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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
Jan 14, 2010
Lam Woon-kwong, the former director of the chief executive’s office, has been named new chairman of the Equal Opportunities Commission (EOC), a government spokesman said on Wednesday. Lam, 58, replaces former EOC chairman Raymond Tang Yee-bong after Tang’s contract expired on January 11. Lam’s term will last for three years, commencing on February 1. “An open recruitment exercise was conducted to select the new EOC chairman and a selection board was appointed to consider the candidates and make recommendations to the chief executive. Lam has accepted the appointment,” the spokesman said. He said Lam had extensive experience in public administration and had served in a number of senior positions within the government. This includes working as secretary for home affairs and as a director of the chief executive’s office.
Taiwan plans to cut eight ministry-level agencies and eliminate tens of thousands of jobs in the biggest revamp of its cabinet system in six decades, the government said on Wednesday.
China food and retail group Bright’s US$1.4 billion bid for CSR, Australia’s largest sugar refiner, could see mainland eventually emerge as a major new market for the country’s sugar exports. Currently Indonesia, Malaysia, Japan and South Korea take the bulk of Australia’s supplies, with mainland buying around 10,000 tonnes out of total imports of around 1 million tonnes a year. CSR, which accounts for around 60 per cent of Australia’s 4.2 million tonnes of raw sugar last year, markets its output through Queensland Sugar under a contract that would last to 2012, Sugar consultancy Kingsman’s analyst Tom McNeill said. But longer-term more Australian sugar could be exported to mainland. Bright, one of the world’s largest food groups, said the acquisition would provide CSR with a direct route to the mainland market, where the mainland company could leverage its existing distribution network to distribute CSR products. It sees the purchase of CSR Sugar as a first step in further developing Australia’s sugar industry, with potential for further significant investment in milling and refining infrastructure. This could reverse a trend of falling Australian sugar production from as much as 5.45 million tonnes in 1999 as farmers switched to higher yielding crops. “Bright Food would look to work closely with cane growers and would be open to inviting CSR’s cane growers to take some form of ownership interest in CSR Sugar,” Macquarie Group said in a research note. If Bright decided not to extend its contract, then Queensland Sugar’s own future could be in doubt as it would have far less sugar to market. “You would expect there could be some implications if there are say half a million tonnes or one million tonnes going off to one buyer in China that owns 40 per cent of the milling infrastructure in Queensland,” said McNeill. Bright’s proposal comes as the world is facing a global shortage of the sweetener for the second straight year, sending prices to the highest level in nearly three decades. Kingsman estimates the deficit next year could be between 8 million to 9 million tonnes following a 15 million tonnes deficit last year. It expects prices to remain high as there are few stocks to fall back on. Analysts said the implications of Bright’s proposed purchase remain unclear as mainland is generally self-sufficient in sugar though this year it faces a shortfall even though it has reserve stocks. “China is not traditionally a large importer of sugar but this year they’ve had a little bit of a crop failure so the expectation is that they’re going to take in two to four million tonnes,” said Scott Briggs, an agriculture commodities specialist at ANZ Banking Group. Mainland usually produces 14 million or 15 million tonnes a year. CSR, a sugar, building products and aluminium conglomerate, last year said it planned to spin-off its sugar and renewable energy business either through a trade sale or a separate listing as part of a group restructuring. Bright Food believes its potential offer, which would be in cash, is a much more attractive and secure alternative than CSR’s demerger plans. Its approach demonstrates mainland’s increasing appetite for Australian commodities outside mining assets.
Chia Tai Enterprises International has obtained syndicated bank loans of 327 million yuan (HK$371.4 million) and US$202 million (HK$1.57 billion) for refinancing and to expand its mainland supermarkets. Three Thai banks granted two six-year-term loans to Chia Tai (0121), which runs the Lotus Supercenter chain in the mainland. The yuan loan is onshore in nature while the offshore US dollar loan carries an interest rate of LIBOR plus 200 to 300 basis points. Chia Tai chief executive and executive vice chairman Soopakij Chearavanont said the firm learned a costly lesson when the Thai baht depreciated during the Asian financial crisis. To minimize risks, Chia Tai now pays suppliers in their local currency. Chia Tai has identified 40 locations to open supermarkets and department stores, he said. "We try to use the minimum to invest in properties," explained Soopakij. "We try to encourage the landlord to build the property according to our own design." Chia Tai is also looking for brand sponsors for appliances such as refrigerators to cut costs. All the Thailand-based firm's 45 mainland branches have a positive cash flow, Soopakij added, and 41 are profitable. He said the average profit for its Shanghai stores was 20 million yuan last year, with the best-performing outlet recording 42 million. Chia Tai is targeting a profit margin of at least 4 percent as it draws more high-end clients.
The Chinese mainland and Taiwan are
likely to open tourism representative offices on each side of the Taiwan Strait
around the Lunar New Year, said a mainland spokesman Wednesday. The offices were
expected to open around the Spring Festival that falls on February 14, said Yang
Yi, spokesman with the State Council Taiwan Affairs Office, at a press
conference in Beijing. The mainland had become the second largest source of
tourists to Taiwan, he said. Last year, 606,200 mainland tourists in 23,289
groups toured Taiwan. Jan 13, 2010
Air cargo throughput via Hong Kong in December surged 38.5 per cent from a year earlier, rising for a third straight month and indicating the rebound in global trade flows is accelerating, data from Hong Kong Air Cargo Terminals Limited (Hactl) shows. For all of last year, however, air cargo volume fell 8.3 per cent to 2,323,605 tonnes, Hactl said. “Last year was a year of ups and downs,” Lilian Chan, Hactl’s general manager of marketing and customer services, said in a statement. “We do not have a crystal ball to predict the market condition, but we are expecting a more stable year this year.” Cargo exports from the city in December increased 43.7 per cent from a year earlier, but export volumes for the whole of last year dropped 11.6 per cent. Exports to the United States and Europe continued to improve in December, surging 39.9 per cent and 38.6 per cent, respectively. Exports to the mainland jumped 58.6 per cent from a year earlier, Hactl said. December cargo imports rose 46 per cent from a year earlier, whereas imports for the full year fell 3.1 per cent. Hong Kong is a re-export centre for trade between Asia and the rest of the world. Air cargo volumes through Hong Kong in December totaled 232,476 tons.
Three men and two women from Hong Kong appeared in Kwun Tong Court on Monday accused of stealing HK$25 million worth of luxury watches and jewellery from a shop in Tokyo's Ginza district between December 31 and January 2. The male defendants are surnamed Choi, aged 50; Chan, 52; and Chow, 53. The women are surnamed Chan, aged 37, and Lai, 36. No pleas were entered. In court, police requested more time to collect evidence. As a result, the defendants were instructed to appear in court again on Friday. All five were not granted bail and remain in police custody. The defendants were arrested in Hong Kong last Thursday and Friday. Luxury watches worth more than HK$18 million were recovered from apartments in Sha Tin and Sau Mau Ping and from a safety-deposit box. The other stolen goods have not been accounted for. Police believe the group posted six parcels containing the stolen watches and jewellery from Tokyo to Hong Kong by airmail. Police are investigating whether an attack on two postmen at Po Tat Estate in Sau Mau Ping last week, is connected to the case. During the attack, two mail bags were stolen.
US network equipment maker Cisco Systems is restructuring its management in Asia to create a new segment for China, in a nod to the region’s increasing importance. The People's Bank of China, the central bank, announced on Tuesday to raise the deposit reserve requirement ratio by 0.5 percentage points from Jan. 18 this year.
Thousands of officials have fled China over the past 30 years with some US$50 billion dollars in public funds, state media said on Monday, as the government scrambles to stem the tide of corruption. As many as 4,000 officials have disappeared, using criminal gangs, mainly in the US and Australia, to launder their ill-gotten gains, buy real estate and set up false identities, the Global Times said. A joint task force involving 15 government ministries has been set up to choke off graft in civil service ranks, the paper said. Authorities investigated 103 cases involving the outbound travel of more than 300 officials, the paper said, citing a party official responsible for disciplinary issues. In one case, the disappearance to France last year of Yang Xianghong, a top Communist Party official in Wenzhou city, led to the arrest of his wife, who was charged with trying to launder 20 million yuan (HK$22.7 million), it said. The paper did not detail how the US$50 billion dollars were funneled overseas, or how the officials were linking up with criminal gangs abroad. President Hu Jintao has for years made fighting official corruption a priority, saying that the scourge is a matter of life and death for the ruling Communist Party. In recent years, the mainland has sought to negotiate more extradition treaties with Western nations to help it repatriate and punish officials fleeing overseas with public funds.
China's foreign trade in 2009 dropped 13.9% to $2.21 trln and its trade surplus last year slid 34.2% year on year to $196.1 bln.
China banks rushed to extend 600 billion yuan (HK$681 billion) in loans in the first week of this year amid speculation of imminent policy shifts aimed at curbing inflation, state media said on Monday. The strong burst in credit, which was larger than the combined 547.8 billion yuan in new loans given out in October and November, has “set off alarms” in Beijing, the Economic Information Daily reported. The central bank is expected to possibly implement a rise in the reserve requirement ratio, or the amount banks must set aside in reserves, soon after the Chinese New Year on February 14 to rein in credit, it said. That would be the first hike in the deposit reserve ratio for commercial banks since June of last year. Such a policy would work to fight inflation by requiring banks to hold on to more of their funds and lend less, keeping prices down. Mainland’s consumer price index, a key gauge of inflation, rose in November after an almost year-long bout of deflation, stoking fears that Beijing could start tightening monetary policy in the coming months. The People’s Bank of China on Thursday raised the interest rate on its three-month treasury bills for the first time in nearly five months, which was taken as “clearly a tightening signal”, the newspaper said. Mainland banks tend to lend quickly at the beginning of each year to boost their balance sheet and then gradually slow down the pace in the following months. The nation’s new bank loans reached a massive 7.4 trillion yuan in the first half of last year, including a record 1.89 trillion yuan in March, as banks heeded Beijing’s calls to pump money into the world’s third-largest economy to pull it out of the worst slump in years. The figure declined significantly to 355.9 billion yuan in July before rebounding in August and September amid concerns that much of the money had been funnelled into stocks and property, risking a spike in asset prices. December lending data is due to be released in mid-January.
Jan 12, 2010
China's cabinet Sunday issued a notice, saying the down payment requirement for those families applying to buy a second or more houses backed with loans should be no less than 40 percent.
Jan 11, 2010
Sham Shui Po's annual Hong Kong Computer Festival, organised by the Chamber of HK Computer Industry, no longer received council funding, a district councillor said yesterday amid tension among businesses in the district over the festival. Lo Wing-man said that while the council had assisted the festival in 2002 and 2003, it had been self-funding since and bore the risk of losses. His statement follows an announcement by the Hong Kong Computer Association that it will hold the first Sham Shui Po Computer Festival in four shopping malls over the same period as the chamber's event - January 15 to 18. The association's permanent honorary president, Wilson Shea Kai-chuen, said earlier this week that expo-style festivals hurt small businesses in the area. Chamber chairman Leung Ding-kau said some festival profits were put back into the community via programmes to help the needy learn about computers. On claims that expo-style festivals hurt local small businesses, he said 60 per cent of booths were run by local businesses. Leung said 500 businesses had applied for booths in the festival - four times the number available. Applications were drawn out of a hat for fairness, but the system was weighted in favour of local businesses.
Henderson Land Development (0012) and New World Development (0017) will pay a land premium of HK$2.5 billion on their Tai Tong Road project in Yuen Long, market sources said. It represents an average land premium of HK$2,000 per square foot, down from the initial government estimate of HK$3,000 psf. It is also much lower than the HK$3,253 psf premium Henderson paid for its Lok Wo Sha project in Wu Kai Sha in October. The total amount of land premium to be paid is 27 percent lower than the government's earlier request of HK$4 billion. The two developers will officially send their acceptance letter to the government today. This is the first land premium project in the New Territories since the auction of two plots in Tai Po on December 28. The Tai Tong Road project has a total site area of 478,900 sq ft, with gross floor area of 1.17 million sq ft, which could accommodate 13 buildings with 1,700 units. As most of it was agricultural land, the developers have to pay a land use conversion premium. Henderson Land has a 79 percent stake in the project, while New World holds the rest. Henderson's Lok Wo Sha project in Wu Kai Sha cost nearly HK$9.6 billion in land premium in October, with a price of HK$3,253 psf, a record. Further similar deals are expected between developers and the government over premiums on New Territories land. Other large-scale projects being negotiated with the government include Henderson Land's projects in Yuen Long and Sang Wai, Cheung Kong's (0001) Fung Lok Wai project, and the integrated development project in Yau Tong led by Henderson Land.
Beijing is on course to tighten liquidity and exit from its stimulus plans, economists said following the latest signals from the capital. New loans in the mainland this year would be about 7.5 trillion yuan (HK$8.52 trillion), down from almost 10 trillion yuan last year, the China Securities Journal reported yesterday, citing unnamed sources. This projected amount, and an increase in the yield on three-month bonds announced by the central bank yesterday, indicate that Beijing wants to mop up excess liquidity in the banking system and end its loose monetary policy, economists said. The People's Bank of China this week issued bills of up to 130 billion yuan to drain liquidity. It also set the yield on 60 billion yuan worth of three-month bills offered yesterday at 1.3684 percent, from 1.3280 percent at the end of December, the first increase in 19 weeks. The higher yield was announced one day after the release of the central bank's annual work meeting report in which it said it would aim for a "moderate" expansion in lending but set no target. Economists said the central bank may also raise interest rates or the reserve requirement ratio in the second half. The PBOC may want to show its determination to control inflation, and it is a signal to tighten liquidity, Jiang Chao at Guotai Junan Securities told Bloomberg. Hang Seng Bank's (0011) research team says Beijing is concerned about inflation after nine months of deflation. Surging home prices worried mainland authorities the most. "For the government, the recent surge of house prices in some cities poses a more immediate threat," Hang Seng economists Bill Leung and Joanne Yim wrote in a report. Beijing is highly concerned about the heavy dependence of bank portfolios on property-related lending, they said. In the third quarter last year, almost half of new loans totaling 1.29 trillion yuan went to property developers or mortgages. In the fourth quarter, average house prices rose 20 to 70 percent across the country from a year earlier, according to the National Bureau of Statistics.
The annual per capita GDP in Beijing was expected to top 10,000 U.S. dollars in 2009 as the national capital expected an over 9.5 percent economic growth for the same year, said an official with the municipal economic planning agency Thursday. Beijing expected to rake in financial revenue totaling 202.7 billion yuan (about 29.8 billion U.S. dollars), up 10.3 percent year on year, said Zhang Gong, head of the Beijing Municipal Development and Reform Committee. The income of urban and rural residents were estimated to rise by 9 percent and 12 percent respectively in 2009 compared to 2008 figures, said Zhang. Government policies and investment had helped boost local industries amid the global downturn, Zhang said. The city's industrial added value was expected to grow by about 8 percent and the service sector by more than 10.5 percent in 2009, accounting for 73.5 percent of Beijing overall economic strength. Beijing also strengthened infrastructure construction in 2009 to raise its capability for sustained development, Zhang said. The length of highways and track traffic lines in operation reached 884 kilometers and 228 kilometers respectively currently. The city still has 276.7 kilometers of track traffic line under construction, he said. The annual per capita GDP in Beijing was more than 9,075 U.S. dollars in 2008 and the figure was 7,370 U.S. dollars in 2007.
Jan 9 - 10, 2010
Economists are optimistic about Hong Kong's economy this year, and unlike Chief Executive Donald Tsang Yam- kuen they do not think there will be a double-dip. Peter So Kwok-kin, managing director and head of CCB International Securities, said the territory will benefit from excess liquidity from the mainland and overseas, low interest rates and strong corporate earnings. Interest rates in Hong Kong will not increase until the second half of 2010, and by no more than 0.5 percent, So projected. Although investors are concerned that developed countries may wind down their economic stimulus packages, So believes the Hong Kong market will continue to be attractive this year. He estimates the Hang Seng Index to reach 29,000 by the end of the year and the China Enterprises Index to hit 17,000. David Lui, vice chairman of Schroders Investment Management (Hong Kong), says the benchmark is likely to hover between 18,000 and 28,000 points, depending on the pace of economic recovery, the timing of any interest rate increase and capital flows. Catherine Cheung, head of investment strategy and research at Citibank Global Consumer Group, said Hong Kong companies might register a 21 percent year-on-year profit growth because of the low interest rate. The latest HSBC Hong Kong Purchasing Managers' Index showed a marked improvement in business conditions during past five months. The index was at 55.2 in December, staying above 50 despite a marginal easing since November. New orders growth continued to support the overall expansion, while demand from the mainland remained a key growth driver. HSBC's China Services PMI recorded a three-month high of 57.7 in December, pointing to a further strong rise in private sector output.
Taiwan, a major producer of microchips and other electronics, said on Thursday exports had hit the highest growth rate in nearly 20 years in December due to recovering global demand.
A Shenzhen police officer faces investigation and public outrage after holding a wedding banquet for his daughter with 110 tables of guests who tucked into lobster and abalone. Liu Shenqiang is deputy chief of police at Shenzhen airport. News reports, internet comments and now official investigators have asked how he could afford hundreds of thousands of yuan for the wedding feast on Sunday, the Legal Daily reported yesterday. Liu does not stand especially high in the official hierarchy, and critics have seized on the banquet as a glimpse into the perks that even minor power can bring in a top-down political system presiding over a booming economy. The banquet cost at least 440,000 yuan (HK$500,000), with the mainly seafood menu priced at 4,000 yuan a table, the Legal Daily reported, citing Shenzhen media reports. The paper said authorities were investigating the feast, with its suggestions of questionable income or favour-trading. Wedding guests often give cash gifts to the bride and groom, which help offset celebration costs. Liu said earlier he had to hold such a big wedding celebration to accommodate many relatives and friends from his home village and his stint in the army. "There was nothing I could do about it," the Legal Daily quoted him as saying. "I hope everyone will excuse me, and understand it from my perspective." Many internet users were not convinced. "Any public figure has to accept scrutiny and scepticism," one comment said. Beijing yesterday brushed off concerns that its plans to develop Hainan Island would worsen a territorial dispute considered one of Asia's potential flashpoints. The central government wants to transform the province into a major tourism destination over the next decade and expand oil and natural gas exploration in the area. While Hainan's sovereignty is not contested, island chains that Beijing says fall within Hainan's jurisdiction remain in dispute, most notably the Paracel and Spratly groups. "We will only develop tourism and economic and social growth within our territory and territorial waters. I don't think our development will have any impact on others," said Wei Liucheng, Communist Party secretary of Hainan. "We will not encroach upon the interests of others through our development." The island chains are also claimed by Vietnam. On Monday, Vietnamese Foreign Ministry spokeswoman Nguyen Phuong Nga said Beijing's plan "seriously violates Vietnam's sovereignty ... causes tension and further complicates the situation". Chinese forces seized the western Paracels from Vietnam in 1974 and sank three Vietnamese naval vessels in a 1988 sea battle. The sides have yet to demarcate their sea border. China and Vietnam both cite historical and archaeological evidence to back up their claims to the islands, and Beijing has increasingly sought to cement its hold through international maritime law. Taiwan, Malaysia, Brunei and the Philippines also claim all or part of the Spratlys. Wei said plans to develop tourism in Hainan were still under discussion. Energy development will focus on building up the "resource service industry" in the South China Sea, he said. The Spratly and Paracel chains are surrounded by rich fishing grounds and are believed to sit above large oil and natural gas reserves. Lenovo Group is wading into the smartphone market with a thin, touchscreen device based on Google’s Android operating system, following the footsteps of PC rivals like Dell and Acer.
Jan 8, 2010
Daphne International(0210), the Hong Kong-listed female footwear retailer, is to buy a 60 percent stake in high-end mainland shoe distributer Full Pearl International for HK$195 million. The transaction is expected to be completed in the first quarter of this year. "We are delighted to become a major shareholder in Full Pear," Daphne chairman Chen Ying-chieh said. "It will give us an immediate presence in shopping malls and enhance our market position." Full Pearl owns more than 200 stores, mostly in shopping malls in China. It sells its own brands, which include AEE, a high-end female shoe brand based in Shanghai. It also distributes brands including ALDO and Jessica Simpson. Daphne said the company would pay HK$130 million to subscribe to new shares. The acquisition represents a 40 percent holding in Full Pearl and Daphne will pay another HK$65 million to its existing shareholders for the remaining 20 percent stake. Full Pearl's brand will be managed alongside Daphne's own brands, including AREZZO and SOFFT, after the acquisition, the company said. Daphne shares surged 4.37 percent and closed at HK$6.68 yesterday after the acquisition news was released in Taiwan during the morning session.
National education at local schools will receive a big boost in 2012 with the incorporation of modern Chinese history into the primary curriculum and the launch of a new junior secondary subject aimed at strengthening students' national identity. Benjamin Yung Po-shu, principal education officer in curriculum development with the Education Bureau, says the measures are being rolled out in response to calls for the boosting of national education in Chief Executive Donald Tsang Yam-kuen's past two policy addresses. Yung said knowledge about modern China's social and economic development and its impact on society would be incorporated into general studies in primary schools. Primary school students currently study China in various subjects, including Chinese and general studies, with a stronger focus on softer elements such as Chinese tradition and customs. At the junior secondary level, a new subject, life and society, will replace economic and public affairs and social studies. The new subject will be divided into three parts: individual, society and country. Yung said the subject would be taught under the "one country, two systems" framework. "A step-by-step approach will be adopted," he said. "Students will first learn about themselves and Hong Kong laws and systems and extend to Hong Kong's relationship with China and China's economic and political systems." Yung said the government would fund more exchange trips to the mainland so that students could learn about the nation's development and history. This month, 2,500 senior secondary students from more than 200 schools will visit six historic cities, including Beijing and Xian , on a five-day trip that will cost HK$17 million. Each student will pay HK$900 for the HK$5,500 trip, with the government subsidising the rest. Yung said the number of places on such trips would be expanded to 10,000 in three years. Ada Cheung Wai-ching, principal of St Bonaventure Catholic Primary School in Diamond Hill, which sent 36 students on a government-organised three-day trip to Guangdong in November, said such trips could strengthen students' affinity with the nation. "They feel that they are Chinese after the trip," she said. "That sense of identity couldn't be nurtured through such activities as flag-raising." However, education sector lawmaker Cheung Man-kwong said the government's move smacked of indoctrination. "All that teaching about China's development and systems seems like the government is helping the central government to explain its policies," he said. "It does not inspire much critical thinking." He said that making Chinese history a compulsory subject for all junior secondary students would be more effective in strengthening national identity than organising a host of trips to the mainland. "Learning about the 5,000 years of Chinese history through textbooks is much more effective than spending several days in China doing sightseeing," he said. Cheung and the heads of school councils also called for the inclusion of sensitive political subjects like the June 4 incident in 1989 in the primary and secondary curriculums.
The Chinese government will continue encouraging outbound investment while attracting foreign investment in 2010 for "stable and relatively fast" growth of the country's economy, a government official has said. Outbound investment, or "go-global" strategy, should aim at making use of overseas resources, market and advanced technologies, so as to help facilitate development of China's domestic economy, Zhang Xiaoqiang, vice minister in charge of the National Development and Reform Commission, said in the speech posted on the commission's website Tuesday. The remarks were made at a conference held in Beijing on foreign investment on Dec. 11, but was not released until Tuesday. In the first three quarters of 2009, China saw its investment overseas at 32.87 billion U.S. dollars, up 0.5 percent year-on-year, according to the Ministry of Commerce (MOC). The country would also continue to attract foreign investment, he said. "Social stability, huge potential market and low cost of productive resources are still advantages for foreign investment," he said. The country would see more advanced technologies and talents from foreign countries and foreign investment would better serve the structural reform of the country's economy. Zhang said the government would stress national economic security while seeking to increase foreign investment. "We have to properly handle new challenges and situations when further opening sectors, including finance and telecommunications." China's foreign direct investment shrank 14.26 percent from the same period last year to 63.77 billion U.S. dollars in the first nine months as foreign companies cut spending amid the global economic downturn, according to the MOC. In the speech, Zhang also said China's currency was facing renewed pressure to appreciate because of the quantitative easing monetary policy in developed countries, a weakening dollar and recovery of China's economy. The pressure would likely spur massive inflow of speculative money, making liquidity management more difficult. Premier Wen Jiabao also said in December in an interview with Xinhua that the yuan faced appreciation pressure. "China will not yield to foreign pressure for the appreciation of its currency yuan in any form," Wen said. "A stable Chinese currency is good for the international community," Wen said.
Jan 7, 2010
Agricultural Bank of China (ABC), the only bank among the Big Four State-run lenders yet to float shares, is planning to raise up to 150 billion yuan ($21.97 billion) through a dual listing in Shanghai and Hong Kong as early as April this year. Further delays in the construction of the Guangzhou-Shenzhen-Hong Kong Express Rail Link could cost the taxpayer dearly, Secretary for Transport Eva Cheng Yu-wah warned on Tuesday. She appealed to legislators to vote on Friday in favour of the HK$67-billion funding for the rail link that will connect Hong Kong via Guangzhou with the national express rail network on the mainland. Cheng was speaking after she travelled from Wuhan to Guangzhou on the new high-speed railway between the two cities on Tuesday morning. The rail link, which opened on December 26 and is estimated to have cost 116.6 billion yuan (HK$132.3 billion), has shortened the travel time by nine hours. It is part of a national express rail network connect infrastructure networks across the mainland. The Secretary for Transport, along with Director of Highways Wai Chi-sing and a group of local reporters departed Wuhan at 9am and arrived in Guangzhou before noon. Speaking after her arrival, Cheng said the construction of the Hong Kong to Guangzhou section should be completed as soon as possible. “We are seeking funding for the Hong Kong section of the express rail link and it is estimated it would be completed by 2015. By the time the Wuhan-Guangzhou high-speed railway has been operating for five years, the Beijing-Guangzhou high-speed rail link will have been running for two years. We hope Hong Kong will be able to enjoy the economic benefits brought by [access to] the high-speed railway [network],”Cheng said. Cheng said if the construction of the railway was further delayed, taxpayers in Hong Kong could be losing HK$5 million per day. She also argued that the high cost of constructing the rail link was reasonable because the price of commodities had risen sharply over the past few years.
Hong Kong's consumer confidence continued to improve significantly over the last three months, according to a fourth quarter survey released by the Bauhinia Foundation Research Centre (BFRC) on Tuesday. The BFRC interviewed 1,070 residents from December 1 to 5 last year. It found that the Bauhinia Hong Kong Consumer Confidence Index (BHKCCI) increased significantly from 115.4 in the previous survey in September to 127.1 in December last year. Chairman of the BFRC Anthony Wu Ting-yuk said the rise in the BHKCCI shows that local consumers’ optimism regarding the city’s economy and its short-term prospects have increased. “This will be translated into higher consumer spending and investment over the next three months,” he said. Respondents’ expectations for the property market over next three months have also improved. “Hong Kong’s property market has slowed down since last October because of rising concerns over speculation and possible asset bubbles. Nevertheless, our survey suggests that more respondents are likely to buy flats in the short-term future,” he said. However, Wu said consumers were still cautious regarding the long-term outlook for the state of the economy.
China automobile franchiser Zhongsheng Group and mining equipment company International Mining Machinery (IMM) are planning to raise capital through Hong Kong initial public offering in first quarter of 2010, sources close to the companies said. Zhongsheng, based in harbour city of Dalian, aims to raise between US$800 million and US$1 billion, aiming to tap the robust growth in the country’s auto market. The company mainly provides sales, spare parts, services and surveys businesses for major international automobile brands, including Audi and Toyota in mainland, now the world’s biggest car market. Morgan Stanley and UBS are handling Zhongsheng’s IPO. IMM aims to raise about $500 million from initial public offering by February, sources close to the deal said on Tuesday. IMM, backed by private equity firm The Jordan Company, mainly designs and manufactures coal mining equipment. “IMM plans to seek Hong Kong listing committee approval in the middle of January, and aims to list next month,” one of the sources said. Swiss bank UBS and BOC (SEHK: 3988) International, the flagship investment banking arm of Bank of China, were handling IMM’s Hong Kong IPO, said the sources.
More migrant workers living in Guangzhou are expected to flood Hong Kong's tourist spots following a further relaxation of travel restrictions that is on the cards. The Individual Visit Scheme will be extended to non-permanent Guangdong residents, a mainland source told Sing Tao Daily, sister paper of The Standard. The news comes less than a month after non-Guangdong residents living in Shenzhen were allowed to visit Hong Kong from December 15. Previously, they had to apply in their home provinces. The source said the new move should help Hong Kong's economy and boost its retail trade, but the source could not estimate how many will be eligible in the extended scheme. The Individual Visit Scheme was first introduced in four Guangdong cities - Dongguan, Zhongshan, Jiangmen and Foshan - on July 28, 2003 under CEPA, the Closer Economic Partnership Arrangement. Over the years, it has been expanded to dozens more cities covering the whole of Guangdong province, and also Beijing, Shanghai and Tianjin. According to figures revealed in the 2009 budget speech, over 35 million mainlanders had visited Hong Kong under the scheme since its 2003 launch and it was described as being an important stimulus for the city's various consumer industries. Meanwhile, the number of tourists to Hong Kong rose slightly by 0.3 percent to almost 2.96 million last year, with mainland tourists showing the biggest jump at 6.5 percent from the previous year. Currently, mainland tourists account for more than half of the visitors to Hong Kong. The figures were released by the Tourism Board which had originally forecast a possible 1.6 percent drop last year because of the financial tsunami. But the number of tourists from places other than the mainland has dropped in general. Meanwhile, outgoing chairman of the Travel Industry Council Ronnie Ho Pak-ting said the biggest challenge faced by the sector is the growing trend of online booking of air tickets. Airlines nowadays encourage travelers to book online instead of through travel agents and are also reluctant to hold seats for such agents, said Ho. This would lead to tour groups becoming smaller and tours more costly, pressuring travel agents to raise fees, he warned.
Every British teenager should have the chance to learn Putonghua due to the growing importance of the mainland in world events, the UK government said on Monday. One in seven secondary schools, which teach pupils aged 11-16, currently offer Putonghua and Schools Secretary Ed Balls said he wanted to extend this through language partnerships between schools. “In this new decade our ties with emerging economies like China will become even more important and it's vital that young people are equipped with the skills they need, and British businesses need too, in order to succeed in a rapidly changing world,” he said. “That's why we want all secondary pupils to have the opportunity to learn up-and-coming languages like Putonghua if they choose, either at their own school or a nearby school or college.” Businesses are increasingly interested in staff who speak Putonghua, according to a poll published last year by the CBI business lobby group. It found that 38 per cent of employers were looking for Putonghua or Cantonese speakers, compared to 52 per cent for French and 43 per cent for German. According to last year’s results for GCSEs, the compulsory exams taken at age 16, a total of 3,469 candidates took Putonghua – 16 per cent more than the previous year. The take-up may also increase after the biggest exam board in the country began offering Mandarin GCSE last September, with the first pupils expected to complete the two-year course in June next year. However, the opposition Conservative Party expressed scepticism at the government’s aspirations, noting that take-up of modern foreign languages has fallen since ministers made the subject optional at GCSE in 2002.
The Peru-China Free Trade Agreement will come into force on Jan. 15, slightly earlier than planned, after Peru accelerated the ratification process in hopes of reaping early benefits from the bilateral accord, the Peruvian trade ministry said Monday. The Peru-China FTA, originally scheduled to take effect on Feb.1, will now enter into force on Jan. 15, according to the Peruvian ministry. "Initially we had estimated that the free trade agreement would be effective from the first of February," Peruvian Minister of Foreign Trade and Tourism Mercedez Araoz said. Peru ratified the accord through a supreme decree signed by President Alan Garcia and Foreign Minister Jose Antonio Garcia Belaunde. "I have talked with the foreign minister... The protocol between China and Peru to propose the date of application of the FTA will be realized this week," President Alan Garcia said. The president said he hoped the FTA would deliver the order of an additional 800 million U.S. dollars worth of exports and imports in trade with China in the first year of the FTA pact. China is Peru's second largest trading partner, with two-way trade in 2008 reaching 7.5 billion U.S. dollars, a 2 billion dollars rise over the previous year.
Jan 6, 2010
Hutchison Telecom said on Monday that it has been approached by controlling shareholder Hutchison Whampoa (SEHK: 0013) on a possible bid to take the company private. “The board of directors of Hutchison Telecommunications International (SEHK: 2332) Ltd has received an approach from the company’s majority shareholder, Hutchison Whampoa Ltd, regarding a possible general offer to the company’s shareholders and option holders,” Hutchison Telecom said in a statement to the Hong Kong Stock Exchange. It added that an announcement on the matter “may be imminent”. Shares of Hutchison Telecom, which is about 60 per cent owned by Hutchison Whampoa, were suspended on Monday afternoon pending the release of an official announcement. Billionaire tycoon Li Ka-shing controls majority of Hutchison Whampoa shares. The stock was up 2.48 per cent at HK$1.65 prior to the suspension. During the morning session, it had risen as high as HK$1.68 per share.
Shares in Sands China climbed 5.18
per cent after Citigroup and UBS initiated coverage on the Macau unit of US
casino operator Las Vegas Sands with “buy” ratings. Citigroup issued a target
price of HK$12.50 on Sands China, saying that the company would benefit from its
large exposure to the mass-market gambling segment in Macau and a strong
presence on the Cotai strip. The stock rose as much as 6.3 per cent to their
highest level in more than two weeks earlier. “Overall, we see SCL [Sands China
Ltd] as having the most scope for expansion within the “managed-growth”
constraints set by the Chinese government,” said Citigroup analyst Anil Daswani
in the report on Monday. UBS also initiated coverage on the stock with a “buy”
rating on Monday, a UBS spokesman said, declining to give more details.
Citigroup’s Daswani forecast total revenue in Macau, the world’s largest and
fastest-growing gambling market, to grow by 8 per cent next year and 11 per cent
in 2011. But he issued a “sell” recommendation on Wynn Macau, the Macau unit of
Wynn Resorts, citing the company’s focus on VIP gamblers, which has lower
margins than the mass market segment, and a lack of expansion plans on the Cotai
strip.
The construction of the Lanzhou national petroleum reserve base which will have a capacity of 3 million cubic meters began in Yongdeng County of Lanzhou City, Gansu province. The reserve base is another large-scale national petroleum base in Western China following the one in Dushanzi.
Jan 5, 2010
Hong Kong shoppers are brimming with confidence for the year ahead and are prepared to spend almost twice as much as they did last year, according to the organizer of the 44th Hong Kong Brands and Products Expo in Victoria Park. Top-ticket items have been selling well, and while the attendance is almost the same as last year, some stalls are reporting a 50 percent increase in business. From December 12 to mid-afternoon yesterday, more than two million people had visited the Victoria Park event. Chinese Manufacturers' Association chairman David Wong Yau-kar predicted the total attendance would equal last year's record of 2.2 million by the time the expo closes today. Wong said sales figures were not yet available but indications are turnover will exceed last year's record of HK$270 million. "The atmosphere is better than last year. People seem to have more confidence in the year ahead," he said. A dry seafood and drugs vendor said business was up 50 percent on last year. "People are clearly more willing to spend this year," said Hung Sau-san, a promoter for Nam Pei Hong Sum Yung Drugs. "High-priced products are selling very well." Hung said said stocks of the company's abalone were sold out yesterday. She said many customers bought two sets of items on special sale, instead of one, mainly because of the price cuts and special offers that have come into effect as the expo winds down. "Many customers from the mainland said they were shopping at the expo because they wanted genuine products." Hung expects the price of dried seafood and instant noodles to be slashed for today with many shops offering "buy one, get one" bargains. A shopper, Ms Leung, who was accompanied by her husband and two daughters, said it was her second visit to the expo. She was looking for instant noodles, oyster sauces, power-saving light bulbs and had spent between HK$3,000 and HK$4,000. "The products are one third or about half the retail price, though they are a bit more expensive than the last expo," she said. Last year nearly 3.5 million packets of instant noodles, 500,000 fishballs and 250,000 egg tarts were snapped up at the expo, according to organizers.
Shops, restaurants and hotels looking to cash in on high-speed rail link - Most of the mainland visitors travelling to Hong Kong on high-speed trains in the first two years of the rail service's operation are likely to be making their first trip to the city, tourism trade observers say. Given that first-time mainland travelers generally tend to spend more and stay longer in the city than the typical tourist or repeat visitors, shops, restaurants and hotels can expect a business boost as the mainland fulfils its high-speed rail link ambitions. Mainlanders are already among the top spenders among visitors to Hong Kong, parting with an average of HK$5,676 each last year, compared with HK$5,439 overall for overnight visitors, HK$2,138 each for same-day visitors and HK$1,498 for all visitors, according to Hong Kong Tourism Board data. But Hong Kong Retail Management Association chairwoman Caroline Mak Sui-king believes the real figure is higher at between HK$5,000 and HK$8,000 or much more. The tourism boost could lead to a double-digit percentage increase in the number of mainland visitors arriving once high-speed trains connected less accessible regions of the country to the city, Michael Wu Siu-ieng, the chairman of the Hong Kong Travel Industry Council, said. Almost 16.9 million mainlanders visited Hong Kong last year. The trains, which travel at more than 300km/h, run between Wuhan and Guangzhou and between Tianjin and Beijing. The mainland plans to overhaul its railway system with high-speed lines by 2012. Hong Kong will link with the mainland network if the Legislative Council backs a controversial government plan to operate high-speed trains to Guangzhou by 2015 at a cost of about HK$67 billion. Lawmakers will discuss the project's financing on Friday. Like the construction industry, which stands to benefit from the creation of thousands of jobs, the tourism trade is keen to see the project go ahead as soon as possible despite arguments by some academics and politicians that the city's first high-speed train service would come at too high a social cost. Many New Territories villagers would need to be relocated to accommodate the rail line. Michael Li Hon-sing, the executive director of the Federation of Hong Kong Hotel Owners, said that over the longer term, connecting to the mainland's high-speed railway network would reap economic benefits for Hong Kong. Relatively fast travel and check-in times would foster tourism and business as high-speed trains made it easier and more convenient for people to do business with the mainland, where many factories and manufacturers are located. Meanwhile, more than 100 people - including Tai Kok Tsui residents and Tsoi Yuen villagers - marched yesterday in protest against the high-speed rail project. Chanting slogans and waving banners, they marched from a park in Tai Kok Tsui to the shopping precinct in Mong Kok, passing through some of the areas that would be affected by the project. The protesters urged legislators to veto the funding request when it is put to a vote on Friday. The spokesman for the protest organizers said: "We shall fight to the end to protect our homes. We want to make it very clear. The government cannot destroy people's homes just because their homes are on the land it wants to take."
Jan 4, 2010
Hong Kong television viewers could soon have more choice, with two companies seeking licenses to operate new free-to-air services that would break the 30-year duopoly enjoyed by TVB (SEHK: 0511) and ATV. Telecommunications firm City Telecom has lodged its license application, and cable-television broadcaster Cable TV also plans to apply soon. "We believe the current duopoly limits innovation, and Hong Kong is falling behind other more liberalised markets around the world," City Telecom said yesterday after filing its application with the Broadcasting Authority. "The company is determined to provide the public with more choice of free-TV programs." The company expects to invest a maximum of HK$210 million in the venture. Its content would include news and infotainment, programmes covering arts and culture and programming for children, young people and the elderly. A spokeswoman would not reveal how many channels would be offered. Pay television operator Cable TV is also planning to enter the free-to-air market, though it has said nothing publicly about what it is proposing, nor given any indication of what it would show were the government to approve its bid. It hopes to submit an application within days. Its vice-president for external affairs, Garmen Chan Ka-yiu, said City Telecom's application would not affect Cable TV's plans.
A former senior police officer faces investigation on charges of taking massive bribes, official media reported on Thursday, in a development that appears to be linked to a broadening stock manipulation scandal. Zheng Shaodong, who as assistant minister of public security was in charge of handling economic crimes, was formally dismissed from his post and from the ruling Communist Party, the website of the People’s Daily newspaper reported. “An investigation found that Zheng Shaodong abused his position,” said the report. “He accepted huge bribes, and his relatives took massive cash payments from others.” The “suspected economic crimes have been handed to judicial organs for handling”, said the report, using words that suggest Zheng is likely to stand trial. The brief report was a glimpse into the intermingling of power and wealth in today’s society, a mix that has toppled other senior officials and, critics say, tainted more who remain in their jobs. The report did not say precisely how much money Zheng is accused of taking in bribes, and nor did it say who bribed him. Earlier news reports linked his fall to an investigation into alleged stock manipulation by Huang Guangyu, the founder of the home appliance retailer GOME, who has also been detained. Zheng Shaodong was detained in January at the beginning of the investigation of Huang. Once China’s richest man before falling from grace, Huang is also being investigated on suspicion of committing crimes separate from the original stock manipulation accusation, Beijing prosecutors said last week.
Economic growth on China looks set to accelerate into the New Year, with booming factories driving a December manufacturing survey to a 20-month high while South Korea’s exports to the country surged on strong demand. The survey released on Friday also showed the rapid pace of activity pushed up prices of inputs such as labour, raw materials and capital to a 17-month high, potentially complicating efforts of officials who want to maintain growth-friendly policies without driving inflation expectations. The official Purchasing Managers’ Index (PMI) jumped to 56.6 in December from 55.2 in the previous month, the China Federation of Logistics and Purchasing said. It was the 10th consecutive month of expansion and the biggest monthly rise since March, reflecting that manufacturers, far from plateauing after a recovery, have actually gathered momentum heading into next year. “We expect China’s strong economic growth momentum to continue next year, with the major source of growth coming from a broad-based improvement in private consumption, and further strengthening in private housing investment, and a solid recovery in exports,” Jing Ulrich, chairman of China equities at JP Morgan in Hong Kong, said in a research note. Demand on the mainland has given a welcome boost to the economies of many neighbouring Asian countries over the last year as the region’s traditional Western markets remain weak. South Korea, Asia’s fourth-largest economy, said on Friday that its exports to China between December 1 and 20 were up 74.4 per cent to US$54.23 billion, while exports to the US in the same period grew only 8.7 per cent to US$19.04 billion. Overall Korean trade figures for December rose much faster than expected from a year earlier, indicating world trade was recovering quickly from the financial crisis and paving the way for an interest rate increase in Korea soon. Exports during the final month of this year grew 33.7 per cent from a year earlier to US$36.24 billion, blowing away the median expectation for 25 per cent growth. Imports gained 24.0 per cent over a year earlier to US$32.94 billion. South Korea, home to global suppliers of ships, cars and electronics gadgets, is the first major exporting economy in the region to release monthly foreign trade figures and is an early indication of trends in North Asian trade. “The export figures indicate an economic recovery is spreading to developed countries from emerging markets. The overseas momentum will boost Korea’s overall growth, of course, including domestic demand,” said Song Jae-hyeok, an economist at SK Securities in Seoul. “That will confirm views of an interest rate rise in the first quarter, probably in February.” The Bank of Korea indicated on Thursday that rates will rise next year at an appropriate pace. By contrast, China’s central bank said this week that monetary policy will remain loose, though flexibility will increase, a reference to slightly tighter controls on bank lending. Indeed, a slower expansion of new export orders for the second straight month in December supported the cause of officials who have been extremely cautious in winding down pro-growth policies. “The fall in the indicator for new export orders warrants attention, as it shows we must avoid undue optimism about the improvement in the international market place,” said Zhang Liqun, a researcher at the State Council’s Development Research Centre who comments on the PMI for the logistics federation in Beijing. China’s economy is expected by some analysts to grow by more than 9 per cent next year, increasing worries among some economists that deflation experienced through most of this year will quickly flip to inflation. However, the State Council Development Research Centre, a leading national think tank, said in a report on Friday that China’s gross domestic product would expand by 9.5 per cent next year, thanks to robust real estate investment and mild inflation. China’s economy shot back to nearly double-digit growth this year after nearly standing still at the end of last year, giving a lift to Asia and countries such as Australia which have been able to feed its voracious appetite for commodities. The country’s 4 trillion yuan stimulus package, complemented by a record surge in bank lending, propelled the economy to 8.9 per cent year-on-year growth in the third quarter of this year and put it on track for even faster expansion this year.
Jan 1 - 3, 2010
Drug control in Hong Kong is poised to be overhauled with the creation of a new safety office following a series of drug-related blunders this year. The setting up of the office was recommended yesterday by a government-appointed review committee, which is proposing that it be in place by 2011. All controlled drugs would be labelled "prescription drugs" or "drugs to be supervised", while pharmacy owners could be prosecuted if they breach a code of practice. Drug manufacturers would be inspected more often, and customers able to obtain refunds during drug recalls. The measures are among 75 recommendations the drug review committee made yesterday. The Food and Health Bureau is expected to accept most of them after a final report from the committee is published in the next week. The new office will employ 94 pharmacists, 20 scientific officers and 14 doctors. They would primarily handle Western medicines, William Chui Chun-ming, vice-president of the Society of Hospital Pharmacists of Hong Kong and one of the committee's members, told the South China Morning Post (SEHK: 0583) . He said the government had promised to establish a centre for drug safety in the long run, which would oversee both Chinese and Western medicine, but no timetable was available yet. Permanent Secretary for Food and Health Sandra Lee Suk-yee the 75 recommendations would enhance drug safety in Hong Kong if implemented. Some would require legislative amendments. She said the administration had decided to set up an office for drug safety because government regulation of Chinese medicine was still in the initial stages.
Donations have been pledged for the establishment of a school of veterinary medicine at City University, the university's president, Kuo Way, said. The university had earlier unveiled plans to set up the school in collaboration with Cornell University in the United States. The plan is backed by the municipal government of Shenzhen, where a farm and veterinary hospital will be set up. CityU will model the school's program on the existing curriculum offered at Cornell, which will send professors and doctoral students to Hong Kong to teach. Professor Kuo says the unsolicited donation will come from a staunch supporter of the planned veterinary medicine program. "We didn't ask for it. He made the pledge of his own accord," Kuo said. A spokeswoman said CityU would not reveal the identity of the donor and the amount pledged so as not to affect its application to open the veterinary medicine school. A University Grants Committee spokesman said the panel received CityU's application in August. "We are consulting various government departments on the plan and will announce our decision later," he said. CityU's plan for the school did not receive positive response from the Education Bureau, which ruled out in March plans to launch such a programme for the time being. A Society for the Prevention of Cruelty to Animals spokeswoman expressed reservations about the plan. "A veterinary student has to learn about all kinds of animals like poultry and dolphins. If Hong Kong offers such a program, students might not have the chance to get exposed to all kinds of animals," she said. The Veterinary Surgeons Board of Hong Kong says there are 520 registered veterinary surgeons in the city, compared with 361 four years ago. While there are no figures showing pet ownership in Hong Kong, the Agriculture, Fisheries and Conservation Department says 80,000 dogs have been registered for chip implants over the past three years. Hong Kong Veterinary Association member and veterinarian Phillip Mak Chi-kin, who owns the pet clinic Peace Avenue, says the market can absorb graduates from CityU. "If Hong Kong has its own vet school, local people don't have to go overseas. The school can also attract mainland students and make Hong Kong the hub of veterinary medicine in Southeast Asia," Mak said.
The government will name two buildings in honor of Nobel Prize winner in Physics Dr Charles Kao Kuen and renowned Chinese scholar Jao Tsung-I, a spokesman said on Wednesday. “In recognition of the outstanding achievements of Nobel laureate Professor Charles Kao and renowned Chinese scholar Professor Jao Tsung-I, the government will name a 288-seat auditorium and a forum in the Hong Kong Science Park as Charles Kao Auditorium. A centre to promote Chinese arts and culture in the former Lai Chi Kok hospital will be named the Jao Tsung-I Academy,” he said. Chief Executive Donald Tsang Yam-kuen said this naming of the buildings was intended as a tribute to both academics' distinguished contributions to Hong Kong and the world. “Hong Kong is proud of their achievements. The naming arrangement is to pay tribute to them on behalf of the Hong Kong people and to bring lasting honor to them,” Tsang said. Tsang said he hoped the naming of an auditorium and a forum after Kao in the Science Park would help inspire new home-grown technology in Hong Kong. The government plans to seek funding support for the revitalisation of the buildings from Legco next year. The project is expected to be completed by mid-2012. Dr Charles Kao Kuen – known as the “father of fibre optics”, received this year’s Nobel Prize for Physics from King Carl Gustaf of Sweden on December 10 for his discovery of the properties of glass fibre, which has revolutionised global communication. Professor Tsung-I is a world-renowned scholar who has attained achievements in Chinese and Oriental Studies as well as arts and culture. He received many prestigious awards, including the Order of Arts and Letters, Ministry of Culture of France, the Grand Bauhinia Medal, and a Prize for Special Contributions to the Protection of Dunhuang Relics.
Bank of East Asia (SEHK: 0023) said on Wednesday that it will sell HK$5.11 billion in new shares, raising proceeds to strengthen its capital position to support business development initiatives. The bank said it would sell 167.1 million shares at HK$30.60 each. The issue price represents a 2.12 per cent discount to Wednesday’s closing price of HK$31.25. As part of the deal, Negocio de Finanzas e Inversiones I, SLU, a unit of Spain’s Criteria, would buy 120.837 million shares, raising its stake in the bank to 14.99 per cent after the deal, from 9.81 per cent, BEA said in a statement It also said Sumitomo Mitsui Banking Corp would buy 46.267 million shares, raising its stake in Bank of East Asia to 4.05 per cent from 1.91 per cent. After the issue, Bank of East Asia’s total capital adequacy ratio (CAR) and Tier 1 CAR will increase to about 16.0 per cent and 11.7 per cent respectively.
Heavyweight IPO candidate UC Rusal has lured four heavyweight cornerstone investors to its initial public offering in Hong Kong, market sources said. Malaysian tycoon Robert Kuok Hock Nien, whose family controls Kerry Properties (0683), is among the big names who will invest in the world's largest aluminum maker for a six-month lock-up period. Nathaniel Rothschild's NR Investments and New York hedge fund Paulson & Co will also be participating in the deal, sources revealed. Rusal plans to raise about US$2 billion (HK$15.6 billion) from selling a 10 percent stake in SAR and Paris to repay debts. Vneshekonombank, a Russian state bank, is also one of the cornerstone investors. Rusal is tipped to turn profitable in 2009 by investment banks arranging the share sale. The firm will kick off pre- marketing next Monday, aiming for a listing on January 29. Book building will begin on January 12, with the offer price to be set on January 21, a banking source said.
New mortgage loans approved in Hong Kong dropped 11.1 percent in November, after the government voiced concerns over potential asset bubbles and implemented measures to cool surging home prices.
The government of Macao Special Administrative Region (SAR) Wednesday announced that it has decided to extend the "Plan to Support Macao Tourism Industry" to the end of March 2010, in a bid to stimulate local leisure tourism, business tourism and the aviation industry. The SAR Government Tourist Office initiated the "Plan to Support Macao Tourism Industry" on May 18 this year and launched are vision committing more resources from August to the end of the year. According to the new arrangement, all of the programs under the plan will be extended from Dec. 31, 2009 to March 31, 2010. Under the plan, the SAR government has allocated a sum of 6.8 million patacas (860,759 U.S. dollars) to fund 30,000 guiding services in local tourism market, and 21.83 million patacas (2.76 million U.S. dollars) to support business tourism, including 31 meetings and conventions, 19 exhibitions and 26 incentive travel events, according to the Tourist Office. The Tourist Office also funded the training initiatives organized by travel trade associations for tourism employees to enhance the service quality of the industry through the plan. The overall budget of the "Plan to Support the Macao Tourism Industry" from January to March 31, 2010 is 126.4 million patacas (16 million dollars), the Tourist Office said. It also said that the program was aimed at maintaining the momentum and competitive edge Macao has been building as an international destination.
China will perform its duty in an objective and fair manner and work with other members to maintain international peace and security when it assumes the rotating presidency of the UN Security Council next month, the Chinese envoy to the UN said here on Tuesday. Zhang Yesui, China's permanent representative to the United Nations, said in an interview that assuming the council presidency was an important task for China in the field of multilateral diplomacy in 2010. The 15 council members are now discussing the agenda for next month, which includes a series of talks on global and regional hot-button issues, open debates and consultations, said Zhang. "According to what I have got till now, it will be a busy schedule," he said, adding China would do its utmost to make sure the Security Council works smoothly and efficiently. The presidency of the Security Council rotates among its members in the alphabetical order of their names in English. Each president holds office for one calendar month. China previously assumed the presidency in October 2008. Touching on the international situation in 2009, Zhang said the year had witnessed complex and profound changes in world affairs. He said the multilateral diplomatic situation this year had three basic features: First, global crises assumed unprecedented complexity while international summits became the principal platform to address these pressing issues. Second, the reform of the international system was high on the agenda, and initial efforts in global economic governance paid off. Third, emerging countries grew rapidly and exerted increasing influence on multilateral affairs. The year also saw dynamic diplomatic efforts by China in the international arena, Zhang said. President Hu Jintao, Premier Wen Jiabao and other Chinese leaders took an active part in international summits, making significant contributions to the international community's efforts to address global and regional issues, Zhang said. As a permanent member of the Security Council and the largest developing country in the world, China fully participates in the work of the UN and plays a constructive role, the ambassador said.
Bank lending in the mainland this month is expected to exceed 300 billion yuan (HK$340.79 billion) due to a boost in mortgage lending, taking the loans total for the whole year to a record 9.7 trillion yuan. Days after the Guangzhou government was forced to scrap a plan to build a rubbish incinerator near a stylish residential district in Panyu district, authorities say four more will close before the city hosts the Asian Games to improve air quality and reduce foul odours. Small-scale refuse incinerators in Lanhe, Dongchong, Yuwotou and Shiji towns are scheduled to be shut down by the district government before the Games, Guangzhou Daily reported yesterday. The multi-sport event runs from November 10 to 27 next year. Incinerators have become a flashpoint between Panyu government officials and local residents, with 500 people taking to the streets last month to protest against a plan to build a large incinerator in Huijiang village. The Ministry of Public Security and Guangzhou government had said earlier that they would make all-out efforts to prevent protests during the Games. The plan for the Huijiang incinerator, which was supposed to burn 2,000 tonnes of rubbish a day, was scrapped earlier this month as a result of the protest. Residents in other parts of Panyu also complained that the existing incinerators were affecting their health. The authorities yesterday said they decided to shut down more incinerators simply to ensure clean air quality as the Asian Games Village, which will house international athletes, is in Panyu. The government also launched a publicity campaign and complained that the district now faces an urgent crisis with overflowing rubbish. Guangzhou Daily yesterday said about six small-scale incinerators in small towns like Dashi, Nancun and Dagang were already shut down and the urban solid waste was buried in the Huoshaogang landfill. This pushes the daily processing capability of the landfill from 300 tons to 1,200 tonnes daily. This means it is expected to be filled up in two years. Some current rubbish treatment facilities would be upgraded and improved but others, like the four small scale incinerators, will be closed, the report said. Professor He Guowei of Guangzhou University's Environmental Science and Engineering Institute expects more garbage facilities and factories to be shut before the Games in a desperate attempt to clean the air. "For sure they will be closed as they produce foul smell. Many factories will also be shut down before the Asian Games to bring up the air quality, just like what happened in the Beijing Olympics last year."
The US Commerce Department said overnight on Tuesday it has set preliminary anti-dumping duties of up to 145.18 per cent on steel grating imported from mainland to offset unfairly low prices. The United States imported about US$91 million worth of the product from mainland last year. Steel grating is used in industrial floors, docks, ramps, drainage covers, staircases and other applications. The trade case is one of about a dozen brought by US companies this year against goods made in mainland, saying they have benefited from government subsidies or are being sold in the United States at less than fair value. The Commerce Department said it set a preliminary anti-dumping duty of 14.36 per cent on four mainland producers or exporters in the steel grating investigations. Those firms were Ningbo Jiulong Machinery Manufacturing Co, Sinosteel Yantai Steel Grating Co, Ningbo Haitian International Co/Ningbo Lihong Steel Grating Co and Yantai Xinke Steel Structure Co. All other mainland exporters or producers received an anti-dumping duty rate of 145.18 per cent, the Commerce Department said. The decision is a victory for two US companies who filed a case in May asking for import protection. Those were Alabama Metal Industries Corp and Fisher & Ludlow, which has US production facilities in Pennsylvania and Illinois. The US International Trade Commission is set to vote later on Wednesday in a case in which US companies are seeking duties on imports of oil well pipe from mainland that totalled more than US$2.6 billion last year. Canada’s Industry Minister Tony Clement on Tuesday said he had approved a US$1.7 billion acquisition by PetroChina (SEHK: 0857) of two Athabasca Oil Sands Corporation projects in northeastern Alberta province. The deal gives PetroChina International 60 per cent control of the Athabasca’s MacKay and Dover oil sands deposits. “I am satisfied that the investment is likely to be of net benefit to Canada,” Clement said in a statement. The minister said the mainland company made a commitment to contribute more than US$250 million to cover its share of developing the oil sand projects over the next three years, as well as boosting employment and managing a regional office in the area for a period of five years. The oil sand deposits of MacKay and Dover are projected to yield five million barrels of oil, according to Athabasca. The October 31 PetroChina-Athabasca agreement is one of the top oil sand deals reached in Canada since it slumped into economic recession in late last year. At an estimated 175 billion barrels, the oil sands in western Canada are the second largest oil reserve in the world behind Saudi Arabia, but they were long neglected, except by local companies, because of high extraction costs. Since 2000, skyrocketing crude oil prices and improved extraction methods have made exploitation more economical, and have lured several multinational oil companies to mine the sands, but foreign investments remained cyclical. To date, the United States remains the largest consumer of bitumen from the oil sands. China has said it will ban mandatory hepatitis B tests for employees joining companies and students enrolling in schools in an effort to stamp out discrimination against the nation’s millions of carriers. “Health institutions face punishment if they are found administering hepatitis B tests to education applicants or job candidates for ordinary professions,” health ministry spokesman Mao Qun’an said in a statement. “The Ministry of Health will strengthen the supervision of medical and health institutions to ensure they comply... with the adjusted regulations and investigate and prosecute those who violate the rules.” Mao did not specify in the statement, posted on the ministry’s website on Tuesday, when the rules would take effect. Applicants for jobs in professions where the virus could be spread, such as blood collection, would still face restrictions, the spokesman said. More than 90 million people in the mainland have hepatitis B, which is transmitted through sexual contact, childbirth and blood transfusions, according to the World Health Organization. The new rules follow a Beijing district court ruling in May last year that the tests amounted to illegal discrimination. A design company was ordered to pay a job applicant around 20,000 yuan (HK$22,682) after it withdrew an offer because he had hepatitis B, according to the Hong Kong-based China Labour Bulletin. The court judgement was the first time a hepatitis case was successfully litigated in China, according to the group, which monitors the protection of rights of mainland workers.
China has upheld the independence and integrity of its justice system, as would any other country, in the trial and execution of Akmal Shaikh, say legal experts. Dec 31, 2009
Chief Executive Donald Tsang on Tuesday sounded a pessimistic note on the city's economic recovery, warning it may experience a "double dip in the middle of next year." Tsang said from Beijing that Hong Kong’s economic recovery “would not proceed smoothly, and I am prepared,” according to Dow Jones. “I am a bit pessimistic about the pace of recovery and we may experience a double dip in the middle of next year,” said Tsang, who travelled to Beijing on Sunday to meet with mainland leaders. However, he said the city’s government had a reserve of HK$500 billion (US$64 billion), which was “enough for two years worth of expenses,” RTHK reported. The city’s GDP grew 0.4 per cent in the three months ending September 30 compared to the second quarter, according to government statistics. However, year-on-year, GDP fell 2.4 per cent for the third quarter, narrowing from the 3.6 per cent decline in the second quarter, the data showed. Hong Kong looks set to adopt a carbon intensity target, in line with what the mainland pledged voluntarily before the Copenhagen climate talks. Carbon intensity is the amount of carbon emitted per unit of energy consumed. The news came after Premier Wen Jiabao met Chief Executive Donald Tsang Yam-kuen in Beijing yesterday. Tsang told Wen that Hong Kong was willing to "co-ordinate" with the mainland's carbon reduction plan, but that the city would need Beijing's help to adjust its fuel mix in order to gradually reduce its reliance on coal and boost the proportion of gas and nuclear power in generation. "Premier Wen has agreed to it in principle and says he will study it seriously," Tsang said. Hong Kong already has a target for energy intensity - meaning the energy used to produce a unit of gross domestic product - a 25 per cent cut below the 2005 level by 2030, which it has agreed with Asia-Pacific Economic Co-operation forum members. The mainland, before Copenhagen, pledged to cut carbon intensity by up to 45 per cent below 2005 levels by 2020. About a half of the electricity consumed in Hong Kong is produced by coal, about a third by gas and the rest by nuclear power from Guangdong. Andrew Brandler, chief executive of CLP Holdings (SEHK: 0002), said recently there might be potential for two new nuclear power units being considered in Daya Bay to supply electricity to Hong Kong. A technical feasibility study is under way on the two units. The nuclear power station now has six units, with two supplying power to Hong Kong. The government is reforming its procurement system by introducing an electronic platform. The aim is to use less paper, expand the supplier base and streamline procedures. A one-year pilot scheme was introduced for three departments in September, which the government expects could help save up to HK$5 million in procurement costs and cut transaction times by one-third. Last year, the government spent HK$12 billion on goods, of which the Logistics Department spent HK$4 billion. Included in the spending of other departments was HK$4.3 billion on "low-value" purchases, meaning items costing less than HK$1.43 million. These covered a range of goods, from stationery and batteries to computer accessories and audio-visual equipment. It takes about two weeks from a tendering process to delivery of such items. Stephen Mak Hung-sung, deputy chief government information officer, who oversees the project, said the platform would first target these low-value purchases, and expansion of its scope might be considered in future. Mak's office, which is responsible for the government's information technology, is among the first to test the system, along with the Immigration and the Environmental Protection departments. The departments open tenders through the online platform and solicit quotations from a list of about 5,000 suppliers. As the information can be made available to other departments, the platform may also be used to identify better bulk-buying bargains. Mak said the three departments made about 24,000 "low-value" transactions last year, covering more than 100 items and comprising about 8 per cent of the government's purchases. "We expect that each transaction can save up to HK$210, mostly from paper and other transaction costs," he said, adding that transactions would be streamlined, with a span for a transaction down to about 10 days. Mak said suppliers would find it easier to do business with the government using the platform, but they could also continue to use paper until the whole procurement system migrated to the internet.
China's national auditor says officials stole or misused 234.7 billion yuan (US$34.4 billion) this year and 67 are under criminal investigation, state media reported on Tuesday. Investigators recovered 16.3 billion yuan (US$2.4 billion) following annual audits of 55 government departments and hundreds of public institutions and companies, Xinhua news agency and newspapers reported. The communist government publicises such annual audits in hopes of allaying public anger about chronic corruption and official abuses. “Despite some improvement, embezzlement, waste of money and false fiscal reporting still existed in central departments,” Xinhua paraphrased Liu Jiayi, the country’s chief auditor, as saying at a conference Monday. Misconduct included the unauthorised purchase of cars by government agencies, Liu’s agency said on its Web site. The agency and news reports gave no identities for officials accused of criminal misconduct or details of their offences.
State-run Sinochem Corporation has received a 46,000-ton refined fuel cargo at its eastern China storage for government reserves, the company said on Tuesday, marking the first official evidence of the start of government refined fuel stockpiling. A top mainland energy official said in September that China had begun adding refined fuel to its state reserve as part of a larger plan to enhance the country’s energy security, but didn’t give any details. China, having filled its first state crude reserve tanks of about 100 million barrels, aimed to stockpile 10 million tonnes of fuel reserves by 2011, roughly two weeks’ current consumption of petrol, diesel and kerosene combined, an industry official told reporters in May. The cargo was offloaded into Sinochem’s newly completed storage facility in Yangzhou, in eastern Jiangsu province, on December 10, the company said in a statement on its website, adding that more fuel will be pumped into the facility. Sinochem has undertaken the job to transport and store state refined fuel reserve, it said. It didn’t specify what fuel was stockpiled, or the size of storage Sinochem operates at the site.
Beijing will use stimulus spending to speed up shifting 330,000 people slated to be displaced for a vast water transfer project, accelerating work on the troubled scheme, an official newspaper said on Tuesday. The displaced residents, mostly poor farmers in central Henan and Hubei provinces, are being moved for the South-North Water Transfer Project, which will draw water from southern rivers for the country’s dry north. The construction of two long canals in central and eastern China has been troubled by chronic pollution, troubles relocating displaced residents and engineering hitches. But now Zhang Jiyao, the official in charge of the project, has “urged local authorities to complete all migrant displacement by the end of 2011”, the China Daily reported, citing an official meeting on Monday. The earlier deadline was 2014. Half the residents will be relocated by the end of next year, when 48 billion yuan (US$7 billion) will be spent on the project, boosted by funding from China’s blitz of stimulus spending to counter the financial crisis, said Zhang. Big dams and hydro projects have been a lightning rod for discontent in China. Around the Three Gorges Dam, the nation’s other mighty hydro project, clashes dogged the move of 1.4 million residents. The South-North Project is the latest of these ambitious efforts, and the push to speed up resettlement could stir more complaints from farmers, especially near the Danjiangkou Dam that will feed the main central route. Most of the people displaced by its rising waters will be sent to less fertile farmland. Resettlement there began earlier this year. “Nobody really wants to move,” said Ma Feng, a villager from Machuan Village near the dam, who was moved earlier this year to a new home hundreds of kilometres away. “We were forced to accept it in the end, because the officials and police made us,” she told Reuters by telephone. “But if they move all the dam residents, that will be much more difficult.” The central route will wind along 1,421 kilometres (883 miles) of canals and tunnels from Danjiangkou to Beijing, as well as the nearby port city of Tianjin and surrounding areas. The separate eastern route cuts through coastal provinces up to Tianjin. The planned completion for the first stage of the central route was pushed back to 2014 after it became clear that earlier deadlines of next year and last year could not be met. A proposed western route, which would tap rivers on the Tibetan highlands to feed northwest areas, is still being examined by experts. Building company China National Chemical Engineering said on Tuesday it priced its Shanghai A-share initial public offering at 5.43 yuan a share, at the top of an indicated range, raising 6.7 billion yuan (US$980 million). China National Chemical, whose competitors include China State Construction Engineering Corp and Metallurgical Corporation of China, is selling 1.233 billion A-shares denominated in yuan, or 25 per cent of its expanded capital after the IPO. Its IPO attracted 393 billion yuan in subscriptions, with the retail portion being 63 times oversubscribed, the company said in a statement published in the official Shanghai Securities News. It had previously set a price range for the IPO of 4.90-5.43 yuan, saying it needed funds to supplement working capital, buy production equipment and build an information network. Mainland companies typically price their IPOs at or near the top of the indicated range due mainly to strong investor interest in new shares. China National Chemical joins a slew of other Chinese firms in a rush to tap buoyant stock markets this year in the mainland and Hong Kong, while China’s regulators are speeding up IPO approvals to boost equity supply as part of an effort to prevent asset price bubbles. The final IPO price values the company at 45 times its last year earnings on a fully diluted basis, much higher than a historical price earnings (PE) ratio of 22 times for China State Construction, 16 times for Metallurgical Corporation and the overall Shanghai market’s historical multiple of 28. Mainland companies typically set the PE of their IPO shares at a hefty level due in part to huge, often speculative, interest in new shares that has been common in China’s nascent stock market. That has led to a slew of companies seeing their shares fall below their IPO prices after a period of trading, with the latest examples including Metallurgical Corporation and China Merchants Securities. Analysts said China National Chemical’s high valuations, in addition to the fact that it is in a crowded domestic industry, may still not deter initial speculation in its shares on their listing debut. The company has said it would apply to the Shanghai Stock Exchange for a listing right after the IPO but has not yet given a listing debut date.
*News information are obtained via various sources deemed reliable, but not guaranteed
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Chinese New Year - Year of the Tiger
- February 14 2010
Holidays Greeting from President Obama & Johnson Choi
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," said Zhao Xiao, who is a former director of the Macro Economy
Department of the Economic Research Center at SASAC. It is also in line with
SASAC's move to reduce the number of centrally administered SOEs while improving
their competitiveness, he added. Established in 1988, China Energy Conservation
Investment Corp (CECIC) is the only centrally administered SOE concentrating on
the energy saving and environmental protection business. Its portfolio now
covers three main areas: energy conservation, environmental protection and clean
energy development. The company aims to achieve a turnover of 50 billion yuan
and a profit of 5 billion yuan by 2012, according to its website. By that time
its energy saving capacity will reach 4.25 million tons of coal equivalent and
400,000 tons in chemical oxygen demand reduction annually. Established in 1980,
China New Era Group Corp focuses on trade in military products. "It is a win-win
cooperation. The merger would enable CECIC to get more funds to develop its
green business. It would also help China New Era, which focused on trade
previously, to expand its portfolio," said an industry insider who asked not to
be named. 
China's move to raise bank reserve
ratio draws global response - The decision of the People's Bank of China to
increase the deposit reserve requirement ratio has drawn worldwide attention and
fluctuations in global markets. The PBOC decided on Tuesday to raise the deposit
reserve requirement ratio by 0.5 percentage points as of Jan. 18, which analysts
translated as a move to manage inflationary expectations and avoid a recurrence
of the lending boom. 
The Chinese flag flutters beside Google
headquarters in Beijing, On Thursday, Beijing’s first official reaction after
Google threatened to quit China over cyber-attacks, gave no indication that
China would give ground.
Google's threat to pull out
of China over what it claims to be cyber attacks has left millions of Chinese
users concerned - and analysts described the move as the company's strategy to
put pressure on the Chinese government. Google - the world's largest search
engine - said in a statement yesterday that it is considering exiting China
after the company had been hit in December with major cyber attacks that it
believes originated in the country. It is not clear whether users in China,
including many foreigners, would continue to access services such as Gmail and
Google Map, should the company shut its service. David Drummond, Google's chief
legal officer, said in an unusual statement posted online that the company had
detected a highly sophisticated and targeted attack from China that resulted in
the theft of the company's intellectual property. "These attacks ... led us to
conclude that we review the feasibility of our business operations in China." He
said Google will no longer continue censoring results on Google.cn, a
Chinese-language website it launched in 2006, and is discussing with the Chinese
government the possibility that it operate an unfiltered search engine within
the law. "We recognize that this may well mean having to shut down Google.cn,
and potentially our offices in China," he added. The statement marks a shift in
the company's China strategy for the past five years, which is to provide
censored results under Chinese law through its domestic search engine in
exchange for a presence in the world's largest online population. That strategy
helped Google take about 35 percent of China's search engine market in the
fourth quarter of last year, according to domestic research firm Analysys
International. Jiao Jian, an office worker who uses both Baidu and Google every
day, said the possible shutdown of the Google search engine will have little
impact on his life as many other firms provide similar services. "But it's hard
to find alternatives to Google's other services, such as Google Map, Google
Earth and Gmail," he said. He also expressed concerns over the availability and
safety of his Gmail account if Google exited the country. 
China's health ministry has urged vulnerable groups to get swine flu
vaccinations or limit travel during the upcoming Chinese Lunar New Year holiday
due to the spread of the A(H1N1) virus. “Pregnant women, children, the elderly,
obese people and those with chronic diseases should avoid public travel during
the peak period of Spring Festival travel,” the ministry said in a statement
posted on its website late Wednesday. Such vulnerable groups should also get
swine flu vaccinations and steer clear of crowded public places and people
showing obvious flu symptoms, it said. The ministry also urged for prevention
measures to be stepped up, including wearing face masks, frequently washing
hands and getting early medical checkups for coughs and other flu symptoms, it
said. Tens of millions of people are expected to pack into trains, planes and
buses during the upcoming Lunar New Year travel period when Chinese return to
their hometowns and villages for annual family reunions. This year’s travel
period extends from January 30 to March 10. Lunar New Year’s Day, or the start
of the traditional Spring Festival, falls on February 14. Last week, the
ministry announced it had recorded 659 swine flu deaths in China last year,
nearly all of them in the last two months of the year, and warned that the
danger of mass outbreaks still existed in certain areas. The total number of
A(H1N1) infections recorded last year stood at 120,940, it said. At the end of
October, the reported death toll stood at just six. The number of recorded
deaths then spiked, reaching about 180 at the start of December and 659 by the
end of the month. On Wednesday, the ministry said it had recorded 2,173 new
cases of the swine flu and 51 deaths due to the disease from January 4 to 10.
An assessment of the People's Liberation
Army Navy inadvertently released by the US Office of Naval Intelligence suggests
the mainland will build a naval force over the next 10 to 15 years that is
equipped for operations "well beyond its traditional operating areas around
Taiwan and the South China Sea", Jane's Defence Weekly reported. The ONI report
said the overall size of the PLA's navy might remain relatively steady as
Beijing put emphasis on quality over quantity. It expected future naval fleets
to "include one or more aircraft carriers" and many modernised attack
submarines. It said the government would speed up the building of submarines and
naval air forces "in the next five to 10 years before levelling off". The PLA
would add approximately 10 modern submarines to the force, the report said. It
said preparing for possible armed conflict over Taiwan would remain the navy's
top priority. But the need to secure vital sea lanes for the mainland's growing
commercial fleets, combined with rising domestic and international pressure for
Beijing to take up greater security responsibilities in the region, would drive
the navy to expand its operations beyond Taiwan, the American intelligence
report concluded. It said East Asia contained "numerous hot spots and potential
conflicts that challenge China's interests". The report, titled A Modern Navy
with Chinese Characteristics, was briefly placed online as an open-source
document by the ONI in November before being withdrawn from public view, Jane's
said. The report noted that while the PLA had been adding impressive new ships
and hardware to its naval fleet, the command-and-control structure had "yet to
catch up with the sophistication of the PLA's newest surface platforms
[warships]". The ONI believed the navy, as a next step, would focus more on
improving the command structure, providing better training and modernising
tactical doctrines. Air defence also remained the weakest link for the navy, it
said. The PLA's rapid military build-up over the past few years has attracted
worldwide attention. On Monday, the PLA tested a missile interceptor in space,
prompting the Pentagon to ask Beijing for clarification over its plans and
intentions. US State Secretary Hillary Rodham Clinton yesterday called on China
to step up military exchanges with the US to build confidence. "The relationship
China has with its neighbours as well as the United States and the rest of the
world will be crucial to what happens in the 21st century," Clinton said in
Hawaii. "Similarly, we hope that there will be increasing trust-building between
our militaries ... We each have our national interests. We each have to be
primarily responsible for our own people. But I honestly believe that both the
Chinese and American people will be safer and more prosperous in the future if
we have a good, solid relationship between our two countries," she said.
The chairwoman of the legislature's Finance Committee says it aims to complete
the twice-delayed vote on funding for the HK$66.9 billion express rail link to
Guangzhou by Saturday. Emily Lau Wai-hing made the comment yesterday as
lawmakers who back the project planned a move to oust her if the timetable is
not met. After consulting Legco's secretariat, Lau decided yesterday to set down
10 hours - six on Friday and four on Saturday - to complete discussions and to
vote on funding. "Ten hours should be more than enough. If lawmakers cannot
finish questioning on Friday, a vote should come on Saturday," she said. "I got
this impression from the secretariat. We should have trust in our colleagues." A
second meeting on funding was adjourned at 10.45pm on Friday after six hours of
debate. Lau said that if proceedings dragged on on Saturday the meeting could be
extended for a further four hours, with lawmakers' approval. Legco secretary
general Pauline Ng Man-wah said all lawmakers - excluding president Tsang Yok-sing
- had been polled in the past two days about the number and nature of questions
they planned to ask, and they had concluded that this should take seven hours
and 25 minutes. "We set aside another two hours for anything unforeseeable
happening," Ng said. "Lawmakers will also file written questions for the
government." Lau, without mentioning names, said some lawmakers wanted to move a
vote of no confidence against her as committee chairwoman. But as such a motion
must be submitted six days ahead of the meeting it is unlikely to be processed
in time for Friday, unless Lau shortens the notification period. "I am an
easygoing person. If someone sees the need for it, I will think about it," she
said. The 23 pan-democrat lawmakers who oppose the funding said they did not
want a vote of no confidence. But Ip Kwok-him, of the Democratic Alliance for
the Betterment and Progress of Hong Kong, said Lau needed to improve the way she
handled repetitive and irrelevant questions. "At some point, you must make a
decision and draw a line," he said. Ip said many of the 76 questions asked at
two previous meetings of the committee were not about funding, but were about
domestic issues such as location and ways to dump construction waste from the
railway. He said such issues were not dealt with by the Finance Committee. The
chairman of the Democratic Party, Albert Ho Chun-yan, said earlier that two or
three of its members still had questions. Alan Leong Kah-kit of the Civic Party
has six or seven questions, while his colleague Ronny Tong Ka-wah said the
number of questions he wanted to ask depended on how the government answered
them. Albert Chan Wai-yip, of the League of Social Democrats - who is preparing
to table 31 motions with his two colleagues when the questioning is over - said
10 hours may not be enough, as he expected each of his motions to take about an
hour. But Ng believes tabling of the motions will only take about four minutes
each if they fail to gain the consent of more than half of the lawmakers. She
said she had set aside 150 minutes for tabling of motions. However, when Tong
proposed adjourning the funding discussion at the first meeting members
discussed the issue for about an hour. Lau said she would act to end the debate
when lawmakers starting to repeat their questions. Supporters of the link
continued their publicity campaign, with the MTR Corp running a full-page
advertisement in all major Chinese-language newspapers yesterday. Several
executive councillors and former government official Sir David Akers-Jones made
public calls for funding for the project to be passed soon. Persistent delays to
the project have done no harm to the popularity of transport minister Eva Cheng.
A telephone survey of 1,011 people between Monday and Saturday last week by the
University of Hong Kong's public opinion program found 38 per cent of
respondents supported Cheng, up five percentage points from the previous poll
late last year.
Executive Council members Leung Chun-ying,
Anthony Cheung Bing-leung and Ronald Arculli yesterday defended the government's
HK$66.9 billion express rail project and called on lawmakers to "act
responsibly" in voting on the funding for it. They denied their remarks
indicated the government and the council are getting impatient and intended to
pressure the Legislative Council into approving the funds. "Legco has the right
to ask the government for more information. But its mechanism should not result
in some issues dragging on without a resolution. Our society hopes a decision
will be reached," Cheung said. Exco convenor Leung warned of the impact of
further funding delays on the city's economy. "We should take a macroscopic view
of the issue and consider whether the future development of Hong Kong will be
marginalized," he said. He said the government will do its best to answer any
technical questions raised by lawmakers, but there must be a time when questions
end and action begins. Leung said similar doubts were cast on other major
infrastructure projects, such as Chek Lap Kok airport, but the government was
eventually proven right. Had Hong Kong insisted on using the old Kai Tak
airport, it would not be able to meet today's surging demand, he said. Arculli
said the express rail is very important for the future of the city's economy,
especially in connecting with mainland cities. Legco Finance Committee
chairwoman Emily Lau Wai-hing said she did not feel any pressure from Exco
members.
Hong Kong does not have to worry about
its place in the financial world, according to retiring Hong Kong Exchanges and
Clearing (0388) chief executive Paul Chow Man-yiu. The city's proximity to the
mainland will take care of that, Chow said. In his last official media event
yesterday, Chow said less intervention is the key to continuing success for the
local bourse. In reflecting on his almost two decades in the stock market, Chow
said he counts himself "lucky" to have met so many people and gained their
support. "I am gratified and treasure their friendship," he said. Chow has been
the chief executive of the bourse twice since 1989, serving in that capacity for
about 15 years, a record for the HKEx position. Chow attributes key achievements
made by the stock market, including being ranked No 1 in fundraising and seeing
its market value grow by 30 times in 20 years, to team effort at HKEx as well as
market participants. As long as businesses develop according to market needs,
the success will continue, Chow said. Looking ahead, Chow believes HKEx may grow
together with other mainland markets such as Shanghai and Shenzhen. As long as
the Chinese currency is not freely floated, and overseas investors are not
allowed to buy mainland stocks, the Hong Kong market has the advantage of "being
close to home," Chow said. "Chinese enterprises will still come to Hong Kong for
listing." The HKEx is also ready to handle yuan products at any time, he said,
but warns the market against high expectations. "We're able to support yuan
products if the policy is in place, and incoming chief executive Charles Li [Xiaojia]
will work on those products in the next few years," Chow said. "We should not
expect them to come in a great way in the next few years," Chow said. "It takes
time. But we are ready, if the market is ready." Chow said strong foundations
allowed the HKEx to weather the financial crisis caused by the Lehman Brothers
collaps in 2008. The stock exchange will on Monday kick off the first stage of
its AMS/3 system, which will see the speed at which orders are matched and
executed increase. Chow said capacity by orders per second will increase to
1,500 from 200. The second stage will be launched in the second half of 2011.
Chow free real time quote services are expected to be available to all
applicants by the end of next year. It now offers the free services to three
Hong Kong portals and three mainland portals. Meanwhile, Li, who will assume
duties on January 16, restated the bourse's gratitude to Chow for his nearly two
decades of service.
Cathay Pacific (SEHK: 0293) yesterday
said that with increasing air traffic demand in sight, it is increasing its
fleet this year. The carrier said it would take delivery of five airliners this
year, including four Boeing 777-300ERs and an Airbus 330-300 - the same number
of new planes as last year, one of the peak years for aircraft delivery. The
carrier also deferred the mothballing of one of two Boeing 747-400s that it had
been planning to retire. "Most people believe that 2010 will be a better year
than 2009, and I agree," Cathay chief executive Tony Tyler was quoted as saying
in the internal CX World magazine. "However, it's not going to be an easy ride."
The International Air Transport Association (Iata) predicts the global aviation
industry would see large losses for the year, but the deficit would shrink to
US$5.6 billion compared with the US$11 billion last year. "Despite the signs of
returning travel and freight demand, airlines have continued to be extremely
cautious about capacity," Iata said in a report released yesterday. Since early
2008, passenger capacity has been cut by 7 per cent on international markets and
freight capacity by 10 per cent. Restoring rates and fares to their previous
levels is the top priority of airline executives. Average air fares started to
rise during the second half of last year but were still 10 to 15 per cent below
the 2008 average, the airline trade body said. Cathay finished 2009 with the
highest passenger and cargo yield in December. It carried 5 per cent more
passengers last month compared with the same period in 2008, paring the drop for
last year to 1.6 per cent. The Hong Kong division of Cathay attained the best
performance in 16 months in December, as holiday travellers filled up 84 per
cent of the flights to popular getaway destinations during the 15-day Christmas
and New Year period. Forward bookings for January and February were "promising",
the company said. Because of the robust demand for air cargo, tonnage at Cathay
surged 25 per cent year on year to 144,000 tonnes in December against a 3.3 per
cent drop in capacity a year earlier. The four new B777s will be used on flights
to Toronto and Los Angeles after the summer schedule begins on March 28. The
carrier will increase the number of weekly flights to Toronto to 10 from seven
and add three more weekly flights to Los Angeles, making it 17 times a week.
Cathay Pacific Airways (0293) expects healthy traffic during the Lunar New Year
after ending 2009 with a bang. Cargoes at Cathay and its wholly owned subsidiary
Dragonair last month surged 25 percent year on year, while passenger volumes
jumped 5 percent. "The year ended well, with stronger passenger demand leading
to an improved load factor and yields at the highest level of the year," said
Tom Owen, general manager for revenue management. Improved yields from economy
class and a gradual improvement in the number of premium passengers were the
main drivers, Owen said. But for the whole of the year, the airlines carried 1.6
percent fewer passengers while cargo tonnage fell 7.1 percent. Flight numbers
last year were cut by 5.6 percent from 2008 to 56,442. Cathay expects another
challenging year ahead, following the International Air Transport Association's
forecast the industry may lose US$5.6 billion (HK$43.68 billion) this year. "If
IATA's forecasts are correct it's not going to be an easy ride," said Cathay
chief executive Tony Tyler. "Our business last year fell far and fast, and
recovery is likely to be slow and gentle at best," he said. Cathay will step up
capacity and frequencies on US and and European routes. Cathay shares edged up
0.58 percent to HK$13.86 yesterday. 
Le Prestige, the second phase of the
Lohas Park project in Tseung Kwan O, is among the developments targeted by
mainland buyers. The focus of China's property buyers has shifted in recent
months from Hong Kong's luxury housing market to mass-housing units selling for
range of between HK$2 million and HK$5 million. The number of deals by mainland
buyers in this price range rose by 41 per cent last year, according to data
compiled by mReferral Mortgage Brokerage Services. A range of factors were
behind the big jump, said Sharmaine Lau Yuen-yuen, mReferral's chief economic
analyst, including rising rentals and low interest rates. Against this backdrop,
mainlanders living and working in Hong Kong were persuaded to buy instead of
renting. "They are not in the millionaire class that can afford to pay HK$20,000
per square foot for an investment. But they are real buyers," said Lau. Typical
of the new wave of mainland property buyers in Hong Kong is Xue Li, who recently
paid HK$3.8 million for an apartment in Le Prestige, the second phase of the
Lohas Park residential project in Tseung Kwan O. A Chinese-language teacher at a
secondary school in Cyberport in Pok Fu Lam, Xue bought the 900 square foot flat
in December by arranging a 90 per cent mortgage. "I have worked in Hong Kong for
3-1/2 years and have no plans to move back to my home city Wuhan before my
13-year-old daughter graduates from university," said Xue. "Rentals are high so
I decided to rather buy a flat taking into account the low interest rate." Xue
is paying about HK$9,000 rent and will now pay a similar amount on mortgage
repayments. "Any mainlander who plans to stay in Hong Kong will now be
considering whether to buy," she said. Julia Wang, a researcher at a Hong Kong
university, also recently bought a 1,070 sq ft unit at Monte Vista in Ma On Shan
for HK$3.8 million. "I will stay in Hong Kong and will not go back home. The
property market in Hong Kong is steady and so I bought the apartment instead of
continuing to rent," said Wang. Paul Louie, the regional head of property
research at Nomura International (Hong Kong), said the deals were part of a
buying trend by mainlanders into the market. "This trend is underway and if it
is sustained the increase in mainland buying interest in the lower-priced
category could have broad implications," said Louie. Lau said buyers of homes
worth between HK$2 million and HK$5 million were generally end-users, while
investors targeted more expensive units since buying a property priced above
HK$6.5 million offered Hong Kong residency through the capital investment
entrant scheme. At the end of September last year, 33,482 mainlanders had taken
residence in Hong Kong since the mid-2003 introduction of a scheme to attract
mainland professionals. Some mainlanders also target cheaper homes as
investments. Rain Wang, a garment trader in Guangzhou, said she had signed up
for an 830 sq ft flat in Nathan Road for HK$2.8 million. With HK$1 million on
deposit, she is arranging a loan of HK$1.8 million that requires her to pay
HK$9,000 a month. "The original owner separated the flat into nine rooms and
rents them out, reaping combined monthly rental of about HK$20,000. I bought the
unit with the leasing contract," said Wang. This is the third property she has
bought in Hong Kong as long-term investments. The other two are rented out in a
similar manner. Last month, a group of about 20 buyers from Fujian ,and Wenzhou
in Zhejiang bought 20 units in Le Prestige, for HK$6 million to HK$7 million
each, said an agent. According to a recent survey by Nomura International (Hong
Kong), the number of plus-HK$10 million flats sold last year rose by six
percentage points from 21 per cent of deals to 27 per cent. 
Members of a Chinese rescue team are
ready to depart for quake-hit Haiti, at the Capital International Airport in
Beijing, capital of China, Jan. 13, 2010. A 50-member Chinese rescue team is
ready to depart for quake-hit Haiti later Wednesday afternoon, hours after the
7.0-magnitude earthquake rattled the Caribbean country on Tuesday local time.
The team consists of search and rescue personnel, who have conducted many rescue
tasks of this kind in the past years, and three sniffer dogs, Liu Xiangyang,
deputy chief of the National Earthquake Disaster Emergency Rescue Team, told
Xinhua at the Beijing Capital International Airport. "Most of the members are
very experienced," said Liu, waiting for the departure. The team will also take
some food, equipment and medicine with them.
China Construction Bank (CCB)
and Europe's second largest lender Banco Santander, are planning to set up a
joint financial holding company and open 100 village banks in the country over
the next three years, people familiar with the matter told China Daily. The
joint venture is likely to be set up with a registered capital of 3 billion yuan
and this could eventually go up to 5 billion yuan in three years. CCB would
invest 1.8 billion yuan and hold a 60 percent stake in the joint venture, while
Santander would hold the balance, the sources said. The holding company would
hold a 51 percent stake in each of the newly set up village banks. Village banks
are financial institutions set up primarily for farmers and should have a
registered capital of at least 1 million yuan. They can accept deposits and also
conduct lending activities. The CCB proposal, which would create the first
financial holding company in the country, and a new model to develop rural
finance, is yet to be approved by the State Council, according to the sources.
"The model could help to create a unified plan to develop China's rural
financial services network. It would also help to introduce foreign banks'
advanced experience in rural financing," the sources said. During the financial
crisis, Spanish bank Santander became the largest lender in the euro zone with a
market value of 54 billion euros by the end of 2008. Its subsidiary, Banesto
Bank, has a strong presence in rural financial services. The bank has around
1,900 branches in Europe, with nearly one-third of them in rural areas.
Currently foreign banks are not permitted to hold more than 20 percent stake in
Chinese financial institutions. However, the stipulation does not exist for
village banks invested by foreign lenders. 
Commercial Aircraft Corporation of
China employees adjust a C919 airplane model at the 2009 China International
Industry Fair held last November in Shanghai. The nation started work on an
aircraft engine research and development center yesterday. Yesterday's ground
breaking of an aircraft engine R&D center in Shanghai may help the city in its
bid to become the nation's aircraft-manufacturing hub. The ceremony, located in
the city's Minhang district, was held by AVIC Commercial Aircraft Engine Company
Co (ACAE), a joint venture with the Aviation Industry Corp of China (AVIC). AVIC
develops and manufactures military aircraft and components for both military and
civilian aircraft. The R&D facility will serve as a center for air-worthiness
testing, customer service and international communications. In addition, it will
serve as the headquarters for ACAE. Total investment in the R&D center will be
3.23 billion yuan, with construction to be completed by 2013, according to ACAE
general manager Zhang Jian. The center will focus on engine research and
manufacturing for China's home-grown, 150-seat aircraft project, the C919.
Future plans will also include researching larger jet engines. The Shanghai
municipal government and AVIC reached a strategic cooperation agreement in
November 2008 to co-invest in ACAE and help make Shanghai into a manufacturing
center for Chinese development of passenger-aircraft engines. China's first
jumbo jet, the C919, will initially be equipped with foreign-made engines for
the plane's maiden flight in 2014. ACAE will domestically produce C919 engines
once it masters the necessary techniques. According to Zhang, the first
homegrown engine is expected to come off the assembly line in 2016. The engine,
which makes up 20 percent of an aircraft's total cost, and is traditionally
regarded as the heart of an airplane. So far, China has not developed its own
engines, which has stifled its growth in the aviation industry. Last December,
Commercial Aircraft Corp of China Ltd (COMAC), the company in charge of the C919
passenger airplane program, signed a deal with CFM International, a joint
venture between General Electric and Safran of France. Under the agreement, the
C919 will be equipped with Leap-X1C turbofan engines.
Major mainland cities rushed to
announce plans to boost the supply of low- cost homes after the central
government outlined 11 policy directions to contain price surges. But experts
feel the municipal moves will have limited impact. ICBC International analyst
John So noted that a similar pledge last year from major mainland cities saw
poor execution. "For every 100 homes expected [countrywide], fewer than 30 were
built eventually. The execution was not so effective, with the exception of
Shanghai," So said. Beijing deputy mayor Chen Gang said the city has earmarked
30 billion yuan (HK$34 billion) this year for the construction of low-cost
housing, while the corresponding land supply will account for more than 50
percent of the total supply, People's Daily reported. Huang Xinjing, vice
director of Guangzhou's Housing Guarantee Office, said the city will invest 3
billion yuan in building affordable homes this year, with 56,000 such homes
hitting the market in the first half. Nanjing will start building 6.5 million
square meters of low-cost homes this year. Centaline (China) vice managing
director Lai Kwok-keung said: "The current focus on low-cost homes cannot cool
down the market. These homes have no investment value, whereas many homebuyers
are indeed investing." Both Beijing and Shanghai vowed to ensure steady growth
in land supply. The capital plans to develop no less than 100 billion yuan of
land to deliver 280 million sqm of private homes, while Shanghai will speed up
the clearing of idle land and reduce the size of each public plot available. Lai
said even though the new plots are likely to be far from city centers, the
increase in supply will signal to buyers that they do not necessarily have to
put up with existing price levels. The State Council on Sunday issued a 40
percent downpayment requirement for all second-home buyers, reducing chances of
upgraders getting the small leeway they enjoyed earlier. 
In a surprise move, Beijing yesterday jumped in to put a brake on runaway bank
lending. The central bank raised the reserve requirement ratio for lenders by 50
basis points - to 16 percent - triggering a slide in European stocks and the
Australian dollar. The People's Bank of China also boosted the benchmark
one-year bill yield to 1.8434 percent in the morning - the first increase in the
past five months. Market watchers interpret the moves as the first step of
China's exit from its stimulus plans, reversing the world's loose monetary
policy prevalent since the Lehman Brothers collapse in September 2008. The
Aussie dollar decreased for the first time in three days, falling 0.6 percent to
92.37 US cents. London stocks were down 47 points in late trade while the Paris
benchmark was 34 points lower. Economists said bank lending of 600 billion yuan
(HK$681.1 billion) in the first working week of the year - nearly double the
monthly average last year - alarmed Beijing, prompting the sudden action.
Analysts expect lending in January to exceed 1 trillion yuan. The reserve ratio
- the percentage of deposits that banks are not allowed to lend - at top
mainland banks will rise to 16 percent, effective from Monday, the central bank
said. The 50 basis points increase could mop up about 200 billion yuan from the
banking system, economists said. China is expected to incrementally raise the
reserve ratio further - up to 17.5 percent - the level before the onset of the
2008 financial crisis. So far, no interest rate hikes have been forecast, but
these may follow if lending remains unabated, economists said. Tao Dong, chief
regional economist at Credit Suisse, said the larger-than- expected first-week
lending caused Beijing to be concerned about excess liquidity that could fuel
possible asset bubbles in both the stock and property markets. "[The reserve
ratio hike] is definitely related to the January credit growth, for the
first-week figures show not much adjustment by banks in lending," Tao said. He
predicts there will be two or three more hikes in the reserve ratio until it
climbs back to 17.5 percent. Shenyin Wanguo Securities chief economist Gui
Haoming agrees, saying the reserve ratio could climb by another 150 basis points
this year. Both Tao and Gui said yesterday's hike marks Beijing's first step to
withdraw from the 4 trillion yuan stimulus plan Premier Wen Jiabao launched in
November 2008 to rescue the economy. "The central government is a bit worried
about the liquidity in the market. It prefers to have early control of it
despite [lingering] uncertainties about economic growth," Gui said. But Tao and
Gui see no imminent increase in interest rates. "Only when credit growth is not
under control [will rates rise]," Gui said. Citi Investment Research economist
Shen Minggao forecasts the central bank will wait until the third quarter to
raise interest rates, unless bank lending sharply boosts inflation. BNP Paribas
chief economist Chen Xidong said interest rates may go up by the second quarter
if further hikes in the reserve ratio fail to temper bank lending.
USA Federal and state watchdogs in the
United States have opened a new front in the campaign to keep poisons out of
Chinese imports, launching inquiries into high levels of cadmium in children's
jewelry, while Walmart pulled many suspect items from its store shelves.
Google's threat to quit the mainland
over censorship and hacking intensified frictions between Beijing and Washington
on Wednesday as the United States said internet control was a serious issue and
demanded an explanation from China. Beijing has not made any significant comment
since Google, the world’s top search engine, said it will not abide by
censorship and may shut its Putonghua google.cn website because of attacks from
the mainland on dissidents using its Gmail service and on companies. Authorities
in Beijing were “seeking more information on Google’s statement that it could
quit China”, the official Xinhua news agency reported, citing an unnamed
official from China’s State Council Information Office, or cabinet spokesman’s
office. Differences over the internet now seem sure to intensify tensions
between the US and China, joining issues like climate change, trade, human
rights and military ambition. “This is a clash of behemoths. This is a big
country and this is a big company,” said former US Department of Justice
computer crimes chief Mark Rasch. With the mainland the largest lender to the
US, holding US$800 billion in Treasury bills, these internet tensions will make
steering this vast, fast-evolving relationship all the more tricky, especially
with the US Congress in an election year. Beijing has said it does not sponsor
hacking. Its officials have also accused the west of seeking to undermine its
one-Party rule by backing dissidents and campaigns against censorship. Now
Google is at the heart of those tensions. Pressing China for an explanation, US
Secretary of State Clinton said: “The ability to operate with confidence in
cyberspace is critical in a modern society and economy. “We have been briefed by
Google on these allegations, which raise very serious concerns and questions,”
Clinton said in a statement in Honolulu. “We look to the Chinese government for
an explanation.” Economic analysts said the issue had snowballed beyond Google
and its problems. “If this becomes heavily politicised, and there are signs that
it is, and people in the Chinese government say, ‘This is good. It serves you
right, and we won’t bow our heads to the United States, then there’ll be no way
out,” said Xie Wen, a former executive in the mainland for Yahoo and other big
internet companies, who is now a prominent industry commentator. “The impact on
China’s image will gradually also affect the enthusiasm of investors,” he added.
“It’s not the pure economic losses – a billion or so – it’s the deteriorating
environment.” The burst of statements from the US underscored how tightly it is
bound to the mainland, both economically and politically. Beijing’s policy of
filtering and restricting access to web sites has been a frequent source of
tension with the US and tech companies, such as Google and Yahoo Inc. Google’s
announcement suggested the recent intrusions were more than isolated hacker
attacks. “These attacks and the surveillance they have uncovered – combined with
the attempts over the past year to further limit free speech on the web – have
led us to conclude that we should review the feasibility of our business
operations in China,” Google chief legal officer David Drummond said in a
statement posted on the company’s blog. Some 20 other companies also were
attacked by unknown assailants based in China, said Google. RBC Capital Markets
analyst Stephen Ju said the move was a turnaround for Google. “Just about every
earnings call recently has been that they are focused on the long-term growth
opportunities for China and that they are committed.” Google shares dipped 1.3
per cent although an executive described China as “immaterial” to its finances.
Shares in Baidu, Google’s main rival in the mainland, surged seven per cent. A
Google spokesperson said the company was still investigating the attack and
would not say whether Google believed Chinese authorities were involved.
Analysts have noted that US President Barack Obama, during a visit to China in
November, told an online town hall that he was “a big supporter of
non-censorship”. Eurasia Group said US-China relations were the top risk of next
year. “We’ll see significant deterioration in US-Chinese relations in the coming
year,” it said, citing economic, security and cyber-security pressures. After
the Google announcement, searches on its google.cn search engine on Wednesday
could turn up images and sites previously blocked, including bloody pictures
from the 1989 crackdown on pro-democracy protests in Beijing. The ruling
Communist Party, wary of the internet becoming an uncontrolled forum for the
country’s 360 million users, is unlikely to allow Google to avoid repercussions.
If google.cn shuts down, Beijing may also seek to restrict access to Google’s
main search engine, which can also carry out searches in Puthongua, although
China’s “firewall” of internet filters blocks many users from opening up the
results. “The general tendency over the past year has been to accuse foreigners
of having a Cold War mentality and being anti-China and aiding and abetting
China’s enemies,” said Rebecca MacKinnon, an expert on the Chinese Internet at
the Open Society Institute. “How exactly they are going to react to this, I
cannot anticipate, but it’s likely that it will not be pretty.” 
China's mid-space missile
interception test may seem less fancy than when it knocked out an ageing
satellite with a missile three years ago, but its practical implication and
technological achievements are far greater. The success shows China is gradually
closing the military gap with the United States, thanks in part to the People's
Liberation Army's ability to learn from mistakes at the Pentagon. China is now
the only nation after the US that has successfully intercepted a supersonic
incoming missile outside the atmosphere - a feat that not only attests to its
sophisticated missile technology but also demonstrating it has acquired
complicated radar tracking systems. In 2007, China shocked the world when it
knocked out one of its ageing weather satellites with a missile, raising
concerns that it may target the satellites of other countries. But according to
General Xu Guangyu , a retired officer at the PLA's General Staff Headquarters,
the satellite test was low-tech compared with the experiment announced on
Monday. Xu said the 2007 test was relatively straightforward, as the satellite's
mass and orbit were already known, and it had no defence system. It was also
unable to make any emergency manoeuvres. Monday's test was anything but
straightforward. The defence system had to identify the location and trajectory
of the missile. Because of the speed of the warhead, the time for response
including detection, aim and launch was a matter of minutes. "Satellite
interception is like shooting a beer bottle. Missile interception is like
shooting ducks," Xu said. "Monday's announcement marked a milestone in China's
active defense strategy. Mid-course missile interception requires superior
technology and equipment. As China is becoming one of the most powerful
countries in the world, the development is natural." There was suspicion that
the test may have been a computer simulation, but the US Department of Defense
confirmed detection of abnormal activities in space. "We detected two
geographically separated missile launch events with an exo-atmospheric collision
also being observed by space-based sensors," Major Maureen Schumann, a Pentagon
spokeswoman, was quoted as saying by the Associated Press. "We are requesting
information from China regarding the purpose for conducting this interception as
well as China's intentions and plans to pursue future types of intercepts." The
race between China and the US to weaponise space is something akin to the
tortoise and the hare. The US has a huge lead, but slowly and surely China is
starting to catch up. The cause of the Pentagon's recent slow progress is not
complacency, but rather serious technical issues. More than US$100 billion has
been invested in its ground-based mid-course defense (GMD) system, but last year
new tests were cancelled because of delays. According to unclassified military
research papers, China has been closely monitoring and studying US technology
for more than a decade, and the army, air force and navy each has a ballistic
missile defense program. Piecing together information from intelligence
networks, academic journals and even media reports, Chinese military researchers
have discovered a number of flaws in the GMD system that should be avoided.
Colonel Wang Guoyu of the PLA's Luoyang -based electronic equipment testing
centre wrote in a 2005 paper that the GMD system had a weakness in mid-course
interception that the PLA should address. According to the paper, the US
space-based infrared satellites could not effectively tell the difference
between a real missile and the decoys that it released. The decoys could be as
small as a balloon coated with metallic paint or as large as a cloud of
aluminium foil. The satellite's infrared sensors had technological limits and
could not obtain enough information to distinguish between them. As a result,
the defence system has to rely mainly on ground-based radar stations to analysis
the invading objects. This is a time-consuming process and sophisticated
missiles can be hard to detect. Xu said Monday's test did not mean that the
construction of China's missile defence system was completed. "In comparison
with the US, we still have a lot of work to do," he said. "In particular, we
need more better and more powerful early warning satellites. The missile defense
system's base should not be on the ground, but in space."
A cargo ship loaded with containers
disembarks from the Tianjin Port in this file photo. Mainland’s Maritime Safety
Administration said on Wednesday ice floes were threatening operations of major
ports like Dalian, Tianjin and Qinhuangdao. Ports along the northern China coast
face a cold front in the coming days that threatens to disrupt operations by
expanding the worst sea ice floes seen in three decades, officials said on
Wednesday. Mainland’s Maritime Safety Administration said 30-cm thick ice floes
were now closing in on the Bohai and northern Yellow Sea coast, the location of
major ports like Dalian, Tianjin and Qinhuangdao. The administration said the
situation was likely to get worse in the next few days. Another cold front is
forecast that may seriously impact port safety and operations in Shandong
province, which receives major daily shipments of iron ore and delivers coal to
energy-poor southern regions. Smaller facilities have been hit badly, with ships
already prevented from entering the Haimiao port in the city of Laizhou, which
lies at the south of Bohai Bay, the administration said. But other ports say
business has continued more or less normally so far. “There are still queues of
iron ore ships along the east coast,” said a trader based in Tianjin. “We are
seeing a slight slowdown in shipments from Australia but this was not caused by
the weather.” A shipping company official in Rizhao, mainland’s second biggest
coal port, said the situation had not seriously slowed business. “I think
further north, at Qingdao and elsewhere, the sea ice problem is more serious,
but Rizhao has not yet felt the impact. Our business carries on as usual,” he
said. Officials at Qingdao, also in Shandong, as well as Dalian in Liaoning
province, said shipping had not yet been interrupted by the freezing conditions.
However, an official at the Qinhuangdao port, mainland’s biggest coal
distribution centre in Hebei province, said temperatures of minus 26 Celsius
have slowed down operations considerably. “The low temperatures have interrupted
our operations and affected our equipment,” he said. He said problems at the
port, rather than the ice on the water, had delayed coal shipments to southern
parts of the country. A statement posted on the website of the Hebei Province
Maritime Safety Administration said authorities in Qinhuangdao are working to
guarantee thermal coal deliveries.
Beijing plans to spend up to 374
billion yuan over the next five years cutting emissions, with about 80 per cent
of the money earmarked for developing hybrid and electric car technology.
According to a document posted on the National Development and Reform
Commission's website, the central government will invest a total of 300 billion
yuan in hybrid and electric vehicle technology. In a guideline released on
Monday, the government stated that 11 sectors, including petrochemical,
non-ferrous metals, steel, textile and machinery, are expected to employ more
fuel efficient technologies. Besides "green" vehicles the petrochemical and
non-ferrous metal sectors are also in line for significant investment to improve
energy efficiency. Analysts said the policy maker is targeting
emission-intensive industries to use more efficient technology to abate rising
demand for energy, increasing greenhouse gas emissions, and deteriorating
natural resources like land and water. China did not make substantial
commitments during the Copenhagen climate summit last month, but said in
November that it would aim to reduce its "carbon intensity" by 40 to 45 per cent
in 2020. The government estimated that a total of 41.17 million tonnes of coal
equivalent (tce) will be saved if the 11 main sectors of the economy used more
energy-efficient technologies. China, the world's largest car market with sales
of 13.6 million vehicles, is also struggling to limit oil consumption. The NDRC
estimates there will be three million hybrids and 1.5 million pure electric
vehicles on the roads in 2015. According to a report by consulting group
McKinsey, annual emission from the mainland's road transport sector will grow to
1.8 gigatons of carbon dioxide equivalent in 2030 from 0.4 gigatonnes in 2005,
while petrol and diesel consumption will increase to almost 500 million tons in
2030 from 110 million in 2005. 
Yuan funds, or private equity funds
formed in China and denominated in the domestic currency, have captured the
attention of international real estate investors and fund managers. In this
opening of a two-part examination of the funds, we take a look at recent
developments in the sector and the opportunities these have created for foreign
players. Next week we will examine the structures under which such funds may be
established. Yuan funds are already a prominent feature of the developing
domestic private equity industry and increasing foreign involvement in the
sector, either in the form of fund management or direct investment, has become
possible as a result of changing policies and programs. The increased interest
in the funds is also an adjustment by foreign players to the rise of China-based
institutional investors and the massive increase of domestic liquidity, which
has made it increasingly difficult for international investors to compete with
domestic players for deals. Foreign investment in mainland real estate from
offshore is strictly regulated and the laws governing foreign investment in real
estate put cross-border foreign investors at a severe competitive disadvantage
to domestic investors with yuan funding sources. A foreign investor wanting to
buy mainland property is required to set up a special legal entity, a
foreign-invested enterprise (FIE) in China in order to purchase and own the real
estate. The establishment of the FIE is extremely time consuming and requires
numerous governmental approvals, onerous minimum capitalisation requirements,
burdensome debt to equity ratios, and strict currency conversion and
repatriation requirements. FIEs are typically project-specific companies so each
investment requires the establishment of another FIE and a repeat of the
governmental approval process. In contrast, domestic players are not subject to
the same extensive governmental approvals and entity restrictions. Domestic
players can simply move more quickly and effectively on deals. In the
circumstances, some foreign investors and fund managers believe that by coming
onshore by way of a yuan fund with cash resources in the currency available for
deployment, they may avoid the complexities associated with making each
investment through the establishment of an FIE. Moreover, to foreign fund
managers a yuan fund represents an opportunity to tap the mainland's
ever-growing pool of individual and institutional investors. With such a fund, a
fund manager can raise and manage funds domestically in China from new sources
and at the same time earn management fees and carried interest. For a new
entrant to the sector, the first major consideration when establishing such a
fund is the structure of the fund vehicle. Though various options are available,
much of the current attention on foreign-invested or foreign-managed yuan
real-estate funds is focused on a limited-partnership structure. A limited
partnership formed under Chinese law is attractive because it shares some of the
features with limited partnership vehicles found in other jurisdictions, such as
general partner management, limited liability of limited partners, operational
flexibility and pass-through tax treatment. Foreign investor and manager
involvement in limited partnerships has only recently become increasingly
feasible due to changes in the partnership laws and the introduction of
local-government programmes designed to promote the private equity industry. As
a result, many foreign real estate investors and fund managers desiring to
compete in China now view yuan funds established under a limited partnership
structure as the "next opportunity". For those wishing to take this route there
are essentially two different paths for foreign party involvement in a
limited-partnership yuan fund. They are a foreign-invested limited partnership
or a domestic limited partnership.
Nanluoguxiang in downtown
Beijing is ranked as one of the 25 best Asian flavored tourist destinations
recently in Time Magazine. It is famous for its boutiques, restaurants and bars
along both sides of the hutong laneways which give a cultural flavor. 
Chief Justice Andrew Li inspects a police guard of honour in a ceremony at City
Hall in Central to mark the opening of the legal year yesterday. Chief Justice
Andrew Li Kwok-nang emphasised Hong Kong's separation of powers and the role of
an independent judiciary as a guardian of rights and freedoms yesterday. His
remarks, at the opening of the legal year, came weeks after a top Beijing
official lauded Macau's "co-operative" judiciary for being socially
constructive. It was Li's 13th and final speech at the opening of a legal year.
He will step down in eight months. The lead topic of his speech, the
independence and role of the judiciary, went to the heart of Hong Kong's
greatest concerns since the resumption of mainland sovereignty - the
preservation of the rule of law and an independent judiciary within a sovereign
state with one-party rule. "Each jurisdiction has its own constitutional
arrangements distributing power between the executive, legislative and judicial
branches ... the arrangement for one jurisdiction may not be appropriate for
another," Li said. "It is important for the role of the independent judiciary in
Hong Kong to be reiterated and strongly emphasised and for its role to be
clearly understood. The Hong Kong system involves checks and balances between
the executive, the legislature and the judiciary. "The independent judiciary has
a vital constitutional role to ensure that the acts of the executive and the
legislature fully comply with the Basic Law and the law and that our fundamental
rights and freedoms, which are at the heart of the Hong Kong system, are fully
safeguarded." During a visit in July 2008, Vice-President Xi Jinping said the
three branches of government should give each other mutual support and
understanding. Last month, Zhang Xiaoming, a deputy director of the State
Council's Hong Kong and Macau Affairs Office, praised the Macau judiciary for
co-operating with the Macau government and legislature, saying it was
"constructive" for society. Li later said he was not responding to anyone. "But
I did want to take this opportunity, since it was my last public speech, to
emphasise the role of Hong Kong's independent judiciary. I feel that this needs
to be clearly explained for everyone's understanding, whether for the Hong Kong
public, or for people outside of Hong Kong." In his speech, Russell Coleman SC,
chairman of the Bar Association, said: "In Hong Kong, we enjoy and we prize the
separation of powers. Comparisons with some other countries, or other special
administrative regions, are not apt. "No greater co-operation is required of any
judge in Hong Kong than that he or she should exercise his or her judicial
powers independent of any interference, whether from the executive or
legislative branches or anywhere else." Li also stressed that comparisons should
not be made between Hong Kong and Macau. "Macau also works under the 'one
country, two systems' concept, but Macau's legal system ... is absolutely not
suitable for Hong Kong," he said. Li was given a standing ovation to mark his
final speech at the opening of the legal year. He used his address to comment on
several topical issues affecting the Hong Kong public and the legal community,
including the increasing number of of judicial reviews, the progress of civil
justice reform and mediation services and the need for better access to justice.
An independent judiciary is crucial for safeguarding the fundamental rights and
freedoms of the people of Hong Kong – and ensuring the executive and legislature
comply with the constitution and the law, Chief Justice Andrew Li Kwok-nang
tells judges and lawyers at City Hall yesterday in his 13th and final speech at
the opening of the legal year.
After 32 years in the property
industry, Shih Wing-ching yesterday retired as the chairman of Centaline Group,
the largest property agency in Hong Kong. The city's best known and most vocal
property expert, Shih, 61, is also recognized for his wide-ranging interests and
philanthropy. He writes a daily column in the free newspaper he founded,
covering real estate, business and politics, which he says he will continue.
Once a Marxist, he remains friends with the controversial politician "Long Hair"
Leung Kwok-hung and is a strong advocate of corporate social responsibility. He
once even held a seminar on sex. Many in the industry see Shih's retirement as a
loss for the city's property industry. "The outspoken attitude of Shih Wing-ching
helped to raise the social status of property agents in the past few years,"
said Henderson Sunlight Asset Management chairman Tony Tse Wai-chuen. He said
one of Shih's major contributions was pushing agents towards a corporate
standard. Shih's firm also set up a database with market and transaction data
for buyers. Shih formed Centaline Property Agency in 1978 with a staff of four.
It now has 21,700 employees. "I have changed the practices of the real estate
agency and advocated the improvement of market transparency," said Shih. "I'm
proud to say the transparency of Hong Kong's property market is higher than in
other cities." Most Chinese companies are inherited by the children of the major
shareholder, but Shih donated his stake in Centaline Group to the charity fund
he runs in March 2008. The foundation runs poverty alleviation programmes in
mainland rural areas and disaster relief projects. His portion of the profit
generated by the group will be transferred directly to the fund. His shares in
AM730, a free newspaper he founded, will also be donated this year. Shih
postponed his plan to retire two years ago when the global financial crisis
erupted in 2008. Centaline and listed Midland Holdings are the two largest
property agencies in Hong Kong. "The monthly turnover of Centaline Property
Agency surpassed that of Midland in 2009," said Shih. "We will strengthen our
Hong Kong agency business this year and plan to widen the gap." Commission
income of the group soared 69 per cent to more than HK$7.5 billion last year and
it generated a profit of HK$1.2 billion. With the strong profit growth and
"saturation" of the agency business in Hong Kong, Shih said yesterday he had
decided to step down from the Hong Kong operation. He will continue to be
involved in the mainland business in the short term and will focus on his
charity after that. Shih expects Hong Kong property prices to surge 20 per cent
in the first half on the influx of liquidity and rise in small unit prices, but
said prices would drop in the second half if the economy improved as government
support measures dwindled. Former Centaline vice-chairman Sherman Lai Ming-kai
was named chief executive of Centaline Group and head of the Hong Kong and
mainland agencies. 
Shanghai's burgeoning initial
public offering (IPO) market is shaking Hong Kong's status as the world's
fundraising king and will challenge the latter's role as China's international
financial center as the country moves toward a convertible currency, market
observers said. "It is certain that Shanghai will surpass Hong Kong in 2010 as
the world's largest IPO center," said Terence Ho, strategic growth markets
leader of accounting firm Ernst & Young. Chinese companies are expected to raise
$55.7 billion on the Shanghai Stock Exchange in 2010 while in Hong Kong the
figure is expected to be $47.7 billion. Last year, Hong Kong raised
approximately $30 billion in new listings with Shanghai's $27.3 billion closely
behind, according to Bloomberg data. Analysts said it would be a matter of time
for Shanghai to eat into Hong Kong's share in the IPO market as China is moving
toward a convertible currency. "The yuan's internationalization could be a
threat to Hong Kong as foreign capital could then flow freely into the
mainland's A-share market," Ho said. "Global fund managers will also increase
the percentage of their investment on the mainland." China is on the way to
reforming and improving its capital market by introducing new financial tools
including stock index futures, margin trading and short selling. Shanghai is
also preparing itself for an international board that will allow foreign
companies to raise capital in the mainland. Foreign companies HSBC and global
exchange group NYSE Euronext are keen to become the first batch of overseas
companies to list on the A-share market. However, Ho pointed out that Hong Kong
in the short term will maintain its advantage of high international exposure and
market liquidity. "In the short term, Shanghai is unlikely catch up with Hong
Kong in terms of international exposure and liquidity," he said. "Currently, the
two places have different roles. Hong Kong caters to millions of international
investors while Shanghai mainly targets domestic investors." Ho noted that
although the yuan's internationalization may jeopardize Hong Kong's role as
China's gateway to the global financial market, it may create new opportunities
for Hong Kong as more capital will be pumped into Hong Kong from mainland
investors. To maintain its status as world-leading IPO market, Hong Kong needs
to work on attracting more mainland companies and keep the existing ones,
analysts said. 
With a flurry of IPOs last year, Hiong Kong stock market led the global market
for companies listing first, but doubts about the credibility of some new comers
is casting a shadow over the bourse. Hong Kong’s stock exchange was the world’s
hottest IPO market last year with more than US$30 billion in new listings, but
it stands accused of sacrificing quality for quantity. The bourse is keen to
stay ahead of rival Shanghai and attract non-Chinese companies, but criticism
has mounted after the controversial approval of Russian aluminium giant UC
Rusal’s share sale and a string of listing debacles. The exchange repeatedly
delayed approving Rusal’s US$2.6 billion initial public offering (IPO). Unproven
allegations that chief executive Oleg Deripaska has links to organised crime
dogged the world’s biggest aluminium maker in its attempts to become the first
Russian company to list in Hong Kong. And when the listing was finally approved
last month, the Securities and Futures Commission (SFC) stepped in with what
observers call “unprecedented” restrictions for the IPO. The SFC stipulated a
minimum investment in Rusal equivalent to about US$130,000 – reportedly a bid to
shield small investors from the complicated offering. “It was quite a surprise
that the SFC agreed to Rusal’s listing,” said Raymond Chan, acting director of
the Centre for Corporate Governance and Financial Policy at Hong Kong Baptist
University. “I think the exchange and SFC are aware of the quality problem.”
Chan warned that the exchange could be putting its reputation at risk. “Listing
in Hong Kong would be associated with low quality.” Concern over the issue
spiked after a string of mainland companies shocked the market with
less-than-full disclosure last year. “We list a lot of fairly sub-standard
companies here – just look at the listings in the past year,” said a corporate
governance expert who requested anonymity. “It doesn’t do anything for this
exchange.” Trading in shares of Asian Citrus, the mainland’s largest orange
plantation owner, was suspended on their debut amid claims that executives had
misrepresented the company’s value. Aluminium producer China Zhongwang Holdings
raised more than US$1 billion in April and then was also accused of
misrepresenting details in its share sale prospectus, and obscuring its links to
mainland’s military. The company said last week that it had been cleared of
wrongdoing after an independent review by accounting giant Ernst & Young. It did
not make that report public and China Zhongwang has since suspended trading in
its shares without explanation. China Metal Recycling, which also listed in Hong
Kong last year, saw its shares plunge almost 50 per cent when its chief
financial officer quit, saying he was denied access to company financial
records. Chan said Hong Kong was perceived as a good place to list because of
the lighter regulatory touch. “That’s one reason why many mainland companies
select the city as their first overseas exchange – the regulations are not too
tight for them, especially compared with the US,” he said. “But the transparency
and disclosure in Hong Kong is less stringent than in most western exchanges.
“We need to improve that to get the same standard as other exchanges.” For its
part, the exchange said it had joined a general trend away from so-called
merit-based listings to a disclosure-based regime, putting the onus on company
directors for the accuracy of information flowing to investors. Loss-making
Rusal did not meet the bourse’s profit test, but companies can still list if
they meet other criteria, including positive cash flow, an exchange spokesman
said. “HKEx (SEHK: 0388) agrees entirely that good corporate governance is of
paramount importance and therefore over the years has committed itself to
building a quality market,” the spokesman said. “A quality market will result in
a virtuous cycle which attracts issuers and investors.” But a high-profile
critic questioned the adequacy of the exchange’s disclosure rules, with no
requirement for quarterly financial reports. “Virtually every place in Asia
requires quarterly reporting now,” said shareholder activist David Webb. “Some
people think that the easier we make it to list, the better. If that’s the case,
we might as well just trade on eBay without any regulation at all.”
Mainland property developer Shanghai
Forte Land is in talks to buy a high-end residential property in Shanghai from
Goldman Sachs in a deal worth more than US$200 million, two people familiar with
the situation said. Foreign investors including Goldman, Morgan Stanley and
Macquarie Group have been reducing their property holdings in the mainland
during the past year, taking advantage of the country’s real estate market
rebound as the global financial crisis weakened some western banks. Forte is in
the final stages of negotiations with Goldman to buy Shanghai Garden Plaza,
after rival bidders such as Poly Real Estate Group quit, the sources said.
Goldman bought the residential complex of villas and serviced apartments in 2007
for US$190 million, according to real estate agency CB Richard Ellis. Shanghai
Forte spokeswoman declined to comment. Goldman spokesperson could not be reached
immediately for comment. Mainland has vowed to curb speculative inflows, punish
land hoarding and speed up home supplies in a bid to cool a property market boom
fuelled by loose monetary policies and last year’s nearly 10 trillion yuan
(HK$11.35 trillion) in new bank lending. Mainland’s mature property market is
losing lustre for foreign investors as yields decline due to surging prices and
falling rental income, Grant Ji, director of global real estate agency Savills
said on January 6. Last July, Macquarie’s investment unit sold Shanghai luxury
property City Apartments for about US$44 million. Morgan Stanley also exited
some mainland projects last year, including high-end residential property
Chateau Pinnacle in downtown Shanghai. 
Hong Kong's toy exports went down 10 percent to 88.55 billion HK dollars (11.35
billion U.S. dollars) in the first 11 months of 2009, according to figures
released by the Hong Kong Trade Development Council Monday at a toys and games
fair. Toy exports to Russia fell 57.1 percent while exports to Czech rose 58.2
percent. Exports to the U.S. dropped 23.6 percent and that to the European Union
dipped 8 percent. As for baby products in the first 11 months of 2009, the
exports reached approximately 6 billion HK dollars (726 million U.S. dollars).
Its top export markets were the U.S., the U.K., Macao, Italy and France. The
36th Hong Kong Toys and Games Fair, Asia's largest toy show, opened on Monday
featuring about 2,000 exhibitors from 38 countries and regions.
A proposed "sunshine law" requiring Macau
officials to disclose their wealth faces a hurdle in the form of complex
business interests at high levels of the government, analysts say. Chief
Executive Dr Fernando Chui Sai-on said last week he was considering a sunshine
bill, echoing President Hu Jintao's call for a cleaner Macau government. Jose
Coutinho, a legislator and head of the Macau Civil Servants Association, said
the biggest challenge facing enactment of such a law came from within the
government. It would be difficult to introduce because some people may not want
their assets to be disclosed, he said. "Full disclosure will prompt questions
about their sources of income." Under Macau's existing asset declaration law,
top officials only need to report their wealth to the Court of Final Appeal, and
the public is barred from accessing the files on their assets. Political
commentator Professor Larry So Man-yum of the Macau Polytechnic Institute said
the plan to enact a sunshine law in Macau was ultimately driven by the central
government. "Clearly, there's the central government's will behind it, as
President Hu's call was followed by a quick response from Macau," So said.
Building a clean and efficient government was among the "four hopes" expressed
by the president when he attended the inauguration of the new Macau government
last month. Chui mentioned his plan for a sunshine law when he met academics and
experts on various social issues on Tuesday last week, in a meeting seen as part
of the preparations for his policy address in March. He said he would increase
the transparency of officials' assets, which should be made "adequately open" to
the public. He said he was considering making such information on officials'
wealth accessible to the public. Chui said he had discussed the plan to improve
transparency with Fong Man-chong, Macau's new Commissioner Against Corruption.
Macau is a tiny and close-knit city with the interests of its influential
citizens often interlinked. Chui's family, one of Macau's ruling clans, has
widespread business interests in the city, covering property, construction,
tourism and commodities. When he ran for chief executive in an uncontested race
in July last year, Chui tried to convince the public that he could avoid
conflicts of interest arising from his family business background. "It's hard
for one to choose one's family background, but after getting educated and
serving society, one can obey the law," he said in May last year. In a
controversial land deal in 2006, a company associated with Chui Sai-cheong - the
chief executive's elder brother and a legislator - acquired a 100,000 square
metre site on Taipa island from the government for below market price. The
company acquired the site for 231 million patacas, which property consultants
said was half its market value. So said successful enactment of a sunshine law
would help ease the public's doubts over Chui's impartiality. But he said the
devil was in the details and the law must come with clauses ensuring full
disclosure and high accessibility of information disclosed. "We'll have to see
whether the law will apply to an official's spouse, what types of assets will be
subject to disclosure and whether the public can access the information," So
said. Coutinho said a sunshine law alone was not enough and an accountability
system must be introduced to ensure a clean government. In April last year,
former secretary for transport and public works Ao Man-long was jailed for 28
years and six months on 81 counts of bribe-taking, money laundering and other
crimes involving hundreds of millions of patacas. The scandal fuelled campaigns
against "businesspeople ruling Macau" - a play on the phrase "Macau people
ruling Macau", enshrined in the city's Basic Law.
Actor Jackie Chan poses next to a wax
figure of himself during the unveiling of the figure at Madame Tussauds
Hollywood in Los Angeles on Monday, Jan. 11, 2010.
Beijing confirmed on Tuesday that an espionage probe into an Australian
executive with mining giant Rio Tinto was complete and defended its handling of
the case, which has strained ties with Canberra. “Shanghai police have completed
their investigation into the Rio Tinto case and the case has been turned over to
Shanghai prosecutors,” said foreign ministry spokeswoman Jiang Yu. However,
Jiang declined to comment on whether Australian passport-holder Stern Hu and
three Chinese colleagues would eventually face trial. The four were arrested in
July and initially accused of stealing state secrets. The allegations were later
watered down to industrial espionage, centering on alleged bribery during talks
over iron ore contracts. “The case has all along been handled according to
relevant Chinese laws, legal processes and China-Australia consular agreements.
I believe this case will result in a lawful and just outcome,” Jiang added. The
spokeswoman said it was up to prosecutors in Shanghai to decide whether and when
to bring the case to trial. Australia said on Monday that it had been notified
by Beijing that the case had been turned over to prosecutors. Hu’s arrest soured
diplomatic relations with Australia and raised questions about business deals
with rapidly industrialising China, the world’s biggest iron ore consumer. It
came just weeks after Rio Tinto snubbed a massive cash injection from a mainland
state firm, and coincided with annual iron ore contract talks. The tense
negotiations later collapsed. 
US
Open finalist Caroline Wozniacki crashed out in the first round of the Sydney
International on Monday to China's Li Na while Japan's Kimiko Date Krumm
continued her renaissance. Li upset fourth seed Wozniacki, 2-6, 6-3, 6-2, while
Date Krumm battled to a 6-3, 5-7, 6-4 victory over world number 20 Nadia Petrova
of Russia.
People queue up in the rain for tickets
for the American science fiction movie "Avatar" at the Heping Cinema in downtown
Shanghai January 10, 2010. The cinema which holds the only one IMAX screen in
Shanghai provides 24-hour ticket service to meet the increasing demands from the
public. 
Cycle maker gets Buffett share bump - The
chairman of Chongqing Zongshen Power Machinery Co Ltd, Zuo Zongshen, test rides
one of the company's new motor cycles. Media reports said Warren Buffett has
expressed an interest in the Shanghai-listed firm. The chairman of Chongqing
Zongshen Power Machinery Co Ltd, Zuo Zongshen, test rides one of the company's
new motor cycles. Media reports said Warren Buffett has expressed an interest in
the Shanghai-listed firm. Everything that Warren Buffett mentions an interest in
turns magically to gold, or at least it appears to in China. The most recent
beneficiary of Buffetts' influence over Chinese markets is Zongshen Power
Machinery Co Ltd, a Chinese motorcycle maker that has captured market attention
after media reports said the US investment guru had shown an interest in the
company. Just last Friday a rumor that company's chairman Zuo Zongshen was
heading to the US to meet with Buffett this month sent the company's shares
soaring to hit the 10 percent trading limit, closing at 20.1 yuan. The market
value of the company skyrocketed to 1.1 billion yuan and trading volume also
surged substantially that day. Yesterday, Zongshen confirmed the meeting but
declined to provide additional details. Its stock was suspended from trading
yesterday. Zongshen Power's ambitious energy sector expansion plan is believed
to be the main reason for the meeting between its chairman Zuo and Buffett. It
remains to be seen whether Buffett will invest in the company or not. Last
November, Zuo announced his company's plan to expand into the business of new
energy, including the production of lithium batteries and electric motorcycles.
The company is also actively seeking long-term strategic partnerships in the
field, taking advantage of China's booming green revolution. There has been
widespread speculation that Zongshen Power could become another Buffett-backed
stock after Chinese electric car-and-battery maker BYD and suit maker Dayang
Trands. Both firms saw a sharp surge in their share prices after Buffett's
endorsement. The stock price of BYD has undergone a six-fold leap since
September 2008 when MidAmerican Energy - a unit of Buffett's Berkshire Hathaway
- agreed to buy a 10-percent stake in BYD for $230 million. 
Shanghai Airlines, which is
scheduled to merge with China Eastern, said yesterday it is seeking to delist
its shares from the Shanghai Stock Exchange. The company's shares were suspended
from trading following the notice. Shanghai Airlines was officially listed on
Oct 22, 2002. The company's shares closed at 10.82 yuan last Friday, up 51.75
percent from their debut price some seven years ago. At the end of the third
quarter of 2009, total assets of Shanghai Airlines amounted to 16 billion yuan,
on a debt ratio of 93.1 percent and quarterly losses of 253 million yuan.
Despite the merger, Shanghai Airlines is expected to retain an independent
operational license. According to the announcement, Shanghai Airlines'
shareholders can choose between accepting 1.3 China Eastern shares for each
Shanghai Airlines' share, or sell their Shanghai Airlines' shares to China
Eastern for 5.5 yuan each, 35 percent below the current price. Dissenting
shareholders of China Eastern can also convert their stock to cash at a rate of
5.28 yuan per share. Analysts say most shareholders will not accept the cash
option because of the substantial price discount. The major shareholders of
Shanghai Airlines, including Best Prospect Overseas Limited and Jinjiang
International, have vowed to pass on the cash option. Shanghai Airlines'
shareholders that opt for the share exchange option stand to enjoy a 12 percent
premium based on Friday's closing price of China Eastern shares at 6.1 yuan
each. China Eastern shares will not be available to stakeholders until the
merger is completed. After the merger, China Eastern will have a fleet of over
300 airplanes and connect 150 cities. Ji Lijun, an analyst at Shanghai
Securities, said the two combined companies would reshape the airline market.
"The new China Eastern will occupy a market share second only to China Southern
Airlines," Li said. "It will also benefit from the busy Beijing-Shanghai air
route." 
The mainland, the world's third-biggest
producer of wind power, has dropped a rule stipulating that more than 70 per
cent of wind turbines must be made domestically, whether by foreign or local
companies. The policy had been scrapped recently and there was no longer a
quota, said Shi Lishan, a deputy director of renewable energy at the National
Development and Reform Commission. Overseas companies had lost out on
wind-energy projects because bidding criteria made it impossible for them to
compete with domestic developers, the European Union Chamber of Commerce in
China said last year. But Shi said last month the mainland still relied on
foreign expertise for wind-turbine design and development and locally made
components had yet to meet global standards. Gordon Kwan, the head of energy
research at Mirae Asset Securities in Hong Kong, said: "If China has to wait for
the quality of their wind turbines to catch up with foreign countries, it'll
have to wait for a while. "Countries like Spain and Denmark are already very
successful in wind power generation. If China can immediately apply the
technology, that could speed up its plan to increase wind in their energy mix."
The mainland aims to increase its capacity to produce power from wind fivefold
by 2020 to help combat climate change. The mainland's wind-power capacity will
rise to 100,000 megawatts by then from at least 20,000MW this year, National
Energy Administration chief Zhang Guobao said on May 26. The mainland has 70
wind- turbine makers with a capacity of about 15,000 megawatts a year, Hong
Kong-based CLSA analyst Dave Dai said in September.
Fashion designers challenge
traditional Western couturiers - The Devil along with countless Chinese people
may wear Prada but there is a growing feeling that the world's second-biggest
consumer of luxury goods could start looking closer to home for fashion
accessories. China is on the verge of fielding high-end fashion that can compete
with anything coming out of Paris, New York, London or Milan, say observers. "It
is very likely to be the next birthplace of another luxury brand because of the
country's cultural history, booming market and a big number of talented
designers," said Luee Sun, a London-based buyer who purchases fashion items for
department stores. From Dec 1, 2007, to the end of January 2009, China consumed
$8.6 billion in luxury goods, surpassing the US last year to become the second
largest luxury goods market in the world behind Japan, according to the US-based
World Luxury Association (WLA). A forecast from Bain & Co showed a
stronger-than-expected rise in luxury sales for Asia, especially China, amid the
worst ravages of the financial crisis. It predicted in 2009 luxury-goods sales
in the Chinese mainland would jump by 12 percent from a year earlier. However,
the road ahead will be long and hard for fledgling Chinese fashion gurus
competing with Western rivals, say experts. Daisy Wu, a 28-year-old postgraduate
of University of the Arts London, quit her job as a design assistant at a top
luxury goods company in London and returned to China with the ambition of
creating her own products. "During my previous job I was always being asked to
contribute some Chinese elements and inspirations to the western design pieces.
Chinese characteristics are increasingly being used in all kinds of luxury
products, ranging from clothes to jewelry," Wu said. "I was wondering why we
didn't create a Chinese luxury brand by leveraging our own history and culture."
As she spoke, Wu took off her favorite Armani suit and Hermes scarf, put aside
her Chanel handbag and changed into the hoodie and sneakers more favored by
dispossessed youth. The young woman visits a wholesale fabric market at least
twice a week seeking inspiring materials. "The market is chaotic and buying
materials is really a fight," Wu said. "Good fabric at appropriate prices is
always in strong demand. When I find it I grab it and press the money into the
seller's hand." Wu opened a six-square-meter store called "Red" at Dongsi, in
Beijing's Dongcheng district, selling the clothes and accessories that she
designs. It's a far cry from the 200-sq-m studio she used to work in. Every day,
Wu has to argue with tailors, asking them to obey her designs precisely on every
detail and burn the midnight oil to adjust garments stitch by stitch. The
average price of a "Red" brand designer piece is about 1,000 yuan but, despite
the cost, Wu has won a great number of fans. She said: "All luxury brands
started with a small workshop and I will contribute my talent and life to create
the history of my brand." "However, it requires a long time to develop the
philosophy behind a new brand. Furthermore, it will take generations to gain the
worldwide acceptance of designers, the fashion media and, of course, fashion
enthusiasts. It is the same for all luxury brands." Kevin Yeung, chairman of
Hong Kong Fashion Designers, said China shouldn't rush into the business of
luxury branding because of the length of time it takes to build up popularity
and reliability among consumers, encouraging them to accept the brand's
philosophy and inevitable high prices. Unlike Daisy Wu, middle-aged Ji Pingsheng,
also known as Mouse Ji after his designer suits, is further advanced in the
luxury goods business. Ji was the first Chinese designer to have his brand sold
at the Galleries Lafayette, the top luxury department store in Paris, France.
The "little mouse" products are displayed next to those of Liu Jo, Armani and
many other examples of design "royalty". Ji proudly says Mouse is one of the
best sellers. Ji has opened more than 600 stores across Europe and many top
luxury department outlets have courted him. "Ji is the family name I inherited
from my ancestors while Mouse is the year I was born. I tend to integrate the
two Chinese cultural symbols into my brand," said Ji, who majored in the art of
porcelain at university. "However, pure Chinese elements cannot gain global
popularity: You need to go international."
The first phase facilities of
Tibet's largest thermal power plant started production on Saturday to help
relieve the winter power shortage on the chilly plateau. The first phase
facilities of Tibet's largest thermal power plant started production on Saturday
to help relieve the winter power shortage on the chilly plateau. To bridge a 30
percent of gap between demand and supply in the region, the China Huaneng Group,
the nation's leading power generator, invested 300 million yuan ($43.94 million)
in building up contingency projects in Lhasa and Ngari. The projects involved
nine sets of diesel generators with a capacity of 100,000 kW in Lhasa and 10,000
kW in Ngari. After the first four sets of equipment start working, the other
five will function as of the Lunar Spring Festival and the Tibetan New Year, or
Losar, which will fall on Feb 14, the company said. All the facilities will be
transferred to the Tibet autonomous regional government after the project is
completed. By then, Lhasa will not suffer blackout anymore. 
Cars line up during heavy traffic at a
city highway in Beijing in this file photo. Figures released on Monday showed
that China overtook the United States as the biggest auto market in 2009. China
auto sales surged past the United States to reach record levels last year on
government incentives, and automakers are poised for solid but slower growth in
the world’s fastest growing major auto market in 2010. After a landmark year in
which the country zoomed past the United States and mainland automakers made key
acquisitions abroad, Beijing’s renewed policy incentives to bolster demand will
likely keep it as a bright spot for car manufacturers battered by the financial
crisis. Vehicle sales in the country came to a record 13.6 million units in
2009, the China Association of Automobile Manufacturers said on Monday, well
above the country’s previous target of 10 million units. That compared with
annual sales of 10.4 million cars and light trucks sold in the United States,
the lowest level in 27 years. The mainland tally, which also includes heavy
vehicles, is still higher than that of the United States after deducting roughly
650,000 units of heavy trucks, Orient Securities said. “Sales have been
extremely hot in most parts of last year with little seasonal changes. Many
people have to wait for weeks or even months to get their cars,” said Qin Xuwen,
an analyst with Orient Securities. Mainland’s passenger car sales jumped 52.9
per cent to 10.3 million units in 2009, rebounding sharply from single-digit
growth a year earlier, official data showed. Sales in December surged 88.7 per
cent to 1.1 million units, topping 1 million units for monthly sales for the
third time this year. Analysts attributed the boom largely to Beijing’s policy
initiatives, which had effectively lifted market sentiment and attracted buyers
back to showrooms. A low comparative base in 2008, when car sales slowed to a
single-digit growth rate for the first time in at least 10 years, also helped
inflate the 2009 growth rate. The market, they said, would return to a slower
but more rational growth rate of roughly 10 per cent in 2010 on continued policy
support from the government even though the renewed tax incentives for small
cars were not as aggressive as expected. Industry executives themselves,
including Chen Hong, president of SAIC Motor Corp, mainland’s biggest automaker
and a GM partner, remain sanguine about the outlook for next year, due largely
to pent-up demand in smaller cities where cars are no longer a luxury item as
wealth grows. BYD, 10 per cent owned by Warren Buffett’s Berkshire Hathaway,
raised its 2010 sales target last week after achieving its 2009 sales goal ahead
of time. It now aims to sell 800,000 vehicles next year, up from a previous
target of 700,000 units, Paul Lin, manager of the company’s marketing
department, said. Mainland is now a safe haven for industry heavyweights
battered by a sharper-than-expected industry downturn, which had forced two of
Detroit’s big three automakers into bankruptcy in 2009. General Motors, still
majority-owned by the US federal government, agreed late last year to cede
control of its flagship car venture to partner SAIC Motor Corp. Volkswagen also
pledged to invest US$5.8 billion in mainland through 2011 to expand its
production capacity and shore up its R&D. Ford Motor, a relatively latecomer to
mainland and a cautious player, broke ground in September for its
long-contemplated $490 million third mainland plant. “China used to be the one
that was eager to attract big, outside investment, but it’s the other way around
now,” said Zhang Xin, an analyst with Guotai Junan Securities. “It’s a market
too important to ignore.” The past year has seen mainland automakers venturing
on to the global stage for the first time in a major way, ready to snap up
big-name brands, such as Volvo and Hummer, which they previously admired from
afar. Zhejiang Geely Holding Group, parent of Geely Automobile (SEHK: 0175), is
on the verge of acquiring Ford’s Volvo car unit, following Beijing Automotive
Industry’s purchase of some Saab platforms in December. Sichuan Tengzhong Heavy
Industrial, an obscure machinery maker, has also agreed to take over GM’s Hummer
brand. But mainland automakers are still facing an uphill battle to become truly
global players, industry observers said. The short-cuts they have taken, hoping
to lead them to the hall of fame, may turn out to be a long and arduous journey.
“It’s no surprise China’s auto industry wants to go international,” said Klaus
Paur, director of global industry consultant TNS’s North Asia Automotive
division. “But I have the impression they are getting too ambitious. There are a
lot of question marks here as they don’t even have a solid brand in their home
market.”
As northern China braces for another
drop in temperatures, vehicles drive through a newly cleared road in Fuyun
County of Altay Region in Xinjiang. More than 5,400 people were evacuated after
the province was hit by a strong blizzard that left one person dead and 800 home
destroyed, reports said on Sunday. The cold front is expected to send
temperatures plummeting to minus 35 degrees Celsius in northern Heilongjiang
province, and then grip the area for most of the week, the central weather
bureau said. The temperature in Beijing – which hit the lowest point since 1971
last week – is set to drop to minus 15 Celsius by Tuesday before edging up to
around zero degrees on Friday, the station said. Frigid weather has gripped most
of the north of the country since the start of the year, with heavy snows
disrupting air, road and rail traffic last week, and the plunging temperature
causing a spike in power use. The government was rushing tents and other relief
supplies to its northwestern Xinjiang region after heavy snow killed one person
and forced the evacuation of nearly 5,500 others, state media said at the
weekend. Snowstorms, which raged until Friday, also “flattened” 799 houses and
damaged nearly 5,000 others, the report said. The situation has caused several
provinces and regions to ration electricity or take other power-saving moves to
reduce strain on electricity supply grids as residents turn up the heat to stay
warm. The spike in energy demand has also resulted in a 15 per cent increase in
coal prices as compared with a month ago, the Beijing News reported. Production
in the major coal region of Shanxi has fallen due to the widespread closure of
mines under a new safety reform plan, further pushing prices upwards, the
Yangcheng Evening News said. But due to the shortages and rising prices,
end-users were seeking cheaper coal from small mines, the paper said, indicating
that a black market for the fossil fuel was already developing and mines were
opening illegally. Meanwhile, coal transport prices fluctuated wildly, rising
12.4 per cent at the Shanghai Shipping Trade Centre last week when shipments
were hampered by snow before falling by more than 11 per cent this week, the
Beijing Times said. According to Xinhua, the cold snap has resulted in the most
severe sea ice in north and eastern China in three decades, with ice breakers
working to keep sea lanes free and navigable. A large portion of the coal from
north is shipped to the south by sea.
Passengers buy train tickets at a
ticket office of Nanjing Railway Station, in Nanjing, capital of east China's
Jiangsu province, January 10, 2010. The station began to sell the first batch of
train tickets for the Spring Festival travel period on the day. The National
Development and Reform Commission has predicted the nation's railway network
will carry 210 million passengers during the Spring Festival travel period,
which lasts from January 30 to March 10. 
Chan $2b private hospital plan is
counting on promised land - Former legislator Bernard Charnwut Chan has set his
sights on building a HK$2 billion, 300-bed private hospital in Wong Chuk Hang,
Aberdeen. Chan, president of insurer and medical services operator Asia
Financial Holdings, said he is looking forward to serving Hong Kong patients by
applying his family's more than 20 years of experience in running medical
services in Thailand. Chan said the biggest hurdle in running private hospitals
in Hong Kong had been the high cost of land. "So here is a very rare chance for
the government to release its land for building private hospitals. We believe
the news would attract many investors from overseas," Chan told Sing Tao Daily,
The Standard's sister newspaper. Last month, the government announced seven
special requirements for those submitting "expressions of interest" to develop
private hospitals at Wong Chuk Hang, Tseung Kwan O, Tai Po and Lantau. Companies
have until March 31 to submit documents. Chan expressed particular interest in
Wong Chuk Hang because of its proximity to the University of Hong Kong's medical
school and Central district, where most private doctors have their clinics. It
would be convenient for both patients and their doctors to travel to Wong Chuk
Hang, he added. Chan also disputed the perception that mainlanders are the major
clientele of the city's private hospitals. "Mainland mothers come to Hong Kong
to give birth not because they prefer the medical services here ... there are
other reasons," he said. Chan said medical tourism is a success in Thailand,
while Singapore's market is also maturing. Chan warned the medical cost in the
city - which is 30 percent more than Singapore and double that of Thailand - is
too high to be competitive. 
Hongkongers continue to fear further
acid attacks despite the arrest early on Sunday of a 39-year-old man on the roof
of a building believed to be the site from which acid was thrown onto shoppers
in the Temple Street night market late on Saturday. That attack, in which 30
people were injured, was the eighth acid attack in the city in 13 months and
took the number of injured to more than 100. All occurred on busy streets packed
with shoppers, with five cases involving injuries. By 7pm yesterday, the
arrested man - the first person arrested in connection with any of the attacks -
was still in police custody but no charges had been laid. He was found on the
roof of a building from which police believe two bottles of acid were hurled
into Temple Street at about 9.30pm. Chief Executive Donald Tsang Yam-kuen
condemned the acid attack yesterday. "It is very frustrating ... it is also very
sad," he said. He hoped the public could help police find the culprit. "I
believe this incident can be ended soon so the public do not have to worry," he
said. Police have offered rewards totalling HK$1.5 million for information
leading to the capture of the culprits behind the acid attacks. Yau Tsim Mong
District Council will hold a meeting today with the government to discuss how to
improve safety in Temple Street and other busy streets in the district,
including Mong Kok's Tung Choi Street, known as Ladies' Market. "Yes, a man has
been arrested, but then we are not sure if he really did it," councillor Hau
Wing-cheong said. "And even if he did, will there be other attackers?" Hau said
he hoped the attacker would be caught soon and that he feared the target of the
next attack would be Tsim Sha Tsui. "You can see all these incidents are aimed
at busy areas. The attacker tries to get the most attention possible," Hau said.
Councillor Chan Wai-keung urged the government to consider registering everyone
who buys acid. "By doing so, we can easily trace the culprit if such incidents
occur," Chan said. "Nowadays, people also have to report their personal details
when getting mobile phone services. In the wake of the recent spate of
incidents, something has to be done to safeguard the public." But Hau disagreed
with imposing registration. "Many people buy acid to clean their toilets.
Recently I talked to shops selling this product and they all said [a register]
would bring many troubles to their business." Both councillors said security
measures of tenement buildings in the district should be improved. "Many such
buildings do not even have security guards, and people can go in and out without
any interference," Chan said. Hau said: "The government should install more
surveillance systems in the district. Then not only can it trace the suspect,
but it can also pose a deterrent effect." Police yesterday gave questionnaires
to shops on Temple Street and took videotapes from surveillance cameras.
Officers also checked the bags and registered the personal details of everyone
entering or leaving two buildings at the junction of Nanking and Temple streets,
either of which they believe the acid could have been thrown from. Forensic
detectives were also seen collecting samples, including fingerprints, from many
parts of the buildings.
Donald Tsang and his wife Selina attend the starting ceremony for the Community
Chest Hong Kong and Kowloon Walk for Millions at the Hong Kong Stadium in So Kon
Po yesterday. Chief Executive Donald Tsang Yam-kuen has waded into the row over
construction of the HK$66.9 billion high-speed rail link to Guangzhou after a
vote on funding for the project was delayed again on Friday. Yesterday, Tsang
said he understood the concerns of lawmakers and the villagers of Tsoi Yuen
Tsuen who would have to leave their homes for the project, but stressed the rail
link would bring economic benefit to Hong Kong. "We respect the right of
lawmakers to raise questions, and my colleagues will continue, with great
patience, to answer those questions. But the Finance Committee has already held
two relatively long meetings. "I hope very much that in the next meeting, this
issue can be decided upon, and that this plan goes ahead as soon as possible,"
he said. A vote on the funding had initially been expected in mid-December, but
pan-democrats' concerns over the cost-effectiveness and the environmental impact
of the project, combined with the Christmas holiday, meant an additional meeting
was held on Friday. But after more than six hours' debate, and with many
questions remaining unanswered, the meeting ended without a vote. Another
meeting will be held on Friday this week. The government considers construction
of the 26-kilometre line the most important infrastructure project since Chek
Lap Kok airport, and is desperate to start work as soon as possible. Even if
work is completed by 2015, as scheduled, it would already be two years after
completion of the rest of the link across the border. However, Tsoi Yuen Tsuen
residents, combined with an increasing number of discontented young people, who
see the project as another indication of the government failing to respect their
values of sustainable development and heritage preservation, have exerted
sufficient public pressure to derail the construction schedule. Environmental
concern group Green Sense yesterday said it would begin mobilizing heritage
supporters from a wider age range, including high school students born in the
1990s, to oppose the government's plan. Green Sense president Roy Tam Hoi-pong
said he would send letters to about 500 teachers to organize school trips, and
expects 50 to 100 to respond positively to his suggestion. He said he would
stage exhibitions on Hong Kong's environment and the government's obsession with
the rail project. Yesterday, Legislative Council president Tsang Yok-sing
refrained from criticizing lawmakers for delaying tactics, saying the public
would judge for themselves. "It's normal for lawmakers to raise questions of the
government over public matters, although of course to use the raising of
questions as an excuse to delay proceedings would contradict the public's
expectations of the legislature." Finance Committee chairwoman Emily Lau
Wai-hing said the Legco secretariat was seeking lawmakers' views on to how to
proceed with this Friday's meeting, in order to decide on how to set time
limits. The government will submit its suggestions today.
While some cities make much of
their "tallest" buildings, Hong Kong is being advised to do the opposite by
using underground space to cater for the pressing demand for land from the
growing population in the next 40 years. We may not have to live and work 30
metres underground. But we may commute and shop at depth to allow a less dense
and greener environment on the surface, if a university's proposal to be
submitted to the Development Bureau this month is realized. "Urban sites will no
longer be available in the coming years. Without reclamation, we have to come up
with an alternative," said Cheung Kwok-pun, a University of Hong Kong
architecture professor who is leading a study sponsored by the university's
development fund. The study suggests constructing underground developments
beneath reclaimed land along the harbor, covering about 410 hectares in West
Kowloon, Kai Tak, Quarry Bay, Central and Wan Chai. It proposes a five-storey
basement under the reclaimed land, incorporating new commercial floor areas, a
traffic network, car parking and an energy centre to support the needs of the
underground facilities. The underground developments would be connected by
environmentally friendly transport such as a monorail, electric vehicles and
even cross-harbour tunnels specially designed for pedestrians and cyclists. "The
linkages will provide synergy to second business districts like Kai Tak and West
Kowloon and increase accessibility," Cheung said. "People will park their cars
at the traffic hubs and ride on public transport." The study team said the
concept was technically and financially sound. Reclaimed areas are chosen
because they are encumbered with fewer hard rocks, cables and pipelines, making
the construction cheaper. Cheung said redevelopment was expected to be more
frequent in West Kowloon in the coming decades, providing new opportunities for
a more sustainable and creative development approach. "Instead of increasing the
density above ground continuously, we can transfer some commercial areas from
the surface to underground, including facilities and infrastructures causing air
pollution and creating eyesores," he said. Preliminary financial assessment
shows a development of 150 hectares under West Kowloon, extending from Lai Chi
Kok to the new arts hub would cost about HK$350 billion. The financial model
assumes development under public-private partnership, with the underground space
provided by the government at no cost. The development cost could be recovered
in five years under this condition, with an annual rental income of HK$68
billion generated from the underground commercial areas. Land revenue generated
from surface development will be higher as the environment is improved with less
density and more green space. "It's time to look at it [a new approach]," Hong
Kong Institute of Engineers president Andrew Chan Ka-ching said. "The proposal
provides impetus for our community to discuss the city's visions for 2050." The
proposal, far-fetched in some eyes, offers a possible solution to
over-congestion and prompted suggestions that future developments should not
proceed without a long-term planning strategy for 2050. Chan said going
underground in urban areas was not the only solution. An alternative was housing
more of the city's population in the New Territories. "Without a population
policy, I don't know where we are going and what we are planning for," he said,
urging the government to draw up a road map for the city's growth. As the deputy
chairman of global engineering consulting firm Arup, which has realised numerous
world-renowned projects, Chan said accessibility and attractiveness were the
keys to success for underground developments. The firm's 610-metre Guangzhou TV
tower by the Pearl River became a landmark in the city last year. Some 10.9
metres below the tower and its surrounding public park are two extensive sunken
plazas for cultural and tourist activities, connecting the iconic museum, opera
house and public library designed by veteran architects on the other side of the
river. The plazas of more than a million square feet are twice the size of City
Plaza in Taikoo Shing, linking to an underground transport interchange. Many
examples of underground developments are found overseas for purposes of heritage
conservation and relieving density, including the Louvre's underground museum
complex in Paris and an extensive underground shopping mall in Osaka. But Chan
warned that underground developments could use more energy for ventilation and
lighting, and space was also required for effective evacuation and gradient of
roads going up to the surface. "It will require careful designs," he said.
"Bubble tea" from Taiwan is taking off in Hong Kong, but already some are asking
when the bubble will burst. Small takeaway shops selling Taiwanese-style
beverages, including the island's bubble tea - a drink made with Chinese tea and
milk and served with tapioca balls - have sprung up in the city in recent
months. However, competition among vendors is also white-hot. The latest player
to join the "tea wars" is Share Tea, a bubble-tea franchise brand owned by the
United International Business Corp of Taiwan, which opened its first Hong Kong
shop next to Kowloon City Plaza last Friday. The company says it plans to open
three more shops later this month - in Mong Kok, Tsuen Wan and Hung Hom - and
expects to have between 30 and 40 outlets this year. "If we can make it, we will
probably become the biggest bubble-tea brand in Hong Kong," said Angus Lai, the
general manager of the company, which runs 150 Share Tea counters through
franchisees in Taiwan. However, the task may not be easy because of competition
from the existing bubble-tea retailers as well as many more seeking to enter
this potentially profitable business. Bubble tea made its first appearance in
the city last summer and thanks to a variety of flavours and relatively cheap
prices, usually ranging from HK$10 to HK$20, the drinks have quickly become a
favorite. According to Lai, the newly opened shop in Kowloon City recorded daily
turnover of between HK$12,000 and HK$15,000 during a trial run last week,
selling between 900 and 1,000 cups every day. "Based on our experience, daily
sales can rise to between 1,500 and 2,000 cups in the summer," said Lai. Driven
by high demand and considerable profit margins, the bubble-tea business has
since flourished, with Mong Kok, Causeway Bay and Tsuen Wan being the favourite
locations. In Mong Kok, several bubble-tea stalls operate on the same street,
sometimes in adjoining shops. Despite the claims of "unique flavours" and
"outstanding quality" on big banners, their menus look similar, with several
fixed categories that include bubble tea, milk tea, fruit juice and pure tea. In
Causeway Bay's Cannon Street, there are six Taiwanese-style bubble-tea shops on
the 100-metre strip. One is Gong Cha, a leading franchise brand from Taiwan.
Shop manager Elisa Mak Yee-man, who previously operated three shoe shops in Mong
Kok, sold two of her shoe shops last summer and raised more than HK$1 million to
open a beverage counter in Causeway Bay. "I take it as an investment, though
it's a high-risk one," said Mak, who noted there were only three bubble tea
shops in the vicinity when she opened for business. "But I think my real rivals
are the other two Gong Cha outlets, in Wan Chai and Aberdeen. It is unavoidable
that they will divert part of the loyal customers of our brand." Just a stone's
throw away from her outlet, a snack stall also launched self-made bubble tea,
selling for only HK$6 per cup. However, the price did not seem to impress
customers, who were prepared to queue at the other franchise chains during the
busy business hours in the afternoon. "It will cost you seven or eight bucks to
buy a coke in a convenience store. Yet with just a little bit more money, you
can get a freshly made, clean and healthy drink. That's why people love it,"
said Mak. But Mak said she did not plan a long stay in this business. "People
may get tired of bubble tea one day, just as they did with Japanese cheese cake
and Macau egg tarts in the past. I think I will sell my shop before the craze
wanes," she said. Another bubble-tea franchisee, Franco Lee, was one of the
early starters, joining the beverage chain East Sunrise in June last year. The
Taiwanese franchise now has 10 outlets in the city. Previously a marketing
professional in a multinational retailing company, Lee believes a small business
such as bubble tea will have a big market in Hong Kong. "In the past, bubble tea
was mostly sold in small family-run restaurants or food stalls," he said. "Now
it's different. Many smart businessmen or those with marketing expertise are
engaged in this industry. You know, people make the business." But Lee noted
that competition was tough, and even unhealthy in some places. "I think quite a
number of brands are likely to be washed out of the market over the coming one
or two years. Only quality ones will survive," he said.
Saudi Arabian King Abdullah bin Abdul
Aziz al-Saud (R) shakes hands with Chinese Minister of Commerce Chen Deming
during their meeting in Riyadh, capital of Saudi Arabia, Jan. 10, 2010. Saudi
King Abdullah bin Abdul-Aziz held talks on Sunday with visiting Chinese Commerce
Minister Chen Deming on further boosting economic and trade cooperation between
the two countries. The king said Saudi Arabia and China enjoy deep traditional
friendship and substantial exchange, and that the strategic friendly relations
between the two countries have been consolidated and deepened. China's economy
develops rapidly, and the two countries should further their cooperation in
various fields, such as in dealing with the fallout of the global financial
crisis, he said. The king said Riyadh welcomes the Chinese enterprises to
actively participate in Saudi economy as the Gulf Arab country is speeding up
construction in the petrochemical industry, infrastructure, education and health
fields. Abdullah said that he believes that the Saudi-Sino economic and trade
cooperation will have a brighter prospect. The Chinese minister said Chinese
President Hu Jintao last year paid a successful visit to Saudi Arabia, which has
vigorously boosted the economic and trade cooperation between the two countries.
As this year marks the 20th anniversary of the establishment of diplomatic ties
between China and Saudi Arabia, the Chinese government is expecting to expand
the bilateral economic and trade cooperation, in hopes of boosting the bilateral
trade volume to 60billion U.S. dollars by 2015, Chen added. Chen said the
Chinese government appreciates the trust of the Saudi king and the Saudi
government in Chinese enterprises, and will work together with the Saudi side to
support contract projects and investment cooperation between enterprises of both
countries in the electricity, railway and new energy fields. Also in the day,
Chen, together with Saudi Minister of Finance Ibrahim bin Abdel Aziz al-Asaf,
convened the fourth meeting of China-Saudi joint committee on economy and trade
in the Saudi capital. Chen arrived in Riyadh on Saturday and will visit
Ethiopia, Mozambique and Tanzania later. 
German auto giant Volkswagen AG posted a 36.7 percent surge in 2009 China sales
to maintain the top position it has held for more than 20 consecutive years. The
company said in a recent statement that it sold a total of 1.4 million vehicles
on the Chinese mainland and in Hong Kong last year. 
Beijing will complete its construction
of five new subway lines and start work on another four this year, authorities
said yesterday. Liu Yinchun, deputy director of the Beijing municipal commission
of development and reform, said the five new lines ready this year are Yizhuang
line, Daxing line, Changping line, Fangshan line and the first phase of line 15,
making a total track length of more than 300 km. The city will also kick off the
construction of another four subway lines. They are line 7, line 14, Xijiao line
and S1 line - the first railway in China to handle medium and low speed maglev
trains. The S1 line will run from the west fourth ring road to the center of
Mentougou district. It will be able to handle maglev trains capable of speeds of
160 km per hour, twice as fast as standard underground trains, and is scheduled
to open in 2015. Liu said Beijing now has nine subway lines under construction,
totaling another 209 km. "I don't think any other city in the world can surpass
Beijing in terms of subway line construction speed," Liu said at a news
conference yesterday at the commission. The average number of daily subway
passengers in Beijing was 4.8 million in 2009, accounting for 34 percent of the
total number of passengers that use public transport. "We aim to lift the
percentage to over 50 by the end of 2015," Liu added, "At that point, the total
length will exceed 561 km." Beijing has long faced a serious traffic problem
from its enormous population and a flawed public transport system. The
government invested 10.3 billion yuan in various transport programs in 2009,
equaling 75 percent of the whole infrastructure investment. Liu admitted that
Beijing's transport system continues to drag behind the ever-increasing demand,
but the government has decided to maintain the high investment rate. Most
Beijing residents are looking forward to seeing more subway lines open this
year. Zhao Yan, a 25-year-old girl who lives in Shunyi district, said she
usually takes the bus to office, but will start using line 15 when it opens.
Gregor Lippe, a German who has lived in Beijing's Gulou Street for over six
years, said the subway lines are good news. "I prefer to take the subway because
I don't drive. It's faster and safer," he said. But not everyone is happy about
the current plan. "Nine lines are far from enough for a city of this size," Li
Xiaobin, a 27-year-old subway guard in Yonghegong subway station, told METRO
yesterday. "And I don't think the new lines will help much because more people
will just decide to take them."
A Chinese entrepreneur who made a record donation of almost US$9 million to Yale
University has caused a stir among mainland internet users after he attributed
his success to postgraduate studies at the Ivy League school. Zhang Lei, the
founder and managing partner of Beijing-based Hillhouse Capital Management, last
week gave the auspicious figure of US$8,888,888, the largest amount the
university's management school has ever received from a "young" alumnus. Zhang,
who graduated from the school with a master's degree in business administration
and a master's in international relations in 2002, said he decided to make the
donation because Yale's educational system had "changed his life". But this
comment - and his decision to give money to a foreign university - appears to
have ruffled feathers back home, prompting a flurry of angry posts on the
internet. By yesterday evening more than 1,500 anonymous messages had been
posted on huanqiu.com, which first broke the story on the mainland, and the vast
majority were aggressively worded and even abusive. "This bird-student will have
a horrible death!" wrote one, using a slang term for students who study
overseas. Others called Zhang a dog, a traitor or suggested he must have mental
problems. Many expressed disgust that Zhang - who studied at Renmin University
in Beijing before going overseas - did not appear to value his school and
undergraduate education. "You spent more than 10 years studying in Chinese
universities; if it weren't for the Chinese higher educational system, you
wouldn't be anything at all," wrote one poster. Others appeared to consider the
prospect of Chinese money going overseas as some sort of personal affront. "You
made this money in China after you graduated, so any donations should go back to
China," wrote one. Though the online comments are only a straw poll of the most
opinionated readers, the strength of the reaction was unmistakable. Even so, a
minority did speak out in support of Zhang's decision. "Well donated! If you
donated that money [in China], then more than half would fall into the wallets
of corrupt officials," wrote one. Others also commented that it was a sorry
indictment of the mainland educational system when a celebrated "prize student"
like Zhang - who ranked first out of 100,000 students in his provincial
university entrance exam - thought only his time at Yale had contributed to his
success in life. Zhang set up his company - which is named after Hillhouse
Avenue, the main street running through the Yale management school's campus - in
2005 using an endowment from the management school. He began managing a fund of
US$30 million, but that pot has since swollen to US$2.5 billion. Zhang is also a
member of the Yale management school's board of advisers and its board of China
advisers. In a statement posted on its website, Yale said the donation would be
used primarily to help build a new campus for the management school but "a
portion of the gift" would also be set aside for scholarships and "a variety of
China-related activities". Speaking at an event in Beijing last Monday, the
president of Yale, Richard Levin, said the donation was a "truly extraordinary
gift" that reflected Zhang's "deep commitment to Yale".
In what is becoming a potent
mix of business and regional politics, Air China (SEHK: 0753) and China Southern
Airlines are jostling for the controlling stake in Shenzhen Airlines, following
the arrest of its largest shareholder last month for "economic crimes". The cost
of failure for China Southern - whose main hub is in Guangzhou - will be high.
It can lose its dominant position in south China if Beijing's Air China gets the
lion's share of Shenzhen Air, the mainland's fifth-largest airline. Air China
will press hard after failing to take control of Shenzhen Air in 2005. But the
complexities of the contest go far beyond a simple commercial acquisition.
Whoever wins the 65 per cent stake in Shenzhen Air that is up for grabs will
need the blessings of the nation's airline regulator, the provincial government
of Guangdong and the central government. Air China, which already owns a 25 per
cent stake in Shenzhen Air, looks like a sure bet at first glance. When the 65
per cent stake in Shenzhen Air was first put out for tender in 2005, Air China
joined the Shenzhen State-owned Asset Supervision and Administration Commission
to bid for the stake, only to be defeated by a consortium led by Shenzhen Air's
majority owner Li Zeyuan after 49 bids. Li, however, was arrested for alleged
economic crimes last month, reportedly for committing fraud during the tendering
process. The media have reported that he failed to pay in full for the stake and
that about 20 per cent of that stake remains with the Guangdong government's
investment arm. Shenzhen Air is among the few mainland carriers that have been
profitable. It reported 49.94 million yuan (HK$56.73 million) profit in the
first half of last year. It operates 84 aircraft and has assets valued at more
than 20 billion yuan, according to the company's website. On Christmas Eve, the
Shenzhen municipal government and Guangzhou-based China Southern, the largest
mainland carrier, signed a comprehensive co-operation pact. The Shenzhen
government, which owns 10 per cent of Shenzhen Air, said it would support China
Southern to build its own passenger terminal in Shenzhen Airport and invest in
the cargo terminal and ground handling business at the airport. Details of the
support have not been disclosed. The Shenzhen government also said it would
offer undefined "concession measures" to facilitate China Southern's passenger
and cargo business in the city. "It's a signal that the Shenzhen government is
encouraging China Southern to go for the stake in Shenzhen Air," said an airline
executive. China Southern has vowed to double its fleet size in Shenzhen in five
years to increase its international and domestic connection there. "If Air China
takes over Shenzhen Air, which has a 50 per cent market share in that southern
city, China Southern's dominant position in south China will face unprecedented
challenge," said Kelvin Lau, an analyst at Daiwa Securities SMBC. Guangzhou's
airport - where China Southern has a 50 per cent market share - is already
poised to be marginalized by the proposed high-speed rail that will connect the
airports in Hong Kong and Shenzhen. Air China, the most profitable carrier on
the mainland, has abundant resources to help Shenzhen Air expand its
international and domestic network, which would put China Southern's 30 per cent
market share in Shenzhen at risk, Lau said. "Air China's plan to get Shenzhen
Air will be derailed again if the Shenzhen government supports China Southern to
acquire Shenzhen Air," said a market watcher. It is not the first time that the
Shenzhen government has invited China Southern to reinforce the competitiveness
of Shenzhen airport. At the beginning of last year, when the air traffic demand
was heavily dampened by the financial crisis, the Shenzhen government
spearheaded a program called "fly via Shenzhen" by consolidating the aviation
resources of Shenzhen Airport and Shenzhen Air with China Southern. Rather than
letting Beijing's Air China come into the market, the Shenzhen government is
tipped to back a consolidation between Shenzhen Air with China Southern to
strengthen the air hub in Shenzhen. By doing so, the combined market share of
China Southern and Shenzhen Air will amount to 80 per cent in Shenzhen. "But Air
China, which owns a 25 per cent stake in Shenzhen Air, is the largest obstacle
for China Southern to go ahead with the plan," said Lau. "The co-operation
between Cathay [Pacific Airways] and Air China is not very intimate," said a
market observer. "So it is very important for Air China to get the control of
Shenzhen Air to gain a foothold in south China." 
Asia Cassava
Resources Holdings, the largest importer of the starchy plant's dried roots into
China, reported sales volume doubled in the nine months to December on the back
of rising demand from makers of liquor, chemicals, and ethanol fuel. The Hong
Kong-based and listed company had cassava sales of just over one million tonnes
in the period, up from around 500,000 tons in the year-earlier period, chairman
Chu Ming-chuan said. Around 60 per cent of annual sales are typically recorded
in the second half of the financial year, which ends on March 31, he said. The
company is the biggest grower and exporter of cassava in Thailand and about 20
per cent of sales are to makers of ethanol fuel, with the rest sold to makers of
liquor and chemical producers in China. Chu attributed the growth in sales to
new customers and increased demand from existing customers. The company's
largest customer is Henan Tianguan Ethanol Fuel, which is 40 per cent-owned by
the nation's largest oil producer China National Petroleum Corp. Henan Tianguan
is one of four firms tasked by Beijing to build pilot plants to make ethanol
fuel from plant materials as a cleaner-burning alternative to petrol. Due to
concerns that overzealous investment in ethanol fuel production capacity would
drive up grain prices and inflation, Beijing in 2007 stopped approving new
plants that use wide-acre grain crops as raw material. Those that use plant
sources such as cassava are encouraged. Ethanol fuel production is still a
nascent industry whose viability is heavily dependent on state subsidies and
sustained high oil prices. Demand depends on how fast Beijing pushes the
expansion of ethanol fuel pilot programs via subsidies and fuel price control
policies. For example, state control on domestic petrol prices saw
Shenzhen-listed Anhui BBCA Biochemical post an operating loss of 315 million
yuan (HK$358 million) in the first nine months of last year amid low oil prices.
But owing to 574 million yuan of subsidies, it booked a net profit of 188
million yuan on 3.68 billion yuan of sales. Ethanol prices are also
state-stipulated and are slightly cheaper than petrol prices. Ethanol is mixed
into ordinary petrol to produce ethanol fuel, with ethanol making up not more
than 15 per cent of the content. Chu said cassava's higher starch content meant
it is more competitive than corn, the main raw material for ethanol production
on the mainland. This is because it takes only 2.8 tons of cassava to make a
tonne of ethanol, compared to 3.15 tons for corn. The corn price, at HK$1,900 a
ton, is also around 20 per cent more expensive than cassava at HK$1,550 yuan a
ton. But in Thailand, state fuel price controls and a lack of subsidies meant
the ethanol fuel industry had not yet been developed, Chu said. It is the
world's third largest cassava producer with output of 29.1 million tons last
year, according to the UN Food and Agriculture Organization. China produced 4.5
million tons. Chu said cassava demand is expected to rise since Beijing has
targeted to raise ethanol fuel output to 10 million tons by 2020 from 5.2
million tonnes this year. Asia Cassava plans to spend HK$10 million to expand
its procurement and logistics facilities in the six months to March 31, and HK$8
million to retrofit its new procurement center in Cambodia. It has five
procurement and warehouse centers in Thailand and one in Cambodia. To cut
logistics costs the company recently agreed to buy a US$5.95 million vessel
capable of moving 43,500 tons of cassava from Thailand to mainland ports ten
times a year. Chu expected the investment to be recouped in less than three
years, based on a freight saving of US$40 per tonne for each trip, assuming the
vessel returns to Thailand empty. The company plans to add one or two
procurement and warehouse centers annually. "The key to encourage farmers to
grow more cassava is to set up procurement facilities near them," Chu said. "Our
centres are open for business 365 days a year and will buy as long as their
product meets our quality standards and they are willing to take the prices we
set." 
Model display costumes during the pre-show of World Boutique, Hong Kong in Hong
Kong Convention and Exhibition Center, south China, Jan. 5, 2010. The show,
believed to be the biggest fashion show in Asia consists of Hong Kong Fashion
Week and World Boutique Hong Kong, will be held on Jan. 18 - 21, 2010. Global
fashion talents will be on hand here for Asia's largest fashion event later this
month, the Hong Kong Trade Development Council said on Tuesday. Hong Kong
Fashion Week for Fall/ Winter and World Boutique will be held from January 18 to
21 at the Hong Kong Convention and Exhibition Center, featuring altogether over
2,000 exhibitors from30 countries and regions. During four days of the two
flagship fairs of Asia's fashion industry, there will be also a series of runway
shows, presenting ideas from leading local and overseas designers, and
professional seminars addressing current industry issues. The 41st edition of
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. The 8th World Boutique showcases
the latest fashion brand collections, including apparel, watches, shoes, fashion
jewelry, home fashion and lifestyle products. The Chinese mainland will have a
strong new presence at the Quanzhou Pavilion featuring ten top brands from the
Chinese mainland. The Netherlands, famous for its design capabilities, will host
a country pavilion for the first time this year. The Hong Kong Fashion
Extravaganza will also return this year, 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. 
A glum-looking transport minister
Eva Cheng and lawmaker Raymond HoChung-tai (right) after the meeting ended
without a vote. Cheng appealed to lawmakers to approve funding for the rail line
next week. 
A blind person negotiating the streets with a guide dog is a common sight in
many cities around the world. In Hong Kong, however, the blind must make their
way around a crowded city littered with hazards, armed with nothing but a cane.
But that's about to change. For the first time since 1972 an attempt is being
made to introduce guide dogs into Hong Kong. Four people with impaired vision
will be selected to go to the United States to choose a dog and receive training
- all for free. The project is being organised by the Hong Kong Society for the
Blind (HKSB) and the Ebenezer School and Home for the Visually Impaired. The
HKSB recently launched a fund-raising drive aimed at large corporations to raise
the HK$1 million needed to get things started. Once the money arrives, the
school will fly in an expert to select the four and fly them to Michigan for
training. "At the training centre, they can choose the dog they like," said
project researcher Ben Fong Tin-tai, Ebenezer School's senior orientation and
mobility instructor. The idea is to improve quality of life for some of the
city's 122,600 visually impaired. "These blind people will no longer need to
rely on a cane to find their way and feel obstacles, and the guide dog can lead
them around much quicker," Fong said. As a bonus, they also get a good
companion. "We will notify all groups for the visually impaired and everyone can
apply. The four will be from different ages and backgrounds to increase fairness
and versatility." With a limited budget, Fong said they would initially choose
those with basic proficiency in English so they do not need to hire a
translator. Priority will also be given to dog lovers with a good sense of
direction. Fong said he was not worried about regular funding to sustain the
project, citing guide dog centres overseas that easily raise money with donation
boxes in the street, charity walks, and dog sponsorship - methods they will
copy. When they raise more money the plan is to set up a local training school
and train instructors to teach the dogs and their users. The project is a dream
come true for the chief executive officer of Ebenezer, Dr Simon Leung Man-on,
who first proposed the idea more than two decades ago. "I studied in Germany and
saw many blind people had a guide dog. I thought 'why can't Hong Kong blind
people have them?'" But without much support in rehabilitation circles, Leung
could not realise his dream. Then a few years ago public interest was stirred by
the Japanese movie Quill, featuring a blind person and a guide dog. This
inspired the school to start a feasibility study in 2006. This involved sending
Fong and his colleague Piers Kuan to research guide dog centres in Australia,
South Korea, and Taiwan. Fong believes Hong Kong can follow Taiwan's example and
set up a small, self-funded guide dog training center. "Tokyo, Seoul, and Taipei
are not much bigger than Hong Kong," he said. "If they can do it, Hong Kong can
too." Tony Shing Li-lim, of the Hong Kong Federation of the Blind, said the dogs
could help the visually impaired integrate in society. He urged the government
to amend the Building Ordinance to allow guide dogs in more buildings and he
called on the Social Welfare Department to start an allowance for visually
impaired dole recipients with guide dogs. Leung said although public transport
systems allowed guide dogs, a new law and public education were needed to give
guide dogs access to all public places. A spokeswoman for the Housing Department
said guide dogs were allowed in public housing. A spokeswoman for the Equal
Opportunities Commission said denying access and refusing service to a guide dog
violated the Disability Discrimination Ordinance.
Hutchison Whampoa (SEHK: 0013),
controlled by Li Ka-shing, is offering to take its unprofitable subsidiary,
Hutchison Telecommunications International (SEHK: 2332), private for HK$2.20 a
share, or about HK$4.23 billion. News of the takeover terms helped propel
Hutchison Telecom's share price to a record yesterday, climbing 28.5 per cent to
HK$2.12. About HK$491.62 million worth of its shares changed hands, the largest
amount in more than a year. "Investors are betting that the privatization can be
successfully finished," said Patrick Yiu Ho-yin, the managing director of CASH
Asset Management. Hutchison Whampoa's shares reached as high as HK$56.85 in
yesterday's trading before settling at HK$56.35, unchanged from the previous
session. The conglomerate's cash buyout offer, arranged by Goldman Sachs,
represents a 37 per cent premium over the subsidiary's closing share price the
day before trading was suspended on January 4, according to a joint statement
filed yesterday with the exchange. Shares of Hutchison Telecom - which runs
loss-making mobile network operations in Thailand, Sri Lanka, Vietnam and
Indonesia - closed at HK1.60 on December 31 and HK$1.65 on Monday. Trading of
the shares resumed yesterday. "Based on our valuation, the [Hutchison Whampoa]
offer is pretty fair," said Gary Pinge, the senior vice-president of industrial
conglomerates and transportation research at Macquarie Securities. "The
privatization will help make decisions [on Hutchison Telecom's business] much
easier." Hutchison Telecom posted an unaudited HK$285 million loss in the first
half of last year, compared with a HK$1.17 billion profit for the same period in
2008. It had been divesting strategic assets in Israel, India, Hong Kong and
Macau over the past three years. Hutchison Whampoa said the deals had helped the
subsidiary maximize returns to shareholders. The network operator is estimated
to have generated total returns of 178 per cent for shareholders, or an annual
return of about 22 per cent to the end of last year. But those divestments also
shrank Hutchison Telecom's market capitalization to HK$7.9 billion from a high
of HK$95.6 billion in January 2007. The company is in discussions to exit
Thailand by selling its stake in Hutchison CAT for an undisclosed sum to the
state-owned CAT Telecom, its joint-venture partner. Investments in other
emerging-market operations - Hutchison Telecommunications Lanka, Vietnamobile
and Hutchison CP Telecommunications - will continue, according to Hutchison
Whampoa. It said those investments "will position Hutchison Telecom's businesses
to compete more effectively in their markets and better tap the potential
opportunities there". Hutchison Whampoa anticipates the subsidiary's accumulated
cash will be used for further network investments, meaning there will be no
surplus cash for dividends. Li expressed his concern in May last year about the
difficulty of privatizing companies in Hong Kong, noting it was easier to close
a business than deal with shareholders "stirring up issues" against such a
transaction. Hutchison Whampoa's buyout bid comes less than a year after Li's
younger son, Richard Li Tzar-kai, failed to privatize PCCW (SEHK: 0008).
The boring machine, weighing 650 tons,
was designed in Germany and made for both rock and soft-ground tunnelling. A
HK$100 million boring machine will today begin cutting a drainage tunnel to
solve the problem of flooding in West Kowloon. The machine - named Dae Jang Geum
after a popular female character in a Korean TV drama - will create a drainage
tunnel in Lai Chi Kok that runs for 3.7 kilometers. The tunnel will divert
rainwater from higher ground before it runs downstream to Lai Chi Kok, Cheung
Sha Wan and Sham Shui Po and discharge it into the harbour near Stonecutters
Island. The tunnel will start underneath Tai Po Road, run under Ching Cheung
Road and outfall to Victoria Harbour, near Stonecutters Island. The whole
project is costing the Drainage Services Department HK$1.7 billion. Construction
work began in November 2008 and will be completed by the end of 2012. The boring
machine, weighing in at a massive 650 tonnes, was designed in Germany and made
there and on the mainland. Made for both rock and soft-ground tunnelling, Dae
Jang Geum costs 10 per cent more than machines that can only drill through hard
rock. The cone-shaped boring head is 5.7 metres in diameter and will tunnel
through 10 meters a day. It is a tradition in the industry to give boring
machines a female name. Dae Jang Geum was chosen for her passionate and fearless
character. Intercepting rainwater costs more than improving existing drainage
networks in urban areas, but it causes less disruption to commercial activities,
said Tsui Wai, assistant director of the department. On average, the Lai Chi Kok
tunnel will be 40 metres underground. The depth increases the difficulty of
construction work, Tsui said. Since 1998, the department has spent HK$3.3
billion on improving the drainage network in West Kowloon. Two other major
drainage projects - in Tsuen Wan and on Hong Kong Island - are still in progress
and will finish by 2012 at a total cost of HK$4.2 billion. Tsui says that by
then most areas in Hong Kong will be free from flooding problems. "Even if an
area is hit by storms bringing the highest rainfall in 50 years, the system will
be able to cope with it," he said. But low-lying areas such as Tai O could still
be troubled by floods.
Billionaire Li Ka-shing is optimistic about the local economy, but warns that
even though there are no signs of a property bubble uncertainties still abound.
The chairman of Cheung Kong (Holdings) (0001) and Hutchison Whampoa (0013) did
not specify the uncertainties. "There are a lot of worries, which people will
regard as jokes if I disclose them publicly," Li said. "But as the highest
person of a group you have to take these into consideration, right?" On the
possibility of a double-dip recession, Li said: "We have to be very cautious
with every move. After the 2008 financial crisis, anything can bring about a
shock, which can last for years." He expects the property market to remain rosy
this year, but said prices of metals, oil and building equipment have started
climbing. Li said unless there are major unforseen circumstances, he is
optimistic about business prospects. He also said "90-odd percent" of his
employees have had salary increases based on their performance. "There is no way
to shun salary increments." The group has a low average land acquisition cost
and is confident of generating good returns on property developments, Li said.
With a gearing ratio below 12 percent, it also has HK$50 billion to invest. He
rejected claims there is a property bubble, saying people are more careful after
the financial crisis. Li confirmed that Hutchison Telecom (2332) is set to go
private. "Anything that is beneficial to shareholders has to be done in spite of
difficulty." Li said his successive shareholding increases in the group has
nothing to do with the privatization, as the mobile carrier's market
capitalization - HK$7.94 billion - is small. This compares with Cheung Kong's
HK$235.09 billion and Hutchison's HK$240.88 billion. Li said he will invest more
in the two companies. He said global stock markets ran ahead the curve during
the economic rebound last year. Li added that he is careful and is picking
stocks this year based on their net asset values, price-earnings ratios and
development potential.
Hong Kong pop singer Sandy Lam presents a Chi-pao at a press meeting for her
2010 Shanghai vocal concert, scheduled on February 19, in Shanghai. 
Actor Jackie Chan poses for a
portrait during a press day for his upcoming movie "The Spy Next Door" at the
SLS Hotel in Los Angeles January 8, 2010. 
A ceremony celebrating the
establishment of the China-ASEAN Free Trade Area is held on January 7, 2010 in
Nanning, capital of southwest China's Guangxi Zhuang Autonomous Region - Experts
give advice for SMEs to better cope with CAFTA - The key for small- and
medium-sized enterprises'(SMEs) success in coping with the China-ASEAN
(Association of Southeast Asian Nations) Free Trade Area is to study and
understand the rules and take advantage of them, a senior expert suggested.
Zhang Yunling, Director of the Institute of Asia-Pacific Studies under the
Chinese Academy of Social Sciences, made the remarks in an exclusive interview
with Beijing Review at the Forum on the China-ASEAN Free Trade Area (CAFTA) on
January 7 in Nanning, capital of southwest China's Guangxi Zhuang Autonomous
Region. CAFTA, which started operation on January 1, 2010, covers a population
of 1.9 billion and involves about $4.5 trillion in trade volume. It is the
world's largest FTA for developing countries and the third largest FTA after the
North American Free Trade Area and the European Union. The average tariff on
goods from ASEAN countries to China has fallen from 9.8 percent to 0.1 percent.
Zhang said the establishment of the FTA promotes closer cooperation between
China and ASEAN in a more comprehensive way, including trade, investment and
services. However, a recent survey showed that the percentage of enterprises
implementing CAFTA is relatively low due to their lack of understanding of FTA
rules and details. Hence, the government should help them in this regard, Zhang
said. "Enterprises, small- and medium-sized enterprises (SMEs) in particular,
should not see ASEAN as purely an export market. They should study local
markets, set long-term goals and find their positions. Cooperation among
enterprises will be more helpful than marketing alone," Zhang noted. Zhang's
view was echoed by Mirzan Mahathir, President of the Asian Strategy and
Leadership Institute, Malaysia. Mahathir said that a lot of encouragement is
required to get SMEs to "look beyond their national borders." "It is important
to assist SMEs through incentives, concessionary funding and opportunities to
network with potential partners so that they can make the changes necessitated
by implementation of CAFTA," Mahathir said. With the theme of "Win-Win Results
and Greater Success," the two-day event, proposed by Chinese Premier Wen Jiabao
at the 12th China-ASEAN Summit in October 2009, aimed at celebrating the
establishment of CAFTA, discussing and exploring closer cooperation in trade and
investment, and creating more opportunities for regional economic cooperation.
Events held in conjunction with the forum included the launch of a China-ASEAN
business portal website, the opening of the Qinzhou Free Trade Port Area and the
Nanning Bonded Logistics Center in Guangxi, and a signing ceremony for 18
projects between China and ASEAN worth a total of $4.89 billion.
Chinese auto market overtakes US
as world's largest - China's passenger vehicle market ended last year with a 59
percent year-on-year sales increase to surpass the United States as the world's
largest auto market for the first year, thanks to the central government's
stimulus package. The domestic sales of cars, sports-utility vehicles (SUV),
minivans and multi-purpose vehicles (MPV) hit 10.26 million units last year,
surging from 6.4 million units in 2008, said Rao Da, secretary-general of the
China Passenger Car Association on Friday. The growth is also the highest in the
country's auto history, with total automobile sales expected to surge 44 percent
year-on-year to 13.5 million units in 2009. Statistics from the US consulting
institution Center for Automotive Research showed that new car sales in the US
last year plunged 21 percent year-on-year to a 27-year low of 10.43 million
units, more than 3 million behind China. The China Association of Automobile
Manufacturers (CAAM) is expected to release detailed market figures of the
country's automobile industry on Monday. The spike in vehicle sales was largely
boosted by the government's stimulus policies for lifting market demand, which
included tax cuts on small-displacement automobiles, subsidies for trade-ins and
subsidies for farmers to buy vehicles. A low comparative base in 2008, when car
sales growth slowed to 6.7 percent with 9.38 million vehicles sold, also helped
boost 2009 figures. To further support the world's fastest growing auto market,
the Chinese government said last month it will extend stimulus measures in the
automobile industry for one more year. The purchase tax for smaller cars will be
lifted from the current 5 percent to 7.5 percent of the total vehicle price. The
government also decided to raise the subsidy for trade-in cars from between
3,000 and 6,000 yuan ($440 to $880) to between 5,000 yuan and 18,000 yuan per
vehicle. The government's continued support for the industry promises to fuel
its rise for the coming years. Automobile industry consulting firm Sinotrust
predicted that vehicle sales will reach 15.13 million units this year, with a
year-on-year growth rate of 15.2 percent. According to the Ministry of Public
Security, until the end of last year, almost 200 million Chinese people are able
to drive a vehicle, making up about 15 percent of the country's 1.3 billion
population. "Natural demand will continue to expand in the next few years," said
Lang Xuehong, chief auto industry analyst at Sinotrust. Chinese automakers
launched a record 221 new passenger vehicle models last year, with a majority of
them upgraded models and less than half being new ones, according to the latest
statistics from the CAAM. 
Chinese automakers are expected to launch about 100 new models this year. The
brisk sales have also brought challenges to China's appeal for a green society.
However, a number of analysts said the sales may also speed up automakers'
efforts to develop next-generation energy-efficient and emission-free vehicles.
Moreover, "the revised policy for this year, with tripled subsidies to encourage
the replacement of outdated vehicles with high emissions and unstable driving
performance, will contribute to an environmentally friendly society in which the
automobile industry has a heavy responsibility," said Yale Zhang, director of
the Greater China Vehicle Forecasts for US auto industry consultancy CSM
Worldwide. Still, Chinese cities may face worsening traffic as the car boom puts
an increasing number of people behind the wheel, with a number of local
governments already expressing concern about the rising number of cars. Zhang
Gong, director of Beijing's municipal commission of development, said the
capital will enter the "automobile age" when every 100 families own 66.1 cars.
The capital is rated in a Sohu.com survey of more than 5,000 Web users as the
most crowded Chinese city in November. 
Chinese Premier Wen Jiabao(R) talks to Li Youlan, wife of late vice premier and
defense minister Zhang Aiping during a symposium held in Beijing's Great Hall of
the People to mark the 100th anniversary of the birth of Zhang Aiping, Jan. 9,
2010.
Post-graduate entrance exam 2010 kicks
off - Students enter into the post-graduate entrance examination center at
Huazhong University of Science & Technology (HUST) in Wuhan, central China's
Hubei province, January 9, 2010.
Candidates wait at Shanghai Normal
University campus before entering into examination rooms on January 9, 2010. The
annual national post-graduate entrance examination kicks off on Saturday. There
are 1.4 million candidates taking part in the exam this year, an increase of 13%
from 2009. 
A worker atop metal
scaffolding at a construction site in Shanghai. Global investors have played
down fears of overheating in China's property sector and said they would
continue their investments. International investors do not anticipate any burst
in the property bubble for now and continue to remain bullish even as the
government is taking steps to cool the sector. Noted investor Mark Mobius, who
oversees $34 billion of developing-nation assets at Templeton Asset Management
Ltd, said in Singapore on Friday that he plans to increase holdings in Chinese
stocks by purchasing shares that benefit from consumer demand, including
developers and raw-material suppliers. "Property prices are high, but I don't
see a crash," said Mobius. "The Chinese are watchful and they are not going to
let things get out of control. They want the growth to continue at a measured
pace and there's nothing wrong with that." China's property prices climbed in
November at the fastest pace since July 2008, fueling concerns of asset bubbles.
Residential prices in 70 major cities rose 5.7 percent from a year earlier,
compared with a 3.9 percent increase in October. The State-owned Assets
Supervision and Administration Commission on Thursday asked enterprises under
its supervision to be careful while venturing into the real estate and stock
markets amid the complicated and fickle economic conditions. Meanwhile, the
central bank on Thursday raised the auction yield of its three-month bills for
the first time since mid-August and is set to drain 137 billion yuan ($20
billion) from the market this week, as it intensifies the pace of quantitative
tightening to curb excessive market liquidity. The China Banking Regulatory
Commission may further increase the down payment from the existing 40 percent to
50 percent for second-home buyers to curb speculative purchases, said sources.
Andrew Mattock, who manages the $342 million Henderson Horizon China Fund, said
he would stay "fairly aggressive" on property stocks as the risks of curbing
loan growth are already priced in. The Shanghai index of property stocks has
dropped nearly 28 percent in the year through Jan 7 after reaching a one-year
high in July. Shenzhen-based Vanke, the country's biggest publicly traded
developer, and Guangzhou-headquartered R&F Properties Co are among the worst
performers on the MSCI China Index in the last six months. The measure has
climbed 23 percent during the period, lagging behind a 35 percent gain in the
MSCI Emerging Markets Index.
With goods worth US$1.07 trillion shipped abroad in the first 11 months of last
year, China has become the world's largest exporter. China has overtaken Germany
as the world's largest export market earlier than expected. Germany said
yesterday its exports dropped 19.9 per cent to €734.6 billion (HK$8.16 trillion)
in the first 11 months of last year, during which China's exports stood at
US$1.07 trillion (HK$8.35 trillion). Some economists, who had expected China to
surpass Germany in exports this year, said the latest figures showed the
mainland had fared better than other nations in weathering the global financial
crisis. "Although China leads exports with a small margin, on a bigger picture
the country will rise further," Barclays Capital Asia economist Peng Wensheng
said. "It is likely to become the world's second-biggest economy this year."
China, which replaced Germany as the world's third-largest economy in 2007, was
expected to surpass Japan as the world's No 2 economy after the United States
this year. China's December export figures have been forecast to end a 13-month
contraction. Shipments rose 5 per cent from a year earlier, according to the
consensus in a Bloomberg poll of economists. Imports may have surged 32.5 per
cent, leaving a trade surplus of US$20 billion. China is expected to announce
full-year trade figures on Monday. Deutsche Bank chief economist Ma Jun forecast
China trade would rebound sharply this year on gradual recovery in overseas
demand and the central government's increased efforts in spurring domestic
consumption. "As the country's economic importance in the global arena grows,
many emerging countries will look to China for negotiations in issues like
currency and carbon emissions reduction," Ma said. "It has a bigger role in the
international stage." He said China would have to be flexible in the yuan
exchange rate along with strong exports this year. He added that the yuan value
could appreciate by an annualised 4 per cent against the US dollar this year
even though state leaders promised to maintain a "stable regime". The yuan has
hovered at 6.82 to the dollar since the beginning of last year. Even with an
anticipated recovery in exports, some economists expect China to beef up
domestic consumption to reduce reliance on foreign trade. Peng expected imports
would jump at least 13 per cent this year, faster than an estimated 11 per cent
rise in exports. He also said figures for last year would show a decline of 16
per cent in exports and a 12 per cent fall in imports. In addition to the two
trillion yuan economic stimulus package this year, the central government offers
preferential taxes for car buyers and subsidies for buying home electrical
appliances in rural areas as key measures to fuel domestic demand. UBS economist
Wang Tao said China's economy would grow 9 per cent this year, more than the
country's target of 8 per cent.
Photo taken on Jan. 7, 2010 shows
the brillant cable-membrane structure of the Expo Axis during a trial
illumination in Shanghai, east China. The Expo Axis is a large, integrated
commercial and traffic complex, which also serves as the main entrance to the
World Expo 2010 site. 
The ceremony marking the start
of building its third generator of Ningde nuclear power plant is held in Ningde,
southeast China's Fujian Province, Jan. 8, 2010. Ningde nuclear power plant, the
first in Fujian, started building its third generator Friday. With an investment
of 50 billion yuan (6.8 billion U.S. dollars), the Ningde plant would be
equipped with four 1-million-kilowatt generators in the first-phase
construction. Its first generator would be installed in 2012. 
Chief economist of the World Bank Justin
Yifu Lin delivers a speech at a forum about the forecast and views of Chinese
economy held at the New York Stock Exchange in New York, the U.S., Jan. 7, 2010.
He said stopping importing from China may result in an increase in the U.S.
trade imbalance. Stopping importing from China may result in an increase in the
U.S. trade imbalance, chief economist of the World Bank Justin Yifu Lin said
during a speech here on Thursday. Addressing the audience at a forum about the
forecast and views of Chinese economy held at the New York Stock Exchange, Lin
said the imbalance between the United States and China actually "reflects some
kind of specialization due to the state of development." The type of products
that China exported to the United States are labor-intensive living necessities
that the United States will never produce anymore and has no competitive
advantages, Lin said. "If China will not export those type of labor-intensive
products, U.S. will have to import from other middle income or lower income
countries," he added. "And very likely, the cost of importing from other
countries will be higher." Lin said U.S. companies always have a free choice to
import from China or other countries, and they currently choose China is because
the cost is lower. "If U.S. has to switch the source of the import from another
country, (U.S.) people will have to pay for them no matter how high the price is
because that is a definite necessity," Lin said," that means most likely the
trade imbalance in U.S. may increase." 
Morning commuters in New York
Times Square walk past a Weatherproof Garment Company advertisement depicting US
President Barack Obama standing along the Great Wall of China January 6, 2010.
The White House spokeman says this company hasn't obtained the authorization,
and warns the company to remove all related billboard. 
Billboard of Weatherproof
Garment Company depicting US President Barack Obama standing along the Greet
Wall of China shows along the roadside of New York Times Square, January 6,
2010. 
The demand by mainlanders for Hong
Kong homes showed no signs of abating in the fourth quarter of last year, while
the city's property policy changes gave local buyers pause, according to a
report. Buying interest from across the border increased throughout all Hong
Kong's residential property types, with mainlanders accounting for 14 per cent
of transactions last month, up from 11 per cent in September, a study by Nomura
International shows. The brokerage house examined 625 recent deals totalling
HK$8.6 billion in the 25 housing estates selected in a previous survey in
September. Nomura looked at the 25 latest transactions in each of the selected
estates that closed on or before December 15. Corporate buying rose to 27 per
cent from 23 per cent, while local buyers accounted for 55 per cent, down from
62 per cent. About 5 per cent was by foreigners. All figures are rounded off.
"It is unknown how many corporate buyers are from the mainland. If we exclude
corporate buyers, individual mainland buyers accounted for 20 per cent of the
purchasers," said Paul Louie, the regional head of property research at Nomura.
That figure is up from 15 per cent in the previous survey. The increase in part
reflected a decline in buying from Hong Kong. "Bear in mind that the past three
months saw active government fine-tuning of its housing and lending policies,"
Louie said. "The reduced loan-value ratio for luxury properties, tougher
pre-sale rules and threats of additional policy tightening may have given the
local population pause, triggering the reduced transaction velocity for the
overall market." Mainlanders, who are less reliant on financing and are
accustomed to dealing with policy interventions, could be less sensitive to
policy tweaks, he said. They still preferred luxury properties with each worth
an average HK$10 million, but they were shifting to mass housing, Louie said.
Mainland buyers are also active in the primary market. "Up to 30 per cent of
buyers of new residential properties in Hong Kong are mainland investors, with
many viewing Hong Kong real estate as a good long-term investment," said
Benedict Ma, an associate director of CB Richard Ellis' research department.
Victor Lui Ting, an executive director of Sun Hung Kai Real Estate Agency, a
unit of Sun Hung Kai Properties (SEHK: 0016), also agrees mainlanders are still
keen on Hong Kong luxury homes. Lui said the company recently sold units at the
Cullinan development at Kowloon Station at between HK$20,000 and HK$25,000 per
square foot. Some buyers came from the mainland. Ma said: "In 2009, we noticed
strong demand from mainland investors for Hong Kong residential real estate,
given the low interest rates and ample liquidity." Their purchases helped boost
luxury prices an estimated 6.8 per cent over the fourth quarter on Hong Kong
Island to an average HK$18,700 per square foot, compared with an increase of
17.6 per cent in the third quarter, according to CBRE. Sales volumes in Hong
Kong remained stable during the quarter at about 9,000 transactions per month,
but moderated compared with monthly sales of 11,000 to 12,000 in the third
quarter. "I would not be surprised to see greater investment interest from
mainland investors in Hong Kong residential property this year, given the rising
concern of the government about potential asset bubbles on the mainland and
recent moves to help cool the property market," Ma said.
Hongkongers may be a step closer to
getting a public holiday for Confucius' birthday. Lawmaker Chan Kam-lam will
move a Legislative Council motion next Wednesday demanding the government make
the day a holiday, and yesterday the Confucian Academy said other religious
leaders would back the proposal. But it does not mean Hongkongers would have an
additional day off each year. Instead, the academy suggests replacing the public
holiday on Easter Monday - the last day of the Easter holiday - with Confucius'
birthday on August 27. Confucius, a philosopher and teacher, was born more than
400 years before Christ. "Do not do to others what you do not want done to
yourself" is one of his most quoted teachings. "There is a holiday for Qu Yuan
[a third-century scholar and patriotic poet]. Why shouldn't there be one for
Confucius?" Tong Yan-kai, president of the academy, said, referring to the Tuen
Ng Festival, a day when people remember the death of Qu Yuan. The academy has
been lobbying for a public holiday in honour of Confucius' birthday since 1997.
It says Christian, Buddhist, Taoist and Muslim leaders in the city support
making Confucius' birthday a holiday called Teachers' Day. Tong said Protestants
had formerly opposed the plan, but were now ready to support it. Scrapping the
Easter Monday holiday and adding a new holiday on August 27 would be the best
option, he said. If there were objections to this proposal, the government could
retain the Easter Monday holiday but rename it in honour of Confucius' birthday.
Despite the academy's passion for Confucius, it seems the government is not
enthusiastic about making his birthday a new holiday. There are 17 general
holidays a year, of which 12 are statutory holidays. Any amendment would affect
the public and their consent should be sought, a spokeswoman said. No
information was available that showed the public had reached a consensus that
Confucius' birthday should be made a holiday, she said. "It's not the best time
at this stage to consider their recommendation." Shortening the Easter holiday
would cause inconvenience for the business sector, Federation of Hong Kong
Industries deputy chairman Stanley Lau Chin-ho said. Europeans and Americans all
enjoyed Easter holidays and to stay connected with the international market, it
would be best if there were the same holidays in Hong Kong, he said. It would be
inefficient if businessmen worked when their clients were on holiday. Easter was
also something that made Hong Kong special in the eyes of mainland tourists, Lau
said. Many tourists were attracted by Easter sales in Hong Kong, he said.
Employees could be disappointed if their long weekend holiday at Easter was cut
short, he said. Peter Koon Ho-ming, secretary general of the Anglican Church in
Hong Kong, said that, since Easter falls on a Sunday and religious celebrations
take place on that day, scrapping the Easter Monday holiday would not greatly
affect believers. 
City hospitals are preparing for a new
surge of mainland women wanting to give birth here, after maternity agents who
offer special Hong Kong packages slashed their prices. Fierce competition has
seen mainland-based agents cut their fees by nearly half from 30,000 yuan
(HK$34,067) to 16,800 yuan, after the Hospital Authority last Friday lifted its
restrictions on mainland mothers booking its maternity services. About a quarter
of the 40,000 babies born in public hospitals in 2008 were children of non-Hong
Kong residents. Until October last year, about 8,300 babies were born to
non-local mothers out of a total of 33,320 born in public hospitals. A Hospital
Authority spokesman said it will carefully monitor the use of maternity services
by both locals and non-locals. The authority does not rule out reinstating
measures to ensure there are enough beds for local mothers. In a fiercely
competitive market, agents offer add-on services, such as cord blood storage and
fung shui consultancy, to choose baby names. One of the agents claimed on its
website it can even make arrangements for women who have been blacklisted from
giving birth here by the Immigration Department. But the fee for the "special
service" is 120,000 yuan. Some also offer "luxurious one-stop service packages"
costing from 200,000 yuan to 300,000 yuan. The "luxurious package" promises a
suite in a private hospital and assistants to accompany the woman from prenatal
checkup to her discharge from hospital. The package also includes arrangements
for the baby's vaccinations, a 10-day stay in a luxury hotel room with full sea
view, health-care insurance, the baby's medical checkup after birth - and even
baby formula. Other agents also said they provide home-made meals for the
mothers-to-be during their stay in Hong Kong. Kwong Kwok-hay, deputy medical
superintendent of the private Hong Kong Sanatorium and Hospital, said the
hospital will accept women regardless of their nationality. "We serve them like
any other locals as long as we have vacant beds for them and they are referred
by our affiliated obstetricians," Kwong said. About 30 percent of babies born at
the hospital are to mothers who are non-locals. Over the years, the influx of
mainland women giving birth here has been blamed for the severe shortage of
maternity beds for local women. The number of babies born in Hong Kong to
mainland parents has increased 24 percent from 10,567 in the first half of 2008
to 13,105 in the same period last year. One of this year's crop of new year
babies was the boy of a Fujian couple born at Hong Kong Baptist Hospital. 
Legislators Chim Pui-chung
and Wong Yuk-man had to be separated by security guards in the Legco chamber,
after a heated shouting match broke out during a debate on the funding for the
express rail link to Guangzhou on Thursday. Legislators on Thursday afternoon
rejected a request by the Professional Commons think-tank to appear before
Legco’s finance committee on Friday to present an alternative proposal for the
construction of the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong
Express Rail Link in a more cost-effective way. The chairman of the Professional
Commons and Civic Party vice-chairman Albert Lai Kwong-tak on Wednesday said
their proposed plan to build a terminus in Kam Sheung Road – instead of West
Kowloon – would help the government to save at least HK$30 billion – instead of
using HK$66.9 billion to construct the rail link as proposed by the government.
Lai argued that there was already a station in Kam Sheung Road and, by building
a terminus there and an express line link to Tsing Yi, the length of the project
could be reduced by half – saving billions of dollars. He also argued passengers
could easily use other stations to link to the rest of the city from there. Lai
said, as the government has not shown any genuine interest in their proposal, it
was vital for them to present their ideas during a 30-minute session before
Legco’s finance committee – ahead of the legislators vote to approve funding for
the project. But their bid was rejected by the chairman of the committee, Emily
Lau Wai-hing after a debate. During that debate, Chim Pui-chung of the financial
services functional constituency – a supporter of building the rail link – and
Wong Yuk-man, chairman of League of Social Democrats (LSD), had a heated
argument and swore at each other – actions which led Emily Lau Wai-hing to call
a halt to the proceedings on two separate occasions. The two lawmakers had to be
separated by security guards in the Legco chamber and continued their argument
during one recess, local media reported. However, after the meeting, the pair
shook hands in front of journalists outside Legco building and apologised to the
public for exchanging insulting words. “We shouldn’t set a bad example to the
younger generation,” Chim said. Outspoken lawmaker Wong Yuk-man also apologized.
“As a public figure and an adult, I really regret my actions. It doesn’t look
good... I am really sorry,” Wong said. In another development, the government,
chambers of commerce and the Post 50s campaign group continued to run
advertisements in local newspapers on Thursday urging lawmakers to vote in favor
of funding the project. Chief Secretary Henry Tang Yin-yen and the Secretary for
Transport Eva Cheng Yu-wah on Thursday continued to try to persuade the
lawmakers to pass the motion. “The government’s proposal has been designed to
bring the maximum economic benefit to Hong Kong in the long term while keeping
the impact to villagers and the environment to a minimum... We will try our best
to explain the proposals to the lawmakers,” Cheng told local media.
Hainan is poised to become a top international tourism destination by 2020,
complete with gaming options that may include horse racing. That, together with
the promise of duty-free shopping for mainlanders, could affect Hong Kong in the
long term, though provincial leaders played down this aspect at a press
conference in Beijing yesterday. A mainland paper, the Information Times,
reported Hainan may be developed as a trial base for gambling options such as
casinos and horse racing. Gambling on horses in the mainland was outlawed in
1949. And a modern racecourse in Guangzhou was closed in 2001 after local
newspapers exposed the gambling activities taking place there. Another
racecourse was opened in Wuhan in 2007 but gaming is restricted to picking two
winners from five races. Winners get scratch coupons offering prizes from a few
yuan to 4,000 yuan (HK$4,540). Hainan's Communist Party chief Wei Liucheng said
the process of turning the island into a tropical holiday paradise will begin
this year. And he promised that people will be greatly impressed with the
changes in just 10 years. Governor Luo Baoming said the island has much to learn
from Hong Kong and that he does not think the tax- free shopping will affect the
SAR. He said gambling options, including a sports lottery, will be developed on
an experimental basis, adding the island may have legal boundaries that are less
strict than the rest of the mainland. However, Luo insists Hainan will not
overstep the law. "If entertainment elements are not introduced, something will
be missing in Hainan's promoting itself as an international tourist
destination," Wang Yongsheng, from the Regional Tourism Development of the
Regional Science Association of China told China Securities Journal. Wang said
there are regional precedents for the trial. "Gambling is forbidden in South
Korea, but overseas passport holders can gamble at Walker Hill in Seoul; this
fits the country's policies and also meets the entertainment needs of overseas
visitors," he said. But Hong Kong may yet have cause for worry. Several travel
agencies in Chongqing said they will organize shopping trips to Hainan once the
policy, proposed by the State Council, is approved. "It'll be much more
convenient to purchase luxury goods in Hainan than Hong Kong, as the return
flight tickets and price of local hotels are cheaper, and tourists don't need to
apply for an exit permit in advance or choose international flights," China
Travel Service Group general manager Liao Wei told Chongqing Business News.
Peking University urban planning professor Dong Liming said the island is
currently underdeveloped and most of the tourists are domestic travelers. "A
gambling industry and tax-free service will contribute to the economic growth of
the island," he told Global Times.
Lawmaker and Beijing loyalist Cheng Yiu-tong
on Thursday was forced to clarify remarks he made on Wednesday morning that a
march by local activists to the central government liaison office on New Year’s
Day had "shocked Beijing". Cheng, a trade unionist who sits on the Executive
Council and a National People’s Congress delegate, speaking to local media on
Wednesday morning after a radio interview said that such protests could make
Beijing doubt whether Hong Kong was ready for universal suffrage. He also said
that radical protesters were in the minority and that “if the majority of people
are like that, Beijing will have to send troops here.” On Thursday, Cheng said
his comments were only his “personal analysis” of the thoughts of Beijing
officials. “I have no intention of denying the comments I made yesterday, and I
still think that I haven’t said anything wrong. I can’t remember whether or not
I mentioned that [it was a personal opinion] during the radio programme,” Cheng
said. “This was not the first time [protesters had marched on the liaison
office], and based on my understanding of matters in Beijing, I am sure [these
actions] would easily arouse suspicions among officials in Beijing. “They must
wonder why the Hong Kong people’s focus has shifted from away from lobbying the
SAR government to Beijing instead,” he said. Cheng was referring to scuffles
that broke out between police and pro-democracy protesters on New Year’s Day
after about 10,000 people marched from Chater Garden to central government
offices to call for universal suffrage – and more jobs to help low-income
people. Despite heavy police security around the liaison office, about 10
radical protesters, mostly supporters of the League of Social Democrats, broke
through the police cordon and attempted to enter the building. Joseph Cheng Yu-shek,
a political science professor at the City University of Hong Kong and political
commentator, said Cheng Yiu-tong was not speaking directly on behalf of Beijing
on Wednesday and his comments didn’t necessarily represent the views of Beijing.
“Members of the pro-Beijing unit, like Mr Cheng Yiu-tong, shouldn’t try to
represent Beijing and pass on information or messages to the public. This is not
healthy as it only serves to damage the image of the central government, and may
affect the principles of ‘One country, two systems’ in Hong Kong,” Joseph Cheng
told SCMP.com. “If the government in Beijing wants to send a message to the
people of Hong Kong, either Beijing officials or officials at the central
government liaison office should convey those messages. Members of the
pro-Beijing unit should simply shut up or just speak on their own behalf,” he
added. 
While less than half of local households have bought high-definition
televisions, entertainment industry giants overseas are well down the highway in
ushering 3-D programmes into the home. US-based sports broadcaster ESPN and
science network Discovery Channel have both unveiled plans to launch new 3-D
networks in the next two years. ESPN will roll out its network as early as June
with a plan to air a minimum 85 live sporting events in the first year,
including 25 games from the World Cup. Discovery Communications, which
distributes the Discovery Channel, has joined Sony and theatre firm IMAX in a
bid to launch a dedicated 3-D network in the United States next year. The
network will feature films and natural history, space and exploration programs.
The moves follow the success in cinemas around the world of the 3-D epic Avatar.
Many believe that the technology is poised to take over the home market.
Analysts say the technology has existed for decades but has been held up by a
lack of 3-D programmes. Some TV viewers have also complained about eye fatigue
after watching 3-D TV. While special glasses are needed to watch Avatar and
other 3-D films, there are now TV models that enable viewers to experience the
effects without them. "The technology now enables real-life depth-of-field
effects," said one local industry veteran. Dr Kenneth Lam Kin-Man, an image
processing expert at Polytechnic University, said the technology in recent years
had reduced the cost of producing 3-D programs. In the past it could take
several days to produce a few seconds of footage, and special equipment was
needed, he said, but computers had made things easier. But Lam said the key to
success was solving the problem of eye fatigue. "After all, Hong Kong people
want to relax when they watch TV," he said, noting that 3-D TV required viewers
to concentrate hard. This could tire the eyes within half an hour. Hong Kong is
in the middle of its transition from analogue TV to digital TV, which offers
high-definition channels. No local TV broadcasters have stated an interest in
introducing 3-D TV. Analysts in the US expect that one household in 30 may
embrace 3-D in-home technology by early next year, and up to 20 per cent by
2015. 
Hong Kong-based WaterfrontAir, which
originally planned to operate a seaplane service between the city and Macau,
will launch seaplane flights from Shenzhen to Macau and Guangzhou in the fourth
quarter of this year. WaterfrontAir and Shenzhen Airport Ferry Terminal Services
Company, a subsidiary of the Shenzhen Airport Company, yesterday signed a
memorandum of understanding to provide seaplane services from the Shenzhen
Airport ferry pier to neighbouring cities in the Pearl River Delta.
WaterfrontAir, which will have its headquarters in Shenzhen, hopes to launch
seaplane services from Hong Kong to Shenzhen, Guangzhou and Macau next year. The
company will start with seaplane flights from the special economic zone to Macau
and Guangzhou. The firm, set up by entrepreneurs Michael Agopsowicz of Canada
and Peter de Kantzow of Australia, will lease a fleet of 18-seater DHC-6 Twin
Otter floatplanes for the flights. WaterfrontAir has been pressing ahead since
last year with the plan to operate a scheduled seaplane service between a new
Kai Tak waterfront aerodrome and the Pak On ferry terminal near Macau's Cotai
Strip. The Tourism Commission and the Tourism Board have given their backing for
the proposal, saying it will enhance Hong Kong's appeal. But the project needs
to pass an assessment of its environmental impact. Scheduled seaplane services
operated between Hong Kong and Macau between the 1930s and 1950s. "It takes a
long time to get approval for launching seaplane flights in Hong Kong, and we
have decided to start our operations in Shenzhen as the city happened to be a
lot faster in granting the green light," Agopsowicz said. The company intends to
commission an environmental impact assessment and a noise impact assessment in
the first half of the year. "If things proceed smoothly, we expect to launch
seaplane flights between Hong Kong, Shenzhen, Guangzhou and Macau next year,"
said de Kantzow, the son of Cathay Pacific (SEHK: 0293) co-founder Sydney de
Kantzow, who also set up Macau Air Transport Company in 1948. The flight from
Hong Kong to Shenzhen will take 15 minutes, compared with 45 minutes for the
Hong Kong to Guangzhou trip. The flight from Hong Kong to Macau would take 20
minutes. The firm plans to charge about HK$2,800 for a one-way trip between Hong
Kong and Guangzhou.
Full body searches are being
carried out on all those flying to the United States from Hong Kong - and
controversial X-ray-like body scanners may be on the way amid heightened
security fears. The new "full pat-down" searches and extensive carry-on luggage
checks by airline staff follow a security directive issued by Washington in the
wake of the failed Christmas Day "underwear bomber." Officials at Chek Lap Kok
insist the checks - which take place immediately before boarding - will not add
journey time for passengers. The United States singled out 14 "high-risk"
nationalities for the checks but Hong Kong has decided to search everyone,
regardless of nationality, both for logistical reasons and to avoid accusations
of discrimination. It is also looking at introducing controversial scanners that
are capable of peering through clothes to create three- dimensional images of
passengers to reveal any concealed weapons or explosives. Authorities in
Britain, Canada, the Netherlands and Nigeria have faced a public backlash over
the scanners amid privacy fears. Sidney Chau Foo-cheong, the executive director
of Avseco, Chek Lap Kok's security provider, said the 14 high-risk countries are
Afghanistan, Algeria, Cuba, Iraq, Iran, Lebanon, Libya, Nigeria, Pakistan, Saudi
Arabia, Somalia, Sudan, Syria and Yemen. But Chan added: "It is very difficult
to separate them and it will be very bad in terms of discriminating against
people and delaying them. "It is difficult in Hong Kong and it is also manpower
intensive to separate these nationals. Therefore, the airlines have decided that
they will conduct 100 percent pat-down searches of everyone." He said there have
been no complaints from passengers so far. "We explain to them it is for their
own safety. The passengers in general don't welcome it but they understand the
situation." The searches are conducted at the entrance to the airbridge near the
boarding gate or on the airbridge itself. It means all passengers on the nine
daily flights to the United States will undergo two security checks, one after
clearing immigration, and the new one. A spokeswoman for the Airport Authority
said: "Hong Kong International Airport maintains its general security measures
while respective airlines operating flights to the United States will conduct
extra body and baggage searches in front of the boarding gates." Among the
carriers who fly stateside from Hong Kong are American Airlines, Delta Airlines,
Cathay Pacific, Continental, United and US Airways. On December 25, Umar Farouk
Abdulmutallab, 23, tried to bomb Northwest Airlines Flight 253 from Amsterdam to
Detroit by detonating explosives hidden in his underwear. The device failed,
only setting off a fire in his seat.
China's commerce minister stresses yuan
stability, concerned about U.S. dollar value - Chinese Commerce Minister Chen
Deming (L) meets with Turkish State Minister Zafer Caglayan in Ankara, capital
of Turkey, on Jan. 7, 2010. China's Commerce Minister Chen Deming said here
Thursday the stability of the Chinese currency contributes to the recovery of
the world economy while voicing concerns over the strength of the U.S. dollar.
"The Chinese government has stated on many occasions it will keep the exchange
rate of the yuan, or Renminbi, basically stable," said Chen during a visit to
the Turkish capital Ankara, adding "We feel that is an important support and
contribution for the world economy, which is undergoing a crucial period of
recovering." 
Three dairy executives could face trial as early as next month for selling
tainted milk products, prosecutors said on Thursday, admitting the case had been
under investigation for months. The case against the general manager of Shanghai
Panda Dairy and his two deputies comes after “illegally high” levels of melamine
were found in powdered and condensed milk, a spokesman for Shanghai prosecutors
told reporters. “We will file the case with the court in around half a month,”
the spokesman said, asking not to be named due to the sensitivity of the case.
The three – who face charges of producing and selling toxic and hazardous food –
could face trial before the end of February, he added, saying the case would
take at least a month to reach the courtroom from the time of filing. Shanghai
Panda Dairy was shut down and put on a “black list” during a tainted milk
scandal last year, in which at least six infants died and nearly 300,000 were
made sick by milk products laced with melamine, a toxic chemical. Panda Dairy’s
products were found to have the second-highest levels of melamine in the nation,
behind the now bankrupt Sanlu Group, the Shanghai Daily reported last week.
Authorities had allowed Panda Dairy to resume production, but the latest probe
revealed it had re-used tainted condensed milk that had been recalled from the
market, the spokesman said. He admitted government inspectors had discovered the
products contaminated with melamine, which gives the appearance of a higher
protein content, months before the media first reported the dairy’s closure last
week. “The case was uncovered quite early, actually,” the spokesman said.
“Quality supervision authorities found the problem in a February-April
inspection. The case was then handed to the police in April and the related
people were detained by the police in April,” he said. He did not comment on why
authorities waited so long to make the investigation public, but the media have
suggested the case was concealed out of fear that the revelations could damage
the country’s economic recovery. A total of 21 people have been convicted for
their roles in that scandal. Two were executed and former Sanlu boss Tian Wenhua
was given life in prison. One other person was given a suspended death sentence,
a punishment that is routinely commuted to life imprisonment, while 15 others
were jailed for two to 15 years. Sanlu, once one of the largest dairy
manufacturers on the mainland, was declared bankrupt in February this year after
having amassed 1.1 billion yuan (HK$1.25 billion) of debt, Xinhua reported at
the time.
Resorts, lotteries coming to
Hainan - Government loosens regulations to spur island province's development -
Lottery regulations are being relaxed in China's tropical southern island
province of Hainan to help it become a global resort within a decade, marking a
big step forward for the country's lottery business. The State Council, China's
Cabinet, gave permission to Hainan on Monday to "explore and develop"
pari-mutuel sports lotteries and instant sports lotteries on large international
events, which is expected to enrich Hainan's tourism resources. It aroused media
speculation that horseracing is likely to be introduced to the island, or that
Hainan would even become China's answer to Las Vegas. "Hainan has been given
more space than other parts of China to explore the lottery market, but it does
not mean Hainan will break China's laws," Hainan Governor Luo Baoming told a
press conference yesterday. He declined to confirm whether pari-mutuel
horseracing would be introduced to the island. Gambling is illegal on the
Chinese mainland, according to Chinese laws. Welfare and sports lotteries were
permitted two decades ago to raise funds for welfare and sports causes, and a
regulation was passed last year to legalize the lottery business in China, said
Wang Xuehong, director of the China Center for Lottery Studies based in Peking
University. Previously, pari-mutuel sports lotteries could only bet on the
results of foreign basketball and football games, not domestic games, out of
fear of match fixing and other unfair practices, she said. "Now the rules allow
pari-mutuel sports lotteries to bet on the results of domestic and international
sports events that are held in Hainan, which will be a big step forward for
China's 22-year-old lottery business," she said. Biking, sailing, beach
volleyball and horseracing, as long as they are held in Hainan, could all be the
subject of the pari-mutuel lottery in the future, she said. The lotteries, as
well as duty-free shopping, a broadened visa-free policy and a harsher crackdown
on illegal tourism practices to improve Hainan's image, are expected to work
together to attract more tourists from home and abroad. Hainan is expected to
become a global tropical island resort destination by 2020, and the tourism
industry is expected to contribute 12 percent of GDP in Hainan by then. To
support the island's development, the State Council has given the nod to Hainan
to explore the possibility of allowing domestic tourists outside of Hainan to do
duty-free shopping on the island. The Ministry of Finance is leading a
feasibility study on the practice as well as giving tax refunds to overseas
tourists in Hainan. The news, however, worried some who fear Hainan might shake
Hong Kong's position as the shopping paradise. To reject the concern, Hainan
Party chief Wei Liucheng said Hainan is only in the experimental stage, and it
will take a period of time for Hainan to build and develop a shopping
environment matching the level of Hong Kong. "In the period we can foresee, a
strong competition between Hainan and Hong Kong is not going to take shape," he
said. Hainan will also attract tourists by further extending its favorable
visa-free policy to five other nations - Finland, Denmark, Norway, the Ukraine
and Kazakhstan - from the previous 21 nations including the United States, Japan
and Canada. The requirement on tour groups from Russia, the Republic of Korea
and Germany will also be loosened to require a minimum of two people, and they
can stay for a maximum of 21 days in Hainan. "Sanya in Hainan province is
already in the top few cities in China in terms of tourism facilities and
service quality," said Tang Yibo, supervisor of the holiday department of
ctrip.com, China's leading online travel service. "Now with the central
government's policy support, I believe Hainan will elevate itself in many
aspects, such as infrastructure and service, to an international level. It will
benefit tourists more," he said. Hainan received some 750,000 overseas tourists
in 2007, mostly from Russia and South Korea. In total, it received 18.4 million
tourists from home and abroad in 2007. 
Bottles of Corona and Carlsberg are lined
in the window of a bar in Beijing. Enforcement officials recently broke up a
gang selling fake liquor and warn that counterfeit beers could pose a health
risk.
Ice sculptures are displayed at the
International Ice and Snow Sculpture Festival in Harbin, in Heilongjiang
province. Fairy tale palaces, towering pagodas, and an Egyptian Sphinx - all
carved from ice - are among the sights at the 26th annual event. A recent cold
spell has benefited the festival, but has caused havoc in other parts of
northern China.
American carmaker Ford, whose Chonqing
factory is seen in this file picture, said on Thursday that sold 440,619
vehicles in mainland in 2009. Ford Motors posted a 44 per cent jump in its
mainland vehicle sales last year and aims to outpace growth in the world’s
largest auto market this year, banking on continued state policy incentives to
drive demand. Ford, which broke ground for a US$490 million new plant in
September, sold 440,619 vehicles in the country in last year. That compared with
306,306 units in 2008 and marked an acceleration in annual growth from 32 per
cent in the first nine months of 2009, the company said in a statement. “We
think there will be something like 8 per cent growth of the market this year,”
Nigel Harris, head of Ford’s sales and marketing in mainland, told reporters.
“Our ambition is to sell more than 8 per cent.” Ford is the latest auto firm to
report strong sales growth in the country, where automobile demand rebounded
strongly last year thanks to Beijing’s aggressive cuts in sales taxes on small
cars and subsidies for buyers in rural areas. Larger rival General Motors, sold
1.83 million vehicles here last year, up 67 per cent. Sales of Toyota Motor rose
21 per cent to 709,000 units during the period. Harris attributed Ford’s record
sales last year partly to its popular Focus sedan, which racked up a tally of
134,336 units, or nearly a third of its overall sales. Sales of its all-new
Fiesta small car, rolled out in March, came to 47,358 units, company data
showed. Ford also makes Mondeo, S-MAX, Volvo S40 and S80 among other models in a
three-way tie-up with Chongqing Changan Auto Co and Mazda Motor. Overall sales
of the venture soared 55 per cent to 315,791 units last year. Sales of Ford’s
Transit light commercial van, made at its partly owned Jiangling Motors Corp,
rose 22 per cent to 33,585 units, it said. Ford, the only Detroit automaker that
has steered clear of emergency federal funding and bankruptcy, is a relatively
latecomer to mainland, where GM and Volkswagen lead. However, it is speeding up
expansion in the country with a 150,000 unit new car plant in Chongqing,
scheduled to start operations in 2012. The number 2 Detroit automaker has also
expanded its service warranty programme for cars to 3 years/100,000km, effective
on January 1, compared with 2 years/40,000km previously company executives said.
Ford had in October named the parent of Geely Automobile Holdings (SEHK: 0175)
the preferred bidder for its premier Volvo car unit and aimed to complete the
deal in the first quarter. Company executives declined to say whether Volvo S40
and S80 models will continue to be manufactured at Ford’s mainland venture after
the sale. Ford sold more than 15,000 locally manufactured Volvo cars in mainland
in 2008, or 3.4 per cent of is total sales in the country, according to Jeffery
Shen, president and CEO of Ford’s China car venture.
ICBC (Asia) (0349) assured the public that banks have not been driving mortgage
rates down due to fierce industry competition. Director and deputy general
manager Stanley Wong Yuen-fai said banks have, as a whole, agreed on the same
mortgage rates. He rejected claims that banks have cut their mortgage rates.
"Most banks had adopted prime rate [5.25 percent] minus 3 percent by the end of
last year," Wong said. "It's not true to say they cut prices further in 2010."
Banks are keen to make mortgage loans since the weighted average risk is low
across the property cycle and, therefore, their capital returns are higher than
other loans, Wong explained. He added competition has not heightened, as there
was a time last year when the mortgage rate was as low as prime minus 3.2
percent. After the Monetary Authority warned in October that some aggressive
mortgage plans may incur losses, lenders soon raised their rates, according to
Wong. He said both the US and global economies appear to be getting out of the
financial crisis and. since the United States is set to raise its rates in the
second half, there is no room for any decrease in mortgage rates in the city.
Wong expects Hong Kong interbank offered rates to increase accordingly. He added
there is still a considerable difference between the common mortgage rate of
2.25 percent and the three- month HIBOR of below 0.5 percent, so banks will be
able to cope with the associated risks as long as the increase is not too big.
Higher US rates and a better global economy may drive out of Hong Kong capital
which is seeking risk shelter for other investment opportunities, said Wong.
There will then be less liquidity in the city. Meanwhile, the Land Registry said
home sales in the territory fell to the lowest level in eight months in December
after the government expressed concern over potential asset bubbles and took
steps to cool surging house prices. Sales slid 9 percent to HK$34.7 billion in
December from November. The number of transactions dropped 1.1 percent to 9,108
units from 9,213 units. 
U.S. player Michael Chang of the
Americas team speaks at a press conference in Hong Kong, south China, Jan. 4,
2010. The Hong Kong Tennis Classic 2010 tournament will be held in Hong Kong on
Jan. 6-9. Top tennis stars would represent four teams, namely Europe, Asia
Pacific, Russia and the Americas in the tournament. 
Maria Sharapova of the Russia team
attends a press conference in Hong Kong, south China, Jan. 4, 2010. The Hong
Kong Tennis Classic 2010 tournament will be held in Hong Kong on Jan. 6-9. Top
tennis stars would represent four teams, namely Europe, Asia Pacific, Russia and
the Americas in the tournament. 
Asia's largest fashion event, this
month's Hong Kong Fashion Week, will see a big increase in the number of
exhibitors over last year's event, with more big-name European labels taking
part. About 2,000 exhibitors from 30 countries and regions will participate in
Hong Kong Fashion Week for Fall/Winter and World Boutique, which both run at the
Convention and Exhibition Centre from January 18 to 21. This represents a 25 per
cent increase on last year's 1,600 exhibitors. The big-name European brands
joining the fashion events for the first time include Britain's Vivienne
Westwood and Spain's Mango. The gradual economic recovery in the West could be
the reason behind the welcome increase in European participants, the deputy
executive director of the Trade Development Council, Benjamin Chau Kai-leung,
said. Vivienne Westwood's creative director, Andreas Kronthaler, and the brand's
marketing and merchandising director, Christopher di Pietro, said a seminar
during Fashion Week would "decode" the English fashion icon. Vivienne Westwood
would also use the Hong Kong events to make the world debut of its crossover
series with Lee Jeans. Russian and South African exhibitors will take part in
Fashion Week for the first time. Two new zones - intimate wear, and testing,
certification and inspection - will be set up at the trade fair. World Boutique,
which showcases designer labels in particular, has attracted 250 exhibitors from
19 countries and regions. Appearing in the city for the first time will be The
Underground Quarter by Londonedge, a group of 11 exhibitors from the United
States and Europe that features alternative, rock or street fashion. Also for
the first time, the Netherlands will host a country pavilion. A total of 25
fashion shows will take place at the two fairs and about 3,800 overseas buyers
will be present for the events. Chau said the Trade Development Council spent
HK$80 million bringing overseas buyers to Hong Kong throughout 2009. The number
of exhibitors at the year's fairs was up 1 per cent compared to 2008, and the
number of buyers was up 2 per cent. The council would continue to spend money on
encouraging overseas buyers to come to the city, but he did not spell out the
exact amount. The council would emphasise Asian markets such as Indonesia and
India in its trade promotion work. Boby Chan Yum-kit, the chairman and managing
director of exhibitor Moiselle, said the company saw double-digit growth in
sales during the Christmas holiday period compared with last year. The
purchasing power of mainlanders had surged in the second half of 2009, he said.
HK talent short amid film industry's golden period on mainland - The mainland
film industry has hit a high and in the process created a shortage of filmmaking
professionals in Hong Kong. Jack So Chak-kwong, the chairman of the Hong Kong
Film Development Council, said that the industry had reached a peak on the
mainland, setting box office records with a fast-rising number of cinemas, and
Hong Kong filmmaking talent had become highly sought after. Speaking at the
opening ceremony of the Hong Kong Baptist University's Academy of Film
yesterday, So said that there was not enough talent to meet the demand, and
there was an urgency to speed up training of professionals. He said that most
industry practitioners - from the lighting to the post-production processes -
had been employed because of the favorable environment on the mainland, with
more investors investing in the market. So said that mainland box office takings
in 2009 reached 6 billion yuan (HK$6.96 billion), 40 per cent more than the 4.3
billion yuan in 2008, and cinemas had been increasing at a rate of two new
screens per day. "But it's also worrying because we do not have enough talent,"
he said. Wilfred Wong Ying-wai, council and court chairman of the Baptist
University and a board member of the Film Development Council, said that as
local TV stations no longer provided much training for filmmaking talent, an
academy focusing on talent grooming could play a key role. Cheuk Pak-tong, the
film academy's director, said it would focus on training professionals to meet
industry needs with courses focusing on production management, scriptwriting and
post-production. The Film Development Council has given HK$3.4 million to
support the development of the Academy of Film. The academy has about 300
undergraduate students, 100 students studying for the master of fine arts degree
and 30 pursuing high diplomas. Meanwhile, the Hong Kong International Film
Festival Society said that 25 projects from 17 Asian territories had been
shortlisted for this year's Hong Kong-Asia Film Financing Forum.
China has raised solemn representations to the United States government and
urged it to cancel and cease arms sales to Taiwan, Foreign Ministry spokeswoman
Jiang Yu said Tuesday. 
The Chinese government said on
Monday that it aims to build the southern island of Hainan into a top
international tourism destination by 2020. The country also plans to develop the
only tropical island province to be a platform for international economic
cooperation and cultural exchanges, according to a statement of the State
Council, or the Cabinet, released on Gov.cn, the official web portal of the
Chinese government. The island will also become a base of agricultural
production and a base for developing resources and services in the South China
Sea, said the statement. The government said it would maintain the healthy
development of the island's property sector and encourage developers to build
premium hotels and resorts. It also supports family-run hotels and
property-rental services. The plan also includes measures to promote modern
tropical agriculture in Hainan, including tropical fruits, aquatic products and
others, and expand its agricultural cooperation with Taiwan. The government will
further extend its favorable visa-free policy to five other nations including
Finland, Denmark, Norway, Ukraine and Kazakhstan from the previous 21 nations
including the United States, Japan and Canada. The statement also said the
government would boost the island's development by expanding oil and gas
exploration, offering more duty free services, improving transportation
networks, developing logistics, reducing pollution, building more information
networks and infrastructure. The government plans to lift the value-added output
of tourism in Hainan to more than 8 percent of its gross domestic product (GDP)
by 2015 and more than 12 percent by 2020, the statement said. Figure of how much
value-added output of tourism accounted for in the province's GDP in 2008 was
not available. Hainan's preliminary GDP stood at 145.9 billion yuan (21.36
billion U.S. dollars) in 2008, up 9.8 percent year on year. 
Photo taken on December 2009 shows the
panorama of a construction site of a tourist resort in Qionghai of south China's
Hainan Province. The southernmost island province will be shaped into a world
top class tourist destination by 2020, according to a State Council announcement
released on Monday. The government said it would maintain the healthy
development of the island's property sector and encourage developers to build
premium hotels and resorts. It also supports family-run hotels and
property-rental services. Efforts should also go to the financial sector in the
island by pushing forward the trial program of cross-border trade RMB settlement
and backing qualified tourism firms to get listed in the stock market.
Hainan Beach - The government said it would maintain the healthy development of
the island's property sector and encourage developers to build premium hotels
and resorts.
Beijing's largest diamond marketplace
"Make Lumer Shopping Plaza" opened for business during the New Year's Day
holiday. With a floor space of 10,000 square meters and located in Solana, M&L
plaza, they offer diamond categories that could be 20 times that of traditional
diamond shopping centers. And it also offers buy-back services for diamonds with
a weight more than 0.3 carat. Industry statistics show China, which saw a 15
percent growth of diamond consumption last year, is the only country that
experienced an increase in diamond consumption in the global financial crisis.
China has been a major consumer for diamonds in the world. The transaction value
of Shanghai Diamond Exchange, the only diamond exchange in China, reached $1.37
billion in 2008.
China may export its
controversial maglev train expertise to Malaysia as it ramps up efforts to be
one of the world's leading railway builders. Mainland firms including CNR
Tangshan Railway Vehicle are in the running to win billions of dollars of
railway contracts in the Southeast Asian country as part of the sector's "going
out" policy. The Ministry of Railways signed a contract on Monday with
Industrial and Commercial Bank of China (SEHK: 1398) to help companies win
projects abroad. But questions are being asked about whether the magnetic
levitation project is the right choice to showcase the country's train-building
prowess. The German-developed technology uses powerful magnets to suspend a
train above a track and propel it at speeds of up to 450km/h. Shanghai's 30km
maglev line - the only one in commercial operation in the world - is suffering
from both significant financial losses and criticism from nearby residents. It
was built at a cost of 10 billion yuan (HK$11.36 billion) - 3,300 yuan per
centimetre. CNR Tangshan sales chief Wang Dianwu said the company had been in
talks with parties in Malaysia over various railway projects but he declined to
comment on a Malaysian newspaper report that it was in talks to build a
cross-sea maglev rail link between Georgetown on Penang island with Butterworth
on the West Malaysian peninsula. If this project becomes a reality, it will be
China's first export of its maglev railway system. CNR Tangshan is a subsidiary
of China CNR Corp, a state-owned rolling stock manufacturer that listed in
Shanghai last month. Keretapi Tanah Melayu (KTM), the Malaysian railway company,
is expanding capacity and in the next six months is expected to call for an open
tender to buy 38 six-car trains worth two billion ringgit (HK$4.58 billion). KTM
president Aminuddin Adnan reportedly said it was looking at companies from
China, Japan and Europe to supply the trains, to be delivered over 18 to 24
months. But Aminuddin indicated KTM does not appear eager to buy the Chinese
maglev. He told the Malaysian newspaper Star: "I would rather wait for the
second-generation trains to come before we seriously look into this. Otherwise,
we may be investing in a technology which is still at an early stage." Penang
Chief Minister Lim Guan Eng told the Edge newspaper he had not received any
proposal for a maglev rail link between the island and the peninsula. CNR
Tangshan was reportedly in talks to build the maglev rail link between Penang
and the peninsula, as well as two 350km/h rail links, one connecting the
Malaysian capital, Kuala Lumpur, with Johor Bahru and another linking Kuala
Lumpur with Kuantan. "My personal view is Malaysia won't use maglev. It's much
cheaper to build high-speed rail than maglev," said Jiong Shao, the head of
China equity research at Nomura. The higher cost of maglev railway is due to the
special elevated tracks that need to be built. "China also doesn't own its
technology for maglev. It's from Siemens." Under Beijing's plan to expand rail
exports, the railways ministry will provide political guidance and support to
firms in their efforts to win contracts overseas while ICBC will provide
financing to foreign projects undertaken by Chinese firms. 
Supporters of the proposed express
rail link project to Guangzhou make their voices heard in a march in Central
Thursday. Construction of the HK$66.9 billion high-speed rail link project faces
the threat of further delay, with lawmakers opposed to it planning to hijack
today's funding vote by tabling at least 30 motions for discussion. But even if
the pro-government majority manages to deal with these and passes the funding by
the end of the six-hour meeting at 10pm, lawmakers who support the project will
still face thousands of protesters who have vowed to surround the building. Even
before tonight's showdown, scuffles between supporters and opponents of the
project broke out in several places yesterday. At a special Legislative Council
Finance Committee meeting to discuss whether transport experts from the
Professional Commons group, which opposes the project, should be allowed to
present a counter-proposal at today's meeting, independent lawmaker Chim
Pui-chung, who backs the project, engaged Wong Yuk-man of the League of Social
Democrats in a shouting match. The pair shouted derogatory remarks for several
minutes, calling each other names such as "beggar", "prisoner" and "someone with
a triad background", until the meeting's chairwoman, Emily Lau Wai-hing, ordered
them to stop. Soon afterwards, they shook hands and apologised for their
behaviour. "I regret what I did. It looks bad and sets a bad example for the
young," Wong said. "I hope Chim will not take my words to heart." Project
supporters from the Association of Engineering Professionals in Society were
surprised when three Professional Commons members stormed into a press briefing
yesterday, challenging them to a debate and handing out leaflets to reporters.
Association senior vice-chairman Yim Kin-ping said: "They have had enough
discussion ... This man [Paul Zimmerman] is not even an engineer," Yim said,
while a colleague snatched leaflets from reporters. He said the Professional
Commons' proposed alternative - moving the terminus from West Kowloon to Kam
Sheung Road and connecting it to the Airport Express - could not possibly be
better than the government's plan, which had taken billions of dollars and years
of study by numerous experts to complete. The Finance Committee rejected the
Professional Commons' request to speak at today's meeting. Lawmakers said they
had had at least two chances to present their proposal to legislators since
November. Lau pledged to stop lawmakers from repeating questions today, but said
she could not deprive them of their right to speak. "I will conduct the meeting
according to the procedure, in a fair and open manner," she said. She has
scheduled another meeting for next Friday in case today's fails to bear fruit.
Albert Chan Wai-yip, of the League of Social Democrats, said he and his
colleagues would keep tabling motions to prevent a vote on funding. "We will
invite discussions on subjects such as whether there will be any noise
mitigation measures for properties along the line," he said. "Each affected
housing estate can be made a separate motion." Ronny Tong Ka-wah, of the Civic
Party, who successfully delayed the last vote on December 18, said he would not
seek an adjournment today. "Many questions are still left unanswered. I believe
today's meeting may not be long enough to cover all of them," he said. Tycoon Li
Ka-shing said funding would be passed eventually because Hong Kong people were
intelligent enough to know what was good for them.
The entire, 800-strong police
tactical unit will be on standby for tomorrow's vote on funding for the
multibillion-dollar express railway project, with opponents threatening to
surround the Legislative Council building with 10,000 protesters. The last time
the entire police tactical unit was placed on standby was during protests by
Korean farmers at the World Trade Organisation meeting in 2005. Police
negotiation experts will also be on standby for tomorrow's showdown in case
tempers start to fray. The negotiators have previously only been deployed for
major public events such as the WTO meeting and the Olympic equestrian
competition in 2008. Police are concerned about the impact of the protest on
traffic and public order in Central, especially since 800 people have joined a
Facebook group to chat about their "readiness for commotion and bloodshed"
during the protest. The protest's organiser - an alliance of the Justice and
Peace Commission of the Hong Kong Catholic Diocese and a group of youngsters who
call themselves the Post-80s Anti-Express Railway Group - said opinions would be
expressed in a peaceful and rational manner. Organiser Huck Yuen, who denied any
links with the Facebook chat group, said: "A lot of people and groups are
planning their own actions right now. "We will be peaceful and show restraint
but there is no way we can know or prevent actions others may take." More than
100 police from the quick reaction team and uniformed officers from Central
district will be deployed to manage the crowd. Supporters and opponents of the
HK$66.9 billion high-speed rail link to Guangzhou have been lobbying support
since November. A survey of 1,018 people by the University of Hong Kong found
that 45 per cent opposed the project or demanded its suspension, almost triple
the 16 per cent in a similar survey in May. Only 47 per cent of respondents
supported the project, down from more than 80 per cent in May. Nearly 60 per
cent said they had little knowledge of the project. Pan-democrat lawmakers,
meanwhile, are finalising tactics to delay tomorrow's vote. Albert Chan Wai-yip,
of the League of Social Democrats, said he and his two colleagues - Leung
Kwok-hung and Wong Yuk-man - would each propose a motion during the six-hour
meeting, such as urging the government to reconsider moving Tsoi Yuen village to
another place. The Transport and Housing Bureau has already ruled out that
option, saying that rebuilding the village would recognise the legality of
unauthorised squatter huts and cause upheaval to existing land policy.
Professional Commons - a group of experts closely connected to the Civic Party -
is demanding time to talk about its alternative proposal during the meeting.
"The taxpayers are paying an unnecessary HK$13.4 billion if the project begins
now because the building tender works price is rising in light of the many
infrastructure projects on the go," group spokesman Albert Lai Kwong-tak said.
Lawmakers had suggested Lai speak at a Legco rail subcommittee meeting instead
but he refused that offer. Legco will hold a meeting today to decide if the
group should be allowed to address tomorrow's meeting. More than half of
lawmakers have expressed support for the project. This means that delaying
funding is all the pan-democrat camp can do to prevent construction of the link,
which would hook up to the national high-speed rail network by 2015. But Chan
said they would fight until the last minute and would walk out of the meeting in
protest when the council voted on the government's HK$2 billion compensation
package for Tsoi Yuen Tsuen land owners and residents. The Finance Committee can
conduct another special meeting to continue deliberation of the project's
funding if tomorrow's meeting fails to yield an outcome. 
A teenage psuedo-model was placed on
probation for 12 months by the Eastern Magistrate's Court on Tuesday after she
pleaded guilty to possessing ketamine. Dressed in a black t-shirt, sweaters and
trousers, Monique Chau Hoi-ying, 17, a form five student and a part-time model,
appeared in Eastern court accompanied by her relatives. Appearing at a press
conference on Tuesday afternoon, Chau repeatedly bowed and apologized for her
actions. She said she understood that taking drugs can harm people's health and
affect their prospects. Chau said she also hoped that young people would learn
from her mistakes. On November 17 last year, Chau was caught with a small amount
of ketamine in a lavatory at her North Point school. Acting Principal Magistrate
Bina Chainral placed Chau on probation for 12 months and ordered her to pay
HK$500 in court fees. Chau was also ordered to visit a drug rehabilitation
treatment centre, if her probation officer deems necessary. 
The government plans to include two Hong Kong Island sites worth billions of
dollars on the application list this year in response to market calls for
premium plots, a source said. The first site is 8-12 Deep Water Bay Drive and
the other is 47 Sassoon Road, the source told Sing Tao Daily, sister publication
of The Standard. Midland Surveyors director Alvin Lam Tsz-pun said the Deep
Water Bay Drive parcel with mountain views can sell for nearly HK$2.8 billion,
representing a land cost of HK$12,000 to HK$13,000 per square foot. He expects
the Sassoon Road lot to be worth HK$15,000 psf where developers can build houses
of up to three stories. The residential project Glendale now occupies the Deep
Water Bay parcel and is a civil servants quarters, as is the case with the
Sassoon Road site. According to the Lands Department, some homes will be on
lease until the end of August. It covers 110,000 square feet and can deliver a
gross floor area of over 230,000 square feet under a plot ratio of 2.1. Up to 14
stories are allowed at the site. Lam said Glendale is still nice in appearance
and hence he believes it is likely that government would let developers renovate
the buildings for sale. Glendale is only 20-odd years old and the source said
the government may invite public tenders, just as it did earlier with block A of
Wylie Court in Yau Ma Tei and blocks B and C of Winfield Building in Happy
Valley. Concerning the news, a spokesperson from the Lands Department said there
are still tenants living in Glendale and for now none of them have failed to
renew their contracts. The government has been looking into launching luxury
Hong Kong Island sites in recent months, including two projects in North Point
and one in Kennedy Town. 
Calling for the abolition of functional
constituencies in the Legislative Council as part of electoral reforms would be
reckless because the system had operated smoothly for the past 23 years, the
deputy chairwoman of the Basic Law Committee said. In a surprise reference to
former governor Chris Patten, Elsie Leung Oi-sie said that instead of calling
for an end to the seats, people should look at how Patten's reform of 1995
expanded the franchise from 69,825 registered voters to 1.15 million by creating
nine new functional constituencies. Speaking at a constitutional reform seminar,
Leung said references could be drawn from Patten's move, which was condemned by
Beijing, to make functional constituencies compatible with universal suffrage
when it is introduced. "It would be reckless if we just call for the scrapping
of a tried and tested system, which has been running smoothly for 23 years,"
Leung said. Patten's nine new constituencies were abolished after the handover,
when the legislature was disbanded and a new structure introduced. "After 15
years, reference can today be drawn from this model, and also 15 years later in
2020. Some people have pointed out the deficiencies of functional
constituencies. In fact, these problems can be resolved," she said. The former
secretary for justice was hitting back at the call by critics to abolish the
trade-based constituencies, which now comprise half of the 60-seat legislature.
Critics say the seats allow industry groups to hold too much power, and
lawmakers are chosen in a small-circle election. Introduced in 1985, these
seats, representing about 230,000 voters, have long been criticized for placing
unequal weight on business and professional bodies. While toeing the
government's line that these constituencies, in their current forms, did not
comply with the principles of genuine universal suffrage, Leung said they could
be improved when universal suffrage was introduced to elect the legislature in
2020. Leung's comments followed suggestions floated recently by pro-government
figures who hinted that functional constituencies should stay beyond 2020. On
the plan by the Civic Party and League of Social Democrats for one lawmaker from
each of the five geographical constituencies to resign in order to trigger a de
facto referendum on universal suffrage, Leung said it would not be effective, as
Hong Kong had no referendum mechanism. Her remarks were attacked by
pan-democrats, who cited them as evidence of their fears that Beijing was trying
to keep the functional seats indefinitely. "Functional constituencies have
always been a transitional measure," Civic Party leader Audrey Eu Yuet-mee said.
"That's why we have to fight harder, or they will remain forever." At a district
consultation forum last night, most speakers, who were from the Beijing-loyalist
camp, supported the government reform proposals, despite a protest by
pan-democrats outside and inside the venue in Tsuen Wan. Chief Secretary Henry
Tang Ying-yen urged people to support the proposal to achieve democracy
incrementally in 2012, while Secretary for Constitutional and Mainland Affairs
Stephen Lam Sui-lung said whether functional constituencies should be scrapped
was something to be decided after 2017.
Conglomerate Hutchison Whampoa (SEHK:
0013), controlled by Li Ka-shing, has offered to take subsidiary Hutchison
Telecommunications International (SEHK: 2332) private. The buyout bid apparently
shows a renewed faith by Li in privatizing local companies, a process he
described as difficult several months ago. In a statement to the Hong Kong
exchange yesterday, Hutchison Telecom said parent Hutchison Whampoa had
approached it about "a possible general offer to the company's shareholders and
option holders". Hutchison Telecom, which runs mobile-telephone networks in
emerging markets such as Indonesia and Vietnam, said an announcement "may be
imminent" and requested trading of its shares be suspended. Trading was
suspended in the afternoon after rising 2.5 per cent to HK$1.65, which valued
the company at HK$7.94 billion. "The offer should be a positive development for
both the parent firm and subsidiary stocks," said Danie Schutte, the head of
research for China and Hong Kong at CLSA. He expected Hutchison Whampoa to offer
a premium of 5 to 10 per cent of Hutchison Telecom's share price. "Hutchison
Whampoa has experience in privatizing companies and unlocking their value,"
Schutte said. "It can crystallise Hutchison Telecom's value whenever it sees fit
to do so" amid the improving economy. The possible takeover would give Li
greater access to the US$1.4 billion that Hutchison Telecom raised from the sale
last year of a controlling stake in Partner Communications, Israel's
second-biggest mobile-telephone carrier. Li controls 67 per cent of Hutchison
Telecom's shares through a 60.4 per cent stake held by Hutchison Whampoa, and
personal holdings. "Hutchison Telecom's stock price has been undervalued for a
while, given its strong cash position," said Kenny Tang, an analyst at Redford
Securities. The deal will provide Hutchison Whampoa increased ownership of the
subsidiary's businesses in the faster growing emerging markets. According to a
disclosure filed with the stock exchange yesterday, Li bought a total of 1.54
million Hutchison Whampoa shares in three separate transactions late last month
that allowed him to boost his stake in the company to 51.74 per cent from 51.7
per cent. The buyout bid comes less than a year after Li, who is also chairman
at flagship firm Cheung Kong (Holdings) (SEHK: 0001), expressed reservations
about privatisations in Hong Kong. At Cheung Kong's annual general meeting in
May, he said privatising a company in Hong Kong was so difficult that it would
be easier to close it down. Under stock market rules, any privatisation offer
must be accepted by the holders of at least 90 per cent of minority shares for
it to succeed. Under such circumstances, Li said: "Whenever there are people
stirring up issues, privatization will be impossible. The easiest way to do it
is to announce a complete closure of the company. "Some laws in Hong Kong follow
those of Britain and the United States. Very often, some of these laws are still
kept even when overseas countries have abolished them," he said. At the time he
said that his comments were not made in response to younger son Richard Li
Tzar-kai's failed bid to privatize PCCW (SEHK: 0008).
Macau casino revenue rose 48 per cent to
11 billion patacas in December compared with a year earlier, according to a
report seen on Tuesday. Shares of Macau casino operators rose on Tuesday on
reports that gambling revenues in the enclave in December rose 48 per cent from
a year earlier, signalling sustained growth in the world’s largest gambling
market. Shares of Sands China, the Macau unit of Las Vegas Sands, rose as much
as 6.53 per cent to a near three-week high, while Wynn Macau, the Macau unit of
Wynn Resorts advanced 5.13 per cent to a three-week high of HK$9.89. SJM
Holdings, gambling tycoon Stanley Ho’s flagship firm, gained as much as 5.7 per
cent to its highest level in more than two months in early trade. Macau casino
revenue rose 48 per cent to 11 billion patacas (HK$10.5 billion) in December
compared with a year earlier, according to a report from Susquehanna Financial
that cited Portuguese news agency Lusa. “The first half will be very strong; we
should see momentum maintain,” said Aaron Fischer, CLSA’s head of Asian consumer
and gaming. “We believe the earnings will surprise significantly on the upside,”
Fischer said. “Revenue growth has been very strong for the last few months and
these companies have been cutting costs a lot.” Fischer expects Macau gambling
revenues to rise 17 per cent next year. In this year, gambling revenues rose 10
per cent from a year ago. Fischer’s top picks are Wynn Macau, which is slated to
open a new Macau resort on April 1, and SJM, Macau’s biggest casino operator by
market share, thanks to the recent opening of its latest property, “Casino
Oceanus”. Shares of Galaxy Entertainment Group (SEHK: 0027) and Melco
International Development (SEHK: 0200) also rose to their highest level in more
than two weeks.
Heavy snow has brought more travel
chaos to northern China, stranding thousands of truckers for two days on a
Beijing highway and 1,400 rail passengers in Inner Mongolia, state media said on
Tuesday. The snow that blanketed the region at the weekend has ended in Beijing
but the national weather centre said the mercury dipped Tuesday to -15.6 degrees
Celsius (4 degrees Fahrenheit) – the coldest temperature in more than two
decades. The freezing weather was expected to continue until Thursday for the
Chinese capital, nearby Tianjin and Inner Mongolia, with temperatures forecast
to fall as low as minus 32 degrees Celsius, it said on its website. On the
outskirts of Beijing, truck drivers were forced to sleep in their vehicles for
two nights on a highway when snow made the road impassible, causing a
20-kilometre (12-mile) back-up, the Beijing News reported. The newspaper, citing
transit police, said the highway would only be cleared on Tuesday – after two
chilly nights for the drivers, some of whom said they were afraid to sleep for
fear of dying of exposure. Others said they were prepared for the traffic mess.
“We brought food as we expected the jam,” said one trucker, who had two cases of
instant noodle and one thermos of water on board. The heavy snow and freezing
temperatures have led to hundreds of flight cancellations and delays in Beijing,
shuttered schools on Monday and snarled traffic throughout the capital. In Inner
Mongolia, a train hit a wall of snow more than two metres (6.5 feet) high on
Sunday, leaving 1,400 travellers in the dark and without heating overnight
before they could be evacuated, the China Daily reported on Tuesday. “Though
snow stopped yesterday, the temperature was -28 Celsius, freezing the doors,”
the paper quoted Zhang Jianwen, a police officer involved in the rescue effort,
as saying. Nearly 2,000 people including police and local farmers were mobilised
to dig out the train, which was heading from the city of Harbin in Heilongjiang
province to Baotou in Inner Mongolia, the report said. Central China was now
under a snow storm warning until Wednesday, stretching from Henan to Hunan
provinces, the national weather bureau said on its website. 
The Foreign Ministry is about to project a younger, softer side. A reshuffle
yesterday saw the last of the sixtysomethings moved on, and three diplomats in
their fifties promoted to vice-ministers. Ambassador to Japan Cui Tiankai ,
ambassador to Britain Fu Ying and former ambassador to Libya Zhai Jun are the
new faces. They replace current vice-ministers Wu Dawei and He Yafei. The
departure of Wu, 63, means all the principal officials in the Foreign Ministry -
the minister, seven vice-ministers, two assistant ministers and one disciplinary
secretary - are in their fifties. Fu, 57, is the most colourful of the new
faces. Of Mongolian ethnic origin, she was the first female ambassador from an
ethnic minority and is also only the second woman vice-minister since 1949. Her
resume is solid, with wide experience in the Asia-Pacific region - from
ambassador to the Philippines and Australia to involvement in multilateral
negotiations regarding Cambodia, North Korea and the Association of Southeast
Asian Nations - before she was made ambassador to Britain in April 2007. It is
her signature use of "soft" diplomacy mixed with outspokenness that has set her
apart from most other Chinese diplomats. After the Olympic torch relay in London
last year was disrupted by thousands of pro-Tibet protesters, Fu wrote an
article in The Sunday Telegraph criticising Western media for demonising China -
but it was far from the usual Beijing rhetoric. "They were convinced that the
people here were against them. One girl remarked she couldn't believe this land
nourished Shakespeare and Dickens," Fu wrote of young athletes who flew in from
Beijing for the relay. She frequently accepted interviews or wrote for British
media, from the BBC to The Guardian - and even tabloid newspaper The Sun. He,
54, who has enjoyed a smooth career progression so far with North American
affairs as his major responsibility in the past decade, is likely to take over
from Zhou Wenzhong as ambassador to the United States. Cui, 57, was in office
when President Hu Jintao paid a visit to Japan in April 2008, the first
presidential visit in 10 years. Zhai, 56, who has also been stationed in Yemen
and Saudi Arabia, is known for his African experience.
Giant pandas for the 2010 Shanghai World
Expo are seen at the Shanghai Zoo in Shanghai, east China, Jan. 5, 2010. Ten
giant pandas selected for the world expo by the Chinese giant panda protection
and research center were flown to Shanghai on Jan. 5 from the center's Bifengxia
base in Ya'an City, southwest China's Sichuan Province. They will be shown to
the public late this month after two weeks of quarantine.
A man displays his newly-bought Tiger
stamp pasted on a postcard in Tianjin January 5, 2010. According to the Chinese
lunar calendar, the year of the tiger begins on February 14, 2010.
Financial Secretary John Tsang Chun-wah
cancelled a trip to Beijing because of severe weather conditions in the capital,
he told local media on Monday. Tsang said he will reschedule his discussions
with officials in Beijing relating to financial, monetary and trade matters
later this week. Tsang was originally scheduled to visit Beijing on Sunday to
meet with the National Development and Reform Commission, the People’s Bank of
China and the China Securities Regulatory Commission. However, Tsang’s trip was
postponed until Monday because of bad weather. A spokesman for Hong Kong
International Airport said as of 11am on Monday eight flights scheduled to
arrive from Beijing and four flights departing from Hong Kong or the capital had
been delayed. Two Dragonair flights to Beijing had also been cancelled.
Colombia is well-known for its
coffee, beauty queens and drug-related violence. But it rarely earns a mention
for artistic and culinary flair. One of the country's entrepreneurs now hopes to
change that, having successfully combined art and cuisine in a new restaurant
business that is about to venture abroad with the help of Washington-based Small
Enterprise Assistance Funds (SEAF), an investment firm providing growth capital
and operational support to businesses in emerging markets. With SEAF's help,
Macau could one day become a destination of the new Colombian export. Hector
Rondon, the director-general of the Colombia unit of SEAF, said the private
equity firm in July 2008 bought a stake of about 20 per cent in Inmaculada
Guadalupe y Amigos en Compania, which runs one of Colombia's most well-known
restaurants - Andres Carne de Res, whose literal translation means Andrew's
Beef. SEAF manages US$500 million of funds that invest in 30 nations in Central
and Eastern Europe, Latin America and Asia, and plans to launch a new fund in
Africa. Its investment destinations include some of the riskiest and less
sought-after markets such as Afghanistan, Macedonia, Georgia and Serbia. The
restaurant's founder and biggest shareholder, Andres Jaramillo, opened for
business 26 years ago in Chia, about 35 minutes drive north of Colombia's
capital Bogota, in partnership with his wife Stella. Born in Medellin, Jaramillo
dropped out of economics studies in university and later a machinery sales job
which required him to wear a suit. "One day while on a bus, he saw a girl who
was scared by his attention. But he chased her three blocks and today she is his
wife," said Rondon. "He is the type of person who gets what he wants." With a
loan from his uncle equivalent to US$500 in today's money, Jaramillo started a
restaurant with two tables, serving beef cooked by his Argentinian
sister-in-law. Today, the restaurant has expanded into an entertainment complex
with 1,100 seats that can serve up to 3,000 people when packed. It expanded by
gradually buying up neighbouring properties one by one. The walls and ceilings
of the restaurant are adorned with arts and crafts made from recycled materials
such as bottle caps, old chandeliers and road signs, which are being continually
changed, giving it notoriety as "the restaurant that is never finished". Its
festive atmosphere is enhanced by performances by artists, musicians, comedians
and pranksters in costumes. Guests are handed newspaper-style menus and the bill
comes in a treasure chest. Operating only from Thursday to Sunday with a menu of
800 items, it has became noted for family gatherings during the day and a
discotheque at night on weekends, as well as a place frequented by politicians,
movie stars and sports figures. Today, the restaurant compound includes a
2,000-square-metre playground that can handle 500 children, and a workshop with
90 artists designing and making metal and wooden decoration materials and
restaurant utensils and tableware. The company has 1,000 staff in Chia, plus its
own warehouse, packaging and meat-processing facilities. With SEAF's cash
injection and management input, Inmaculada Guadalupe last year opened a second
restaurant in downtown Bogota, called "Andres D.C.". The new restaurant occupies
three floors and the rooftop of a shopping centre and can seat 786 guests.
Rondon said Inmaculada Guadalupe was now considering whether to export its
business model overseas, first to other Latin American communities in Mexico and
Miami and later to other parts of the world. It has already received 20 business
plans from different places, including Madrid and Dubai. "We have also been
approached by international hotel-casino chains operating in Macau, and we are
talking to funds that specialise in the entertainment sector on possible
overseas expansion there," Rondon said.
A worker shovels snow to clear a
basketball court at a school in Beijing on Monday. The capital dug out from the
weekend's heavy snowstorms, seeking to restore flights and reopen highways and
rail lines covered by drifts. Schools were shut down, flights delayed and
traffic snarled in Beijing on Monday following two days of heavy snow in
northern China – with even more frigid weather forecast. Up to 30 centimeters
(12 inches) of snow fell in the capital and nearby Tianjin on Saturday and
Sunday, the Central Meteorological Administration reported – the biggest
snowfall in January in the region in more than 50 years. Although snow was not
forecast in the capital in the coming days, snowstorms were expected in
northeast China and eastern Shandong province on Monday as people returned to
work following the New Year holiday, the administration said. A Siberian cold
front meanwhile could bring historic low temperatures of between minus 20 and
minus 32 degrees Celsius (minus four and -26 Fahrenheit) to Hebei province and
Inner Mongolia on Tuesday and Wednesday, it said. Temperatures in Beijing were
expected to drop to minus 16 degrees Celsius on Monday, the coldest in the
capital in decades, the China Daily reported. In China’s coldest region of
Heilongjiang province, the mercury has already plummeted to minus 36 Celsius,
the paper said. More than 3,500 schools in Beijing and Tianjin were forced to
shut their doors on Monday, giving more than 2.2 million students an extra day
of New Year’s holiday, state media reported. At Beijing’s international airport
– where nearly 1,200 flights were cancelled or delayed on Sunday – workers had
cleared the runways and the situation was returning to normal, an airport
spokesman told reporters. More than 100 flights on Monday morning were delayed
and two dozen cancelled, the spokesman said, adding that workers needed to
de-ice the snow-covered planes that were unable to take off over the weekend. Up
to 30 highways in Beijing and the surrounding regions were still closed to
traffic or only partially opened on Monday, the China News Service reported.
Inner city roads in the capital remained icy and covered with snow on Monday,
but traffic was flowing, albeit at a slow pace. The city has mobilized 300,000
people to clear the snow, the China Daily reported. The nation’s rail network
was operating normally, but long-distance bus services in north China were
disrupted, the paper said. The frigid air from the north was also expected to
send temperatures plummeting below the freezing mark in much of central China,
where heavy fog could cause problems for air and road travellers, the weather
bureau said. 
Visitors look at minivans at a GM
joint venture dealership in Chengdu, Sichuan province in this file photo. The
American automaker said on Monday that their sales of vehicles in mainland
jumped 57 per cent last year. General Motors’ China vehicle sales last year
jumped 66.9 per cent from a year earlier, the company said on Monday as
Beijing’s policy initiatives drove customers to showrooms. General Motors, which
competes with Volkswagen AG and others, sold 1.83 million vehicles in the
country in 2008 and expanded its market share to an estimated 13.4 per cent, up
from 12.1 per cent at the end of last year, it said in a statement. Shanghai GM,
its flagship car venture with SAIC Motor Corp, sold 727,620 cars last year, up
63.3 per cent from a year earlier, it said. SAIC-GM-Wuling, GM’s commercial
vehicle tie-up with SAIC and Liuzhou Wuling Automobile, sold 1.06 million
vehicles in 2008, up 63.9 per cent. FAW-GM Light Duty Commercial Vehicle Co, a
tie-up with FAW Group set up in August, sold 34,510 light trucks and vans up to
the year-end. “We are proud of our performance this year,” Kevin Wale, president
and managing director for GM’s mainland operations, said in the statement.
“Chinese consumers responded enthusiastically to our line-up of modern,
fuel-efficient and stylish products,” GM launched several new models in mainland
last year, including the new Buick LaCROSSE and new Regal, popular among the
business elite. It had said that it planned to roll out 30 new or revamped
models in the country.
People visit an ice sculpture
for the upcoming 26th Harbin International Ice and Snow Festival at a park in
Harbin, Heilongjiang province, January 3, 2010. The festival will kick off on
January 5, 2010, local media reported.
Now is a good time to take a fresh look at Sa Sa International Holdings (0178)
which has had a good track record in recent years. The cosmetics wholesaler and
retailer also provides beauty and health club services. For the six months ended
September 30, the group's retail and wholesale business had a turnover of
HK$1.76 billion, up 8.3 percent year- on-year. The overall gross profit margin
increased to 43.9 percent from 42.7 percent. Earnings per share were 8.9 HK
cents. Dividend per share was 9 HK cents, including a 6 cents special dividend.
The dividend payout ratio is more than 100 percent. As of September 30, it had
69 Sa Sa (including eight in Macau), one La Colline specialty store and one
Elizabeth Arden counter. Hong Kong can expect more mainland tourists as
non-Guangdong residents in Shenzhen qualify for visas. This will boost cosmetics
sales in the SAR. Sa Sa has distributed special dividends in the last few years.
With its healthy cash flow and HK$480 million cash without debt, it will be able
to maintain a high dividend payout ratio. Sa Sa closed on Thursday at HK$5.14
with a dividend yield of 4.4 percent. Brokers give Sa Sa a target price ranging
from HK$5.20 to HK$6.50. Wait for the price to drop near HK$5 before showing
interest. Dr Check and/or The Standard bear no responsibility for any investment
decision made based on the views expressed in this column.
A top-level police reshuffle is expected
soon with more than half of the force's 21 most senior officers retiring in the
next two years, sources say. Deputy Police Commissioner (management) Andy Tsang
Wai-hung - who is widely tipped to take over from Commissioner Tang King-shing
when he retires in May next year - is in line for a move. He will probably
replace Deputy Commissioner (operations) Peter Yam Tat-wing, who retires in
March, sources said. In his 31 years with the force, Tsang, 51, has mainly
focused on criminal cases. He was promoted to head the Organized Crime and Triad
Bureau in 2000 and in 2003 helped arrest Kwai Ping-hung, the then most wanted
person in Hong Kong. John Lee Ka-chiu, 52, director of crime and security, is
expected to be promoted to Tsang's current position, sources said, and is being
groomed to succeed Tsang in the top post in the future. However, a senior
officer has still to be identified as a future commissioner as the force has no
one in mind after Lee. Lee, who joined the force as an inspector in 1977, has
worked in a wide range of posts at divisional, district, regional and
headquarters level. Most of his career has been spent in criminal investigation
and intelligence work. Lee, who holds a master's degree in public policy and
administration, has commanded various crime units. In 2003, he attended the
Royal College of Defense Studies in London. He was promoted to assistant
commissioner in the same year. In July 2005, he assumed command of the crime
wing. In January 2007, he was promoted to senior assistant commissioner and took
up his current post as director, responsible for policies and strategic
direction in the areas of crime and security. Since Director of Operations
Henrique Koo Sii-hong and Director of Personnel and Training Richard Tang Hau-sing
will retire later this year, and with Lee being promoted, there will be three
vacancies in the rank of senior assistant commissioner. Four current assistant
commissioners are likely to compete for these posts. They are Kowloon West
regional commander Tang How-kong, Hong Kong Island regional commander Paul Hung
Hak-wai, Hong Kong Police College director Albert Cheuk Chun-yin and New
Territories South regional commander Tse Shu-chun. Four chief superintendents
are then expected to be promoted to assistant commissioners.
Hong Kong exporters are bracing
for a rise in Guangzhou's minimum wage, with factory owners in the Pearl River
Delta saying there is growing speculation it will be raised to as high as 1,000
yuan (HK$1,135) a month, up from 860 yuan. A rise of that magnitude - 16 per
cent - would align Guangzhou's minimum pay with that of Shenzhen, which has
among the highest salaries on the mainland. Hongkongers own an estimated 50,000
factories on the mainland employing an estimated 12 million workers, a legacy of
Beijing's policy of opening up to foreign investors in the late 1970s. "There is
talk among government officials about the increase," said Leon Lam Hing-chau,
chief financial officer of Pacific Textiles Holdings, which produces mid- to
high-end fabric at its production base in the Panyu district of Guangzhou. A pay
rise would add to the operating costs of manufacturers, which are still battling
the repercussions of the global financial crisis. However, bigger pay packets
are good news for tens of millions of migrant workers and would support the
central government's hopes of increasing domestic consumption. Dennis Ng
Wang-pun, who runs a jewellery factory in Panyu, said he had heard talk of a
possible wage increase, but made the point labour shortages had been so severe
over the past couple of years that many factories were already paying more than
the minimum requirement. "Any increase below 10 per cent is manageable for
factory owners, but a sharper increase will be damaging," Ng said. "There have
been more orders recently, but this is an illusion of a turnaround in exports."
Toy and electronics makers reported a stronger inflow of orders last month, but
Ng said the orders would usually have been placed earlier in the year.
Federation of Hong Kong Industries chairman Cliff Sun Kai-lit warned the central
government not to withdraw too early measures designed to help factory owners,
such as the freezing of administrative charges and corporate contributions to
social welfare funds. "The global financial crisis has not yet bottomed out,"
Sun said. "Exporters are still recuperating from the export slump." He said
Shenzhen municipal government officials had reached "an internal consensus" to
keep the minimum wage unchanged for another year. The minimum wage was frozen
last year to help manufacturers battered by the downturn following a directive
by the Ministry of Human Resources and Social Security in November 2008. Nelson
Siu Nai-sun, the president of the Hong Kong Professionals and Executives
Association, a human resources body with 2,500 corporate members in Hong Kong
and the mainland, said a rise in the minimum wage in Guangdong was necessary
because of rising living standards and looming inflation. "There is a genuine
need to raise it, otherwise workers can't catch up with rapidly rising living
standards," Siu said. "It will also be an incentive to lure migrant workers back
to the south." He anticipates Guangdong's minimum wage could jump between 10 per
cent and 20 per cent a year for the next few years. The last rise was in 2008,
when the rate rose 12.9 per cent. Siu said labor shortages had worsened in
Guangdong since October after a larger than expected number of orders caught
factories off guard.
Many of Hong Kong's longer-term
investors have an innate trust of physical share certificates. HK investors turn
away from paperless scrip - Tangible proof of shares preferred. For Hong Kong's
senior citizen investors, share certificates are as much a sign of wealth as
cash or gold bars. With so many arriving in the city from the mainland as
refugees, it is perhaps easy to see why they are distrustful of anything they
cannot carry easily. That may explain why after more than two decades, a
proposal to move to a scripless, or paperless, share market has so far
foundered.
Despite higher turnout, exhibitors at
the Hong Kong Brands and Products Expo are looking back at last year's event
during the economic downturn with nostalgia because bargain hunters seem to be
spending less this time around. The expo attracted a record 2.18 million punters
by the end of its 23rd day yesterday, said a spokesman for Chinese
Manufacturers' Association of Hong Kong, which organizes the fair. Some 2.16
million people attended last year's event, which ran for 23 days and was also in
Victoria Park. Shoppers yesterday jostled for goods in anticipation of
exhibitors slashing prices over the final days to clear stocks. Shopping carts,
large bags and boxes strapped to trolleys thronged the park as bargain hunters
toted their purchases and sought more deals. The fair was so crowded that the
swarms of eager shoppers, some eating ice cream or curry fish balls, often came
to a standstill and waited for minutes for the congestion to ease. However,
brand manager Yung Hau-ming of Sun Shun Fuk Foods Co which sells Sau Tao
noodles, said sales were down. "With still one day to go, I think business is
going to be a little worse than last year." Despite the pessimism, Yung did not
expect the company to offer more discounts because prices were already low. She
blamed the dampened sales on strong interest in bargains during last year's
economic slump and the fact that last year's fair was nearer Lunar New Year.
Elsie Lung Yin-foon, sales manager of food service for Lee Kum Kee sauce
company, said fewer people visited her store this year and business was down.
The firm was offering a bottle of its seafood XO sauce and a bottle of oyster
sauce for HK$30. But John Mak, brand manager for Imperial Bird's Nest, said
business was up, as he expected. "There are more big-spenders than last year,"
he said, adding he did not expect to have to offer discounts today. Sitting
beside two full carts, a Mrs Chan said she was at the fair yesterday for the
third time this season. She said she spent about HK$2,000 on health food - half
of what she spent last year. "Things were cheaper last year. I bought a lot.
Many of the things I got last year I still haven't opened so I'm buying less
this time." The expo started on December 12 and was closed at 10pm Sunday.
Bai Chunli says the government might need to create more jobs in scientific
research, and schools could train more youngsters. Hong Kong is lagging the
mainland in creating the atmosphere for the pursuit of science, according to a
leading scientist from the Chinese Academy of Sciences, who is urging the
government to offer more jobs in the field. In a session with about 600 Hong
Kong students yesterday, Bai Chunli, a nanotechnology expert and the executive
vice-president of the academy, thought more could be done to encourage
scientific research in the city. "Hong Kong is an energetic city with remarkable
inputs in innovation. But comparing it with the mainland, I can see room to
enhance the atmosphere in scientific research," he said. Bai said one of the
major concerns of young researchers was their careers, with the city renowned
for its strengths in the finance, trade and property sectors. "If Hong Kong
wants to boost its economy by innovations, the government might need to create
more jobs in scientific research and, in the long run, the tertiary institutes
could train more youngsters for the field," he said. Bai said many opportunities
had emerged on the mainland for talented people who wanted to devote their
careers to science. He added that the academy would also launch open recruitment
later this year. Gwen Wong May-wan, the wife of Nobel laureate for physics
Charles Kao Kuen, had earlier said Hong Kong did not have the vision to support
scientific research that took time to bear fruit. Young innovator Chan Yik-hei,
who met Bai yesterday, said many people developed their interests in science
when they were young but gave up later for career concerns. Chan, now a student
at the University of Science and Technology, plans to fine-tune one of his old
inventions - a watch that can monitor body signals, such as blood pressure and
temperature - for use by the elderly this year. "To me, doing science is an
entertainment," he said. "I hope my ideas can help others."
Corporate sponsorship of the
arts is on the rise in Hong Kong despite the tough economic times, largesse that
may help dispel the city's former reputation as a cultural desert. The coffers
of the annual Hong Kong Arts Festival, the city's largest and longest-serving
cultural event now in its 38th year, are expanding, thanks to the business
community. The rise in sponsorship comes amid a global financial crisis that has
hit hard the bottom line of many companies. The city also has a tax deduction
scheme for companies supporting the arts that is less generous than that in
other countries. Altruism is not only the motivation for the generosity. Brand
building and feting of important clients at festival cocktail parties are also
important for corporate sponsors. The corporate sponsorship fee for the Arts
Festival amounted to HK$16.36 million for the 12 months to June last year, up 25
per cent from a year earlier. Sino Land group general manager Nikki Ng Mien-hua
said the financial crisis had not affected the developer's spending on the arts.
"We have increased the amount of money for art sponsorship because we want to
support the event amid the financial crisis," Ng said. "As we can afford to pay,
we would like to do more to support the festival to prevent any financial stress
it may face." The group also allows artists to use its shopping centers to host
exhibitions free of charge. The festival, partly funded by the government but
which has long historical links with business, includes hundreds of music,
opera, dancing and other performances running for about two weeks every February
to March. "The festival was first started by business leaders including Sir Run
Run Shaw and Sir Kenneth Fung," said Charles Lee Yeh-kwong, the chairman of the
government-funded Hong Kong Arts Festival Society, which manages the annual
event. "It is indicative of their vision that they saw the need for the festival
as an integral part of life in Hong Kong. I am very glad that many business
leaders of today also understand the importance of the festival and give it
strong support." In general, corporate sponsorship makes up about 20 per cent of
the festival's annual expenditure with government funding and box-office sales
taking care of the rest. The Hong Kong Jockey Club, Swire Properties, HSBC
Holdings (SEHK: 0005, announcements, news) , Hang Seng Bank (SEHK: 0011) and
businessman Stanley Ho Hung-sun are other key supporters. Sino Group has been a
committed backer since 1992 and this year will sponsor the Nina Simone Tribute
Concert, Cafe de los Maestros and the Mariinsky Ballet's Don Quixote. Ng said
the company liked to choose programs that attracted a mass audience so as to
help brand building. From the corporate point of view, arts sponsorship is an
important marketing tool but generally expenditure fluctuates with the economic
cycle. While property developers such as Sino Land have largely escaped the
worst of the crisis, many United States and European banks and insurers have
been hard hit and seen their budgets for art sponsorship slashed. One US
insurance company's chief executive, who does not want to be named, said his
firm had to turn down a proposal for arts sponsorship because of the financial
crisis. "When I have had to cut down spending and fire some of my colleagues due
to the financial crisis, how can I agree to spend millions of dollars to sponsor
an art program?" he said. Local lender Bank of East Asia (SEHK: 0023) had
considered cutting its sponsorship of the Arts Festival, but finally decided
against it. "We consider it important to show BEA as a company which takes its
social responsibility seriously," a spokesman said. Hang Seng, which used to
sponsor the finale program of the arts festival, is now supporting a program
that enables full-time students to attend any festival event at half the price.
"This is in line with Hang Seng's direction of nurturing more local youth to
appreciate arts," said Walter Cheung, the head of corporate communication.
Nearly 10,000 students benefit from this scheme each year. Tisa Ho, an executive
director of the Hong Kong Arts Festival, said that without corporate
sponsorship, the event would not be sustainable. "We would have to raise ticket
prices or compromise on the quality of our programming, both of which are
counter-productive to the festival and Hong Kong as a whole," Ho said. Corporate
sponsorship of the arts in countries such as Britain and the US is not only a
way to give back to the community but is a method of reducing taxes. Governments
generally provide generous tax reduction incentives for corporations to sponsor
arts programs. In Hong Kong, such deductions are not as generous. If companies
donate money to subsidize student tickets or if they directly donate funds to a
particular creative project, they are able to enjoy a tax deduction. But actual
sponsorship of programs does not attract the same concession. "It would be
helpful to the arts scene in Hong Kong as a whole if corporate sponsorship could
be encouraged," Ho said. "In some places, tax incentives have been quite
effective, even where tax rates are relatively modest." How does sponsorship
actually work? Corporate sponsors pick a program they would like to sponsor and
discuss the actual funds with the festival organizers. The amount could range
from half a million to several million dollars. In return, the company is named
in the program leaflet and other promotional materials for the festival. In
addition, a number of complimentary tickets are given to the sponsors to
entertain their guests and staff. Some firms also host cocktail receptions for
their guests. Sponsorship fees for the festival's opening and the finale
programs are usually higher because they are larger-scale performances.
Western train makers are wrestling
with the dilemma of tapping into China's booming rail market at the cost of
helping to transform their new Chinese partners into future rivals on global
markets. If foreign rolling-stock manufacturers wish to make and sell products
in China, they are required to be minority partners in joint ventures with
Chinese rolling-stock makers and sell or transfer technology to their Chinese
partners. Siemens of Germany, Alstom of France and Bombardier of Canada have
formed joint ventures to manufacture trains with China South Locomotive &
Rolling Stock Corp (CSR) and China CNR Corp, the only two Chinese firms allowed
to sell trains on the mainland. "We are definitely seeing a shift in the nature
of the relationships between China rolling-stock manufacturers and their foreign
partners, which is being driven by China's ability to provide technology
compliant with international standards to markets in the Middle East and
elsewhere," said Iain Carmichael. Carmichael, a managing director of Lloyd's
Register Rail (Asia), an international transport risk management organisation,
said the dynamics of the relationships had shifted away from the Chinese side
being dependent on their foreign partners to the foreign partners now needing
the Chinese manufacturers. "With this shift, Chinese rolling stock has become
internationally competitive, and the nature of the relationship will continue to
shift from one of collaboration to one of increased competition," he added.
Foreign firms can hardly ignore the size and growth of China's rolling-stock
market. Nomura estimates 450 billion yuan (HK$511 billion) will be spent buying
trains in China from 2009 to 2012, more than double the spending in the past
five years. "Is there tension between European and Chinese train makers? Yes,
obviously. The Catch-22 is if the foreign firms don't do the joint ventures,
they don't participate in China's market - but if they do, the China-made
products become their competition overseas," said a former infrastructure
consultant. One example of competition between Chinese rolling-stock makers and
their Western partners is in Poland. CSR is competing with Siemens and
Bombardier in a tender for 11 electric locomotives for Koleje Mazowieckie, a
Polish train operator, according to a European trade article. CSR submitted the
lowest bid at €34.98 million (HK$387.71 million) , while Bombardier offered
€40.52 million and Siemens €44.03 million. The winner will be chosen later this
year. The inroads by Chinese train makers into Europe have, meanwhile, generated
tension. One Chinese rolling-stock manufacturer was recently planning to tender
for an electric train project in Europe, for which the Chinese firm wanted to
buy electric traction systems from European suppliers. "All the European
companies refused to supply this equipment, presumably because they were worried
about the Chinese company winning this order," said a British rail executive.
"Our channel checks reveal Chinese rolling-stock vendors are in a good position
to supply the high-speed trains that may be needed in the US and Britain within
two to three years," wrote Jiong Shao and Stephen Chow in a Nomura report.
Chinese trains were sold for the first time in developed countries in the first
half of 2009, when CNR won deals to supply rolling stock to Australia and New
Zealand. CNR won US$660 million of overseas orders in the first half of 2009,
while CSR won at least US$740 million for the whole of 2009. In developing
markets like eastern Europe and Africa, the market share of foreign firms would
decline in two to three years, said a Hong Kong equity research analyst. "There
is no doubt CSR and CNR are already a threat to European train makers. In
developing markets like Africa and the Middle East, not too many countries need
trains faster than 300km/h, so they are willing to buy slower trains from
China." Chinese companies will capture at least 10 per cent of the international
rolling-stock market outside China, predicts Nomura. In the US$110 billion
global rolling-stock market, "we are starting to see the China brand gain
traction overseas, backed by a perception of quality comparable to overseas
offerings but at lower prices", it said. Chinese rolling-stock companies had a
price advantage of 20 to 50 per cent over their overseas competitors, Nomura
added. "But this is more than just price. After several technology transfers,
Chinese rolling-stock suppliers now have the technology to produce high-speed
trains running at 350km/h." For example, Siemens is the main technology partner
of CNR Tangshan, a subsidiary of CNR which produces 350km/h high-speed trains,
the world's fastest operational trains. The technology transfer from foreign
firms to their Chinese partners has not been a smooth ride. "The Chinese
Ministry of Railways invited international groups to work with domestic
factories to raise standards and improve products, but the result has been quite
disappointing," said the British rail executive. Railways Minister Liu Zhijun
criticised CNR Tangshan for substandard quality during his inspection of the
company in June last year, accusing CNR Tangshan of not properly absorbing
Siemens technology. "If there are weaknesses in the high-speed trains built by
CNR Tangshan with technology from Siemens, this is because either not all the
information has been disclosed or the product was weak in the first place. In
either case, the responsibility lay with Siemens and if CNR Tangshan is at
fault, it is in not asking sufficient questions," said the British rail
executive. "When Siemens and Alstom have been transferring technology, they have
been careful not to give everything away, sometimes transferring last-generation
technology and sometimes leaving gaps in the training. The relationship between
the international and domestic partners may be a bit strained." Tensions between
Alstom and its Chinese partners surfaced in early 2009. In January 2009, Alstom
Transport chief executive Philippe Mellier told the Financial Times that China
was restricting its rolling-stock market to foreign firms and suggested other
countries should not open their markets to Chinese trains made with foreign
technology. Later that month, China's Ministry of Railways denied Mellier's
claims. "The Chinese authorities and [internet users] were upset. What is funny
is Alstom retracted its position later," said the former infrastructure
consultant. In a press conference in Beijing in February 2009, Alstom chairman
and chief executive Patrick Kron said Mellier's remarks did not represent his
company's position, and added: "We have no complaints whatsoever with our
Chinese partners and we are not experiencing any problems in the use of
technologies by our partners." To resolve the tension between staying in the
lucrative China market and giving too much competitive advantage to Chinese
partners, some foreign partners were more comfortable transferring their
non-core technology, said the former consultant. "Nearly all of them are
cautious in transferring their most advanced technologies. The Chinese may not
get the best technology. "Foreign firms like Siemens are smart companies. They
know that after transferring their technology, it will hurt them, but gaining
the China market will compensate for their loss of market share in their home
turf." Siemens said it expected 20 billion yuan of orders from China's stimulus
measures from 2010 to 2012 in various businesses, including rail, energy and
health care. In December last year, Bombardier reaped 941 million yuan from an
order to supply trains to Shanghai's Metro Line 12. Siemens and Alstom did not
reply to requests for comment.
In the highest profile judicial
corruption case since the founding of the People's Republic, a top Beijing judge
accused of abusing his power by accepting bribes is due to stand trial after a
year-long internal investigation. Huang Songyou , former vice-president of the
Supreme People's Court, will face charges of taking more than four million yuan
(HK$4.54 million) in bribes, the China Business Journal reported yesterday.
Citing an informant, the Journal said the investigation into Huang's case had
entered its final stage, and would move to a judicial hearing no later than the
National People's Congress and Chinese People's Political Consultative
Conference in March. Huang, 52, worked in Guangdong's top court for almost 20
years before being promoted to Beijing in 2002. He is the highest ranking
Supreme Court judge to be investigated by the party's top anti-graft watchdog,
causing a major shake-up in the mainland's judiciary sector. His downfall casts
unprecedented doubt on the authority and credibility of the mainland's judicial
system. The internal investigation generated an anti-corruption storm in the
judiciary last year, when corruption cases involving judiciary officials
increased by 51 per cent from 2008. According to the 2009 working report of the
Supreme People's Procuratorate, more than 13,000 corrupt officials were found
nationwide. Of them, 2,620 were from the judicial sector - about 32 per cent of
them judges and 10 per cent prosecutors. Last June, a major judicial reshuffle
was launched in a bid to combat rampant corruption and injustices following a
raft of scandals that began last year. Huang has been under shuanggui - a
Communist Party internal disciplinary procedure under which party members are
detained and interrogated - since October 2008 for allegedly severely violating
party discipline. He was removed from his positions and expelled from the party
in the same month. In October last year, his case was passed on to the Supreme
People's Procuratorate. Mainland media reported that Huang led a lavish
lifestyle, abused his power and accepted large bribes. Four other senior Supreme
Court judges were involved in Huang's case, with one placed under shuanggui and
the other three pending further investigation. One, senior Supreme People's
Court judge Li Jun , received a three-year sentence for taking 100,000 yuan in
bribes, according to the Journal. The other three judges were not identified.
Huang also had a role in a land-sale corruption case in Guangdong that brought
down several of the province's top court officials. It also led to the detention
of the province's top enforcement court official, Yang Xiancai , last July. In
October 2008, former Beijing district court president Guo Shenggui was sentenced
to death, with a two-year reprieve, for bribery and embezzlement. He illicitly
amassed 7.97 million yuan between 1998 and 2008. Huang formally supervised the
civil cases division and the Office of Enforcement of Supreme Court Decisions
before he was removed from the post. 
In the hectic last week before she
became US secretary of state, Hillary Rodham Clinton squeezed in a Bon Jovi
benefit concert in New York, part of a frantic effort to pay off the debt from
her presidential campaign. No sooner had she arrived at the State Department
than Clinton discovered she needed to start raising money all over again. This
time, the cash-starved beneficiary was not her own campaign but the United
States, which needed US$61 million to finance the construction of a national
pavilion at the World Expo in Shanghai. Under federal law, no public money could
be used for the project. And Clinton, as a federal official, could no longer
solicit private financial donations herself. So she turned to her
well-established network of Clinton fund-raisers, and after negotiating with the
State Department's lawyers about what she could legally do herself to support
the project, she mounted an ambitious fund-raising campaign that has netted
close to US$54 million in barely nine months. With multimillion-dollar pledges
from PepsiCo, General Electric, Chevron and other American corporations, the US
is on track to open a sleek, 60,000-square-foot pavilion at the Expo, which runs
from May until the end of October. The prospect of the nation's chief diplomat
asking for money worried government lawyers, according to officials. Referring
to the first secretary of state, one lawyer asked: "Would Thomas Jefferson do
this?" They imposed strict limits on the kinds of calls or other contacts she
could make, allowing her to promote the pavilion but prohibiting any one-on-one
appeals for cash. Despite those restrictions, and a dismal economy, Clinton is
closing in on her US$61 million goal. She is clearly proud of the effort, which
staved off what could have been a rupture in American-Chinese relations. In a
year in which she has mostly worked to prove herself a loyal member of the Obama
team, the campaign also showcases her enduring political drawing power. "The
idea, for many people, of raising more than US$50 million would seem really
daunting," Clinton said. "Maybe because I had participated in raising so much
money in the past, I wasn't daunted by it. I knew it was going to be hard under
the circumstances." By all accounts, the effort to build a national pavilion was
near death at the end of the Bush administration. The near-collapse of the
global economy, the proximity of the expo to the Beijing Olympics in 2008 and
the general ambivalence of the State Department had left USA Pavilion, the
non-profit group in charge of the project, with little support or money. There
is a sense in the US that Americans got disenchanted" with world's fairs, said
Nick Winslow, a former Warner Bros executive who is the president of USA
Pavilion. With deadlines passing, the Chinese advanced the Americans money to
conduct technical work for the pavilion. They raised the issue with former
president Jimmy Carter when he visited China last January. Enter Clinton, who
made her first trip as secretary of state to Beijing in February and was eager
to talk about trade, climate change and the North Korean nuclear threat.
Instead, she got an earful about how bad it would be if the United States did
not have a presence at the Shanghai Expo. Shanghai is spending US$45 billion to
transform the city, and nearly 200 countries have signed on to take part. "I was
dumbfounded that so little attention had been paid to it," Clinton said.
"Everyone knows China is going to be an enormously powerful player in the 21st
century. They have an expo, which is a kind of rite of passage that countries
like to do to show they have arrived. We're not there? What does that say?" She
said she did not relish the prospect of more fund-raising - "When would it ever
end?" she recalled asking herself - but she promised Chinese officials she would
try to raise the money. There was little support for it within the State
Department. So Clinton turned to two major fund-raisers with long ties to the
Clinton family: Elizabeth Bagley and Jose Villarreal. Hillary Clinton appointed
Bagley to be the department's special representative for global partnerships, a
job that involves rounding up private support for public projects. Villarreal, a
well-connected San Antonio lawyer, has raised money for Hillary Clinton as well
as for Bill Clinton, former vice-president Al Gore and Senator John Kerry. In
July, Hillary Clinton named him the commissioner general to the expo. To kick
off the effort, Clinton held a conference call with 10 prominent chief
executives. Chevron, PepsiCo and General Electric each pledged US$5 million.
Indra Nooyi, the chief executive of PepsiCo, made calls to other chief
executives. Bagley and Villarreal called companies with operations in China. "In
the beginning, we had to use a patriotism argument," said Kris Balderston,
Bagley's deputy. "The second wave of argument was commercial diplomacy. All of a
sudden the companies understood it would be good for them." Although Bagley is a
State Department employee, she said she was advised she could solicit
contributions. Her experience in the political trenches made a difference,
Villarreal said. "Any other diplomat would not have had the broad base of
contact," he said. Clinton said it was easier raising money for this project
than to pay off campaign debt. "I'm much better at raising money for other
people and other causes than I am for myself anyway," she said, adding: "Even
though I've obviously raised a lot of money." 
Shanghai, Guangzhou move
to cool red-hot property market - The Shanghai city government says it will
increase land supply to take some of the heat out of the booming housing market.
Shanghai and Guangzhou are the first cities to respond to the central
government's efforts to restrain sizzling house prices, announcing a withdrawal
of incentives for home purchases and tougher measures against developers
hoarding land. Analysts said the moves could affect sentiment in the short term
but they do not expect to see any major correction in the industry. The Shanghai
local government said that from today, the resale lock-up period for a property
would go back to the original five years after it was shortened to two years
under an incentive programme introduced in 2008. The incentive announced in 2008
meant owners could resell a property after two years without paying a 5.5 per
cent business tax. In addition, only first-time buyers of units smaller than 90
square metres in Shanghai can continue to enjoy the preferential deed tax of 1
per cent, according to the Oriental Morning Post. Non-first time buyers will be
required to pay 1.5 per cent. The Shanghai city government also said it would
increase land supply to take some heat out of the market. The Guangzhou
government announced tougher penalities for developers hoarding land, with
developers required to pay a one-time penalty of 20 per cent of the land cost.
Previously, they were only required to pay instalments every month. The measures
come after Premier Wen Jiabao recently issued warnings that the government could
use land supply and financial and tax measures to regulate the market. Wen also
reiterated Beijing's intention to increase the supply of affordable housing to
low-income groups. The central and local governments' moves come as home prices
in key cities have risen dramatically over the past year amid an environment of
loose credit policy. In November, the average price of new homes in urban
Shanghai, Beijing and Shenzhen was 31,209 yuan, 22,798 yuan and 19,851 yuan per
square metre, respectively, Knight Frank said. These represent growth rates of
68 per cent, 66 per cent and 50.8 per cent from 2008, according to Xavier Wong,
the director and head of research of the property consultant's Greater China
division. Transaction volumes in the mainland's housing market, which hit a new
high last year, would not be sustained in the coming year, as many policies that
over the past year effectively boosted investment and speculative demand had
been and would be scaled back, Wong said. "A mild correction in home prices in
certain cities may be seen in the first half of 2010, but a major correction in
home prices similar to that in 2007 and 2008 is not expected, as residential
inventory has been substantially reduced after bumper sales over the past year,"
he said. David Ng, the head of property research at Royal Bank of Scotland, said
the announcement of measures by the central government cleared the uncertainties
clouding the market. However, he believes that political leaders are still not
comfortable with economic growth and will tolerate a heated property market a
while longer.
Financial Secretary John Tsang Chun-
wah was among thousands of passengers affected by one of the worst snow storms
to hit Beijing as 15 flights between Hong Kong and Beijing had to be canceled
and 19 delayed. The Hong Kong Airport Authority said eight inbound flights were
canceled and nine delayed while seven outbound flights were canceled and 10
delayed. But heavy snow at Beijing Capital Airport caused about 90 percent of
all flights to be delayed or canceled, China Central Television said. Over 500
flights were delayed and about 400 flights were canceled, stranding thousands of
passengers, it said. To ensure safety, only one of the airport's three runways
was operating much of yesterday, reports said. Tsang, who was supposed to leave
for Beijing for a series of meetings with central government financial
officials, re- starts his trip today. The Airport Authority said 18 flights had
been scheduled to arrive in Hong Kong from Beijing yesterday while another 18
were to fly from Hong Kong to the capital. Jacky Hui Chung-ki, senior EGL Tours
marketing manager, said about 100 customers in three of its tours were forced to
stay in Beijing last night while about 100 in four tours could not head for the
capital as scheduled. "We have yet to hear any complaints from our clients. I
think they understand that it is out of our control," he said. Daniel Chan
Kin-pang, deputy general manager of Hong Thai Travel Services, said more than 60
travelers in two tours had to spend one more night in Beijing at their own
expense. He said an outbound tour of some 20 travelers to Beijing suffered a
six-hour delay and their flight finally took off around 4.30pm yesterday.
Hundreds of passengers stranded at Hong Kong International Airport were angry
about the delays and cancellations. "I came here for sightseeing. Now I don't
know where to stay tonight. The airlines said it is none of their business," a
mainland tourist complained. Snowstorms snarled New Year traffic and air travel
in the mainland where the lowest temperatures in decades are forecast. 
Hang Seng Bank, the second-largest bank
in Hong Kong, today announced it has received permission from the Guangdong
branch of the China Banking Regulatory Commission (CBRC) to open its first
cross-city sub-branch. The sub-branch, located in Foshan, Guangdong, is among
the first group of cross-city sub-branches approved by CBRC's Guangdong branch
under the Closer Economic Partnership Arrangement between the mainland and Hong
Kong. Hang Seng has submitted an application to establish another sub-branch in
Zhongshan, Guangdong, the bank said. Hang Seng China has opened 37 banking
outlets in 12 cities on the mainland, including 16 in Guangdong province.
Top-tier schools widen the net - Elite
institutions seek non-Chinese speakers - St Paul's head, Anissa Chan, inspects
extension works. Two elite English-medium schools offering the local curriculum
have drawn up bold expansion plans that will enable them to admit children from
non-Chinese-speaking families. St Paul's Co-educational College and Diocesan
Boys School are setting up boarding houses and International Baccalaureate
programs and have devised adapted Chinese-language programs for pupils who are
not native speakers of Chinese. The moves will permit the Direct Subsidy Scheme
schools, which require all pupils to study Chinese language, to widen their nets
to include children from English-speaking families, as well as foreign pupils
and ethnic minority children. Currently, almost all pupils at the schools, which
are obliged to offer the local curriculum and will run the IB Diploma alongside
it, have Chinese as their mother tongue and most are permanent residents. DSS
schools have discretion in setting their own curriculums and language policies
and the government has recently given them further autonomy in line with its
policy of developing Hong Kong as an education hub. The Executive Council
decided late last year to allow DSS schools to set up boarding houses at their
own cost, provided at least 50 per cent of places are reserved for non-local
pupils. St Paul's Co-educational College will launch an adapted Chinese-language
program for junior secondary pupils in September, targeting children who have
attended English-medium primary schools and speak a little Chinese. It coincides
with the start of a one-year preparatory course that will lead into the IB
diploma, which will be taught in a HK$300 (US$38.8) million 13-storey extension -
currently under construction - that also includes a dormitory for 80 children.
Principal Dr Anissa Chan Wong Lai-kuen said: "This new language program opens up
our admissions to a wider range of students. We want to attract all students who
are interested in studying at St Paul's, irrespective of their background. "We
very much want to be a key player in Hong Kong's role as an education hub. But
we are not establishing an international stream. At St Paul's we have one big,
integrated community. We have an ethnically-blind admissions policy and we want
to enrich the diversity of our student body to encourage
international-mindedness and intercultural awareness." The Macdonnell Road
school's Chinese language and culture program is taught at native-speaker level
and leads to a Hong Kong Diploma of Secondary Education exam (HKDSE). Pupils
taking the adapted program will instead take an easier International General
Certificate of Secondary Education (IGCSE) alongside the other HKDSE courses or
take Chinese as a foreign language under the International Baccalaureate
diploma. Diocesan Boys School in Mong Kok began offering an elementary Chinese
program for non-native speakers two years ago, leading to a General
Certificate of Secondary Education exam in Chinese for foreign-language
learners. Last year, the school opened a new dormitory block with space for up
to 220 pupils and in September it launched a one-year course leading to the IB
diploma program, which is due to start this year. Headmaster Terence Chang
Cheuk-cheung said: "Diocesan Boys is ready to go international once the
government gives the green light. But we won't sacrifice the interests of local
boys for the sake of internationalization. "The local boys should always be our
first priority. However, we can see that eventually we might have to take some
boys from overseas as well as from the mainland. "I predict most of them might
come from the mainland. "At the last meeting of our school committee's working
group ... we decided that we have to formulate a policy on admission of mainland
and international students to follow the IB program." It would cover language
teaching, recruitment, admissions and the quota for non-local pupils. Mark Bray,
director of Unesco's International Institute for Educational Planning in Paris,
who is an expert on international schooling in Hong Kong, said the new options
would provide a "middle path" in the education system. "I think this should
appeal greatly to many expatriate families who increasingly see Chinese as an
important language and would like their children to speak it," he said. "And I
think there is some potential for these elite schools to attract bright students
from across the region." The programs would also provide a way for Hongkongers
returning from abroad who spoke English at home to ensure their children would
"integrate with society" and "keep in touch with their heritage". In the last
school year, international schools provided places for 19,251 primary pupils and
15,347 secondary pupils. About 15,000 pupils are studying with the English
Schools Foundation. 
Famous
British school looks to create leaders at HK offshoot - Leadership will be on
the curriculum when Hong Kong's first international boarding school opens its
doors in three years' time under a franchise arrangement with a leading English
public school. With an illustrious history dating back to 1243, Harrow School
has produced eight prime ministers and countless statesmen, and its Hong Kong
offshoot is aiming to carve out an equally prominent future role. Executive
headmaster Dr Mark Hensman said: "Our hope is that students from Harrow Hong
Kong go on to become famous leaders in their fields in Hong Kong, Asia - and the
world - be they musicians, scientists, humanitarians or politicians." Harrow
International Management Services, which runs international schools in Beijing
and Bangkok, won a government tender in August for a boarding school on the site
of a former military barracks in Tuen Mun. Unlike its parent school in Britain,
which is only for boys, the Hong Kong school will be co-educational. Hensman,
who is leading the project, said plans for the HK$500 (US$64.52) million building were well
advanced and the school was due to open in 2012 offering an education leading to
British A-levels. "The great icons of Harrow - Winston Churchill, Nehru, and
King Hussein of Jordan - very much represent what Harrow can do for people," he
said. "The Harrow experience by its very breadth gives students huge exposure to
a wide range of experiences through which they can learn leadership skills.
"What we want to do is make that explicit. So we will have a leadership
program embedded in the curriculum as well as the co-curricular program for
the school." Leadership studies - involving skills such as time management and
organization - would be offered as a subject and "leadership for a better world"
would be one of three main strands in the curriculum. Programs for students aged
seven to 16 would be strongly oriented towards the humanities, especially
subjects such as geography, history, politics, religious studies, media studies
and sociology. "These are subjects that help students to understand their world,
which we believe is crucial to having any kind of leadership role," Hensman
said. The school's site - on a hill in a remote northwest suburb of the city -
echoes the location of its parent school, which sits on a hilltop high above the
sprawling suburbs of northwest London. But while Harrow's complex of historic
buildings and playing fields is spread across 162 hectares, its Hong Kong
offshoot will occupy a site of just 3.7 hectares. Hensman said: "Harrow on the
Hill is a very picturesque location. This site is also very attractive. It's
small but its elevation and view of the harbor make it quite attractive. "We are
being quite innovative, both in terms of the space and in terms of ensuring that
it is physically attractive. The sports field will form the centre of the
school. "We are having to create space by going up. It will be six to seven
stories high and we are also having to create large indoor spaces. For example,
the swimming pool will be indoors." Like their counterparts in Britain, students
at Harrow International School Hong Kong will wear boaters - the wide-brimmed
straw hat that is the school's hallmark - and the Harrow blazer. And both day
pupils and boarders will be allocated to one of eight houses - the traditional
pastoral system of the English public school - with one house occupying each
floor of the boarding block. The management company's sole franchise arrangement
with Harrow - which has been nicknamed "boater diplomacy" - gives it right of
first refusal on all proposals for Harrow international schools in Asia. Land
for the boarding school was provided by the government and the construction
project is being bankrolled by Daniel Chiu, executive vice-chairman for Hong
Kong, of oil and gas supply firm Fortune Oil. "Fees will be commensurate with
the top international schools in Hong Kong," Hensman said. "Whatever is the
highest end of the fee structure, we will be towards the upper end of that." The
company was also looking at charging debentures - long-term capital instruments
that help to meet school building costs - in Hong Kong. The highest fee charged
by an international school is currently HK$153,000 (US$19,780) a year and debenture prices
range up to HK$1.6 million (US$206,451).
Deng kept his HK options open in 1979 - Deng Xiaoping left open in 1979 the
options of taking back Hong Kong in 1997 or allowing the status quo to continue
after the expiry of the New Territories lease, according to Britain's
declassified record of a meeting between Deng, then China's paramount leader,
and Hong Kong governor Murray MacLehose 31 years ago. During the historic talks
in Beijing on March 29, 1979, Deng told MacLehose that China "might" take over
Hong Kong by 1997 but it would respect the city's "special status". "[Deng said]
they had not taken over Macau so far. There were two solutions by 1997, to take
Hong Kong over, or to allow present realities to remain," the record said.
Deng's apparently flexible position on the resumption of sovereignty differed
from his unequivocal declaration in 1982, during talks with then British prime
minister Margaret Thatcher, that China would take over Hong Kong in 1997. The
record of the earlier meeting was compiled by Britain's Foreign and Commonwealth
Office and was recently declassified from the Britain's National Archives in
London under the 30-year rule. MacLehose returned to Hong Kong after the trip,
triumphantly bearing a message from Deng to "ask investors in Hong Kong to put
their hearts at ease" and that the Chinese leaders attached great importance to
the value of the city to the mainland's modernisation program. But the governor
said in public at the time that he did not intend to reveal details of his
conversation with Deng. Amid growing fears among Hongkongers over post-1997
arrangements, the landmark visit by MacLehose to Beijing, the first official
visit by a Hong Kong governor, was hailed at the time as the prelude to
extensive Sino-British negotiations on the future of the colony. The meeting
between Deng and MacLehose was the first occasion in which the future of Hong
Kong was put on the agenda in high-level talks between Britain and China. During
the one-hour meeting at the Great Hall of People, Deng said: "China has a
consistent policy: sovereignty over Hong Kong belonged to China. But Hong Kong
has her own special status....When the two sides [Britain and China] discuss the
question, China will respect the special status of Hong Kong." Deng was
vice-premier but effectively paramount leader of the country at the time.
MacLehose raised the land leases in the New Territories with Deng, saying the
problem could not be overcome by generalised assurances. The land leases were
due to end in 1997, when Britain's 99-year lease on the New Territories expired.
The British government warned at the time that business confidence in Hong Kong
would be undermined if the Hong Kong government did not issue commercial leases
beyond 1997. "The Governor said what he had in mind is replacing the leases
valid to 1997 with leases valid as long as Britain administered the New
Territories. This would get rid of the date," the record of the talks said.
"Deng commented that it would be best to avoid wording which mentioned
continuing British administration. It would be better to say that, since the
Chinese Government has expressed its political view, all would be well for
investment." MacLehose reassured Deng that what he proposed would not affect the
Chinese government's position on Hong Kong. A report by the Foreign and
Commonwealth Office described Deng's reaction to MacLehose's proposal as
"non-committal but not negative" while the governor believed Deng's comments had
been favorable. Bill Quantrill, a Foreign and Commonwealth Office official,
believed it was possible that Deng wanted the reference to British
administration removed because he thought the leases should be phrased so that
they could continue in force in a scenario he envisaged in which "Hong Kong
would pass nominally under Chinese sovereignty, while continuing to be run on
its present basis". According to Lu Ping , former director of the State
Council's Hong Kong and Macau Affairs Office, Deng told MacLehose that the lease
issue was not a subject for discussion because Hong Kong's sovereignty belonged
to China. But the British files do not mention that remark. In July 1979,
Britain's ambassador to China, Percy Cradock, explained the proposed solution to
China's Ministry of Foreign Affairs. Beijing told Cradock two months later that
the proposal was "unnecessary and inappropriate" and Britain then stopped
pursuing it. While reiterating China's long-standing position that the
sovereignty of Hong Kong belonged to China, Deng spelled out his preliminary
idea of "one country, two systems" during the meeting with MacLehose, three
years before he outlined his full-fledged blueprint for resolving the future of
Hong Kong. "In this century and in the beginning of the next century, Hong Kong
will be continuing with a capitalist system, while China is continuing with a
socialist system," Deng said. He added that there were two solutions by 1997, to
take Hong Kong over or to allow present realities to remain. In a telegram to
the Foreign Office in April 1979, Cradock, who joined MacLehose for the meeting
with Deng, wrote that the essence of what Deng said was that sovereignty
certainly belonged to China but that the time when sovereignty might be
exercised was uncertain. "On this he kept his options open ... It is the essence
of our position that we are in fact paving the way for a continuation of the
political situation beyond 1997," Cradock wrote. David Wilson, then political
adviser to the governor, who also attended the meeting, noted in a telegram to
the Foreign Office that the special status Deng envisaged for Hong Kong was the
continuation of the existing economic and social system. Wilson served as
governor of Hong Kong from 1987 to 1992. Deng's flexible stance may be
attributable to the fact that Beijing had not formed a firm view by the late
1970s on the timing of resumption of Hong Kong's sovereignty. The State
Council's Hong Kong and Macau Affairs Office was set up in 1978 to plot strategy
on the Hong Kong question. From the founding of the People's Republic of China
in 1949, Beijing had maintained the position that Hong Kong was part of China
and the Hong Kong question would be resolved "when the time was ripe". During a
talk with Thatcher in Beijing in September 1982, Deng said unequivocally that
Beijing would take back Hong Kong in 1997 and rejected her formula of exchanging
the sovereignty of Hong Kong for continued British administration after the
lease on the New Territories expired. During the meeting with MacLehose, Deng
suggested improving living standards in Guangdong to curb the massive flow of
mainland immigrants into Hong Kong in the late 1970s. More than 100,000 people
came to Hong Kong from the mainland legally and illegally in 1978, putting
pressure on public services. The Hong Kong government estimated that nearly
100,000 illegal immigrants slipped into Hong Kong in 1979.
Lam Man-tin, a managing director of Aeon Stores, says consumer sentiment has
greatly improved since the fourth quarter of last year. Department store
operators say 2010 looks like being markedly better than last year, although
2009 ended on a healthy note, with shoppers out in force over Christmas. Aeon
Stores (Hong Kong), the operator of 32 outlets including six Jusco general
merchandise shops in the city, recorded a 13.3 per cent rise in sales between
December 25 and 27 last year, which was higher than usual over recent years. The
Japanese retailer said average spending per person rose 3.6 per cent and
customer traffic increased 10 per cent over the period. Lam Man-tin, a managing
director of Aeon Stores, said consumer sentiment had greatly improved since the
fourth quarter of last year as the economy recovered. "We forecast that Hong
Kong's gross domestic product will turn positive this year. Given a better
economy, we believe we can achieve a high single-digit rise [in sales] this
year," said Lam. To further boost sales, the company has launched a one-dollar
promotion, which runs until Monday, enabling shoppers to redeem selected
products with HK$1 under certain conditions after they have bought a certain
quantity. Lam said they also ran the one-dollar promotion during the last New
Year holidays when the market was reeling from the financial crisis and credit
crunch. "The difference is that we didn't set any purchase requirement last time
for customers to purchase the HK$1 products. It was aimed at attracting more
people when the economy was bad," he added. Last month, the company opened a
fifth Jusco supermarket, with an area of 60,000 square feet, in Tseung Kwan O.
"Its turnover in the first two weeks is far better than our original estimate,
which is also a sign of the robust recovery of the retail sector," said Lam.
Talking about the marketing strategy this year, he said more high-end food and
apparel products would be offered on shelves to boost customers' average
spending. Meanwhile, the cash-rich retailer also plans to expand to other parts
of the city. "We don't have any limit for the number of new shops, as long as we
can find appropriate sites," he said. Another Japanese department store, Yata,
in New Town Plaza in Sha Tin, also released sales figures yesterday. Its
turnover increased 5.8 per cent over the past year, with travel-related products
and baby stuff seeing the highest sales growth. The store's senior manager
Rebecca Tse said the local economy had fully recovered at the end of last year
and the consumption momentum would remain strong this year. The company expected
a 10 per cent rise in sales this year and a 2 to 10 per cent pay rise for its
employees. Hong Kong Retail Management Association chairwoman Caroline Mak Sui-king
said the retail sector had rebounded fast after being hit hard by the financial
crisis early last year. Many Hongkongers, who had cut budget on daily
consumption, became generous this Christmas with a stronger confidence in the
economy, she said. "We are pretty optimistic for the market of 2010. Despite the
pressures of rising labour and leasing costs, this year should be a good year
for local retailers," Mak said.
Hong Kong property prices will go
up this year, but the gains will not match the sizzling pace of 2009, say real
estate experts. Home prices this year were likely to grow 10 to 15 per cent in
the wake of the continued hot money inflow from the mainland and the United
States, said Benny Wong at Pan Asian Mortgage, which specialises in mortgage
origination and capital market financing. But he and other property
professionals say prices will not rise by the nearly 30 per cent rate of last
year - when a heavy inflow of hot money drove up values. David Ng, the head of
regional property research at Royal Bank of Scotland, also does not expect a
sharp rise in home prices. "Last week's land auction result reflects that
developers are more cautious about the market than the individual luxury-home
buyers," he said. On December 28, Sino Land bought a 2.09-hectare residential
site in Tai Po for HK$5.15 billion. Sino Land's 85 per cent joint venture also
picked up an adjacent residential site of the same size for HK$5.25 billion. The
remaining 15 per cent of that plot is owned by KWah International Holdings. The
plots were sold for an average HK$7,214 per square foot, far lower than the
HK$9,000 some analysts had forecast. But the price tag is not low when compared
with the HK$4,668 to HK$6,368 per square foot fetched by nearby plots in 2007.
"The auction outcome is a wake-up call for the market and a clear warning that
the existing disconnect between the property sector and the pace of recovery of
the economy cannot continue indefinitely," said Nicholas Brooke, the chairman of
Professional Property Services. Property owner and investor Teddy Tse says the
auction result has removed his concern about a potential asset bubble in the
market. "It's a good sign. It indicates that the market will not go crazy, but
rationalise," said Tse, a senior manager at a US-based commodity firm. In
anticipation home prices will rise 10 to 15 per cent this year, Tse is eyeing
units of about 700 sqft and valued at about HK$4 million to HK$5 million for
investment. Tse's view is in line with analysts who forecast that housing prices
will grow but at a much slower rate. However, analysts sometimes get it wrong.
At the beginning of 2009, there was consensus that the global financial crisis
would force a continued decline in prices and rents. According to the data
compiled by Centaline Property Agency, housing prices rose 29 per cent from
January 1 to December 28 last year. On average, prices are now 73.23 per cent of
the price level in 1997, it said. In terms of total housing transaction volumes,
115,229 property deals were lodged with the Land Registry as of December 30,
according to Ricacorp Properties. This is a gain of 19.68 per cent from 2008.
Total residential sales value over the period amounted to HK$432.1 billion, an
increase of 23.5 per cent, Ricacorp said. But much of those gains came from the
huge flow of funds into the city. According to the Hong Kong Monetary Authority,
more than HK$640 billion of hot money flowed into the city from October 2008
because of low interest rates and loose monetary policies around the world.
Moreover, the increase in prices may be skewed by high sales of luxury housing.
Buying by wealthy Hongkongers and mainlanders saw high transaction prices in
luxury projects such as 39 Conduit Road, Mid-Levels, the Masterpiece in Tsim Sha
Tsui and Westminster Terrace in Yau Kom Tau, near Tsuen Wan. But Ng of RBS said
this did not reflect the overall market sentiment. Property purchases above
HK$10 million are usually made by wealthy Hongkongers or mainlanders, not
first-time local homebuyers or those upgrading for the first time. Demand is
therefore not coming from the mainstream buyers, which means a surge in
sentiment from luxury property sales can only have a short-lived effect on the
overall market. Ng said transactions below HK$3 million accounted for 74 per
cent of the secondary market. "A 5 per cent increase in home prices at best is a
sensible forecast for this year," said Ng. That lower assessment is partly a
reflection of the sober outlook for the economy. Chief Executive Donald Tsang
Yam-kuen on Tuesday warned of the risk of a W-shaped - or double-dip - recession
in 2010, reflecting continued uncertainties about the state of the global
economy. Hong Kong had just recorded its first year-on-year growth in exports
since the global financial crisis. Exports in November surpassed HK$240.7
billion, up 1.3 per cent from November 2008. The year-on-year contraction in
gross domestic product eased from 7.8 per cent in the first quarter to 3.6 per
cent in the second and 2.4 per cent in the third. Unemployment dropped to 5.1
per cent in the September-November period, having hit a peak of 5.4 per cent
between April and August. But Tsang says Hong Kong's economic recovery will not
be a smooth one. "I am a bit pessimistic on the pace of recovery and we may
experience a double-dip in the middle of next year," he said.
The
US dollar's fall against other currencies poses questions over its reserve
status. The US dollar lost much of its lustre over the past decade as its status
as a global reserve currency was challenged and its value against most key
currencies saw erosion. On the foreign exchange market, the euro was virtually
at parity with the dollar on December 31, 1999, but a decade later the greenback
has fallen 30 per cent against the single European currency. The euro, launched
on January 1, 1999, ended in New York trading at US$1.4323 on Thursday, the last
trading day of the year. The dollar's rapid fall against the euro is ironic as
the United States Federal Reserve had to come to the rescue of the faltering
single European currency in September 2000 as part of a co-ordinated market
intervention by leading central banks. The greenback also faced the same
misfortune against other key currencies. While it was roughly stable against the
British pound, it has lost nearly 10 per cent against the yen and a hefty 35 per
cent against the Swiss franc in the past decade. The trade-weighted US dollar
index, a measure of the unit's value against other world currencies, has lost 11
per cent in the past 10 years. According to recent figures from the Bank for
International Settlements, which serves as a bank for central banks, the share
of transactions involving the dollar fell to 88 per cent in 2007 from 91 per
cent in 2001. On December 31, 1999, the International Monetary Fund estimated
the share of dollar-based assets held by governments, excluding the United
States and China, was 74.9 per cent. However, on September 30 last year, it
dipped to 70.2 per cent. Some sceptics had doubted the euro could rise to the
challenge as a common European currency. "The euro is already beginning to
challenge the US dollar's status as the world's primary reserve currency and it
is an understatement to say that over the past 10 years, the euro has come a
long way," said Kathy Lien, the director of currency research at Global Forex
Trading. In 1999, it was inconceivable to ask the head of the IMF whether the
dollar's status was being threatened. Today, he talks about it himself. "I
expect the dollar to remain the principal reserve currency for some time," IMF
managing director Dominique Strauss-Kahn said in November in Beijing. In 1996,
the Fed found "over 60 per cent" of US coins and dollar notes abroad but the
share dropped to "approximately 50 per cent" in 2007.
Chinese President Hu Jintao (R)
talks with Tung Chee-hwa, vice-chairman of the Chinese People's Political
Consultative Conference (CPPCC) National Committee, during a New Year tea party
held by the National Committee of CPPCC, in Beijing, China, on Jan. 1, 2010.
Fireworks explode in the sky near
the International Finance Center in Hong Kong, south China, Jan. 1, 2010, to
celebrate the New Year.
Fireworks explode in the sky near
the International Finance Center in Hong Kong, south China, Jan. 1, 2010, to
celebrate the New Year. 
A metal parts shop in Shanghai. Copper
almost doubled during 2009 while the S&P GSCI Index of 24 raw materials rose 50
per cent, the most since at least 1971. Commodities posted the biggest annual
gain in four decades, led by a doubling in copper, sugar and lead prices, as
Chinese demand compensated for the longest slump in the global economy since the
second world war. In 2009, the S&P GSCI Index of 24 raw materials rose 50 per
cent, the most since at least 1971, and commodities drew record investment of
US$60 billion this year, Barclays Capital estimated. The MSCI World Index of
stocks in 23 developed nations climbed 27 per cent last year, and United States
treasuries fell 3.5 per cent, according to Bank of America Merrill Lynch
indices. China, the biggest consumer of commodities such as copper and iron ore,
expanded 8.5 per cent for the year, according to the median estimate of
economists surveyed. The nation imported record amounts of both raw materials,
making up for slack demand in the US and Europe. "If you look at the theoretical
or global portfolio of assets that are out there, the percentage of commodities
allocation is tiny, less than 1 per cent," said Kevin Norrish, a commodity
analyst at Barclays Capital in London. "If you look at what investors think that
they should have, clearly that would suggest there's a lot of potential for
growth." In 2009, the Reuters/Jefferies CRB Index of 19 raw materials advanced
23 per cent, the most since 1979. China's central bank would maintain a
"moderately loose" monetary policy because 2010 would be a crucial year for
strengthening the recovery, the bank's governor Zhou Xiaochuan said. Among
industrial metals traded in London, lead posted the biggest gain. Since the end
of 1999, the metal more than quadrupled, leading gains among 36 exchange-traded
raw materials in the US, Europe and Asia. Copper also doubled during the year,
leading gains in the CRB gauge. The metal climbed almost fourfold in the decade.
In 2009, gold futures in New York rose 24 per cent, the ninth consecutive annual
gain. The US dollar's slump spurred demand for precious metals as an alternative
investment. Crude oil advanced 78 per cent. The Organization of Petroleum
Exporting Countries, accounting for 40 per cent of global supply, reduced output
in response to the worldwide economic slump. Raw-sugar futures in New York more
than doubled for the year, trailing only copper's advance in the CRB index. Cane
harvests in Brazil and India, the biggest producers, were hurt by adverse
weather.
President Hu inspects Hebei,
underlines efforts to support agriculture - Hu Jintao (C, front), Chinese
President, general secretary of the Central Committee of the Communist Party of
China (CPC) and chairman of the Central Military Commission, shakes hands with a
family member of villager Zhang Futai during an inspection tour at a village of
Liqizhuang Town, Sanhe City, north China's Hebei Province, on Jan. 1, 2010. Hu
Jintao made the inspection tour in Sanhe City on Friday.
Shanghai's first modern streetcar
line begins operation in the east China city on January 1, 2010. There are 15
stations along the 9.8-kilometer route with a flat ticket fare of 2 yuan. It
connects with Shanghai Metro Line 2 at Zhangjiang High Tech station.
FTA with ASEAN comes into force -
The world's largest free-trade area (FTA) came into being on Friday, an
initiative that analysts said gives a shot in the arm for global trade troubled
by rising protectionism.
Luxury housing prices go
through the roof - Gray-slate-clad villas surrounded by an imposing stone wall
and an ostentatious main gate flanked by thick Roman columns are making history
by setting record sale prices despite repeated government warnings of
overheating in the property market. In the latest sale at Forbes Park estate in
the Gubei area, a villa of about 700 sq m was sold to an anonymous buyer at
about 190,000 yuan per sq m. It is an all-time high for residential properties
in Shanghai, nearly double the earlier record of 100,000 yuan per sq m for
Tomson Riviera apartments in Lujiazui financial center of Pudong district. The
annual average disposable income of Shanghai residents in 2008 was 26,675 yuan,
which means it will take seven years' income for someone to buy a single square
meter in the complex. Most of the tenants in the complex are overseas Chinese
from Hong Kong and Taiwan, plus a few expatriate executives in multinational
firms, said a saleswoman at the estate's sales office. Luxury housing prices go
through the roof - The upmarket area is particularly favored by Taiwan
industrialists and Hong Kong investors, and the estate is developed by Wan Te
Yuan, a relatively little-known company which has been involved in this project
of 21 villas and two tower blocks since 2004. The salesperson at Forbes Estate
said that a total of 18 villas have been sold and the apartments in the two
tower blocks have either been sold or are for rent. Forbes Park, according to
property agents in the vicinity, was not a hot property because it is not
located in Gubei's prime area. "Far from shops and supermarkets, Forbes Park
definitely is not the star property in our district," said Liao Tao, the manager
of the Gubei branch of Great Town Real Estate. But "timing is everything in this
market", he said. "There are too many big spenders chasing too few quality
properties in the inner city," he said. "In December 2004, only one property -
by Rich Gate in downtown Luwan district - was sold for over 50,000 yuan per sq
m, but in 2009, 1,460 units were sold above this price, showing robust growth in
the high-end market," said a report by local property agent E-House. "The units
are too expensive for most Chinese, but not for those who are used to luxury
accommodation and high living overseas," said Xue Jianxiong, an analyst with
E-House (China) Holdings Ltd. "Compared with upscale housing in cosmopolitan
cities around the world, there is upward potential. Hong Kong's most expensive
property was traded at 700,000 yuan per sq m in October, while top luxury
properties are priced about 690,000 yuan per sq m in London," he added. Property
prices in Shanghai and in most other major mainland cities have risen to levels
fewer and fewer people can afford. More than 80 percent of urban residents
cannot afford to buy homes, said the latest report from the Chinese Academy of
Social Science. In December, the central government introduced various measures
to moderate the property prices, including tighter mortgage conditions policies
for second-home buyers. Li Qin, an employee at Tomson Riviera told China Daily
that the developer is to release a batch of independent villas near the city's
Tomson Golf Club in Pudong New Area next year, but refused to be pinned down on
prices. "It should not be lower than 100,000 yuan per sq m," Xue Jianxiong said.
This year will be critical if the central government is to deliver on
commitments on energy intensity and pollution control, says renowned mainland
environmentalist Ma Jun , even as it considers new targets for cutting emissions
for the next five years. China pledged in 2006, as part of a five-year plan, to
cut energy consumption per unit of gross domestic product by 20 per cent and two
key air and water pollutants by 10 per cent before the end of this year.
Officials have admitted falling short of interim targets, but insist the
five-year pollution control and energy efficiency drive is on track to meet the
goal. "It remains a tough race to the finish line, with only a year to go to
meet those ambitious targets," says Ma, director of the non-government Institute
of Public and Environmental Affairs. He says 2010 will probably be a defining
year not only because of the significance of the ongoing campaigns, but also due
to the fact that Beijing has started compiling the next five-year blueprint,
which will map out key development policies and set growth targets for the
period between 2011 and 2015. Ma says rolling out detailed measures to deliver
on its first carbon emissions target, pledged last month, will become a critical
test for the central government. The pledge was made amid mounting international
pressure in the lead-up to the UN climate talks in Copenhagen. Premier Wen
Jiabao promised at the climate summit that progress towards slashing carbon
intensity - the amount of carbon dioxide produced per unit of gross domestic
product - by 40 per cent to 45 per cent from 2005 levels by 2020 would be a
mandatory target in the new five-year plan. Ma says China, the world's biggest
emitter of greenhouse gases, is expected to remain in the international
limelight after the disappointing failure at Copenhagen last month to cut a new
global deal to tackle climate change. "The pressure is unlikely to recede as
long as China still refuses an absolute cut in carbon emissions," he says.
Although China refused mounting calls for international supervision of its
self-claimed progress in combating pollution, the government looks set to take
further steps to improve transparency in government-controlled environmental
information, including carbon-related statistics. "China may insist that the
matter remains its own domestic affair, but the pressure has been building up
both at home and abroad for more accountability and transparency in the fight
against pollution as well as global warming," Ma says. The mainland public is
also expected to push the government and polluting enterprises to become more
transparent and unveil key information deemed essential to protect public
health, he says. Disputes over toxic chemical leaks and the siting of garbage
treatment plants have sparked a spate of mass protests and even violence on the
mainland in the past few years. "People are becoming more sensitive to any
health risks in their backyards and it remains a top challenge for authorities
to address growing public concerns over the high environmental price of dazzling
economic growth," Ma says.
A New Year tea
party is held in Beijing, China, on Jan. 1, 2010, by the National Committee of
the Chinese People's Political Consultative Conference (CPPCC). Chinese
President Hu Jintao (C) and other leaders Wu Bangguo, Wen Jiabao, Jia Qinglin,
Li Changchun, Xi Jinping, Li Keqiang, He Guoqiang and Zhou Yongkang, all members
of the Standing Committee of the Political Bureau of the Communist Party of
China (CPC) Central Committee, attended the tea party. Chinese President Hu
Jintao on Friday urged maintaining steady and relatively fast economic
development in a speech he made as he and other senior leaders celebrated the
New Year's Day with political advisors Friday morning in Beijing. Hu and Wu
Bangguo, Wen Jiabao, Jia Qinglin, Li Changchun, Xi Jinping, Li Keqiang, He
Guoqiang and Zhou Yongkang, all members of the Standing Committee of the
Political Bureau of the Communist Party of China (CPC) Central Committee,
attended the tea party held by the National Committee of the Chinese People's
Political Consultative Conference (CPPCC). Hu said that the year 2010 is the
last year of the country's 11th Five-Year Plan period and steady and relatively
fast economic development is crucial for pulling the country fully out of the
financial crisis. He said the country will continue to implement a proactive
fiscal policy and a moderately easy monetary policy, while increasing the
policies' flexibility and pertinence to fit changing situation. He also said
all-out effort will be made to maintain social stability and the government will
put more efforts into solving livelihood issues such as health care, education
and employment. Hu added that the country will stick to the guidelines of "one
country, two systems", "Hong Kong people governing Hong Kong", "Macao people
governing Macao" and a high degree of autonomy to maintain long-term prosperity
and stability of Hong Kong and Macao. He said the policy of "peaceful
reunification and one country, two systems" will be adhered to and exchanges and
cooperation across the Taiwan Strait will be enhanced to bring more benefits to
people on both sides. The party was presided over by Jia, chairman of the CPPCC
National Committee. The leaders were joined by members of the central committees
of non-Communist parties, senior members of the All-China Federation of Industry
and Commerce, personages without party affiliation, officials of the central
authorities and representatives from all walks of life and all ethnic groups in
Beijing. 
A customer picks up bananas at a fruit
market in Jakarta, capital of Indonesia, on Jan. 1, 2010. China and the
Association of Southeast Asian Nations (ASEAN) on Friday kicked off the world's
largest free trade area (FTA) embracing developing countries. The China-ASEAN
FTA covers a population of 1.9 billion and involves about 4.5 trillion U.S.
dollars of trade volume. China and the Association of Southeast Asian Nations
kicked off free trade area Friday. From Friday, the average tariff on goods from
ASEAN countries to China is cut down to 0.1%.·Six original ASEAN members will
slash average tariff on Chinese goods from 12.8% to 0.6%. China and the
Association of Southeast Asian Nations (ASEAN) kicked off their free trade area
(FTA) on Friday. The world's largest FTA embracing developing countries covers a
population of 1.9 billion. The average tariff on goods from ASEAN countries to
China is cut down to 0.1 percent from 9.8 percent. The six original ASEAN
members, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand,
will slash the average tariff on Chinese goods from 12.8 percent to 0.6 percent.
By 2015,the policy of zero-tariff rate for 90 percent of Chinese goods is
expected to extend to the four new ASEAN members, Cambodia, Laos, Myanmar and
Vietnam. Dozens of trucks, mostly carrying dragon fruit from Vietnam, thronged
border markets Friday morning, waiting to be unloaded at the Tianyuan Fruit
Trade Market, one of China's largest market for fruit import, at the Pingxiang
Port in Guangxi Zhuang Autonomous Region. "The establishment of the free trade
area is really good news for me," said Liu Yuzhen at the Tianyuan market, who
has been trading fruits for 16 years. She now sells more than 10 tonnes of
apples, pears, oranges and other fruits to southeast Asia every day, and hopes
her business will expand as the FTA will facilitate the customs clearance and
reduce the logistics cost. Gu Xiaosong, vice president of the Guangxi Academy of
Social Sciences, said both ASEAN members and southern China provinces abound
with tropical primary products like rubber and tropical fruits, and thus
competition in the earlier stage of the FTA will be unavoidable. "But such
competition will eventually lead to optimization of the agricultural and
industrial structures in the region, which will help form a more competitive
entity in the global market," he said. There is a provision in the FTA for a
temporary delay in tariff reduction by reclassifying goods as "sensitive" and
"highly sensitive" products. 
Local residents gather at The Place
Square to celebrate the upcoming New Year together in Beijing, China, on Dec.
31, 2009. 
Local residents gather at The Place
Square to celebrate the upcoming New Year together in Beijing, China, on Dec.
31, 2009.
Local residents gather at The Place
Square to celebrate the upcoming New Year together in Beijing, China, on Dec.
31, 2009.
The neon lighting showing the
121-days countdown to the Shanghai 2010 World Expo appear on the grand
commercial building at the Lujiazhui Finance and Trade Zone, in Pudong District
of Shanghai, east China's metropolis, Dec. 31, 2009. A magnificent new-year eve
neon illumination is shown on 18 grand edifices at Lujiazhui Zone to mark the
countdown to the advent of the new year.
Fireworks explode in the sky above
the Olympic Sailing Center in Qingdao, east China's Shandong Province, on Dec.
31, 2009, to celebrate the upcoming New Year. 
Brightening fireworks flare and
scintillate over the Hanshan Temple, during the 31st Suzhou New Year Eve Bell
Ringing &Felicity Worshipping Activity at Hanshan Temple, a major pilgrimage and
tourism event with some 80,000 local citizens and visitors from both home and
overseas taking part in, in Suzhou, east China's Jiangsu Province, Jan. 1, 2010.
Chinese Hong Kong star Jackie
Chan poses beside a Chinese float during a preview of the Tournament of Roses in
Pasadena, California, the United States, on Dec. 31, 2009. Jackie Chan and
Chinese basketball player Yao Ming came to Los Angeles to promote the Shanghai
2010 World Expo float, which is the first float ever made to appear at the
Pasadena Rose Parade in the history of the World Expo.
Chinese Hong Kong star
Jackie Chan (L) and Chinese basketball player Yao Ming rest beside a mascot of
Shanghai 2010 World Expo during a preview of the Tournament of Roses in
Pasadena, California, the United States, on Dec. 31, 2009. 
Lianhuanhua, printed by the Shanghai
People's Fine Arts Publishing House, depicts stories of the Monkey King seeing
through all the disguises of the white-skeleton demon—first, a beautiful girl,
then an old lady and an old man—and finally killing it.
The city skyline is ablaze with
fireworks as Hong Kong welcomes the new year - and new decade - with a bang.
About 400,000 revellers gathered along both sides of the harbour to see in the
start of 2010, with a further 20,000 people celebrating in Lan Kwai Fong and a
record 100,000 at Times Square, in Causeway Bay, police said. Hongkongers' were
in the mood to party, with optimism for the coming year at a high not seen since
2004.
Hong Kong Island will be the greyest, while new towns will be the most youthful.
The workforce will have shrunk and some of us will have to work longer. Sai
Kung, Yuen Long and Kowloon City will be growing the fastest. Those are among
the Planning Department's projections for the city's population in 2018, as
interpreted by the Elderly Commission. "The increasing number of elderly people
is not necessarily a burden on society. But proper measures should be in place
to ensure the city has a big enough workforce," said Leong Che-hung, chairman of
the commission, which advises the government on policies affecting the elderly.
He said the government must start encouraging employers to show flexibility on
the age of retirement. While there is no mandatory retirement age in Hong Kong,
most employers take their lead from the government and require staff to retire
at 60. According to the projection, the population is expected to increase from
6.98 million in 2008 to 7.59 million in 2018, of which 16 per cent will be over
65, with their number having risen from 878,900 to 1.23 million. By 2018, people
living on Hong Kong Island will have a median age of about 44 - two years older
than the rest of the territory. North Point and Chai Wan will have the largest
proportions of elderly residents in the city. They will account for 21 per cent
of the population in Eastern District. The proportion of people of working age
will shrink from 74.5 per cent to 71.6 per cent. Mainland immigrants, who will
be the major source of population growth in Hong Kong, will be concentrated in
the new towns of Tseung Kwan O, Tin Shui Wai and Tung Chung; Sai Kung, Yuen Long
and Kowloon City districts will see the fastest population growth. Leong urged
the administration to take the lead in introducing a flexible retirement age in
the government and governmental organisations. "The current retirement age for
civil servants is 60. But it's a waste of resources, as people at this age are
still healthy and active nowadays," he said. Leong noted that the British
government was considering extending the retirement age from 65 to 67 to
increase the country's workforce. Leong said a flexible retirement arrangement
would allow people's talents to be used according to their ability and their
employer's needs. "These experienced leaders can step aside as an adviser or a
consultant. The younger generation will still be promoted," he said. Paul Yip
Siu-fai, professor of social work at the University of Hong Kong, said the poor
quality of the future workforce might aggravate the problems of the ageing
population. It was often too difficult for young migrants to catch up with the
local education levels, Yip said, and even if some mainland migrants were
professionals, their qualifications were not recognised in Hong Kong. Yip
suggested streamlining the queue for one-way permits - which allow mainland
residents to migrate to Hong Kong - so that children arriving from the mainland
could be admitted to school at an early age as possible. "It's far easier for
them to catch up with school work and avoid becoming a dropout if they start the
local education from kindergarten," he said. Yuen Long District Council chairman
Leung Che-cheung said districts with the most workers, such as Tin Shui Wai,
needed more educational facilities and government support. "The future workforce
might not be able to match the city's occupational demands if the government
does not plan carefully now," he said. 
Hundreds of extra police officers will
hit the streets tonight as up to a million revelers welcome in the new year.
Police will mobilize 2,000 officers to step up security in the wake of a series
of acid attacks in crowded areas. The latest in a spate of attacks left six
people injured after acid was thrown from a high-rise building in Causeway Bay
on December 12. No one has been arrested. The main focus of celebrations will be
the fireworks display and light show over Victoria Harbor. The number of
pyrotechnic firing points on 10 landmark buildings has been increased by 50
percent - from 6,000 last year to 9,000. Prime viewing spots are the Avenue of
Stars, West Kowloon Waterfront Promenade, the waterfront at Golden Bauhinia
Square in Wan Chai and the area around the Central piers on Hong Kong Island.
Pre-countdown entertainment will also be staged at the viewing deck of the Hong
Kong Cultural Centre and projected onto its facade. And as the last minutes of
2009 tick away, Causeway Bay's Times Square - which is throwing a fancy dress
bash entitled "Love Hong Kong" - is expecting at least 100,000 partygoers to
usher in 2010. The nearby WTC More also expects the same number of revelers to
crowd into the alleyways and side streets around the mall. Restaurants along the
harborfront say bookings for tonight are very heavy, and bar managers are
expecting a hectic night. But amid all the expected revelry, there were words of
warning on drink- driving from the government yesterday. Secretary for Transport
and Housing Eva Cheng Yu-wah appealed to drivers to either stay away from
alcohol or their cars. She said the administration is also considering granting
police the power to suspend the licenses of motorists charged with drink-driving
and awaiting trial. Special traffic arrangements will be implemented tonight in
Times Square, Causeway Bay typhoon shelter, Lan Kwai Fong, Two IFC and the area
fronting Central Piers 7 and 8. 
Drug tests using hair will be piloted in clinics and rehabilitation centers next
year - but the process is unlikely to be introduced into schools. Commissioner
for Narcotics Sally Wong Pik-yee was yesterday briefed on the hair method
developed at the Government Laboratory. "The government is gearing up for
preparatory work in the hope that a pilot service can be introduced in 2010,"
she said. Samples for a hair test are easier to collect and store than urine
samples. About 4cm of hair from the root can reveal the amount of drugs taken in
the preceding three months. Between 20 and 60 pieces of hair are needed for each
test. In urgent cases, results can be generated in eight hours. The drawback is
the higher costs compared to urine tests because of the use of more sensitive
equipment. Wong said the pilot hair test will be voluntary like the Trial Scheme
on School Drug Testing, but she did not rule out the possibility of using
hair-test results as evidence in court cases. The Government Laboratory dealt
with about 6,800 drug cases and examined about 17,000 drug samples between
January and November. The most commonly found drug is ketamine followed heroin,
cocaine, ice, cannabis and ecstasy. Wong also said the trial school drug test
scheme in Tai Po has identified some drug users, but she declined to disclose
the number because it is too small and might expose the identities of the
students involved. She insisted the scheme has been effective in protecting
student privacy. Urine samples submitted to the Government Laboratory carry only
a code and the laboratory has no information which could identify an individual.
She also added some frontline anti- drug campaigners in Tai Po reported the
number of cases seeking help has doubled since the launch of the drug-test
scheme. The number of arrests related to drug abuse has gone down slightly as
well, reflecting the effectiveness of the scheme. Wong said the government will
organize talks and workshops for private labs to share the hair-testing
technology and assist them with obtaining the relevant accreditation. Hong Kong
Lutheran Social Service Cheer Ever Green Center supervisor Tang Kam-biu backs
hair drug-test technology, but is worried the cost is prohibitive. "The hair
test helps trace longer drug-taking history and provides more evidence and
convenience for abusers, but the center would not be able to afford the high
cost, which I heard is about HK$1,000," Tang said.
The share sale is seen a
defensive deal by BEA chief David Li (left) against Guoco owner Quek Leng Chan,
who has been building his stake. Bank of East Asia (SEHK: 0023) yesterday
announced the sale of HK$5.11 billion in new shares to two banks in a move
analysts say is aimed at protecting it from a hostile takeover. "There is no
doubt this is a defensive transaction," said Louis Tse, a director at VC
Brokerage. "This will make it more difficult and more expensive for Guoco to
incrementally build up its stake in the market." Guoco Group (SEHK: 0053), a
conglomerate owned by Quek Leng Chan, surprised the market when it snapped up a
5 per cent stake in BEA in January this year and has since increased its holding
to about 8 per cent. The new placement shares have been issued to BEA's two main
strategic shareholders. Spain's Criteria CaixiaCorp is buying 120.8 million new
shares to raise its stake from 9.8 per cent to 14.99 per cent. Japan's Sumitomo
Mitsui Banking Corp will buy 46.3 million shares, increasing its equity holding
from 1.91 per cent to 4.05 per cent. The two banks will pay HK$30.60 each for
the shares, a 2.1 per cent discount to BEA's closing price yesterday of
HK$31.25. Quek's rapid accumulation of an 8 per cent stake caught market
attention as it is unusual for the Malaysian financier to remain satisfied with
a minority stake. After selling Dao Heng Bank to Singapore's DBS Bank in 2001,
Quek tried to buy International Bank of Asia in 2002, Chekiang First Bank in
2003 and Asia Commercial Bank in 2006. After the issue, BEA's total capital
adequacy ratio and tier-1 capital adequacy ratio rises to about 16 per cent and
11.7 per cent respectively. The share sale to Criteria Caixia falls within an
agreement it signed with BEA in June that allows the Spanish bank to raise its
stake to a maximum of 20 per cent. BEA boosted its tier-1 capital with a US$500
million hybrid instrument comprising subordinated bonds and preference shares.
On completion of yesterday's placement, the holdings of BEA chairman David Li
Kwok-po drop to 2.29 per cent from 2.49 per cent. The market has long viewed BEA
as ripe for takeover because of the relatively weak grip by the Li family,
although its position has for the moment been bolstered. Although only Hong
Kong's fifth-biggest lender, BEA's attraction lies in its strong position on the
mainland. BEA China has the largest banking network in Guangdong province among
all foreign banks, with a branch each in Shenzhen, Guangzhou and Zhuhai and 18
sub-branches. In the first half of this year, BEA China contributed 40 per cent
to the group's pre-tax profit and about 35 per cent of its loan portfolio. BEA
expects loan growth on the mainland to easily surpass that of its Hong Kong
units and contribute more than 50 per cent to its loan portfolio in coming
years. It will probably be one of the first banks to list on the mainland.
Sales of HK$1.3 billion a year make Citicall one of the city's top retailers of
consumer appliances and computer products.
More than two decades after the idea
was first proposed, Hong Kong's stock market may in 2012 finally adopt so-called
scripless shares, abandoning physical certificates in favor of electronic
recording of shareholdings. Although the Hong Kong stock exchange is the world's
seventh-largest by market capitalization, the law still requires all companies
to issue physical share certificates. In Australia and on the mainland, all
investors have their shareholdings in electronic records. Since 1996, Britain
has allowed investors to opt for electronic records or physical share
certificates. In a third attempt to start a scripless market, the Securities and
Futures Commission and Hong Kong Exchanges and Clearing (SEHK: 0388) yesterday
jointly launched a consultation paper on the subject. It would allow investors
to turn in their existing share certificates, creating electronic records in an
account under their own names or the names of their brokers in the Central
Clearing and Settlement System. The proposal also allows investors to keep their
share certificates. They could also opt for turning the electronic record back
into physical shares at any time. In the case of initial public offerings,
investors could choose to receive physical share certificates or an electronic
record. This dual system would be in place for some years before any attempt
would be made to abolish share certificates. SFC executive director Keith Lui
Kei-kwong said it was hard to predict when Hong Kong would abolish share
certificates entirely since experience overseas showed some investors preferred
holding certificates. Australia turned all share certificates into electronic
records in 1999, but there are still certificates in use in the United States
and Britain. Lui said there were still nine million investors holding share
certificates in Britain, 13 years after the move to go electronic. Introducing
the scripless market is the last major proposal of the Ian Hay Davison Report,
which suggested a range of reforms for the local market in 1988. The SFC had the
first consultation on a scripless market in 2002, followed by an HKEx
consultation in 2003. But both failed to proceed due to the lack of support from
investors and brokers. "This may be the right time to propose the scripless
market as many more investors are trading through the internet than 2003," Lui
said. "The proposal is more environmentally friendly as it would reduce the
number of trees needed to be cut to produce the share certificates." The
consultation will last three months. A more detailed plan for a consultation
will then be prepared for a change in law.
Director General of the World Health
Organisation Margaret Chan speaks to reporters at the WHO headquarters in
Geneva, Switzerland on Tuesday. The H1N1 flu pandemic may not be conquered until
2011 and continued vigilance is required against the virus which can still
mutate, the head of the World Health Organisation said on Tuesday. WHO
Director-General Margaret Chan also warned that although countries have shored
up their defences against the first influenza pandemic in more than 40 years,
they remain ill-prepared for mass outbreaks of the deadlier bird flu virus. “It
is still premature and too early for us to say we have come to an end of the
pandemic influenza worldwide. It would be prudent and appropriate... to continue
to monitor the evolution of this pandemic for the next six to 12 months,” Chan
told a year-end news conference. “The one thing we need to guard against is a
sense of complacency,” she added. Countries including Britain, Canada and the
United States have passed peaks of a second wave of H1N1, but outbreaks are
intensifying in India, Egypt and elsewhere, according to Chan. H1N1 has now
spread to more than 200 countries, with nearly 12,000 deaths confirmed in
laboratory, but it will probably take two years to establish the true death
toll, she said. Millions of people have been infected with the virus which
emerged in April, most recovering without special treatment. But young people,
pregnant women and people with underlying health conditions such as heart or
lung disease are more vulnerable and often require intensive care in hospital.
Influenza viruses are notoriously unpredictable and can mutate into more severe
forms, according to the WHO chief. Chan, who admitted she had not received her
own H1N1 flu shot yet but would have it soon, said: “I am a bit more relaxed,
but I will never let down my guard.” Rich countries and drug companies have
pledged to donate 190 million doses of H1N1 vaccine for use in some 90
developing countries, she said. Her United Nations agency plans to start
distributing the first doses in Azerbaijan and Mongolia in early January, to be
followed by Afghanistan, she added. On recalls of some H1N1 vaccine – by
AstraZeneca’s MedImmune unit and Sanofi-Aventis SA – she said they were because
they were not as potent as they should be but posed no risk. “The recalls are
not related to safety of vaccines,” she said, saying the issue had been dealt
with in an “ethical way”. Chan, noting the world’s financial crisis and weak
health systems in some countries, said: “The fact that the long overdue
influenza pandemic is so moderate in its impact is probably the best health news
of the decade.” But Chan, who fought avian flu and Sars while serving as health
director in her native Hong Kong, said the world was still not ready to combat a
pandemic of the H5N1 bird flu virus, noting it was “more toxic and deadly”. “No,
the world is not ready for a pandemic to be caused by H5N1,” she said. 
Photo showing a visitor looking at vehicles at a BYD dealership in Chengdu,
Sichuan province. On Wednesday, the electric car maker said it plans to sell
800,000 cars in the coming year. China battery and car maker BYD, whose
stakeholders include billionaire investor Warren Buffet, said on Wednesday that
it has raised its next year sales target, as it prepares to roll out its first
electric cars. The company had lifted its sales target for next year by 14 per
cent to 800,000 cars, from a previous target of 700,000, said Paul Lin, manager
of the company’s marketing department. He attributed the revision to robust
demand from Chinese consumers under Beijing’s 4 trillion yuan (HK$4.5 trillion)
economic stimulus plan, which includes several measures specifically aimed at
boosting car sales. “The company already reached its this year target of 400,000
cars in November, so now we are setting our next year target to double that
number at 800,000 cars,” Lin said, adding that this year’s final sales should
come in at around 440,000 cars. He added that BYD’s highly anticipated e6, its
first electric car, had passed government safety inspections and received other
necessary permits. The company planned to start selling the e6 in mainland in
the first quarter of next year, aiming to export them to the United States by
the end of next year, he said.
The annual Hong Kong Computer
Festival will be moved to a new venue because of safety concerns stemming from
the tens of thousands of shoppers who jammed the streets of Sham Shui Po during
last year's event. The four-day festival has been held near Apliu and Yu Chau
streets since 2002, and the area was flooded by 450,000 visitors in December
last year. The venue for the next show is the Cheung Sha Wan Playground. It will
be held in mid-January, the dates having been changed to avoid a clash with the
East Asian Games. District councillor Lo Wing-man said the decision to change
the venue was made before a series of acid attacks from buildings began in the
area, in June. The building nearest to the park is about 100 metres away, and Lo
said he was confident that the police could monitor the event closely. The theme
this time is "Green I.T. for Business Opportunities". About 140 booths will be
set up, compared with 89 for the last event. Organisers will increase the number
of security guards by 20 per cent, to 100. Despite the economic downturn last
year, exhibitors achieved total sales of HK$230 million. Leung Ding-kau,
chairman of the Chamber of Hong Kong Computer Industry, anticipates a 10 to 15
per cent increase in sales this time. About 40 new models of hi-tech equipment
are expected to be released. Leung said new releases would be more expensive
than last year, when prices were cut because of the downturn. But they will
still be around 10 per cent cheaper than those sold outside the festival. The
festival will be held on January 15-17 from 11am to 10pm, and on January 18 from
11am to 9pm. Admission is free. 
Rusal adds Robert
Kuok as cornerstone investor - Aluminium giant signs up Malaysian tycoon for HK
listing - After months trying to add a famous Asian investor to its planned US$2
billion Hong Kong share sale, indebted Russian aluminium giant Rusal has signed
up Malaysian tycoon Robert Kuok as a cornerstone investor, according to people
connected to the deal. Rusal was close to securing sovereign wealth fund China
Investment Corp as a long-term backer. However, this fell through because CIC
did not want to be locked into Rusal for the six months required of cornerstone
investors in Hong Kong, people involved in the deal said. A spokesman for Kuok's
conglomerate vehicle Kerry Group, which also owns the South China Morning Post (SEHK:
0583), declined to comment. The Securities and Futures Commission has banned
retail investors from participating in the share sale. While the regulator gave
no specific reason for doing so, Rusal's cornerstone investors, which also
include European financier Nathaniel Rothschild and United States hedge fund
billionaire John Paulson, appear to be swallowing a lot of risk. The aluminium
firm, controlled by Russian oligarch Oleg Deripaska, owes its banks US$14.7
billion after it gobbled up rivals during the commodities boom of 2007. Rusal
faced bankruptcy last year before winning a life-saving debt restructuring deal
with its 72 lenders early this month. Initial research from Rusal's financial
advisers and independent stockbrokers obtained by the Post shows analysts are
deeply split on the firm's future financial health, with some predicting it will
have to sell assets or raise cash after the share offer. A Macquarie report,
which is only published in draft form and has not been made public, forecast
that Rusal "will require some capital injection or asset sale" to meet its debt
repayments. The note was dated December 7. Rusal signed its debt restructuring
deal on December 3. The Australian bank said Rusal needed to pay a minimum of
US$3 billion to its foreign lenders, which are owed US$7.3 billion, by 2011. But
Macquarie added Rusal would not generate enough free cash - money left over
after business expenses - to meet these payments unless depressed global
aluminium prices rose above the bank's own forecasts. The analysts said that to
repay its debt, Rusal must generate US$1.045 billion in free cash flow next year
and US$1.37 billion in 2011. They also forecast Rusal needed aluminium prices to
stay at or above US$2,300 per tonne during this period to hit that target. As
the global financial crisis has caused aluminium to pile up in warehouses all
over the world, Macquarie reckons the metal's price will only hit US$1,984 next
year and US$2,094 in 2011. It is unclear whether Rusal sanctioned these
forecasts. A Macquarie spokesman said the report might change substantially
before the final version was sent to potential investors. Other analysts have
published conflicting accounts of Rusal's future debt payment schedule. London
stockbroker Liberum Capital, in a research note dated December 22, says Rusal
will generate US$7 billion of free cash in the next four years and "meet its
financial obligations with Russian and international lenders". BOC (SEHK: 3988)
International puts a very different complexion on Rusal's borrowing conundrum.
It says the firm's foreign lenders have asked it to repay US$5 billion of its
US$7.3 billion debt by the end of 2013. BOCI says if Rusal cannot meet this
target, it will repay the international banks in warrants - rights to buy shares
at a set price in the future. Rusal owes US$4.5 billion to Russian
government-owned bank Vnesheconombank and US$2.98 billion to other Russian
lenders. Banks also have wildly different estimates of what Rusal is worth. BOCI
values the company at up to US$26.7 billion. Renaissance Capital, a London
stockbroker, values it at US$24.4 billion.
The world's biggest aluminium
company, Rusal, has a stark warning for investors in its Hong Kong stock
offering: unless prices for the metal rise and the US dollar strengthens against
the Russian currency, it could default on its loans and be declared bankrupt.
The warning is one of many contained in the company's listing document,
published yesterday, which runs to more than 1,000 pages and spells out the
risks and the opportunities of participating in the offer. The listing of the
first Russian company on the Hong Kong Stock Exchange is already one of its most
controversial. The exchange's listing committee several times sought more
documentation from the company, and the Securities and Futures Commission has
blocked participation in the offering by retail investors. Rusal, the world's
largest aluminium company, is aiming to raise up to HK$20 billion via the issue
of 1.6 billion shares, which will be sold at between HK$9.10 and HK$12.50. The
proceeds of the listing, one of the largest in Hong Kong in the past two years,
will all go to paying off the company's huge US$16.8 billion debts. It only
recently completed a restructuring - the biggest in Russian corporate history.
Rusal expanded rapidly in the boom years prior to 2008. It plunged into debt
following the onset of the financial crisis as the price of aluminium plummeted
form its peak of US$3,122 per tonne to US$1,300 per tonne in March 2009. Its
warning about the risk of default and bankruptcy is based on the December 2
price of US$2,126 and an exchange rate of 29.4 roubles to the US dollar. Retail
investors will only be able to take part in the initial offer if they are
prepared to invest a minimum of HK$1 million. They will have to buy the shares
from financial intermediaries such as brokers and banks and provide assurance
they are knowledgeable investors. Shares can only be traded in the secondary
market in board lots of HK$200,000. The listing document carries an unusual
warning in large red type on its cover noting that Rusal "does not meet the
profit test to qualify for listing ... and has been admitted on the basis of its
large market capitalisation, revenue in excess of HK$500 million and positive
cash flow from operating activities". It further warns: "The group continues to
have significant debt obligations and is subject to stringent covenants and
repayment schedules that severely limit its operations and ability to incur new
financing." The document notes a decline in the price of aluminium of 20 per
cent would make it difficult for the company to meet its restructuring
agreements. A 50 per cent decline in the price would mean it was unable to meet
most of its obligations and make it, along with the rest of the aluminium
industry, unprofitable. Despite the dire warnings to investors, the company
believes that, based on its operating assumptions and the outlook for the
sector, it will be able to reduce its debts over the next four years to an
extent that it will be able to refinance the remainder. The document also draws
attention to the risks to the company arising out of chief executive Oleg
Deripaska's looming court action in London. Former business associate Michael
Cherney claims he was cheated out of a significant stake in Rusal. 
The plan to allow direct investments
of yuan in the city is expected to push up property prices. Beijing's decision
to allow mainlanders to make direct investments in yuan in Hong Kong looks set
to boost property sales and corporate acquisitions, but it risks fuelling asset
bubbles, according to market watchers. Investments were likely to pour into
luxury homes, commercial properties, financial products and corporate takeovers
under a plan to allow mainland investors to use the currency to invest here,
said experts. Few details of the plan were released, but it is one of several
proposals Premier Wen Jiabao raised during Chief Executive Donald Tsang Yam-kuen's
visit to Beijing on Monday and will help lay the foundation to make the yuan an
international currency. "Hong Kong is a major window to test the waters," said
Tao Dong, Credit Suisse's chief regional economist excluding Japan. "It helps
the city's financial development and boosts its position as an offshore yuan
settlement centre." Yuan-denominated direct investments in Hong Kong is yet
another step in the central government's effort to make the yuan a freely
convertible currency. In July, the city was allowed to settle cross-border trade
in yuan, a move that led to 490 million yuan (HK$555.6 million) in transactions
by the end of last month. There are also 57 billion yuan in deposits in Hong
Kong. "The plan will create a pool of yuan in the form of investments in the
city," said Priscilla Lau Pui-king, an associate professor and associate head of
the department of business studies at the Hong Kong Polytechnic University. "It
could funnel tens of billions of yuan of investments into Hong Kong through the
mainland's sovereign fund (China Investment Corp)." Describing the plan for
allowing direct investments of yuan as the equivalent of "the mainland's solo
traveller scheme", Federation of Hong Kong Industries deputy chairman Stanley
Lau Chin-ho expects the city's retail sales and corporate mergers and
acquisitions to thrive. Midland Realty chief analyst Buggle Lau Ka-fai
anticipates investments could flow into luxury and commercial properties, but he
is sceptical about whether the central government will allow a large amount of
funds to flood into the city during the trial stage. Tao said the Hong Kong
government would have to put in place policies to handle excess liquidity,
fearing that extra funds could fuel an asset bubble. "It is a dilemma for the
government," Tao said, commenting on how Hong Kong would manage additional funds
on top of the HK$640 billion in hot money that has flowed into the city since
October last year. "The plan comes with a cost."
Students of Ning Po No 2 College
mourn the death of their teacher Chu Chi-shing who was killed in a drink-driving
traffic accident in Kwun Tong on December 24.
Reshuffles in the ranks of the
People's Liberation Army have given rise to a new phenomenon - the "princeling
generals" - with the latest to be promoted a son of a former head of the
military. General Zhang Haiyang has been made the political commissar of the
Second Artillery Corps - China's strategic missile force - the People's Daily
reported yesterday. The promotion, five months after Zhang was raised to full
general from lieutenant general, makes him a possible candidate for a seat on
the Central Military Commission - China's supreme command - in the next party
leadership reshuffle in 2012. Zhang's promotion is not the first for a so-called
princeling general. President Hu Jintao has promoted three officers, including
Zhang, to full general this year. All are the children of former party leaders.
Observers have noted Hu's apparent penchant for picking the next generation's
leaders from the powerful clique of "princelings" - the offspring of prominent
party leaders. But until recently the phenomenon has been most notable in
civilian power circles. Zhang is the third son of retired general Zhang Zhen,
who, under then president Jiang Zemin, was a vice-chairman of the Central
Military Commission between 1992 and 1997. His father-in-law, Sun Keji , was
formerly deputy political commissar of the Nanjing military region. His father
played a key role in helping Jiang secure absolute control of the army in the
early days of the former president's rise to power. Until his promotion Zhang
Haiyang had been the political commissar of the Chengdu military region. The
Second Artillery Corps controls China's nuclear and conventional strategic
missiles and is considered the most powerful and professional unit in the PLA.
Zhang, 60, is considered relatively young among top brass in the military. He is
also one of the few PLA generals with battle experience, having fought in the
Sino-Vietnamese war in the late 1970s and mid-1980s. He was also widely praised
for his performance following the Sichuan earthquake last May and crackdowns on
rioting in the southwestern province and in Tibet earlier that year. These,
together with his powerful family connections, make Zhang a rising star in the
military. The promotion was widely reported by state media, which highlighted
his father's prominent place in the army. The People's Daily website said Zhang
and his father "are the PLA's first father and son generals". "You cannot ignore
his own contributions just because of his princeling background, but there is a
trend that future important military roles will be taken over by the second or
third generation [offspring of prominent officials]," said Macau-based military
commentator Antony Wong. The others raised to full general are Liu Yuan - the
son of former party chairman Liu Shaoqi, and Ma Xiaotian, the son of a deputy
chief of general staff headquarters. Liu Shaoqi was a founding father of the
People's Republic and a one-time heir to Mao Zedong. Ma's father-in-law was also
a senior PLA official in the military's disciplinary department. Zhang joined
the army in 1969 at the age of 19. He was promoted to lieutenant general in 2003
and became a member of the party's powerful Central Committee in 2007. He fought
in the Sino-Vietnamese war in 1979 and again in border conflicts in 1986. He
also distinguished himself in leading his troops in disaster relief work after
the Sichuan and Yunnan earthquakes last year. There has been speculation that in
2012, Zhang will join the party's Central Military Commission, which commands
the entire armed forces. He is most likely to succeed Li Jinai, the director of
the general political department which oversees political work in the army and
ensures its absolute loyalty to the party. Retired PLA general Xu Guangyu said
that although Zhang is a possible candidate, a commission place is not
guaranteed because he was not appointed commander of the Second Artillery Corps.
Beijing, on Thursday, decried a US decision to impose duties of 10 to 16 per
cent on Chinese-made steel pipe, the biggest US trade case to date against the
mainland, and said it had been made a scapegoat of protectionist interests. The
Ministry of Commerce said it was “strongly-dissatisfied with and
resolutely-opposed” to the vote of the US International Trade Commission for
countervailing duties, which Washington said were needed to balance out unfair
state subsidies to Chinese manufacturers of pipes for oil wells. The global
financial crisis and fall in demand for oil, not Beijing’s policies, were to
blame for pressures on US manufacturers, said a statement issued on the
ministry’s website. “US domestic industry has been seeking opportunities to win
trade relief and protection, and shifted the blame for its hardships onto
imports,” an unnamed ministry official said in the statement. “Finding that
Chinese oil well pipes have damaged US industry is a mistaken step that ignores
the facts.” The ministry made no mention of any tit-for-tat moves against US
products, but these cannot be ruled out. It urged Washington to abandon the
decision at a final vote on the anti-dumping case in May. But a lawyer
representing the United Steelworkers union and US companies in the case earlier
told reporters that a hearing is virtually certain to also approve separate
anti-dumping duties on the pipes. The ITC vote capped a year of US-China trade
friction likely to extend into next year. US companies and unions brought about
a dozen trade cases against the mainland this year, alleging government
subsidies and unfair pricing practices. President Barack Obama also angered
Beijing in September by slapping a 35 per cent duty on imports of about US$1.85
billion of Chinese-made tyres in response to what the ITC said was a surge in
imports that disrupted the market. Beijing, in response, accused the US of
protectionism, filed a complaint against the tyres decision at the World Trade
Organization and began a probe into whether US autos are “dumped” in the
mainland at unfairly low prices. The US imported US$2.74 billion of “oil country
tubular goods” from the mainland last year, more than triple the previous year,
as rises in oil prices led to increased demand for the oil-well tubing and
casing.
A woman dries red lanterns in the air in
YangZhao Village of Jifeng Township in Yuncheng City, north China's Shanxi
Province, Dec. 31, 2009. The handmade red lanterns sell well as the New Year
nears.
Geely, mainland’s No 1 private carmaker, said on Thursday that its parent
company has strong support from the central government to acquire Ford Motor’s
Volvo unit, and expects robust growth for mainland’s auto industry next year,
also with help from Beijing. “Without government support, the [Volvo] deal could
not be done,” Gui Shengyue, chief executive of Geely Auto (SEHK: 0175), said at
a media briefing in Hong Kong on New Year’s Eve. Last week, Ford said it was
nearing an agreement to sell Volvo to Zhejiang Geely Holding Group, underscoring
mainland’s arrival as a major force in the global auto industry. Gui said he
believed Zhejiang Geely Holding Group, parent of Hong Kong-listed Geely Auto,
had financial support for the acquisition of Volvo. Reports had earlier said
that Geely was seeking at least US$1 billion in loans to finance its US$1.8
billion bid for Volvo, and that three major mainland banks including one policy
lender had agreed to offer the money. Geely Auto would be looking for
opportunities to participate in the Volvo project once the acquisition is
closed, Gui said. “The ultimate goal is to inject Volvo into the listed
company,” said Gui. However, he added that he could not predict when that goal
would be realised. Home-grown Geely, which means “lucky” in Putonghua, is hungry
for modern, innovative technologies from the Swedish brand to upgrade its car
lineup and tap the country’s auto market, now the world’s biggest. Besides
Beijing’s support for Geely’s Volvo acquisition, Geely also benefits from the
central government’s subsidies policy, which will continue next year. In early
December, Beijing said it would subsidise sales of “green vehicles” in some
cities as the Hu Jintao administration stepped up efforts to promote
environmentally friendly vehicles to cut fuel emissions and boost domestic
consumption – key to maintaining the country’s economic growth. The government
will also give rebates to private car buyers for the first time. The global auto
industry has changed dramatically during the past year’s financial crisis.
Global carmakers such as Volkswagen and General Motors are stepping up their
presence in mainland, which overtook the United States as the world’s largest
auto market this year. Volkswagen said last month that it planned to more than
triple its sales in southern mainland by 2018. For their part, mainland
carmakers such as Geely and Beijing Automotive Industry Holding Group (BAIC) are
jumping at the chance to pursue overseas acquisitions. “The landscape of China’s
auto industry has gone through great changes and I think going overseas for
acquisitions is a trend,” said Gui. To catch up with the tough competition and
get Volvo working quickly after the acquisition, sources have said that Geely
has already hired external consultants to advise on internal restructuring and
integration for Volvo. Some analysts have warned that brand recognition after
the Volvo deal and the cultural gulf between mainland and western managers could
challenge to Geely’s goal to turn the Volvo deal into a long-term success.
Top Chinese
leaders including President Hu Jintao on Wednesday watched Peking Opera at the
National Center for the Performing Arts in a gala to mark the New Year. Top
legislator Wu Bangguo, top political advisor Jia Qinglin, and other senior
leaders including Li Changchun, Xi Jinping, Li Keqiang, He Guoqiang and Zhou
Yongkang also watched the performance together with nearly 1,000audience. The
programs include excerpts from modern Peking Opera "The Red Lantern" and a
series of traditional works such as "Si Lang Tan Mu", or "The fourth son visits
his mother". The 200-year-old Peking Opera, regarded as a cultural treasure of
China, combines instrumental music, vocal performances, mime, dance and
acrobatics.
The central government's
attempts to cool the property market appears to be failing, with mainland and
Hong Kong developers spending 16.33 billion yuan (HK$18.52 billion) on nine
sites yesterday. Hot bidding for the sites, located in Beijing, Chongqing and
Foshan, signals that developers remain bullish despite recent government
measures to discourage excessive price appreciation. Sun Hung Kai Properties (SEHK:
0016) acquired a residential site in Foshan, Guangdong province, for 3.46
billion yuan. The property covers 330,000 square metres, which could provide a
total gross floor area of 1.29 million square metres. That translated into 2,682
yuan per square meter. The developer, which did not join a Hong Kong land
auction for two residential sites in Tai Po on Monday, is boosting its land bank
on the mainland as it relies on growing demand for housing. The Foshan site is
the first plot the company bought on the mainland this year. China Merchants
Real Estates acquired a residential site in urban Chongqing for about 5.1
billion yuan. The 336,600 square metre site could provide a total gross floor
area of 1.45 million square metres. The unit rate is 3,517 yuan per square
meter. The Beijing municipal government pocketed 7.7 billion yuan from the sale
of seven development sites in the city. Despite six of the sites being located
in semi-urban and rural areas, developers bid aggressively. A residential site
in Chaoyang district was the only one located within the Fourth Ring Road area,
which marks the start of the capital's urban area. The site was sold to Yajule
for 710 million yuan, 325 per cent higher than the opening bid of 167 million
yuan. The site could provide a total gross floor area of 41,464 square metres,
while the accommodation value is 17,123 yuan per square metre. Average property
prices in the area are about 20,000 yuan per square metre. Dickson Wong Hung,
deputy general manager of Centaline (China), said the accommodation values of
the seven sites were similar to prices of existing housing estates there,
although they were in rural areas. A site in Pinggu district acquired by local
developer Tian Run was a good example of how aggressive the developers were,
Wong said. The developer spent 2.005 billion yuan buying the residential site,
506 per cent higher than the opening bid of 331 million yuan. "The average land
price is 5,789 yuan per square metre, which is similar to the average property
price of 7,000 yuan in the area," he said. "The average selling price of the
project has to reach more than 10,000 yuan per square metre in order to generate
reasonable profit." Under the new measures released by Beijing two weeks ago,
land buyers are required to pay a down payment of at least 50 per cent of the
total price. Meggie Qin, the head of research in Beijing for Jones Lang LaSalle,
said the local governments were trying to cool the property market by lowering
opening bids on sites. "That's why we saw the land prices were much higher than
the opening bids," Qin said. "The relaxation in property loans this year has
also supported developers bidding for sites aggressively." She said the
government might release more cooling measures next year, but the impact might
be limited. "Property prices in Beijing did not drop sharply in 2008 even though
the government released cooling measures. It gave developers confidence." Wong
said strong competition in the mainland property market was also one of the
factors encouraging aggressive land biddings. "There are a lot of developers on
the mainland, but there are fewer and fewer development sites for sale,
particularly in first-tier cities," he said. "They can't miss the chance to
acquire a site with development potential."
It's a case of perfect symmetry as police
officers stand alongside their new vehicles provided by the local government in
Taiyuan, Shanxi province, to help ensure public security over the New Year
holiday. A handover ceremony for the vehicles took place yesterday. 
EMPLOYMENT PROJECT: The Qingdao Bay
Bridge, funded by the government, is under construction and will be put into use
in 2010 
China has agreed to raise next year crude imports from Kuwait by 50 per cent to
about 240,000 barrels per day, trade sources said, with mainland refiners set to
process at record rates as demand rebounds strongly. The jump, which follows a
one-third increase this year, comes after Iraq said it would more than double
exports to the world’s second-largest oil consumer and Saudi Arabia agreed to a
12 per cent increase for next year. “The deals have been finalized,” said a
trade source familiar with the term supply agreements. “It’s a big increase.”
“Sinopec has raised the volume quite sharply,” said a second trade source. The
increases from Iraq and Kuwait, both of which supply mostly heavy, high-sulphur
oil, are partly due to top exporter Saudi Aramco cutting back on similar grades
mainland oil refiners consider more economic to process, traders said. But more
importantly, it’s the expected demand increase from mainland that has led to the
supply growth. Sinopec Corp (SEHK: 0386), Asia’s top refiner, has said it will
raise crude throuhgput next year to 4.1 million bpd, 14 per cent above the rates
recorded in the first three quarters of this year. Mainland’s fuel demand is
poised for an 8 per cent expansion next year, more than double this year’s 3 per
cent, Sinopec’s president, Wang Tianpu, said last month, amid increasing signs
of a strong economic recovery spurred by aggressive government spending. Most
oil from Kuwait, a member of the Organisation of the Petroleum Exporting
Countries, goes to Sinopec and the rest to PetroChina (SEHK: 0857,
announcements, news) , mainland’s second-largest refiner. The 240,000-bpd level
would be about 6 per cent of mainland’s current total crude imports of nearly 4
million bpd, and brings the country closer to Kuwait’s top buyers such as Japan
and South Korea. Mainland imported 28 per cent more crude from Kuwait, now the
country’s seventh largest supplier, in the first 11 months at 6.67 million
tonnes, or 146,000 bpd, according to mainland customs data. Kuwait, the world’s
7th largest crude exporter, aims eventually to export 500,000 bpd crude to
mainland, or double the next year level, and is working to achieve that target
by investing in a refinery or two in partnerships with mainland’s state
refiners.
Industrial and Commercial Bank of China (1398) is set to witness its most
dramatic change in the latest round of personnel reshuffles in the mainland
banking industry. ICBC president and vice chairman Yang Kaisheng, 56, will
retire from his posts, a source said. China Cinda Asset Management Corporation
president Tian Guoli is likely to replace him. ICBC vice president Niu Ximing
has resigned from his current post and will assume office as president and vice
chairman of the Bank of Communications (3328), the two lenders revealed
yesterday. ICBC is China's largest bank. Luo Xi, Agricultural Bank of China vice
president, will replace Niu as ICBC vice president while it is said that Niu's
predecessor Li Jun will work as the supervisor of Bank of China (3988). Analysts
said it is normal for Niu to gain promotion after years of good performance at
ICBC. Niu, 53, joined ICBC in 1983 and was promoted more than 10 times in the
past 26 years. It does not necessarily mean there will not be any further
internal reshuffles among the top five lenders, according to Nomura analyst May
Yan. Meanwhile, ICBC vice president Wang Lili will also take up the post of
executive director. Neither BoCom nor ICBC spokesmen would confirm the
unannounced reshuffle. It is an official policy in the mainland that senior
bankers may only be promoted to another bank. Separately, China Construction
Bank Corporation (0939) has stepped up its effort to become an integrated
financial institution. It bought from ING Insurance International a 50 percent
stake in Pacific- Antai Life Insurance Company. PALIC's registered capital
stands at 800 million yuan (HK$908.5 million). As at the end of June 2009, it
had a client base of 300,000 customers, 350,000 in- force policies, 2,507
insurance agents and total assets of 3.5 billion yuan. Following the
acquisition, CCB will further expand the platform for providing customer
services. It will promote cross-selling of life insurance products and banking
services products among its customers by leveraging on its abundance of
resources in terms of individual and corporate clients, CCB said. 
A Beijing judge has asked mainland novelist Mian Mian and defendant Google Inc
to hold talks on a settlement in a copyright suit and report back. Mian Mian, a
counterculture writer known for her lurid tales of sex, drugs and nightlife,
filed the suit in October after Google scanned her latest book, Acid Lovers,
into its online library. The judge's ruling came after a two- hour hearing
yesterday, Mian Mian's lawyer, Sun Jingwei, said. The author, who was not at the
hearing, wants 61,000 yuan (HK$69,260) in damages and a public apology. A Google
spokeswoman in Beijing said the US company removed Mian Mian's works from its
online library as soon as it learned of the lawsuit, and has no further comment
on the issue. "We think even if they remove Mian Mian's work, their previous
behavior is a violation of her rights," Sun said. "We demand a public apology."
A negotiated settlement is a possibility and the court has set no deadline, he
added. Google's ambitious effort to make printed works available online has
faced opposition from writers in the United States, Europe and elsewhere. The
net giant has scanned more than 10 million books, many still under copyright. In
the mainland, the government- affiliated China Written Works Copyright Society
has called on Google to negotiate compensation for authors whose work is scanned
into its library. Mian Mian has no connection to the writers' group.
Shanghai-based Mian Mian shot to fame in 2000 with Candy, a novel that caused a
stir with its graphic depiction of heroin use. Most of her work is banned in the
mainland, though pirated copies are widely available. The writers' group said
more than 80,000 works by Chinese authors have been scanned into Google's
library, but urged writers to negotiate rather than sue. The group is due to
hold settlement talks with Google next month.
Cautious developers have signaled that they do not want home prices to rise too
sharply too fast, to avoid a repeat of the price spiral in the second half of
this year. This came as two sites went under the hammer yesterday in Hong Kong's
first major land auction in two years, fetching a total of HK$10.4 billion,
which was at the lower end of market expectations. Sino Land (0083) and K Wah
International (0173) joined forces to clinch the two residential plots in Pak
Shek Kok, Tai Po. Surveyors were divided over the result but developers were
more positive. Bidding was cautious, sources said, because developers do not
want home prices to rise too sharply. Builders were also eyeing mainland buyers.
"The prices are very reasonable for us. We are very happy," said Sino Land
chairman Robert Ng Chee-siong. "Not expensive or cheap." Kerry Properties (0683)
executive director Chu Ip-pui said the two sites will set another reference for
future home prices. K Wah Real Estate managing director Alex Lui Yiu-wah said
there is still room for home prices to rise next year. Lui added that as China's
gross domestic product rises, more mainlanders will be able to afford homes in
the SAR. Charles Chan Chiu-kwok of Savills Hong Kong said the auction results
reflect that developers are cautious. He does not expect prices to surge over
the next two to three years. But Yu Kam-hung at CB Richard Ellis said the
auction prices are acceptable and will have a positive effect on the property
market. Sino Land is paying HK$5.15 billion - or HK$7,145 per square foot - for
the D1 site. The adjacent D2 site sold for HK$5.25 billion, or HK$7,824 psf,
making them the most expensive plots in the New Territories. Sino Land will own
85 percent of D2 and K Wah 15 percent. The sites were 42.9 percent and 45.7
percent higher, respectively, than the minimum guaranteed bids of HK$3.604
billion each. Sino Land's Ng thanked other developers for "giving face" and not
actively fighting for the sites. "I think the prices were very good, because the
costs will surpass HK$10,000." Cheung Kong (Holdings) (0001) executive director
Grace Woo Chia- ching said: "Prices of nearby properties have not reached that
level." Woo added that market expectations were too high because there has not
been a land auction for a long time. Chu of Kerry Properties also believes the
valuations had been too bullish. When three neighboring sites were auctioned two
years ago, Sino Land and Nam Fung Development teamed up with K Wah to secure the
plots for HK$10.1 billion. Ng said total investment in the two sites bought
yesterday alone will reach HK$18 billion. The five sites together may deliver a
gross floor area of 3.25 million square feet. Ng said construction work will
start in six months at the earliest and it will take about two and a half years
to develop them into a "super-class residential" project with "apartments,
bungalows and houses."
Dai pai dongs in Central could finally
take their place as an integral part of the district's cultural heritage in a
drive by the Food and Environmental Hygiene Department to improve conditions in
and around them. Officials are working with other government agencies and
utility providers like Towngas to to spruce them up, food and environmental
hygiene chief Cheuk Wing- hing told Sing Tao Daily, sister paper of The
Standard. The project will cost several hundred thousand dollars, Cheuk said.
Renovation and preservation work, aimed at attracting more locals and tourists,
could be completed in four to six months. Improving drainage and gas-pipe
installations will be part of the project. But not all owners of the 10 Central
dai pai dongs targeted are happy. Some are worried about the loss of income if
they have to stay closed during renovations. "We still need to pay the staff
during the closure period and it costs a fortune to install gas pipes. I hope
the government will pay all the expenditure," said the owner of a Stanley Street
eatery. But another stall owner, surnamed Lam, welcomed the idea. "There's a
need for change. The government is hoping to turn this place into a tourist
spot." Most of these eateries have poor hygiene conditions, Cheuk said. Those in
other districts, such as the 14 in Sham Shui Po, may have trouble renewing their
licenses if they do not improve conditions. 
A Valin Iron & Steel plant in Hunan
province. Industry insiders said the company's listing plan is designed to
support capacity expansion and overseas acquisitions. Company contemplating IPO
to expand capacity, say sources. Shares of Hunan Valin Steel Co, one of China's
top 10 steel makers, surged nearly 8 percent in Shenzhen yesterday following
unconfirmed reports that its parent was planning to list in Hong Kong. The
report said the steelmaker's parent company, Hunan Valin Iron & Steel Group, may
seek to raise as much as 10 billion yuan through the float and use the proceeds
to expand capacity. The Hunan-based Xiaoxiang Morning Herald cited chairman Li
Xiaowei, who made the remarks at a local government meeting. Lai Bangchuan,
secretary to the chairman, said he was unaware of the Hong Kong listing plan.
Hunan Valin Steel Co, the group's Shenzhen-listed unit, which is partly owned by
the world's largest steel maker ArcelorMittal, rose 8 percent to 7.75 yuan in
Shenzhen trading yesterday. Li also said the company aims to double its profit
next year, forecasting its steel production will hit 19 million tons in 2010,
the newspaper reported. Industry insiders said Valin's listing plan is designed
to support capacity expansion and overseas acquisitions. Li Xiaowei said earlier
in March that the company plans to expand its annual production capacity to 30
million tons by mergers and acquisitions over the next few years. Valin produced
10.83 million tons of crude steel in 2008, classifying it as a second-tier steel
maker when compared with the country's largest steel mill Baosteel and the
second largest mill, Hebei Steel. Li said Valin would succeed in its expansion
goals via mergers or acquisitions, launching it to the sector's first tier.
China Business News reported earlier this month that Valin is eyeing Hunan
Lengshuijiang Iron & Steel Co Ltd, a rebar and low-end construction steel
producer that has a different product mix from Valin. "Valin also needs money to
construct facilities such as ports to reduce its logistics costs", said Yu
Liangui, a senior analyst with online consulting firm Mysteel. Yu said Valin's
Hong Kong IPO plan may also be linked with the Chinese government's recent
activities to curb overcapacity. The central government in October announced
plans to curb expansion of six industry sectors - including steel - by
withholding approvals for new investments and tightening financing. "This may
force Valin to turn to Hong Kong for a listing," Yu said. In March, Valin paid
A$1.27 billion for a 17.4 percent stake in Australia's Fortescue Metals Group.
The move helped the steel maker bolster its iron ore supply and made it the
iron-ore miner's second largest shareholder. Chinese steel mills have long
sought overseas acquisitions to secure their iron ore supplies, thus helping
move forward their capacity expansion plans. The latest company in this process
was Chinese steel maker Wuhan Iron & Steel Group which invested $400 million to
purchase a 21.52 percent stake in Brazilian iron ore miner MMX Mineracao e
Metalicos SA. This was followed by Wuhan Steel's $247-million investment in
Australian iron-ore firm Centrex, and Shanghai-based Baosteel's acquisition of a
15-percent stake in Aquila Resources.
World Gold Council (WGC) data reveals that for the first time in 21 years the
world's central banks have been net buyers of gold and China has been the
biggest buyer this year, adding 454 tones to bring its central bank reserves to
1,054 tones. Amid growing concern over the weakness of the dollar, about 28
billion U.S. dollars worth of bullion was bought by central banks this year,
based on an average price of 978 U.S. dollars an ounce, according to the WGC.
The biggest buyers have been the emerging economies of China, Russia and India,
but smaller countries such as the Philippines, Kazakhstan, Sri Lanka and Mexico
have also been shifting their reserves into gold. The value of the dollar, the
default reserve currency for most countries, has fallen as investors have grown
cautious about America's huge debt burden and possible inflationary trends.
Meanwhile, a handful of developed countries have taken advantage of record gold
prices to reduce the size of their vaults. The metal hit a peak of more than
1,200 U.S. dollars an ounce this year, according to Goldman Sachs. However,
Dylan Grice, an analyst at Société Générale, believes that the continued
weakness of the dollar, concern about inflation and fiscal policy will continue
to drive the gold price. A spate of gold-buying in the 1960s, led by France,
resulted in the collapse of the Bretton-Woods system in 1971 when the link
between the value of the dollar and gold was abolished.
Another spacecraft launch likely in
2010 to prepare for space lab - China plans to launch Chang'e-2, the country's
second lunar probe, at the end of 2010, space authorities announced yesterday.
The design and production of Chang'e-2 is complete, and the lunar orbiter is
undergoing ground tests, the State Administration of Science Technology and
Industry for National Defense said yesterday in a news release. Chang'e-2 is
expected to test the soft-landing technological capability for the Chang'e-3 and
provide high-resolution images of the landing area, the administration said.
"Progress on six key technologies of Chang'e-2 has been made, including the
lunar capture, orbit control and research on high-resolution stereo camera," the
administration's spokesman said. Ye Peijian, chief designer of the nation's
first lunar probe, had told China Daily earlier that the launch was expected in
October. The administration said that Chang'e-3, the country's lunar lander and
rover, is also well on the way toward liftoff. The project is now in the
prototype stage. Chang'e-2 and Chang'e-3 are part of the second phase of the
country's lunar exploration program, which consists of three stages -
"orbiting", "landing" and "returning". Ye said earlier that Chang'e-3 is likely
to be launched before 2013. The country's first lunar probe, Chang'e-1, was
launched in October 2007 and ended its 16-month mission on March 1 this year.
Meanwhile, China's manned space project is also likely to see a breakthrough
next year, a top scientist said. Qi Faren, chief designer of the Shenzhou
spacecraft, told Guangzhou Daily on Sunday that Tiangong-1, or Heavenly
Palace-1, a spacecraft that will test docking technology and prepare for the
future construction of space laboratories, will be launched by the end of next
year at the earliest. According to the official website of China's manned space
program, 
Although it is still struggling with paying back debt in the West, the revived
General Motors has started further expansion in the East, under a new
cooperation model with its Chinese partner. Earlier this month, General Motors
Co and Shanghai Automotive Industry Corporation Group (SAIC) jointly announced
that they had agreed to expand their long-time cooperation in the Asia region,
outside China. GM and SAIC, which currently operate eight joint ventures in
China, have formed a new 50-50 investment company, General Motors SAIC
Investment Ltd, in Hong Kong to facilitate their expansion efforts. They also
announced plans to leverage their resources to support expansion in emerging
markets, beginning with India. "Changes in the worldwide economy have created
new opportunities in emerging markets," said Hu Maoyuan, chairman of SAIC. "By
leveraging our individual assets and those of our China joint ventures, SAIC and
GM are in a strong position to introduce competitive products outside China that
will satisfy the needs of consumers in India and other high-potential global
markets." Based on the automotive industry's long-term potential for growth in
India, SAIC and GM have formulated a joint strategy for investment in the
country. Revied GM starts expansion in Asia -A worker inspects an SAIC-GM-Wuling
Automobile Co minivan on the assembly line at the company's factory in Liuzhou.
Since its establishment in 2002, SAIC-GM-Wuling's domestic sales have grown four
fold. In December, 2009, it was the first Chinese automaker to sell 1 million
vehicles in a single calendar year. "Over the past decade, SAIC and GM have
created one of the world's most successful automotive industry partnerships,"
said Nick Reilly, president of GM Europe, the former president of GM
International Operations, which is based in Shanghai. "Both companies felt this
was the proper time to deepen cooperation beyond China's borders in order to
enhance our partnership as part of our individual companies' long-term growth
strategies." Both companies also reached an agreement for GM to transfer 1
percent of its stake in Shanghai GM to SAIC Motor. "This will assist China's
leading listed automotive company in consolidating Shanghai GM revenue into SAIC
Motor, which will provide investors with a clear understanding of its business.
Shanghai GM management will continue to operate with the existing joint
management structure and oversee operations of the joint venture," said Kevin
Wale, president and managing director of GM China Group. According to Wale,
choosing India to start the Sino-US auto cooperation between GM and SAIC, is not
only a perspective on the huge potential of the Indian market, but also a
consideration that the current Indian market is quite similar to the Chinese
market six or seven years ago. "Based on the cooperation in Indian market, we
both will look for more opportunities in other emerging markets in Asia, which
now has a relatively low capacity of vehicles, but high demand for low-price
small cars and minivans," said Wale. 
China Eastern Airlines (SEHK: 0670) on
Monday agreed to buy 16 Airbus A330 planes for a "substantially lower" price
than the catalogue figure of US$2.6 billion dollars (HK$20.2 billion), the
airline said. “On 28 December this year, the Company entered into the agreement
with Airbus SAS regarding the purchase of sixteen Airbus A330 series aircraft,”
said a statement from the airline on the Hong Kong stock exchange website. It
said the jets were needed to meet growing demand for long-haul flights. The
airline said it had been given “material price concessions” by Airbus in the
form of credit to be used for spare parts, goods and services or to go towards
the final delivery invoice payment for the aircraft. The planes are due to be
delivered in stages between 2011 and 2014. “The aircraft will primarily be used
to satisfy the demand arising from the growth of the market of
long-and-medium-haul routes passenger air transportation for the coming years,”
the airline said. The deal is subject to shareholders’ approval. 
