to benefit more from the stimulus driving the nation's growth. The retail arm of New World Development plans to open two stores each in Beijing and Shanghai this year and might open one each in Shenyang and Zhengzhou, chief operating officer David Lin said.
China's inbound foreign direct investment fell in 2009 for the first time in four years, with cash-strapped firms outside the country undoubtedly affected by the financial crisis. China drew US$90 billion from foreign companies investing in the country’s factories and other productive assets last year, 2.6 per cent less than in 2008, a Commerce Ministry spokesman said on Friday. In December alone, China attracted US$12.1 billion in FDI, up 103 per cent from a year earlier, spokesman Yao Jian said at a news conference. December has often reflected rises in inbound FDI for accounting reasons. China attracted a record US$92.4 billion in non-financial FDI in 2008, an increase of 23.6 per cent from 2007. Inflows, which surged in the years after the country joined the World Trade Organization in 2001, are in the midst of recovering after being hit hard late in 2008 by the global economic slowdown.
Jan 15, 2010
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Hong Kong*:
The Anglican Church in Hong Kong has been ordered to pay HK$180 million in
outstanding tax on a joint development which turned a Tai Po site into a luxury
residential zone. 
Net profit of Hang Lung Properties (0101)
soared 13-fold to HK$17.3 billion thanks to strong sales and fair value gain.
Underlying profit for the six months to December rose fourfold to HK$5.5 billion
after excluding related tax and a HK$16.1 billion revaluation gain. The builder
and landlord declared an interim dividend of 17 HK cents, up 13 percent from a
year ago. Hang Lung sold 425 homes at HK$14,000 per square foot in August. This
lifted property sales up from HK$11 million last year - when no project was
launched - to HK$7.5 billion. "It has always been the market which tells us when
to sell our units," said executive director Terry Ng Sze-yuen. "After The Long
Beach in October 2007, we did not launch any project until this [financial]
year." Chairman Ronnie Chan Chi-chung said the firm is "in no rush" to sell the
remaining 284 homes at The HarbourSide, and 1,200 flats at The Long Beach. There
is no property bubble in Hong Kong, Chan said, adding that small and medium
homes are still affordable. He noted the government has become significantly
more lenient with land applications. "I just don't believe developers are braver
under the current adverse conditions than the boom market two years ago."
Problems will definitely arise if the government does not sell land, Chan said,
but he is hopeful that the supply of affordable flats will rise. While Ng finds
Hang Lung's local rental increase of 5 percent reasonable, Chan said rental
contribution from the mainland will exceed that from Hong Kong within two years.
Retail complex Palace 66 in Shenyang, which will be completed in mid-2010,
already has 80 percent committed tenancies. Chan expects annual returns of 5-6
percent in the first three years at the project. Returns on Hang Lung's two
Shanghai malls topped 40 percent while rentals were at least twice that of its
neighbors. The firm's land bank comprises 20 million square feet in prime
mainland commercial locations. 
HSBC Group Chief Executive Michael
Geoghegan poses in front of HSBC headquarters in Central as he starts his first
day of work on Wednesday. HSBC Holdings (SEHK: 0005) chief
executive Michael Geoghegan said on Wednesday that tougher United States
regulations to limit the size and activities of America’s largest banks would
have little impact on HSBC. US President Barack Obama has proposed significant
limits on how banks can operate. This includes stopping retail banks using their
own money in investments. Banks may instead be limited to investing their
customers’ funds. Geoghegan made the comments to reporters on his first day of
work with HSBC in Hong Kong – after re-locating from London. “We have a surplus
in our banks in America and Canada. So, I don’t think this [the proposed changes
to banks] would affect us too much,” the 56-year-old British-born banker said.
Geoghegan said that when the new regulations become law they might be “slightly
different” from what some people were now advocating. “We would encourage the
regulators – the Basel Committee – and others, to think carefully about the
changes they want to make,” he said. The Basel Committee on Banking Supervision,
made up of central bankers and regulators from nearly 30 countries, is putting
together a package of stricter financial rules in response to the credit crisis.
“Everybody wants a strong banking system and to make sure it’s a level playing
field. But that’s not easy to achieve. That will take it some time,” he added.
On Wednesday, Geoghegan was welcomed by over 100 HSBC staffers. He said HSBC was
a truly international (SEHK: 0732) operation. “We have a chief executive in Hong
Kong and a chairman in London. The chief executive now runs the entire group and
the team is spread all over the world. Some are in London, some are in New York
and some in Brazil and Mexico,” he said. Geoghegan said he would meet Hong
Kong’s major political officials and clients later. HSBC announced its decision
to move its chief executive from London to Hong Kong last September – a move
that indicates it is focusing more on the mainland in future. The bank has also
hired financial advisers to prepare a listing on the Shanghai Stock Exchange.
Michael Geoghegan joined HSBC in 1973 and previously led the group’s South
American and European operations. He is the first chief executive based in Hong
Kong since William Purves in the early 1990s. HSBC Holdings has been
headquartered in London since 1993. 
A typical two-axle double-decker which
will be introduced by Kowloon Motor Bus next month to save costs and to protect
the environment. The new model meets Euro V emission standards. Kowloon Motor
Bus will introduce a new two-axle double-decker in a bid to cut costs and reduce
pollution. The new model, to be introduced next month during non-peak hours,
meets the Euro V emission standard, which means it releases at least 40 per cent
less nitrogen oxide emissions than most buses on the road. Most Hong Kong buses
are 12-metre double-deckers with three axles. The two-axle buses are not only
cleaner but are more cost efficient. However, they do have a smaller capacity of
88 passengers, compared to over 140 for larger models. "We could deploy these
smaller and greener buses during non-peak hours, when patronage is low," KMB's
principal engineer, Kane Shum Yuet-hung, said. The new model has an intelligent
gearbox that adjusts automatically to the best shift under different road
environments and changes in loading, while its air conditioning adjusts every
four seconds. The new model costs about HK$2.5 million - cheaper than the
average price of HK$3 million for three-axle buses, but its mass production will
have to wait until the first model completes road testing in the next three
quarters of this year. New World First Bus also plans to introduce the same
model next month. Meanwhile, KMB insists it has no plans to increase fares in
the near future. Bus companies can make a fare rise application when a formula
consisting of figures on wage-index changes, the composite consumer price index
and the company's productivity gain calculate to an outcome higher than 2 per
cent. KMB managing director Edmond Ho Tat-man said the latest calculation -
taking into account last July's salary increase for bus drivers - gave an
outcome of just 0.59 per cent. "At present, we have no plan to raise fares," Ho
said. "If we can rationalise more bus routes, it would further ease our pressure
for a fare rise." The Environment Bureau is consulting the public over an air
quality objective that includes 19 proposals to improve the city's air quality.
They include bus route rationalization and quicker replacement of old bus models
- which officials estimate may push bus fares up by 15 per cent. 
Harbor City in Tsim Sha
Tsui expects double-digit growth in Lunar New Year sales from improving
sentiment and mainland tourists. Shopping centre operators in the city are
forecasting double-digit sales growth over the Lunar New Year to be fuelled by
mainland tourists continuing their buying spree. With just less than three weeks
to go before the festival, Maureen Fung Sau-yim, the general manager for leasing
at Sun Hung Kai Real Estate Agency, expects the firm's 12 shopping centres to
have 11.7 million customers in the build-up to the holiday. This would boost
turnover by more than 13 per cent to HK$240 million for the period, she said. At
Sun Hung Kai's apm mall in Kwun Tong, operators plan to organise 30 themed
shopping tours, such as "wedding tours", "property purchasing and shopping
tours" and "hotel guest shopping tours". Fung estimated they would attract about
1,500 people who would be spending an average of HK$3,000 to HK$3,500 per
person. Harbour City shopping arcade in Tsim Sha Tsui, one of the city's
largest, also hopes to see double-digit growth for the period. Canis Lee Lai-yi,
an assistant general manager of leasing at Harbour City, said buying sentiment
rebounded quickly in the second half of last year, as consumers had saved money
during the financial crisis and the human swine flu outbreak. The shopping
centre's annual turnover surged 16 per cent to HK$15.5 billion last year, with
average turnover per square metre rising to a record HK$2,384 in December. Lee
said mainland shoppers contributed significantly to those figures, with HK$5.3
billion of retail sales being settled by the mainland's electronic payment
network China Union Pay last year, up 65 per cent from HK$3.2 billion a year
earlier. The amount represents about an eighth of the HK$42 billion total paid
by China Union Pay cards in Hong Kong last year. The shopping arcade had an
occupancy rate of 98 per cent, with the remainder under renovation, Lee said.
She also expected double-digit growth in rents this year. Tenants are paying a
base rent ranging from HK$200 to HK$600 per square foot. Official data shows the
city had about 18 million mainland visitors last year, up 6.5 per cent from
2008. A further 7.5 per cent rise is expected this year. 
Single smart card to cover HK and
Shenzhen purchases later this year - Millions of commuters in Hong Kong and
Shenzhen will be able to use a single stored-value card to pay public transport
fares and make small-value purchases in the two cities starting later this year.
A card with two chips - integrating the Octopus card and the Shenzhen Tong smart
card - will be introduced, Hong Kong Monetary Authority chief executive Norman
Chan Tak-lam said yesterday. The use of cash-free transactions would in future
be expanded to the entire Pearl River Delta region, he said. Speaking at a forum
on integration between Hong Kong and the Delta region, Chan said a "two-in-one
card", with chips for the Octopus card and Shenzhen Tong, was technically
simple. "But there is a need to issue new cards and tackle the issue of value
uploading involving different currencies," he said. Another feasible proposal
would be development of a common card reader for use in Shenzhen and Hong Kong,
including the Octopus card, Shenzhen Tong and Shenzhen Bank Card. There are more
than 20 million Octopus cards in circulation in Hong Kong, while 6.5 million
Shenzhen Tong cards have been issued. More than HK$90 million worth of
transactions are made each day with Octopus cards, but they are accepted only at
11 fast food outlets in Shenzhen and four duty-free shops at the Lo Wu and
Huanggang control points. Chan said mutual use of e-money in Hong Kong and the
delta region would be conducive to creating a world-class Pearl River Delta
metropolis. Tan Gang, vice-president of Shenzhen-based think tank the China
Development Institute, said integration of stored-value cards would bring huge
convenience for cross-border travellers. "It will encourage more Shenzhen
residents to travel to Hong Kong and stimulate consumption there," he said. "It
will also serve as a new platform for further co-operation between Hong Kong and
Shenzhen." Visitors to Hong Kong from the mainland are among the top spenders,
parting with an average of HK$5,676 last year, compared with HK$5,439 overall
for overnight visitors, HK$2,138 for same-day visitors and HK$1,498 for all
visitors, according to the Hong Kong Tourism Board. Octopus Holdings has been
studying a possible merger with the Shenzhen smart card since 2008, but little
progress has been made due to technical and operational obstacles, while there
are also concerns over currency exchange. The company's chief executive,
Prudence Chan Bik-wah, said last year that putting both chips in one card could
cause the systems to interfere with one another. But a company spokeswoman said
there had been breakthroughs. "We still need to perform tests over the next few
months on the new card's technical viability."
Rusal chief executive Oleg
Deripaska toast with Ronald Arculli, chairman of the Hong Kong Stock Exchange,
during the Russian company's listing debut at the Hong Kong stock exchange on
Wednesday. Russian metals giant Rusal plunged on its Hong Kong stock market
debut on Wednesday but the controversial firm’s boss expressed confidence about
tapping the resources-hungry mainland market. The world’s largest aluminium
producer closed at HK$9.66 per share, a 10.56 per cent fall from its initial
public offering (IPO) price of HK$10.80. Rusal chief executive Oleg Deripaska
told reporters the listing price, which was at a premium to rivals in the
sector, was “reasonable”. “You see what’s happening in markets all over the
world,” the 42-year-old, who is dogged by unproven allegations that he has links
to organised crime, told reporters at the Hong Kong exchange. The billionaire
oligarch – once Russia’s richest man before metals prices plummeted last year in
the global financial crisis – said debt-laden Rusal was a good long-term bet as
it taps the fast-growing market in mainland. “We believe in the growth in Asia,”
he said. “This company is best in class.” Moscow-based Rusal became the first
Russian firm to list in Hong Kong. Its IPO, worth US$2.2 billion, was the city’s
biggest by a company from outside Asia. “We believe this is the first step –
there will be more Russian companies on the Hong Kong Stock Exchange,” Deripaska
said. “More Russian money will come into Hong Kong.” But Howard Gorges,
vice-chairman of Hong Kong-based South China Securities, said Rusal’s prospects
could be dim, noting that its trading debut tumble was “a warning to punters”.
“Just because the company is listed now, I don’t think it means a lot of people
will be rushing into it,” he said. “Rusal has had a cloud hanging over it.”
Controversy swirled around Rusal’s share sale after the exchange repeatedly
delayed approving its IPO amid concerns about its huge debt of US$15 billion. In
a highly unusual move, the city’s Securities and Futures Commission effectively
restricted the IPO to institutions and so-called professional investors by
mandating a minimum investment of about HK$1 million. Rusal reached a deal to
restructure its debts with creditors last year. But its 1,100-page IPO
prospectus outlined a laundry list of possible risks, including potentially
crippling lawsuits, its debts, and even the company’s demise should metals
prices plunge again. Helen Lau, senior research analyst at OSK Asia Holdings,
said Rusal is a low-cost producer that will benefit from stronger demand for
metals. But she warned that its problems are a red-flag for investors,
especially when compared with rivals such the “stable” Aluminum Corp of China (SEHK:
2600). “Rusal does have an attractive upside,” she said. “Hopefully all these
political and legal disputes can be settled as soon as possible.” The state of
Rusal’s balance sheet marks a fall from grace for Deripaska, who was among a
small group of entrepreneurs who scooped up formerly state-owned assets after
the Soviet Union’s collapse in 1991. Among those assets was the Sayansk
aluminium smelter in Siberia, the flashpoint in a bloody feud known as the
“aluminium wars” that saw gangland slayings and private armies battle it out for
control of the sector. In 2004, Deripaska bought out his then-partner, current
Chelsea football club owner Roman Abramovich, and merged Rusal with rival firm
Sual and the aluminium operation of Switzerland-based Glencore. The move created
the world’s biggest aluminium concern in 2006 which now employs 75,000 people in
19 countries, and accounts for 12 per cent of the world’s aluminium output.
Along the way, Deripaska locked horns with fugitive Israeli businessman Michael
Cherney, who is suing him for US$4 billion over a disputed stake in Rusal.
Cherney is wanted by Interpol over Spanish allegations of money-laundering.
Separately, the West African nation of Guinea is suing Rusal for US$1 billion in
damages stemming from a privatisation dispute. Deripaska and Rusal have
dismissed both legal actions as without merit.
Compulsory en
bloc acquisition of units in old and neglected blocks in Hong Kong for
redevelopment could be sped up by policy changes the government is proposing in
a bid to get rid of buildings that pose "a serious threat to public safety". The
changes are contained in a bill published last week that calls for the
introduction of mandatory inspection every 10 years of buildings that are more
than 30 years old, and mandatory checks on windows in such buildings every five
years. The bill will be debated in the Legislative Council on February 3 and, if
passed, the provisions are likely to take effect late next year. The bill
provides that owners of units in old blocks will be required to engage qualified
inspectors to check their buildings and windows, and to undertake the necessary
repair works specified by the inspectors. The move follows the lowering of the
minimum number of sales acceptances by unit holders to 80 per cent from 90 per
cent before a developer can compulsorily acquire a building more than 50 years
old. The lower threshold will take effect from April this year. Property
analysts say as a result of the changes, more flat owners could consider selling
their units to developers rather than paying for the mandatory repair works.
Tsim Chai-nam, the director of Clerk of Works Services, estimates the inspection
cost at HK$4 to HK$5 per square foot, possibly reaching HK$4,000 per household
if the inspection includes common areas. Repair costs could begin at about
HK$3,000 for the repair of drainage systems, rising to HK$50,000 if external
walls and windows need repair. One occupant of an old building, Chinese medicine
practitioner Kwan Chi-yee, welcomed the proposed mandatory inspections. Kwan
opened a clinic in a 600 square foot flat in a 40-year-old building on Hennessy
Road 20 years ago. "This is a good policy. Many people have been hit by falling
concrete and windows from old buildings in the last few years. The policy can
ensure the safety of pedestrians," he said. But he worries construction firms
and inspectors could raise their fees if the policy is introduced. Sito Lai-jin,
82, who lives alone in a 500 sq ft flat in a building more than 40 years old at
Fuk Wa Street in Sham Shui Po, worries about the plan. "I am retired and have no
income. How can I afford the inspection and maintenance costs? I hope the
government will offer a subsidy," she said. Charles Chan Chiu-kwok, the managing
director of Savills Valuation and Professional Services, says repairs on old
buildings could cost unit owners from HK$10,000 to HK$100,000. He believes the
new policies will encourage flat owners to sell their units rather than pay the
cost of mandatory repairs. "Changing windows and [fixing] drainage will not help
flat owners sell their units at a higher price. Spending on repairs cannot be
offset by gains in property prices," he said. "But flat owners can improve their
living environment by selling their units at a good offer from the developers.
It will also be easier for the flat owners to sell their units after the sale
threshold has been cut to 80 per cent of the total ownerships." Tsim said Clerks
of Works would benefit from the policy changes but he worried flat owners might
suffer. "I expect many construction firms will provide free property inspection
to lure flat owners. They may overstate the problem of the buildings to get more
renovation jobs," he said. Standards were another problem. "Some construction
companies may not fully repair the buildings so if the problems recur, they can
get another job. Thus it is important to monitor the standard of repair works,"
Tsim said. He said most flat owners might be willing to renovate their buildings
in the early stage of discussions. "However, they will have different opinions
when they negotiate the costs. Some will try to lower the costs by cutting some
of the works while others may insist on a complete repair."
It's a real tough life in HK - If
you think you've got it tough - you have. That's the view of life in Hong Kong
from across the border, where a poll has just put the SAR top of the most
formidable places to live in all of China. Among minuses in the quality of life
seen for white-collar workers here: Work is at breakneck pace because of a fear
you won't make ends meet; Love must take a back seat - and if you are married
the pressures of life can wreck the partnership; and Health is sacrificed in the
chase to earn. The grim views from the mainland comes with a poll by Xinhuanet,
an online arm of the national news agency. Hong Kong is "the most toilsome" of
Chinese cities, ahead of Suzhou, Shenzhen, Taipei, Guangzhou and Shanghai. With
the unenviable ranking are jarring remarks about the place Xinhuanet says merits
the "vibrant and dynamic" tag, though for plenty of wrong reasons. "Working
overtime is a catchword of the Hong Kong people," it says, and "very few people
shop around during working hours. The streets are usually packed with mainland
tourists." The turnover rate of the labor force is high - in part due to mass
layoffs and fierce wars for talent among companies. Although people are plugged
up with earphones, it goes on, many workers do not have time to watch
television, but wives could well be TV junkies. Nor is there time to seek true
love, resulting in a drop in the number of marriages and a higher rate of
divorce. "The trend is that single women live together while men want to get
married," it says. Health is another casualty in the money chase. The more
people work the less often they work out. There's certainly no time to enjoy a
good meal - reflected in the spread of fast-food joints. Although Xinhuanet
fails to give details of the method and size of its poll, an associate professor
of sociology at the Chinese University of Hong Kong does not find the message
surprising. "Hong Kong's economy has been developing far longer than most
mainland cities," Chan Hoi-man says. "People here generally have to face complex
problems at work and suffer enormous pressure." Hong Kong is more comparable
with cities such as Tokyo and New York, he added, while the living standard is
generally higher than in mainland cities. And as for the promotion of a five-day
week, that does not help much as the workload of most people is as heavy as
ever. Leung Hon-chu, a principal lecturer in sociology at Baptist University,
goes along with views that job security is lacking and workers tend to use every
chance to earn more money. Indeed, Leung says, there's no time to enjoy life.
China*: China
has centralized its energy strategy within a new government agency launched on
Wednesday, aiming to co-ordinate policy-making that previously was shaped by a
tangle of agencies. Premier Wen Jiabao will be the head of agency and
Vice-Premier Li Keqiang will be the deputy, according a central government
notice. “The National Energy Committee (NEC) is established to step up energy
strategic decision-making, overall planning and coordination,” the central
government said in a notice published on its website (www.gov.cn) It is
responsible for working out national energy development strategy, reviewing
energy security and major energy issues as well as planning domestic energy
development and international cooperation, it added. Mainland’s plan to create a
“super ministry” to steer the energy sector was put on hold in 2008 due to the
difficulty of reaching a consensus between big energy firms and existing energy
agencies. Instead, the national parliament approved the establishment of the
National Energy Administration (NEA) and the NEC in early 2008. The NEA was
officially launched in July 2008, but still lacks real power to carry out many
of its assigned tasks as responsibility for the energy sector is currently
dispersed among a number of departments. The NEC committee has 21 members,
consisting mainly of ministers from a wide range of ministries such as the
Finance Ministry, the Commerce Ministry and the central bank. Zhang Ping, head
of the National Development and Reform Commission, will work as the head of
NEC’s general affairs office while Zhang Guobao, head of NEA, will act as Zhang
Ping’s deputy in NEC. The NEA will also be responsible for handling specific
works of NEC, according to the notice. Analysts said that the launch of the
committee is aimed at creating an authoritative body to better organise the
scattering power distributed between different ministries.
Gates: Net curbs in China very limited -
Microsoft Corp chairman Bill Gates has described Beijing's efforts to censor the
Internet as "very limited", saying corporations which operate in China should
abide by the local law. In an interview on ABC's Good Morning America on Monday
about Google's dispute with China, Gates said the Internet is subject to
different kinds of censorship around the world, noting that Germany forbids
pro-Nazi statements that would be protected as free speech in the United States.
"And you've got to decide: Do you want to obey the laws of the countries you're
in, or not? If not, you may not end up doing business there," Gates, the world's
richest man, said without mentioning the search engine giant by name. "The
Chinese efforts to censor the Internet have been very limited and so I think
keeping the Internet thriving there is very important." He declared he was
unimpressed and a bit perplexed by Google's recent threat to shut down its
operations in China, citing disagreements with government policies and
unspecified attacks. One may or may not agree with the laws in China, Gates
said, but nearly all countries have some controversial laws or policies,
including the United States. "What point are they making?" Gates asked. "Now, if
Google ever chooses to pull out of the United States, then I'd give them
credit." Google is currently in delicate negotiations with the Chinese
government to continue its presence in the world's most populous Internet
market. Its top lawyer said on Monday that the issue would probably be resolved
in weeks, but cautioned it could take months. Google's complaints have received
backing from the White House with Washington soon raising Internet freedom to
the level of a major facet of its human rights agenda. Beijing has tried hard to
play down the row with Washington over the issue, insisting that the Google case
is just a legal and technical matter that should not be linked to bilateral
ties. Observers agree with Gates' remarks on following local rules, noting the
US bans child pornography while France bans Internet access to Nazi imagery. Fan
Jishe, a scholar in US studies at the Chinese Academy of Social Sciences, said
every country has its own way of online supervision. He said the Google dispute
is only an excuse for the Obama administration to criticize China on Internet
freedom. He said even if the Google issue had not come to the fore, Obama would
have exerted pressure on Internet freedom sooner or later. He noted that Obama
had held up the United States as a model of free flow of information during his
visit to Shanghai last year. He Jingchu, a professor at Southwest University of
Political Science and Law said in an article yesterday that Obama's
over-interpretation of the issue is aimed at diverting domestic attention from
his unsatisfactory political achievements to the Sino-US relationship, the
world's most important. 
Li Na reacts after
beating Venus Williams at the women's quarterfinals at the Australian Open in
Melbourne on Wednesday. Li Na has set her sights on breaking into the world's
top five after stunning sixth seeded Venus Williams in the quarter-finals of the
Australian Open on Wednesday. Sixteenth seed Li made it two Chinese players into
the semi-finals when she came from a set down to upset Williams 2-6, 7-6 (7/4),
7-5 in an error-strewn match. She will now face either defending champion Serena
Williams or Belarusian seventh seed Victoria Azarenka for a place in the final
after seeing off Williams in two hours, 45 minutes on Rod Laver Arena. “It’s the
best day of my whole life,” an exuberant Li, who joins countrywomam Zheng Jie in
the final four, said. “It’s good for both players and it’s good for Chinese
tennis.” The 17th ranked Li set herself a goal for this year of breaking into
the top 10, and will now achieve that ranking after reaching the semi-finals.
“It’s so exciting, maybe I’ll have a beer tonight,” a smiling Li said. “I don’t
know, because the goal, my goal this year was top 10, but now it’s only January,
so, it’s come quickly.” When asked whether she will dream about reaching the top
five she replied: “Maybe – why not?” Li and Williams made 110 unforced errors
between them in a poor quality match that will be best remembered for the drama
of the fluctuating third set, which featured nine breaks of serve. Li started
nervously and seemed overwhelmed by the occasion as she wilted badly in the
first set against the power of the American. She was broken in her first two
service games and although she managed to get one back, Williams broke once more
at 5-2 to take the first set in only 30 minutes. The start of the second set
followed a similar pattern but things changed at 2-4 when Li suddenly began to
play with far greater freedom. Williams tightened up as her forehand went to
pieces and she was broken twice, the second time when serving for the match at
5-4. Li pounced in the tiebreak to level the match as a nervous Williams came up
with a host of unforced errors. “Actually I was nervous in the first set, I
mean, Venus played aggressively in the first set,” Li said. “She didn’t miss a
lot of balls. I was feeling more pressure in the first set. Then in the second
set I was feeling a little bit better, but still was like 5-3 down. Then I just
tried to get more balls back.” Li’s tiebreak win signalled the start of a
see-sawing final set in which both players struggled to hold serve – at one
stage there were six consecutive breaks. Li finally held and came out to serve
for the match, only to be broken, but Williams dropped her serve straight away,
giving Li another chance. This time she made no mistake as another unforced
error from the American gave her the match. Li, who started her sporting career
in a Chinese badminton program but was told by her coach to give tennis a try,
has now beaten two top 10 players in a row following her fourth round win over
over fourth seed Caroline Wozniacki. It was also her second win in as many
matches against Williams – she beat her in straight sets at the Beijing
Olympics. Williams gave her credit. “Obviously, I think I was playing good
tennis – I don’t think it has anything to do with whether I was playing good,”
she said. “I have to give her a lot of credit for playing well and picking her
game up.” 
China, Switzerland voice
opposition against trade protectionism - Chinese Vice Premier Li Keqiang(4th L)
attends the joint press conference with President of the Swiss Confederation
Doris Leuthard(4th R) in Bern, capital of Switzerland, on Jan. 26, 2010. Li
Keqiang arrived in Zurich on Monday, kicking off his formal visit to
Switzerland. 
XAIC
extends contract with Boeing - A Boeing 737 aircraft parked at Jinan Yaoqiang
International Airport. The deal will help XAIC in its efforts to become a
strategic partner for Boeing. Xi'an Aircraft International Corporation (XAIC)
yesterday delivered the 1,500th vertical fin for Boeing's best-selling B737
aircraft and signed an extended contract to supply another 1,500 units to the US
aircraft manufacturer. The new order is the largest subcontracting agreement in
terms of volume the Chinese aviation manufacturing industry has ever received.
"The extension of the contract showed that XAIC is capable of producing
large-size aircraft components in large volume for leading international
aviation manufacturers. It is a milestone in XAIC's efforts to become a
strategic partner for Boeing and Airbus," said Meng Xiangkai, president of XAIC.
Vertical fins are typically found on the aft end of the fuselage and are
intended to reduce aerodynamic sideslip. XAIC, a subsidiary of Aviation Industry
Corporation of China (AVIC), signed the first contract for producing 1,500 units
of B737 vertical fins in 1996 and is currently able to produce 21 to 24 units of
vertical fins per month. Boeing manufactures 31 B737 planes per month. Nearly
two-thirds of the B737 worldwide fleet are equipped with vertical fins produced
by XAIC. Boeing and XAIC did not reveal the total value of the contract. "Since
the 1980s, Boeing has purchased parts and components worth more than $1.5
billion from China. That (the purchasing volume) will more than double in the
coming years," said George Maffeo, vice-president for supplier management,
airplane programs, Boeing Commercial Airplanes. Boeing's archrival Airbus is
also expanding industrial cooperation in China. The total annual value of
Airbus' procurement in China reached over $100 million in 2008 and is expected
to touch $200 million this year and $450 million in 2015. XAIC also produces
wings for Airbus A320 airplanes. The A320 wing is the largest and most
complicated aircraft component a Chinese company has ever made. China is Airbus'
only wing manufacturer outside Europe. XAIC is a major supplier to China's
homegrown regional jet ARJ21 and large commercial passenger aircraft C919 by
manufacturing fuselage and wings. AVIC is using XAIC as a platform to
consolidate its commercial aircraft manufacturing businesses by injecting assets
worth 8 billion yuan into the Shenzhen-listed company. 
Lawmakers, from left, Albert
Chan Wai-yip, Alan Leong Kah-kit, Tanya Chan, Leung Kwok-hung and Raymond Wong
Yuk-man sign their resignation letters outside the Legislative Council building
in Central on Tuesday. Five pro-democracy lawmakers from the Civic Party and the
League of Social Democrats (LSD) tendered their resignation letters on Tuesday
to Legislative Council secretary general Pauline Ng Man-wah. The group, includes
all three lawmakers from the league – “Long Hair” Leung Kwok-hung for New
Territories East constituency; Raymond Wong Yuk-man for Kowloon East; and Albert
Chan Wai-yip for New Territories West. They were joined by two lawmakers from
the Civic Party, Alan Leong Kah-kit, who represents Kowloon East geographical
constituency and Tanya Chan, who represents Hong Kong Island. The legislators
shook hands with Ng after submitting their resignations. The five said they
planned to discuss their resignations in the Leglislative Council on Wednesday
if Legco president Jasper Tsang Yok-shing allowed it, local media reported.
Flanked by journalists and supporters, the lawmakers again explained that by
resigning, they hoped to force by-elections. This is to trigger a de-facto
referendum to promote full democracy in Hong Kong. Alan Leong said the
resignations were necessary. “I have to keep my election promise and strive for
real universal suffrage.” LSD chairman Raymond Wong said he and his colleagues
were not worried about the consequences. “We have nothing to fear. We have to
make sacrifices for the successful [implementation of universal suffrage],” he
told reporters. Civic Party leader Audrey Eu Yuet-mee stressed that democracy
was ultimately “about the people” of Hong Kong. “What we are trying to do is to
give the opportunity back to the people – to vote for real democracy and to vote
for the abolition of functional constituencies,” she told reporters. “This is
something we cannot do alone in the Legislative Council,” Eu said. “There’s no
reason to fear the people’s will.” Eu said they were lawmakers were looking
forward to contesting the by-elections so they could debate the early
implementation of universal suffrage. Before the lawmakers submitted their
resignation letters, Executive Council member Anthony Cheung Bing-leung said he
believed they should not have resigned. But Chinese University of Hong Kong
political scientist Ma Ngok said: “They are doing this partly out of
frustration. They feel they need to do something more radical, [to] try
something new,’’ he said.
A top score in Hong Kong's new school-leaving diploma is worth more than the
highest grade in the much-vaunted International Baccalaureate exams, a study has
shown. Information released by the examinations authority yesterday shows the
diploma examinations compare favorably with other international exams using the
British centralized universities admission system's yardstick. The data was
based on benchmark matching of grades in the Hong Kong Diploma of Secondary
Education exams and Britain's General Certificate of Education A-level exams.
Examinations authority chief Francis Cheung Wing-ming, who announced the
benchmark matching results for the diploma exam and British A-level yesterday,
says the results of the research are very positive. However, a comparison of the
benchmarks for the three examinations shows the new diploma exams do not measure
up to the Hong Kong Advanced Level Examinations (HK A-level) as far as
assessment grades are concerned. The Hong Kong Examinations and Assessment
Authority two years ago asked the British national qualifications agency UK
Naric to do the benchmark matching of the British A-levels and Hong Kong
A-levels. Yesterday's results were based on research done by Britain's
Universities and Colleges Admissions Service (UCAS). "Overseas universities see
Britain's GCE A-level as a reference when they lay down admission requirements,"
Cheung said. "UCAS' benchmarking tables involve around 40 international exams
including the United States' advanced placement tests and International
Baccalaureate [IB]. Our Level 3 is higher than the Level 3 for IB. Our Level 5*
is equivalent to IB's highest grade Level 7, but we still have a higher grade,
which is 5**." However, the diploma exams do not compare favorably with the HK
A-level, the school-leaving examinations under the old system. A Level 3 in the
diploma exams is equal to an F - or fail - under the HK A-level, and Level 4 is
equivalent to an E for the HK A-level. An examinations authority spokeswoman
stressed the diploma exams could not be compared with the HK A-level. "You study
six years for the diploma but seven years for HK A-level. The duration of
schooling, curriculum and assessment methods are different for the two exams,"
she said. Under the diploma, students leaving secondary school will be graded
Levels 1 to 5, with the highest possible score being Level 5**. Katherine
Forestier, the director of education and science services at the British
Council, said depending on institutions' own admissions requirements, students
achieving the minimum of two Level 3s will be able to enroll in British
undergraduate programs. 
World Bank economists
yesterday warned about the risks of asset bubbles in China even as the
government tries to hold back excessive lending and keep prices stable. Asset
price inflation, or increases in housing prices in particular, is potentially
"very dangerous" for China because they are self-reinforcing, made possible by
"very cheap credit", said Hans Timmer, director of the development prospects
group at World Bank. "Asset price rises bear more risks (than consumer
inflation)," he said at a press conference yesterday in Beijing. "If the price
in a grocery store goes up, then demand comes downs; but if the housing price
goes up, then actually demand might increase because people expect further
increases," he said. "This is a much more dangerous phenomenon." Housing prices
in 70 major Chinese cities increased by 7.8 percent year-on-year in December,
the fastest pace in 2009, according to official data. But many people complain
that price rises are much higher than indicated in the index and have become
unaffordable. Economists, meanwhile, are worried about "house price bubbles"
bursting, which could affect the balance sheets of banks and the health of the
overall economy. "I can't say there are (asset) bubbles at the moment," Timmer
said. "But there's a risk it is an area where you have to keep your eyes
peeled." Dong Yuping, senior economist at the Chinese Academy of Social
Sciences, said: "Although house prices rose very fast in some big cities last
year, it is hard to say if bubbles have already formed. There are few
widely-agreed standards for us to decide whether there are bubbles or not." He
said, however, that policymakers must be cautious. "If house prices continue to
rise faster than people's income growth, the risk of bubbles would be higher."
Timmer said the Chinese government has taken appropriate measures to keep the
risk under control. "The first step is to recognize this is a potential issue
and be willing to act, and the Chinese government does both." The government has
raised taxes on sales of second-hand homes and tightened land transfer rules,
among others, to hold back surging prices. "The government is concerned about
property prices rising too rapidly and sensitive to middle-class discontent
about housing affordability," said Wang Tao, head of China economic research at
UBS Securities. "However, in an overall environment of weak global demand, the
government will be cautious very careful to avoid dampening overall activity in
the sector." The government is expected to tighten monetary policy to reduce the
scale of lending and prevent liquidity-fueled inflation. Last year, new yuan
lending increased to 9.6 trillion yuan ($1.4 trillion), almost double that of
the previous year. Timmer said China is yet to see a real threat of high
inflation, although the consumer price index (CPI), a key gauge of inflation,
rose sharply by 1.9 percent in December, compared with 0.7 percent a month
earlier. "I'm not that afraid that there'll be a fast inflation rise," he said.
Timmer said China's CPI growth since last November has had a lot to do with the
surging international commodity prices that plunged at the end of 2008. "It's
not necessarily a sign of ramping inflation," he said. Some economists have
warned that the CPI could rise to 5 percent or even higher this year, although
most analysts believe that the government can keep it under 3 or 4 percent. The
World Bank also suggested China tackle some long-term issues, such as structural
reforms, to make its economic growth more sustainable. 
PetroChina (SEHK: 0857)’s rapidly
expanding international trading network will soon include the Middle East when
it sets up an energy trade desk in the regional financial and commodities
trading hub of Dubai, industry sources said. Asia’s largest oil and gas
producer, PetroChina is also studying the option of either acquiring or building
an oil terminal facility in the United Arab Emirates, the sources said. “They
have approached us to discuss the economic feasibility of developing a terminal
in the UAE,” a trader based in the Middle East said. “They have not yet taken a
decision, but they have been studying the option for about a year now.” The
energy giant was also expected to set up a three-man crude trading desk this
year in Dubai, which is fast becoming a regional oil and commodities trading hub
rivalling the likes of New York, London and Singapore, sources said. Recently US
oil firm ConocoPhillips and a unit of Thailand’s PTT joined the likes of Vitol,
BP and Lukoil to open Gulf trading outposts. Shell’s trading arm has also
expanded its trading desk in Dubai, along with Trafigura who have also added new
staff in the past year. Sources familiar with PetroChina’s plans to set up
operations in Dubai said the mainland firm has already relocated a crude trader
from Singapore to the emirate. “They are now looking at setting up an office
here, they are in that process of getting the logistics in order,” a Middle East
based trader said. “Initially they will have three crude traders, and then the
office will likely expand, but they haven’t really showed their cards as to what
they will be doing here.” Most of the region’s producers, including Saudi
Arabia, Iran and Kuwait effectively bar their customers from trading their
crude. But they take a far more lenient view of refined fuels like gasoline and
diesel, for which import demand has risen as a petrodollar revenue boom in
recent years has fuelled strong consumption growth. “They may be positioning
themselves for the possibility that there will be some form of commercial crude
business developing once Abu Dhabi completes its pipeline into Fujairah,” a
crude trader from a Gulf Arab producer said. The United Arab Emirates will
complete a pipeline allowing the world’s third-largest oil exporter to pump
around 60 per cent of its crude exports to Fujairah, a port on the Gulf of Oman.
The mainland oil giant is flexing its muscle all across the world, making sure
it is strategically placed to exploit new commercial business that could emerge
in the region because of new refining capacity. The firm’s trading operations
are now located in Asia, the United States and Europe. PetroChina is presently
in talks to take over about 5 million barrels of heavy oil storage in the
Caribbean, which was formerly leased by Saudi Aramco. “At the moment it [office
in Singapore] could serve as a listening post for the company, and then it will
slowly develop to something more,” a Middle East based trader said. “They
probably anticipate Dubai evolving into a price setting hub for the Middle East,
the way Singapore has for Asia.” But with mainland’s growing importance on the
global refined fuel markets, as its refineries run at full tilt and hit fresh
export highs for distillates, PetroChina could also be looking for an outlet for
its products into the less mature East African markets. “There is still quiet a
bit of potential in the region, they could be looking to grab market share in
Africa,” a Singapore based trader said. “Everyone is out to lay claim to new
incremental demand, Africa is still untapped, risky business for some, but not
so much for a company like PetroChina.”
Worker welds the interior of a car at the
Geely auto factory in Ningbo in this file photo. On Tuesday, reports said Geely
aims to build a new factory in Beijing, capable of producing up to 300,000 Volvo
cars a year. Zhejiang Geely Holdings will produce up to 300,000 Volvo cars a
year at a new factory in Beijing as part of its plan to pull the Swedish brand
out of the red by next year, a source said on Tuesday. Zhejiang Geely, parent of
Hong Kong-listed Geely Automobile, aims to complete the purchase of Ford’s Volvo
unit for up to US$2 billion by May, according to the source and to a document
submitted to regulators by Geely. The addition of such capacity would nearly
double Geely’s current output, which reached 321,900 units last year for the
entire group, up 45 per cent from a year earlier. Geely has set an ambitious
annual sales target of 2 million cars by 2015. Analysts said the 2011 break-even
target could be a stretch for Geely, which has no experience running a foreign
company. “I think it’s optimistic to break even next year as it needs to build a
plant first and it might take time for Chinese buyers to accept a made-in-China
Volvo,” said John Zeng, an analyst with IHS Global Insight. “It will break even
eventually but that’s going to take time.” Geely Automobile Holdings (SEHK:
0175) is mainland’s largest private car maker. Its charismatic founder, Li Shu
Fu, sometimes likened to Henry Ford, has shown global ambitions for Geely, which
means “lucky” in Putonghua. Ford, the only major US automaker to avoid
bankruptcy last year, is selling its luxury Swedish brand to free up cash as it
climbs out of the industry’s worst ever downturn. The deal would see Geely
acquire Volvo for US$1.5 billion to US$2 billion, with an expected closing date
in May after the signing of the initial agreement next month, according to a
copy of the Geely document. Geely said in December it was near such a deal, and
later added it had strong support from the central government for the purchase.
Geely will set up a separate company with registered capital of 8 billion yuan
(HK$9 billion) to buy Volvo. Foreign strategic investors and the Hong
Kong-listed Geely will hold a 51 per cent stake of the company. Geely shares
were down 3.7 per cent, amid a broader market sell-off and following a run-up
that saw the shares more than double since mid-September on hopes for a Ford
deal. The purchase would be the biggest in a recent spate of similar
acquisitions of distressed global assets by mainland carmakers, which have
thrived during the global downturn due to strong incentives for their industry
under Beijing’s 4 trillion yuan stimulus plan. Under the deal, Geely will keep
the brand and operations in Sweden, including Volvo’s headquarters, production
facility and research centre, intact after the acquisition. “[Geely] will keep
the core value of Volvo as a luxury brand unchanged, while improving it with the
development in emerging markets, and add more fashionable, dynamic and
passionate international elements,” said the document. Volvo is expected to post
earnings before interest and tax (EBIT) of US$703 million in 2015, the document
said. A Geely representative declined to comment. Among other deals involving
mainland vehicle makers, Sichuan Tengzhong Heavy Industrial Machinery is in the
process of buying GM’s Hummer brand, though that deal has yet to close and GM
said earlier this month it is still awaiting approval by mainland regulators.
Last month, Beijing Automotive Industry Holding Corp (BAIC) sealed a deal to buy
technology from GM’s Saab unit for US$200 million, saying it would use the
technology to launch an aggressive campaign to develop its brand both at home
and overseas. The buying spree comes as mainland zoomed past the United States
to become the world’s largest auto market last year. Vehicle sales in the
country jumped 46 per cent to a record 13.6 million units for the year,
according to the China Association of Automobile Manufacturers, well above the
10.4 million cars and light trucks sold in the battered US market. Analysts
expect mainland’s car sales to continue growing this year under renewed
government incentives, though they expect the growth rate to slow to about 10
per cent.
Experts from China and
Taiwan on Tuesday launched the first round of talks aimed at paving the way for
a major trade pact between the one-time rivals, both sides said. Zheng Lizhong
(R), executive vice president of the Chinese mainland's Association for
Relations Across the Taiwan Straits (ARATS), shakes hands with Kao Kung-lian,
vice chairman and secretary general of Taiwan's Straits Exchange Foundation (SEF),
during the first expert discussion in talks on the Economic Cooperation
Framework Agreement (ECFA), an economic deal which is expected to boost the
cross-Taiwan Straits economic ties, in Beijing, capital of China, Jan. 26, 2010.
Chinese vice premier calls
for closer economic ties with Switzerland - Chinese Vice Premier Li Keqiang (L)
shakes hands with Gerold Buehrer, president of Economiesuisse during a dinner
party held by the Economiesuisse, the Swiss Business Federation, at Zurich on
Jan. 25, 2010. Li Keqiang arrived here on Monday for a four-day official visit
to Switzerland, during which he will also attend this year's World Economic
Forum (WEF) annual meeting in Davos. 
Premier Wen jiabao visits
blizzard-hit Xinjiang, promising relief measures.
Avatar's
success brings fame to Chinese mountain - This photo shows the floating
Hallelujah Mountains in the film "Avatar" (left) and a mountain in China's
Zhangjiajie area. The global blockbuster Avatar is so successful that local
residents in central China want their mountains to be named after the floating
rocks in the movie, "the Hallelujah Mountains." Hundreds of locals in ethnic
Tujia costumes launched an "official ceremony" Monday to rename the Qiankunzhu
mountains, prototypes for "the Hallelujah Mountains." The peak is 1,074 meters
above the sea level and one of more than 3,000 mountains in the Yuanjiajie
Scenic Spot, the core area of the World Natural Heritage Wulingyuan Scenic Zone
in Zhangjiajie City, Hunan Province. Hollywood photographers spent four days
shooting there in 2008. His pictures became the prototypes for many elements in
"Avatar", said Song Zhiguang, director of the Yuanjiajie Scenic Spot
Administration.
Workers are seen on the
Bund in Shanghai municipality of east China, Jan. 26, 2010. The reconstruction
of the Bund, the landmark of Shanghai and EXPO 2010, is to finished by the end
of March.
A worker walks on the
Bund in Shanghai municipality of east China, Jan. 26, 2010. The reconstruction
of the Bund, the landmark of Shanghai and EXPO 2010, is to finished by the end
of March.
A worker is seen on the
Bund in Shanghai municipality of east China, Jan. 26, 2010. The reconstruction
of the Bund, the landmark of Shanghai and EXPO 2010, is to finished by the end
of March.
The Bund is seen in
Shanghai municipality of east China, Jan. 26, 2010. The reconstruction of the
Bund, the landmark of Shanghai and EXPO 2010, is to finished by the end of
March. 
A local farmer airs newly-made red
lanterns at a big yard in Hongmiao Village in Huairou District in Beijing, the
capital of China, Jan. 26, 2010. The mountain village enjoyed a long history for
producing Chinese traditional red lanterns in winter to meet the large demand
from the festival market as the Spring Festical, the Chinese lunar new year,
approaching. 
Hongkongers might get faster help
if they run into trouble overseas under an Immigration Department idea to keep
details about travellers' itineraries and their emergency contacts. The details
would be submitted on a voluntary basis and put into a new electronic database,
which officials said could help locate travellers in dangerous areas. The
initial idea is to send alerts via mobile text messages and leave information
about emergency assistance, deputy director Chan Kwok-ki said yesterday. At
present, the department does not keep a record of outbound travellers'
destinations or their contact information. In urgent cases, officials contact
the families. "We want to give swift aid to travellers in emergency situations
and we need to know where they are," he said. It would be up to individuals to
decide whether to supply the information, Chan said. Director Simon Peh Yun-lu
said the department would also make improvements to its 1868 hotline - an
emergency number for travellers overseas - this year. Teams would be set up to
provide additional manpower to handle assistance calls and public inquiries in
emergencies. The assistance to Hong Kong residents unit, which handles the
hotline, received 1,519 calls from residents last year, 62 of which related to
traffic accidents and 551 concerned the loss of travel documents. Launched in
August 2005, the hotline has received more than 5,000 calls from residents who
ran into trouble abroad, including those relating to a fatal traffic accident in
Egypt in 2006 and the Sichuan earthquake in 2008. Meanwhile, about 100 officers
received training last year in preparation to take over management and operation
of the Castle Peak Bay Immigration Centre, Chan said. The detention facility,
currently managed by the Correctional Services Department, holds immigration law
offenders who are awaiting deportation. The Immigration Department is expected
to assume responsibility by April. Chan said the officers had received tactical
training and been taught the necessary skills to maintain order at the facility,
including how to use handcuffs, pepper spray and other weapons. "Our use of such
equipment will be on a par with Correctional Services," he said.
Former CITIC Pacific boss Larry Yung
Chi-kin emerged victorious yesterday after three minority shareholders suing him
said they will discontinue their action. The move came after the Small Claims
Tribunal agreed to a bid by Yung to move the lawsuit to the High Court. "The
case involves complex legal issues that the tribunal didn't have the resources
to investigate," Hong Kong Small Claims Tribunal adjudicator Wong Lai-wing said.
Legal representation is not allowed in the tribunal, which hears claims for less
than HK$50,000. Yung, 67, the son of late Vice President Rong Yiren, faced two
retirees and a housewife, who were claiming a combined HK$115,516 in losses on
CITIC Pacific shares after the company disclosed losses related to unauthorized
currency bets. The claimants argued against a move to the High Court, saying
they could not afford the legal fees to fight there. "I feel so disappointed
about the result, this [tribunal] is supposed to be the place where we can find
justice," minority shareholder So Wai-ching said after the hearing. "We don't
have the money to pursue a lawsuit in the High Court, we just have to give up,"
the retired civil servant added. A CITIC Pacific statement dated September 16,
2008 and signed by Yung, said company directors were not aware of any material
adverse change in the financial or trading position of the group. The claimants
called that statement false and misleading information and said they lost money
when they sold shares after CITIC Pacific disclosed its currency trades. The
three shareholders had each bought 5,000 CITIC shares in October. The
adjudicator said the claimants' belief that Yung was responsible for the
company's action is an oversimplification of the law. "The circular was issued
by the company, not the defendant," said Wong before ordering the case to be
transferred to the High Court. Yung said in his filing to the tribunal that he
signed the September 16 statement on September 5, before he was aware of CITIC
Pacific's potential losses from bets the Australian dollar would gain against
the US dollar. CITIC Pacific, which makes steel and develops property, bought
currency contracts to fund an A$1.6 billion iron ore mine in Australia. The
stock slumped 55 percent on October 21, 2008 in Hong Kong trading, six weeks
after the board was informed of its currency troubles. That prompted two
investigations and a bailout from its mainland state-owned parent, CITIC Group.
Police are still investigating the case for possible prosecutions, Secretary for
Financial Services and the Treasury Ceajer Chan Ka-keung said last week. The
Securities and Futures Commission, which has concluded its investigation, may
consider civil proceedings if criminal charges are not brought, according to
Chan.
Hong Kong Disneyland is considering
issuing annual passes for Guangzhou residents in an attempt to boost the park's
attendance and income, its managing director said yesterday. Speaking at the
Legislative Council's economic development panel meeting, Andrew Kam Min-ho
outlined the park's strategies for bringing in more mainland visitors. "We'll
increase our sales offices in the mainland - including a new one in Chengdu - to
increase our coverage in China," Kam said, adding that promotion campaigns would
be held in 24 mainland cities. "For the Shenzhen and Guangzhou market, we're
considering issuing an annual pass to increase their spending in the park."
Currently, overseas tourists can buy an annual pass in Hong Kong and on the
internet. The cheapest adult pass costs HK$650 and is valid on most weekdays;
the deluxe one is priced at HK$1,300; the premium pass, with no entry
restrictions, costs HK$1,800. The one-day admission fee for adults is HK$350.
But Michael Wu Siu-ieng, chairman of Travel Industry Council, said issuing
annual passes for non-residents of the city would be useless in boosting park
attendance. "Even Shenzhen residents who have the multi-entry permits to visit
Hong Kong mainly come here to go shopping. They only go to the park once a
year," he said. "The annual pass should be a privilege for locals." The park
pledged yesterday to boost attendance and the occupancy rate of hotels,
especially in the off season. Secretary for Commerce and Economic Development
Rita Lau Ng Wai-lan told legislators that although the park had yet to break
even, it had brought a lot of tourists and economic benefits to the city. Lau
said more than 700,000 visitors came to Hong Kong because of the theme park last
year, up 17 per cent compared to a year ago. Lawmakers urged Disneyland to
disclose more information to further increase the park's transparency, and the
park said it would inform its shareholders of the request. The meeting was the
first time lawmakers had discussed Disneyland's performance after it opened its
books this month, disclosing a net loss of HK$4.4 billion in the three years to
October. 
The Hong Kong University of Science and
Technology's (HKUST) business school has emerged as the first Asian school to
advance to the top 10 on the annual Financial Times rankings of the world's top
100 MBA programs. Overall, the MBA program at HKUST was ranked ninth and was
tied with the University of Chicago. It was placed 16th last year and 17th in
2008. HKUST was also ranked sixth for the "international experience" its program
offered students. Its ranking for "international mobility", as measured by
employment movements within three years of graduation, moved up two notches to
15th. This year's rankings also saw for the first time three Chinese schools
making it to the top 30. Besides HKUST, the Chinese University of Hong Kong (CUHK)
was also on the list, at 28th. Shanghai's China Europe International Business
School was 22nd. The dean of the HKUST business school, Professor Leonard Cheng
Kwok-hon, said: "We are delighted to have made this remarkable achievement ...
[it] proves that schools in Asia, with determination and sufficient resources,
are well-positioned to play a leading role in global business research." The
dean of the CUHK's faculty of business administration, Professor Wong Tak-jun,
said the ranking was a significant recognition of the faculty's efforts over the
years. "Leveraging our faculty's China focus and extensive alumni network, we
aim to nurture our students' insights in China," Wong said. This year, the
faculty has launched new courses, including corporate risk management, to equip
students on how to cope with the changing global business landscape, he said.
The university said in a statement that despite the financial crisis last year,
47 per cent of its MBA graduates found jobs globally, in 13 countries.
Meanwhile, the London Business School again took the top position in the
Financial Times rankings. Last year, its MBA program shared the top ranking with
the Wharton School of the University of Pennsylvania. Wharton came in second
this year. Professor Sir Andrew Likierman, the dean of London Business School,
said: "Our school is an institution of which we can all be proud." Of the
students last year, 81 per cent found jobs within three months of graduation.
"Considering the economic conditions over the previous year, we are pleased and
proud of our graduates' impressive achievement," Likierman said.
Hong Kong Exchanges and Clearing (SEHK:
0388) will expand yuan-related business and attract more overseas companies to
list in the city over the next three years, according to new chief executive
Charles Li Xiaojia. "The internationalisation of the yuan would be the most
eye-catching development in the global financial market over the next 10 years,"
Li said. "Hong Kong could be the best place for China to expand the role of the
yuan into an international currency." The yuan is not yet freely convertible but
senior mainland officials have declared an ambition to liberalise trade of the
currency and allow it to act as a reserve currency for other central banks over
the long term. "This will be a difficult and lengthy process but this is how
Hong Kong can contribute to the development of China," Li said. Li compared the
HKEx's development of yuan-related business to the introduction of H shares in
Hong Kong in 1993 by then stock exchange chairman Charles Lee Yeh-kwong. "When
we drink the water, we have to think of the one who dug the well," he said. "If
Charles Lee had not dug the well in 1993 to bring H shares to Hong Kong, how
would we have got so many H shares listing here? "We have to dig a well for the
yuan business to let our next generation have the water to drink." But Li
declined to disclose a concrete plan on how the exchange would develop the yuan
business, only saying it would be a long-term strategy. Li and other senior HKEx
management had a brain storming two-day meeting on Friday and Saturday to
collect ideas for the bourse's new three-year strategy. Another meeting will be
held next month. The meeting has set yuan business as a focus for the next three
years. Besides that, the bourse has also reiterated its ambition to attract more
international firms to list here. "Hong Kong is an international financial
centre and it is very important for us to have more international firms to list
here," Li added. Li again said Hong Kong and Shanghai were not competing against
each other but were running a marathon together. "Hong Kong should run faster
and we also want Shanghai to run faster. We should not want the others to run
slowly to let us win the game,'' he said.
Wang Zihua's last pay rise was two years ago, and the 56-year-old Harbin post
office worker is concerned that his 1,200 yuan (HK$1,365) monthly salary is
being eaten away by rising prices. Mainland inflation remains tame, but prices
have been creeping up in the past few months and policymakers may not only have
to step up their rhetoric, but also the pace of monetary tightening, to prevent
Wang's fears from becoming a reality. "I really worry that prices may rise more
quickly in the future, especially for rice, meat and vegetables. After all, we
can skip buying things like clothing and entertainment, but we can't skip food,"
Wang said. Inflation picked up to 1.9 per cent last month, its highest in 13
months, although still low by international standards. Some economists have
dismissed the rise as a result of volatile food prices and bad weather, but
these factors could profoundly affect consumer and corporate behaviour, in turn
determining how fast prices may rise over the next few months. The central bank
has been trying to fulfil its promise to manage inflation expectations by
cracking down on speculation in the property market, curbing rampant loan
growth, guiding market rates higher and lifting bank reserve requirements.
However, double-digit economic growth in the fourth quarter of last year,
accelerating consumer price rises and surging exports all shorten the odds that
the central bank will go further and raise interest rates, perhaps as early as
this quarter. "It's safe to say that this will only increase inflationary
expectations, and inflationary expectations can be self-fulfilling. So there's
no point for them to wait," said Qu Hongbin, the chief China economist with HSBC
(SEHK: 0005) in Hong Kong, of last week's batch of strong economic data. In
fact, food prices rose more than 5 per cent last year - with food accounting for
a third of the consumer price basket - the country is particularly vulnerable to
food price shocks. In 2008, food prices rose more than 14 per cent after pig
stocks were hit by the blue ear disease, driving overall prices 5.9 per cent
higher. What should be particularly unsettling for the People's Bank of China is
that its own survey results for the fourth quarter show an index of future price
expectations outstripping another of future income confidence by the biggest
margin in two years. "If workers expect inflation to increase, they may argue
for higher wages. If corporations see costs going up, they may want to raise
prices," said Peng Wensheng, the chief China economist with Barclays Capital in
Hong Kong. "That channel is particularly important given what happened last year
- expansion of bank credit. That in itself already generated some inflation
expectations." Mainland growth has led the global economic recovery, so how
aggressively Beijing tightens policy is crucial for world markets. Last week,
investors pulled a net US$348 million out of China-focused equity funds, the
most in 18 weeks, fund tracker EPFR Global said in a report. Whether the country
is too slow in responding to the inflation threat is hotly debated, although
analysts agree that it faces a huge challenge. After mainland banks doled out a
record 9.6 trillion yuan in new loans last year, they added 1.1 trillion yuan
worth of credit just in the first two weeks of this month, causing the central
bank to take punitive action against some lenders. Furthermore, with inflation
creeping up, deposit rates provide only 35 basis points worth of incentive for
consumers to keep their money in the bank. That may keep driving savers to
equity and real estate markets in search of higher returns, confounding
Beijing's efforts to tame asset price inflation. Managing inflation expectations
is a long established facet of modern central banking. They are a useful gauge
of real borrowing costs and public understanding of monetary policy. However,
measuring where people and businesses expect prices to go is more art than
science on the mainland. It lacks a market for inflation-linked securities and
has few established surveys to track consumer and business views. Yu Song, a
Goldman Sachs economist, expects prices to rise 3.5 per cent this year -
assuming the government decisively tightens policy. He is concerned the mainland
will not adjust its exchange rate enough to matter and exports will keep growing
rapidly this year. That means the government will try to cool domestic demand
using incremental steps that may be insufficient to keep prices pressures
bottled up. "We may see inflation continuing to rise despite an apparently
tightened policy stance," he said in a research note. 
Confucius, now rehabilitated, may be
back at centre stage of mainstream culture on the mainland but the ancient sage
lags far behind blue-skinned aliens living in the fictitious world of Pandora
when it comes to cinema pulling power. Confucius has taken 38 million yuan
(HK$43.25 million) at the box office since its nationwide premiere on Friday.
That pales in comparison with Hollywood blockbuster Avatar, which raked in 110.5
million yuan in its first three days. Avatar's box office takings on the
mainland now stand at more than US$100 million, making it the most popular movie
there. Even though the authorities have cut Avatar's run short in many cinemas
to give more screen time to domestic films, it is highly unlikely that Confucius
will ever come close to the US movie's record. With a production cost of 150
million yuan, Confucius aims to capture the hearts and minds of the younger
generation, who are increasingly losing interest in traditional culture. The
movie is fast-paced and action-packed, with the leading role played by Chow Yun-fat
- the Chinese-speaking world's most iconic movie star. One of the mainland's
sexiest actresses, Zhou Xun , plays Confucius' lover. Mainland authorities
clearly hoped it would turn out to be a big hit. They made 2,500 theatre copies
of Confucius, almost 1,000 more than for The Founding of a Republic - a
political propaganda film released last year. However, the film is not arousing
much interest among the young. "It sounds too boring to me. When I go to the
cinema I'm looking to relax and have fun, not be lectured about Confucian
teaching," said Chen Jinni , a Shenzhen bank clerk. He said he would rather
watch a comedy, or Avatar in 3D. Sixteen-year-old Li Hua said: "Chow Yun-fat is
too old. He's not popular any more. Watching Avatar is the coolest thing. "I
won't waste my money. Our school organised for us to watch The Founding of a
Republic in September. Maybe the school will organise for us to watch
Confucius." Those who did watch it came back disappointed. "I love history so I
went to watch the film. But I was totally lost ... My boyfriend even fell in
sleep in the middle of it," said Helen Wu, a journalist in Guangdong, Beijing
yesterday reiterated rules that see most screen time given to domestic films.
The State Council also called for steps to boost the mainland film industry,
such as building more digital cinemas and having studios raise funds through
bank loans and by issuing shares and bonds. The statement came after the 2D
version of Avatar was pulled ahead of schedule from cinemas on Friday amid
charges that it had been shunted aside to make way for Confucius.
MTR
Corporation (0066) is inviting developers for expressions of interest in two
residential sites atop its Austin station - the first such move by the railway
operator since the onset of the financial crisis in 2008. 
The yuan business in Hong Kong could be
more "market-oriented" with the market deciding how the Chinese currency should
develop, said Joseph Yam Chi-kwong, former chief executive of the Hong Kong
Monetary Authority. In an exclusive interview with Sing Tao Daily, sister
publication of The Standard, Yam suggested that mainland regulators allow the
yuan to trade and appreciate according to market demand. This, he said, will
speed up the currency's internationalization. Yam was recently appointed
executive vice president of the China Society for Finance and Banking - a
research unit under the People's Bank of China. In his first media interview
since retirement, Yam said he understood Beijing's concerns but said the
authorities should put their minds at ease. "We are confident that the yuan's
offshore market won't have much impact on its onshore market under a logical
arrangement." The yuan business should not be limited to Hong Kong residents, or
only mainland banks and their Hong Kong branches allowed to issue yuan bonds in
the SAR, he added. "We should manage risks, rather than avoid them. There will
be reward after the risk," said Yam, who has focused on developing the yuan
business in Hong Kong since he headed the SAR's de facto central bank. In the
early years of the decade, Beijing approved a series of yuan-related businesses
including deposits, remittances and credit cards. Now the yuan can be settled
globally through Hong Kong's real-time payment system, providing an efficient
and safe platform for transactions. Yam also believes 2010 could be "a year for
an exit policy, as loose monetary policies cannot be maintained amid inflation
and fiscal deficit." And the government should also pay attention to hot-money
fluctuations. Yam said Hong Kong will benefit from China's support. The mainland
has achieved its target of 8 percent GDP growth last year. Hong Kong will be
able to exit smoothly from stimulus measures if China winds down its stimulus
successfully and maintains economic growth. Yam said when he was HKMA chief he
had a host of aides to help him. Now he takes him two hours to do something than
once took just 30 minutes. But retired life is relaxing.
In Hong Kong, a new year usually
requires new money. As the Lunar New Year approaches, the Hong Kong Monetary
Authority and the city's note-issuing banks are busy printing about 200 million
new bills - mostly HK$20 notes - for a total of more than HK$4 billion in new
currency to be used in lai see packets. Most Hongkongers want newly printed
banknotes for their lai see packets, traditionally given to unmarried people as
a gift and blessing in the Lunar New Year. In recent years the Monetary
Authority and banks have been asking customers to accept "almost new" banknotes
instead for environmental reasons. But their advice has not taken hold and new
lai see money is still a big production. It takes roughly 266 tonnes of cotton
to make 200 million banknotes, which occupy 333 cubic metres of storage space
and could fill 13 20-foot containers, according to the authority. "The three
note-issuing banks need to arrange 500 trips with security escorts to transport
these brand-new notes," a spokesman said. In 2006, the authority introduced the
so-called "ying-san note" or "good-as-new" note, hoping to lower costs and
support environmental protection, the spokesman said. "Ying-san notes are
perfectly suitable for use as lai see money. Using brand-new notes for lai see
consumes a great deal of resources. Ying-san notes may help to reduce the
resources and logistics involved." Authority statistics show that on average
about 200 million new banknotes are printed to prepare for the New Year. If they
were all HK$20 notes, the most common type for lai see, the amount would reach
at least HK$4 billion. But considering that some people use HK$50, HK$100 or
HK$500 bills in lai see packets, and others use the ying-san notes, bankers
believe total lai see money may well amount to about HK$10 billion a year.
Authority statistics seem to bear this out. Cash in the form of notes and coins
circulating in the city during the Lunar New Year in January last year increased
to HK$203.45 billion. This was up HK$17.66 billion on the HK$185.79 billion in
circulation a month earlier. Then in February, after people opened their lai see
packets and put the money back in the bank, the cash circulating in the city
dropped back to HK$190.78 billion, or HK$13 billion less. During the two to
three weeks leading up to the Lunar New Year, banks start letting customers
queue up to exchange old bills for new lai see notes. Many banks refused to
disclose figures, but Bank of East Asia (SEHK: 0023) said it needs about HK$400
million in lai see money, with the most popular bills HK$20 and HK$50. Banks
also encourage customers to use ying-san notes. HSBC (SEHK: 0005) imposes a
quota on new notes but not on ying-san bills. "Many customers are
environmentally aware and choose to opt for the ying-san note over the new
notes," a spokesman for HSBC said. But not everyone. "Some customers are not
willing to accept non-newly printed notes," a spokesman for BEA said. "It is
difficult to change tradition overnight. For environmental protection, we hope
our customers can gradually change the habit of using only new notes for lai
see." Derek Yung Kai-ming, chief executive of Prudential Assurance Hong Kong,
said he would not mind using good-as-new ying-san notes. "The lai see packets
are to send out your blessing to the others in the Lunar New Year and I do not
think it needs to be brand-new money," Yung said. Most Chinese companies will
also give a "start working lai see" to all employees on the first day back at
work after the Lunar New Year. Prudential, for example, gives lai see to all its
4,000 agents. "I do not think the staff or agents will mind if the banknotes are
brand new or not," Yung said. "For environmental protection reasons, maybe we
should use the ying-san notes more." Max Chan, an executive of a listed company,
said he would usually like to use newly printed bills for lai see packets but he
would accept the ying-san notes provided they were in good condition. "However I
would not accept the very old and dirty HK$20 notes because it is not good to
send out very shabby banknotes in the Lunar New Year," Chan said. On the other
hand, "if I send out lai see packets with HK$100, I would not care if they are
new notes or not. The value is high enough to make sure the one who receives the
lai see will be happy". 
The finance chief has defended his comic-book bid to generate young people's
interest in his upcoming budget. John Tsang Chun-wah also says he does not mind
being turned into a "spirit" by netizens because it creates discussion. Tsang
was slammed last year for using a comic strip to solicit views. However, he said
in his blog the response to his move is good and he feels the end justifies the
means. Distribution of 30,000 free copies of this year's financial comic strips
to schools and the 18 district offices began two weeks ago. "Some people say it
is not sufficiently serious to conduct consultations by means of a comic,
fearing that some concepts may be too simplified," Tsang wrote in his blog. "But
I believe that this kind of consultation is meaningful as long as we truly want
to know the views of the public." His budget, due to be released on February 24,
is widely expected to have measures to help the poor. Chief Executive Donald
Tsang Yam- kuen hinted as much earlier this month when he told legislators
during a question-and-answer session he is studying further relief measures to
help the poorly paid and exploring more communication channels with youngsters.
John Tsang also said in his blog he does not mind being turned into a spirit in
a separate budget consultation advertisement that has been modified by one or
more netizens. In a modified advert on YouTube, Tsang first pops up as a spirit
between two diners discussing social welfare measures in a Hong Kong-style cafe,
or cha chaan teng. He then appears as a headless spirit who can be recognized
from his speech, in another clip featuring two fencers in action and a spectator
voicing the hope more resources can be put into education. Later, Tsang appears
with his arms extended and his face turning a bluish- green as two office
workers express the hope government will boost the economy and improve the job
market. In response to the 31-second video, which has so far attracted more than
46,000 hits, he said: "I definitely don't mind. My goal has been partially
achieved as the promotional video has aroused public interest and discussion."
This year's budget comic, written by Keith Ho and illustrated by manga artist
Michael Fong, continues the adventures of main character Yat, who faces problems
when preparing the budget of a university students' engineering club. In the
story, Yat travels back to the Three Kingdoms era, 220AD to 280AD, to seek
insights. 
A
new online submission system and the launch of an international competition for
short films has resulted in a dramatic increase in the number of films seeking a
place at this year's Hong Kong International Film Festival, more than doubling
last year's tally to 804. However, fierce competition between the films is
expected because only about 200 will be accepted by the festival, which
celebrates its 34th anniversary this year. Organisers said films from North and
South America, Europe and Australia were mainly responsible for the increase in
submissions. The 804 films come from 69 countries and regions, compared to last
year's 365 films from 50 countries and regions. Among them, 602 are feature
films. Some 202 short films have been submitted, up from last year's 59. The
executive director of the Hong Kong International Film Festival Society, Shaw
Soo-wei, said the number of submissions reflected the city's important position
in the Asian film market. "Hong Kong being at the crossroads of commerce with a
long history in filmmaking, the HKIFF represents a destination to capture the
fastest-growing markets, co-production opportunities and film project financing
in Asia," Shaw said. The artistic director of the society, Li Cheuk-to, said the
sharp increase in submissions was largely because of the inaugural short film
competition, which opens a new door to many young filmmakers. Li said the new
online submission channel helped filmmakers, allowing them to upload their films
online rather than having to send DVDs. Although Asia, particularly China, was a
growing market for films, the increase in the supply of films from the region
was not as strong as that from Western countries, Li said. "It shows that
Western countries, especially developed English-speaking countries, are still
major suppliers of films, and the Asian market is a good market for them," he
said. This year's submissions cover a much wider variety of themes than in
previous years, Li said, adding that he held high hopes for the short film
competition. Since the organisers have decided to cut this year's festival by
six days to 17 days, only about 200 films will be shown, compared to 300 in
previous years. Li said the shortening of the festival brought it into line with
its duration when it was operated under the Leisure and Cultural Services
Department. As well as selecting films from submissions for showing, organisers
will invite specific films to participate in the festival. The programme will
not be published until February 25. However, one film has been confirmed - the
Asian premiere of the fully restored version of Fritz Lang's masterpiece
Metropolis, to screen on April 1. The screening of the silent film, which had
its world premiere in Berlin 83 years ago, will be accompanied by the live
performance of the original score by Gottfried Huppertz, a close collaborator of
Lang. The Hong Kong Sinfonietta, directed by renowned conductor Frank Strobel,
will perform the score. The festival will run from March 21 to April 6. 
Hong Kong Disneyland's net losses of
HK$4.4 billion in the past three years is at "the high end of the scale", but
could be corrected by reinvestment and increased market penetration, a theme
park veteran says. "By the third year a park should be profitable," Darrell
Metzger, the International Association of Theme Parks and Attractions' immediate
past chairman said in an interview. Metzger worked in the Disney resorts in
California and Tokyo for 10 years before running Ocean Park from 1991 to 1995.
He also managed Sentosa Island Resort in Singapore for nearly seven years from
2001. Based on information revealed by Disneyland last week and a confidential
document, which was seen by the South China Morning Post earlier, the theme
park's HK$4.4 billion in losses does not include its first year when its loss
was believed to be HK$1 billion or more. "Substantial losses for three years
would indicate a more fundamental problem," Metzger said. He said Hong Kong
Disneyland had found it difficult to "steal" loyal clients from Ocean Park and
had to rely on broadening the market. One area Disney had to look at was its
hotel occupancy rate, which dropped to 70 per cent last year because of the
prevalence of human swine flu. By comparison, Disney hotels in Orlando and Tokyo
usually had occupancy rates of between 80 per cent and 90 per cent. Metzger said
Disney themed hotels required a higher occupancy rate because they had the added
costs of providing entertainment such as appearances by Disney characters, which
was more expensive than any five-star competitor would dare to spend. Hong Kong
Disneyland last year attracted 4.6 million guests, with each visitor spending an
average of HK$552. Raymond So Wai-man, associate professor of finance at Chinese
University, estimated that the park could break even if it boosted either the
attendance figure or average spending figure by 50 per cent to HK$828 per capita
spending or 6.9 million guests. "Obviously, it's impossible to achieve that in a
year," So said. "Under the most optimistic scenario, the number of guests will
surge to 6.9 million visitors by 2014 if the attendance increases by 10 per cent
year on year from now on." Disneyland's management has forecast that it will
break even after 2014 when a HK$3.63 billion expansion is completed. Metzger
agrees with this projection, saying the theme park "will be approaching
break-even or mild profits in the next five years". Now based in California, he
said the challenge to increasing attendance was in luring more visitors during
non-peak dates, which required a solid and consistent marketing and sales
strategy. Metzger expects Disneyland to be a must-see Hong Kong attraction for
tourists in 10 years. He believed the park helped enrich Hong Kong as a tourist
destination and was "characteristically ahead of the curve" with Singapore
opening Universal Studios this month and South Korea in 2014, as well as
Shanghai Disneyland opening in several years. Legislators will discuss
Disneyland's performance at today's meeting of the economic development panel.
What goes around comes
around. Having angered hundreds of people with the editing of the live broadcast
of the Hong Kong Film Awards last year, TVB (SEHK: 0511) has finally lost the
game to ATV, which will be airing the awards show for the first time in 14
years. According to a person familiar with the situation, ATV has won the tender
for the exclusive rights to broadcast this year's awards show on free
terrestrial television by default. The source said TVB lost the rights not
because it was unwilling to pay the seven-digit fee for the rights, but because
it made some technical mistakes when submitting its tender. He did not elaborate
on the mistakes. The news of ATV winning the rights was welcomed by many in the
industry, the source said. "Many have been unhappy with TVB's treatment of the
Hong Kong Film Awards as it showed a lack of respect to the organisers and the
film industry while scoring a lot of advertising dollars with an awards show
funded by public money," the source said. The Hong Kong Film Awards received a
HK$5.85 million subsidy from the Film Development Fund last year. Hundreds of
viewers complained to the Hong Kong Film Awards Association about TVB's handling
of last year's awards show, in which a segment paying tribute to filmmakers who
had died in the past year was edited out to accommodate commercials. TVB, which
ended its three-year contract with the association after last year's ceremony,
also shortened Josephine Siao Fong-fong's acceptance speech for a life-time
achievement award and cut out a speech by ATV veteran actress Nina Paw Hee-ching,
who won best actress. The association subsequently held an open tender for this
year's broadcast rights. ATV said it will assist in producing the ceremony but
the association will call the shots. The broadcaster said it will not edit out
any segments without the organisers' consent. TVB could not be reached for
comment. The association said details of this year's broadcast rights will be
announced at a February 9 press conference, at which the year's nominations
would also be unveiled. 
Health chief urges pregnant women: Get
the jab - Worried mothers-to-be are being urged to set aside unproven concerns
that the human swine flu (H1N1) vaccination can hurt the unborn and to go ahead
and get the jab. The plea was made as Hong Kong's health chief said it would
have been "irresponsible" if the government had not advised pregnant women to
get vaccinated against H1N1 for they have a much greater risk of serious illness
than most people if they are stricken with the pandemic flu. Secretary for Food
and Health York Chow Yat-ngok was defending the vaccination policy after two
women suffered stillbirths on a single day last week. That was just weeks after
they received the jab. A 33-year-old woman lost her 37-week unborn baby on
Tuesday after receiving the vaccine on December 27. But she was suffering from
gestational diabetes when admitted to Queen Elizabeth Hospital, health
authorities said at the weekend. On the same day, a 37-year-old woman suffered a
stillbirth at Tuen Mun Hospital. She got the jab on December 28. "We still have
not been able to confirm the cause of death," Chow said of the Tuen Mun case,
but he insisted no evidence has been found to connect the stillbirth to the
vaccine. Investigations for common causes of stillbirths - including infection
and genetic and metabolic disorders - are being carried out in both cases. From
150 to 220 stillbirths are recorded in Hong Kong every year. Meanwhile, Chow
said there is no scientific evidence and therefore no reason to change the
vaccination policy for high-risk groups. Pregnant women have 10 times the risk
of serious complications from the flu that require hospital attention, he said,
and in some cases the virus means death. "If we did not have [this policy] it
would be irresponsible," he said of the recommendation that pregnant women be
vaccinated. Worldwide, there has not been confirmation of any flu vaccine
causing fetal deaths - a fact that had Chow cautioning: "We must be very careful
to draw conclusions." Chow's plea was echoed by Shane Solomon, chief executive
of the Hospital Authority. He urged pregnant women to receive the jab because
the risk of them needing intensive care in hospital is 10 times greater than
that other people face. While pregnant women remain high on the flu fighters'
worry list, fears are easing over youngsters because many have built up an
immunity to H1N1. If recommendations by scientific committees of the Centre for
Health Protection are accepted, primary school children will not be a target of
a mass- vaccination program. The committees examined "local serology data, which
show that about half of the children have adequate antibody levels," a spokesman
said. That suggests "a substantial number" already have immunity against the
coming second wave of flu. So "the scientific committees do not regard primary
school children as a special target group recommended for vaccination."
A security row is cooking
after pictures of teens posing in restricted areas of Government House surfaced
on Facebook. The group posted on the internet 40 pictures of themselves having
fun at the expense of somber officialdom. The group of around 10 teens, a child
and a dog is believed to have been attending a barbecue in the staff quarters of
Government House when they were given access to the restricted zones of Donald
Tsang Yam-kuen's official residence. They made the most of their photo
opportunity by posing everywhere - in a ballroom, the kitchen, and next to
senior government officials' private lockers. Others included some of the
youngsters pretending to be the chief executive hosting senior officials and at
a mock flag-raising ceremony. Some photos were taken in front of a present of
calligraphy by former president Jiang Zemin that read "Tomorrow will be better,"
as well as close-ups of Tsang's pet koi. Their green "visitor" badges were
clearly visible in a picture taken in the kitchen, although the date of their
recent visit is unknown. A Chief Executive's Office spokesman said it is
investigating how the group gained access to forbidden and private areas of the
chief's home. The youths had been guests of a resident domestic worker. "We will
talk to the domestic worker [today] to investigate why such photos were taken,"
the spokesman said. "The chief executive is totally ignorant of the incident."
He added that staff living in the dormitory are allowed visitors though the
photos appear to suggest someone was showing them around restricted areas.
"Government House is a somber place which all visitors should respect," he
added. It is the first known incident of a breach of restricted zones of
Government House, though there have been several such incidents overseas. In
November, a couple gatecrashed a White House state dinner and met President
Barack Obama and his deputy Joe Biden. The US Secret Service only knew of the
"scoop" after the couple uploaded their pictures with some of the most powerful
people in the world on Facebook. In May, a royal chauffeur gave two undercover
journalists a tour of Queen Elizabeth's stable of cars at Buckingham Palace.
They got into the grounds without being searched and walked right past a
uniformed police officer in a security booth. 
Hong Kong actor Chow Yun-Fat and
Chinese mainland actress Zhou Xun pose during a news conference for their movie
"Confucius" in Hong Kong January 25, 2010.
Beijing widened its attack against US
criticisms of internet censorship on Monday, raising the stakes in a dispute
that has put Google in the middle of a political quarrel between the two global
powers. China has stepped up its defence of curbs on the internet nearly two
weeks after the world’s biggest search engine provider, Google, said it wanted
to stop censoring its Chinese Google.cn website and was alarmed by online
hacking attacks from within China. Google’s complaints received backing from the
White House, but China countered with accusations that Washington was using the
internet to support subversion in Iran. The dispute has stoked friction between
Beijing and Washington, already wrestling over trade, US weapons sales to Taiwan
and human rights. The rising heat over the internet feud could narrow room for
both sides to back down quietly while they seek to cooperate on broader
financial and diplomatic worries. “The more this case takes on high-level
political import for the Chinese government, the more likely it is to stick to
its guns,” said David Wolf, president of Wolf Group Asia, a Beijing-based
company that advises investors on China’s media and telecommunications sectors.
“The Chinese government can’t be seen as backing down on such a fundamental
issue,” said Wolf. US Secretary of State Hillary Clinton last week urged China
and other authoritarian governments to pull down internet censorship, drawing a
sharp rebuke from Beijing. After Google first made its criticisms, Beijing was
tight-lipped. Now Chinese officials have decided to swing back at Washington. In
the latest jab, a spokesperson for China’s State Council Information Office said
the nation “bans using the internet to subvert state power and wreck national
unity, to incite ethnic hatred and division, to promote cults and to distribute
content that is pornographic, salacious, violent or terrorist”. The comments
from the unnamed spokesperson were issued on the central government’s website.
“China has an ample legal basis for punishing such harmful content, and there is
no room for doubting this. This is completely different from so-called
restriction of internet freedom,” the spokesperson said. The government comments
were accompanied on Monday by scathing official newspaper commentaries aimed at
Washington. “This year, we’re seeing problems over trade, the Dalai Lama, and US
weapons sales to Taiwan coming to the surface,” said Jin Canrong, a professor of
international relations at Renmin University in Beijing. “The politicisation and
ideological turn of the Google case could make it more difficult to work
together. The basic need for co-operation, economically and diplomatically,
hasn’t changed, but each of these issues could disrupt co-operation from day to
day.” President Barack Obama may meet the Dalai Lama, Tibet’s exiled Buddhist
leader, in coming months. Beijing calls the Dalai Lama a dangerous separatist
for seeking Tibetan self-rule, and is sure to be angry about such a meeting.
Washington has also unveiled arms sales to Taiwan, the self-ruled island Beijing
regards as a renegade province. The State Council Information Office is the
cabinet arm of China’s propaganda apparatus, which is steered by the Communist
Party, and is one of several agencies behind internet policy. The latest
comments from China made no direct mention of Google or Clinton. They appeared
intended to amplify the government’s case that its internet controls are for it
to decide, and expressing non-violent views online can be a crime in China.
China has jailed dissidents and advocates of self-rule in Tibet who have used
the internet to challenge Communist Party policies and one-party rule. Late last
year the country’s most prominent dissident, Liu Xiaobo, was jailed for 11 years
on charges of “inciting subversion”, largely through essays he published on
overseas internet sites. On Sunday, the People’s Daily, the mouthpiece of the
Communist Party, accused the United States of exploiting social media, such as
Twitter and YouTube, to foment unrest in Iran. On Monday, the paper said
Washington was hypocritical about internet controls, noting the US has laws
seeking to restrict images and words that can be seen by children. “This
‘internet freedom’ that is being promoted everywhere is nothing more than a
foreign policy tool, a fantasy of freedom,” said a commentary in the paper.
Since Google said it could pull back from China over censorship and hacking, the
company has stressed it wants talks with Beijing seeking ways to defuse its
complaints. But, especially in ideologically-sensitive sectors such as the
internet and media carefully watched by the Communist Party, foreign companies
can find political uncertainties never far from the negotiating table. “Google
may look back and see it pursued an ill-advised course by bringing in the US
government in such high-profile way,” said Wolf, the industry consultant. China
has blocks YouTube, Twitter and Facebook, and imposes a “Great Firewall” of
filtering to stop citizens seeing banned images and ideas on overseas websites.
On Monday, China’s Ministry of Industry and Information Technology, rejected
suggestions the government was behind the sophisticated hacker attacks described
by Google. 
Li Na upset Caroline Wozniacki 6-4, 6-3 to join
compatriot Zheng Jie in the Australian Open quarter-finals on Monday, the first
time two Chinese players have made the last eight of the same grand slam. In a
match in which both players struggled to hold serve, the big-hitting Li grabbed
the momentum to seal the first set then raced to a 2-0 lead in the second.
A tower constructed by China's
state-owned television broadcaster as part of its new headquarters, gutted in a
spectacular fire last year, will be rebuilt and not demolished, state press said
on Monday. Much of the north tower of the new China Central Television (CCTV)
complex will be stripped of everything but its main structure, which was not
seriously damaged in the deadly blaze, and rebuilt, the Beijing News said.
Travel peak for upcoming Spring
Festival starts in E China.
The Chocolate Wonderland
will finally open to the public on the square at the north side of the Bird's
Nest Stadium on January 29th. As the first chocolate theme park in China, the
Chocolate Wonderland will feature artifacts made from 80,000 kilograms of
chocolate. Aside from enjoying a visual feast of chocolate-made famous Chinese
sculptures, visitors will also be able to learn how to make chocolate and taste
their creations during the three-month display. The 20,000-square-meter
chocolate wonderland consists of five indoor halls, including the World's
Chocolate Hall, World's Candy Hall, Wonderland Theme Hall, Sweet Experience Hall
and Sweet Gift Hall, and outdoor activity areas Sweet Stage and Sweet Shopping
Street. The chocolate exhibition includes the largest chocolate replica of the
Great Wall in the world; life-sized chocolate replicas of the Terracotta
Warriors and chocolate waterfalls. Zheng Yaoting, general manager of
Beijing-based Artsource Planning Company, says all the chocolate comes from
Belgium, and costs more than 200 yuan a kilo. A regular ticket for the Chocolate
Wonderland will cost 80 yuan, while it will be 60 yuan for the elderly and other
concessionary groups.
Chinese Premier Wen Jiabao (3rd L)
visits Kazak shepherds at a village in the suburbs of Altay, northwest China's
Xinjiang Uygur Autonomous Region, on January 23, 2010. Wen visited blizzard-hit
Xinjiang on Saturday and Sunday. Chinese Premier Wen Jiabao has promised to take
effective measures to help people through the worst snow in Xinjiang in six
decades, said a statement from the State Council General Office Monday. Wen
visited Altay and Tacheng, two regions in northwest China's Xinjiang Uygur
Autonomous Region, on Saturday and Sunday, the statement said. "The Spring
Festival (China's Lunar New Year holiday) is drawing near. We must implement
well relief measures and make sure that people in blizzard-hit regions will have
a peaceful and happy festival," said the Premier at a meeting with Xinjiang
officials on Saturday evening. The central government would provide more support
to affected regions, including funds and relief materials, he said. 
Guangzhou Automobile Group Co,
the Chinese partner of Japanese car giants Toyota and Honda, plans to sell
shares in Hong Kong, seeking foreign capital to boost its domestic expansion.
China's sixth-largest automaker will go public in Hong Kong through a backdoor
listing using its Denway Motors unit, Denway said in a statement to the Hong
Kong Stock Exchange on Friday. However, the listing would not offer shares for
public subscription, said Denway. Denway shares, which doubled last year, jumped
7.58 percent to HK$4.97 (64 cents) in Hong Kong on Friday after the announcement
and amid expectations Guangzhou Auto would pay a premium to take it private.
Guangzhou Auto now holds a 37.9 percent stake in Denway, a Hong Kong-based
investment company controlling units and associates engaged in vehicle
manufacturing and trading, according to the company's website. Guangzhou Auto
will also exchange shares for stock in Denway Motors Ltd which may or may not be
at a premium to Denway's current trading price, said Denway, adding that the
ratio of the share exchange would be determined after the Hong Kong bourse
approves the listing. Guangzhou Auto submitted an application for a share sale
to Hong Kong's stock regulator on Jan 19, according to the statement. "A
backdoor listing would not generate any cash for the moment, but Hong Kong is
obviously an ideal funding platform for the automaker in the long term," John
Zeng, an analyst with IHS Global Insights, was quoted by Bloomberg as saying.
Such a listing would also allow Guangzhou Auto to simplify its structure for
investors by taking away its listed Denway unit, and replacing it with shares in
the parent company. Last year, Guangzhou Auto started aggressive expansion
initiatives in the mainland in the hope of raising its competitive edge among
the over 100 industry players across the country. In May, it bought a 29 percent
stake in sports utility vehicle maker Hunan Changfeng Motors Co to become the
firm's biggest shareholder, promising to triple its annual production capacity
within three years. 
It would have been standard for many boys and girls in Hong Kong - parents
nagging them to stop reading comics or watching cartoons and do something
useful. But for Arnold Wu King-lok, Japanese animation was the inspiration for a
life-long passion for building electronic robots. Wu's favorite is the Juohmaru
series, and it is one of his aims to build a robot based on the character.
Juohmaru is a fictional model robot in a 1983 Japanese television series,
Plawres Sanshiro. What impressed Wu about the series was the main character's
ability to control his robot with a notebook computer, so he vowed to build a
similar prototype. A quarter of a century has passed but the 36-year-old still
has the same goal. In 2008, he set up a workshop in Kwun Tong, where he and a
couple of dozen other enthusiasts gave vent to their passion. Wu beams with
pride as he displays a small army of his robots, each meticulously
hand-assembled and fitted with dozens of servo motors and integrated-circuit
chips connected by bundles of colourful cables. One of these, probably Wu's
favorite, is imposing and menacing, with a pair of eye-like LEDs. Wu says his
hobby is fairly affordable as each figure costs a few hundred to a couple of
thousand dollars to build. And the components can be reused to build new models.
"The greatest satisfaction comes more from the process of building the robot
rather than the end product," Wu said. "You start with an abstract concept, then
you design and build the circuitry, joints and body parts. After countless
trials and errors, and solving one problem after another, you finally succeed.
That is a very satisfying experience." Wu says robot-building is not a nerdy
loner's pastime, and he has used it as an opportunity to build a wide social
network. Two years ago, he started the RoboDream Workshop in an industrial
building in Kwun Tong, with heavy-duty drills, oscilloscopes and other equipment
which enthusiasts use when they meet to assemble robots. But he insists that his
family comes first. "Sometimes, my wife will complain. But the hobby does not
affect my family life," he said. Wu's experiment with robotics began in 1986
when he bought an Apple IIe computer. Unlike other fledgling computer
enthusiasts at the time, many of whom were busy writing programs for computer
games, Wu was more interested in using his state-of-the-art machine to
manipulate electronic toys. Among his earlier projects that were exhibited at
the Hong Kong Joint School Electronics and Computer Exhibition, one involved a
robot arm and a device that printed the Braille alphabet for the blind from
ordinary text. At the age of nine, Wu took an illustrated book of electronic
projects from a rubbish bin, and began to build gadgets from it. And in
secondary school, he was chairman of an electronics club. Wu learned metalwork
and carpentry at a technical school, and is a self-employed interior designer.
Sometimes, he is able to apply the skills of his hobby to real life, like when
he helped a friend build robot elves for a Christmas event in Disneyland's Small
World. And he wants to apply his robotics skills to help others, such as those
with disabilities, he said. Maily Liu, of the Hong Kong University of Science
and Technology, who helps organise the Robocup Junior Hong Kong, an annual robot
tournament for students of all levels, says the hobby of building robots has
grown in popularity. "Last year, there were more than 130 teams from 69
secondary and primary schools participating in the competitions," she said. "In
the past, the robots' movements were a bit stilted, but recently, the motions
have become more human-like."
For 72-year-old Yu Tai, scattering her husband's ashes into the sea yesterday
after a simple, 10-minute ceremony seemed a natural choice. "Humans belong to
nature. It's good to return to nature when you die," Yu said. Yu was a member of
one of six families on the government's first free ferry service for burials at
sea. After the 35-minute boat ride from the Sai Wan Ho public pier to the east
of Tung Lung Chau, the families prayed and burned joss sticks. The vessel paused
as each family took about 10 minutes to perform a simple ceremony. They
scattered the ashes of their cremated relatives into the sea, using a
1-1/2-metre half-tube. Only human ashes and a handful of flower petals were
allowed to be scattered into the water. Lau Oi-wan, who scattered her mother's
ashes from the ferry, said sea burials were cheaper and saved waiting for an urn
in a columbarium. "It takes a long time to get an urn. I don't come from a rich
family - we would need to save up to buy one, they're very dear," she said. The
new service will run every Saturday at 9am. Each boat trip will take up to 10
family groups, limited to seven family members, relatives or friends. The free
boat service has been contracted out for a year at a cost of about HK$180,000.
Tang Pui-han, who was also aboard the ferry, said sea burials had a practical
advantage - saving space. "You need space to build columbariums. It wastes land.
But sea burials save land so that it can be used for other purposes," she said.
However, Food and Environmental Hygiene Department director Cheuk Wing-hing said
sea burials would not replace urns. "We will try our best to provide more urns
to meet public needs," he said. "We are not using sea burials to replace urns -
we're just providing another choice." The Hong Kong Sea Burial Service Centre
has provided ferry services for sea burials since 2006. Centre social worker
Chan Fuk-chi said the government should loosen regulations for memorial services
at sea. "People have different religious beliefs. Christian families want to
have a pastor present, while other religions want to burn offerings. The
department's memorial ceremony is too simple. We should respect the wishes of
the deceased," he said. Cheuk said allowing pastors on board would be considered
in a review of the service. St James Settlement social worker Gary Sham Chi-wing
welcomed the free service and said it would help poor families. "Those families
who have financial difficulties will benefit," he said. "But sea burials will
not solve the urn shortage issue. The government should act to solve that."
Since July 2007, Hongkongers have been able to apply to scatter the ashes of
relatives at three maritime locations: areas east of Tung Lung Chau and Tap Mun
and one south of the West Lamma Channel. 
Locals dominate Bruce Lee
contest - Architects from Hong Kong, Poland and Shanghai were named the winners
in the professional category of a competition calling for ideas on the best way
to restore Bruce Lee's former home in Kowloon Tong. Hongkongers made a clean
sweep of the open category. The Ideas Competition for Bruce Lee's Residence drew
more than 140 entries from around the world. It was jointly organised by the
Institute of Architects, the Institute of Planners and the Institute of
Surveyors, with support from the Tourism Commission. However, the organisers
said the designs were just ideas and would not necessarily become a reality.
Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan said the
entries reflected one of Lee's best-known quotes: "As you think, so shall you
become." She said the strong response from more than 20 countries - including
African nations, Greece and the Netherlands - showed Lee's widespread influence.
With the competition wrapped up, Lau would not disclose whether the two-storey
house at 41 Cumberland Road, which was at one time a love hotel, would be
restored as a memorial hall for the film and martial arts legend. Lee spent his
final years there before his death in 1973 at the age of 32. Current owner Yu
Pang-lin has agreed to donate the HK$100 million property. He said he had been
negotiating with the government on the restoration plan and hoped it could go
ahead as soon as possible. "I'm in my 80s now, and I hope to see this project
completed in my lifetime," Yu said. Hong Kong team Jimmy Yuen Gi-tsun and Cheung
Kwai-yin's Journey of Little Dragon won first prize in the professional
category. Yuen, a 34-year-old landscape architect, said he was a fan of Bruce
Lee. The local team's design - featuring an undulating structure resembling a
dragon's body - caught the eyes of judges, including Lee's daughter, Shannon.
"I'm very excited. This is totally unexpected," Yuen said, after receiving a
trophy and the HK$50,000 prize. Polish architect Witold Opalinski's design won
second prize and HK$25,000. It also resulted in his first trip to Asia, and
today he will visit Lee's former home for the first time. Opalinski, 31, said he
admired Lee and had spent nearly three months working on his design, which
incorporates the concept of yin and yang. The third prize was awarded to a team
from Shanghai. Yu had planned in 2008 to sell the house and other properties to
raise funds for Sichuan earthquake victims, but he decided not to go ahead with
the sale after receiving pleas to preserve the property. He later proposed to
increase the floor space to 30,000 sq ft and turn it into a museum complex with
a cinema, library and martial arts center. All entries are on show at City Hall
until February 4, the Hong Kong Cultural Centre from February 9 to 16, and the
Sha Tin Town Hall from February 23 to March 6.
One of the
features of the 2008-09 global financial crisis was the decline in prices across
asset classes as investors shunned risk, casting doubt over the benefits of
diversification. Currency was an exception. Since currencies have relative
prices, it is impossible for all to decline at the same time: whenever one
falls, its counterpart rises. This is why currency diversification is a good
investment strategy even in the worst of times. Last year, most currencies rose
against the Hong Kong dollar in the second and third quarters in tandem with the
US dollar, which stabilised in the last quarter of 2009 and into 2010. Jan
Friederich, a Hong Kong-based senior economist with the Economist Intelligence
Unit, says the fundamentals are set for a "mildly stronger US dollar this year"
as there is a shift to tightening in the United States. The prospect of a
stronger Hong Kong dollar diminishes the appeal of the higher interest rates
earned on currencies such as the Australian and New Zealand dollars. Last year
the aussie and kiwi strengthened by 29 per cent and 24 per cent respectively
against the US dollar, placing them among the best performers of the world's
most traded currencies, along with the Brazilian real and South African rand.
Any weakening this year could easily offset the higher interest rates earned by
holding deposits in these currencies. The Reserve Bank of Australia became the
first G20 central bank since the recession to raise rates, in October last year,
raising the benchmark from 3 per cent to 3.25 per cent, then to 3.5 per cent in
November and 3.75 per cent in December, resulting in a widening interest rate
differential between Australia and other countries. Once other countries start
to raise rates, the prospect of a narrowing interest rate differential may see
the aussie weaken. One fear is that tightening in the US will see the greenback-aussie
carry trade unwind. In 2007-08, the aussie was bid up as speculators borrowed
cheaply in yen at extremely low interest rates to buy the currency. Last year,
extremely low interest rates in the US encouraged speculators to borrow cheaply
in US dollars to buy the aussie. Countries which send a large proportion of
their exports to China - like Australia and Brazil - last year saw their
currencies outperform those which trade mainly with the US and EU. This year,
says Bilal Hafeez, global head of FX strategy at Deutsche Bank, "US-linked
currencies may outperform China-linked currencies", referring to countries which
will benefit most strongly from a recovery in US demand. Nevertheless, while
China has moved early to slow bank lending this year, BNP Paribas senior
strategist Chin Loo Thio notes that "there is still support for commodity
currencies such as the Australian dollar this year" since the China growth story
is still intact. There is a strong overlap between currencies referred to as
"China-linked" by analysts and those referred to as "commodity currencies",
given the importance of Chinese demand to the price of commodities ranging from
iron ore to copper. Two currencies which will benefit strongly from a recovery
in the US are the Canadian dollar and the Mexican peso and can be viewed as
"US-linked currencies" although both countries are also oil exporters. This is
because news about the US economy has a more direct impact on them than news
related to China's economic performance. Forecasts for both the loonie and the
peso are, however, mixed for 2010. Analysts expect the loonie to remain flat
this year (albeit with more potential to rise than fall) while the peso is being
boosted by many analysts who are promoting it as one of the cheapest
emerging-market currencies. Mexico's currency has rebounded strongly so far this
year. As in other markets, timing is crucial when it comes to forex, too.
Uncertainty over the outlook for inflation around the world suggests that
investors should avoid locking into longer-term time deposits this year, opting
for shorter-term (up to three months) fixed deposits rather than longer periods.
Forecasts for the year hinge on how markets will react to the withdrawal of the
unprecedented measures in response to the crisis. Some estimate that these
non-conventional measures are likely to start to be removed in the US as early
as March, well before interest rates are actually raised by the Federal Reserve.
The US dollar may strengthen up until the point that tightening is perceived (by
the markets) to have actually begun and then reverse. Consequently, a period of
relative US dollar strength may provide Hong Kong investors with an opportunity
to buy currencies that will benefit from the recovery in the US. Most
importantly, investors should take care to reap the benefits of diversification.
For Hong Kong investors already invested in the mainland's stock market, beware
that buying Australian dollars is essentially the same bet. Exposure to
emerging-market equities may best be accompanied by increasing holdings of
developed-market currencies. Asia's capital controls mean it is easier to
speculate on an improvement in an emerging market's economic prospects by buying
shares traded on that country's stock exchange. In contrast, betting on a
developed country by buying its currency can offer a better return than buying
shares, and at lower transaction costs. 
Hong Kong's public
housing estates are going green. In recent years, the Housing Authority has been
using its public housing estates as laboratories for the latest green
technologies, a move that could help reduce Hong Kong's air pollution and
encourage more sustainable building practices. Some of the authority's latest
efforts can be seen in Yau Lai Estate, a newly built housing estate in Yau Tong
that opened last year. Standing near the estate's main entrance are three green
walls covered in a mix of grass and climbing plants. While the walls also serve
a decorative purpose - the arrangement of red and green plants on one is based
on a drawing of a fish made by Yau Tong schoolchildren - a study completed last
November found that the greenery cooled temperatures on the walls' exterior
surface by up to 16 degrees Celsius. Temperatures on their interior surface
dropped by 1.5 to 3.5 degrees. If the green walls are adopted on a widespread
basis, they could significantly reduce housing estates' energy consumption by
cutting air-conditioning costs, said the Housing Authority's chief architect,
Clifford Cheng Chiu-yeung. They would also help cool the outside ambient
temperatures. That in turn would reduce Hong Kong's urban heat-island effect,
which has been making summer weather even hotter and more unstable than normal.
The walls are part of a collection of tools the Housing Authority is using to
green its estates. Ten green roofs have been built over the past few years,
mostly on low-rise structures within the housing estates, such as wet markets
and rubbish depots. Twenty per cent of each new housing estate land area is now
required to be devoted to greenery, and the authority plants one tree for every
15 residents. "We've begun to rethink how we should build," said Ada Fung Yin-suen,
the authority's deputy director of development and construction. "Slowly and
gradually over the past 10 years, we've increased the greening ratio of our
properties by planting more trees and gardens, but also by looking into things
like green roofs." Each green wall and green roof is a testing ground for
different types of plants and maintenance techniques. Before planting, a root
barrier and several drainage layers are built on the roof, followed by a
lightweight soil mix. At Choi Ying Estate in Kowloon Bay, a layer of grass was
laid on top of a shopping centre. In nearby Diamond Hill, Fu Shan Estate's wet
market was covered by different-coloured species of sedums - a small,
water-retaining shrub - arranged in the pattern of a fish, a design meant to
symbolise prosperity (SEHK: 0803). Hong Kong's long, hot summers limit the
number of plants that can be used. According to Evans Iu Po-lung, the Housing
Authority's chief landscape architect, only three of 50 species of sedums can
survive here. In one experiment at Ching Ho Estate in Sheung Shui, a green roof
covered in sedums was not watered for three months in an experiment meant to
test the plants' durability. More than 70 per cent died. "Originally, we used
some decorative plants in our greening projects, but we were criticised by
ecologists, so we're exploring more native species," said Iu. One local species
of wedelia, a creeping plant, was rejected for use on roofs and the ground
because it attracted rats, but it has proven effective for vertical greening.
The Housing Authority's willingness to experiment has been a boon for local
developers of green building technologies. The walls at Yau Lai Estate make use
of a newly patented green panel technology developed by Strongly International.
Having a high-profile public body like the Housing Authority as a client has
helped the company demonstrate that its technology is feasible, said its
technical director, Jaime Yeung. Strongly's products use a soil substitute made
from a mixture of organic materials such as bark and recycled paper. It weighs
90 per cent less than natural soil, and does not settle and harden when wet. For
a green wall, the soil is placed in small plastic pots that are plugged into
brackets on a steel frame. About 30 different plants can be used, depending on
wind conditions, the local microclimate and how much maintenance a client is
willing to perform, said Yeung. Strongly's own studies have shown that a green
wall can reduce interior temperatures by as much as 8 degrees, he said. But it
is harder to estimate how much of an impact a green roof or green wall has on
the city's wider environment. "The heat-island effect in Hong Kong is more
severe than in other parts of the world because it's very congested and the
ventilation is poor because of all the high-rises," he said. "But the impact
depends on the density of installations. If you only have a 10-square-metre wall
in an area like Mong Kok, it won't make much difference. It really depends on
government policy to make it more commonplace." The problem is that green-panel
technology is expensive to implement and maintain. A green wall that Strongly
developed for Sau Mau Ping Estate in Kwun Tong cost HK$6,000 per square metre to
build. Annual maintenance can cost 3 to 8 per cent of the wall's initial
construction cost. For the Housing Authority, which draws most of its revenue
from rental income, the expense of building green walls and green roofs means
that only a handful of projects can be completed each year. "We want to green
everything possible, but we can't do it extensively unless costs come down,"
said Fung. Jim Chi-yung, a professor of geography at the University of Hong
Kong, is currently performing a vertical greening experiment on the roof of the
university's main library. "Very few people are willing to invest millions of
dollars to green a wall," he said. "Some developers are trying to put flower
pots on walls, basically. We should make use of nature's climbers without having
to put soil on the walls. Otherwise the methods used are so expensive." Another
problem is public awareness. Hong Kong has been slow to embrace green
technologies, said Iu, because many people in Hong Kong still are not aware of
the city's environmental challenges. In one estate, he said, residents who were
allergic to pollen from native cottonwood trees asked the Housing Authority to
chop the trees down; it refused. "Most people brought up in such an urban
environment have no knowledge of nature," he said. "Many people are scared of
caterpillars, without realising they are harmless, for example. We need to
change the mentality of people towards greening if we want to go forward. The
most critical thing is to get our residents to accept and agree with what we're
trying to do." For that reason, the Housing Authority is investing in so-called
environmental "software" to complement hardware like green roofs. Last year, it
invited tenants to grow their own plants in estate gardens. Back at Yau Lai
Estate, the green walls have been well received. Oscar Wong, 19, was walking to
the MTR when he stopped to gaze at one of them. "I think it's good for the
environment," he said. "In Hong Kong the air is very polluted, and maybe this
can help make it cleaner."
A Chinese doctor examines an injured
girl in Port-au-Prince January 23, 2010. The second group of 15-strong Chinese
doctors will arrive at the Haitian capital on Monday to take the place of
another 15 medical staff sent among the first 50-person Chinese rescue team.
China will have two players in the last 16 of a grand slam for the first time
after Li Na beat Daniela Hantuchova at the Australian Open yesterday to join her
compatriot, Zheng Jie, in the fourth round. Li, who in recent years has vied
with Zheng for top-player status in China, passed the milestone with a
hard-fought 7-5, 3-6, 6-2 win over the Slovakian, and will face Caroline
Wozniacki, Denmark's fourth-seed, for a place in the quarter-finals. "It was not
easy to play against [Hantuchova] because we are friends, so it was a little bit
of a different feeling, but still you can see we were both fighting a lot on the
court," the 27-year-old said. Li, who became China's first title-winner in 2004
and first to reach the last eight of a grand slam with her run to the
quarter-finals at Wimbledon in 2006, has become used to milestones, and was not
all that fussed about passing another. "I didn't play last year. If I had
played, I think it would have happened last year," Li, whose friend Zheng
reached the fourth round in 2009, said. "I think it's very good [for] Chinese
tennis, [for] women. It's because we are working so hard and never giving up in
every match ... step by step." Li, who boasts a powerful forehand, reached the
quarter-finals at the US Open last year, where she was stopped by eventual
champion Kim Clijsters, but the 16th seed has never gone further than the fourth
round at Melbourne Park. In preparing for her next match, Li will be more
careful about dining out, after a visit to Melbourne's Chinatown left her
feeling sick. "I was looking around Chinatown, so every day I've found a
different Chinese restaurant; I prefer Chinese food," said Li, who hails from
Wuhan, the Yangtze town known for sweltering summers and where hot food is
popular. Li said she had found the "best" spicy restaurant in Chinatown, but may
have overdone it. "I ate there two days in a row, but now my stomach feels so
bad," she said. Wozniacki, who beat Israel's Shahar Peer 6-4, 6-0, conceded she
would have to be at her best against Li, after the Chinese number-one beat her
in the first round in Sydney a week earlier. "I'm going to do my best. She's a
great player; she beat me last time," the 19-year-old Dane said. "It's going to
be a tough fight." Elsewhere yesterday, American sixth-seed Venus Williams, a
finalist in 2003, beat local favourite Casey Dellacqua 6-1, 7-6 (7-4).
When wealthy Beijingers
bought flats in one of the city's most exclusive apartment complexes, they claim
they weren't told a four-lane highway would be built beneath their windows. Now
hundreds of them are threatening legal action against secretive Hong Kong
billionaire Hui Wing-mau, the founder and chairman of the Shimao Group. The
residents of Shimao Olive Garden say they will sue the property tycoon - also
known as Xu Rongmao - unless his Shimao Property (SEHK: 0813) company helps stop
construction of the highway. The block, with its exclusive views over the
Olympic National Park, is considered among the five most desirable places to
live in the capital. "We were duped into buying our homes because Mr Hui's
company did not disclose the land around our complex was subject to future
development," said Ruben Liu, a financial investor who is spearheading the
residents' protest. "We stand to have our quality of life ruined by an
expressway and will lose millions of yuan because our properties will drop in
value." Peter Wong, an American business owner married to a Chinese national who
is also co-ordinating the campaign, said: "We have been cheated. We were led to
believe by the Shimao Group that our homes were built on protected green belt.
But we have been given government documents that claim the Hong Kong developer
was made aware that future construction had been approved and was likely. You
don't expect such deception from a Hong Kong company." A spokeswoman for the
Shimao Group in Hong Kong said the company's Beijing office had been in contact
with the residents. "It's the first we have heard about this issue at
headquarters [in Hong Kong]. We are investigating the complaints and will work
with the residents for a solution," she said. More than 100 residents staged a
protest this month, unfurling a large banner calling for a halt to construction
and for the Shimao Group and Beijing government "to protect our rights". They
also used a 40-strong fleet of cars - including Maseratis, Ferraris and
Mercedes-Benz - adorned with protest stickers to block construction vehicles and
halt work for several hours. A poster campaign around the complex calls on its
6,000 affluent residents to take action. It also calls on them to pour funds
into a legal war chest in readiness for a court showdown with Hui, a justice of
the peace who is ranked sixth on the latest Forbes China 400 Rich List with a
net worth of US$3.85 billion. Wong said: "We have the support of 300 residents
so far. We are determined to get justice. We are not out to make trouble, but we
know our rights and cannot be cheated like less well off citizens. We will seek
compensation from Mr Hui if the road is completed. But our aim is to fight to
have it stopped." The expressway will link a new mass-housing complex 1.5
kilometers away in Changping district to the Olympic park in Chaoyang district.
Both district administrations and the developer claim construction of the road
is legal. As part of their well-organised and well-funded protest, the Olive
Garden residents have targeted municipal urban planning officers. But their act
of middle-class militancy has rattled the authorities. On January 11, police
vehicles blocked the road when 60 residents boarded three coaches taking them to
the offices of the municipal urban planning department for a protest. Seven
residents were allowed to meet senior officials, who handed over an official
document - since seen by the Sunday Morning Post (SEHK: 0583) - that states
construction of the road was approved in 2000. Government officials said the
Shimao Group was made aware of future building projects before it broke ground
in 2003. In an official letter issued two weeks ago, the Beijing government
"suggested" the construction be stopped. But Wong said work continues around the
clock. "The government's reaction has been meaningless," he said. The flats were
sold on the strength of their quiet, green and prime location and stunning
views. A brochure states: "Excellent quality makes you feel at home ... Shimao
noticed the remarkable regional, ecological and viewing value of the national
forest park." The flats sold for between 15,000 and 20,000 yuan (HK$17,000 and
HK$22,700) per square meter in 2005. Property agents say prices have doubled
since then. A bridge being built across the Qing River is the focus of protests.
Speaking from her 33rd floor penthouse Angela Chui said: "We saw the diggers and
workers move in at the start of December. We thought they were building another
footbridge, but then we saw the protest posters and were told by other residents
the expressway will come within 10 meters of the complex. "We were told the land
around us was protected by the government. The work is taking place on what we
believe to be green belt. We have to fight to stop it." Wong said: "We have been
brushed off by officials and the Shimao Group. But we will not be ignored."
US and Chinese diplomats have held
several meetings to discuss the alleged China-based cyber attacks on Google,
including one with the Chinese ambassador, according to the US State Department.
"We are having high-level meetings and we will continue to have meetings, and we
will continue to press this issue aggressively," spokesman Philip Crowley said.
"We will continue to seek an explanation from China." The confirmation of
meetings between the two sides was made as US President Barack Obama said he was
"troubled" by cyber attacks on Google and wants answers from China. Crowley said
the latest US-China meeting was between Kurt Campbell, US assistant secretary of
state for East Asian and Pacific affairs, and Chinese ambassador Zhou Wenzhong .
The discussions covered a speech on internet freedom by Secretary of State
Hillary Rodham Clinton which drew a sharp reaction from Beijing, the cyber
attacks on Google and the "broader aspects of our relationship", he said. "We
have a broad relationship with China," Crowley said. "We think it is far more
stable than it has been in some time. That said, we have a range of issues where
we have, you know, disagreements." A White House spokesman said Obama was also
looking to Beijing to shed light on the cyber attacks, which prompted Google to
say it will stop censoring Web search results in China, a move that may force it
to leave the country entirely. "As the president has said, he continues to be
troubled by the cyber-security breach that Google attributes to China," White
House deputy spokesman Bill Burton said. "As Secretary Clinton said, all we are
looking for from China are some answers." Clinton urged Beijing to conduct a
thorough and transparent probe into the cyber attacks on Google and criticised
China and other nations for censoring the Web and restricting the "free flow of
information". Her comments drew the strongest reaction to date from Beijing in
the dispute over Google, with the foreign ministry saying the United States
should "respect facts and stop using the so-called internet freedom issue to
criticise China unreasonably". Crowley said the US had "taken note" of the
Chinese foreign ministry's statement but had no further comment. He also said
Washington had not yet made a formal request to Beijing, known as a "demarche",
asking for an explanation for the cyber attacks on Google. Beijing has also
stepped up publicity to defend its internet policies. China needs no lessons
about its internet from the United States, Beijing Association of Online Media
chairman Min Dahong told official media yesterday. "How China's internet
develops and how it is managed are Chinese people's own affairs," Min said in an
interview with Xinhuanet.com. "On the internet question, China doesn't need any
lessons from the United States on what to do or how," he said. Xinhua also
quoted Zhou Yonglin, deputy director of the operational department in the
national computer network emergency response technical team (CNCERT), as saying
China is the largest victim of internet hacking. Google has not yet stopped
censoring search results on google.cn, but Google chief executive Eric Schmidt
said on Thursday it would happen soon. "We continue to follow their laws, we
continue to offer censored results. But in a reasonably short time we will be
making some changes there," he said. Google, the world's top search engine, said
it may shut its Chinese-language google.cn website and offices in China after
alleged cyber attacks originating from China, which also targeted other firms
and human rights campaigners using its Gmail service.
The unloading volume of imported alumina
at Lianyuanggang Port has reached some 300,000 tons in Jan., and its unloading
volume of imported alumina totalled 2.6 mln tons in 2009, ranking atop of China.
Zhou Taocan's garment company had
few customers during the first half of last year. But now, as his business is
picking up, he can't find enough workers. "Businesses are bouncing back. We are
looking for more workers," said Zhou, general manager of a Hong Kong-funded
garment company based in the manufacturing city of Dongguan. The company cut its
employees from 500 to 300 in the first half of last year due to reduced overseas
orders following the global financial crisis. "But we faced a shortage of
workers in the second half of the year since businesses are picking up," Zhou
said. Zhou's company is not alone. Many factories in the Pearl River Delta
region in Guangdong province, a major economic powerhouse in South China, cannot
find enough workers as their businesses recovered in the second half of last
year. "We found it hard to hire skilled workers in the last year, especially at
the year's end, as a growing number of workers returned to their homes earlier
than before," a manager surnamed Chen with Guangdong Aihua Group. The Shantou-based
company, which mainly produces woolen garments, is in need of more workers this
year as it has expanded production lines, Chen said. Sources with Guangdong
foreign economic and trade authorities said Guangdong's exports will see an
annual increase of 10 percent this year, which means more workers are needed as
orders increase. "We have to upgrade technology and facilities to reduce the use
of more workers. And we will increase salaries and welfares to attract skilled
workers," Chen said. Sources with Dongguan labor and social security authorities
said that the job requirement rate in the city hit nearly 1:2 last month, which
means one worker is offered two jobs. "It is unusual since the rate used to be
lower in previous years," Chen Weibiao, general manager of Dongguan Sanhe Human
Resource Center, told China Daily. Only about 1,000 workers were looking for
jobs at a job fair last month in Zhongshan, another manufacturing city in
Guangdong. At the fair, companies were offering about 5,000 jobs. "We are
planning to organize more job fairs for local companies to hire workers," Chen
said. At Guangzhou railway station on Friday, a 35-year-old migrant worker
surnamed Zhou said he would not come back to the province after the Spring
Festival. "I want to find a job in inner regions or probably open my own
business," said Zhou, carrying two bags at the railway station and preparing for
a train back to his hometown, Anhui province. "My salary was not increased last
year. Friends have told me my current salary is almost the same as theirs in my
hometown," said Zhou, who has been working in a toy factory in Shenzhen for
three years. The shortage of workers may drag small- and medium-sized
enterprises into a "crisis" because the economic rebound has not been based on a
solid foundation, said Liang Guiquan, a researcher with Guangdong provincial
situation study and research center. But Liang said that the worker shortage may
help speed up industry upgrading and migrant worker utilization in the Pearl
River Delta area. "Companies, if they want to hire fewer workers, should do more
in facilities and technology upgrading," Liang said.
Lenovo chief executive Yang Yuanqing
announces the company's LePhone smartphone, which runs on a version of Google's
Android. Lenovo Group (SEHK: 0992) , dismissing any impact of Google's likely
exit from China, says sales of its mobile internet devices will one day surpass
those of personal computers in its core mainland market. The world's
fourth-largest maker of personal computers insists the conflict between Google
and the mainland government will not affect its new business, noting the
collaboration with local technology suppliers on its latest handheld products.
Chief executive Yang Yuanqing yesterday unveiled three mobile internet devices,
including a smartphone that runs a version of the Google-developed Android
operating system. This came days after Google postponed the launch of two new
Android-based mobile telephones, made by Motorola and Samsung Electronics, for
3G network operator China Unicom (SEHK: 0762). That led to heightened tensions
over Google's dispute with Beijing about censorship at its Chinese-language
internet search service and online attacks that targeted the company and other
large foreign enterprises on the mainland. He Zhiqiang, the chief technology
officer at Lenovo, said the company's new LePhone handset used a customised
version of Android that was developed by a local partner. "We are co-operating
with other major Chinese internet services providers, including Sina, Sohu and
Tencent (SEHK: 0700)," He said. The LePhone will be released on the mainland in
May and on international markets later in the year. Lenovo also presented its
Skylight smartbook, a blending of smartphone and netbook, and the IdeaPad U1
hybrid notebook, which features a detachable screen that can be used as a
multi-touch tablet computer. The Skylight, which will debut in April in the
United States, and the U1, which will be available in the third quarter, run on
customized versions of the free Linux operating system. Shares of Lenovo climbed
steadily in yesterday's trading to close 4.2 per cent higher at HK$5.65. "Their
mobile internet device line-up looks pretty good, but the most difficult part
now is execution in the consumer market to make these successful," JP Morgan
Securities analyst Charles Guo said. Yang announced yesterday the approval by
shareholders of Lenovo's plan to reacquire for US$200 million the handset
manufacturing company it sold in 2008. The computer maker would buy in cash and
shares 100 per cent of Lenovo Mobile Communications Technology from an investor
group led by Hony Capital, the private equity arm of parent firm Legend
Holdings. 
Cold weather hits N China's Inner
Mongolia
Nicole Ip Wing-shung poses with the new
kind of tomatoes in the city at FarmFest 2010 in Mong Kok on Friday. More than
250 stalls would offer fresh organic agricultural and fishery products at Fa Hui
Market in Mong Kok from Friday, a government spokesman said. FarmFest 2010 is
the largest market for local farmers to sell organic products. The event is
expected to attract over 100,000 visitors. The three-day event has been
organized by the Agriculture, Fisheries and Conservation Department, Vegetable
Marketing Organization, Fish Marketing Organization and the Organizing Committee
of FarmFest. The market will resemble a Tai O fishing village, with a running
waterfall and stilt-houses as the backdrop, the spokesman said. “Of the 250
booths, more than 150 will sell local premium produce, including fresh organic
tomatoes, lettuces and cabbages, seafood and ornamental plants,’’ he said. About
100 booths will also sell local delicacies and gourmet food. Cultural
performances and cooking demonstrations will also be shown. The festival is open
from Friday to Sunday, from 10am to 8pm. Admission is free. 
More than 260 overseas companies
established bases in the territory last year, Director-general of Investment
Promotion at Invest Hong Kong Simon Galpin revealed on Friday. In 2009, Invest
Hong Kong spent about HK$110 million organising seminars and study tours for
overseas and mainland investors. This was to promote investment in the city.
“This has helped 265 companies set up or expand their businesses in Hong Kong,”
said Galpin. “The mainland continued to be the single largest market by source
of completed projects, followed by the US and UK,” Galpin said. He expects new
companies would help create more than 6,000 new jobs within their first two
years in Hong Kong. Hong Kong remains the base in Asia from which overseas,
mainland and Taiwanese companies prefer to expand their business,” Galpin said.
He noted that 2009 had been a “very challenging” year due to the global economic
crisis. 
WTO director general Pascal Lamy says
trade friction between US and China is bound to rise but said his institution
was up to the task of ensuring that Washington and Beijing never get into an
all-out trade war. Trade friction between the United States and mainland over
everything from cars to chemicals will increase in the coming years as the
world’s biggest importer and exporter buy and sell more of each other’s goods,
the World Trade Organisation’s director general said Thursday. Pascal Lamy said
his institution was up to the task of ensuring that Washington and Beijing never
get into an all-out trade war that could have devastating consequences for the
global economy. The WTO will be challenged over the next two years as
unemployment figures remain high and test the free trade credentials of world
leaders, he predicted. “There is no risk of slipping into a trade war,” Lamy
said in an interview. Placing the US-China relationship in a historical context,
Lamy compared it with the tensions that existed between Washington and Tokyo in
the 1980s and between the US and Europe over different periods in recent
decades. In these cases, disagreements increased as the value of their trade
expanded, he said. But the international trade body with its negotiations and
rules for settling legal disputes defused the tensions. The United States and
mainland are engaged now in a series of trade spats over issues such as steel,
poultry, patents and Hollywood films. Google’s threat to pull out of mainland
over concerns about censorship and security also could sour relations between
the two countries. “The question is not whether there is friction, the question
is whether it is handled the right way,” Lamy said. The 62-year-old Frenchman, a
former European Union trade commissioner, is now in his second term as director
general of an organisation that resolves international commercial disputes and
negotiates new rules for export of farm produce, manufactured goods and
services. In the 4½ years since Lamy entered office, healthy economic growth has
been replaced by a crippling global slowdown. Annual trade crashed by 10 per
cent after 16 years of uninterrupted growth. And the vision of a 150-nation deal
to tear down trade barriers around the world has been partly replaced by the
immediate challenge of preventing countries from erecting new obstacles to each
other’s goods. Lamy credited the WTO’s close monitoring of countries last year
for preventing a slide into global protectionism where countries break the rules
to shield domestic jobs from foreign competition – pressure that was only
natural, he said, as financial markets collapsed and whole economies teetered on
the edge. “We are certainly not out of the woods on protectionism,” Lamy said.
“The fundamental reason there is a protectionist impulse has to do with the job
market. We know that unemployment will remain high this year, maybe even next
year.” He didn’t elaborate, but some trade observers believe the danger could be
even greater in 2010 as governments shift their focus to job creation plans from
last year’s stimulus packages and financial bailouts. As governments try to make
it easier on national companies to hire people, free-trade principles may be
sacrificed along the way, with the ultimate risk being a worldwide descent into
a trade war as happened during the Great Depression, the argument runs. Lamy has
been pushing governments to complete what he says is the final lap of the Doha
global trade round, which could add billions of dollars to the world economy.
The negotiations launched in Qatar’s capital in 2001 aim to reach a binding
treaty that would slash subsidies and cut tariffs in agriculture and
manufacturing, including for new economic powerhouses like China, India and
Brazil. But the talks are mired in disagreement. The round is already six years
behind schedule, and even a completed accord would have to win parliamentary
approval in most countries and Senate ratification in the United States. With
unemployment over 10 per cent and President Barack Obama’s Democratic Party
showing weakness, it is unclear how committed the United States is to finishing
the round. Lamy said he believed Washington was committed to a pledge it made
with other countries last year to wrap up an agreement by the end of this year.
Whether the Americans would take on such a challenge in the current environment,
he declined to answer. “That’s more a question for them, than a question for
me,” Lamy said. “They tell me ... they want to conclude the Doha round by the
end of this year.”
China First Heavy Industries,
the country’s second-largest maker of heavy machinery, said it will launch an
initial public offering in Shanghai next week to raise at least 8.4 billion yuan
(HK$9.54 billion). First Heavy was joined by five other smaller companies, all
due to list on the Shenzhen Exchange, in announcing IPO plans on Friday, as the
government steps up share sale approvals to cool surging asset prices.
State-owned First Heavy, which makes equipment for steel mills, power producers
and refiners such as Baosteel Group and Sinopec (SEHK: 0386), will issue up to 2
billion yuan-denominated A shares, or 30.59 per cent of its expanded capital,
the company said in a statement to the Shanghai Stock Exchange. First Heavy’s
IPO announcement comes just days after China XD Electric, the country’s largest
maker of electricity transmission and distribution equipment, raised 10.3
billion yuan in mainland’s first major IPO this year. Rival China Erzhong Heavy
Industries is also holding an IPO in Shanghai that will raise up to 2.55 billion
yuan and will start taking retail subscriptions on Friday. The flood of IPOs
announced in recent months reflects Beijing’s worries about surging prices in
the property and stock markets, with the benchmark Shanghai Composite Index up
80 per cent last year, amid fears that an influx of speculative funds from
overseas may help to fuel asset price bubbles. Mainland this year is expected to
see a further pick-up in the pace of IPOs, which PricewaterhouseCoopers forecast
would raise more than 320 billion yuan for the full year, up 73 per cent from
last year. Agricultural Bank of China and HSBC (SEHK: 0005) are among
multibillion-dollar listings expected in Shanghai this year. The new supply has
weighed on share prices, with the mainland’s key index down almost 1 per cent on
Friday, but coming off a one-month intraday low. Analysts expect the market to
remain generally buoyant as mainland’s strong economic growth bolsters corporate
earnings. “The IPOs would have a short-term impact on the market, but in the
longer term, ample liquidity, rising corporate profits and good economic
fundamentals are still likely to push the index up,” said Zhang Yidong,
strategist at Industrial Securities. The fattening pipeline of big mainland IPOs
has nevertheless cooled investor enthusiasm for new listings and led companies
to set more modest price ranges, after several large firms’ shares recently
slumped below their IPO prices within just a few weeks or months of listing. XD
Electric on Wednesday priced its shares at the top of a lower-than-expected
indicated range, while Erzhong Heavy Industries has also set a modest price
range for its IPO. Analysts have said First Heavy’s IPO may be priced at similar
valuations to Erzhong, which gave an indicated range of 7.20 to 8.50 yuan, or
28.8 to 34 times 2008 earnings on a diluted basis. First Heavy posted a 999
million yuan net profit in 2008, up 20 per cent from a year earlier, according
to its IPO prospectus. The company, based in northeastern Heilongjiang province,
will use the IPO proceeds to upgrade technology, manufacture equipment and
supplement working capital. It has hired BOC (SEHK: 3988) International as its
lead underwriter and will begin book-building next Monday. It will take retail
subscriptions one week later on February 1.
Property sales on the mainland
soared 75.5 per cent year on year to 4.4 trillion yuan (HK$5 trillion) in 2009,
heightening the fears of many that a massive property bubble is building. "In
the eyes of many market participants, the public or even the policymakers, the
market to a certain extent has gone over the top. There is a property bubble,"
said Xavier Wong, director and head of research for property consultant Knight
Frank's Greater China division. While the figures, issued by the government,
show the value of sales skyrocketed, sales as measured by floor area expanded by
only 42.1 per cent, according to the National Bureau of Statistics. The
significant difference suggests there has been a big increase in property
prices. This, in turn, casts doubt on the official announcement last week that
home prices rose just 7.8 per cent year on year in December. "Go ask anyone on
the street, and no one will believe that home prices have gone up just 7.8 per
cent," said Lee Hing-yin, director of research and advisory for property agents
Colliers International - East China. Wong said that "from the difference between
the sales value and sales volume, overall property prices rose about 24 per cent
last year." The jump triggered fresh concern a nationwide property bubble is
inflating. Premier Wen Jiabao yesterday repeated his pledge to regulate the
property market by tackling speculation and increasing the supply of mass
housing and so-called economic housing for the needy. Underpinned by a sharp
rise in mortgage lending and strong pent-up demand, the total value of home
sales grew by 80 per cent year on year and that of office space by 66.9 per
cent. The biggest growth in sales by value was seen in the wealthy eastern
seaboard province of Zhejiang, where prices rose 129.7 per cent, and in
Shanghai, where they were up 125.9 per cent, the statistics bureau said on its
website yesterday. The booming market was reflected in record-high sales
commissions at Centaline Property Agency's branch in Shenzhen, where general
manager Andy Lee said home prices in major districts increased by about 80 per
cent last year. "This is the busiest year I have ever experienced since I was
stationed in Shenzhen in 1996," Lee said. "The market has gone to the top,
especially in November. None of our 300 property agents was allowed to take a
day off that month." Commission on sales of homes in the secondary market at
Centaline's Shenzhen branch were 100 million yuan in November, compared with a
monthly average of between 60 million and 70 million yuan, Lee said. "Obviously
the government figure on home price growth is understated," he said. Average
home prices in Shanghai's urban areas rose more than 60 per cent, to about
20,000 yuan per square metre in December, from 12,000 yuan in January last year,
said Lee Hing-yin of Colliers. Looking ahead, Andy Lee at Centaline said home
prices and sales volumes would drop in the first three months of this year as a
result of the central government's austerity measures. To counter property
speculation, Beijing has tightened lending standards for mainland banks from
this week, requiring them to set aside a higher proportion of deposits as
reserves. The market reacted swiftly, with sales volumes falling 6 per cent in
Beijing and 38 per cent in Shenzhen in the past two weeks compared with the two
weeks prior to that. But Wong of Knight Frank and Lee Hing-yin of Colliers did
not expect a dramatic decline in home prices. "It is unlikely that the growing
bubble will burst given the strong demand for property, the fast pace of
urbanisation and developers' low inventory of unsold properties," Wong said.
In 1998, computer science engineer Li Yanhong developed Rankdex, an experimental
search engine that ranked websites according to their relevance to each other.
At around the same time, Google Inc's Larry Page and Sergey Brin were tinkering
with an algorithm that would make their search engine the largest in the world.
Li, known by his English name Robin, grew Rankdex into what would become the
world's third-largest search engine and China's "Google-killer" - Baidu Inc. In
an archetypal rags-to-riches tech story, 41-year-old Li started Baidu in a
3-star hotel room in Beijing. His search giant now dominates the world's biggest
internet market, with more than 60 per cent share by revenue and about 75 per
cent by traffic. Baidu raked in US$468 million in revenue in 2008 and Li,
described by his peers as geeky and low-key, is worth US$2.1 billion, according
to Forbes' 2009 rich-list. Baidu vaulted into greater prominence after Google's
shock announcement last week that it may leave China amid censorship and hacking
concerns. Analysts said Baidu stands to be a big winner whether or not Google
quits China - as it would be in a stronger position to negotiate prices with
advertisers, who may be leery of working with Google if it stays. Since Google's
announcement, Baidu's Nasdaq-listed shares have gained around one-fifth in value
and hit a record US$470.25 last Friday. However, Baidu warned in October that
its shift to a new advertising system, Phoenix Nest, would lead to softer
revenues in the first quarter of this year. Analysts also noted that other
players such as Tencent Holdings (SEHK: 0700), China's largest internet firm by
market value, but which has only a tiny search presence, would also be battling
for business if there was a Google vacuum. Li grew up during the Cultural
Revolution, when many intellectuals were branded dissidents and university
students were forced to work in the countryside. He started his search firm
believing in the transformative power of the internet, and said in 2005 that
China would have the world's biggest internet market, and other search firms
should watch out for Baidu. Referring to a 2005 comment by billionaire Microsoft
founder Bill Gates that Google was becoming influential, Li said: "If he is
worried about Google, he will probably be more worried about Baidu somewhere
down the road." With his technical background and local understanding, Li looks
set to rule the Chinese market for now. Li's views on censorship are largely
unknown, but Baidu, named from an ancient Song Dynasty poem, co-operates with
Beijing censors to leave out politically sensitive search results. "He's pretty
even keeled about it," said a source close to Li. Li, whose parents were factory
workers in China's coal-mining Shanxi province, studied information management
at the prestigious Peking University and later studied in the United States,
receiving his Masters degree from the State University of New York. Baidu's
advantage may be that it does not have Google's idealism, and early on, was
clearly keyed into knowing what Chinese users wanted - music. "At that time, MP3
search was getting critical mass and it was a major boost in the early days for
Baidu," said Mark Natkin, managing director of Marbridge Consulting. "Even after
Google launched its catalogue of music downloads, it was limited compared to
Baidu's MP3 search." 
Sales persons from a
Taiwan company introduce their tea products to mainlanders at a farm produce
fair in Fujian Province - A Breakthrough Year in Cross-Straits Relations - In
the first 11 months of last year, a total of 547,000 mainlanders visited Taiwan
and it has been estimated they brought revenue of $1 billion to the island's
tourism industry.
Government plans to make China's southern island province of Hainan an
international tourist resort have cut the supply of housing as owners and
developers hold out for huge profits. More than 200 property buyers had arrived
everyday since the end of last year when the government unveiled plans to turn
the tropical island into a top international destination by 2020, said Li Zhuo,
a salesman with Rongyu Project in Haikou, the provincial capital. Prices were
rising by about 1,000 yuan (164 U.S. dollars) per square meter each day on some
properties and properties that had been selling for 15,000 yuan a square meter
at the beginning of the year were now asking20,000 yuan, he said. The Shanhuwan
real estate project in Haikou had sold 600 of its 643 apartments in two weeks
despite prices jumping almost 50 percent, said salesgirl Min Xia. In the popular
tourist destination of Sanya, the average price of Shanyuhu project had soared
from 13,000 yuan a square meter in November, to 28,000 yuan as of Thursday, and
was almost sold out. The tourism promotion blueprint, which was officially
announced on Jan. 4 and is expected to be approved by the National Development
and Reform Commission, drew real estate developers and investors from home and
abroad, driving up the property market to fever and causing property bubble
fears. "Many home developers and owners suspended sales, expecting higher prices
and profits," said Liu Haiyi, assistant general manager of Hainan Jintai Real
Estate Development Co., Ltd. In an effort to clamp down on potential
speculation, the provincial government on Jan. 15 suspended the leasing of land
and approval of projects, which worsened speculation concerns. The suspension
was aimed at cooling the overheated sector, but it may have led to a second wave
of price hikes, said a property agent surnamed Wu. "Sufficient housing and land
resources could be provided to fulfill demands of the market and the tourism
promotional campaign," Wei Liucheng, secretary of Hainan Provincial Committee of
the Communist Party of China, said Tuesday. "We will blacklist real estate
developers who seriously disturb the property market order and not approve any
new land for them," he said. Official statistics show 58,489 commercial homes,
totaling almost 6 million square meters, were on the market in Hainan's major
cities as of Monday. In the first half of 2009, Hainan had approved development
of 3,164.7 hectares of land, including 1,522.65 hectares already under
construction, according to the provincial administration of land, environment
and resources. Wei said homes for local residents were a priority. The
authorities should conduct comprehensive supervision campaigns and work out
plans for land approval for residential purposes. Strict penalties should be
meted out to those who violated land use and transfer regulations. Hainan is one
of the five special economic zones. Agriculture and tourism are its pillar
industries.
Jackie Chan, an ambassador of
the Shanghai World Expo, sings at a gathering at the Shanghai Grand Stage on
January 21 to mark the 100-day countdown to the Expo. More than 50 incumbent
heads of state will visit Shanghai to see the World Expo which opens on May 1.
People have free porridge
distributed during the Laba Festival at the Yonghe Lamasery, or the Lama Temple
in Beijing, January 22, 2010. The Laba Festival, which falls on the eighth day
of the twelfth month of the lunar Chinese calendar, commemorates the date of
Sakyamuni Buddha's enlightenment. The tradition of eating "laba porridge" is
believed to bring good fortune.
Price tag for land in Beijing
soars - China's booming property sector may be about to slow some time this
year. Fengtai property may retail for 30,000 yuan per sq m. Property prices may
have hit a new high in one Beijing district after China Overseas Property Co Ltd
snapped up a parcel of land for a staggering 17,153 yuan ($2,512) per sq m
yesterday. China Overseas Property, one of the country's largest real estate
firms, paid 5.97 billion yuan for the 348,000 sq m piece of land. The closing
price was 200 percent higher than the owner's original asking price, thus
pushing property prices to a record high in Beijing's Fengtai district. Despite
government efforts to cool down the overheated property market, Shenzhen-based
Vanke and Shanghai-listed Poly Real Estate were among 14 developers jostling
over the plot, located near the southwest side of Beijing's Fourth Ring Road.
"Even with a conservative estimate, the selling price of residential units on
this plot will surpass 30,000 yuan per sq m," said Meng Qi, a market analyst
with US-headquartered real estate brokerage, Century 21. Neighborhood apartment
prices currently range from 17,000 yuan to 18,000 yuan per sq m. "The appearance
of the new pricing high indicates real estate companies are still optimistic
about property sales this year," Meng said. After intensive efforts by the
government to tighten real estate policies, most property developers haven't
changed their strategies and still plan to raise prices. William Kwok, director
of Cheung Kong Real Estate Limited, said his firm will likely increase the price
of a residential property project in Beijing by 10 to 15 percent, but sales will
target homeowners and not speculators. Moreover, Cheung Kong plans to offer more
Hong Kong properties to domestic investors, hoping to capitalize on the growing
buying power of mainland residents. For instance, the company has recently began
pitching a commercial property in Tsim Sha Tsui district called "1881 Heritage"
to lure buyers in Beijing and Shanghai. According to Kwok, China's property
prices are likely to stabilize in 2010 after a stronger-than-expected rebound
last year. "In cities where the price has soared more than 50 percent in 2009, a
price adjustment may occur, but a tumble is not likely to happen given that
demand remains robust," he said. 
Energy firms gear up to meet demand
- Employees of Anhui Huaibei Power Company investigate power supply issues amid
heavy snow last month. Demand for power will rise rapidly this year because of
brisk industrial activity. China Huaneng Group (Huaneng), the country's largest
power producer, plans to increase electricity production 11 percent and coal
production 29 percent this year, in a move to meet rising domestic demand. Power
production in 2010 is expected to be 466.5 billion kWh, and coal output 56.86
million tons, the company said yesterday. The company hopes to increase its
sales revenue to over 200 billion yuan ($29.29 billion) this year, it said. "We
will further expand our portfolio and improve our business structure to increase
competitiveness," said Huaneng General Manager Cao Peixi. Huaneng, which
produces approximately 11.6 percent of the country's total energy, increased its
power capacity and coal production by 21.5 percent and 75 percent respectively
last year. China's power supply will continue to see solid growth this year,
said Xue Jing, director of the statistics and information department under the
China Electricity Council (CEC). Demand for power will rise rapidly this year
because of brisk industrial activity, she added. "China is expected to see a
balance between supply and demand this year, but some regions may experience
temporary blackouts," she said. Following a sharp decline in the first half of
2009, demand on power has risen dramatically over the past few months due to
increased industrial activity. "We believe this growth will continue," said Xue.
US automobile parts maker
ArvinMeritor has said that it would channel the bulk of its investments to China
over the next three years to capitalize on the demand arising from extensive
infrastructure construction, said a top company official. The Troy,
Michigan-based company would also make considerable investments to grow its
off-highway business in China, said its Asia-Pacific President Tim Bowes. "Over
the next three years, a majority of our investments would be in China, our
biggest market in the Asia-Pacific region," said Bowes. ArvinMeritor and its
Chinese partner Xuzhou Construction Machinery Group (Xugong) are investing $10
million in their joint venture Xuzhou Meritor Axles Ltd (XMAL) in Xuzhou,
Jiangsu province. The US firm holds a 60 percent stake in the joint venture, and
it is the biggest independent off-highway axle producer in China, with a 20
percent market share. It provides axle products for most of the major original
equipment manufacturers. "The investment reinforces ArvinMeritor's strategy to
expand its off-highway business globally as well its long-term commitment to
China," said Bowes. The additional investment would boost XMAL's overall annual
production capacity by more than 20 percent. "The investment we are making in
XMAL is the first phase of our strategic development plan that is expected to
help us improve our off-highway manufacturing and product capabilities in China
as well as support our efforts to grow this business in one of the largest
off-highway markets in the world," said Bowes. ArvinMeritor would decide the
details of its second investment between March and April this year, after XMAL
achieves its target of 20 percent capacity improvement. China contributed nearly
58 percent of ArvinMeritor's revenue in the Asia-Pacific region. "Off-highway
and Asia-Pacific, particularly China, are two key areas of our company's overall
growth strategy," said Bowes. "Therefore, it's our plan to continue to invest in
the off-highway business in China." China's off-highway market has seen huge
demand of late due to the infrastructure construction spree triggered by the 4
trillion yuan stimulus package. According to Bowes, the off-highway vehicle
market is much larger than the passenger vehicle market, especially in emerging
economies such as China and India. The century-old company also plans to launch
50 new axle models and more global technologies in China over the next three
years, and reinforce its local research and development capability. The company
has three manufacturing bases in the country, at Shanghai, Shiyan in Hubei
province, and Wuxi in Jiangsu province. 
About 10,000 MTR passengers were left stranded last night after a system glitch
shut down all the trains on the East Rail Line for about an hour. The case is
believed to be the most serious disruption to services on the line in recent
memory. The MTR Corporation (SEHK: 0066)'s head of operations, Choi Tak-tsan,
said the shutdown at 7.20pm was caused by a data network transmission failure
that occurred at an operation control centre at Fo Tan. He said the centre
immediately suspended train services on the line to ensure safety. A spokeswoman
said about 10,000 people were affected by the shutdown and the failure was a
first for the line. Ticketing windows at various stations were crowded with
passengers, many of whom yelled at station staff as they complained about refund
arrangements. Services from Hung Hom to Lo Wu and Lok Ma Chau were brought to a
standstill until 8.20pm, when engineers succeeded in re-establishing the data
network. The MTR arranged for buses to take passengers to other stations along
the line, but long queues for the buses quickly formed at Hung Hom, Mong Kok
East and Kowloon Tong. The rush-hour shutdown frustrated people trying to get
home after work. Some were seen shouting at station staff, while others asked
for refunds when they were told to leave the station and take the connecting
buses. A woman passenger at Mong Kok said: "The announcement about the signal
system failure came after I had been waiting in a train for 30 minutes, and
there was no information about how long we would have to wait or the
arrangements for us." Another woman passenger at a connecting bus stop at the
station said she was confused over the transport arrangements. "They asked us to
leave the station," she said. "I don't know where the buses go." Choi said a
further investigation would be conducted to determine the cause of the
transmission failure. The Transport Department said it had asked the MTR to
submit a report on the case as soon as possible. The Electrical and Mechanical
Services Department said it would monitor how the operator ensured there would
not be a repeat failure. On August 1 last year, about 1,200 passengers were
affected when train services between Mong Kok East and East Tsim Sha Tsui shut
down for 40 minutes after a transformer station at Ho Man Tin malfunctioned.
Chaotic scenes were also seen then, with passengers complaining to station
staff.
Hongkongers will soon be able to enjoy the most spectacular view yet of Victoria
Harbour - 383 metres up on the 100th floor of the International Commerce Centre
in Kowloon. The observation deck of the highest building in Hong Kong, which
towers to a height of 483 metres, will be open to the public by the end of the
year. "I believe this building with 118 levels will be the new landmark of Hong
Kong," the chairman of the Hong Kong Tourism Board, James Tien Pei-chun, said,
adding that the board would promote the Kowloon station development again when
the deck opened. The observation deck will offer a 360-degree panoramic view of
Kowloon and the harbour. It will be the first of its kind in the city and will
open in the fourth quarter of the year. Four express lifts will take visitors
from the second floor of the ICC to the deck in one minute. The general manager
of the observation deck, Elaine Tsui, said there would be multimedia exhibitions
documenting the changes in the city's lifestyle and development. A tourist
information centre will also be set up. The public will be able to buy tickets
to visit the deck. Prices have not yet been decided, but Tsui said that they
would take into account prices at similar tourist spots in other Asian cities.
The only public space that offers a view of the harbour from a higher altitude
is The Peak. But visitors still have to walk around the hill to get a 360-degree
view. "The view from The Peak is different ... both Kowloon and Hong Kong Island
can be seen from the ICC observation deck located in the city centre," Tsui
said. Only two towers in the world have observation decks higher than the ICC
one. The viewing point on the Burj Khalifa in Dubai is on the 124th floor at 442
metres above sea level. The three decks in the Shanghai World Financial Centre
are on the 94th, 97th and 100th floors, at 423, 439 and 474 metres. The ICC deck
is higher than the one at Taipei 101, which is on the 89th floor at 390 metres.
But Taipei 101 is a taller building at 508 metres. Businesses have progressively
moved into the office space in the ICC below the deck. The Ritz-Carlton, the
highest hotel in the world, will open this year above the observation deck on
the 102nd to 118th floors. Fine-dining restaurants will open on the 101st floor.
The observation deck has not yet been named. The ICC is inviting the public to
submit proposed names for it to www.shkp (SEHK: 0016)-icc.com/odeck by March 5.
The Hong Kong and Shanghai
stock exchanges have agreed to co-operate more on regulatory issues and jointly
develop derivative products and exchange-traded funds. At a meeting of officials
from both bourses in Hong Kong yesterday, HKEx (SEHK: 0388) chairman Ronald
Arculli said: "According to an old Chinese saying, a single tree cannot make a
forest. Jointly with our mainland counterparts, we can accelerate China's growth
and financial development in a prudent manner." Listing division executives from
the two exchanges will meet every two months to discuss issues of disclosure and
other regulatory matters. This was to enhance regulation for companies listed in
both places and boost shareholder protection, said Charles Li Xiaojia, the chief
executive of the Hong Kong exchange. "This is a great beginning," he said. Li
also sought to play down fears of Shanghai posing a threat to Hong Kong. "We're
not fighting. We're not in that kind of a relationship. We're running a marathon
together." Shanghai Stock Exchange president Zhang Yujun said although Shanghai
would introduce an international board, it would not compete with Hong Kong.
"This is not a zero-sum game. Both stock exchanges would like to grow the market
for China together," Zhang said. "Our goal is to make the cake bigger so that
everyone in the market will be able to share more." Zhang said there were enough
companies in China to keep all its bourses busy. Demand for the services of
securities exchanges by companies would only grow as governance and accounting
practices improved, he said.
China power output surged last
month, a sign of economic expansion many observers say is a more reliable
indicator of revival than the big increase reported yesterday in gross domestic
product. The 25.9 per cent year-on-year jump in electricity generation - the
strongest growth in a non-holiday month in 12 years - indicates Beijing's 4
trillion yuan (HK$4.54 trillion) stimulus program has lifted the mainland from
the trough of the global downturn. More than 70 per cent of the electricity the
mainland generates is used by industry, primarily in the steel, cement,
aluminium and other heavy industrial sectors. The National Bureau of Statistics
unveiled fourth-quarter GDP growth of 10.7 per cent and December consumer price
inflation of 1.9 per cent - both slightly higher than expected. The figures,
coupled with sharp gains in housing prices last year and runaway bank lending
this month, stoked fears that the economy may be overheating. Many economists
predict interest rates will be increased earlier than expected to pre-empt a
full-blown asset bubble. With gross domestic output of 33.5 trillion yuan last
year, China will surpass Japan as the world's second-largest economy this year,
analysts believe. Nevertheless, it still lags far behind Japan in total
consumption and economic output per capita. The growth in power output is partly
explained by a cold snap which began in December and extended into mid-January.
Analysts expect mainland power output will continue to grow strongly year on
year in the first half of 2010 because of the low base for comparison during the
depths of the global financial crisis. "The low-base effect means we could see a
25 per cent to 30 per cent rise in electricity generation for January and 15 per
cent for the first half of this year," Citigroup Asia Pacific utilities analyst
Pierre Lau wrote in a research note. For the whole year, he expects power
generation growth to be 12 per cent, the high end of the 6 per cent to 12 per
cent range forecast by nine brokerage analysts polled. The China Electricity
Council, which represents generators, tipped a relatively conservative 7 per
cent. Stronger power demand, the aggressive closing of older, polluting plants
and a slowdown in new plant construction is expected to absorb excess generation
capacity for the first time in four years. Analysts expect power plant
utilization hours to grow between 2 per cent and 5 per cent this year, against
declines of 6 per cent last year. This is positive for the industry, which has
been suffering falling profits since September's 40 per cent increase in
spot-market coal prices.
HK$2 billion in public money up for grabs
in a city-wide scheme to subsidize the upkeep of buildings is ripe for attack by
corruption syndicates, an anti-graft advisory panel has warned. Operation
Building Bright, run by the Development Bureau, was launched last year to
provide subsidies for maintenance to 2,000 buildings. Michael Sze Cho-cheung,
chairman of the Independent Commission Against Corruption's Operations Review
Committee, descrined the scheme as "big meat" for syndicated corruption.
Building management accounted for about one- third, or 924 cases out of a total
of 2,183, of the private sector complaints received by the ICAC last year.
"Since more buildings are getting old and subject to mandatory repair order, it
poses a risk for corruption, especially as there's a subsidized scheme," Sze
said yesterday. The ICAC has also suggested that private sales of properties
should be kept at a minimum to reduce the risk of corruption and complaints
about new flats. Anissa Chan Wong Lai-kuen, acting chairman of the Corruption
Prevention Advisory Committee, said the ICAC made the suggestion to the Real
Estate Developers Association of Hong Kong, in response to complaints received
about unfair practices in the primary sale of residential properties. The
association had adopted several suggested measures, including requiring
developers to provide timely information contained in the provisional Agreement
for Sales and Purchase, and to set out in the price list the unit rates based on
the flat's saleable area and gross floor area. The ICAC received 73 corruption
reports related to real estate and property transactions last year, of which 63
were pursuable. This compared with 91 reports in 2008, of which 79 were
pursuable. A year after the financial crisis, the number of corruption reports
did not surge as feared. 
Liu Mingkang, chairman of the China
Banking Regulatory Commission, addresses the Asian Financial Forum in Hong Kong
on Wednesday. banking authorities have instructed some major banks to curb their
lending over the rest of this month, official media and banking sources said on
Wednesday, sending shares sharply lower. The central bank told some individual
lenders, including Citic Bank and Everbright Bank, to increase their reserve
requirement ratio by half a percentage point, banking sources said. A surge of
new lending in January has triggered a series of intensifying actions by
authorities to rid the financial system of excess cash that can fuel inflation
and asset bubbles. Last week, mainland’s central bank raised bank reserve
requirements for the first time since June 2008. “The question now is not
whether we need to control credit and money supply but when and how to control
it,” said Chen Xingdong, chief China economist with BNP Paribas in Beijing.
“Policy will not be a straight line,” he said. Mainland banks doled out a record
9.6 trillion yuan (HK$10.9 trillion) in new loans last year. The lending surge,
combined with Beijing’s 4 trillion yuan stimulus plan helped kick-start the
economy after a late 2008 slump, but aroused fears of overheating, with data due
on Thursday expected to show double-digit growth again. Zhu Baoliang, chief
economist at a government think tank, also said consumer inflation has
accelerated significantly in December. Confusion lingered surrounding the full
scope of authorities’ actions. The official China Securities Journal on
Wednesday cited unnamed banking sources as saying that some banks had been told
to stop all lending for the rest of the month. However, a source at the China
Banking Regulatory Commission who spoke on condition of anonymity said the CBRC
had not ordered banks to halt lending for the rest of January. “It is our
long-standing principle banks that do not meet regulatory requirements must not
lend any more,” the source said. A senior official with China Merchants Bank (SEHK:
3968) and a senior executive with Agricultural Bank of China said that their
banks would stop approving new loans until the end of this month. Worries over
the impact of lending curbs knocked Shanghai’s benchmark index down 2.9 per
cent, weighed on the rest of Asia-Pacific and hurt the Australian dollar. Shares
of mainland banks traded in Hong Kong were hit.
Chairman of Orient Overseas
(International), Tung Chee-chen, seen here on a file photo, said on Wednesday
that its recent sale of mainland property would generate the company a US$1
billion profit this year. Orient Overseas (International) (SEHK: 0316) (OOIL)
will seek M&A opportunities with the US$2.2 billion in cash it raised from the
sale of its China property assets to Singapore’s CapitaLand earlier this week, a
company executive said. Tung Chee-chen, chairman of OOIL, was speaking on the
sidelines of the Asian Financial Forum in Hong Kong on Wednesday. The sale to
CapitaLand came as the money-losing Hong Kong company seeks to raise cash and
focus on its core shipping business. OOIL said the sale of residential, hotel,
and retail properties in mainland would generate a US$1 billion profit this year
after it posted a net loss in the first half of last year after being badly hit
by the global economic crisis. Some analysts predicted the company would use the
cash to pay a dividend. Tung said the company would review all options,
including paying a dividend, but had made no plan yet. The company would also
consider raising freight rates in May, he said. However, even with a rate
increase, he cautioned that the industry would still not reach breakeven because
of rising fuel costs. Overcapacity was also a worry, he said. “There is still
around 11 per cent of capacity idle,” said Tung. “Even with demand back, there
is concern of oversupply in the industry.” He said that the “worst is over” for
the shipping industry, but cautioned that the situation had not returned to
normal. Earlier in a statement, the shipping group said total revenues for the
fourth quarter of 2009 sank 22.7 per cent, suggesting a slump in global trade
continued to affect sea carriers. Orient Overseas Container Line (OOCL) posted
total revenue of US$1.07 billion in October-December, taking total revenue for
the year to US$3.84 billion, down 35.2 per cent, it said in a statement on
Wednesday. Average revenue per TEU (twenty-foot equivalent unit) decreased by
19.4 per cent in the fourth quarter from the same period last year, and the
average revenue per TEU was down 24.7 per cent for the full year of 2009, it
said in an unaudited operational update. OOCL’s load factor fell 3.8 per cent
for last year despite a 9.6 per cent decrease in loadable capacity, it added.
When Hong Kong Disneyland
opened in September 2005 it was viewed as a major tourism cash cow that would
help drive the city's economy. The wholly government-owned Ocean Park, with a
mandate to provide public recreation and education, faced intense competition.
But it has risen to the challenge. For the past three financial years it has
beaten Disneyland on number of visitors, and has also made - with the exception
of last year - increasing net profits. The figure has risen from HK$119.5
million in 2005-06 to HK$204.7 million in 2007-08. Even in 2008-09, despite the
financial downturn, it still registered a net profit of HK$98.6 million.
Visitors to Ocean Park have grown from 4.38 million in 2005-06 to 4.8 million in
2008-09. Hong Kong Inbound Tour Operators' Association chairman Simon Hau
Suk-kei said Ocean Park had certain advantages over the Disney venue. It had
been established for 33 years and was better known to overseas visitors, whereas
Disneyland had only been operating for four years, he said. An Ocean Park visit
is now a fixed itinerary for many inbound tours from the mainland, whereas a
trip to Disneyland is optional. "Visitors would have to pay an extra HK$400 and,
given the location, they have to spend a whole day at Disneyland. Many therefore
do not often choose to go," Hau said. But he said that with the launch of the
solo visitor scheme, many visitors from Guangdong were coming to Hong Kong
specifically to spend a day or two at Disneyland. "Currently, about half of
these tourists will visit Ocean Park, compared with 20 per cent for Hong Kong
Disneyland. There is a huge potential for growth for Disneyland." He added: "An
average visitor spends between HK$1,000 and HK$2,000 at Disneyland, but would
only spend HK$200 to HK$300 at Ocean Park." Dr John Ap, an associate professor
of tourism at Hong Kong Polytechnic University, said it had taken about 30 years
for Ocean Park to reach an attendance of nearly 5 million, while the Disneyland
venue had been open for less than five years. "Don't be too pessimistic. We have
to wait five more years to get a better picture [of Hong Kong Disneyland]," Ap
said, adding that theme parks usually recorded no profit in the first few years.
Lawmaker Fred Li Wah-ming said the Disney venue suffered from a bad start, which
affected its reputation and popularity. "Hong Kong Disneyland was, until
recently, governed by foreigners who do not understand the local culture or the
characteristics of mainland visitors," he said. "Now the management has changed,
but it will still take time for the park to change."
Hong Kong Disneyland has for the
first time revealed its financial performance - and the numbers make for grim
reading. The park made a net loss of HK$4.4 billion in the three years to
October, and Disney says it may not now break even until after 2014. When the
government announced 11 years ago that it intended to pour HK$23 billion of
taxpayers' money into the Lantau theme park for a 57 per cent stake, it said the
venture could break even as early as 2009 and no later than 2011. Now Walt
Disney's regional chief Bill Ernest, who used to run the park, says it may break
even after three new themed areas open in mid-2014. The park's management
yesterday issued figures for the two years to October - their publication a
condition of the HK$3.63 billion deal sealed with the government in June to
expand the attraction at Penny's Bay. They showed its losses over two years were
HK$2.88 billion. A confidential document seen by the South China Morning Post (SEHK:
0583) shows it lost a further HK$1.51 billion in 2006-07, its second year of
operation. Ernest, president and managing director of Walt Disney Parks and
Resorts in Asia, said the park's financial situation "is going to turn a corner"
following its expansion and it might break even then. However, the park's
managing director, Andrew Kam Min-ho, said it might break even next year. He
noted that its loss before interest, taxes, depreciation and amortisation fell
by 57 per cent last year, to HK$70 million. "The park has been open for only
about four years and it's still developing infrastructure," Kam said. In that
time it had built a "stable" financial foundation. The government, legislators
and academics expressed disappointment at Disneyland's performance. "We note
obviously as a shareholder the performance as delivered by the theme park
company is certainly falling short of our general expectation," said Secretary
for Commerce and Economic Development Rita Lau Ng Wai-lan. She said the
government would continue to monitor its performance and press the management to
make improvements. Leung Wai-kin, a professor at Chinese University's school of
hotel and tourism management, said the performance was "very bad" and a
surprise. "The project is a failure," Leung said. "It's benefit-cost ratio is
too low." Paul Chan Mo-po, legislator for the accountancy sector, said: "The
worst is over but it's still bleeding." He complimented the park for its efforts
to control costs - to which the management attributed the reduced losses in the
last financial year - but urged it to take steps to boost attendance. Government
figures show the attraction has generated more than HK$24 billion in additional
spending in the city since it opened and has been responsible for boosting Hong
Kong's gross domestic product by slightly more than 0.2 per cent a year. Dr John
Ap, an associate professor of tourism at Polytechnic University, said there were
no benchmarks against which to measure Disneyland's performance. "At this point,
we don't need to panic because theme parks don't generally generate a profit
within the first few years of operation," Ap said. "But in the long term, we
want to make sure it's a success." He called upon the government - which,
following the expansion deal in June owns 52 per cent of the park, with Walt
Disney holding the other 48 per cent - to be more transparent by providing the
public with more information about its performance. The park has received more
than 19 million visitors since it opened in September 2005, which is well short
of the government's 1999 forecast of at least 23 million visitors. Attendance
last year rose by 2 per cent over the previous year, to 4.6 million, though
ticket sales were hit by the global outbreak of swine flu and the financial
crisis. Occupancy rates at the park's hotels fell 8 percentage points year on
year, to 70 per cent. The management said the park's business over the last few
months had been improving and was back to the level seen before the swine flu
outbreak began in May. However, the park will face competition for regional and
international visitors from other new parks in the region, such as Singapore's
Resorts World at Sentosa, which opens today.
The Hong Kong Tourism Board expects visitors to the city this year to rise by
just over 5 per cent, or 1.5 million, to 31 million, and that they will spend
HK$174 billion, 7 per cent more than last year's arrivals. The forecast follows
better-than-expected visitor arrivals last year, which grew 0.3 per cent to
almost 29.6 million; the board had predicted the total would fall by 1.6 per
cent. Anthony Lau Chun-hon, the board's executive director, said arrivals rose
last year thanks to a 6.5 per cent year-on-year increase in mainland visitors,
to almost 18 million, despite the swine flu outbreak between May and July. He
said the easing of restrictions on non-Guangdong residents of Shenzhen visiting
Hong Kong in tour groups last month also helped. The board expects a further 7.5
per cent increase in mainland visitors this year, and Lau said the mainland
market would remain the growth driver in the city's tourism sector. It expects
19.3 million to visit this year, meaning six in every 10 visitors will come from
across the border. The number of visitors from elsewhere is expected to rise by
only 1.7 per cent given the slow pace of recovery from the global economic
crisis. The board will set aside about HK$18.8 million, or 10 per cent of its
budget, to promote the city's attractions in emerging markets such as India, the
Middle East and Russia. The number of visitors from Taiwan fell 10 per cent last
year, and the board expects a drop of another 12 per cent because direct flights
between the island and the mainland has reduced the need for passengers to
transit through Hong Kong. The board plans to tap into green tourism in Hong
Kong by promoting hiking trails and the city's first geopark, and to highlight
Hong Kong as an arts hub in the long term. It also plans to promote Hong Kong as
a festive city by dividing the year into six periods, each emphasising
traditional festivals. One will be the annual Hong Kong International Dragon
Boat Regatta, which will become a three-day event and include a beer festival.
To mark its 35th anniversary, the regatta will return to the Tsim Sha Tsui East
waterfront. The board is also promoting multi-destination tours with partners in
Guilin, Yunnan, Xian, Guangdong, Shanghai, Beijing and Hainan. It will look at
the opportunities to draw visitors to the World Expo in Shanghai - and Asian
Games in Guangzhou - to Hong Kong before and after those events.
A
mainland property tycoon is believed to be nearing a deal to buy a controlling
stake in ailing broadcaster ATV from Payson Cha Mou-sing. Cha intends to sell
all of his stake in Asia Television to Wang Jing, The Standard has learned. Cha
will hold a press conference today. The price involved is not known, however, if
the deal goes through Cha will have lost money on his investment, according to
sources. Complicating the matter is an agreement Cha has with Taiwan company
Want Want China Holdings (0151) chairman Tsai Eng-meng, another major ATV
shareholder. Tsai has first refusal on Cha's stake, but the two are involved in
an acrimonious standoff, with the Taiwanese tycoon publicly blasting Cha
recently for not keeping his word in handing over the broadcaster's controlling
stake to him. If the deal with Wang goes through, legal action by Tsai is
likely. The battle between Tsai and Cha prompted the resignation of ATV chairman
and director Linus Cheung Wing- lam last month. Cheung, hired by Cha just over
year ago, was said to have been under intense pressure in the months before he
quit to secure a deal between Tsai and Cha. Wang, who has Hong Kong residency
and is in his 40s, first came to prominence in the mainland over a land deal. He
found fame at the age of 28 for selling a prime plot of land in Shanghai for 170
million yuan (HK$193 million). Educated at Shanghai University with a major in
Russian, Wang came to Hong Kong shortly after graduating. He has been investing
in property in the SAR. Under Hong Kong law, the holders of free-to-air
television broadcasting licenses must be Hong Kong residents. Cash-strapped ATV,
long in the shadow of city rival Television Broadcasts, is now facing fresh
challenges with a number of firms seeeking free-to-air licenses. ATV has fired
hundreds of staff in the past year in a desperate bid to slash costs, with
losses said to be as much as HK$1 million a day. Cha struck back at some of
Tsai's accusations just before a shareholders' meeting last month. According to
reports, Tsai had agreed to invest HK$1 billion in ATV but put in only HK$200
million and stopped investing. "When Tsai bought a stake in ATV, he agreed to
inject capital of HK$1 billion, but whether the promise was verbal or in black
and white, only the two parties would know," a source close to Cha said. Tsai
denied making any agreement. 
President Hu Jintao and other
top leaders attended a lavish state funeral on Wednesday for eight Chinese
peacekeepers killed in the Haiti earthquake, the single biggest loss of life in
the history of Beijing's participation in UN missions. The ceremony at the
exclusive Babaoshan Revolutionary Cemetery was broadcast live on national
television, highlighting the state media’s portrayal of the eight police
officers as models of self-sacrifice and martyrs to the cause of world peace. Hu,
Premier Wen Jiabao, and the seven other members of the ruling Communist Party’s
all-powerful politburo standing committee circled the flag-draped coffins to the
strains of a funeral march before paying their respects to family members. They
were followed by other state leaders and scores of uniformed police and military
officers. On Tuesday, thousands of mourners lined the Beijing streets to pay
their respects as a convoy carried the bodies from the capital’s airport to
Babaoshan, where former state leaders and national heroes are interred. The
deaths have been the top news story in China for days, with a headline Wednesday
in the official People’s Liberation Army Daily stating: “Peacekeeping heroes,
the fatherland greets you on your return home.” “Sacrifice, service, loyalty,
selflessness, their spirit inspires all police officers and soldiers to make new
efforts for national security and world peace,” the paper said. About 125
Chinese police were in Haiti as part of a 9,000-strong UN peacekeeping mission
seeking to maintain stability in the impoverished and politically volatile
nation. The eight had been in a meeting with the head of the UN peacekeeping
mission when the 7.0-magnitude quake struck on January 12, bringing down the
UN’s five-story headquarters building. The eight were formally named
revolutionary martyrs, an honour that confers additional financial compensation
for their families, as well as assistance with employment and education. The
seven men and one woman, aged 35 to 60, included four members of the
peacekeeping contingent and four members of a delegation from the Public
Security Ministry’s equipment, finance and international cooperation
departments. Their bodies were pulled from the rubble over the weekend by a
Chinese search and rescue team. The oldest member of the delegation, Guo Baoshan,
was just months away from retirement and had planned to return to his hometown
in the northeastern province of Liaoning for the Lunar New Year holiday in
mid-February, said a relative quoted by Xinhua news agency.
The
head of sovereign wealth fund China Investment Corp (CIC) said short-term
capital flows into emerging markets were adding pressure on governments and that
it would be some time before the global economy recovered from the financial
crisis. “At present, global liquidity is a little bit excessive,” CIC head Lou
Jiwei said at the Asia Financial Forum here on Wednesday. “Short-term and
frequent capital flows into emerging markets brought big pressure on governments
to manage capital.” Shares in Shanghai and Hong Kong fell on speculation that
the government had told some major banks to stop lending for the rest of
January, in a further attempt at keeping the surging economy from overheating.
Policymakers in much of Asia and in other emerging economies have been worried
that so-called “hot money” could create destabilising asset bubbles in property
or stock markets, while pushing up their currencies and making their exports
less competitive. CIC, established in 2007 and with about US$300 billion under
management, has been aggressively investing across the globe since it was
formed. The fund was burnt by some of its early investments in the US financial
industry. “I think it may still take a while for the global economy to recover
to a normal level,” Lou said. “How to drive domestic consumption is now not only
a theme for countries in emerging markets but also for developed economies.”
Taking lessons from substantial paper losses on investments in Blackstone Group
and Morgan Stanley, CIC has more aggressively sought deals in the energy and
commodities sectors since last year. Lou, a former vice-finance minister, said:
“All countries should strengthen coordination on and improve liquidity
management and maintain prudential monetary policy.” CIC spent US$2 billion
buying distressed US assets from property to infrastructure via three funds,
including one managed by Goldman Sachs. Last year, CIC also poured up to US$2
billion into US mortgages under a US Treasury-backed plan. Lou said that CIC
would be focusing more on investing in Asia this year. “We will maintain our
current portfolio and will also target different currency zones to diversify the
categories of our investments,” said Lou in response to a question about CIC’s
investment focus in 2010. He declined to specify further. “Given that our money
is from China’s foreign exchange reserves, we cannot make investments at home,
which is a pity. As you know, China is the fastest growing economy in the world
now.”
Property developers have reacted with
alarm to reports that Beijing plans to enforce a nationwide crackdown on
developers found guilty of leaving sites idle for speculative land banking
purposes. "The government will strictly crack down on any illegal use of land
and hoarding of sites meant for development to resell the land for profit," Yun
Xiaosu, deputy minister of Land and Resources, said last week.
Leading makers of liquid crystal display (LCD) in South Korea and Taiwan are
headed for a robust first half this year on improving demand for flat-screen
television sets, but their performance for the final quarter of last year is
likely to be hit by seasonal weakness and a strong currency. The LCD industry
rebounded from a downturn last year, thanks to China's television-buying spree
and a shortage of key glass output that kept screen prices firm. The outlook is
bright for the next few quarters as strong Chinese demand for screens used in
televisions is lifting the sector from the seasonal downturn earlier than
expected. "We are heading into strong sales season in China, starting from the
Lunar New Year holidays to Labour Day," said Mirae Asset Securities analyst Lee
Hak-moo. "There are also the Super Bowl, the Winter Olympics and the World Cup
lined up in the coming months. Those sports events can bolster television demand
and could bring strength in the first half." DisplaySearch recently upgraded its
global LCD television shipments forecast for this year to 171 million units, a
22 per cent increase over the estimate last year. "China is a hot growth engine
for the global flat panel television market as the transition from cathode ray
tube to LCD and plasma continues to drive market growth," the research firm
said. China is set to become the world's biggest LCD television consumer next
year and LCD makers are pumping in billions of dollars to build factories to
cash in on its huge potential. But LCD makers' earnings deteriorated in
October-December after peaking in the third quarter, as seasonal weakness dented
panel prices. The stronger Korean won is also expected to have weighed on
earnings at Samsung Electronics and LG Display, the world's top two producers of
LCD screens. No 2 player LG Display is set to report an operating profit of 445
billion won (HK$3.06 billion) in the fourth quarter, Thomson Reuters says. But
according to StarMine SmartEstimates LG Display's operating profit is likely to
drop 21 per cent. Taiwan's AU Optronics Corp is expected to swing to a small
profit in October-December from a year-ago loss, Thomson Reuters says. On a
consolidated basis, Samsung's LCD business would likely swing to an operating
margin of about 8 per cent in the fourth quarter, from a loss of 5 per cent a
year ago, but down from a 15 per cent margin in July-September, analysts said.
Samsung reports earnings on January 29. In the past two months, LG Display
shares have jumped 30 per cent and Samsung's have risen 12 per cent, compared
with a 6 per cent gain in Seoul's broader market. AU rose 26 per cent, against a
7.5 per cent rise in Taiwan's benchmark. Beside the confidence in Chinese
demand, analysts also bet the global economic recovery would spur demand for
larger LCD televisions in developed markets longer term. "Thirty-inch-level TVs
were the mainstream in 2009. When the economy recovers on a fuller scale, demand
will grow for bigger 40-inch levels - likely from the second half," said Park
Hyun, an analyst at Prudential Investment & Securities.
Chief Executive Donald Tsang Yam-kuen
told anti-rail link protesters who acted "irresponsibly" in the heated clashes
outside the Legislative Council to reflect on their actions. Speaking for the
first time after Saturday's attempt by some protesters to storm Legco, Tsang
said: "The act of some protesters who irresponsibly tried to storm into the
Legislative Council was in breach of the the core values of Hong Kong's society,
the principle of the rule of law and overall interests [of the city]. The
government and the general public definitely cannot accept it." He said the
protesters have to reflect on what they did. But in the wake of the scuffles,
Tsang pledged to explore more ways of consulting the public on large
infrastructure projects in future. He said funding approval for the
Guangzhou-Shenzhen-Hong Kong Express Rail Link "demonstrated that the
Legislative Council is able to decide on this matter and it has also reflected
that we are determined to proceed with a project supported by the majority view
of the public." James Sung Lap-kung, academic coordinator at the City
University's School of Continuing and Professional Education, said Tsang's
attitude is understandable. "The government may think that its authority will be
undermined if protesters wrongly believe that they can demand a dialogue with
officials by surrounding Legco," he said. Sung also said Tsang's remarks are
aimed at showing Beijing that his administration can keep a rein on the
situation. Chan King-fai, a core member of the Post-80s Anti-Express Railway
Group, said the core values of Hong Kong's society include people's pursuit of
more freedom. Also yesterday, Secretary for Security Ambrose Lee Siu-kwong said:
"These kind of violent acts have violated our stability and law and order. These
acts will not be accepted and agreed with by the majority of the community." In
response to accusations that police failed to give any warning before repeatedly
using pepper spray, Lee said the officers were very restrained and used minimal
force to control the situation that day. "It could be clearly seen on television
that our police officers were scolded and provoked by some protesters. They used
violence in an attempt to breach police lines and tried to take away the metal
barricades. These were already illegal acts," he said. Meanwhile, a Metro
Broadcast news reporter came under fire from netizens on HKGolden.com after she
criticized the protest on Facebook. The reporter, Iris Hui, wrote: "What I
oppose is they did not know what they were doing when they rushed to confront
the police." The 20-page comments on the forum condemned Hui as too narrow-
minded and encouraged other netizens to dig into her background. 
Minnie and Mickey Mouse pose at the Hong
Kong Disneyland Park, which reported on Tuesday that it made a net loss of
HK$1.315 billion in 2009, partly because of the “unfavourable impact” of the
H1N1 swine flu outbreak. Disney's troubled Hong Kong Disneyland theme park made
a net loss of HK$1.315 billion last year while attracting 4.6 million visitors,
in its first major admission of its financial performance since opening in 2005.
Since opening to great fanfare in 2005, Disney’s first magic kingdom in China
has struggled to attract the expected flood of visitors from the mainland,
although its performance was difficult to gauge given Disney’s initial refusal
to fully disclose key results and attendance figures. In a legislative paper by
Hong Kong’s Tourism Commission to local lawmakers, however, it said Hong Kong
Disneyland (HKD) made a net loss of HK$1.315 billion in 2009, partly because of
the “unfavourable impact” of the H1N1 swine flu outbreak. The paper added that
the park made a net loss of HK$1.574 billion in 2008. “We would like to point
out that HKD is a long-term asset that grows over time and it is still in its
early years of development,” the paper said while noting the park’s continued
cost containment efforts. The paper added that Hong Kong Disneyland had brought
Hong Kong well over HK$30 billion in economic benefits over the past four years.
The park’s attendance last year was 4.6 million, 2 per cent more than 2008,
generating revenues of HK$2.541 billion. The theme park, Disney’s smallest, is
now undergoing a US$468 million expansion aimed at bolstering its
competitiveness with a rival Disneyland that is scheduled to open in Shanghai by
2013. As part of the expansion deal, partly financed by the Hong Kong
government, Disney pledged to boost the transparency of its operations by
releasing annual operating and financial results. Hong Kong Disneyland managing
director Andrew Kam said the losses were contained last year mainly because of
cost-cutting efforts and growth in attendance. Kam said that the Disney park is
expecting to boost attendance and break into profit when the construction of
three new themed areas are completed by mid-2014. Asked whether the Shanghai
Disneyland would pose a threat to Hong Kong’s theme park, Kam said he believed
China’s market was large enough to have two Disney parks. Secretary for Commerce
and Economic Development Rita Lau Ng Wai-lan on Tuesday said she was
disappointed about the business performance of Hong Kong Disneyland. “As a
shareholder, the performance delivered by the theme park company is certainly
falling short of our general expectations. It is very important for management
to control costs and improve the efficiency of its operations, with a view to
boosting the performance of the company,” she told local media. 
Dumping that broken washing machine may
cost you HK$200 in future, and you may be looking at HK$100 to get that old TV
out of the door. Under the "polluter pays" principle, which is the theme of a
three-month consultation paper released yesterday, you will likely start paying
for the recycling or dumping at the start of an appliance's working life. For a
key point of the government paper points to a levy when you make a purchase,
along with an end-of-life fee. The aim is to come up with legislation to reduce
the dumping of electronic waste in landfills, and not just because of space
considerations. For much of what makes an appliance tick - lead, copper and
mercury are common - is hazardous to health, with youngsters particularly
susceptible to many toxic substances. In outlining what it calls the proper
management of waste electrical and electronic equipment - WEEE is the striking
acronym that bureaucrats have come up with - the government does not offer
specific levies for various items. However, experience elsewhere suggests HK$100
for a small TV set and HK$200 to HK$250 for bulky appliances, because size does
matter in planners' thinking. So computer products will cost less, though many
are packed with poisons. The consultation paper quotes a recent poll that points
to a fee of up to 2.5 percent of the retail price being levied. There is neither
a timetable for the scheme nor a date for when a recycling and treatment plant
will be up and running, but officials have lately been hoisting danger signals
over landfills. Hong Kong generates around 70,000 tonnes of WEEE every year,
Secretary for the Environment Edward Yau Tang-wah said yesterday, and this
increases by 2 percent annually. "By introducing the proposed producer
responsibility scheme, we can on the one hand avoid the negative impact that
WEEE might bring about on the environment, and on the other promote the
recycling of waste and the reuse and recovery of useful materials," Yau said.
Currently, 80 percent of such waste is recovered by secondhand dealers, who
export parts to developing countries to process and reuse. Hong Kong Electronic
Industries Association chairman Chan Kei-biu agreed with the thrust of the
scheme but believes the prepay option is unfair. "A user may not dispose of an
item for many years, leaving the importer holding the levy that may never be
used," Chan said. But Cheung Yiu-shing, chairman of the Hong Kong Waste
Electrical and Electronic Equipment Recycling Association, said it would be fair
for importers, recycling companies and consumers to share the costs. Retailers
of electronic appliances look likely opponents of the scheme. Small companies
could not afford the additional work that handling the levy would entail, said
one.
Any attempt to conduct a de facto
referendum on Hong Kong's electoral reform would be inconsistent with the Basic
Law, Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung said
yesterday, three days after Beijing sent the same message to pan-democrats. Five
lawmakers from the Civic Party and League of Social Democrats plan to resign,
triggering by-elections they will contest on a platform of genuine universal
suffrage and the scrapping of Legco's functional constituencies. They say the
exercise will be a de facto referendum. On Friday the State Council's Hong Kong
and Macau Affairs Office said any "so-called referendum" would be inconsistent
with Hong Kong's legal status and a "blatant challenge" to the Basic Law and the
central government's authority. Lam said electoral changes could only be carried
out using procedures prescribed by the Basic Law. "Any arrangements to promote a
referendum outside these constitutional procedures would not be consistent with
the Basic Law," the minister said. "Also, whatever the outcome of this movement
for five legislators to resign from geographical districts, it will not change
our constitutional procedures for adopting new electoral arrangements." Lam was
asked whether the proposal by the two pan-democratic groups was
unconstitutional, but he sidestepped the question. He also said the Hong Kong
government would not propose a law to allow referendums. Under the two parties'
plan, five pan-democratic legislators - one from each of the geographical
constituencies - will announce next week that they are resigning. They say the
subsequent by-elections will allow residents to express their position on
constitutional reform through the ballot box. However, there are still
uncertainties about the arrangements for by-elections. Some Beijing-friendly
lawmakers say they may block the government's application for financing to
conduct them. The Constitutional and Mainland Affairs Bureau has estimated that
the by-elections will cost HK$150 million. Wong Kwok-kin, vice-president of the
Federation of Trade Unions, said: "People may mistake the by-elections for a
referendum. Endorsing such expenditure may just add heat to the debate." Two
pro-government political parties, the Democratic Alliance for the Betterment and
Progress of Hong Kong and the Liberal Party, said they had not yet decided
whether to support the financing proposal. Liberal Party chairwoman Miriam Lau
Kin-yee said: "It is a waste of taxpayers' money." Hong Kong delegates to the
National People's Congress and the Chinese People's Political Consultative
Conference are expected to discuss constitutional reform today at their annual
meeting, which is being held in Zhuhai. It will be hosted by Qiao Xiaoyang,
deputy secretary of the National People's Congress Standing Committee. 
Richard Li
Tzar-kai wants to try his hand in Hong Kong's free-to-air television market,
just three days after a local pay-TV operator filed a similar application. The
telecoms giant PCCW (SEHK: 0008), which Li controls, says it is going to apply
for a free-to-air TV licence. Observers believe the move, if approved by the
government, may enhance competition in the television market. In a brief
statement yesterday, PCCW said: "With its ubiquitous terrestrial and wireless
networks, taken together with its quality local content production, PCCW has
decided to apply for a [free-to-air] TV licence." However, the company did not
give a timeline, nor did it mention how much it was prepared to invest. It only
said an application would be submitted "in the near future". A spokesman said
yesterday PCCW was not prepared to elaborate further on the plan at this stage.
PCCW's move came after two other local pay-TV operators, City Telecom (CTI) and
iCable Communications, recently submitted applications for free-to-air TV
licences. PCCW owns NOW TV, a pay-TV service transmitted through the broadband
network. It is unclear if this will breach the so-called cross-media ownership
restrictions under the Broadcast Ordinance. The restrictions are meant to
minimise conflicts of interest and prevent development of a media monopoly and
editorial uniformity, according to the Broadcasting Authority. The Commerce and
Economic Development Bureau, which oversees Hong Kong's broadcasting policy,
declined yesterday to comment, saying the government had not received any
application from PCCW. However, a spokesman said: "The government and the
[Broadcasting Authority] welcome those who intend to operate a free-to-air TV
service to submit their applications ... and there is no pre-set ceiling on the
number of licences to be granted. "All the applications will be assessed on
their individual merits." Li became embroiled in a cross-media ownership
controversy in 2006 when he wanted to acquire the Chinese-language daily Hong
Kong Economic Journal. But a subsequent investigation by the Broadcasting
Authority concluded that PCCW Media, in which Li holds an interest via holding
company PCCW, had not contravened the cross-media ownership provisions. The
authority was satisfied Li was not exercising control of PCCW Media.
Broadcasting policy observer Charles Mok said any increase in competition in the
local TV market, which is now dominated by Television Broadcasts (SEHK: 0511) (TVB),
was welcome. The other free-to-air TV station is Asia Television (ATV). Mok also
urged the government to review the cross-media ownership restrictions. "In the
information age, the influence of cross-media ownership might not be as big as
it was in the last century," he said. "One can hardly influence the public, even
if you own many newspapers and many TV stations." His views were shared by
legislator Samson Tam Wai-ho, who said he believed the Hong Kong market could
accommodate more than two free-to-air TV stations. He added that spectrum
availability would not be a big problem given the development of digital
broadcasting. Dr Lo Wai-luk, an associate professor at Baptist University's
school of communications, was more sceptical. "Running a TV station should not
be a long-term target of Mr Richard Li," Lo said. A TVB spokesman said yesterday
TVB welcomed fair competition. ATV was not prepared to comment. 
Mainlan d wind power producer Xinjiang Goldwind Science & Technology Co has
chosen China International Capital Corp (CICC) as lead underwriter for a Hong
Kong initial public share offering aimed at raising US$1.5 billion in the first
half of 2010, sources close to the plan said on Tuesday. The strong post-IPO
performance of China Longyuan Power Group Corp, the world’s fifth-largest wind
power generator, could herald a wave of public offerings from Asia’s renewable
energy sector. Longyuan shares have traded 33 per cent above the offering price
since listing in December last year. Longyuan raised US$2.2 billion, making it
the largest wind power IPO in 2009. Xinjiang Goldwind’s US$1.5 billion IPO looms
largest in the pipeline for 2010. “There are definitely more renewable energy
IPOs in the making, given that this is what Beijing is seriously looking to
grow,” said one of the sources. Goldwind, already listed in Shenzhen, said in
October last year that it planned to float shares in Hong Kong, with an eye
toward expansion, but did not give financial details. Goldwind was seeking
approval from the mainland securities regulator in Beijing for a Hong Kong IPO,
said the sources, who declined to be identified as they were not authorised to
speak to the media. CICC, partly owned by US investment banking giant Morgan
Stanley, declined to comment. Other global investment banks, including UBS, were
pitching to Goldwind in the hope that it would hire at least one more sponsor,
said the sources. Haitong Securities, one of mainland’s 10 biggest brokerages,
which helped Goldwind list in Shenzhen, was also expected to be appointed to
handle part of the company’s H-share offering, another of the sources said.
Goldwind planned to issue no more than 15 per cent of its enlarged equity
capital in the Hong Kong offering, the sources said, with a 15 per cent
over-allotment option in case of strong demand. Based on Monday’s close of 28.53
yuan (HK$32.38) for Goldwind’s Shenzhen-listed shares, its Hong Kong offering
could raise up to 7.93 billion yuan. The first source added that CICC bankers
had suggested that Goldwind should wait “for a while” until its Shenzhen-listed
share price rose to a more attractive level, which would benefit pricing for the
Hong Kong IPO. Goldwind also needs approval from its A-share investors for the
Hong Kong IPO plan.
Orient Overseas (International) Ltd
(0316) is selling its mainland property business for US$2.2 billion (HK$17.16
billion) to Singapore developer Capital and and expects to book a profit of
about US$1.055 billion. 
Kowloon Motor Bus has stepped up random
checks on buses to ensure their drivers are not speeding. Since the Tseung Kwan
O tragedy last November, in which two people were killed and 34 injured, laser
gun checks on buses have increased from five to 12 times a month, with about 100
buses being "gunned" each time, a KMB spokesman said. The company said a
cross-department safety committee was also set up last month to educate drivers
about speeding. Before the accident, laser gun checks were carried out only
twice a month. This was increased to five in December in some areas. The
spokesman said the number of drivers complying with speed limits has improved
from 89.28 percent in November to 92.7 percent in December. On average, around
seven per 100 checked were found to be speeding, the spokesman said. KMB
operations director Tim Ip Chung-tim said drivers may sometimes be unaware they
are speeding when traveling down a slope. "It is hoped that such detections will
remind drivers of their responsibility," Ip said. Drivers found speeding will be
sent warning letters and called to face-to-face meetings with the management.
Plans are also afoot to install black boxes in all KMB-operated buses. A
driver's handbook will be issued to emphasize proper driving attitudes and to
remind drivers to pay special attention to situations on the road. A database of
potentially hazardous areas will also be established and uploaded onto the staff
website, he added.
Relatives of one of the UN
peacekeepers killed in the recent earthquake in Haiti walk with his portrait
during a ceremony at the airport in Beijing on Tuesday. Beijing angrily denied
accusations on Tuesday that its rescue team in Haiti was only searching for
Chinese nationals missing after last week's devastating earthquake. “Concerning
the comments that Chinese rescuers only rescue Chinese, these comments are false
and are made out of ulterior motives,” foreign ministry spokesman Ma Zhaoxu told
reporters. “The Chinese rescue team departed China immediately after the quake.
They not only found the bodies of the Chinese peacekeepers, they also found the
bodies of UN officers in Haiti and many others.” The 60-strong Chinese medical
team in Haiti has already treated more than 200 locals and China has air-lifted
rescue supplies and aid to the devastated country, he said. “These actions are
not selfish and brook no accusations. The accusers should be accused,” Ma said,
after media reports about China’s contribution to the humanitarian operation in
Haiti. “Our rescue team and Chinese peacekeepers have made a great contribution
to the relief efforts. We have won high appraisal from relevant parties,
including the secretary general of the United Nations.” Tens of thousands were
killed in the 7.0-magnitude quake that struck Haiti on January 12, with an
estimated quarter of a million injured and 1.5 million left homeless. Ma said
China would consider a UN request for nations to help provide an additional
3,500 peacekeepers to help maintain order in Haiti, but made no firm commitment.
The bodies of eight Chinese peacekeepers killed in the quake were on Tuesday
repatriated and given a state funeral, including a procession down the Avenue of
Heavenly Peace, the capital’s main thoroughfare, past Tiananmen Square. “They
sacrificed their lives for the maintenance of peace. Here I would like to
express deep condolences,” Ma said.
Industrial and Commercial Bank of China (SEHK: 1398) plans to buy a 50 per cent
stake in Cathay Financial’s life insurance unit in mainland, in what would be
the first purchase by a mainland company of a stake in a Taiwanese financial
firm, a source with direct knowledge of the situation said. ICBC, the world’s
largest lender by market value, was in talks to buy the stake for about 400
million yuan (HK$454 million) from China Eastern Airlines (SEHK: 0670), the
source said on Tuesday. “As long as Cathay is not opposed, ICBC could buy China
Eastern’s stake in the life unit,” the source said. “This is just one option
ICBC and Cathay Financial are considering. The ultimate goal is for ICBC to
invest in Cathay Financial,” said the source, who was not authorised to speak to
the media and declined to be identified. ICBC had been in talks to buy a stake
in Cathay Financial in a potential US$3.4 billion deal that would be the first
direct investment by a mainland bank in a Taiwan financial group, reports said
in December last year. ICBC declined to comment, while Cathay officials were not
immediately available for comment. The talks come days after a landmark
financial deal signed by Taiwan and Beijing took effect, opening the possibility
for financial firms on both sides to invest in each other. The planned stake
purchase, which would allow Cathay to access mainland’s biggest banking branch
network, is subject to regulatory approvals in Taiwan and mainland. ICBC
chairman Jiang Jianqing is currently visiting Taiwan, where he is due to speak
at a local economics forum later on Tuesday.
Happy life of Expo pandas at new
home
Brilliant pavilions greet
100-day countdown to 2010 Expo
Indoor decoration in China
Pavilion of World Expo starts
Former Vice President of the Supreme
People's Court, Huang Songyou (left) seen in a visit to Hong Kong in July 2006.
A mainland court sentenced a former top Supreme Court judge to life in prison on
Tuesday for taking bribes and other graft charges, a court official and state
media said. Huang Songyou is the latest top official snared in a stepped-up
campaign against corruption, which President Hu Jintao has described as one of
the greatest threats to the legitimacy of Communist Party rule.
Banks lent 38.93 billion yuan
to buyers of new homes and 60.65 billion yuan to buyers of second-hand homes in
Shanghai last year. Mainland banks in Shanghai's red-hot housing market lent
99.58 billion yuan (HK$113.2 billion) in new mortgages last year, up
dramatically from 5.8 billion yuan in 2008, as home seekers rushed to buy and
prices hit new highs. The banks lent 38.93 billion yuan to buyers of new
residential properties and 60.65 billion yuan to buyers of second-hand homes,
the Shanghai office of the People's Bank of China said yesterday. Lending soared
more than 1,600 per cent compared with 2008, when the property market and
overall economy were hit hard by the global financial crisis, the central bank
said. Analysts said the sharp increase in the city was in line with the national
surge in home mortgages. "At the end of 2009, outstanding medium- and long-term
consumer loans [nationwide] stood at 4.9 trillion yuan, an increase of 1.588
trillion yuan from the end of the previous year," Xavier Wong, the director and
head of research of property consultancy Knight Frank's Greater China division,
said. "In 2008, outstanding medium- and long-term consumer loans increased by
only 345 billion yuan. Housing mortgage loans account for about 99 per cent of
medium- and long-term consumer loans in China." The increase was helped by lower
tax charges and looser credit policies introduced by the central and local
governments in late 2008, he said. In November, the average price of new homes
in urban Shanghai was 31,209 yuan per square metre, up 68 per cent from 2008,
Knight Frank said. Nationwide, prices in many cities rose more than 40 per cent,
Wong said. Looking ahead, he said, some uncertainties hung over the market,
which was facing continued growth in liquidity but also suffering from
tightening administrative measures. Liao Qun, a senior vice-president and chief
economist at Citic Ka Wah Bank, expects mortgage loan growth in Shanghai and the
country as a whole to slow in the first half as the property market slows amid
the austerity measures. But prices and sales volume would pick up in the second
half owing to strong demand, he said. In order to pre-empt surging residential
prices from creating a property bubble, the central government issued directives
early last month intended to curb speculation in the residential market. Among
these were a resumption of the 5.5 per cent business tax on second homes bought
and sold within five years. The lock-up period had been reduced to two years
last year to shore up the market during the financial crisis. On December 31,
the Shanghai government announced related measures. It further tightened
criteria for concessions on deed taxes and individual income taxes and made
mortgage terms more stringent for buying a second property. Property consultancy
Colliers International says the residential market probably faces a moderate
correction, with price re-alignment in different districts in the short term,
but Colliers does not expect a sharp correction. Given the government's pledge
to maintain the continuity and stability of economic policies, Colliers does not
expect widespread policy reversals adverse to the property market this year, it
says in a research report. Taking into account a continuation of the
government's "moderately loose" monetary policy, Colliers says the residential
market is not expected to experience a sharp relapse this year.
The introduction of margin trading and
index futures in the mainland could speed up the launch of yuan-denominated
products in Hong Kong and give the local equity market a further boost, said Tse
Yung-hai, president of the Chinese Securities Association of Hong Kong. The SAR,
to grasp opportunities and complement Shanghai as one of China's two
international financial centers, should aim to be a wealth and yuan offshore
center by luring more mainland financial institutions to set up headquarters
here, said Tse, who is also deputy chief executive of BOC International. Tse
sees no need for mainland firms to trade Hong Kong shares in yuan, but the
possibility of listing yuan-denominated derivative products is high. "Listing
yuan-denominated derivative products based on mainland indexes could help
eliminate the exchange risks for investors," Tse told The Standard. "Products
such as the CSI 300 index derivatives could trade in Hong Kong in yuan ... the
market would be big, since hedging cost would be low and many people would be
interested." The launch of margin trading and index futures would help narrow
the gap between A- and H-shares through arbitrage and also improve the
convergence of both the mainland and local markets. But as Shanghai and Hong
Kong are both financial centers, firms may choose to be listed in either one or
both. A shares should continue to trade using the yuan and H shares with the
local dollar, he said. Tse also urged the SAR government to be more proactive in
promoting the city as a wealth management center by attracting more financial
institutions to set up their headquarters here. His call came right after
JPMorgan and billionaire George Soro's flagship investment arm, Soros Fund
Management, announced plans to set up offices in Hong Kong. Tse said Hong Kong
should also target mainland banks. "Hong Kong should build awareness and seize
every opportunity to develop before [the yuan is] freely convertible and
Shanghai becomes an open market. "There are 400,000 people in China whose net
worth is more than 1 million yuan (HK$1.13 million) each, but there are
insufficient financial planners and financial products there," Tse said. With
all its professionalism, efficiency and good regulatory system, Hong Kong
"should fight very hard for the market." Hong Kong also has dozens of
enterprises, like BOCI, which are familiar with the situation in the mainland.
Tse said one of the roles of the Chinese Securities Association of Hong Kong -
which was set up last month - is to help the city capture the growing market.
Nineteen mainland brokerages, with a 9 percent share of the market, are founding
members of the association. 
Hong Kong Fashion Week, Asia's largest
fashion event, opened in the city on Monday, showcasing the industry's newest
collections, looks and products and attracting exhibitors and buyers from all
around the world. The 41st edition of Hong Kong Fashion Week for Fall/ Winter
2010 and the 8th World Boutique is held from Monday to Thursday at the Hong Kong
Convention and Exhibition Center. The twin events feature altogether over 2,000
exhibitors from 30 countries and regions, a 17 percent increase over last year,
as well as close to 5,000 buyers from 39 countries and regions, according to the
Hong Kong Trade Development Council. During four days of the two flagship fairs
of Asia's fashion industry, there will be a series of runway shows, presenting
ideas from leading local and overseas designers. Fair highlights include the
Hong Kong Fashion Extravaganza on Monday, featuring four celebrated fashion
designers, including Dorian Ho from Hong Kong, Guo Pei and Xie Feng from the
Chinese mainland, as well as Japan's Toshikazu Iwaya. The events also offer 25
special seminars to address current fashion topics, including a forecast of
2011-2012 Fall/Winter fashion influences. Hong Kong Fashion Week for Fall/
Winter has a worldwide reputation for showcasing the newest collections, looks
and products in the industry. The event features 1,700 exhibitors from 24
countries and regions, with Russian and South African exhibitors joining for the
first time. World Boutique showcases the latest fashion brand collections,
including apparel, watches, shoes, fashion jewelry, home fashion and lifestyle
products. The event also includes such global fashion names as Vivienne
Westwood, which will take the spotlight at a runway show. The Netherlands,
famous for its design capabilities, also hosts a country pavilion for the first
time this year. 
A model presents a creation by
Japanese designer Tokshikazu Iwaya at the Hong Kong Fashion Week for Fall/Winter
2010 January 18, 2010.
Members of the "post-80s" generation
are less happy and more anxious than those of the older generation. That's
according to a survey by the Hong Kong Christian Service, which interviewed 400
respondents from September to November last year. It found the happiness score
for those between 20 and 28 is 4.14 points, compared to an average of between
4.5 and 5.5 points for the whole group. The "happiness index" included the
qualities of determination and strategy to strive for a better future. The
"post- 80s" group did better among the interviewees aged 20 to 63 on
determination but not on strategy. The survey also found 40 percent of
respondents between 20 and 28 years old showed symptoms of moderate or severe
anxiety, which was twice that of the older groups. About 20 percent of those
interviewed belong to the "post-80s" group, according to survey organizer
Natalie Cheung Yu. Cheung said most of the "post-80s" respondents received
tertiary education and are unhappy with their jobs which have low salaries and
long working hours. "They think they have high a education qualification but the
salary is not satisfactory and the chance of promotion is slim." She said the
new generation feared worse than Generation X, those who were born between 1961
and 1980, when faced with salary cuts during the economic turmoil. Another
survey by the Hong Kong Research Association found that those of the "post-80s"
generation are more pessimistic about the future. Of the 1,075 members of the
group interviewed by the association from January 7-13, 32 percent said they are
pessimistic about the future - 8 percent more than those who consider themselves
optimistic. It also found that 43 percent are dissatisfied with the government's
performance and only 14 percent said it is satisfactory. In response to radical
actions by the "post-80s" such as protesting in front of the Legislative Council
building as the Finance Committee discussed the funding of the express rail
link, 37 percent said they accepted their behavior while 39 percent said they
did not. The survey organizer said the result shows the "post-80s" have mainly
negative feelings and urged the government to review the youth policy and
provide more communication channels. 
Secretary for Transport and Housing Eva Cheng Yu-wah said on Monday she had
considered having direct discussions with protesters outside Legco on Saturday
night, but had been advised against doing so by police.
Secretary for Security Ambrose Lee
Siu-kwong speaking to the media on Monday defended the tactics used by police,
saying his officers had used “minimum force” against radical protesters.
Secretary for Security Ambrose Lee Siu-kwong on Monday condemned anti-rail
protesters - saying some of actions taken by them at the weekend had "seriously
undermined" the rule of law in Hong Kong. Dramatic protests erupted after
lawmakers on Saturday approved funding for a costly high-speed express rail link
to the mainland. This sparked clashes between police and thousands of
demonstrators outside the Legislative Council building. After months of often
bitter debate, lawmakers finally approved the HK$67-billion project by 31 votes
to 21. Almost immediately, thousands of mostly young protesters tussled outside
with hundreds of police and riot police. They also tried to prevent officials
and lawmakers leaving the Legco building. Police used pepper spray on protesters
who attempted to breach their cordon and formed a ring around the car of
Transport Secretary Eva Cheng Yu-wah, while trying to clear a path for her to
leave. Ambrose Lee on Monday defended the tactics used by police. He said
officers had only used “minimum force” against radical protesters. “Police were
very restrained and only had to use force when some protesters intentionally
broke through police barriers and blocked roads,” he told reporters. Speaking at
a press conference on Monday afternoon, Donald Tsang also condemned the actions
of the protesters. Tsang said the rail link project was supported by the
majority of people. "It is important for the government to implement the project
because of its long-term benefits to Hong Kong,'' the chief executive added.
Earlier, Secretary for Transport and Housing Eva Cheng Yu-wah said she had
considered having direct discussions with the anti-rail protesters outside Legco.
But Cheng said she changed her mind after being advised against the idea by
police. She said the government would continue working to help the 3,600
residents of Tsoi Yuen Tsuen re-locate to other areas. But Choi Yuen Tsuen
Concern Group vice-chairman Lo Ming-kwong said about 70 families living in the
village said they would stay in the village until the government demolishes it,
local radio reported on Monday. Lo hopes Chief Executive Donald Tsang Yam-kuen
and Eva Cheng would visit the village to meet residents. Choi Yuen Tsuen is home
to about 3,600 people. It has to be demolished to make way for a rescue station
and railway sidings of the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong
Express Rail Link. The government has said it would compensate villagers by
re-housing them or providing them with compensation. The compensation package
would cost about HK$2 billion.
Financial Secretary John Tsang Chun-wah said on Monday he would try to produce a
budget that was fiscally responsible, but also one that would help Hong Kong
citizens. Tsang was discussing his February budget at a closing ceremony for
Operation Santa Claus on Monday afternoon. “I shall endeavour to strike the
right balance between stimulating economic growth, improving people’s
livelihoods and achieving the best possible fiscal position,” he said. Tsang
said the unemployment rate had peaked at 5.4 per cent last summer – and the
jobless rate was now falling. “It currently stands at 5.1 per cent. I hope it
will go down further. This compares with the 6.4 per cent unemployment rate
during the Asian financial crisis a decade ago,” he said. Tsang appealed to
companies to accept more social responsibility. He suggested they conserve
energy, use electric or hybrid vehicles, solar and heating and energy efficient
buildings. Tsang also hailed the success of Operation Santa Claus 2009 – a
charity campaign co-founded by the South China Morning Post (SEHK: 0583) and
RTHK. “Even during these difficult economic times, companies, associations and
individuals have shown great community spirit through their generous donations,”
he said. This year, Operation Santa Claus raised more than HK$9,989,702 from
different organisations. Over the years, it has raised over HK$130 million for
different charities. 
The new social welfare chief has promised
to enhance home-care services for the elderly. Patrick Nip Tak-kuen said he is
aware of public concern over the quality of services at elderly homes after a
senior nursing assistant was jailed for six months and fined HK$3,000 last month
for forcing a woman with dementia to eat her own feces. The director of social
welfare said he understands that many families are now hesitant to send their
seniors to elderly homes following high-profile coverage of the case. The
strengthened services - which the Social Welfare Department is now working on -
are meant for senior citizens whose health is not too frail and who prefer to
live with their families instead of moving to elderly homes. These will include
more day-care and home- care services. "There is quite a large population of
seniors whose health is poor but have not reached the stage where they have to
move to homes for the aged," Nip said. Some families also want to live with
their parents and grandparents and take care of them at home. At the same time
"they may not be able to spare the time or find a full-time helper," Nip noted.
Currently the department and welfare agencies are providing a variety of support
services for the elderly and their families. Nip also said the department will
commission a consultant by the middle of the year to work out guidelines for
welfare agencies to improve their services. The consultant will look into three
aspects: human resources management, financial management and corporate
governance. "We are talking about public funding for these agencies," he said,
adding they have to make sure the agencies can operate to meet public
expectations. 
Mazda and Ford will dissolve their joint
venture in China by 2012, a move that would further weaken the ties between the
two auto makers, Japanese media reported Sunday.
Volvo sold 22,405 cars in China last year,
a surge of 77 percent over 2008, making it one of the fastest-growing mainstream
premium brands in the world's biggest vehicle market. Geely's expected merger
with Volvo will not hamper but boost China operations by the Swedish premium
carmaker, according to Volvo's top China executive. "The merger will not change
Volvo's plans in China. Instead, it will enhance them," said Alexander Klose,
chief executive officer of Volvo Cars China, at a press briefing last week in
Beijing, Klose said Volvo will focus on the Chinese market by putting in more
investment after the deal with current owner Ford Motor Co is complete. Another
major positive for the Swedish brand is that "Chinese authorities will lend
support to Volvo as they have chosen the auto industry as a key sector for the
economy", he said. Volvo will have the same brand direction after the merger and
Geely will not sacrifice the quality of Volvo cars for short-term cost savings,
he said. Klose added that Geely would possibly register a company in Beijing to
own Volvo. In December, Geely and Ford announced they expect to sign a final
agreement on sale of Volvo. Klose did not reveal details about the deal, noting
that he is "not a part of negotiations". Volvo sold 22,405 cars in China last
year, surging 77 percent from 2008, making it one of the fastest-growing
mainstream premium brands in the world's biggest vehicle market. In 2009,
segment leaders Audi and BMW moved almost 160,000 and more than 90,000 cars in
China respectively. Volvo: Brighter future after merger Volvo's compact S40 and
large-sized S80 are being made at Ford's joint venture in China with Chang'an
Motor Corp and Japan's Mazda Motor Corp. "We will carry out localizing
additional cars in China," Klose said, without revealing details. Volvo's
long-term strategy is to build cars in China that are also exported to other
countries, he said. The company said it will import its renovated C30 and C70 to
China in the first quarter of this year. An all-new S60 sedan, which is to debut
at the Geneva motor show in March, is also expected to be brought into China
later this year. Klose said Volvo will continue to expand its sales network in
China to propel sales and will further penetrate into second and third-tier
cities like its competitors. 
China's top appliance maker TCL Saturday started building a 8.5-generation LCD
production line in the southern city of Shenzhen to meet the rising demand for
flat-screen TVs. The plant, in which TCL and Shenchao Technology Investment
Company each hold a 50 percent stake, involves an investment of 24.5 billion
yuan ($3.6 billion). It covers an area of 600,000 sq m. The fund includes 10
billion yuan from TCL and Shenchao, bank loans and also investment from domestic
TV makers and overseas LCD panel producers, the two investors said. The plant
has a full capacity of 14 million LCD panels per year with an estimated output
value of 16.9 billion yuan ($2.48 billion). Its initial phase is expected to be
put into operation in August 2010 and start mass production at the end of 2011.
The second phase will start mass production one year later. TCL, founded in
1981, sold 14.28 million color TVs globally last year. Shenchao Investment,
owned by the Shenzhen government, runs businesses including investment in
projects related to integrated circuits and flat screens.
Developed countries may slip back into recession if they exit strategies taken
to battle the global financial crisis too early, the head of the International
Monetary Fund warned on Monday.
Rescue workers were evacuating thousands
of rural residents from parts of northwestern China after extreme cold and
blizzard conditions killed four people and left half a million snowed under,
meteorologists said on Monday. Some 100,000 homes were either flattened or
damaged by the storms in Xinjiang, and more than 15,000 head of livestock were
killed by the cold front that set in Sunday night. Herders moved thousands of
others to safer pastures at lower altitudes ahead of the latest storm front,
which is expected to last until Wednesday. Temperatures in parts of Xinjiang are
set to plunge to minus 45 degrees (minus 43 Celsius) by midweek, according to
Xinjiang Meteorological Station forecaster Wei Rongqing. Wei said snow was
falling in the region’s Altay district, where accumulations had already risen to
3 feet (94 centimetres). Altay lies in China’s extreme northwestern corner,
1,600 miles (2,600 kilometres) northwest of Beijing, the capital. “Livestock
raising has been hit hard. Both wild animals and livestock haven’t been able to
find food, but now forage has been allocated by the central government,” Wei
said. Some 500,000 people in total were affected by the harsh weather, he said.
The figure includes those who suffered property damage and supply shortages or
were isolated by snow drifts and icy roads. Direct economic losses were being
estimated at 300 million yuan (US$44 million) as of Thursday and were expected
to continue rising, Wei said. “We’re taking emergency measures, including
evacuating remote areas,” Wei said. Parts of northern China are seeing their
harshest winter in decades, with Beijing this month receiving its heaviest
one-day snowfall in 59 years. Temperatures in the capital were due to rise above
freezing this week. 
Motorola is planning to launch five
to six smartphones in mainland this year with one model ready to be unveiled
shortly, officials of the US mobile phone maker said on Monday. “In China, we’ve
already launched two models last month, and there will be another one very very
shortly, and probably another four or five later,” John Gherghetta, Corporate
vice-president and general manager of Mobile Devices Business, told reporters in
Seoul. Motorola is betting on smartphones after losing market share to rivals
for more than two years and has reorganised its mobile business around
developing phones running on Google’s Android operating system. Gherghetta was
speaking at a news conference for the launch of its ’Motori’ smartphone in South
Korea, to be offered by SK Telecom. The new model has a bigger camera and more
media features than its Droid model sold in the United States, according to
Motorola. “There will be a version of this phone in China in the first half,”
Gherghetta said. He declined to identify which mainland operator would offer the
new model. Spiros Nikolakopoulos, vice-president of Mobile Devices in charge of
Asian and international retail distribution, said Motorola was planning “at
least” 20 models across the world this year, “probably four to five in every
country”. Motorola executives also said it was open to developing devices with
other platforms, such as Microsoft’s Windows Mobile. Partner China Mobile (SEHK:
0941) in October said it would introduce eight smartphone models from Motorola
this year using a lower-cost platform called OPhone. Worldwide factory shipments
of smartphones are expected to rise about 28 per cent in 2010, according to
iSuppli.
Health advocates and mainland officials are campaigning to enforce smoking bans
in seven major cities, the latest sign of rising health awareness in the world's
largest tobacco-consuming nation. The drive organised by the government’s Centre
for Disease Control and Prevention seeks to enforce a ban on indoor smoking in
public places and close loopholes in the law. Cities targeted include some of
China’s biggest commercial centers – such as Tianjin on the northern coast and
the mega-city of Chongqing in the southwest – where smoking and breathing in
secondhand smoke add to health threats from traffic, industrial waste, and
polluted air and water. China accounts for more than one-quarter of the world’s
1.3 billion smokers, with 2 trillion cigarettes sold in the country every year.
About 60 per cent of Chinese men smoke, and offering cigarettes remains an
important part of gatherings and social interaction. The project “would help
save millions of lives through lowering tobacco consumption and reducing
secondhand smoking,” said Sinead Jones of the International Union Against
Tuberculosis and Lung Disease, which is co-sponsoring the campaign. Jones, the
union’s director of tobacco control, was quoted in the China Daily newspaper on
Monday. China has nominally banned smoking in public places indoors, but the
restrictions are poorly enforced and undermined by official exceptions and
government policies that sometimes even encourage tobacco use. A rural county in
central Hubei province last year sparked a public outcry after it proposed a
rule urging its officials to smoke more than 230,000 packs of locally produced
cigarettes a year to boost tax revenues. The government said the campaign was an
attempt to crack down on fake cigarettes and illegal cigarette smuggling, but
called it off in the face of public criticism. While urban officials have pushed
to rein in smoking, spitting, littering and other unsanitary behavior,
government finances remain addicted to tobacco. Taxes from tobacco sales topped
416 billion (US$61 billion) last year, up 26.2 per cent from 2008, according to
a report issued last week by the state tobacco industry regulator. Interest on
government loans to the industry added another 97 billion yuan (US$14 billion).
“The big increase in tax income from the tobacco industry is actively
contributing to the security of government finances,” a spokesman for the
regulator, Zhang Xiulian, was quoted as saying on its website. 
Shares in China Eastern Airlines
(SEHK: 0670) surged on Monday after the firm said it expected to return to the
black in 2009 due to the rebound in the aviation industry and lower fuel costs.
The nation's third-largest carrier in terms of fleet size saw its
Shanghai-listed shares jump by the daily trading limit of five per cent to 6.65
yuan. “The results of the Company for 2009 will substantially grow compared to
the same period last year,” China Eastern said in a statement filed with the
Shanghai Stock Exchange over the weekend. “The results of the company for 2009
are expected to turn from loss into profit.” The airline, which posted a net
loss of 13.9 billion yuan (HK$15.79 billion) for 2008, did not give specific
figures for its earnings last year in the preliminary announcement. 
Chinese peacekeepers
and rescuers bid farewell to the bodies of Chinese victims in Port-au-Prince,
Haiti, on Jan. 17, 2010. The bodies of eight Chinese police officers who died in
the Haiti quake would be brought home by a chartered plane of China Southern
Airlines. 
Hu Jintao (4th R), general secretary of
the Central Committee of the Communist Party of China, Chinese president and
chairman of the Central Military Commission, inspects Shanghai Synchrotron
Radiation Facility (SSRF) project, in Shanghai, east China, on Jan. 16, 2010. Hu
Jintao made an inspection tour in Shanghai on Jan. 14-17. Hu visited scientific
research bases, industrial parks and workshops of enterprises during the
four-day tour, making investigations and research on the transformation of the
mode of economic growth and work to promote sound and fast economic and social
development. Hu stressed promoting independent innovation and making
breakthroughs in core technologies. Such breakthroughs would provide strong
support for the transformation of the mode of economic growth, he said. During
his visit to Commercial Aircraft Corporation of China, Ltd., Hu said that the
Communist Party of China (CPC) Central Committee had made a strategic decision
to develop large passenger aircraft. He expressed hopes that the company stick
to independent innovation and succeed at an early date. At the Spreadtrum
Communication, Inc., a high-tech company founded by returned overseas students,
Hu said independent innovation is the lifeline of a company. He told the company
staff "I hope you could make further breakthroughs in core technologies, so as
to boost China's communication industry."
More resident-friendly remedies to
congestion being sought as expo nears - Car ban? You must be choking, say
officials - With dedicated Shanghai Expo traffic plans being rolled out, the
city hopes it won't need to resort to the odd and even-licensed plate system
used by Beijing to keep private cars off the roads on alternate days during the
Olympics. In fact, organizers are banking on 90 percent of Shanghai's 70 million
visitors to rely on public transportation in traveling to and from the expo
site, to prevent the roads from over-clogging with cars. To keep traffic moving
on the roads, nearly 100 one-way streets are being created. Sixty-two one-way
streets will be set up in the city core while another 31 will be marked around
the 5.28-km expo area. "The plan is aimed at minimizing congestion around the
central urban district of Shanghai, but the lengthy delays we see each day will
be reduced," said Han Hao, a professor from the College of Transport and
Communication at Shanghai Maritime University. A number of dedicated expo-bound
routes are also being mapped out. Only specially permitted vehicles will be
allowed to use a 104-km stretch of road within the Middle Ring Rd. The city is
also mulling a temporary ban on the use of government-licensed vehicles as
200,000 of them currently share the roads with 1.6 million privately owned
vehicles. Expanded and new subway lines will be added to the city's existing
tracks to help bring visitors to and from the expo site. Fifty percent are
expected to travel by metro. When the expo opens on May 1, Shanghai will be home
to 420 km of subway track, making it the largest underground metro in the world.
Lines 4, 6, 7, 8 and 9 will have stops located within close proximity to the
expo site, where free shuttle buses will take visitors the rest of the way.
Accommodating up to 100,000 riders per hour during peak times, the subway lines
will operate under extended hours, meaning visitors can catch their last train
home at midnight. 
A bride-to-be poses for pictures at
the riverside of Songhua River in Jilin City, northeast China's Jilin Province,
Jan. 15, 2010. The beautiful rime scenery along the Songhua River attracted lots
of lovers to take wedding photos. 
Lovers pose for pictures at the
riverside of Songhua River in Jilin City, northeast China's Jilin Province, Jan.
15, 2010. The beautiful rime scenery along the Songhua River attracted lots of
lovers to take wedding photos.
Functional seats plan
mooted a month after Deng, MacLehose met - The British government conceived the
preliminary idea of functional constituencies in 1979, a month after the
historic meeting between Deng Xiaoping and Hong Kong governor Murray MacLehose.
A report prepared by the Foreign and Commonwealth Office in April that year
stated there was a need to give Hong Kong people a greater say in their own
government in the 1980s without sparking resentment from Beijing. "It is
difficult to imagine the Chinese being prepared to tolerate a democratically
elected government in Hong Kong with full responsibility for internal affairs,"
the report said. "Nevertheless, as time goes on it could become increasingly
embarrassing for the British government to have to defend in parliament the
maintenance of an undemocratic and non-elective system of government [in Hong
Kong], particularly if there is significant pressure for more democracy among
the people of Hong Kong." The report, entitled "Hong Kong in the 1980s", was
recently declassified by Britain's National Archives under the 30-year rule.
Most government records are transferred to the National Archives and made
available to the public after 30 years. The paper considered British interests
in Hong Kong and set out some of the issues likely to arise in the 1980s that
would affect the formulation of British policy. The Foreign and Commonwealth
Office said the majority of Hong Kong people seemed mainly interested in a
rising standard of living, decent housing and good education. "Such evidence as
we have suggests that they [Hong Kong people] are generally satisfied with the
present form of government," the report stated. "But we cannot take it for
granted that this state of affairs will continue indefinitely. "Improved
education at the secondary and university levels will result in an increasingly
articulate public opinion. The growing student population may become less
docile. "The problem will be to devise a means of giving the people of Hong Kong
a greater say in their own government without causing alarm in Peking. "There
could be a case for electing more local bodies and introducing elections into
some functional bodies," the report said. The recommendation was in line with
Britain's policy of rejecting any idea of full democracy for Hong Kong to avoid
triggering resentment and suspicion from Beijing. The document was written a
month after the historic meeting between Deng and MacLehose in Beijing at which
Deng left open the options of taking back Hong Kong in 1997 or allowing the
status quo to continue after the expiry of the New Territories lease. Sir David
Akers-Jones, secretary for the New Territories in the late 1970s, agreed that
the British government had functional constituencies in mind when it mentioned
"functional bodies" in the document. Akers-Jones, one of the architects of
functional constituencies, said the idea was not surprising, as MacLehose had
already made a more deliberate attempt in the late 1970s to appoint people from
different professions to the legislature. "Why not elect them, because most were
members of substantial organisations?" Akers-Jones said. In a white paper on the
further development of representative government in 1984, the colonial
government decided that 12 legislators would be returned by nine functional
constituencies the following year. The constituencies were commercial,
industrial, financial, labour, social services, education, legal, medical and
engineering. "Full weight should be given to representation of the economic and
professional sectors of Hong Kong society, which are essential to future
confidence and prosperity (SEHK: 0803, announcements, news) ," the paper stated.
The election of the first group of functional constituency legislators -
including names such as Martin Lee Chu-ming and Szeto Wah - in 1985 marked the
beginning of democratic changes in the Legislative Council. The fate of
functional constituencies has emerged as the thorniest issue on the path to
universal suffrage. The pan-democrats have been calling for the abolition of
these trade-based seats by 2020, the earliest date for electing the legislature
by universal suffrage. But the government-friendly camp is making a concerted
effort to retain the seats.
A proposal by Hong Kong Exchanges and Clearing (SEHK: 0388) (HKEx) to revamp its
listing procedures for resource companies and bring in new guidelines has not
gone far enough, according to some market participants. The main criticism
involves the proposal to maintain the existing ban on listing applications by
early-stage explorers of natural resources, which they warn could see HKEx lose
out to rival exchanges.
China is expected to raise interest
rates and let its currency appreciate in the coming months as policymakers
resort to more aggressive measures to prevent the economy overheating, analysts
said. Moves by the central bank in the past two weeks to rein in a surge in bank
lending signalled a policy shift that would help the world's third-largest
economy avoid Japan's boom-bust experience of the late 1980s, they said. "I
believe we are at the beginning of a new phase of policy tightening - we will
see more tightening in the next few months," said Peng Wensheng, the head of
China research at Barclays Capital in Hong Kong. After repeated calls for banks
to moderate their lending activity, the People's Bank of China took action last
week, raising the minimum amount of money that banks must keep in reserve for
the first time in more than a year. It has also in recent days raised interest
rates on one-year and three-month treasury bills in a bid to curb record
lending. The fiscal tightening moves caught analysts by surprise and came after
state media reported banks had extended a massive 600 billion yuan (HK$681.96
billion) in loans in the first week of January. That amount was not far off the
combined 674.6 billion yuan in new loans given out in November and December. New
loans nearly doubled in 2009 from a year previously to 9.59 trillion yuan. The
central bank did not give a reason for its moves but analysts said they showed
the government wanted to rein in a credit expansion that has led to concerns
over inflation, asset bubbles, bad loans and economic overheating. "Growth was
last year's problem - it is dealing with the consequences of growth and the
policies that China successfully reflated the economy with that are the issues
for 2010," said Eric Fishwick, an economist at CLSA Asia Pacific. "China no
longer needs to have a hyper-stimulatory policy." In addition to more bank
reserve ratio rises, Beijing is expected to raise interest rates and allow the
currency to appreciate in the coming months, analysts said.
More international brands are now keen
to secure shop space in Hong Kong's malls and tourist areas. Foreign retailers,
who previously bypassed Hong Kong when setting up their Greater China
operations, are now moving to the city despite a shortage of options and high
rents, property agents say. In the past two years, big international brands were
reported to be setting up shop elsewhere on the mainland, citing the absence of
well-located and reasonably priced retail space in Hong Kong. Now they are
reviewing that strategy. One such case is Japanese dessert maker and retailer
J-Sweets, which rolled out a Mochi Sweets outlet in Shanghai in late 2008. The
outlet sells sweet glutinous rice. Having built up a chain of 40 outlets on the
mainland, the firm decided it needed to expand into a more mature market like
Hong Kong. In October, it opened its first Hong Kong store at the apm shopping
centre in Kwun Tong, and more stores were planned despite high rents, said Cheng
Kye-wai, the firm's co-owner. "Rents here are much higher than on the mainland,"
said Cheng, referring to the six-digit rent demanded for a 160 sq ft shop in the
Tsim Sha Tsui MTR station. But the benefit of opening in a city that boasted
higher disposable incomes was that prices could be higher to offset rents. Cheng
expected a Hong Kong store to sell 2,000 desserts a day, at a cost of HK$10
each, compared with five yuan (HK$5.68) to seven yuan on the mainland. "That's
why we've come here. We see the potential for making a bigger profit," he said.
The firm was now planning to open four stores, in Tseung Kwan O, Kowloon Bay,
Mong Kok and Kwai Fong, but would not be leasing street-level shops, he said.
United States clothing retailer American Apparel also went directly to the
mainland in 2008 and has opened one shop in Beijing and one in Shanghai. Now,
according to property agents, the chain is looking for a 30,000 sqft space to
open a flagship store in Hong Kong. Terence Chan, a director of the retail
department at property consultancy Jones Lang LaSalle, said the monthly rent for
a large street-level shop in a prime location could easily be between HK$5
million and HK$6 million a month. "Having a flagship store in an international
financial centre such as Hong Kong will be more like a brand-building exercise
for them ... the problem is whether they can find the right space," he said.
Chan expected retail rents in Hong Kong to increase by as much as 10 per cent in
prime locations this year given an overall improvement in the economy and
stronger retail sales.
A woman gets a facial laser
treatment in a cosmetic surgery clinic in Taipei. Mainlanders have created a
medical tourism boom in Taiwan. Beijing entrepreneur Li Jinxun's first trip to
Taiwan was a life-changing experience, but not because of the sightseeing. The
46-year-old took advantage of a short trip to the island last month to have
minor cosmetic surgery at a clinic in Kaohsiung city, something he said had made
him feel younger and better looking. "I'm very satisfied. I feel better
already," he said. Li, who runs a construction firm, is among a new wave of
affluent mainlanders eager to fit a bit of nip and tuck into their trips to
Taiwan, where they can expect to find better medical staff and facilities than
back home. "I think the doctors in Taiwan are more skilful, the clinic is
comfortable and the service is more cordial" than on the mainland, he said. The
30 members of Li's tour group paid NT$100,000 (HK$24,000) on average for a
nine-day trip covering sightseeing and cosmetic enhancements, according to the
Kaohsiung Aesthetic Medical Tourism Promotion Association. They opted for simple
procedures, such as teeth whitening, Botox injections to smooth wrinkles and
surgery to remove bags under the eyes or create double eyelids - a popular
procedure in Asia aimed at making the eyes look bigger. "The demand from China
is much higher than what we'd expected, and the visitors just keep coming in,"
said Chen Chun-ting, secretary-general of the association, which plans to host
three 100-member mainland groups in January. "As China gets richer, more and
more people are paying attention to their appearance and are willing to spend
money in this area." The growing interest in medical tourism coincides with an
influx of mainland visitors to the island, under more relaxed rules introduced
since Beijing-friendly President Ma Ying-jeou took office in 2008. More than
480,000 tourists arrived from the mainland from January to November 2009, nearly
five times as many as during the same period in 2008, according to government
figures. Industry watchers are upbeat that Taiwan, which has been promoting
medical tourism for two years, can hold its own against competitors in the
region such as Japan, Singapore, South Korea and Thailand. The prospect is
greatly boosted by Taiwan's advantage in attracting mainland clients. Their
common language, the island's geographical proximity and competitive pricing all
help, they said. "We had a late start compared with our competitors, but we're
confident we can achieve as much. There is a lot of room for growth," said Shih
Chung-liang, head of the bureau of medical affairs at the island's health
department. In 2008, around 5,000 visitors came to Taiwan for health check-ups
and cosmetic surgery, creating an industry worth US$40 million to US$50 million,
according to Shih. "Our main target has been mainland Chinese since cross-Strait
ties improved," he said. Shih said the island's medical tourism market was
expected to grow by 20 per cent annually. Private sector forecasts are even
higher, with one group of 30 hospitals expecting its business to more than
double to US$95 million this year, according to its chief executive officer Wu
Ming-yen. The potential clientele from the mainland is huge, as there are now
around 100 million mainlanders who can boast spending power equivalent to the
average consumer in Taiwan and Hong Kong, Wu said. "China is picking up in
surgical skills as its economy rises but it still trails behind Taiwan in
services. Unlike China, most hospitals in Taiwan are private and very
competitive," he said. Li, the 46-year-old Beijinger, is already planning his
second visit to Taiwan, this time bringing along his wife. "As we get older we
need to look after ourselves more carefully. I want to have my teeth whitened
and get a face-lift for my wife."
The
government may have won a pyrrhic victory yesterday over funding for the HK$66.9
billion express rail link, as thousands of young protesters angered by its
approval laid siege to the Legco building and repeatedly clashed with police.
Transport chief Eva Cheng and her officials were trapped inside for hours as the
protesters demanded to speak to her and tried to force their way into the
building. At one point, riot police and uniformed officers had to repel the
crowds with pepper spray. The project - believed to be the world's costliest
rail line per kilometre - has sparked disputes in and out of the Legislative
Council chamber for the past four weeks. Professional groups sparked a war in
the media with adverts for and against the line, and several lawmakers traded
insults during the funding debate, which ran for 25 hours. On Friday hundreds of
young protesters disputed the turf outside Legco with the project's supporters,
then swarmed Government House's gates.
Paddling Home, by artist Kacey Wong, may be a tiny Hong Kong flat but it has
stunning harbor views. The sampan behind him is a work by Stanley Wong, called
Heaven on Earth, meant to act as a pastoral counterpart to Wong's piece. Both
are included in a biennale jointly held with Shenzhen. The Hong Kong section is
at the West Kowloon Reclamation site until the end of next month.
Scenes
from the Hong Kong version of the True Crime video game, featuring images of the
city's iconic skyline - It's a world full of crime and punishment, where the
lines between good and evil are often blurred. Gun battles rage on the streets,
drug deals go down in darkened alleyways - and you never know just who you can
trust. It's a world that looks very much, at times, like Hong Kong. Welcome to
the new edition of True Crime, the wildly successful video game that has in the
past taken players through the mean streets of Los Angeles and New York. The LA
version of the game alone sold more than 300,000 units in its first two weeks of
release in 2003 and ended up selling more than two million. When it resurfaces
this autumn, True Crime 
A new term has entered the city's
ever-fluid vocabulary, "post-80s generation", which supposedly describes youth
driven to rash and radical extremes by frustration over diminishing
opportunities for upward mobility. The public discussion about them - spurred by
the radical edge of some recent protests - has revived popular interest in Hong
Kong University sociology professor Lui Tai-lok's 2007 booklet Four Generations
of Hong Kong People, a personal observation on the characteristics and
circumstances surrounding four main age groups of Hongkongers. Lui's first
generation is those people born in the 1920s or 1930s, many of whom escaped to
Hong Kong from the mainland during the Sino-Japanese war. Generally quiet and
hard-working, they were able to survive in hard times. They created the
liberal-minded environment in which the second generation was free to develop.
That second generation comprises the post-war baby boomers born between 1946 and
1966, who gave the city its current shape. Those born between 1967 and 1975
belong to Lui's third generation of Hongkongers, while his fourth generation was
born between 1976 and 2000 - or "post-80s", for short. The post-80s live in an
age of material abundance and economic affluence, Lui notes. But their life's
paths are severely constrained by their overprotective and supervisory
second-generation parents, who are determined to prepare them for the
competitive world at an early stage. "In fact, they do not have options. They
can choose [for example] which musical instrument to learn, but they cannot just
choose to listen to music and not play any instrument," he wrote. "Individuality
is a luxury." A more rebellious image of this generation was etched into the
minds of many when a group of post-80s protesters against a high-speed rail link
to the mainland confronted police at the central government's liaison office
after a demonstration on New Year's Day. Since then, many young people have
argued that the public's view of them is mistaken; they consider themselves
reasonable and moderate. But Lui said the situations faced by the third and
fourth generations were not his focus and, in fact, he was not even interested
in the discussion. "The purpose of my book is to give credit to the first
generation, who provided the liberal environment and freedom for us to develop,"
he said. He counts himself among the second generation. Lui wrote his booklet
around the time of his father's death. He wanted to pay tribute to the people of
his father's generation, who had left so much room and opportunity for their
children to develop. "They allowed us to explore and to try out different ways
of life even though they did not approve of them," he said.
Chinese travel abroad
increases - China's statistics from 2009 are expected to show its first deficit
in tourism, due to a weak global economy and a strong travel incentive at home,
a senior researcher said. China Tourism Academy, the think tank for the
country's tourism authority, said that mainland tourists spent some $42 billion
in overseas destinations including Hong Kong, Macao and Taiwan last year. At the
same time, overseas tourists spent only $38 billion on the mainland, down by 7
percent year-on-year. Though official statistics for 2009 are yet to be
released, the academy estimated that the tourism deficit will stand at $4
billion in 2009 - the first ever tourism deficit in China. "The deficit in
tourism service trade is a new sign saying that China is turning into a notable
tourist source market, in addition to being an important destination," Dai Bin,
deputy head of China Tourism Academy, told China Daily. The deficit will enable
China to have more say in the global travel market, and also help lift the
pressure on China for renminbi appreciation, he said. The booming outbound
travel also will encourage domestic enterprises to "go out" and purchase more
shares in foreign travel businesses, he said. Some 47 million trips were made by
mainland tourists to overseas destinations in 2009, up 3 percent year-on-year,
the academy estimated. In contrast, 126 million overseas tourists visited the
mainland last year, down by 3 percent year-on-year, it estimated. Though the
inbound tourists far outnumbered the outbound, apparently mainland tourists,
with swelling wallets and eagerness for shopping, have spent much more overseas.
"Chinese tourists have a different spending concept from others. They could
endure staying at a three-star hotel and eating at a not-so-good restaurant, but
would never go back home empty-handed," said Zhang Wei, general manager of the
outbound department with the China International Travel Service head office.
Also, since many imported goods are sold on the Chinese mainland at much higher
prices, many tourists shop for expensive watches, clothes and cosmetics
overseas, she said. Beijinger Gao Xuenan, on her trip to Europe last month,
spent some 13,000 yuan ($1,900) on a Louis Vuitton bag and a purse, and spent
another 2,000 yuan on a Burberry scarf. "The prices of these goods are much
higher in Beijing. The scarf, sold at more than 4,000 yuan, is even out of stock
in Beijing. I kind of feel I would suffer a loss if I don't buy them in Europe,"
she said. A survey by AC Nielson in 2008 said each Chinese tourist spent an
average $987 per trip. Those travelling to Europe spent an average $1,781. But
foreign tourists usually do not shop for such expensive items in China, she
said. Besides, the global economic downturn has made many foreign tourists slash
their China shopping budgets, said Dun Jidong, spokesman for the China Travel
Service. "But (the economic meltdown) had less impact on mainland tourists, who
traveled with confidence in China's economy," he said. The number of Beijing
tourists joining outbound tour groups through China Travel Service still grew at
a double-digit pace last year as usual, he said. From another view, after years
of promoting China as a tourist destination, the wealthy foreigners who used to
be the primary group visiting the Chinese mainland have been replaced by
ordinary tour groups and backpackers, who spent less in China, Dai Bin with the
academy said. But the average GDP per capita has hit $3,000 in China, "a level
that industry experts agree sends a signal that the country is entering a stage
of explosive growth in travel consumption", he said. The academy forecast that
54 million trips will be made by mainland tourists to overseas destinations in
2010, an increase of 15 percent year-on-year. "Compared to the average western
tourist traveling at least seven times a year, Chinese tourists travel only once
a year. We have a market with huge potential," he said. 
Business beats pleasure this New Year - Liu Zheng, who owns a flower shop in
Beijing, has a dilemma. She could either lock her store on one of the most
lucrative days of business and travel to her husband's hometown for a family
reunion, or she could keep her store open and face the wrath of her husband and
his family. "Why did Valentine's Day have to coincide with the Chinese New Year
this year?" she asked, already aware it is a coincidence that the dates overlap.
Liu's flower shop is located near Xidan commercial district, one of the busiest
areas of the capital. "I make a lot of money on Valentine's Day," she said. "But
my husband hopes we can go back to his hometown in Shandong province and be with
his family. I want to stay here and keep my store open." Liu said the final
decision, however, is her daughter's to make. "But she would probably want to go
and stay with her grandparents because she wouldn't want to miss out on
yasuiqian," Liu said. Yasuiqian is money children receive from older members of
the family during Spring Festival. The overlapping dates of Chinese New Year and
Valentine's Day has forced many storeowners like Liu to choose business over
family reunions. Shopkeeper Wang, who sells stuffed toys in the capital's
popular Wantong New World Shopping Mall, said he and his wife decided to keep
their store open and not meet their daughter, who lives with her grandparents in
another town. "Every February, as Valentine's Day approaches, I sell at least
100 stuffed toys on a daily basis. It's not feasible to keep my store locked at
the most profitable time of the year," said Wang, who refused to give his full
name. 
An orbiter is launched by a
Long-March-3III carrier rocket from the Xichang Satellite Launch Center in
southwest China's Sichuan Province, Jan. 17, 2010. It was the third orbiter that
China has launched for its independent satellite navigation and positioning
network, also known as Beidou, or Compass system. China took one step forward in
its ambition to build an independent global navigation network capable of
rivaling foreign congeneric systems with the successful launch of a new orbiter
into space early Sunday morning. Boosted by a Long-March-3III carrier rocket
into a geostationary orbit from the Xichang Satellite Launch Center, it was the
third orbiter China has launched for the network, also known as Beidou, or
COMPASS system. It will join another two already in orbits to form a network
which will eventually have a total of 35 satellites, capable of providing global
navigation service to users around the world around 2020. The new orbiter and
the carrier rocket were researched and developed by Chinese Aerospace Science
and Technology Corporation and Chinese Academy of Carrier Rocket Technology
respectively. The network will have five satellites in geostationary orbit and
another 30 in non-geostationary orbits, according to a plan for the COMPASS
system. According to the plan, the system will firstly provide navigation, time
signal and short message services in the Asia and Pacific region around 2012.
The COMPASS system will provide both open and authorized services, according to
China's satellite navigation project center. The open service will be free of
charge for the system's users within service area with a resolution of 10 meters
for positioning, an accuracy of 10 nanosecond for time signal and an accuracy of
0.2 meter per second for speed measurement. The authorized service will provide
more accurate services for authorized users. China started to build up its own
satellite navigation system to break its dependence on the U.S. Global
Positioning System (GPS) in 2000 when it sent two orbiters as a double-satellite
experimental positioning system, known as the Beidou system. The Beidou system,
China's first-generation satellite navigation and positioning network, made the
country the third in the world after the U.S. and Russia to have an independent
satellite navigation system. The original Beidou system provide regional service
for telecom, transport and disaster relief within the country, and has played
important roles especially in the Beijing Olympics and relief work for the
8.0-magnitude Wenchuan earthquake in May 2008. The country started to upgrade
the Beidou into the second-generation system by launching two new orbiters into
space in 2007 and 2009 respectively. A statement from the COMPASS system's
special management office said that China will make its own global navigation
system compatible and interoperable with other international competitors,
including the U.S. GPS system, the EU's Galileo Positioning Systemand Russia's
Global Navigation Satellite System (GLONASS). The compatibility and
interoperability, under the framework of the International Committee on Global
Navigation Satellite Systems(ICG) and International Telecommunication Union (ITU),
will make all users benefit from the progress of the satellite navigation's
development, it said. China is willing to cooperate with other countries to
improve the COMPASS system's compatibility and interoperability with other
satellite navigation systems and promote an all-round application of the
system's services, the statement said. Sun Jiadong, an academician with the
Chinese Academy of Sciences and the COMPASS system's chief designer, told Xinhua
after the third orbiter's launch that the system would play a major role in
providing services for national security, environment, traffic, logistics and
other economic activities. "There is nothing could not be accomplished by the
COMPASS system," said the 80-year-old Sun at the launch center, who was crowned
China's top science and technology award by President Hu Jintao last week. The
Beidou experimental system with two satellites in geostationary orbit completed
in 2000 was the first successful stage which helped Chinese scientists gain lots
of experience in constructing the COMPASS system, Sun said. According to him,
the blueprint to build China's own global navigation satellite system in three
stages was initiated in the 1980s and 1990s. "The successful launch of the
COMPASS system's third orbiter today marked a substantial step for the system to
function within the Asia Pacific region by 2012 as the second stage," he said.
With promising application in social and economic activities, the COMPASS system
will also boost the development of China's information technology, the chief
designer said. "In a few years, people would find some new application of the
COMPASS system that they have never imagined before." With the steady progress
to add launch satellites into space, the development of ground-based supporting
facilities and equipment to explore the system's application is comparatively
limited and should be considered as priority, the space expert said. Civilian
application of the U.S. GPS system in China is limited. Only a few companies
sell GPS maps for portable or vehicle-mounted positioning and navigation
devices. Sun proposed that the government should issue regulations and policies
to encourage more Chinese enterprises to participate in the development of the
system's application chain so as to make maximum possible use of those
satellites. Enditem 
Chinese peacekeeping police
wait for the return of their buried colleagues in Port-au-Prince, capital of
Haiti, Jan. 16, 2010. Six bodies of eight Chinese peacekeeping police buried in
the debris of Haitian earthquake have been found by the press time. 
Chinese Premier Wen Jiabao, who is also a
member of the Standing Committee of the Political Bureau of the Communist Party
of China Central Committee, talks with local residents at a supermarket during
his inspection in Beijing, Jan. 16, 2010.
A visitor experiences extracting
the grain from the imperial grain-storing cask on display inside the Imperial
Granary Museum of Ming Dynasty of Nanxingcang Barn, which has been opened to
public visitors, in downtown of Beijing, Jan. 16, 2010. Affluent exhibits
reenacting the history of grains transport through the Grand Canal and the
imperial barns storage are accessible to visitors, who can also experience the
quern of stone mill some 600 years ago.
Riot police officers stand guard during
a protest outside the Legislative Council building in Central on Saturday night
after funding for the controversial express rail link to Guangzhou was approved
by lawmakers. Shortly after the funding was approved, a group of demonstrators
tried to break through a security cordon, but they were rebuffed by police using
pepper spray.
Paul Chow bids farewell yesterday after
his long run at the helm of the stock exchange. He thanked all those who had
supported him.
Hong Kong Exchanges and Clearing (SEHK:
0388)'s new boss, Charles Li Xiaojia, will receive an annual basic salary of
HK$7.2 million, about HK$600,000 or 7.69 per cent less than his predecessor,
Paul Chow Man-yiu, the exchange announced yesterday. Li, the first mainland-born
chief executive of the exchange, takes the helm from 63-year-old Chow, who
retired yesterday as the longest-serving chief executive of the bourse
Hong Kong delivers baby solution
for rich - The flood of Beijing women traveling to Hong Kong to give birth
resumed on Jan 1 when hospitals in the special administrative region (SAR) began
accepting mainland moms again. Many of the women who travel there do so to have
a second child, something that is forbidden for most women on the mainland, said
an officer, surnamed Zhao, from one of the agencies that connects Beijing women
with hospitals in the SAR. An official, surnamed Xi, with the Beijing municipal
commission of population and family planning, confirmed that the road-trip is
popular with women wanting a second child. "If the child does not need to get a
Beijing ID, even though they will be taken to Beijing to grow up, we cannot
control them at all because they are not Beijingers," said Xi. According to
Beijing government policy, parents who have a second child ordinarily must pay a
penalty of up to 240,000 yuan. But babies born in Hong Kong become 'permanent
residents' of the special administrative region and do not have to pay the
penalty. The Beibeian consulting agency is one of the three biggest in Beijing
that help women give birth in Hong Kong. A manager from the agency, surnamed
Dong, said it has helped 15 women since Jan 1, 25 percent more than the same
period last year. "Our office has been busy with women coming for consultations
and to sign contracts," Dong said. Official Hong Kong government statistics say
around half of all births in Hong Kong are to mainland mothers. Dong estimated
that about 10,000 Beijing babies were born in Hong Kong last year. The Hong Kong
government refused to accept pregnant women from the mainland between Oct 8 and
Jan 1 because there was so much demand that Hong Kong women were having
difficulty finding beds. "We are having to book a bed six months ahead of the
arrival of the baby," Dong said. The strong demand led some Hong Kong hospitals
to raise prices from HK$60,000 to HK$100,000. Agencies charge between 80,000 and
150,000 yuan and pass on the fees to the hospitals. "The price was reasonable,"
said a mother, surnamed Sun, who earns more than 500,000 yuan a year and who
gave birth to a girl in July 2009. She said babies born in Hong Kong enjoy all
the rights of SAR residents, such as free medicine and a free visa to 135
countries. Anthony Wu Ting-yuk, president of the Hong Kong hospital authority,
said women from the mainland can save money by avoiding agencies. "It is easy to
give birth in HK and not dependant on agencies," Hu told the Southern Metropolis
Daily on Jan 5. "It costs around 40,000 HK dollars, including the operation and
three-day delivery in hospital if everything goes well," Hu told the newspaper.
Employees at Television Broadcasts (SEHK: 0511) (TVB) threatened to step up
industrial action as they dressed in red yesterday to vent their anger against
management for ignoring demands for pay rises and bonuses. "The company is
ignoring us and we don't know what they think about our requests," Lau Shun-on,
chairman of the TVB Staff Association, said. "We chose to wear red today because
we work so hard it's as if we are bleeding for our jobs." More than 200 staff
joined the red-clothes rally yesterday, followed by a protest outside the
broadcaster's headquarters in Tseung Kwan O. The association also embarked on a
signature campaign. The series of actions came after 200 technicians and props
workers protested in November, demanding a 5 per cent pay rise, an extra
increase for employees in the props unit, and a bonus equaling one month's
salary. Pointing out the company usually adjusted staff salaries in January, Lee
accused the company of using delaying tactics and ignoring employees' requests.
"No matter whether the company thinks our demands are reasonable or not, it
should have given us a response," he said. Ng Koon-kwan, organizing secretary of
the Hong Kong Confederation of Trade Unions, which supports the actions, said it
was disappointing that TVB did not value staff's opinions and contributions.
TVB's deputy controller of external affairs Tsang Sing-ming said the company had
taken note of the requests. "We have told them that salary adjustments and bonus
payouts require the approval of the board of directors ... and we're still
waiting for its approval," he said. Citing the free-to-air broadcaster's
financial reports, the unionists said TVB recorded a net profit of HK$300
million in the first half of last year, after pocketing HK$1 billion in 2008,
while staff salaries were frozen last year. The association also said the
starting salary for a TVB prop maker is about HK$6,000 a month, compared with
about HK$10,000 at Cable TV and RTHK. 
The chief executive yesterday conceded
that the government had failed to communicate with young people and urged the
public not to polarise the post-1980s generation. In the Legislative Council's
question time, Donald Tsang Yam-kuen also admitted for the first time that
social and political problems, not only economic issues, were behind the
deep-rooted conflicts that state leaders said Hong Kong should handle better.
Tsang's remarks came on the eve of a climax in the campaign against the
high-speed rail link - spearheaded by a group of young people in their twenties.
They started their protest outside the Legco Building yesterday ahead of today's
marathon meeting of the Finance Committee to debate the twice-delayed vote on
funding for the proposed HK$66.9 billion express rail link to Guangzhou. They
oppose the project because it will involve the relocation of Tsoi Yuen Tsuen
villagers. In his opening remarks at question time over the post-80s generation,
Tsang said adults must ask themselves whether they had become "more
conservative" in a changing society. "We really have to better understand young
people, listen to their voices and understand their aspirations, visions and
expectations towards society and the government, even when they have
disappointment and grievances on some issues," Tsang told lawmakers. "The
generation after [the second world war] pursues efficiency and economic growth,
while young people today are after values and self-fulfilment. But we should not
simply see the views of the two generations as pitched against each other." The
issue struck a chord with Gary Chan Hak-kan, of the Democratic Alliance for the
Betterment and Progress of Hong Kong, who accused the government of lacking in
its communication with young people. Tanya Chan, of the Civic Party, and Leung
Kwok-hung of the League of Social Democrats, challenged Tsang to put words into
action and meet the young protesters outside. "The youngsters outside are
peaceful and rational ... do you not go out and talk to them simply because you
are too nervous yourself?" Chan said. Tsang admitted that the government was
lagging behind in talking to youngsters, saying the conventional method of
district consultations may be seen by young people, who are more familiar with
online networking sites like Facebook and Twitter, as embarrassing. "It is true
that our present communication method and what we have done have not been enough
... But in any case, the basic principle for good results is to remain rational,
calm and respect the truth." Tsang said the government would try to use the
passion and ideals of young people in building society. Addressing the concerns
of Premier Wen Jiabao over Hong Kong's "deep-rooted" conflicts, Tsang, who had
insisted the conflicts were solely about the economy, admitted for the first
time that social and political problems were also to blame. "In terms of social
conflicts, these mainly appear in the problem of poverty and the demands of
young people ... We all know that people on low incomes are still in difficult
situations, and there are many grievances among the middle-class and youth." He
said he would make it a priority to create more jobs and improve the economy,
and would consider introducing measures to relieve the burden on low-income
families. But Albert Ho Chun-yan, chairman of the Democratic Party, said
acknowledging that political reform was part of Hong Kong's fundamental problem
was not enough. "The key to the problem is how you are going to resolve it," Ho
said, saying the government could not bring change because of the lack of a
democratic system. "Sorry, Hong Kong cannot wait longer to resolve these
problems."
MGM Grand Paradise, the Macau joint venture between Pansy Ho Chiu-king and
loss-making Las Vegas gaming giant MGM Mirage, is auditioning investment banks
to work on a Hong Kong initial public offering in which it may raise up to US$1
billion. People at two Wall Street banks said they had been to see Grand
Paradise to discuss the flotation. One said he had visited the company twice.
The financiers said the company had not reached the second stage of the bank
selection process, where companies send a so-called request for pitches to a
shortlist of potential advisers. Both said they anticipated this would happen
just after the Lunar New Year holiday in mid-February. A Grand Paradise
spokesman declined to comment. Grand Paradise is a 50-50 joint venture between
MGM Mirage and Ho, the daughter of Macau casino magnate Stanley Ho Hung-sun. It
owns the MGM Grand Macau. The joint venture would be the last of Macau's six
licensed casino operators to list in Hong Kong. Wynn Macau and Sands China
raised a combined HK$33.9 billion selling shares late last year. Last October,
MGM Mirage chief executive and chairman Jim Murren hinted a Macau stock sale was
on the cards. "Both partners have discussed it, and we believe it's a very
viable and attractive option," Bloomberg reported Murren as saying. Oppenheimer
gaming analyst David Katz wrote in a research note last month that the Las Vegas
company was close to launching the deal, citing a briefing by MGM Mirage
management. Oppenheimer said the Las Vegas firm expected to reap US$300
million-US$500 million from the joint venture selling a 20-30 per cent stake.
That implies Grand Paradise would raise up to US$1 billion, valuing it at up to
US$5 billion and making Pansy Ho a paper multi-billionaire. The proceeds would
also help the Las Vegas partner tackle its US$12.5 billion debt mountain. Grand
Paradise may face two major challenges: a pending US regulatory hearing and Hong
Kong's listing requirements. Last May, gaming regulators in New Jersey found
after a four-year investigation into the probity of MGM's joint venture with
Pansy Ho found the partnership "unsuitable". The state's Casino Control
Commission will hold a public hearing on whether to uphold its investigators'
recommendations. Should the commission do so, MGM Mirage could be forced to
choose between a future in Atlantic City, or in Macau. A Hong Kong market
listing for Grand Paradise could also need a waiver from the exchange's
profitability test, which requires firms to have stayed in the black for three
years. Grand Paradise booked a net loss of 251.06 million patacas on 9.12
billion patacas in revenue in 2008, according to an annual report released by
the Macao Gaming Inspection and Coordination Bureau. The company was technically
insolvent at the time, as its 10.274 billion patacas in liabilities exceeded its
total assets of 10.271 billion patacas. But surging casino revenue in Macau in
the second half of last year boosted business at the MGM Grand Macau to a record
US$50 million in operating income. In the US, MGM Mirage posted a third-quarter
net loss of US$750.4 million in November. 
Chief Executive Donald Tsang Yam- kuen
has hinted more relief measures are on the way for low-income earners to solve
the "deep-rooted" conflict in the city. In a Legislative Council question and
answer session yesterday, Tsang said he is "seriously studying" further relief
measures to help the poorly paid. "Since January 1, public utilities raised
their tariffs and low-income groups are facing an even worse situation," he
said. "I promise the government will seriously consider some measures to help
them deal with their difficulties. Creating job opportunities is also the most
important part of our policies." He added that low-income groups still face many
difficulties although the unemployment rate has dropped from its peak and the
local economy has showed early signs of recovery. Tsang said the administration
has handed out more than HK$87 billion in relief measures since the financial
crisis and most of it went to the underprivileged. "Besides Comprehensive Social
Security Assistance, we also have subsidies for public housing, electricity,
rates allowances and old age allowances, et cetera," he said. But he said the
number of poor aged 59 and below had dropped 40 percent between 2004 to
2008,while those getting by on an income of less than HK$5,000 a month had
dropped 50 percent. Tsang said income disparities are a way of life in an open
economy and that the problem can only be solved by an economic improvements in
the long run. Yesterday was the first time Tsang has hinted at new relief
measures after he said in a forum in Beijing last month that Hong Kong might
face a double dip in the economy in the middle of this year. He is now
"cautiously optimistic" about the economy amid the early signs of recovery but
said exports to European countries and the United States is expected to be
difficult. "The governments of the world and the central government are now
exiting from the financial market and it brings uncertainty to the global and
local economy," he said. "The interest rate will increase and the US dollar
exchange rate will fluctuate. These pose challenges to a stable recovery." In
response to the "deep-rooted" conflict mentioned by the Premier Wen Jiabao last
month, Tsang admitted the conflict is not only about economic transformation in
the city. "Of course there are many deep- rooted problems in Hong Kong. It is
not economic transformation only but also political and social conflicts," he
said. He said social conflict was shown in the poverty problem and the demands
from young people. 
Singapore Exchange enjoys high
operating margins but lags Hong Kong and other Asian rivals in terms of the
value of its listed firms. Singapore losing fight to lure IPOs - Asia's
second-largest bourse struggles as Chinese firms look for higher valuations -
Singapore is fast losing its charm for Chinese companies, which once drove its
initial public offering bandwagon, threatening its status as a major Asian
bourse and posing a big challenge for new SGX chief executive Magnus Bocker.
Singapore Exchange (SGX), Asia's second-largest bourse by market capitalisation,
enjoys high operating margins and has a successful derivatives business. But it
lags behind Hong Kong and other Asian bourses in terms of the value of its
listed firms. "If SGX is unable to secure large listings, the long-term threat
to Singapore will be severe," said Ernest Kan, head of the IPO Group at
accounting firm Deloitte & Touche in Singapore. Being a small country, Singapore
needs to attract listings from abroad and one way of doing that is to boost the
valuation of foreign firms listed on SGX through steps such as improved investor
education, says Kan. While bigger rival Hong Kong is leading the world with
multibillion-dollar share offerings, many of them from the mainland, Singapore
exchange is struggling to attract and retain the Chinese firms that once
dominated its listing pipeline. Aberdeen Asset Management strategist Peter
Elston says the British fund manager owns SGX shares because the Singapore
bourse operator is well managed and has a 40 per cent return on equity. There is
also potential for the exchange to grow its commodities trading business. "[But]
the long-term growth prospects for SGX are not as good as Hong Kong," he said.
"Singapore is always going to struggle because it doesn't have a hinterland like
Hong Kong has." SGX shares have risen 60 per cent in the past 12 months, lagging
both the 65 per cent jump in the benchmark Straits Times Index and a doubling of
Hong Kong Exchanges and Clearing (SEHK: 0388) shares. Goldman Sachs said Bocker,
who joined in December, had been "surprisingly quiet on the issue of attracting
more offshore IPOs, an area that we believe SGX risks erosion", and hoped he
would talk about plans at the operator's quarterly earnings due on Monday.
Industry players say they expect at least 10 initial offerings in Singapore
worth more than US$100 million each this year, led by India's top developer DLF
which is floating a real estate investment trust (Reit) to raise up to US$1
billion. The exchange is, however, losing some of its better-quality China
companies, which suffer from low valuations due to a spate of corporate scandals
involving Singapore-listed Chinese firms. Several firms were taken private last
year, while others such as XLX Fertiliser and abalone producer Oceanus now have
secondary listings elsewhere in what may be a prelude to an eventual delisting.
Singapore's stock market is valued at 3.5 times its gross domestic product, the
highest ratio in Asia after Hong Kong. SGX is by far the biggest stock market in
Southeast Asia but is smaller than Shanghai, Shenzhen, Mumbai, Seoul and Taipei.
Industry players say Singapore is losing the fight to attract China listings
because Chinese firms command higher valuations in Hong Kong and other parts of
Greater China. China has made it easier for mainland firms to list locally.
Oceanus last month priced Taiwan depositary receipts at a 16 per cent premium to
its share price, sparking a rally in its Singapore shares. Singapore's flotation
market came alive in November last year with the listing of CapitaMalls Asia,
which raised more than US$2 billion and was the city state's biggest in 16
years. Excluding CapitaMalls, however, the biggest IPO last year was worth a
mere US$21 million. Singapore only had one offering in 2008 that raised more
than US$100 million. Industry players say that while SGX is losing the battle
for Chinese firms, it remains attractive to real estate investment trusts (Reits)
from the region because of tax incentives and the presence of many property fund
managers in Singapore. "Investors who qualify can enjoy virtually tax-free
income yield from their investment in a Reit," said Ng Joo Khin of Stamford Law,
the legal adviser for Oceanus' Taiwan offering and Tiger Airways' ongoing share
sale. ARA, the Singapore property fund management affiliate of Hong Kong's
Cheung Kong (Holdings) (SEHK: 0001), plans to launch two property trusts - an
Islamic Reit with Qatar property and a regional logistics Reit with warehouse
operator CWT. Each property trust will hold assets worth about S$1 billion
(HK$5.58 billion) and their share sales will be managed by DBS, a source
involved in the transactions said. Mapletree Investments, a property firm owned
by state investor Temasek, may also float a Reit with up to US$2.8 billion worth
of assets including VivoCity, Singapore's largest mall. Outside the Reit sector,
SGX is also able to attract overseas listings in areas such as plantations,
mining, oil services and logistics. Tiger is on an investment roadshow for a
US$196 million offering, while British private equity firm 3i is likely to
divest its stake in oil services firm Franklin valued around US$250 million.
Domestic consumption has replaced
exports and capital investment as the chief engine fuelling growth on the
mainland, the Ministry of Commerce said yesterday. At the same time, the
government's policy of subsidising farmers has paid off, with rural consumption
outstripping that in urban areas for the first time. Farmers spent a total of
160 billion yuan (HK$181 billion) on about 90 million home-appliance units last
year, the ministry said. "Overall, consumption may contribute 51 per cent of
last year's growth in gross domestic product," said ministry spokesman Yao Jian
at a briefing in Beijing. He added that 2009 was the best year for retail sales
since 1986. Domestic consumption includes private and government spending and
Yao said its increase last year had offset the slowdown in exports. Of the three
forces driving China's economy - consumption, investment and exports - the
contribution of consumption is steadily gaining importance. Due to the lack of
social security, widening economic disparity and heavy tax burdens, the level of
consumption has been low until now. However, despite consumption showing a
significant improvement on the 48.6 per cent contribution to China's gross
domestic product in 2008, it is still a lower component in the overall economy
when compared with countries such as Britain and the United States, where
personal spending makes up about 75 per cent of GDP. Increasing domestic
spending was one of the primary goals of Beijing's massive fiscal and monetary
stimulus last year to buffer the impact of the financial crisis. Stripping out
price fluctuations, retail sales growth last year likely accelerated to the
highest since 1986, Yao said, adding: "Consumption is playing a stronger role in
driving China's economic growth." The four trillion yuan stimulus package, which
is focused on boosting private spending and capital investment in
infrastructure, helped the country emerge from the financial crisis as the
world's fastest-growing major economy. Yet, with the worst of the crisis over,
the government is putting more resources into subsidies to support consumer
spending. That short-term focus on boosting purchases of vehicles and home
appliances, critics say, does little to address the longer-term challenge:
weaning the economy off exports and finding new sources of growth in domestic
consumption. Spending by China's increasingly prosperous consumers is now one of
the most closely watched trends in the global economy, as it could help offset
cutbacks by US households. China's official policy since 2004 has been to get
more economic growth from household consumption, but the goals had been rarely
met until recently.
Foreign direct investment (FDI) to China
more than doubled in December, in the latest sign of economic recovery in the
world's fastest-growing economy. FDI skyrocketed by 103.1 percent from a year
earlier to $12.14 billion, compared to the 32 percent year-on-year growth in
November, the Ministry of Commerce said on Friday. The foreign investment, which
excludes investment in the financial sector, jumped for five months since
August. However, if full-year data is taken into account, China's FDI and newly
approved foreign enterprises fell by 2.6 and 14.8 percent to $90.03 billion and
23,435 respectively. Ministry spokesman Yao Jian said the latest figure signals
foreign investors' confidence in the Chinese market despite the financial
crisis. Last year, 52 percent of foreign investment went to the manufacturing
sector and 42 percent went to the service sector. But Yao said the service
sector will attract more investors, who are expected to resort to mergers and
acquisitions more often. Yao called China "a most attractive FDI destination"
and said the country's investment situation is getting better. Chinese analysts
echoed Yao's claim. "As China's economic growth gains speed, the nation gains
more trust from global investors," said Li Jianfeng, a macro-economy analyst at
Shanghai Securities. "The global economic recovery is also helping push up the
surge," he said. 
Nissan Motor Co's factory in central
China is making cars almost 24 hours a day, yet Pan Xiaowei still waited three
months for her new Tiida compact to arrive at the dealership. "It wasn't like
this a couple of years ago," said Pan, 34, whose husband runs a property
development company in Shandong province. "We used to buy and get a car straight
away, and now you have to pre-order and wait." China overtook the US last year
as the world's largest automobile market with sales surging 46 percent to 13.6
million, according to the China Association of Automobile Manufacturers. Nissan,
Ford Motor Co and Honda Motor Co are running their Chinese factories at full
capacity, with overtime and weekend shifts, and still can't deliver enough cars.
"Based on our current growth rate and planning assumptions, the capacity of our
two facilities will not be able to accommodate the expected future demand for
our products," said Nigel Harris, general manager of Ford's venture with
Chongqing Changan Automobile Co. About 99.7 percent of cars made in China
through November last year were sold, the association said. Foreign automakers
are expanding assembly lines as buyers in secondary cities beyond Beijing and
Shanghai benefit from government subsidies of at least 5 billion yuan ($732.38
million), a sales tax cut and 8.9 percent economic growth. China reported 65,000
kilometers of highways designed for fast traffic by the end of 2009, second only
to the United States, said Li Shenglin, Minister of Communications, on Friday.
China's Internet users hit 384
million by the end of 2009 due to the expansion of Internet access in more areas
and a rapid increase of mobile phone Internet users, according to the latest
report by China Internet Network Information Center (CNNIC). The number
registered a 28.9 percent jump since the end of 2008. Mobile Internet users
increased by 120 million to reach a total of 233 million. More people have
chosen to access the Internet through mobile phones since the Chinese government
issued third-generation (3G) licenses to major telecom operators in January last
year, which enables high-speed connectivity to the Internet. About 8 percent of
all Internet users access the Internet only through mobile phones. By November
last year, the government had used 277.3 billion yuan ($40.62 billion), part of
its 4-trillion yuan stimulus package, to develop telecommunications
infrastructure. Also, the government-funded project to sell household electric
appliances in rural areas at lower prices contributed to more Internet coverage
in the country. 
Mercedes-Benz marked 2009 as their
"best year ever" in China with sales in the mainland soaring 77 percent to
68,500 vehicles, German-US auto giant Daimler Chrysler said Tuesday.
A customer selects sweets in a
supermarket in Taiyuan, capital city of north China's Shanxi province January
14, 2010. According to major markets and food stores in the city, the prices of
Spring Festival goods such as sweets, candied fruits and nuts remain stable
despite price hike of materials like sugar and oil.
Beijing on Friday sought to play down a
threat by Google to quit the country on hacking and censorship concerns, saying
any decision by the internet search giant would not affect US trade ties. The
United States said it was too soon to tell how economic ties would be affected,
but added free information flow was crucial to China’s maturing economy. A
spokesman for China’s Commerce Ministry said there were many ways to resolve the
Google issue, but repeated that all foreign companies, Google included, must
abide by Chinese laws. “Any decision made by Google will not affect Sino-US
trade and economic relations, as the two sides have many ways to communicate and
negotiate with each other,” spokesman Yao Jian told a regular news briefing in
Beijing. “We are confident about developing healthy trade and economic ties with
the United States.”
Lenovo Group (SEHK: 0992) posted the
highest percentage gain in personal computer shipments last quarter, beating
bigger rivals as the industry returned to double-digit growth on strong global
demand. The world's fourth-largest supplier of PCs recorded a 42 per cent
increase in shipments last quarter to 7.87 million units, up from 5.55 million
units the previous year, according to separate preliminary estimates released
yesterday by market research firms International Data Corp (IDC) and Gartner.
The expansion was enough for the mainland computer giant to raise its global
market share to 9.2 per cent from 7.5 per cent a year earlier, noted IDC.
Gartner, by comparison, calculated Lenovo's market share at 8.7 per cent, up
from 7.5 per cent. News of the company's solid performance helped its shares
climb 7.86 per cent to HK$5.90, their highest closing price since June 6, 2008,
when it reached HK$5.91. "The [global PC] market has weathered a storm which
looks to be behind us," said Jay Chou, the research analyst for IDC's Worldwide
Quarterly PC Tracker report. Led by huge demand for laptops and a holiday season
featuring price cuts of unprecedented duration, worldwide PC shipments surpassed
90 million units for the first time to register a 22.1 per cent gain from 73.7
million units the previous year, according to Gartner. Mikako Kitagawa, a
principal analyst at Gartner, described the industry's performance during the
past three months as the strongest quarter-over-quarter growth rate the
worldwide personal computer market has experienced in the last seven years.
"These results indicate the recovery of the PC market on a global level,"
Kitagawa said. IDC, however, saw more modest growth. It said personal computer
shipments grew 15.2 per cent last quarter to reach 85.8 million units from 74.5
million units a year ago. Hewlett-Packard, Acer and Dell remained the world's
top-three personal computer suppliers, each with more than 10 million units
shipped in the quarter to December. Still, analysts maintained that Lenovo
benefited from buoyant sales in its core China market. Kitagawa said China,
where personal computer shipments rose 44.4 per cent year on year to 27.1
million units last quarter, accounted for more than 61 per cent of sales in
Asia-Pacific. Chou said Lenovo also had strong demand in the Europe-Middle
East-Africa market and Japan. At the International Consumer Electronics Show
held in Las Vegas last week, Lenovo's product showcase spurred greater interest
in the company and the range of new devices it will release this year. Chief
executive Yang Yuanqing launched what the company hopes to be the next big thing
- a "smartbook" called Skylight, which combines the best features of smartphones
and netbooks. Lenovo had achieved a net profit of US$53.1 million in its fiscal
second quarter ended September to rebound from three consecutive quarters in the
red.
Chinese Premier Wen Jiabao (R) meets
with visiting German Vice Chancellor and Foreign Minister Guido Westerwelle in
Beijing, capital of China, Jan. 15, 2010. Chinese Premier Wen Jiabao on Friday
called for stronger ties with Germany and welcomed its investment. "China and
Germany should take a long-term view, enhance mutual trust and deepen
cooperation to bring bilateral relationship to a new high," Wen told visiting
German Foreign Minister Guido Westerwelle. Westerwelle, also German Vice
Chancellor, is leading a delegation of lawmakers and business executives on a
two-day visit to Beijing. It is his first China trip since he took office in
October. Wen said China and Germany had maintained a positive and upward
momentum of relations, citing both countries' joint efforts to tackle the global
economic downturn and enhanced communication. Despite global economic downturn,
China and Germany maintained strong trade relations as trade volume in 2009
totalled 105. 73 billion U.S. dollars, down 8.1 percent from previous year. With
complicated international situation and grim challenges ahead, Wen called on
both countries to keep the big picture in mind and push the bilateral
partnership. Westerwelle said his country paid much attention to China relations
and would like to deepen bilateral cooperation in politics, economy and other
fields and jointly address global issues and challenges. Wen pledged more
dialogue and cooperation with Europe to ensure shared interests of Chinese,
Europeans and the world people. Westerwelle said Germany would make positive
efforts to push Europe-China relations. In a brief address to business
executives who accompanied Westerwelle, Wen introduced China's efforts to
implement its opening-up and reform policy. "China will create a more open and
favorable environment for investment and encourage foreign businesses to invest
in high-end manufacturing, technology, services, new energies and energy
efficiency," Wen said. Wen appealed for more foreign investment in China's
central and western regions and vowed to protect the legitimate rights of
foreign investors. "You are welcome to invest and run businesses in China," Wen
told the German executives. Earlier Friday, Chinese Foreign Minister Yang Jiechi
held talks with Westerwelle on bilateral relations, Iran nuclear relations and
climate change. Yang attributed the sound ties to mutual support on issues
concerning each other's unification, sovereignty and territorial integrity,
extensive common interests, mutual respect and equal dialogue.
China's car buyers in Beijing and
Shanghai will soon get handouts from the government if they pick green vehicles,
the Shanghai Securities News said on Friday. Residents in Shenzhen, Changchun
and Chongqing will also be eligible for state subsidies as part of Beijing’s
pilot program to cut fuel emissions, the newspaper said citing unnamed
government sources. Details of the rebates for private car buyers will be
announced later in the month, but they are believed to be similar to those for
fleet buyers.’ Beijing unveiled a trial scheme earlier this year to promote the
use of electric, hybrid and fuel-cell vehicles by public transport operators,
taxi firms and postal and sanitary services in 13 cities. Subsidies will be
based on the gap in prices between more energy-efficient vehicles and those with
traditional engines, with rebates running up to 600,000 yuan (US$87,880) for
fuel cell-powered large commercial buses. The government said in December it
would expand the programme to 20 cities and hand out rebates to private green
vehicle buyers in select cities, but did not name the cities. Many mainland
carmakers, such as BYD – 10 per cent controlled by US billionaire investor
Warren Buffett’s Berkshire Hathaway – have unveiled their self-developed
electric or hybrid models. A recent survey of Shanghai residents conducted by
McKinsey showed that early buyers of green cars were “trendy green” and “running
cost sensitive” types, rather than bargain hunters. In Shanghai alone, electric
vehicle penetration will likely reach 100,000 by 2020, McKinsey said. 
An annular eclipse is observed in Zhengzhou, capital of central China's Henan
Province, Jan. 15, 2010. 
Home prices in large and medium mainland
cities in December rose at the fastest pace in 18 months, but analysts said
activity in major cities had fallen sharply more recently after the central
government moved to cool the sizzling real estate market. They predicted that
prices could fall if the decline in sales volume continued. Capital values of
new and second-hand homes in 70 cities rose 7.8 per cent from a year earlier,
the National Development and Reform Commission said yesterday. That topped a 5.7
per cent gain in November. Prices increased by an average of 1.5 per cent month
on month, compared with a 1.2 per cent month-on-month gain in November. "This is
a big rise, taking into account the 1 to 2 per cent rise a few months ago," said
Li Wenjie, general manager at Centaline Property Agency's Beijing office.
Analysts said the rapid increase explained the central government's urgency in
tightening credit and increasing supply to curb speculation. On Sunday, the
central government issued a new directive to the nation's financial watchdogs,
ordering them to tighten their scrutiny of bank lending to prevent illegal
inflows of funds into the market. They will also move to prevent foreign "hot
money" from affecting the market, according to a circular by the State Council
published by Xinhua. On Wednesday, the central government said it would build
more subsidised homes and planned to increase the supply of small units in
private housing projects and to provide more land for development, which should
help rein in rising prices. Boosted by looser liquidity and strong demand from
home-seekers and investors, prices of new homes rose 9.1 per cent year on year.
Guangzhou topped the list with 19.9 per cent, followed by Shenzhen, with 14.3
per cent, and Haikou, with 13.4 per cent. Second-hand homes rose 1 per cent
month on month but 6.8 per cent annually. Shenzhen had annual growth of 23.9 per
cent, followed by Hangzhou, with 13.9 per cent, and Xiamen at 13.2 per cent. Li
of Centaline said the figures did not reflect current market conditions, saying
transaction volume in Beijing in the first 13 days of January was only one-third
of that in the same period in December. There were about 1,000 transactions
clinched in December, but only 300 in the first 13 days of this month, he said.
In Shanghai and Shenzhen, transaction volumes fell about 30 per cent in the
first 13 days of January compared with the same time in December, agents said.
Samuel Kong, the head of Midland Realty's Shenzhen branch, said the fall in
transactions had not led to lower prices just yet. It takes time, according to
Li. "Transaction activity usually will react first." Jing Ulrich, chairman of JP
Morgan China equities and commodities, said in Beijing that high-end home prices
in Beijing and Shanghai could fall 10 to 15 per cent if transaction volume
continued to shrink, according to mainland media.
Bank of China will apply to set up
outlets in Taiwan once details regarding a financial pact between Beijing and
Taipei have been announced, the bank said on Friday. Bank of China has completed
preparation work for establishing branches in Taiwan, spokeswoman Zhao Rong said
in a statement on its website (www.boc (SEHK: 3988).cn www.boc.cn). “Bank of
China hopes to be among the first batch of mainland commercial banks to set up
branches in Taiwan,” she said. In a related development, Taiwan government
sources said on Friday that mainland’s qualified domestic institutional
investors (QDII) will be allowed to buy local stocks worth about US$500 million.
The moves come a day before a historic financial deal sealed by mainland and
Taiwan takes effect on Saturday. Business ties between the former rivals have
warmed since Beijing-friendly President Ma Yin-jeou took office in 2008.
An alignment of miniature
chocolate sculpture of some 560 terracotta warriors of Emperor Qingshihuang is
on display at the World Chocolate Dream Park inside the Beijing Olympic Park, in
Beijing, Jan. 14, 2010. A batch of elaborate chocolate sculptures, including the
miniature replicas of Great Wall, the Terracotta Warriors, and traditional
Chinese painting of Panorama Along the Upper River During the Qingming Festival
in the same size to the original, are exhibited to visitors. 
Two craftsmen are engaged in
building up a 12-meter-long miniature chocolate sculpture of the Great Wall, at
the World Chocolate Dream Park inside the Beijing Olympic Park, in Beijing, Jan.
14, 2010. A batch of elaborate chocolate sculptures, including the miniature
replicas of Great Wall, the Terracotta Warriors, and traditional Chinese
painting of Panorama Along the Upper River During the Qingming Festival in the
same size to the original, are exhibited to visitors. 
A ship is fastened in the frosen sea
near Sanshan Island, Laizhou city, East China's Shandong province on January 15,
2010. The worst sea ice in 30 years is threatening shipping and the livelihoods
of fishermen on China's eastern coast. The situation is expected to get worse in
the upcoming week, with about 40 percent of Bohai Sea surface frozen already.
Residents in Wenchuan,
the epicenter of the 8.0-magnitude earthquake that killed nearly 90,000 people
in Sichuan province in May 2008, raise money on Friday for the victims of the
earthquake in Haiti.
Three companies, or their key shareholders, are tapping the market for a
combined HK$4.51 billion by placing shares after they rebounded following
Wednesday's plunge. Chen Qiyuan, chairman of Chinese herbal shampoo maker Bawang
(1338), and his wife Wan Yuhua, yesterday placed up to 200 million existing
shares, raising as much as HK$1.03 billion. The couple's investment firm Fortune
Station is selling 150 million Bawang shares, with an option to top up another
50 million shares, at between HK$5 and HK$5.15 apiece, representing a discount
of 6.4 to 9.1 percent on Bawang's closing price of HK$5.50. ZTE Corporation
(0763), the mainland's second-biggest telecoms equipment producer, raised around
HK$2.59 billion for general working capital by placing 58.29 million new H
shares, the company said. The shares were sold at HK$45 each, a 13 percent
discount on the closing price of HK$51.70 on Wednesday, the last trading day
before the announcement. ZTE shares fell 2.03 percent yesterday to HK$50.65.
Cement maker TCC International (1136) sold 256.6 million new shares at between
HK$3.26 and HK$3.43 a share, a discount of 8 to 12.6 percent from its closing
price of HK$3.73. "[Placements] are normal activities considering the large
liquidity and daily turnover in the Hong Kong market," said Redford Securities
head of research Kenny Tang Sing-hing. "Some companies may need funds to develop
new businesses." The placements should not have a major impact on the market,
although the stock price of the companies involved might feel some pressure, he
added.
Soros Fund Management, billionaire
investor George Soros’ flagship investment company, is looking to set up an Asia
presence in Hong Kong amid a resurgence in the region’s hedge fund industry,
said a source familiar with the matter. The fund firm, which was no longer
actively managed by Soros, would relocate some senior managers from its US
offices to Asia, the source said. In November, Soros spokesman Michael Vachon
Vachon dismissed as “rumours” reports about the fund’s plans to open an office
in Hong Kong. Another Soros source said that month that the fund had no such
plans. But an industry source in Hong Kong on Thursday said the fund had hired a
manager from Tiger Asia Management in New York to run its Asian office, which
was likely to become operational in the first quarter of 2010. Vachon was not
immediately available for comment on Thursday. The source, who requested
anonymity because he was not permitted to speak to the media, said he did not
know the name of the Tiger Asia manager. Bloomberg reported on Thursday that
James Chang of Tiger Asia in New York and current Soros manager Dai Jixin were
expected to relocate to Hong Kong to open the Soros Fund office. 
Pro-government camp forces
two-hour extension to rail debate - Twelve hours have been set aside for debate
on the twice-delayed vote on funding for the HK$66.9 billion express rail link
to Guangzhou, instead of the 10 hours scheduled earlier. The extension, which
followed pressure from 33 government-friendly lawmakers, has been agreed by
Emily Lau Wai-hing, chairwoman of the legislature's Finance Committee. However,
this is far shorter than the lawmakers' request for a 20-hour extension. Lau
said on Tuesday that the debate would resume with a six-hour session tomorrow
and would continue on Saturday for another four hours if there was no outcome.
But lawmakers backing the project believe 10 hours is a serious underestimation,
as some legislators had said they would attempt to delay the funding vote for a
third time. "As these lawmakers will exhaust all means to delay the meeting, it
was almost certain that the time you set down for it would not be sufficient,"
the 33 government-friendly lawmakers stated in a petition to Lau yesterday. They
demanded that a total of 30 hours, from tomorrow until Sunday, be set aside to
resolve the issue. However, Lau only agreed to extend the meeting by another two
hours on Saturday. "We came up with 10 hours after a thorough consultation with
all lawmakers. If some lawmakers choose not to believe them now, they shouldn't
have demanded such a poll in the first place," she said. The Legco Secretariat
had polled all lawmakers, except Lau and Legco president Tsang Yok-sing, since
Monday on the nature and number of questions they planned to ask, and concluded
that this should take only seven hours 25 minutes. "They didn't have to tell us
[what questions they planned], but everyone replied to us in a sincere and
co-operative manner," Lau said. Up to yesterday, the government had received
more than 10 written questions from lawmakers, most understood to be from the
pan-democratic camp. Ip Kwok-him, one of the 33 lawmakers who signed the
petition, said whether the funding could be passed this time hinged solely on
Lau's attitude. "If she will not stop lawmakers from asking repetitive or
irrelevant questions, we will seek to move her [from her post]," he said.
However, it is clear that Lau and the pro-government camp differ on the
definition of a repeated question. "If someone asks about the same topic more
than once, that does not necessarily make a repeated question," she said.
"However, when it comes to a point where the government has nothing new to
answer, I will ask if they still want to continue asking, or advise them not
to." The committee chairwoman has no right to stop lawmakers from asking
questions unless they are repeated or irrelevant. Professional Commons, a
think-tank and consultant for lawmakers from the Civic Party, said it was
impossible for the government to give a definite answer to at least five
problems posed by the link - including a joint-location immigration inspection
system, so the administration should retract the project. But transport
secretary Eva Cheng said immigration clearance would not be a big obstacle for
the link's effectiveness, as there were many efficient alternatives to
joint-location inspections - such as electronic advance immigration clearance,
or on-board inspections. However, she believed the government should improve the
public consultation in the future to include more voices other than those of
direct stakeholders. MTR Corp chief executive Chow Chung-kong said any further
delay to the project would increase the cost. 
The express rail fight may be serious
business inside the Legislative Council chambers today and tomorrow, but that
will not be apparent outside. Supporters of the mega project are planning a
samba party and lion dances. Not to be outdone, the anti-railway group will be
handing out rice balls to signal their hopes for a happy ending, as well as
holding a workshop on farming and Chinese culture. Travel Industry Council
executive director Joseph Tung Yao-chung said dozens of agencies will be staging
the samba party and lion dances to lighten the atmosphere. He expects about 500
people to turn out. Support Express Rail convener Lui Dik-ming expects 400 to
500 more to turn out to sing in chorus for the project. With Legco's Finance
Committee set to resume its contentious debate at 3pm today, around 100 young
people turned up the heat on legislators by camping out in the cold in Chater
Garden last night. The camp is organized by the Post-80s Anti-Express Railway
Group and the Anti-Express Railway Alliance. Six core protesters -- who on
Tuesday started a fast they hope will end tomorrow with news of defeat or delay
of funding for the project were doing well but were not appeased by Chief
Executive Donald Tsang Yam-kuen's pledge to listen to their views. One of them,
Wong Hin-yan, 24, said: "He is just putting on a show. We urge him to shelve the
high-speed railway project, but now he has shifted the focus to us." Alliance
core member Bobo Yip Po- lam expects a stronger turnout than last week. They
will be joined by more than 70 members of the Association of Engineering
Professionals in Society, said the senior vice chairman Yim Kin-ping. The group
also placed advertisements in newspapers today. On the eve of today's showdown,
an advert signed by 110 trade associations was placed in newspapers to express
support for the project.
Police are asking mainland authorities to help identify a suspected
plain-clothes public security officer who crossed into Hong Kong territory
during a protest last month. The Hong Kong police request was sent before last
Friday's Legislative Council security panel meeting where Secretary for Security
Ambrose Lee Siu-kwong told lawmakers there was no evidence to show mainland
officers crossed the border to take enforcement action. Yesterday, a police
spokeswoman said: "We have sought the assistance of the mainland authorities in
identifying a person in plain clothes. A written request was sent to the
mainland authorities to identify the person [accompanied by photographs] before
the special Legco meeting on January 8." Police said the suspected plain-clothes
mainland officer was seen crossing over to the Hong Kong side of the Lo Wu
bridge and removing a banner from an activist during the protest in support of
jailed dissident Liu Xiaobo. The man stepped back and appeared to have lost
balance as the protester struggled. A uniformed Hong Kong policeman, who was
among a team of Police Tactical Unit officers watching the protesters on the
Hong Kong side, extended a hand to prevent the man from falling, before the man
rushed back to the Shenzhen side, police said. Twenty-one people staged a
protest on the bridge on December 27 in support of Liu. Four protesters and two
journalists were detained on the mainland for three hours. Hong Kong police were
accused of failing to stop mainland officers from dragging protesters across to
the Shenzhen side of the bridge. Hong Kong police initially said they had not
seen any mainland public security officers exercise jurisdiction on the Hong
Kong side of the border. They later revised that statement to say they did not
see any uniformed mainland law enforcement officers exercise jurisdiction on the
Hong Kong side. Police suspect that the man is a public security officer or an
official from another mainland authority. "Except for this man, there is no
indication to suggest other mainland officers entered Hong Kong and made arrests
in the case," a senior officer from police management said. The border at the Lo
Wu bridge which crosses the Shenzhen River, is demarcated by a grille in the
middle. Law enforcement agencies on both sides clearly know this is the border
and should not cross the line. The incident caused an uproar, with lawmakers and
human rights activists saying it undermined Hong Kong's jurisdiction.
BYD plans to sell electric cars in US
by end of year - After a disastrous year for the United States car industry,
manufacturers are working hard to exude optimism and confidence at this year's
Detroit car show. On that score alone, the winner may be the mainland company
BYD, which created a stir this week by announcing that it planned to start
selling an electric car in California by the end of this year. It would be the
first company to sell Chinese-made vehicles in the United States. It would
require the firm to overcome numerous hurdles, including crash and emissions
testing that can sometimes take years, not to mention arranging a network of
dealers. But BYD, which was founded just seven years ago, is fond of setting
ambitious goals. An introductory video played before the company made its
announcement said, almost as a side note, that BYD intended to be the largest
carmaker in the world by 2025. "We've been talking for years about the imminent
arrival of the Chinese, and it still seems to be imminent," said Jeremy Anwyl,
chief executive of Edmunds.com, a website that gives car-buying advice to
consumers. "It always seems to be `later this year'." But Anwyl said BYD and
other Chinese carmakers were making rapid progress, to the point that the
quality and styling of their vehicles were less problematic than the difficulty
of breaking into a large, mature market like the US. "They've got a long-term
view, and they've certainly got the will," he said. "When they do come, it's
going to almost be as disruptive as when the Japanese came." The rest of the
vehicle industry is closely watching China. Many carmakers have already become
familiar with BYD and other Chinese manufacturers by competing against them in
that country, which overtook the US as the world's largest car market last year,
with sales of 13.6 million vehicles. General Motors, Ford Motor and others know
it is only a matter of time before those companies begin challenging them on
their home turf, too. Later this year, China's biggest private carmaker, Geely
Automobile Holdings (SEHK: 0175), expects to close a deal to buy the Volvo brand
from Ford, and GM could conclude the sale of its Hummer brand to Sichuan
Tengzhong Heavy Industrial Machinery. "China's going to be a force going
forward," Ford chief executive Alan Mulally said at a conference in Detroit. BYD
executives said the first vehicle they wanted to sell in the US was a
battery-powered, five-passenger crossover vehicle called the e6. The company
claims the car will have a range of 330 kilometres. Drivers will charge the
battery by plugging it into an outlet at home or at fast-charging stations,
which do not exist yet. The e6 costs about US$40,000 to make, so government
incentives would be important to making it affordable at first, said Henry Li,
the general manager of BYD's vehicle export trade division. US consumers would
buy the vehicle at stand-alone BYD dealerships, which had not been established,
Li said. Under repeated questioning by sceptical reporters, Li said that none of
the obstacles would be insurmountable for BYD, which counts Warren Buffett among
its investors. "I think the market now is looking for electric cars," Li said.
But he cautioned: "We don't expect high volumes." Li said the e6 complied with
all Chinese vehicle standards and executives were confident it would ultimately
meet the far more stringent US regulations. "In the design, we already
considered these requirements," he said. This is BYD's third consecutive trip to
the Detroit car show. A year ago, the company listed 2011 as its target for
selling the e6 in the US, and it listed a higher range, acceleration and top
speed for the vehicle. Other Chinese carmakers have visited Detroit in the past,
only to find that their vehicles - like the rhombus-shaped sedan with wheels on
three axles and a bamboo interior in 2007 - were not taken seriously, and they
have not returned. Many of the Chinese contenders seemed to market themselves on
the idea that they could undercut competitors on price, regardless of quality or
design. That is not the strategy at BYD, which already makes many of the
batteries used in mobile phones and other electronics. "The product," Li said,
"has to be good."
A Chinese rescue team with
sniffer dogs prepare board a plane in Beijing to leave for quake-hit Haiti on
Wednesday. Eight Chinese peacekeepers working in Haiti were missing after being
buried by a building collapse in a massive earthquake that decimated the
Caribbean country's capital, the mainland government said on Thursday. The State
Council and the Public Security Ministry said in separate statements late
Wednesday that the eight Chinese peacekeepers were in a meeting with UN
officials inside the headquarters building for the UN peacekeeping mission when
it collapsed in the magnitude 7.0 earthquake. The ministry did not say if the
missing were believed alive or dead, and says the rest of China’s 142
peacekeeping police in Haiti are safe. The State Council said the Red Cross
Society of China has pledged to donate US$1 million of emergency aid to Haiti.
China has deployed a team of 60 relief personnel to Haiti that includes search
and rescue crew, medics and seismological experts. The team will bring rescue,
communications and security equipment as well as 10 tons of food, medicine and
other supplies. The earthquake was the most powerful to hit Haiti in more than
200 years. 
An energy-saving
technologies exhibition in Beijing. The merger of China Energy Conservation
Investment Corp and China New Era Group Corp is regarded as a win-win deal to
enhance the two companies' 'green' portfolios. Two centrally administered
State-owned Enterprises (SOEs) are to be merged soon to increase their input in
energy conservation and environmental protection, an industry source revealed.
The government has approved the merger of China Energy Conservation Investment
Corp and China New Era Group Corp, two companies under the administration of the
State-owned Assets Supervision and Administration Commission of the State
Council (SASAC), said a source close to the matter, without elaborating. The
move is in line with efforts to build an environmentally-friendly economy, said
the source, who asked not to be named. "I believe after the merger, the
resources of the two companies could be better used to enhance the portfolio on
green business,"