China.Hawaii Chamber of Commerce ®
"Hawaii-China Guan Xi, We Get Things Done™" - Trade Advocacy Organization
USA Small Business Administration (SBA) Selected Johnson Choi/HKCHcc 2008 United States National Champion
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Do you know our dues paying members attend events sponsored by our collaboration partners worldwide at their membership rates - go to our event page to find out more! After attended a China/Hong Kong Business/Trade Seminar in Hawaii...still unsure what to do next, contact us, our Officers, Directors and Founding Members are actively engaged in China/Hong Kong/Asia trade - we can help!
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Listen to MP3 “Business Beyond the Reef” to discuss the problems with imports from China, telling all sides of the story and then expand the discussion to revitalizing Chinatown - Special Guest: Johnson Choi, MBA, RFC. President - Hong Kong.China.Hawaii Chamber of Commerce (HKCHcc) and Danny Au, Manager, Bo Wah Trading
(approximate $ exchange rates: US$1 = HK$7.8, US$1 = RMB$6.8)
Holidays Greeting from President Obama & Johnson Choi http://www.youtube.com/watch?v=pNk4Z4lUV-k http://www.facebook.com/video/video.php?v=219896871983&ref=mf
Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) http://www.tid.gov.hk/english/cepa/index.html
July 31, 2010
Hong Kong*: Hong Kong's population will swell to 8.89 million in 30 years, with the elderly making up a much larger proportion of citizens and the number of men to women also widening, say latest projections. The elderly population is projected to rise to 28 per cent of the population in 2039 from 13 per cent last year. There will also be fewer men to women. Last year there were 889 men to every 1,000 women but by 2039 the figure will fall to 744. The gap will be even bigger in the 25-44 age group, with just 631 men per thousand women as against 746 last year. Commissioner for Census and Statistics Fung Hing-wang said the imbalance of women to men was due in part to the huge population of domestic helpers. Another factor would be the influx of mainland wives of Hong Kong men, assuming that the 150 daily quota of one-way permits remained unchanged over the next 30 years. Asked if Hong Kong women would find it harder to find husbands, Fung said: "Marriage is about interaction, supply and demand. There are likely to be some adjustments." Fung said the ageing of the post-war baby boomers and of the influx of young mainlanders in the 1980s would contribute to the growing elderly population.
Jade Dynasty staffer Leung Hoi-ming holds a Nan Gong Wen Tian figurine at the 12th Ani-com & Games Hong Kong 2010. Limited edition figures, pseudo-models, comics and bargains - all are in place as the Ani-com comics fair kicks off today. More than a hundred people queued overnight outside the Hong Kong Convention and Exhibition Centre last night, with the majority saying that they were keen to buy figurines of online game or comic-book characters. Among the most expensive is one of Nan Gong Wen Tian - a character from Tony Wong Yuk-long's comic series, The Legend of Nan Gong Wen Tian. The HK$1,200 special edition figurine comes with a transparent arm, and only three are for sale at the fair, which runs until Tuesday. Others are cheaper but also in short supply. A replica of the sword used by Nip Fung, a character in Ma Wing Shing's comic Fung Wan, costs HK$350 but only 20 are available. Brenda Leung, marketing manager for Jade Dynasty, publisher of Wong's comics, said it was expected that business would increase by about 10 per cent from last year's HK$1 million. Lego fans will be able to see 12 local attractions made by Lego enthusiasts, such as models of Ap Liu Street, Wong Tai Sin Temple and the Hong Kong Coliseum, and can vote on their favourite one. Eddie Chow, in his 30s, made a Lego model featuring Tai Po's Lam Tsuen. The set, on which Chow spent more than HK$10,000 and which took a month to make, includes the famed wishing tree which has collapsed. Online gaming companies promise pseudo-models will be there. Online game developer Gamania has invited pseudo-model Da Da and four Taiwanese models. "Da Da will strip 10 items of apparel off herself and give them to the first 10 fans in the queue," public relations representative Kiko Li said. She did not say what the items would be but stressed the event would be suitable for people of all ages. Microsoft, the maker of X Box, has replaced Chrissie Chau Sau-na and Jessica C with another two pseudo-models - Debby Tsang and Kinki Lam. The organiser has ruled out promotional activities by Chan and Jessica C, because they are celebrities "well-known enough to cause a stir", the exhibitor was told. But the company's director of entertainment and devices, Chester Wong Kui-tim, said the replacement models would not adversely affect sales, which he predicted would increase by 40 per cent. X Box 360, a gaming device released two weeks ago, will be offered as part of a promotional package at Ani-com. For HK$2,969, the first 100 buyers will get a HK$2,300 X Box 360, a game, a console and a bicycle.
The MTR Corporation will today consider ways to rescue Octopus Cards' credibility and the future of the company's embattled chief, Prudence Chan Bik-wah.
Sino-Australian relations look to be on the mend with iron ore (above) from Down Under unloaded in Tianjin in March, and now a project between Chalco and British-Australian miner Rio Tinto in southeastern Guinea. Aluminum Corp of China (SEHK: 2600), the nation's biggest producer of the metal, agreed to pay US$1.35 billion for a stake in Rio Tinto Group's Simandou iron ore project in Guinea, making its first investment in the commodity. Chalco will acquire a 44.65 per cent stake by funding development over the next two to three years. The agreement follows an initial accord on the project with Chinalco, Chalco's state-owned parent, in March. Rio is working to repair ties with China, its biggest client, after scrapping a US$19.5 billion investment from Chinalco last year. Chalco, facing a 12 per cent drop in aluminium prices, will benefit from tapping what London-based Rio says is the world's top undeveloped iron ore deposit. "Chalco delayed a share sale this year and the stock performed badly," Owen Liang, a Shenzhen-based analyst at Guotai Junan Securities, said. "The company needs to convince investors of profit growth. The Simandou project will contribute substantially to profit after it starts." This will be Chalco's biggest overseas investment after it pulled a A$3 billion (HK$20.82 billion) bauxite project in Australia last month as market conditions deteriorated. Bauxite is the main raw material for aluminium. In February, the company agreed to jointly develop and operate a US$1 billion smelter in Malaysia with GIIG Holdings. "This project can also efficiently balance China's need for security of supply on the global iron ore market," said Xiong Weiping, chairman of Chalco and Chinalco. The Simandou project would be the foundation for future co-operation between the two companies, he said. Imports of iron ore by China, the biggest buyer, jumped 42 per cent last year to a record 628 million tonnes. The biggest suppliers, Vale, Rio and BHP Billiton, abandoned a 40-year custom of setting annual prices this year and raised rates twice as demand gained. "The project will contribute roughly 4.5 billion yuan (HK$5.15 billion) of profit a year, based on current iron ore prices," Guotai's Liang said. "It will also reduce the pricing power of the three biggest miners." Rio will retain a 50.35 per cent stake after Chalco's investment, and International Finance Corp holds 5 per cent. The Guinean government had an option to buy up to 20 per cent of the project and had "recently expressed a willingness to exercise that option", the two companies said.
A sharp increase in the number of expatriate executives moving to Hong Kong with their families helped drive a 10.9 per cent rise in rentals of luxury residential properties in the first half of this year.
The house at 20 Peak Road, surrounded by foliage, is a two-storey detached building completed in 1948. Sellers of a luxury house on The Peak are confident of achieving a record price following the positive result at this week's land auction. The Shang family, owners of the China Can Company, appointed property agency Jones Lang LaSalle to conduct a tender for the 62-year-old house at 20 Peak Road. The tender will close on September 15. In an auction on Wednesday, a site at Mount Nicholson Road on The Peak sold for the third-highest price on record in Hong Kong - HK$10.4 billion. "The accommodation value [land price per square foot] has a great opportunity to break the record for a residential site in town," Joseph Tsang Hon-ping, international director at the property agency, said of the Peak Road site. The most expensive site sold was 35 Barker Road on The Peak, for which Henderson Land (SEHK: 0012) chairman Lee Shau-kee paid HK$68,228 per sq ft last month. As the development potential of the project is small, Tsang expects the tender will only attract tycoons keen to build their dream home, rather than commercial developers. Lanbase Surveyors director Chan Cheong-kit estimates the 20 Peak Road site to be worth between HK$800 million and HK$900 million as it is in a prime location with panoramic views of Victoria Harbor and Central. "The land price per sq ft may reach HK$68,229, similar to the site acquired by Lee Shau-kee," he said.
China*: Industrial and Commercial Bank of China (SEHK: 1398), the world's largest lender by assets, said it would raise up to 45 billion yuan (HK$51.48 billion) via a rights issue in Shanghai and Hong Kong, following fund-raising efforts by its Chinese peers. ICBC's board has passed a proposal to sell up to 0.6 shares for each 10 shares held by existing shareholders to replenish capital, according to a bourse filing on Wednesday. The plan is subject to approvals from shareholders and regulators. The rights offer would bring total fund-raisings announced by the largest lenders - ICBC, China Construction Bank (SEHK: 0939), Bank of China and Bank of Communications (SEHK: 3328) - to as much as 287 billion yuan. The fund-raising flood comes on the heels of last year's lending binge. After banks lent an unprecedented 9.6 trillion yuan, they now have to strengthen their capital bases to meet regulatory requirements. At the end of March, ICBC's capital adequacy ratio stood at 11.98 per cent, higher than the 11.5 per cent minimum required by the China Banking Regulatory Commission. The ICBC board of directors on Wednesday also passed a plan to privatise Industrial and Commercial Bank of China (Asia), which is a 72.4 per cent-owned subsidiary. Analysts with Citi Investment Research estimate that the deal, which is intended to streamline ICBC's Hong Kong businesses, would cost ICBC US$1.6 billion if the stake is priced at 2.5 times 2009 book value. ICBC sold a 75 per cent stake in brokerage ICEA Finance Holdings to Bank of East Asia (SEHK: 0023) at the beginning of this year and bought a 70 per cent stake in BEA (Canada). In Hong Kong, ICBC has a wholly owned investment bank, ICBC International. Analysts with Guotai Junan Securities estimate that the rights issue will be priced at HK$2.57, 56 per cent lower than the Tuesday closing price of HK$5.87. The analysts do not expect the fund-raising to have a major impact on the market, predicting that Central Huijin Investment, a major shareholder of ICBC and a subsidiary of the nation's sovereign wealth fund China Investment Corp, would probably subscribe to the shares. Separately, Agricultural Bank of China may topple ICBC as the company with the world's biggest IPO if it chooses to exercise a greenshoe option. ICBC completed the world's top initial share sale in 2006 when it raised US$21.9 billion. ABC raised US$19.2 billion in an IPO earlier this month, and boosted the size to about US$20.8 billion after selling a further 3.81 billion shares at HK$3.20 a share, it said yesterday.
China Show of force in South China Sea drill - War games a response to US-South Korean exercises, say analysts - Crack warships from the PLA's three naval fleets jointly exercised in the disputed South China Sea in a move that was hailed by the state media as unprecedented. The drills by the People's Liberation Army Navy in strategic waters on Monday come at a sensitive time; the United States and South Korea are conducting their own joint military drills off the Korean Peninsula. The US further angered Beijing last week by declaring that the resolution of disputes in the South China Sea is in the US' "national interest". The Ministry of Defence and state media did not mention the purpose of Monday's exercises. While it is normal for the PLA to conduct exercises before anniversaries - such as that of its founding on Sunday - experts on the mainland and overseas agreed that the sheer scale of the drills was exceptional. Gary Li, a PLA analyst at the London-based International Institute for Strategic Studies, said the televised display of so many missile tests was highly unusual. "It looks like [China] was clearly sending a message," he said. "I have never seen a senior Central Military Commission member actually participating in naval exercises, along with so many high-level officers. The deck of the observer ship was strewn with gold braid," he said. The news was only reported yesterday by China Central Television and the Ministry of Defence on its website. PLA Chief of General Staff Chen Bingde and naval commander Wu Shengli - both members of the Central Military Commission - supervised the exercises. Flagships of all three naval fleets took part in the war games, indicating the scale of the operation. Xu Guangyu, a senior researcher of the China Arms Control and Disarmament Association, said the three fleets regularly carry out [separate] exercises to mark the PLA's founding anniversary. "But of course, this time there is a strategic necessity to bring all three together for such a big joint mission," he said. State media did not say exactly where the drills took place or how many ships or sailors participated. "We must pay close attention to changes in [regional] situations and the development of our mission; prepare ourselves for military struggle," Chen was quoted by the state media as saying. The military channel of China Central Television showed selected footage of the drills. Luyang-class destroyers, Sovremenny-class destroyers and guided-missile frigates carried out synchronised warfare manoeuvres and test-fired several types of ship-to-air and anti-ship missiles, the footage showed. The CCTV report said the navy focused on how to conduct a precise strike in a complex environment amid sophisticated enemy electronic jamming. "It is a comprehensive and complex exercise in our history. The number of missiles fired and the intensity of the electronic warfare conducted are both remarkable." Military exercises are an important feature of Chinese military doctrine and often offer an important strategic insight into the PLA's intentions and capabilities. Analysts are divided on the exact motive for the latest exercise but agreed that it was a show of defiance against US dominance in Asia. Li said the exercises were probably a further reaction to the ongoing US-South Korean manoeuvres in the East Sea, given their apparently high degree of organisation. Significantly, the PLA was showing off a comprehensive array of long-range attack capabilities, including missiles launched from submarines and fast-attack craft. "It is a very strong message ... showing they can project force across a wide range of platforms in a very comprehensive and adaptable way," he said. Antony Wong Dong, president of the Macau-based International Military Association, said the gathering of main forces of the three fleets in the South China Sea was to show China's concern over America's involvement in territorial disputes in the troubled region. Conducting such co-ordinated manoeuvres of ships from all three fleets is rare for the PLA and would take time to prepare. But recently, the PLA demonstrated it had mastered the required capabilities to bring a separated force together to carry out co-ordinated missions. In April, the PLA navy carried out elaborate long-distance exercises to the southeast of Japan's offshore islands. "It's not that difficult for today's PLA navy to organise joint-fleet exercises at short notice," Xu said. China's rapid growing military clout has raised concerns in the region, particularly among nations that have unsolved territorial disputes with Beijing. A senior Vietnamese military official warned on Wednesday against an arms race in the South China Sea, noting a growing naval presence from a range of nations, including China. Lieutenant General Nguyen Chi Vinh, deputy defence minister, said China's military exercises were its own affair but they must not interfere with the territorial integrity of Vietnam's holdings in the sea's Spratly islands. "We never want to see an arms race in this area," he said. Countries like Vietnam "should be worried" if "concerned parties do not find a common understanding and direction ... and all want to impose their opinion on each other".
Bottles of water are stacked up for sale at a petrol station in Jilin city amid fears that tap water may have been contaminated.
July 30, 2010
Hong Kong*: The Privacy Commissioner has urged the government to give serious consideration to making unauthorised sales of personal data a criminal offence. Roderick Woo Bun, who is investigating the HK$44 million sale of the details of 1.9 million Octopus Card holders, said it should do this as part of a review of the privacy law, which is now under way. Under the law as it stands, the sale of personal data by data users for profit without the consent of the subject is not a criminal offence and there is no penalty for misuse of personal data in direct marketing. An offence is committed only if a person does not comply with an enforcement notice issued by the privacy watchdog after investigation. But in Britain, unlawful obtaining, disclosure or sale of personal data is an offence under the Data Protection Act. "The government should consider introducing a law to regulate transfer of personal data for sale," Woo said at a media lunch yesterday. "The Octopus incident has [shown] that personal data has become a valuable commodity in the market, about which the public has great concern," he said. Woo, who will finish his five-year term on Saturday, said he hoped his successor would encourage and assist the government in reviewing the privacy law. His views were backed by lawmaker Wong Kwok-hing who said there was a pressing need for such a law. "It is very clear that there are too many grey areas and loopholes in the existing privacy law, and the penalties that exist are not stiff enough to deal with contravention of data protection principles," he said.
Patients who join a proposed voluntary health insurance scheme should be asked to pay a higher proportion of the costs of their treatment in public hospitals, then claim the money on their insurance, Hospital Authority chairman Anthony Wu Ting-yuk says. Instead of paying only a heavily subsidised charge of HK$100 a day, public patients covered by the proposed government-regulated scheme would pay part of the full cost of HK$3,300 a day.
Hang Lung chairman Ronnie Chan emphasises a point during a press conference to announce the company's results. Hang Lung Properties (SEHK: 0101) chairman Ronnie Chan Chichung spent more time yesterday discussing recent management upheavals than talking about his company's 400 per cent leap in net profit. He said as far as he was aware, no more executives were planning to leave. Terry Ng Sze-yuen, executive director of Hang Lung Properties and Hang Lung Group (SEHK: 0010), resigned for personal reasons a week ahead of yesterday's annual results announcement. Two months before he left Ng, who had been with the company for 10 years, realised a gain of more than HK$100 million after exercising his share options. His departure came a week after Nelson Yuen Wai-leung, the 58-year-old managing director of both companies, retired on July 14. Philip Chen Nan-lok, who quit Swire Group (SEHK: 0019) to join Hang Lung, succeeded Yuen in both managing director posts the next day. "In our 50 years of corporate history, very few people have left us," said Chan. "We are known as one of the most stable senior management teams. Philip Chen is only our fourth managing director so far." Chan emphasised that Yuen had said he would retire this year when he was hired as a finance director. "As far as I know today, no more [executives] will leave," he said. Asked about the job of investor relations, which was previously handled by Ng, Chan said it was the least complicated work in the company. Hang Lung Properties recorded underlying profit of HK$6.67 billion for the year to June 30. The developer's operating profit from property sales rose to HK$5.25 billion from HK$3 million a year earlier. The company sold 425 garden-view units at the HarbourSide residential project at Kowloon Station at an average price of more than HK$14,000 per square foot. Operating profit from property leasing climbed 8.13 per cent to HK$3.72 billion. Taking into account a revaluation gain from its investment properties, net profit jumped 438.88 per cent to HK$22.25 billion while turnover rose 188.96 per cent to HK$12.05 billion. A final dividend of 54 HK cents was declared, up from 51 HK cents a year earlier. Meanwhile, Hang Lung Group reported that underlying full-year profit rose 154.48 per cent to HK$3.69 billion, from HK$1.45 billion a year ago. It declared a final dividend of 57 HK cents, up from 54 HK cents a year ago. Shares in Hang Lung Properties fell 3.12 per cent to HK$32.60 yesterday while Hang Lung Group was down 0.98 per cent to HK$45.45.
Hong Kong $10.4 billion (US$1.34) Peak sale shows strength of luxury market - Nan Fung Development and Wharf buy Mount Nicholson site - A site on The Peak fetched the third-highest land price in the city's history yesterday, underscoring the continued strength of the luxury residential market. Nan Fung Development and The Wharf (Holdings) (SEHK: 0004) paid HK$10.4 billion in an auction for the site at 103 Mount Nicholson Road - HK$32,014 per square foot. They outbid New World Development, Sino Land and another, unidentified, developer. Analysts had expected it to sell for between HK$8.7 billion and HK$11.4 billion. The 2.33-hectare site contains government staff quarters that have been empty for years. Nan Fung and New World Development were the only two developers to submit aggressive bids. Sun Hung Kai Properties (SEHK: 0016) and Sino Land appeared to take a back seat, even though they have released new luxury projects that have sold well in recent months. New World made the first bid when government auctioneer Graham Ross announced an opening price of HK$8 billion. An unidentified developer and Nan Fung submitted higher offers after Ross warned the site might be withdrawn if the offers failed to meet the government's reserve price. He cut the incremental bid from HK$100 million to HK$50 million when the reserve price of HK$8.2 billion was reached. The unidentified developer withdrew from bidding at HK$8.35 billion. Sino Land chairman Robert Ng Chee Siong, Chinese Estates Holdings (SEHK: 0127) director Lau Ming-wai and Manhattan Realty general manager Patrick Chow sat together, implying they had formed a consortium. Sino Land made an offer of HK$8.5 billion but withdrew when the price reached HK$8.95 billion. That left Nan Fung and New World in the running. The site went to Nan Fung with the 47th bid. Though the site is on The Peak, according to the zoning plan it is closer to Evergreen Villa in Stubbs Road, Mid-Levels. Nicholas Brooke, chairman of Professional Property Services, said: "It is a very good site but it isn't The Peak in many people's minds. There is a challenge with development. Half of the site is slope, and the developer will have to pay extra foundation costs." He believed some developers were cautious about bidding because they expected the government to put more luxury sites on the market in the next 12 to 18 months. Brooke expected luxury residential prices to rise a further 10 to 15 per cent by the end of the year. About 30 per cent of the floor area of the project will accommodate houses, while the rest will be used for flats. The managing director of Savills Valuation and Professional Services, Charles Chan, said the average price of the houses would have to reach HK$55,000 to HK$60,000 per sq ft for the developer to make a reasonable profit, and the flats would have to go for HK$35,000 per sq ft. Including yesterday's sale, the government has generated HK$26.05 billion from land sales since the start of the financial year in April. Its target is HK$34.1 billion. The government will sell four commercial and residential sites worth more than HK$7 billion next month. The Mount Nicholson Road site could provide a gross floor area of 324,861 sq ft. Under government restrictions, the maximum building height for the northern portion is 12 storeys above one basement. For the southern portion it is 13 stories.
In the past 10 years, many deals were done by overseas funds, such as the acquisition of Grand Millennium Plaza in Sheung Wan, but local investors are now back in play.
Officials are trying to track the source of an oil slick that left sludge on Repulse Bay beach yesterday. The Marine Department says preliminary investigations show the oil did not originate from land, but so far officers have drawn a blank. However, they say it is not connected to an oil spill off Tuen Mun on Sunday. The beach on Hong Kong Island, which is popular with both locals and tourists, was closed for a clean-up by the Leisure and Cultural Services Department. It was not known last night if it would be reopened today. The department was alerted at about 9am yesterday to a large patch of oil that was floating off Round Island, which is about two kilometres south of the beach. The oil - which marine officials described as a "rainbow-coloured oil sheen" - then gradually began drifting towards Repulse Bay. It started to hit the shoreline at about 12.40pm. A thick layer of oil was also spotted in a corner of the sea just off the Kwun Yam shrine on the beach. A spokesman for the Marine Department said the size of the oil patch had shrunk to 100 metres by 50 metres by the time it reached the beach. "We deployed a contractor to use a water jet to disperse the oil," he said, adding that no chemicals were used to dissolve the oil. He said it was uncertain what type of oil it was but it was likely to be fuel oil. Samples were collected to determine the properties of the oil. He said even with a good analysis of the oil, the chance of locating the source was slim. The spokesman said the latest incident did not have anything to do with the oil spill in Tuen Mun, which also forced the closure of Cafeteria New Beach and Golden Beach on Sunday. The Environmental Protection Department said their officers had established that the spill at Repulse Bay did not originate from land.
Hong Kong carriers to launch iPhone 4 for free with HK$398 (US$51.35) monthly plan - At the stroke of midnight, thousands of consumers will be the first in Hong Kong to obtain Apple's iPhone 4 for free or just HK$580. Those attractive options are being offered by mobile network operators 3 Hong Kong and SmarTone-Vodafone, which announced yesterday their respective tariff plans for the sleek, video-conferencing-ready smartphone. The two firms and new Apple carrier-partner CSL will each host iPhone 4 launch parties tonight where attendees will be able to buy the device on site instead of heading to the shops tomorrow. To get a free 16-gigabyte iPhone 4, subscribers must choose the HK$398 monthly plan that comes with unlimited data usage and intra-network text messaging. With its plan, 3 Hong Kong bundles 2,500 voice minutes per month - a bit more than the 2,400 that come with the comparable SmarTone-Vodafone package. A 32GB iPhone 4 is available with an upfront payment of HK$580 with that unlimited data plan. For iPad users, 3 Hong Kong is offering unlimited local data and Wi-fi links for an extra HK$50 a month to those on its HK$398 iPhone plan. The cheapest plan for both carriers costs HK$138 a month, with 100 megabytes of data and unlimited intra-network text messaging. With this plan, a 16GB iPhone 4 is offered at HK$3,480 by SmarTone-Vodafone and HK$3,380 by 3 Hong Kong. The handset's 32GB version under the same monthly plan will cost HK$4,280 with SmarTone-Vodafone and HK$4,180 with 3 Hong Kong. Calls made to CSL, the city's largest wireless network operator, about its iPhone 4 tariff plan were not returned yesterday. CSL chief executive Joseph O'Konek had earlier said selected 1010 and one2free shops would remain open at midnight to accommodate preregistered customers not invited to the carrier's launch party. Stephen Chau Kam-kun, SmarTone-Vodafone's chief technology officer, said the operator had stock reserved to cover all 2,000 invited guests at its event at the IFC Mall in Central. "Despite the publicity about the iPhone 4's antenna issues, the demand is huge," Chau said. However, he declined to say how many customers had preregistered to buy the device. PCCW (SEHK: 0008) Mobile, which is not an Apple carrier-partner, introduced yesterday rebate offers of up to HK$4,988 for customers who use its concierge service to order an iPhone 4 from authorised dealers and shops.
A black rainstorm warning issued for the second time in a week saw more than 150 millimeters of rain fall across the territory and left 10 construction workers stranded and a security guard almost swept away by floodwaters in Sai Kung. Similar to last Thursday's black rainstorm, yesterday afternoon's alert was raised from amber to red and then black within about an hour. All warnings were canceled around 6pm. Ten construction workers were stranded in a construction site on Pik Sha Road, near Clear Water Bay Road. Firemen were called to lead them to safety. Also in the same area, a security guard at a residential building escaped before his guard post was swept away by 1.5-meter-high floodwaters. The Hong Kong Observatory said a trough of low pressure brought heavy rain and thunderstorms. Some 174 flights were delayed and suspension of all outdoor works at the airport caused serious interruption in luggage delivery. More than 1,000 people waited to reclaim their baggage in the evening. Some said they waited for almost two hours. The observatory said the storm brought more than 100mm of rainfall to the urban areas in the afternoon. Sai Kung and Lantau Island were the hardest hit, with more than 150 millimeters recorded. There were eight cases of flooding and four landslides reported. Low-lying Tai Tung Village near Ma On Shan suffered serious knee-high flooding. No injuries were reported. The government went to great lengths to prevent a second Sha Po Tsai incident, when more than a dozen villagers were trapped for hours last Thursday before being rescued. One villager drowned there. Lawmaker Gary Chan Hak-kan along with government officials inspected the village and the drainage work upstream. They visited every household to warn villagers to evacuate. Transport services were arranged, and dozens were led to safety at Tai Po Community Centre. Some, however, chose to stay put. A villager surnamed Li refused to go and said the rain was less serious this time. "I dare not sleep tonight in order to protect my home," he said. Today, there will be sunny intervals with a few showers with temperatures between 26 and 31 degrees Celsius. The forecast for tomorrow is sunny with a few showers and mainly fine over the weekend.
Macau boom and strong Singapore debut cut Las Vegas Sands losses - Booming gambling volumes in Macau and a successful debut in Singapore helped casino developer Las Vegas Sands narrow losses and boost sales to a record level in the second quarter. The US parent of locally listed Sands China saw revenue at its three Macau properties - the Venetian, Sands and Four Seasons - rise 41.5 per cent from a year ago to US$1.03 billion. Macau quarterly revenues broke the billion-dollar mark for the first time as gambling volumes from high-rollers soared. Profit rose even faster on cost-cutting measures, as the three Macau properties saw earnings before interest, tax, depreciation and amortisation climb 73.9 per cent to a record US$307.04 million in the three months to the end of June. The company controlled by billionaire Sheldon Adelson said it continued to negotiate for approvals from the Macau government to import the construction workers it needed to resume full-scale work on its Cotai resort complex. The project will feature a 6,000-room Sheraton, Shangri-La and Traders casino-hotel complex with a total projected cost of US$4.42 billion. Its opening date has been delayed from the second quarter to the third quarter of next year and Adelson said yesterday it was "too early to tell" if further delays due to the labour issue would be necessary. Sands China acting chief executive Michael Leven said the company would appoint a recruiting firm to help hire a replacement for former chief executive Steve Jacobs, who was fired last week. "The candidate pool is a global search," Leven said. In Singapore, where Las Vegas Sands partly opened its US$6 billion Marina Bay Sands on April 27, the city-state's second casino booked US$94.5 million in ebitda on US$216.4 million in revenue during its first 65 days of business. The resulting ebitda margin of 43.7 per cent looks sky high compared with Macau's 23 to 33 per cent margins. The difference is due to the lower gaming tax rates in Singapore, and executives said margins would improve further as the new property adds more hotel rooms, shopping outlets and entertainment offerings. Company wide, net losses narrowed to US$4.7 million during the quarter, down from a loss of US$178.3 million a year earlier. Hefty depreciation charges and dividend payments on preferred shares continue to weigh on the bottom line at the US firm, which has not reported a profitable quarter since 2007.
China*: Panic swept the city of Jilin in the northeast Wednesday after toxic chemicals leaked into the Songhua River from a chemical factory warehouse toppled by floodwaters.
Haier has made huge gains at home and overseas through innovation. Haier's ability to innovate and adapt has brought huge rewards in the countryside, where it sought to capitalise on the government's rural subsidies scheme for electrical appliances, which began in 2007. The scheme was given a further boost by the Ministry of Commerce in March when it raised the upper price limit for subsidies to offer higher-end goods to wealthier farmers. Between January and April of this year, Haier's revenue in rural areas grew by more than 40 per cent, giving the company a 29 per cent market share compared to the 11 per cent held by its closest rival, Midea. Ministry statistics show Haier is the best-selling brand of fridges, washing machines and water heaters on the mainland, and has the largest slice of its rural appliance subsidy programme at 32 per cent. Since August last year, General Electric has been using Haier's mainland sales network, which reaches more than 70,000 villages, to distribute its appliances. Hewlett-Packard also has an agreement with Haier to sell to rural customers through the company's Haier Ri Ri Shun Home Appliance Shops network. But Haier's success has not been restricted to China. In terms of volume in the global market and geographical penetration, it has already made huge strides and the current fiscal retrenchment in the developed world could be a further boon to the company's prospects. According to statistics from market researcher Euromonitor, in 2001 Haier was the fifth-largest white goods maker in the world with a global market share of 3.72 per cent. Last year, the company moved into first place with its global market share rising to 5.1 per cent. It is also the largest by market share in the home laundry and refrigeration appliances markets. In contrast, Whirlpool's market share fell to 4.5 per cent in 2009 to second place. Some of Haier's rapid growth can be attributed simply to Western consumers buying less and Chinese consumers buying more in a market that is already dominated by Haier and a handful of other names. However, Tan Heng Hong, a consumer market analyst at consultancy Access Asia, says Haier is able to grab a bigger share of the market when consumers in developed markets are tightening their belts. "Haier stands to gain from consumers in the developed world opting for lower-priced products," Tan says. Peter Williamson, a professor at the Cambridge Judge Business School at Cambridge University, highlights two examples where Haier has been successful in innovating for foreign markets. In the first, it turned a niche product - basic refrigerators which also stored wine - into a mass-market product. "The original was a high-end product that was sold at a high price to connoisseurs," Williamson said. "Haier re-engineered the product and brought the retail price down from US$1,700 to US$750 and distributed it through Sam's Club in the US, increasing the size of the market for that particular product by a few thousand per cent in just a few years." In the second example, just as Haier sends employees to the countryside to conduct research, they also sent people to small offices and universities overseas to do market research on small fridges. As a result, they were first to come up with fridges that have a fold-out wooden top that can be used as a desk. "Chinese manufacturers have lower break-even costs when launching new products to test the market," Williamson said. "Their fixed costs are much lower and product lines are much more flexible than of those of a company like Whirlpool." Some companies and sectors are waking up to the benefits of embracing what is termed "frugal innovation" - the ability to produce innovation at lower cost, shifting creativity away from the traditional domains of the developed world. Haier could be facing stiff competition in the innovation stakes, however. One member of staff in the Haier showroom said: "The mice in the countryside are getting smaller and smaller and squeezing through the tiniest of holes."
China's Peace Hotel reopens after US$64m renovation - Visitors in the lobby of the Peace Hotel in Shanghai yesterday view the refurbishment of what was once the Far East's most luxurious hotel, now restored to its 1930s glory. Shanghai's Peace Hotel reopened yesterday after a three-year, US$64 million renovation to restore what was once the Far East's most luxurious hotel to its 1930s glory. The hotel on Shanghai's neoclassical waterfront will be managed by a joint venture between Fairmont Hotels and Resorts and China's state-owned Jin Jiang Hotels, executives from the two companies said. "This hotel will be one of the most admired properties in China. The history and reputation of the Peace Hotel is legendary. The efforts to restore it to its original grandeur have been remarkable," Fairmont president Chris Cahill said. Gesturing towards a massive octagonal skylight above the hotel's shopping arcade, Jin Jiang chief executive Yang Weimin said that before the renovation began, the stained glass was covered up and the space was a store. "When you came into the shop, you couldn't see the ceiling that you now see. The best thing in the building was hidden from view," Yang said. "Now as I greet guests, the moment they step into the lobby they are in awe." Over time, many of the original features of the 81-year-old hotel were destroyed or covered up as war, revolution and ill-conceived renovations battered the building, an institution in the famed Bund area. A team from Hirsch Bedner Associates worked with local historians to restore and reconstruct the hotel's art deco features, scraping away layers of paint and using old photographs and architectural plans for reference. A new wing was added to the back of the hotel to expand it to 270 rooms, add a sky-lit swimming pool and provide additional lifts and other amenities, executives said. Despite the modern touches, the hotel's restored art deco interior and the kitschy Dragon Phoenix restaurant create a sensation of stepping back in time.
Guangdong province has officially launched a bid to organise the 2020 World Exposition but a host city has yet to be named, mainland newspapers reported yesterday. Speaking at the World Expo on Tuesday in Shanghai, Chen Wenjie, head of the China Council for the Promotion of International Trade, Guangdong sub-council, told reporters they had tendered an official application to the provincial government to host the World Exposition, the Guangzhou Daily reported. Chen said Guangdong had been preparing to apply for the 2020 Expo for two years and had submitted reports to the provincial government for its endorsement. He said it had also expressed interest to Jean-Pierre Lafon, president of the Bureau of International Expositions (BIE). "Guangdong is a vibrant and fast-developing province, and I believe Guangdong is fully capable of organising the World Expo," the newspaper quoted Lafon as saying. The New Express reported that Guangdong had been waiting for an official endorsement from the provincial government so that it could proceed. Subject to the evaluation of the BIE, the entire process from applying to hosting an expo could take up to 10 years. The paper also reported that Guangdong might have to wait until 2025, as a host country needed to wait 15 years for its next turn to host. Local scholars are fully backing Guangdong's bid. Dr Peng Peng, a researcher at the Guangzhou Academy of Social Sciences, said the province was more than qualified to host the event. "My guess is that the expo might be centrally based in Guangzhou and co-organised by a few neighboring cities. Being the richest province in China, Guangdong should be able to attract keen international participation," Peng said.
Mall manager bets on mainland's fast-growing consumer market - Lippo Plaza on Huaihai Road before renovation (left) and after TCBL brought in global brands. When Thomas Tam left property heavyweight Cheung Kong (Holdings) (SEHK: 0001) to establish his own shopping centre consulting company in 2005, he bet his career on the mainland's vast and fast-growing consumer market. His bet proved right as TCBL Consulting is now providing consulting services to about 50 completed or uncompleted shopping centres on the mainland, and employs 300 staff members from just 20 five years ago. Before setting up his own business, Tam was in charge of running Cheung Kong's Oriental Plaza in Beijing, experience that he put to work on his account when he set up TCBL. Now, with a steady increase in the number of new shopping malls being opened and old malls being renovated, demand for his consultancy services - which include mall management and a network of connections to bring in international brands - is on the rise, says Tam. One example is upgrading the three shopping centres - Lippo Plaza, Hong Kong Plaza and Infiniti Plaza on Huaihai Road in Shanghai - by bringing in international brands such as Louis Vuitton, Ermenegildo Zegna, Coach and Tiffany. "Chinese consumers have become the target customers for international companies," Tam said. Top-priced luxury brands such as Louis Vuitton and Gucci were in the first wave of retailers to open outlets on the mainland more than 10 years ago, and mid-priced brands followed in a second wave that got under way over the past three to four years, he said. Luxury brands and fast fashion brands such as H&M and Zara are now expanding into several second-tier mainland cities. "Retailers do not have their eyes solely on first-tier cities, where the pace of consumption growth has begun slowing. They are now looking to second- or third-tier cities such as Dalian, Chengdu and Changchun, where they see the emergence of a growing consumption power," Tam said. The mainland last year became the fifth-largest market for consumer spending in the world, behind the United States, Japan, Britain and Germany. The Ministry of Commerce has predicted the nation is likely to become the biggest consumer market by 2015. "When H&M opened its first Qingdao outlet in April this year, its first-day sales went over 500,000 yuan (HK$571,930). That was very impressive," Tam said. That turnover compared with first-day sales of 2 million yuan when H&M opened its first mainland flagship store in Shanghai, added Lawrence Wu, who left Sun Hung Kai Properties (SEHK: 0016) and joined Tam's consulting operation as joint managing director in 2006. H&M is now planning to expand into western China, while Zara has opened stores in Dalian and Changchun, and Japanese fashion brand Uniqlo recently opened a store in Qingdao. It is not only fashion retailers that are beating a path to the mainland's consumer market. Restaurant operators such as Hong Kong's Lee Gardens have joined the stampede. Their expansion across the border has been fuelled by several factors, says Wu, including the nation's rapid economic growth and the policy support shown by Beijing for consumer spending as a pillar of that growth. Mainland retail brands were also expanding at a fast pace, and would play an increasing role in the country's retail market in future, Wu said. To support this growth, TCBL is planning to open offices in more inland cities including Hefei in Anhui province, Kunming in Yunnan province, and Changsha in Hunan, according to Tam.
A customer leaves an Ikea store in Shenyang, Liaoning province. China ranks No 1 among 27 emerging economies due to its huge consumer market and rapid economic growth, according to Grant Thornton.
An Air China Ltd plane takes off while another is parked at Beijing Capital International Airport earlier this year. Air China, the nation's largest international carrier, will boost capital expenditure by more than 50 percent in 2010 from a year earlier as it takes delivery of aircraft to meet a surge in travel demand. China National Aviation Holding Company is to take over China Aviation Supplies Holding Company (CASC), a major aircraft and material provider for domestic airlines, which is part of the government's plan to consolidate the aviation industry, a source knowledgeable with the deal told China Daily on Tuesday. The proposal is subject to approval by the State-owned Assets Supervision and Administration Commission (SASAC) and the State Council, the source said, adding that no timetable has been established for the deal. "China Aviation Supplies' business will be maintained while some changes are expected regarding its business with other domestic airlines or the competitors of Air China," said the source. The buyer - China National Aviation - is the parent company of Air China. According to the source, CASC's current business portfolio is very complementary to that of China National Aviation, which is the country's air transportation provider. CASC's President Li Hai will be appointed as the vice-president of China National Aviation following the acquisition, the source said. "The acquisition is the result of a structural readjustment of China's aviation industry, and is in line with the country's strategy to make its State-owned enterprises bigger and stronger, with the eventual goal of becoming the world's best," said Li Xuerong, a researcher with China Investment Consulting. The number of China's State-owned aviation companies will be scaled back to five after the acquisition. SASAC said earlier it plans to initiate large-scale industry consolidation this year among State-owned enterprises and will cut the number to 100 from the current 125. The deal, however, also raised some concerns. "China National Aviation will further consolidate its dominant position in the aviation industry after the takeover and is likely to favor its subsidiaries, such as Air China, which will definitely affect other airlines," said Li Xiaojing, director of the Aviation Transportation and Economy Department at the Civil Aviation University of China. With the burgeoning aviation market and limited imported aviation supplies, it is possible that the aircraft supplier will favor Air China over those competing with local subsidiaries of China Airlines, such as Sichuan Airlines. To avoid the unfairness, we need to work on the details of the acquisition, said Li. CASC has a long-term partnership with major airframe and engine manufactures such as Boeing, Airbus GE, Rolls-Royce and Pratt & Whitney. CASC imports aviation supplies and wholesales them to small- and medium-sized airlines without import permits.
July 29, 2010
Hong Kong*: This year's book fair attracted a record turnout, but most booksellers said bad weather and a lack of new bestsellers drove sales down 20 per cent. Over 920,000 people visited the Convention and Exhibition Centre for the weeklong fair, which ended yesterday - up 2 per cent over last year. Young models' publicity campaigns were banned from the fair this year, as the organiser, the Trade Development Council, tried to give reading greater prominence at the event. The fair's 270 cultural seminars proved popular, with some 60,000 attendees, the council's deputy executive director, Benjamin Chau Kai-leung, said. Mainland blogger Han Han's seminar pulled a crowd of about 1,800, while a forum organised by Sir David Tang and featuring British authors Frederick Forsyth, Stephen Fry and Andrew Roberts was attended by nearly 1,200 people, he said. Fry's two-hour autograph session after the forum was the longest. An avid user of social-networking tool Twitter, Fry posted to the site after the forum: "Holy bums. Two-hour forum followed by two hours of signing. Hongkongers adorable but numerous." Each visitor to the fair spent an average of HK$476, a survey commissioned by the council found. It also found more than half of them visited the fair to buy fiction, followed by literature and travel books. "Self-help and business books used to be higher up the chart, but the rise of literature at the fair was perhaps propelled by the seminars," Chau said. Despite the record attendance, turnover fell 20 per cent from last year, Hong Kong Publishing Federation director, Tsang Yip-tai, said. "The combination of bad weather on the first two days of the fair and the lack of new bestsellers - like last year's Twilight - are likely reasons for the fall," he said. Some exhibitors - especially of children's books and cookbooks - slashed prices on the last day of the fair. But most sellers of English books kept their discount rate steady for the duration of the fair at 30 to 35 per cent off. Sellers of English books did better than others, with Swindon and Page One both saying sales were up. But sellers of Chinese books had a different fate: Joint Publishing, Commercial Press and Economic Digest all said sales fell about 15 per cent. Chau said the ban on models' publicity would continue at future fairs because it made for a "better reading environment". "I've received many e-mails from visitors expressing their approval of the measure," he said. A seller of the models' photo books said the ban had not hurt sales.
The Vocational Training Council may increase its 10,000 places for next week's admission for school leavers. This comes after the council received 3,200 applications from its own graduates for 2,000 higher diploma places at its Institute of Vocational Education yesterday. A VTC spokeswoman said the admission process went smoothly, but several students who had queued up since Sunday disputed this, saying the council misled them. The next round, to be held on Wednesday - when results of the Hong Kong Certificate of Education Examinations are released - will be for 10,000 places open to Secondary Five leavers and the council's own graduates who failed to get admitted yesterday. Depending on the overall demand, the spokeswoman said the council might increase the 10,000 places by 5 to 8 percent. "We have around 3,000 VTC graduates and we received a total of 3,200 applications for the coming academic year," she said. "The internal admission scheme of the coming academic year has finished." At the Cheung Sha Wan branch, some students were disappointed over not getting their preferred courses, saying more places should be offered. Frankie Cheng could only get into his third choice. "I'm considering giving up the place. Maybe I'll first get a job and save some money for enrolment next year," he said. A student called Wu, who failed to enter her first choice, was upset, saying the admission office was misleading. "We called the admission office a week before, and were told that there was no need to queue up in advance, but just show up on the admission day," Wu's sister said. Margaret Mak, a Project Yi Jin graduate, said she and her friends may queue up outside the campus from today to increase their chances of admission on Wednesday. "We are competing against Secondary Five leavers who usually have much higher scores," she said. The Democratic Party's youth committee chairman Mok Siu-lun criticized the VTC way of handling the internal admission. Lawmaker Wong Sing- chi suggested it give out tickets for registration, and allow online and postal applications. "Since this is the last year of HKCEE and under the new education policy, the government should increase funding and consider opening more career paths, such as diploma programs," Wong said.
Lawmakers of all political colours rounded on the embattled chief executive of Octopus Holdings, Prudence Chan Bik-wah, yesterday - accusing her of lying to and cheating the public over the sale of cardholders' details and calling on her to resign. Chan denied having lied two weeks ago when she said Octopus had not sold the data to third parties including an insurance company, saying she might have used a "wrong definition" of selling at the time. She caused an outcry on Monday when she told a privacy commission investigation that Octopus had made HK$44 million in the past four-and-a-half years from selling information about 1.97 million holders of the stored-value travel and shopping card to its business partners. The furore mounted at a special meeting of the Legislative Council's finance affairs panel called to discuss the affair. Chan (pictured) did not respond during the meeting to the calls for her resignation but told the media later she was responsible to the public for the affair. She said the most important thing now was to assist investigations by the privacy commissioner, the Hong Kong Monetary Authority and Octopus itself. Privacy commissioner Roderick Woo Bun said a preliminary report on the commission's Octopus investigation would be issued on Saturday.
Li Hau-chun, with tourism sector lawmaker Paul Tse, apologises for the outburst that brought her notoriety and HK bad publicity. Pilloried on websites and in media across the mainland and Hong Kong, accused of wrecking the city's reputation as a tourism destination and afraid to show her face in public for two weeks, the guide caught on video berating tourists for not spending enough finally stood up yesterday and said "sorry". Li Hau-chun, who was seen telling the group that if they didn't pay in this life they would do so in the next, said her outburst had been provoked by a customer who used "strong language" to complain about being steered into shops as part of the tour. "At that time I was very angry and I couldn't control my emotions," said the thirty-something divorced mother-of-one who came to Hong Kong from Hubei a decade ago. The woman whose outburst recalled that of "Bus Uncle" four years ago - when a phone video of a middle-aged man haranguing a bus passenger became an internet hit - looked startled as she apologised. Surrounded by dozens of journalists and cameras in a crowded room, Li, dressed in a black blouse, blue jeans with a Louis Vuitton belt and high-heeled sandals, said: "First of all, I want to say I'm very sorry. I hope our Hong Kong citizens and mainland comrades will forgive my mistake and the misunderstanding." She said she had been hiding for two weeks because she did not have the courage to face the public.
The Hong Kong Daily News, owned by entertainment mogul Albert Yeung Sau-shing, is believed to be on the verge of being bought by property tycoon Henry Cheng Kar-shun. Founded in 1959, the Chinese newspaper has been owned by Yeung's Emperor Group since the 1990s. Casino tycoon Stanley Ho Hung-sun is also a shareholder of the newspaper, having bought an undisclosed stake in July last year. A person familiar with the possible deal said yesterday "A discussion is going to take place." During a public appearance yesterday, Yeung said: "In business, everything is possible," Yet officially both Emperor Group and New World Development said they would not comment. Shirley Woo Suet-lai, publisher of the newspaper, said there had been no instruction from the board of directors and added that the operation of the newspaper would continue as usual. To Yiu-ming, assistant professor in communications at Hong Kong Baptist University, said the takeover was not unexpected. "It is an extension of business of a rich property firm. Like many wealthy companies, it wants to exert more influence in society and the media." However, he said that the acquisition might not be able to achieve the aim of influencing public opinion. "Our recent study found that the influence of this newspaper is really minimal. It will take quite an effort to re-establish the paper, increase its readership and enhance its position in society and the eyes of the Hong Kong people," he said. The 51-year-old newspaper has focused its resources on covering racing and business news, but has faced increasing pressure since the launch of Apple Daily in 1995, and free newspapers such as Headline Daily. New World Development has been involved in controversies in recent years. As a co-developer of The Masterpiece project, in Tsim Sha Tsui, the company sold at least seven of the first 30 flats released there last August to relatives of Cheng. Last November, Cheng had to testify before a Legco inquiry into his company's hiring of former housing director Leung Chin-man. The appointment did not go ahead, but caused uproar, with Leung allegedly involved in the sale of the Hunghom Peninsula housing estate for barely half its original asking price to a consortium that included a New World Development subsidiary.
China*: IMF hails China's policy response in financial crisis - Chinese authorities "quick, determined and effective" policy response has helped mitigate the impact on the economy and ensured that China has led the global recovery, the International Monetary Fund (IMF) said on Tuesday. "Executive Directors commended China' s proactive and decisive policy response to the global economic crisis," the IMF Executive Board said in its annual report on China's economic policy assessments and recommendations after consultation with Chinese authorities. The IMF appraised fiscal stimulus China adopted during the crisis. "Public infrastructure spending was quickly increased, taxes were lowered, the government put in place incentives to boost purchases of consumer durables, and pensions, social transfers, healthcare and education spending were all raised," it noted. On the part of monetary policy, the report noted that China's central bank lowered interest rates and reserve requirements, and removed limits on credit growth, which led to an extraordinary surge in bank lending.
China's hotel star ranking system under increased scrutiny - BEIJING, July 27 - China is planning to accelerate a mechanism with which to strip poorly run hotels of their star rankings in order to protect the image of all the 15,000 star-rated hotels across the country, a top tourism official said on Monday. Anonymous customers' opinions will be considered for the first time along with those of industry experts when evaluating a star-rated hotel's qualification, said Du Jiang, deputy head of the National Tourism Administration of China. Hotels already endowed with a star status will be subject to quality checkups every three years, instead of the current five year period aimed at identifying problems and fixing them, he said. The news came days after the announcement that the Hilton Chongqing was to be stripped of its five-star status for reportedly permitting a venue for prostitution to operate on its premises. The announcement, posted on the administration's website last Friday, said the hotel's actions have "seriously damaged the image of China's star-rated hotels and generated a bad influence". Dai Bin, deputy head of the China Tourism Academy, told China Daily the incident has partly pushed the administration to strengthen its management of star-rated hotels. Even more importantly, he added, a means of expelling poorly run hotels from the internationally recognized star classification system has become critical at a time when the number of China's 15,000 star-rated hotels is growing faster than ever before. In 2009 alone, for instance, the administration gave a five-star status to 63 hotels across the country, pushing the total number of top-level stars up to 432, according to China's tourism development analysis and forecast 2010, a report compiled by the Tourism Research Center at the Chinese Academy of Social Sciences. "Many new star-rated hotels are competing in terms of advanced hardware and the level of luxury", he said "Through this mechanism, the administration hopes to make them realize the importance of good service and how to better serve customers." Zhao Huanyan, of the Hotel Solution Consulting Ltd in Shanghai, echoed these thoughts, saying that the pursuit of quality lodging based on the standards of China's hotel star-rating system has led to disappointment among some foreigner visitors. "They found that China's high-ranking hotels look almost identical - from the lobby to the standard room," he said. The latest move by the tourism authority, he added, should offer fresh ideas for hotel owners, pushing them to improve service while using innovative techniques. The hospitality industry is one of China's first few industries that opened up to foreign investment and management concepts. Since 1982, when the Jianguo Hotel Beijing became the first hotel to introduce international hotel management on the mainland, the world's top 10 hotel groups have entered the Chinese market. The groups now manage 480 hotels nationwide, Xinhua News Agency reported on Monday.
The China Investment Corporation (CIC), the nation's sovereign wealth fund, announced Tuesday it would start a new round of global hiring for "business development" reasons. The recruiting covers 64 job positions, including asset allocation and strategic research, risk management, strategic investment and private-equity investment, according to a statement on CIC website. Applications will be accpeted till August 9, it said. The CIC was established in September 2007 with a registered capital of 200 billion U.S. dollars from China's huge foreign exchange reserves.
China Offer Opportunites for American Fruits - The shifting market dynamics of the food industry in China offer immense opportunities for American companies to boost exports of agricultural products, a top US official said on Tuesday. Eric Trachtenberg, director of the agricultural trade office at the US embassy in Beijing, told China Daily that there have been significant changes in the consumption pattern in China with demand for imported products still strong. "We often tell exporters that China is the place to be. Many US agricultural companies are keen on exploring opportunities here," said Trachtenberg. The US exports many agricultural products to China with soybeans the top commodity in terms of value, he said. Economic development has bought about significant changes in the Chinese food industry. With urbanization and income levels growing, people are becoming more and more conscious of food safety and handling, he said. With land resources fast getting depleted, there is also an increasing awareness of the quality of food and how it is packaged and transported. US companies can cash in on these factors and boost exports to China over the next five to 10 years, Trachtenberg said on the sidelines of the Second US-China Cold Chain Standards and Regulations Conference in Beijing. Cold chain is essentially a temperature-controlled supply chain and involves a series of storage and distribution solutions that ensures the shelf life of agricultural products such as meat and vegetables. "The cold chain industry will boom in China as food safety is gaining more ground," said Trachtenberg. At present only around 15 percent of food, meat and vegetables are transported by cold chain in China, compared with 90 percent in developed countries, he said. Developing a strong cold chain system in China will help agricultural exporters and logistics companies from the US, said Trachtenberg. "In terms of food exports, the main problem confronting US companies is that they are unable to ship their products to inland regions in China due to the absence of cold chain linkages. That certainly is a big trade barrier for US companies," he said. At the same time, it is also an opportunity for logistics companies to sell their cold chain solutions, he said. Over 15 percent of China's perishable agricultural products are lost due to supply chain problems, said Dai Dingyi, vice-chairman of the China Federation of Logistics and Purchasing. Dai and other experts said industry standards are vital for the development of the cold chain industry in China. The standards for the cold chain industry are still in their infancy and there is no clear timetable on when they will be rolled out, Dai said. "China has its unique weather conditions and eating habits, so it should set up a standards system that is different from the US and EU," said Joe Yang, a consultant for the Guangdong Cold Chain Committee.
The People's Liberation Army has conducted two more military drills in the Yellow Sea region - the second and third in 10 days - in an apparent response to ongoing joint US-South Korea military exercises nearby. China Central Television's noon news broadcast yesterday said an artillery troop from the Nanjing Military Command's land force had tested a new type of long-distance multi-launch rocket with support from unmanned aircraft, radar and other reconnaissance equipment. The report did not detail the location or date of the drill but said it was taking place near the Yellow Sea. Also yesterday, Xinhua reported that a military exercise involving rocket tubes, satellite communication vehicles and other facilities had been conducted by the Jinan Military Command in a coastal city on the Shandong Peninsula, which juts into the Yellow Sea. CCTV's report did not mention the Jinan Military Command exercise. Xinhua's report did not mention the Nanjing Military Command drill. CCTV said it was the PLA's first long-range rocket drill on such a massive scale. The TV broadcast showed a series of rockets being fired from 12-tube, 300-millimetre multiple-launch rocket systems, believed to be the PHL03 (known as the AR2 in its export version). A voiceover said the weapon played a key role in the army's long-range firepower. On July 17, the PLA conducted an unprecedented maritime safety emergency drill in the Yellow Sea, based on a scenario that China was engaged in war with other countries. Military observers said the PLA had seldom conducted drills in both land and sea areas in the Yellow Sea, close to the Korean Peninsula, in recent decades. With a firing range up to 150 kilometres, the PHL03 is similar to a small missile. Shanghai-based military expert Ni Lexiong said that the rocket drill was also aimed at hinting that the PLA's land forces were capable of protecting China's ally North Korea if it was invaded. "We realised that our navy is incapable of fighting with the USS George Washington, that's why we didn't conduct any anti-carrier missile tests in the Yellow Sea," Ni said. "However, the PLA's land force is strong enough to expel invaders under the support of long-distance rockets and missiles." Tensions between Beijing and Washington began to rise after reports that the Nimitz-class aircraft carrier USS George Washington would be involved in joint exercises with South Korea in the Yellow Sea, off the east coast of China. But those plans were dropped after repeated protests from Beijing, and the Pentagon said the carrier would just appear in seas east of the Korean Peninsula. A 10-yearly Sino-US relations survey conducted last year showed that up to 72 per cent of Chinese students and 65 per cent of the public had good feelings about the US - almost double the numbers a decade earlier. But Jiang Changjian , an international relations professor at Shanghai's Fudan University who took part in the survey, said the good feelings would be ruined by America's participation in the Yellow Sea drills with South Korea, which started on Sunday. South Korea also said another round of joint military exercises with the US would take place in the Yellow Sea in September. In Beijing, international law experts and retired PLA generals from the National Defence University, the Chinese Academy of Social Sciences and others held a forum to "look into the nature" of the US military's involvement in the Korean Peninsula crisis, China News Service reported.
Guan Jianzhong, chairman of Dagong Global Credit Rating, explains why the mainland should have a greater say in the global credit-rating market. The head of the mainland's largest credit-rating agency believes the failure of the world's top credit-rating agencies to provide warnings of the global financial crisis could give the country a golden opportunity to increase its say in the industry. Guan Jianzhong, chairman of Dagong Global Credit Rating, blamed Moody's Investors Service, Standard & Poor's and Fitch for the global financial crisis and said the mainland, as the world's leading creditor, and other emerging economies should have a say in how sovereign debt is rated. "More credit-rating agencies from emerging economies should be set up and join hands to break the monopoly over the global credit-ratings business by the world's top three companies, all of which are American," Guan said. Beijing-based and privately owned Dagong gave the mainland's government a higher debt rating than the United States, Britain or Japan in a report published this month covering 50 nations, sparking speculation about close links with Beijing officials. Guan said that Hong Kong was an ideal place to headquarter developing non-Western credit-rating agencies. That could make the city a global hub for the credit-rating business to rival the American hold of global markets. "The three leading Western rating companies dominate the rating market, but failed to provide accurate evaluations," he said.
Former British prime minister Tony Blair says Western politicians feel more "curiosity" than fear about the rise of China, but they will need time to get accustomed to the power shift to the East. Speaking in Shanghai yesterday, Blair said there was a mutual lack of understanding that was exacerbated by China's "sudden" dominance of international relations. "A few years ago, we'd all make speeches about [how] China is a very important country," he said. "It seemed like a theory, like an intellectual idea. "What has happened in the last few years, increased enormously by the financial crisis, is that suddenly it is no longer a theory. Suddenly people are aware that China has arrived." However, he denied that Western leaders were trying to limit the mainland's growth. "Is China seen as a threat in the West? I believe not, actually," he said. "But I believe there is an enormous interest and a huge number of questions people have, which is natural. "I think one of the big problems sometimes is that we don't see things from China's perspective and sometimes, likewise, you don't see [them] from the West's perspective." Chinese people needed to understand that the West needed time to adjust to the "huge shift of power to the East", Blair added. Blair has been criticised for "cashing in" on his fame on the international speeches circuit since stepping down in 2007, reportedly charging one of the world's highest appearance fees. In November 2007, he was given short shrift in mainland media for accepting a US$500,000 fee for making a brief appearance at a luxury residential complex in Dongguan, Guangdong province. He declined to comment on the US-South Korean military drills and on Washington's recent statements on the strategic importance of the South China Sea. "The thing you learn in my business is that there are some questions you answer and some you don't," Blair said. "I'm not going to get into the issues to do with the US and South Korea."
China will make its "proactive fiscal policy" more flexible in the second half of the year after revenue soared in the first six months, Finance Minister Xie Xuren said yesterday.
Shares of ICBC (Asia) (0349) were suspended from trading yesterday - setting off speculation that its parent plans to privatize the lender. Such a deal by Industrial and Commercial Bank of China (1398) would be worth at least HK$8.6 billion. A bank spokesman said there would be an announcement today. Analysts said ICBC could make the most of the new yuan settlement deal for local banks if a privatization went ahead. Morgan Stanley last week raised its target price for the bank by 26 percent to HK$25. ICBC held a 72.4 percent stake in ICBC (Asia) at the end of last year. A general offer to purchase the remaining shares would cost the mainland's largest bank at least HK$8.6 billion, based on the record closing price of HK$23.05 for ICBC (Asia) on Monday. ICBC eased 0.3 percent to HK$5.87 yesterday. Analyst Paul Lee of Taifook Securities (0665) said there have always been expectations ICBC would buy out its local arm. Taking into account the limited capital base for ICBC (Asia), he said, the parent "needs to make substantial acquisitions locally or elsewhere it will need to do so on its own." Lee also said economic integration between the SAR and the mainland has raised the subsidiary's growth potential, so even an expensive privatization would be worthwhile. Owing to the modest size of ICBC (Asia) - it is valued in the region of HK$31 billion - it was not necessary for the parent to suspend trading in its shares, Lee said. But an analyst at a mainland brokerage thinks a buyout is unlikely and expects ICBC (Asia) to issue new shares or convertible bonds to a third party. "Shares have reached a 52-week high," he said, and other shareholders cannot expect a "juicy" deal. ICBC (Asia) has always had a low capital adequacy ratio, he added, so it had to catch peers and raise money for expansion while its share price is high. Another Taifook analyst, Matthew Kwok, said fundraising details would have emerged if ICBC was raising money.
The price of garlic continued to soar nationwide this month, rising nearly 25 percent over its previous peak price in May, while most other food products also increased in cost, Xinhua News Agency reported on Monday. As of Sunday, the average price of garlic reached 14.38 yuan ($2.12) per kg, according to statistics from Xinhua News Agency's national monitoring system of agricultural products. The price of garlic in North China's Shanxi province has risen by more than 51 percent compared to May, the largest increase in the country, Xinhua reported. "I only sell several kilograms of garlic a day. Business is not good with the price hike, as restaurant owners buy less to control costs," said Zhao Yali, a 42-year-old garlic dealer, who operates from the Hexi agricultural products wholesale market in Taiyuan, the capital of Shanxi. The wholesale price of garlic in the market, the largest in the city, has hit 14 yuan per kg, seven times more than in January, she said. The retail price of garlic is 20 yuan per kg in the Meetall supermarket in Changfeng street, which is 10 yuan higher than the same period last year, a saleswoman said. There is a similar situation in the provinces of Hebei, Liaoning, Shandong, Jiangsu and Hainan, where prices have risen 30 to 42 percent since May. The price of garlic also exceeded 20 yuan per kg at some markets in Nanjing, capital of Jiangsu, where it is more expensive than pork and chicken, the local Yangtze Evening News reported on Monday. Some customers have reportedly even taken to packaging up the leftover garlic in restaurants, which rarely occurred in the past. China is the world's largest garlic exporter, followed by Argentina and Spain, and meets three-fourths of the world's demand for garlic. The latest price hike is the continuation of a process that began in the second half of 2009. The rocketing price is largely due to a shortage in supply, some analysts said. There has recently been a sharp increase in garlic exports, which has resulted in less garlic for the domestic market, Che Shitang, vice-president of the Qixian County Garlic Company in Henan province, was quoted by the Beijing-based China Industrial Economy News as saying on Monday. The output in the production of garlic has also dropped 10 percent this year in Qixian, he said. Like Henan, Jinxiang county in Shandong province is another major garlic producer, which has seen a 13 percent dip in the output of garlic this year due to inclement weather, the China Industrial Economy News reported. However, Che said malpractices like speculation and hoarding "cannot be ruled out". In May, officials from the National Development and Reform Commission announced that the government will be taking steps to check speculation and rampant price hikes on garlic and other agricultural commodities. Meanwhile, the price of food continues to climb across the country, according to Xinhua.
Models pose with a car made by Chinese automaker BYD during a press conference in Hangzhou, capital of east China's Zhejiang Province, July 27, 2010. The BYD automaker issued its "M6" car to the market of east China on Tuesday.
A Bikini party is held at the 2010 Qingdao International Ocean Festival, which kicks off in Qingdao, east China’s Shandong Province, on July 25, 2010.
July 28, 2010
Hong Kong*: The Privacy Commissioner for Personal Data Roderick Woo Bun on Monday began an inquiry into Octopus Cards over its sharing of customers' personal data.
A private residential project under construction is being put up for sale without an unmodified show flat - which is fine, the government says, because its flat-sale rules do not require the provision of a show flat. A lawmaker and a green group say the scenario again begs the question of how effective the new administrative measures on flat sales are. They call for a requirement to make an unmodified flat mandatory. Industry figures say such a showroom would help rather than hurt business. The Oakhill, a new project in Wan Chai by Lai Sun Development that went on sale last Friday, is the first private residential development that goes without a mock-up property since a raft of measures to raise transparency in flat sales took effect last month. In the sales office in Causeway Bay, buyers can find a three-dimensional map of Wan Chai and models of the 42-storey apartment block, which will house 130 flats and a clubhouse on the top floor. Without a mock-up property, buyers must visualise the layout of the flats from floor plans and artists' impressions. Samples of tiles and finishes are available if they want to get the feel of the kitchen and bathroom. Estate agents have a harder job trying to sell the flats to buyers. One showed a South China Morning Post (SEHK: 0583) reporter photographs of the building under construction and views from another block near the site. "The government has never required a mock-up flat for sale of flats that are under construction. Nor do the new rules," Julian Poon Yui-man, vice-president of Lai Sun Development, said. The company did not set up a show flat as it was unable to find a suitable place, but other measures would be complied with, he added. In the package of measures implemented last month, developers are asked, among other things, to set up at least one unmodified show flat; release a price list and sale brochures three days and seven days before the sale, respectively; and make public within five days transaction information. A spokesman for the Transport and Housing Bureau said a mock-up property was never compulsory. "It is up to a developer to decide whether to set up a show flat, and if it does, it has to follow the guidelines and make one that does not mislead." Before the new measures were launched, there had also been cases where uncompleted flats were sold without a show room. Emerald 28 in Prince Edward, the previous project of Lai Sun, was also sold without a mock-up flat when it was launched. The completed building was later opened to visitors. Swire Property's 5 Star Street in Admiralty and Soundwill Holdings' Warranwoods in Tai Hang also did not feature a show flat during the launch of sales earlier this year, before the new rules. It is easy for developers to set up a mock-up property because their architects usually create one for working purposes, according to a surveyor who declined to be named. But they are usually in inaccessible places like factory buildings. Those who did not set one up for buyers were normally small developers who did not own a large mall in a central location, or those who were selling a development with small flats, the surveyor said. Shermon Lai Ming-kai, CEO of Centaline Property, said estate agents lost a vital sales tool without a showroom. "There have been fewer disputes when a buyer can see an unmodified mock-up flat." Roy Tam Hoi-pong, of concern group Green Sense, said the Oakhill case was "weird" and showed that the new flat-sale rules were useless. "Buyers are not good at visualizing a real flat with floor plans. We need a law that makes things clearer and makes an unmodified show flat mandatory," Tam said. The Democratic Party's spokesman on housing affairs, Lee Wing-tat, said the case was disillusioning. "A developer should not be allowed to publicize artist impressions in the sales office, as they could be misleading," he said, adding that legislation to regulate the property market was required after all. Lawrence Poon Wing-cheung, a spokesman for the Institute of Surveyors, said it was up to the community to debate whether an unmodified showroom should be mandatory, but that without one a project would be less attractive to buyers.
Tai Hang Residents' Welfare Association office bearer Chan Tak-fai enjoys a drink in Ormsby Street as it is today, its low-rise tenements standing in place of the ceramic-tiled houses of the same street at the turn of the 20th century.
The residents' association building, where villagers planned countless fire dragon dances, a tradition to ward off plague. It was once a district of tenement buildings and wooden huts clinging to a hillside without flushing toilets or tap water. Car repair shops crammed the streets, which were overwhelmed with the smell of petrol and paint. Development came to Tai Hang as it did to similar neighbourhoods across Hong Kong, but Tai Hang was seldom in the public eye - apart from a notorious occasion in February 1984, when it was the battlefield for a shoot-out between police and a gang of bank robbers, and during its annual tradition of fire dragon dancing. Now it is in the throes of a facelift that looks set to turn it into a dining and nightlife area to rival Lan Kwai Fong and SoHo in Central and Star Street in Wan Chai. The number of drinking and eating places has doubled in the past three years from no more than 10 to about 20 pubs and mid-range and high-end restaurants. More are expected to open after the luxury residential development Warren Woods is completed in 2012, according to Tai Hang district councillor David Wong Chor-fung. In recent years, developers have also been buying up dilapidated buildings to pave the way for redevelopment, further changing the face of the area. The body shops and family-run food stalls are being gradually but noticeably edged out as they can no longer afford the rents, which have more than doubled from about HK$20 per square foot three to five years ago to about HK$50. "You can easily spot the streets in the area that have become a lot tidier and cleaner after the auto repair shops were replaced by the eateries which are so nicely decorated," Wong said. "Besides the eateries, more special outlets have opened like furniture-design shops, wine shops, an animal hospital and a pet shop." Wong Leung-sing, an associate director of research at Centaline Property Agency, said Tai Hang still had the streetscape and romantic atmosphere of the 1960s with some low-rise tenement flats sitting on very narrow lanes, similar to Lan Kwai Fong and SoHo. But he said Tai Hang was an even better place for restaurants, with plenty of roadside car parking and drop-off places that were not easily found elsewhere. Midland Realty shops department director Tony Lo Chin-ho does not envisage anywhere becoming as bustling and successful as Lan Kwai Fong, which has the edge of being close to Central, the city's main commercial area. But he said there was still very strong business potential in Tai Hang. While some residents, investors and shop owners are cheered by the bright commercial prospects for the area, 64-year-old Chan Tak-fai, who has been living in the district since he was born in nearby Tung Wah East Hospital, lamented the loss of the local characteristics of Tai Hang. One of the city's oldest districts with its famed Lin Fa Kung temple, built in 1846, Tai Hang is one of the very few neighbourhoods in the urban area that still has indigenous Hakka residents. "During my childhood, Tai Hang used to be a small community mostly occupied by Hakka families like me. Even the food sold here was very local, like Hakka-style tea dumplings and rice vermicelli with dried shrimp," Chan said. "Some stalls sold coffee and milk tea. A pot of English tea enough for two cost only 25 cents. The cafe would set a few tables and used wooden boxes for seats. "The district used to be full of two-storey houses with ceramic-tile roofs. There were no flush toilets or tap water and residents had to get the water from a well and wash their clothes at the nullah, which used to be on Wun Sha Street. But the two-storey houses were later torn down and replaced by the low-rise tenement buildings in the '50s and '60s." Despite the fact that a 500 sq ft flat could be packed with as many as three families, "it was a quiet, lovely community back in the 1950s and '60s with about 5,000 residents who all knew each other well". Families would eat their meals at the front door to enjoy the breeze during summer. "The place was so safe that we could move our beds to sleep in the doorway. Bamboo grew on both sides of the street, which made a perfect walking trail," Chan recalled. But as families moved out of the old buildings, which were later torn down to make way for redevelopment, outsiders moved in. "For instance, the two-storey building at the corner has been bought by an expatriate," Chan said. Two years ago, the low-end area of the old days was suddenly spruced up by a new 32-storey luxury residential block, 118 Tung Lo Wan Road, where flats of 1,283 sq ft are renting for as much as HK$50,000. More than half the tenants are expatriates, according to its rental office. And just a few steps from the luxury building, another is under construction. The family-run local food stalls selling cheap meals are gradually being replaced by international cuisines, with Vietnamese, Singaporean, Chinese and Western restaurants, as well as bars and cafes. Among the proprietors is Alex Liu Ka-po, who opened a Southeast Asian restaurant called Bakkutking in October last year. Liu said that even though rents had risen drastically, they remained attractive at about a third or a quarter of those in such prime sites as Lan Kwai Fong, SoHo and Causeway Bay. Rents in Lan Kwai Fong can reach HK$180 to HK$240 per square foot, while SoHo and Star Street in Wan Chai fetch about HK$80. Besides the "much lower rental", Liu liked the location, which he described as "an urban oasis", a quiet corner in the heart of the city. "Our clientele is from both local Tai Hang residents, Chinese and expatriates. Some live in the high-end districts on Braemar Hill and Jardine's Lookout and others just come after reading the food magazines. But these groups of customers want to try out something different and like a wide variety of restaurants. They would not come for Hong Kong-style tea houses that they can easily find anywhere else in Hong Kong," Liu said. But not everyone shares his views. Like Chan, Wong Leung-sing misses his favourite food stalls that sold cow offal and congee. Despite all these changes, Chan intends to stay in the district. "Tai Hang is my home that I have never moved out of since my birth. It brings me a lot of memories about my childhood and all the good times and bad times here. I choose to stay here and wait for my kids and the families who have moved out to return for the Fire Dragon Dance every year."
Big rise in inquiries on schooling outside HK - International study agencies have received a flood of inquiries about overseas schooling from Form Five pupils ahead of the last round of the Hong Kong Certificate of Education Examination results next month. The number of Form Five pupils and their parents seeking advice on study abroad is up by 20 per cent on last year, with interest high in all major destination countries and types of programme, agents say. The 127,000 pupils waiting for their HKCEE results to be released on August 4 are the last year group to take the exams, which are being replaced by the new Hong Kong Diploma of Secondary Education. Parents' groups say anxiety about the diploma and the transitional arrangements is fuelling demand for overseas study among families who can afford the annual fees of HK$200,000 and upwards. Lee Chung-kuen, adviser to the Federation of Yuen Long Parent Teacher Associations, said: "Some parents who plan to send their children abroad after the A-levels or the diploma are making the calculation that perhaps it is better to go and study abroad earlier instead. Parents are saying they don't want their children to be among the first students to take the diploma because it is too risky. And they don't have confidence in the recognition of the diploma." Form Five pupils who do not get their desired grades will not be able to retake the final year of the HKCEE programme at school next year, although re-sits will be offered for private candidates. Instead, some places will be available for Form Five repeaters in the second year of the three-year diploma program. Those pupils admitted to Form Six will go on to sit the last Hong Kong A-level exams at the end of Form Seven in 2012, alongside the first pupils taking the new school-leaving diploma at the end of Form Six. Because the vast majority of pupils are expected to stay on for the diploma, schools will have to squeeze in 150 per cent more Form Six pupils and the final A-level group - with no extra space - for the academic year 2011-12. Ada Tam Tsz-wai, marketing officer of the International Studies Service Centre, said: "We have seen an increase of about 20 per cent this year in the number of inquiries and applications from Form Five students to study abroad. "The most popular country is the UK, then Australia, followed by the United States and then Canada. Many of these students are applying because they are not confident that they are going to get good results in the HKCEE. And many families are applying at the last minute." Joanna D'Ettorre Leung, director of Academic and Continuing Education, said her firm had seen a 10 per cent increase in inquiries about overseas secondary school places this year compared to last year. The average annual cost of a place including tuition and board ranged from HK$200,000 in New Zealand to HK$340,000 in Britain. "It seems to be increasing across the board but the greatest increases I have seen are for Australia, the UK and Canada," she said. "It includes both boarding schools and government schools with home-stay arrangements. The extra students include a small number who started the new senior secondary curriculum last September and have decided not to continue with it." Ann White, director of the Hong Kong-China International Institute of Education, which runs a placement service for study in the US, said attendance at its seminars for school-leavers was up by 30 per cent this year. "We have had a lot of inquiries from Form Five students and their families already this year and I expect that the numbers applying to the United States will continue to climb." Sister Margaret Wong Kam-lin, principal of St Paul's Convent School in Causeway Bay, said parents were particularly concerned about the new core subjects of maths and liberal studies that students had to pass to get into higher education. "Now we have got four core subjects and they have got to score pretty well in all four, plus the electives," she said. "There are some kids who are not particularly strong in maths and, with liberal studies, nobody really knows how to score well. I think if parents can afford it, they will send their children away to study abroad." Terence Chang Cheuk-cheung, principal of Diocesan Boys School, said the government was providing schools with extra funding for teaching the larger number of pupils but no help with meeting the need for extra classroom space. A spokeswoman for the Education Bureau said the teacher to class ratio for Form Six and Seven had been increased to 2.3 teachers during the period of transition to the new senior secondary curriculum, which stretched from 2009 to 2012.
Donald Tsang Yam-Kuen (L), Chief Executive of China's Hong Kong Special Administrative Region, and his wife (R) visit Bifeng Gorge Base of China Conservation and Research Center for the Giant Panda, Southwest China's Sichuan Province, on July 25, 2010.
China*: China's direct investment in Brazil has soared this year to a projected US$12 billion, catapulting it to the top of the South American giant’s foreign investment heap.
Authorities in Dalian said on Monday an oil spill on the country's northeast coast had been "successfully controlled”, amid reports that the clean-up could cost one billion yuan. The spill happened 10 days ago after two pipelines exploded at an oil storage depot in Dalian, a port city in Liaoning province, triggering a blaze that burned for days. About 1,500 tons of oil poured into the Yellow Sea. “So far, large pieces of the pollutant have been successfully removed or controlled,” said Chen Aiping, executive deputy director of the Maritime Safety Administration, according to a statement posted on the ministry’s website. Official estimates say the spill covers over 435 square kilometers (170 square miles) of water but mainland media reports have said the slick has spread to 946 square kilometers. By Sunday afternoon, a total of 41 oil-skimming vessels and 1,200 fishing boats had been mobilized to contain the spill, according to the statement. The Liaoning maritime authorities were coordinating clean-up crews to focus on preventing the spill from expanding further north, it said. The China Business News on Monday cited a manager of a cleaning company working on the site as estimating that the clean-up efforts could cost more than one billion yuan (US$147.5 million). The manager, identified only by his surname Yang, added that it may take another week to clean up the spill. Authorities in Dalian said on Monday an oil spill on the country's northeast coast had been "successfully controlled”, amid reports that the clean-up could cost one billion yuan.
Chinese Foreign Minister Yang Jiechi called for restraint from all parties on Sunday, as the US and South Korea launched a major naval exercise despite threats of nuclear retaliation by North Korea. “All involved parties should commit to providing peace and security on the Korean peninsula,” Yang told a joint press conference in Vienna, after meeting with his Austrian counterpart Michael Spindelegger. Washington and Seoul said the war games, which began Sunday in the Sea of Japan, were meant as a message to Pyongyang to cease its aggressive behaviour, following allegations it torpedoed a South Korean warship in March. But North Korea threatened to respond with nuclear weapons. Yang told journalists that Pyongyang should return to so-called six-party talks, aimed at dismantling its nuclear programme but stalled since December 2008, the Austrian Press Agency reported. He also insisted that world powers should intensify diplomatic talks on Iran’s nuclear programme, APA said. The UN Security Council imposed a new set of sanctions on Tehran in early June, and EU ministers were due to approve further sanctions on Monday in a bid to lure Iran back to the negotiating table over its disputed nuclear program. Yang and Spindelegger met briefly on Sunday afternoon to discuss bilateral relations and their co-operation at the UN Security Council, where Austria currently holds a non-permanent seat. The foreign minister was due to attend the opening of the Salzburg Festival on Sunday evening before meeting with Austrian President Heinz Fischer on Monday.
Beijing aims to cut back the number of crimes that carry the death penalty, and may also end executions of convicted criminals over 70 years old, it was reported on Monday.
NBA star center Yao Ming leads children from quake-hit regions to visit the roof garden of the Saudi Arabia Pavilion at the Expo Site in Shanghai, July 25, 2010. Yao Ming, Jin Jing and other Chinese stars visited several pavilions at the Expo Site with a group of children from quake-hit Sichuan and Qinghai provinces on Saturday, as part of "Touring the Expo with Stars" initiated by some Chinese celebrities.
China key for trade growth - has more than fulfilled its commitment to the WTO - WTO chief says nation's robust import demand vital for global economic revival - The World Trade Organization (WTO) on Friday lauded China for the significant role it has played in reviving global trade growth and said the nation has more than fulfilled its commitment to the organization. The WTO said in its annual report released on Friday that it expects global trade to grow by 10 percent this year. WTO chief Pascal Lamy told reporters in Shanghai that "trade growth is coming back fast after a terrible 2009, thanks in no small measure to the continuing dynamism of China and the other nations." "China's strong economic growth and its demand for imports are important factors in the stabilization of the global economy," said Lamy. The nation has also quickly integrated into the world economy after it entered the WTO in November 2001. It has been an active member and has strictly adhered to the WTO rules, he said. Lamy's comments are in sharp contrast to the tirade launched by the US against the nation and its trade policies. US Deputy Trade Representative Demetrios Marantis had recently said in Washington that China must honor its past commitments and provide new market access. "Failure to do so imperils not just our bilateral ties, but also the success of multilateral trade talks," said Marantis. Firing a salvo, he said the US may even file new WTO plaints against China to defend its (US) rights. Marantis' comments came after China submitted a revised proposal on government procurement agreement (GPA) to the WTO. Under the new proposal, China plans to open up some sectors of government procurement to foreign companies. "China's latest GPA offer is better than its earlier proposal," Lamy said. "The nation has fully fulfilled its commitments and set up a trade mechanism in line with the WTO rules. The Chinese market is now one of the most open markets worldwide," the Ministry of Commerce said in a statement on Wednesday. Tariffs on commodities were slashed to 9.8 percent in 2009 from 15.3 percent before 2001. The tariffs on agricultural goods have fallen to 15.2 percent and 8.9 percent for industrial goods. "China has also removed all non-tariff measures to abide by the commitments it has made," said the ministry. In terms of service trade, China has opened up 100 service sectors, including banking, insurance, telecommunications, education, distribution and accounting, it said. China has also made significant contribution and commitment during the recent Doha Round talks, said the ministry. The Doha Round of negotiations began in 2001 and aims to reduce tariffs and eliminate trade barriers. The talks were suspended several times in the past nine years due to differences between the developed and developing nations on key issues like agricultural tariffs. During his visit to Beijing on Wednesday, Lamy expressed serious concern on the delay in negotiations and said failure to clinch an early will seriously hurt the image of WTO.
Turning to magnetite iron ore could cut China's reliance on gaints BHP Billiton and Rio Tinto. Chinese steel producers are increasingly turning to Australia's magnetite iron ore sector, pouring in funds to explore and develop mines once considered uneconomic, as they nurture new supply sources. If the trend snowballs it could cut China's reliance on giants Rio Tinto and BHP Billiton, a critical move as the duo pursue a controversial iron ore merger that steelmakers fear will create a near-monopoly in Australian material if left unchecked. China has been mining and processing magnetite iron ore for decades, building up a wealth of knowledge and expertise in the area. This helps explain why investment in the Australian sector of around US$10 billion so far is set to increase. A free fall in hematite iron ore prices, which lost 40 per cent over the past three months as steel production fell in China, has done little to sate appetite, with investors taking a longer-term bullish view. "If you're a Chinese steelmaker and you want a direct say in how much iron ore you get, the magnetites are the best option because they offer ground-floor exposure at relatively low cost and include off-take agreements," Eagle Mining Research analyst Keith Goode said. "It's not something the big boys can offer." Firms such as Baosteel, Anshan Iron & Steel, Sinosteel, Citic Pacific (SEHK: 0267) Mining, Shagang, China Metallurgical Corp and others are backing projects that promise to deliver 25 million tonnes over the next two years from only 3.3 million now. Chinese steel mills have long fed on magnetite ores from once-abundant domestic deposits now facing depletion, while the focus in Australia has always been on plentiful supplies of hematite ores. Magnetite, which accounts for just 1 per cent of Australia's total iron ore production, has lower iron content - about 36 per cent versus 61 per cent for hematite - and must be upgraded, typically into pellet form, at an added cost of about US$15 per tonne, to make it suitable for steelmaking. By contrast, hematite is known as "direct shipping ore" or "DSO" because it is mined and beneficiated via a simple crushing and screening process before export. But in the past few years iron ore of any type has turned to gold for anyone able to mine it and transport it to a port for a relatively short journey to Asian shores. This quarter alone, the fifth-biggest iron ore miner in Australia, Grange Resources, was able to raise magnetite iron ore pellet prices by 107 per cent and forecasts are for pellet prices to continue to rise. For now, all but a fraction of Australia's iron ore is still mined in the established Pilbara hematite iron belt, where Rio, BHP, Fortescue and Atlas Iron are forecast to produce a combined 440 million tonnes this year. Traditionally, there has been minimal seaborne trade and steel mills were often built beside magnetite mines, but Chinese firms are displaying a willingness to fund new Australian ports purpose-built to service new magnetite mines. Recent start-up Gindalbie Metals has a contract to deliver nearly 900 million tonnes of iron ore from its Karara magnetite deposits to China's No2 steelmaker, Anshan Iron and Steel, over three decades. Its first shipment of ten million tonnes is due in 2011 via the Indian Ocean port in Geraldton. Last month, the China Development Bank provided US$1.2 billion in loans for studies of a project for a second larger port to maximise production. "The development of new ports is opening up vast opportunities that did not exist before," Garret Dixon, managing director of Gindalbie, said. "For Ansteel, Karara becomes a strategic long-term cost effective source of iron ore for their expanding steel making facilities." There are more than 20 magnetite deposits and prospects in Australia.
July 27, 2010
Hong Kong*: Hong Kong should waste no time in setting up channels allowing yuan issued in the city to flow back to the mainland, said Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung. Chan stressed it is more important than removing the personal daily exchange cap of 20,000 yuan (HK$22,893) in order to strengthen the role of Hong Kong as a cross-border yuan offshore settlement center, according to Sing Tao Daily, sister publication of The Standard. "The yuan can be easily converted into Hong Kong dollars or other international currencies while not being used cross-border," Chan explained at a media briefing in Shanghai. "However, with channels allowing yuan to flow back to China, more people will be using the currency in Hong Kong." The Hong Kong Monetary Authority signed the amendment of the yuan clearing agreement with the People's Bank of China last Monday, allowing businesses in the city to open yuan-denominated bank accounts and conduct transactions in the currency, apparently without any fixed cap. Financial sectors in the city asked for a relief in the 20,000 yuan daily exchange cap while meeting with Hu Xiaolian, PBOC deputy governor. Hu, who signed the agreement as a representative of the Chinese central bank, said she will study the requests. And a more relaxed, yuan-based qualified foreign institutional investor program is seen as desirable. This would allow yuan in the city to move into the mainland market, creating the inflow channels. Fang Xinghai of Shanghai's financial services office, has said a yuan QFII is worth studying.
To prevent the HK$43 billion Hong Kong-Zhuhai-Macau bridge from being underused and to shorten the project's payback period from 48 years to 19 years, Walter Kwok Ping-sheung, the ousted chairman of Sun Hung Kai Properties (SEHK: 0016) (SHKP), said a railway system should be added into the construction of the bridge. After the debate on the construction of a new high-speed rail link from Hong Kong to Guangzhou and Shenzhen was settled earlier this year, Kwok (pictured) said it was time to look westward.
Szeto Wah talks at a Cancer Fund event to fellow patients and those who have overcome the disease about his battle with cancer. Beijing offered medical experts' help after Szeto cancer diagnosis - Beijing suggested sending medical experts to Hong Kong to help treat Szeto Wah's lung cancer, the veteran democrat's doctor said yesterday. Appearing with his patient at a Cancer Fund function, Dr Mok Shu-kam said both the central and local government had been "nervous" when they were first told of Szeto's stage-four cancer late last year. Nine experts from the mainland came to the city in December to have discussions with him, soon after the diagnosis of the chairman of the Hong Kong Alliance in Support of Patriotic Democratic Movements was confirmed. Szeto said the one-off meeting occurred after he was told by Chief Executive Donald Tsang Yam-kuen that the doctors' services were available. Dr Mok, an oncology expert at Chinese University, said no particular suggestion raised by the mainland experts was adopted. "Doctors take all therapy options into account before coming up with a treatment plan for patients," he said. While Szeto has undergone all the chemotherapy sessions required and started medication, Dr Mok said he was doing well at the moment. "He is tough and positive," he said. "He continues with his work, and has gained some weight, too. These are all good signs for a cancer patient." Szeto said his life has not changed much. "I still attend all functions of the alliance and the Professional Teachers' Union, only skipping walking on marches," he said. "And I keep adding three spoons of sugar to my local-style milk tea and have three to four chocolates after dinner every day." Szeto said he had received much love and care. "A lot of people, who I know and I do not know, came to me to send blessings," he said. "It is a gift to know these people at your late stage of life." Szeto said the worst thing of his cancer experience were the words of his first doctor. "Before I went to Dr Mok, the first doctor informed me of the cancer and said I only had 10 months of life left. But now seven months have passed and I still feel very good with my body." Szeto said he has been trying to "coexist with the illness and live long". "I will strive to cure the cancer in the remaining days," he said. But when asked to choose between a recovery and universal suffrage, he picked the latter.
United International College in Zhuhai saw the first full-scale co-operation in higher education between the mainland and Hong Kong. Although it lacks resources, it now has nearly 4,000 students after starting with 270 in the first enrolment in 2005. Ambitious plans for Hong Kong universities to expand into the massive mainland education market have been delayed or shelved as local administrators grapple with the challenge of raising funds and maintaining academic standards. The University of Hong Kong announced in December that it would set up an extension campus in Shenzhen but the proposal appears to have been set aside since Professor Richard Wong, a key figure behind it, resigned as deputy vice-chancellor. A HKU spokeswoman said she did not know who was in charge of the project and there had been no official report on it. HKU vice-chancellor Professor Tsui Lap-chee said earlier this year that the Shenzhen government had allocated the university 100 hectares of land to build a campus within five years. "The HKU campus in Hong Kong is only 52 hectares, so it's a really big piece of land," Tsui said at the university's spring reception. The Chinese University of Hong Kong in February signed a memorandum of understanding with Shenzhen's municipal government to set up a campus in the city that will be run with a local partner. A Chinese University spokeswoman said little progress has been made since it signed the pact. "It will take time as we have to raise funds separately for the Shenzhen project and guarantee the operation there would not be subsidised by our Sha Tin campus," the university's communications and public relations manager, Chan Tsz-ling, said. "We also need to ensure the quality of the staff and the curricula in Shenzhen must be on a par with that in Sha Tin." In November, Polytechnic University agreed with the Dongguan municipal government to set up a working group and conduct a feasibility study on education, research and training. PolyU has been searching for a mainland institution with which to set up a jointly run university in Dongguan but the university would only say that "management is still studying this issue". The Hong Kong University of Science and Technology also joined the race to the mainland, setting up a graduate school in Nansha , Guangzhou, as a trial project.
Luxury property prices are heading for a sharp increase if a development site on The Peak is sold for HK$11.4 billion - the top of the forecast range - on Wednesday, analysts say. This would fly in the face of government attempts to cool the market and further bring into question the policy of releasing more sites for auction, they say. Given the tight supply of luxury residential plots on The Peak, the former government staff quarters at 103 Mount Nicholson Road which has panoramic views of Victoria Harbour, is tipped to go under the hammer at the top of the HK$8.7 billion to HK$11.4 billion range. To maximise returns on the investment, surveyors expect the winning bidder to build houses and apartment blocks on the site. Alnwick Chan Chi-hing, executive director at property consultancy Knight Frank, estimates that the site could support 18 to 25 houses and four to six residential blocks of 12 and 13 storeys with a total of up to 100 flats. "If the site fetches HK$11.4 billion it would mean the land price of the houses will reach HK$55,000 per square foot, while the accommodation value of the residential buildings would be HK$25,000," he said.
Calls are mounting for stricter official controls on breeders after 18 bulldogs, which had effectively been used as puppy machines, were dumped on a dog rescue group. By the time the animals were delivered to the charity Hong Kong Dog Rescue, one had died and several more were bloated from lack of exercise after being kept cramped in cages. Two more dogs died after the group took them in. The charity was approached by a middleman representing an unidentified breeder in Sheung Shui last week and told that unless it took 20 British bulldogs off his hands they would be sold on to other breeders or handed over to the government kennels, where they would be destroyed after four days. The group had no option but to accept delivery and the animals were sent to their Tai Po kennels crammed into the back of two vans in small cages. On arrival, one of the dogs which had suffered from heat exhaustion died despite the efforts of volunteers to give it mouth-to-mouth resuscitation. Almost all were females. There were three puppies - two of which died the next day. Six remain at the kennel after the rest were adopted or fostered. The group hopes more adopters can give them a place they can call home. "We don't know exactly why the breeder gave up these dogs but it's possible that the breeder believed he couldn't make any more money out of them," Alice Lau, the group's adoptions manager, said. Most of the dogs had loose and swollen teats, skin rashes, and were overweight suggesting they did not get proper care and were over mated. "All of them are much heavier than they should weigh - one weighed double what she should be - because they were kept in cages, didn't exercise and were only allowed to continually reproduce," she said. Volunteers fear the breeder, whose identity was kept secret, may still be breeding the bulldogs because he only gave up 18 instead of the 20 originally promised. "Such breeders are not rare, but it's the largest batch we've ever received. It's inhumane to treat animals like that," she said. Since February, under government rules, licensed pet shops are bound to ensure all their animals come from legal and responsible breeders, using hygienic and humane practices. The Agriculture, Fisheries and Conservation Department has also indicated that it will step up inspections of licensed pet shops to check if pet shops and breeders are complying with the regulations. However, a Google search turns up several local breeders' websites, or auction websites, which do not display licence numbers.
Former postmaster general Allan Chiang Yam-wang was named the next privacy commissioner yesterday - and immediately sought to explain away a run-in he had with the office he has been chosen to lead. Chiang was head of Hongkong Post when it was investigated by the Office of the Privacy Commissioner in 2005 after six pinhole cameras concealed in socket-like boxes were installed at the Cheung Sha Wan post office - some near washrooms and changing rooms. Staff were not told about them. At the time, Chiang explained that they were installed to catch a thief. The cameras were later dismantled and the recordings made were destroyed after the privacy commissioner issued an enforcement notice describing the use of secret cameras as highly intrusive. Recalling the incident yesterday, Chiang said his brush with the privacy watchdog had stoked his "passion" for privacy protection and inspired him to apply for the job. He admitted he had not known enough about protecting personal data at the time. "A fall in the pit is a gain in my wit," Chiang said. "This incident gave rise to my interest in privacy protection, and is one of the reasons I applied for the position." Stephen Lam Sui-lung, the secretary for constitutional and mainland affairs, said Chiang had been proactive in handling the incident, and he believed that the experience had given the former postmaster general a greater sense of responsibility about the handling of personal data. Chiang, 59, was picked by an independent committee from a list of 121 applicants. He worked for the government for 33 years and was postmaster general from 2003 to 2006. Lam said he expected Chiang's rich experience in public administration could help make the work of the privacy office more balanced.
It's not so exotic for the honorary consuls - While diplomatic position does have some perks, it's more about building bridges - They're often depicted as suave, sophisticated and never far from the next cocktail party. But while the job of honorary consul might sound exotic, the reality of life as "Our Man in Hong Kong" is not quite the stuff of a Graham Greene novel. Unlike career diplomats, they are not paid for representing the interests of the states who appoint them, nor do they get any direct reward for coming to the aid of its citizens who come into their orbit. Nor are they afforded the same privileges and immunities granted to full-time diplomats under the Vienna Convention. While the position of honorary consul undoubtedly has its perks, not least the ability to carry on your day job and boost its and your profile, career diplomats can look down their noses at their honorary colleagues; the position is often seen as being one of style and little substance. But all that may be changing, at least for the 59 honorary consuls who now ply their diplomatic trade in Hong Kong.
Teams compete at the Hong Kong International Dragon Boat Races at the Victoria Harbour in Hong Kong June 24, 2010.
China*: New lending for mainland property development in the first half of the year was 442.3 billion yuan (HK$506.29 billion), the People's Bank of China said, and not the 162.5 billion yuan it first reported on Friday.
Four pregnant pandas bred in captivity have been released into a special area of Sichuan so their cubs can have a life in the wild. The pandas, aged four to five, were taken to a two-hectare tract that will serve as a training base. It was created in the southwest province to help the endangered animals survive in a natural setting. The pregnant pandas will give birth there and then are expected to remain with their cubs for three or four years, Xinhua News Agency reported. "All of the carefully chosen pandas have experience of living in the wild, and three of them have already given birth to cubs," said Tang Chunxiang, an expert at the Wolong panda reserve, which is behind the initiative. "We hope the mothers can teach their cubs life skills to help them survive in the wild." By recent count, there are only 1,590 pandas left in the wild in China, though wildlife experts have been running programs in attempts to increase the number. But the only effort that involved releasing a captive-bred panda ended tragically. Xiang Xiang, a male cub trained to adapt to the wild and released in 2006, was found dead 10 months later - apparently killed by wild pandas native to the area. This new attempt aims to see the four pandas give birth and protect and raise their cubs on their own, though wildlife workers - who must reduce the animals' reliance on humans - will keep watch through surveillance cameras. "If they need help, the workers will show up dressed in costumes that make them look like giant pandas," Tang said. The workers will also simulate the sounds and smells of the panda's natural enemies so they improve their vigilance in the natural world - a key requirement if they are to survive.
Chinese steel producers are increasingly turning to Australia's magnetite iron ore sector, pouring in funds to explore and develop mines once considered uneconomic, as they nurture new supply sources.
A Super Hornet jet takes off from the aircraft carrier USS George Washington in seas east of South Korea yesterday, as US and South Korean forces begin large-scale exercises. Sino-US relations are under yet another severe test as a massive joint military drill began yesterday off the Korean Peninsula, and the Chinese Foreign Ministry lashed out at the US for "attacking" Beijing on the sensitive issue of the South China Sea. The military drills, code-named "Invincible Spirit" and a response to the sinking of the South Korean naval vessel Cheonan, are to run until Wednesday with about 8,000 US and South Korean troops, 20 ships and submarines and 200 aircraft. Led by the Nimitz-class USS George Washington, they were also going to take place in the Yellow Sea off the east coast of China. But that arrangement was dropped after vehement protests from Beijing. While the United States said the drill meant to "get North Korea's attention", most mainland media yesterday reported it as a move to contain China.
The Washington-led ambush of China over the disputed South China Sea at the region's top security forum on Friday marks a landmark shift in Sino-US ties and exposes deepening strategic fault lines in Asia. Even as US Secretary of State Hillary Clinton figuratively waded into the South China Sea in Hanoi, US and South Korean naval vessels prepared to stage large-scale exercises in the Sea of Japan, or East Sea, close to China's northeast - adding to the tensions of the new landscape. What happened in Hanoi is particularly significant. When Clinton declared that resolving territorial claims in the South China Sea was now in the United States' "national interest" and "a diplomatic priority", she was not just reflecting growing US concern about the potential for Chinese maritime dominance. It showed Washington had firmly grasped an historic opportunity, too. For months now, a rising chorus of East Asian concern at Chinese assertiveness has been voiced in Washington, just as the young administration of US President Barack Obama mapped out ways to re-engage with a neglected region. Alarmed by the refrain that the US was a declining power, US officials spoke privately of the need to reassert US strategic primacy in Asia.
Early rocket science lab demolished illegally - One of the earliest rocket science laboratories, which is part of the prestigious Chinese Academy of Sciences, has become an unusual victim of forced demolition.
More than 100,000 people were evacuated as a tributary burst its banks and heavy rain continued in flood-hit regions along the swollen Yangtze River, state media said.
Spending in the railways sector is to be increased in the second half of this year as only one third of the full investment quota was completed in the first half, the Beijing-based China Times reports. Fixed-asset investment in the railway sector amounted to 271.4 billion yuan in the first six months of this year, an increase of 17 per cent from the same period a year earlier, the newspaper reported, citing data from the Ministry of Railways.
July 26, 2010
Hong Kong*: The Hospital Authority is scrambling to find a new chief executive after Shane Solomon quit suddenly less than halfway through his second three-year contract.
Hong Kong rises to No 4 for foreign direct investment as global crisis eases - Amid the recent financial meltdown, global flows of foreign direct investment plunged 37 per cent last year to just over US$1.11 trillion, similar to the level in 2005 and almost half the 2007 peak, according to a United Nations survey. Investment in Asia accounted for about US$233 billion, with US$95 billion headed for the mainland, the UN Conference on Trade and Development's latest World Investment Report found. Since much of the capital investment destined for the mainland is channelled through Hong Kong, the city surged five spots up the global ranks to number four with reported direct investment of US$48.4 billion, down US$11.2 billion from 2008. Virtually every economy experienced a drop in FDI inflows, but Hong Kong still achieved its highest global ranking ever, partly because most major FDI recipients, such as the United States and Britain, suffered far deeper declines than their Asian peers last year. The US continued to get the most foreign direct investment in the world, with US$129.9 billion, less than half of what it got in 2008. The mainland rose one spot to number two, followed by France, Hong Kong and the Britain. In 2007, the mainland was the only Asian entry in the top 10. Hong Kong remained the second biggest recipient in the region last year. The report said a drop in cross-border merger and acquisition activity was mainly responsible for declining investment inflows to the region. The value of cross-border mergers and acquisitions in Hong Kong, South Korea, Singapore and Taiwan plunged 44 per cent last year. Preliminary FDI data so far this year indicate a healthy rebound, with Hong Kong receiving US$20 billion in the first quarter, up 72 per cent year on year. "Based on the figures for the last quarter of 2009 and certainly the first quarter of 2010, we're seeing a very strong rebound this year," InvestHK director general Simon Galpin said. Annual FDI flows into Hong Kong averaged about US$10 billion to US$13 billion up to 2003 but rose steadily, from more than US$30 billion in 2004 and 2005 to a record of almost US$60 billion in 2008. The dean of business administration at Chinese University, Wong Tak-jun, said that given the relatively slow pace of recovery in major developed economies and across Europe, Hong Kong would probably continue to have a high global ranking this year. Hong Kong compiles its FDI data from its Survey of External Claims, Liabilities and Income, which covers all companies in Hong Kong with direct investment flows during the year.
Property market expected to stay hot - Rise in new flats not seen reining in prices - New housing supply, including units at the Larvotto project in Ap Lei Chau, increased 11 per cent to 61,000 flats by the end of June from 55,000 flats in the first quarter. A substantial rise in new housing supply in the first half of this year will do nothing to cool the red-hot property market, analysts say. Transport and Housing Bureau statistics show that about 7,000 flats were completed in the first six months of the year, equivalent to 97 per cent of the flats completed for the whole of 2009. However, the figure is still lower than normal: there were 17,300 flats completed in 2005 and 16,600 in 2006. From 1999 to 2004, the number of completed flats ranged between 22,900 and 31,100 a year. Construction of new flats also rebounded this year, with 6,600 started in the past six months, compared with 8,200 flats in 2009. Including unsold flats in completed projects and under construction, 48,000 flats were available for sale at the end of last month. Supply is 4.3 per cent higher than three months ago. Centaline Property Agency's research department said 13,000 flats were ready for construction in the first half, 160 per cent higher than the 5,000 flats ready six months ago. Wong Leung-sing, an associate director of research at Centaline, said the increase was due to the government's move to increase land supply in recent months. New housing supply, including completed flats, flats under construction and flats in the pipeline, rose 11 per cent to 61,000 flats by the end of June, up from 55,000 in the first quarter, Centaline figures showed. "The new supply of private housing will continue to increase as the government releases more sites for sale this year," Wong said. He expected 15,687 new flats to be completed this year, 119 per cent more than the 7,157 in 2009. The figure is also the highest level in four years, rebounding from the record low of 8,801 flats, which has been the average total for the past three years. "In the next four years, the number of completed flats will be about 12,000 to 15,000 a year. But I don't think the new housing supply will go back to the peak level of 30,000 flats a year that we saw in the 1980s," he said. "We face the problem of an ageing population. We don't have enough new demand to support a significant increase in new housing supply." Trevor Cheung, an analyst at BNP Paribas, said the improvement in housing supply would not affect property prices. "We aren't suffering from a shortage of flats. The sharp increase in property prices in recent years is not due to tight supply, but to low interest rates and a booming economy. We see strong demand from people who want to upgrade their living environment. Many people want to live in a bigger and better flat," he said. He expected property prices to rise another 10 to 15 per cent by the end of this year. "Property prices will continue to go up unless there is an economic downturn," he said.
China*: Although Shanghai has dropped plans to be an offshore yuan trading hub, the race to overtake Hong Kong as China's top international financial centre is far from over.
'King of the south' looking at life in jail - Chen Shaoji, known as the "King of South China" for his long-standing clout in Guangdong, was given a suspended death sentence yesterday.
US says S China Sea pacts in its national interest, riling Beijing - Clinton stand on a Chinese 'core interest' causes tension at forum - Washington issued a fresh challenge to Beijing yesterday by declaring the resolution of disputes over the South China Sea to be in the US "national interest", comments which exasperated Foreign Minister Yang Jiechi. US Secretary of State Hillary Rodham Clinton told regional counterparts at the Asean Regional Forum that the disputes over the highly strategic sea were a "leading diplomatic priority" and now "pivotal to regional security". While she offered to help foster negotiations, her comments significantly raise Washington's direct involvement in an issue involving Chinese sovereignty - one that Beijing recently warned Washington was among its "core interests", along with Tibet and Taiwan. China and Vietnam claim the sea's Spratly and Paracel archipelagoes in their entirety, while the Philippines, Malaysia and Brunei claim the Spratlys in part. Taiwan's claim mirrors Beijing's. Potentially rich in oil and gas, both island groups straddle vital sea lanes linking Asia to Europe, the Middle East and Africa. "The United States has a national interest in freedom of navigation, open access to Asia's maritime commons and respect for international law in the South China Sea," Clinton said. She referred repeatedly to the need to settle the rival territorial claims under international law - including the UN Convention on the Law of the Sea - and "existing Asean principles". One senior Association of Southeast Asian Nations diplomat said the issue of the Spratly Islands had been raised explicitly by members of Asia's top security forum, as well as concerns about China's military build-up, which has been marked by the rapid modernisation of its navy. "The discussion was quite tense at one point. China ended up on the defensive," said the diplomat, who declined to be identified. Yang was "clearly exasperated", he said. A second diplomat with knowledge of the discussion said Yang responded with "a very strong and emotional statement essentially suggesting that this was a pre-planned mobilisation on this issue ... He was distinctly not happy." Yang declined to discuss details of the meeting with the media. "I expressed the position, the consistent position, of the Chinese side," he said. Yang met Clinton on the sidelines of the forum but a Xinhua report of the meeting did not mention the South China Sea. The move by Washington underscores its desire to forge new security alliances in the region in the face of China's expanding diplomatic and military reach. In another sign of Washington's attempt to play catch-up, Clinton also extended an invitation from US President Barack Obama to Southeast Asian leaders for a Washington summit. Beijing is expected to view the unprecedented US involvement as a provocation, coming after months of backroom pressure to block Vietnam's attempts to internationalise the issue, particularly through Asean. Beijing's envoys have repeatedly insisted the South China Sea dispute should be solved bilaterally between China and individual claimants to the island chains - a situation that would play to China's strengths. But Hanoi has led a discreet regional charge in recent months, with several countries privately urging Washington to act over China's growing assertiveness, from its imposition of a unilateral fishing ban to extensive naval exercises and diplomatic pressure. Vietnam has fortified bases on more than 25 Spratly islets and reefs. China occupies all the Paracels. Tensions between them exploded into violence in a sea battle in 1988, and have long simmered despite progress on other Sino-Vietnamese disputes in recent years. Hanoi has fast-tracked the development of its military relationship with the US, its former enemy, and struck a major submarine deal with Russia, its ally in the cold war. Clinton repeatedly talked up ties with Hanoi, praising Vietnam as a dynamic and great nation. "The partnership and co-operation with Vietnam is increasing day by day," she said. The Pentagon has also noted China's actions with alarm, particularly its persistent warnings to US and other international oil firms to pull out of exploration deals with Hanoi in southern Vietnamese waters. Executives at ExxonMobil - the world's biggest oil firm - were approached by Chinese envoys and told that its China business would be hurt unless it pulled out of a deal with Vietnam. Professor Jin Canrong, associate dean of Renmin University's school of international relations in Beijing, said Clinton's statement would not be welcomed by China's leadership. "It has been China's long-standing policy to handle territorial disputes with neighbouring countries as bilateral affairs ... Thus, such disputes should be resolved by nations concerned," Jin said. While saying he understands US interest in the region, Jin said it was not Washington's business. "China will ignore Clinton's call and reject any US role in the consultation to resolve its territorial disputes with the neighbouring nations." Significantly, the South China Sea gives the Chinese navy some of its only deep-water access - a fact now exploited by the growing number of People's Liberation Army submarines operating from a base on Hainan. Dr Carlyle Thayer, a Vietnam expert at the University of New South Wales in Sydney, said the fact so many participants raised the sovereignty issue yesterday and that the United States had come out strongly, represented a major development for the forum, often derided as a talk shop. "This is a diplomatic challenge to China," he said. "China has been able to use that forum to back its own policies almost unimpeded, and now it's probably looking back and realising what thin ice it was on."
Guangdong scrambles to regain place in sun with culture push - After decades of following the motto "to get rich is glorious", people in Guangdong are starting to focus on culture. The provincial government will host a public forum tomorrow on how to turn Guangdong from the factory of the world into the centre of a Chinese renaissance. Last weekend, top leaders met to approve a guideline for promoting Cantonese culture and developing related industry. While details have not been released, official media said the government had earmarked 25 billion yuan (HK$28.6 billion) for new cultural projects in the next five years. By 2020, the guideline says, Guangdong's culture industry should become one of the pillars of its economy. And it should also actively seek cultural co-operation with Hong Kong, Macau and Taiwan. Ironically, the push comes at a time when Cantonese culture and language are at a low ebb. A move to switch programming on the main channels of a television station in Guangzhou, the provincial capital, from Cantonese to Putonghua has sparked heated debate and spontaneous protests in recent weeks.
July 25, 2010
Hong Kong*: Shane Solomon has resigned as chief executive of the Hospital Authority (HA) for personal reasons, chairman of the HA Anthony Wu Ting-yuk confirmed on Friday.
People line up to buy Apple iPads at an Apple reseller retail shopin Hong Kong on Friday. Eager iPad fans in Singapore, Hong Kong and New Zealand braved long queues and discomfort to get their hands on the coveted Apple device. Eager iPad fans in Singapore, Hong Kong and New Zealand braved long queues and discomfort to get their hands on the coveted Apple device as its second wave of Asia-Pacific launches began on Friday. A 20-year-old New Zealander set up camp outside an Apple seller in Auckland two days before the launch, while other buyers in the region started their vigil in the wee hours of Friday. Japan and Australia were the first Asia-Pacific markets to receive the iPad, getting it in late May along with several European countries. Consumers in other Asian markets who could not wait for the release ordered iPads from abroad or bought them through unofficial local resellers. But this did nothing to dent enthusiasm at Friday. In Hong Kong’s busy Causeway Bay shopping district, a line of more than 100 eager shoppers trailed from a ninth floor Apple store down a humid stairwell, with latecomers fanning themselves as they waited.
Robin McLaren, the man who led the British side of the momentous negotiations for Hong Kong's handover to China, has died in London aged 75. McLaren, who passed away earlier this week, was mourned by the British government and former officials in Hong Kong who were involved in the turbulent rounds of talks between London and Beijing on handover arrangements that ultimately broke down because of the political reforms introduced by former governor Chris Patten. Confirming what he described as the "very sad news", British Consul General Andrew Seaton expressed his condolences to McLaren's widow and family, and praised him for the role he played in the handover process. "Sir Robin's career centred on Hong Kong. He made a huge contribution to the process which led to the successful handover of Hong Kong in 1997 and laid the foundations for the prosperous and stable Hong Kong we know today," Seaton said. "He will be much missed." Born in August 1934, McLaren joined the diplomatic service in 1958 after a stint in the navy. His long connection with China started as a language student in Hong Kong in 1959, followed by postings in Beijing, two postings as political adviser in the Hong Kong government, and head of the Far Eastern department in the Foreign Office. He became fixed in the memory of Hong Kong people when he became senior British representative on the Sino-British Joint Liaison Group between 1987 and 1989, when London and Beijing negotiated for the implementation of the Sino-British Joint Declaration setting out post-1997 arrangements.
The tour industry has a solution to tourist rip-offs: a sticker. Carrying information on visitors' rights, it will be given out to tourists from the mainland when they arrive in the city. The industry has also set up a special task force to consider steps to mend Hong Kong's battered reputation as a tourist destination. The latest blow to its image came last week, when a video clip of a tour guide berating mainland visitors for not spending enough on a forced-shopping tour was broadcast across the mainland. The government has given the task force until September to come up with concrete steps, and has warned it may propose legislation to curb abuses such as forced shopping and ill-treatment of tourists. But the head of a tour guides' union yesterday dismissed the warning as "just a show", and said if there was a crackdown it should be on the travel agencies that run cheap tours for mainlanders. Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan said yesterday the government had not ruled out legislation to regulate tour guides. Lau was speaking after meeting board members of the Travel Industry Council, which set up the task force.
Hong Kong-listed shares of Agricultural Bank of China rose 5.5 per cent on Friday after Morgan Stanley lifted its stake in the lender's H shares by about 1 percentage point.
The Hong Kong Monetary Authority has warned of a loss in the Exchange Fund for the first six months of the year, citing tough times for investing.
Shanghai-based developer Shui On Land (0272), controlled by Hong Kong billionaire Vincent Lo Hong-sui, plans to sell some of the group's retail and office properties outside its home city to help maintain cash flow.
Proceeds from listings in Hong Kong this year are expected to reach a record HK$350 billion - the highest since 2007 - as more mainland and international firms queue up to tap the local market.
China*: China authorities already on Friday warned of potential new problems on the Yangtze downstream from the Three Gorges Dam as water levels in its reservoir hit a record high.
`Smeared' Foxconn chief Terry Gou Tai-ming sends warning to Taiwan - The head of Taiwan technology giant Foxconn has hit out at critics who claim the firm mistreats workers and threatened to review his company's investment plans on the island. Terry Gou Tai-ming, chairman of the group which is a leading sub-contractor for Apple and other electronics giants, was responding to criticism in Taiwan following a series of suicides at the company's plants in the mainland. "I don't know why our image has been smeared to this extent," he was quoted by Huang Chiu-lien, chief financial officer of the group, as saying during a briefing. "He said he was even wondering if there was still room for us in Taiwan. We'll review our local investment plans, but the plans as a whole have not yet been finalized," said Huang, referring to plans that could be worth hundreds of millions of US dollars. The comments come after protests by island academics who have claimed that Foxconn ill- treats its workers in cities such as Shenzhen and have labeled the company a "shame on Taiwan." Taiwan Premier Wu Den-yih threw his weight behind Gou, saying he hopes Gou will not be upset by the criticism and scale back his investment plans for Taiwan. A total of 11 mainland employees have committed suicide this year at Foxconn plants by jumping from buildings, including 10 in Shenzhen. Another worker at a Foxconn affiliate died this week after falling from a dormitory.
Mainland’s biggest military supply provider, Jihua Group, said on Friday it would launch an initial public offering worth about 3.25 billion yuan (HK$3.72 billion) next week mainly to fund production expansion. Jihua Group, which has a 75 per cent share of mainland’s market for military and police garment, among other equipment, planned to issue 1.157 billion A shares denominated in yuan for a later listing on the Shanghai Stock Exchange.
Beijing's population surges near 20 million - Beijing municipal people's congress revealed this week that the Chinese capital now has 19.72 million inhabitants, growing by over 3% in the past 2 years.
SouFun, the mainland’s No 2 online real estate website, is preparing for a US initial public offering worth up to US$300 million, in what could be the largest such listing by a mainland web company this year, sources said. JPMorgan Chase, Bank of America Merrill Lynch and UBS were working on the deal, although no final mandates had been given, sources at the three banks said on condition of anonymity because nothing had been finalised. Media reports have said Goldman Sachs Group and Deutsche Bank may also be vying for mandates. SouFun, 51 per cent owned by Australia’s Telstra Corp, aimed to list on the New York Stock Exchange and could make its offering by year end, said one of the sources working on the deal.
Qinghai province in Northwest China plans to increase lithium output by nearly five times as demand for electric vehicles powered by lithium cells surges, a top local official said on Thursday. The province has the largest reserves of lithium in China and accounts for nearly 90 percent of the output. It plans to increase lithium carbonate output to 30,000 tons over the next five years from 6,000 tons last year, said Liu Shanqing, director of Qinghai's Land and Resources Department. Lithium carbonate is used for soldering flux, in lubricants, focal lenses, ceramics, and high-performance batteries. Citic National Security Lithium Technology Corporation and Qinghai Lithium Co will account for most of the 30,000 tons capacity, with Citic National alone expected to produce 25,000 tons, Liu said. "The original plan was to have a capacity of 60,000 tons by 2015. But since the extraction technologies are not that mature enough, we scaled it down to 30,000 tons," he said. In China, lithium is found in the rock formations of Sichuan and Jiangxi provinces, and also below the surface of natural salt flats where the weather and geography make it the most economical to extract. Lithium is extracted from salt lakes in Qinghai province, which has estimated reserves of over 17.65 million tons. "If the extraction technologies mature in the future, we will try to attract more investors to develop the lithium resources," said Liu. The total annual global output of lithium carbonate is around 100,000 to 150,000 tons, at contract prices ranging from $5,000 to $6,500 per ton. Prices of lithium carbonate are likely to increase by 16 percent year-on-year globally by 2013, due to the increased demand for lithium batteries, said a recent from China International Capital Corporation. "Lithium demand will go up as electric vehicles roll out in massive numbers," said Zhou Haiou, an analyst who tracks the new energy sector at Shanghai-based Guoyuan Securities. China recently surpassed Japan as the world's largest lithium battery provider. It also has about one-tenth of the estimated global lithium reserves and is the world's third-largest producer of the metal. The nation has outlined plans to boost the number of electric vehicles on its roads to 500,000 by 2015 from the present 9,800 units. Other countries like the US plan to have at least 1 million electric cars on the road by 2015. The global market for lithium-ion batteries used in automobiles is forecast to grow 90-fold to 2.25 trillion yen ($24.8 billion) in 2014 from 25 billion yen last year, according to market research company Fuji-Keizai. But there have also been doubts recently that the demand surge would crimp metal supplies in the future. Electric-vehicle maker BYD, backed by billionaire investor Warren Buffett, is reportedly eyeing rich lithium content mineral resources in Sichuan. Similarly a key supplier for Toyota Motor Corp is believed to have secured long-term sources of lithium in Argentina earlier this year.
Fishing boats are docked in the port of Tiger Beach in Dalian city, Northeast China's Liaoning province, on July 22, 2010. More than 30 fishing boats were dispatched off the Dalian coast to help clean up the oil spill after a pipeline explosion on July 16. About 1,000 fishing boats in Dalian have been dispatched for the clean-up effort.
London-based luxury department store Harrods is holding talks with the Shanghai municipal government on the opening of its first store outside the United Kingdom in the historic Bund area. The British emporium is keen on opening a department store in one of the imposing buildings where British banks and merchant houses once traded, a real estate agent familiar with Harrods' plan said. But the choices for the British retailer are limited to only a few locations that are large enough for Harrods, which operates one of London's largest department stores. Its proposed venture in China was initiated by Managing Director Michael Ward. "China is the most probable, but we would have to do a lot of work first," Ward was quoted as saying by The Guardian. Hannah Hodges, Harrods' corporate affairs manager said: "However, no plans have been confirmed to open a store in Shanghai." Harrods is already a well-know purveyor of luxury goods among well-to-do Chinese consumers who make frequent overseas shopping trips every year. The Guardian reported that the number of Chinese travelers who shopped at Harrods in the first six months of this year rose 125 percent year-on-year. Eugene Tang, head of retail at Jones Lang LaSalle in China, said he was aware of talks about Harrods' Shanghai outlet, but he estimated that it would take a long time before any lease agreement can be concluded. "We don't expect to see the opening of Harrods in Shanghai in the next couple of years," said Tang. "It will take much longer for them to get things right before the opening," he added. Negotiations between Harrods and potential Chinese partners will take one year, and another year-and-a-half will be spent on design, decoration and stocking," said Tang. Harrods' move to China is seen as a break with tradition for such a high-end retailer. "Renowned for their conservative business philosophy, most premier British retail brands don't go overseas for expansion," said Regina Yang, an analyst with Knight Frank, a leading property consultancy. But other British retailers have already made a dash for the yuan. Marks & Spencer opened its second store in Shanghai's Yuyuan Garden last month, and it is already scouting for premises for its third branch, according to Yang. Although luxury goods are relatively cheaper in Hong Kong, Europe and the United States, many mainland consumers who are not outfitting their entire wardrobes with designer clothing prefer the convenience of making occasional purchases at local stores, Yang said. High-end brands such as Louis Vuitton, Zegna, Gucci, Dior, Tiffany, Hermes and Prada all opened stores in Shanghai between April and June to meet luxury buyers' ballooning demand. China has overtaken the US to become the world's second-largest luxury goods market, with Japan holding the top spot. Sales of luxury goods in China grew 12 percent in 2009 to $9.6 billion, accounting for 27.5 percent of the global market, according to Bain & Co. In the next five years, China's luxury spending will increase to $14.6 billion, making it the world's largest luxury market. The landmark London department store Harrods was acquired by Qatar Holdings on May 8 for 1.5 billion pounds from Egyptian billionaire Mohammed al-Fayed. Harrods, in London's Knightsbridge district, has over 90,000 square meters of retail space across more than 330 departments.
Flood water is released from the Three Gorges Dam's floodgates in Yichang, Hubei province, on July 20. China, already reeling from deadly floods, braced Friday for a potential new deluge on the Yangtze downstream from the huge Three Gorges Dam as its reservoir’s level hit a high for the year. The warnings came as officials sought to dampen expectations that the dam could completely tame the swelling river amid the worst flooding in a decade, which has left more than 1,100 people dead or missing. The Three Gorges reservoir’s water level reached its highest point this year’s floods, the water resources ministry said, adding it hit the dam’s 158.8-metre mark Friday. State press reports put its maximum at 175 metres. Huge amounts of water continued to thunder out of its massive spill-gates and the government of Jiangxi said the hard-hit eastern province downstream was at a “critical juncture” in flood control. It ordered authorities to redouble flood prevention work along dozens of lakes and rivers already swollen by weeks of heavy rains. “Over the next 20 to 30 days, the high water level of the Yangtze River’s Jiujiang section and Poyang Lake will continue. The flood situation is very grim,” the provincial government said in a statement. Poyang Lake, China’s largest freshwater lake and linked to the Yangtze, is one of hundreds of major Chinese lakes and rivers whose water levels have exceeded their danger marks. Jiujiang is a city of about five million people. Authorities elsewhere in the region issued similar warnings.
Former Japanese businessman-turned-ambassador to China Uichiro Niwa on Friday urged Tokyo to start free trade talks swiftly with Beijing, local media said. Niwa was appointed by Prime Minister Naoto Kan to the key diplomatic post, making him the first ambassador to China from outside the government sector since the two countries normalised ties in 1972. “Japan needs to quickly hold free trade talks with China,” said Niwa, who had served as a senior corporate adviser at trading house Itochu Corporation, in an interview with Japanese media. “Otherwise, Japan will sink,” he was quoted as saying by Jiji Press. China is expected to overtake Japan as early as this year as the world’s second-biggest economy. Niwa also called for Beijing to “heighten transparency” in its military buildup, Jiji said. “I expect China, as a leading nation, to realise the significance of its remarks and actions,” he said. Commenting on the fast turnover of leaders in Japan – which has had five premiers in four years – he said: “How can Japan earn trust when its top leader changes within a year, or months?” The appointment of Niwa, a straight-talker who has actively served on various key government panels, came as Kan has advocated a greater role for private sector figures as Japan’s ambassadors.
Beijing's top negotiator is set to visit Taiwan next month, his first visit since he was mobbed and shoved to the ground by a pro-independence crowd on the island.
Princeton University professor molecular biologist Shi Yigong cast vote on future by returning to China - Professor Shi Yigong, dean of life sciences at Beijing's Tsinghua University, poses with bottles of bacterial culture, part of studies that may produce drugs to fight cancer... "In 20 years [China] could be doing pretty well." Dean cast vote on future by returning to China after 2 decades - Two years ago, molecular biologist Shi Yigong was a prize-winning Princeton University professor with annual research funding of more than US$2 million and a seemingly limitless US academic career. But Shi did exactly what China's leadership hopes to see more of - he turned his back on all that to return home after two decades abroad. The recent return of people like Shi, who now heads the life sciences department at Tsinghua University in Beijing, has provided a ray of hope for China in its uphill battle to reverse a long-term "brain drain" of experts. "China has contributed disproportionately to the advancement of science and technology in the United States, for example," Shi said of the steady stream of China's best and brightest who left for greener pastures in decades past. "Behind China's shiny glass skyscrapers, it has an extreme shortage of top talent and that is really regrettable." With aspirations of becoming a science and technology power, China has tried for years to halt an exodus of top minds, a lingering legacy of the 1966-76 Cultural Revolution when campus upheavals closed universities for years. The chaos severely set back Chinese science and academia. Afterwards, many of the nation's best and brightest - with official encouragement - opted for study abroad, where most have stayed. Many took foreign citizenship. But Shi, 43, said China's growing clout and rapidly modernising research institutions made it an increasing draw for returning scholars, known here as "sea turtles" swimming back to their home beaches. "For talented people to apply their talents, the sky is the limit now in China in terms of innovation," Shi said after a tour of a laboratory where he studies cell proteins, with possible implications for new cancer drugs. From 1978 to last year, 1.62 million Chinese went abroad for graduate studies, according to the government. Only 460,000 have returned. Last year 229,000 left, up 27.5 per cent from 2008. But returnees leapt 56 per cent to 108,000 last year, many drawn by increasingly lucrative enticements and growing research funding. One current programme offers recruits a basic one million yuan (HK$1.14 million) in government funds - plus additional money from their employers and other sources. The government this year promised even more attractive policies in the future in its bid to close the technology gap with the West. The issue resonates in China. Nationalist pioneer Sun Yat-sen and later revolutionaries like Deng Xiaoping and Zhou Enlai , among other notables, were educated or radicalised abroad before returning to shake the halls of power. Yet experts say continued academic problems repel potential returnees. They include rampant research plagiarism, a lack of political autonomy at universities, and a sclerotic academic system marked by infighting and overemphasis on connections, which stifles innovation. "You have a large number of incompetent scientists that get lots of funding because they work the system," said Rao Yi, who returned in 2007 from a top research position at Northwestern University to head life sciences at Peking University. "Sea turtles" also encountered resistance from their Chinese peers, who viewed them as overpaid interlopers, Shi said. Shi and Rao have spoken out for change. They wrote a commentary in the People's Daily in February urging reforms such as more independence for universities. But accusations and insults have followed such suggestions, said Shi, who admitted it has been a "tough adjustment". "Suffice to say that my last 2-1/2 years, in terms of dealing with the media and the blogosphere, were not enjoyable," he said. Cong Cao, a professor of international relations at the State University of New York and an expert on the Chinese academic elite, said China had the "hardware", in terms of research facilities, to succeed. "But in terms of the software - whether the system is really ready to produce first-class work - I'm still not sure," he said. Rao, who is renouncing his US citizenship to retake a Chinese passport, said patriotism was only a small factor in his return. "It's more a question of what side of history you want to be on," he said, noting China's rise. But it would be decades until China rivalled the West in innovation. "In 20 years we could be doing pretty well. But if we don't solve some of the structural problems, maybe we won't go very high, but rather get stuck somewhere in the middle."
China and Singapore forge currency swap deal - The central banks of Singapore and the mainland have signed a bilateral currency swap agreement likely to boost the internationalisation of the yuan, a press statement said on Friday. “The People’s Bank of China (PBOC) and the Monetary Authority of Singapore (MAS) today announced the establishment of a bilateral currency swap arrangement,” said a MAS statement issued after a meeting in Beijing. Financial institutions in Singapore and their customers will be provided with the yuan financing for trade and direct investment through the swap, MAS stated. “The arrangement is a key pillar of co-operation between the PBOC and the MAS and serves to promote bilateral trade and direct investment for economic development of the two countries.” Lasting for three years and extendable by mutual agreement, the swap will provide the yuan liquidity of up to 150 billion yuan (HK$172 billion) and Singapore dollar liquidity of up to S$30 billion (HK$170 billion). The deal would also “facilitate the internationalisation of the Chinese yuan”, the statement said. The agreement “would not only strengthen Singapore’s economic and investment linkages with China but also help to maintain our role as an international financial centre”, it stated. Song Seng Wun, a regional economist at CIMB-GK Research in Singapore, said the agreement reflected the strong financial relations between the two economies, which will be among the world’s fastest growing this year. “If there is a crisis of confidence in each other’s currency, the other can come in to help,” Song added, but stated the chances of that happening were low.
July 24, 2010
Hong Kong*: Hong Kong's Civil Aviation Department (CAD) Wednesday gave approval for passenger fuel surcharges levied by three airlines to be reduced for the period from August 1 to 31. The airlines involved include All Nippon Airways, Cathay Pacific Airways and Singapore Airlines. The new maximum levels of fuel surcharges will be 98 HK dollars (12.61 U.S. dollars) for short-haul flights and 505 HK dollars for long-haul flights, representing a reduction of 7 percent and 2 percent from the current maximum levels for short and long-haul flights respectively. The applicable surcharge levels are based on the ticket issue date. Passenger fuel surcharges seek to allow airlines to partially recover the increase in operational costs due to fluctuations in aviation fuel prices. As the aeronautical authority in Hong Kong, the CAD considers and approves fuel surcharge applications from the airlines in accordance with bilateral Air Services Agreements. Passenger fuel surcharges are reviewed regularly by the CAD. The last review was done at the end of June when the maximum surcharge levels approved by the CAD were 105 HK dollars for short- haul flights and 513 HK dollars for long-haul flights.(1 U.S. dollar=7.77 HK dollars)
AIA Hong Kong underwriters revealed - American International Group is speeding up the process to publicly list its pan- Asian arm on the Hong Kong bourse by appointing three banks as underwriters. The world's largest insurer has chosen Deutsche Bank, Morgan Stanley and Goldman Sachs as global coordinators for the initial public offering of American International Assurance, Bloomberg reported yesterday. AIA is also said to be working on securing strategic investors. The government-backed Shanghai Financial Industry Investment Fund may purchase shares of AIA worth 2 billion yuan (HK$2.28 billion) to 4.1 billion yuan in the offering with an expected return of 27.5 to 31.6 percent, Caijing magazine quoted a source as saying. The Asian insurer is also reportedly having discussions with Standard Chartered and Temasek Holdings, Singapore's state-run investment firm, about investment in the IPO. "No stone will be left unturned in the search for prospective pre-IPO buyers, but there are likely to be plenty of interested parties," said one banker involved in the process, according to The Wall Street Journal. The deal, which could be the biggest IPO ever on the Hong Kong market, may raise about US$15 billion (HK$117 billion), reported Reuters. And fees could top US$500 million. AIG appointed Mark Tucker as the new chief executive officer of AIA on Monday, and said it will proceed with the initial public offering "as soon as practicable." AIA has 23 million customers across Asia and at least US$60 billion in assets. The Shanghai Financial Industry Investment Fund, the largest yuan-denominated private equity fund, is managed by Gimpo Industry Investment Fund Management. This is a joint venture of Shanghai International Group, a subsidiary of the Shanghai government, and China International Capital.
Citic Group, a top Chinese financial conglomerate, may raise as much as 80 billion yuan (US$11.8 billion) in a planned initial public offering (IPO) in Hong Kong, sources familiar with the situation said. The Beijing-based company, which has listed units including Citic Pacific Ltd, China Citic Bank Corp, and Citic Securities, plans to complete its IPO before the end of next year. If successful, it could be the biggest float in Hong Kong next year, a source from a major mainland brokerage said. "IPO preparation is now still in the planning stages," one person who has direct knowledge of the matter told China Daily. Citic Group, the country's largest investment conglomerate owned by the government, aims to raise as much as 80 billion yuan from the share sale, the person said, without specifying how many shares the company planned to sell. The State-owned investment company plans to list its entire business as a group, the person said. Citic Group is currently ranked 254th in terms of revenue among the top 500 global companies listed by Fortune magazine this month. The company posted a gross profit of 35 billion yuan in 2009, a 35.4 percent year-on-year rise thanks to the sound performance of its financial services, real estate and industrial investment businesses. The group's total assets and net assets stood at 2,139.9 billion yuan and 134.8 billion yuan respectively in 2009, up 31.2 percent and 23.1 percent respectively from the previous year. Citic group owns 44 subsidiaries that operate in the Chinese mainland, Hong Kong, Macao, North America, Australia, southeast Asia, Central Asia, the Middle East, Africa and South America. Its core businesses range from the financial sector to the service industry and include industrial investment. Analysts said the planned Hong Kong IPO signaled Citic's intention to extend its business and step up overseas expansion through investments in the Hong Kong market. Although financial and domestic businesses are still the main components of the Citic Group, the company plans to strengthen its non-financial and overseas businesses, particularly in real estate, energy resources and overseas engineering contracting, analysts said. "The fundraising is expected to further cement the company's position in the investment market as it will give it the financial muscle to expand its business," said Li Dahao, an analyst with China Jianyin Investment Securities. "We hope the IPO will provide the opportunity for us to boost transformation of our business practice by enhancing cooperation, risk evaluation, strategy management and allocation of resources," said Kong Dan, chairman of Citic group, in an exclusive interview with Century Weekly magazine.
In a rare show of displeasure yesterday, Chief Executive Donald Tsang Yam-kuen lambasted Hong Kong people for their "not in my backyard" mentality, saying they should be more ready to accept unpopular facilities such as columbariums and public housing estates in their neighborhoods. Everyone had to die some time, the chief executive observed, adding that if the housing needs of poor people were not met, "society will never have a peaceful day". Tsang was addressing district council leaders amid continuing controversy over a shortage of public burial urn niches, and efforts by private owners to build unauthorised facilities where niches can sell for hundreds of thousands of dollars. "Recently, a phenomenon has emerged in our society," Tsang said at the annual Summit on District Administration. "People do not welcome some unpopular facilities. Despite growing public needs for these facilities, there is a `not in my backyard' attitude." He said columbariums should be built in each of Hong Kong's 18 districts and the responsibility to meet public needs did not lie only with officials but also with district residents.
A court has allowed winding-up as an option for the future of a holding company which indirectly owns the Yung Kee Restaurant - but says this does not necessarily mean the famed roast-goose venue will shut down. In the latest move in the legal battle between members of the Kam family who own the restaurant, Court of First Instance judge Mr Justice Andrew Chung On-tak rejected an application by one brother and a nephew to strike out a winding-up petition lodged by another brother. In his decision, Chung said he agreed with the petitioner, elder brother Kam Kwan-sing, better known as Kinsen Kam, that whatever happened to Yung Kee Holdings, it did not mean the restaurant would close. In the hearing that began on July 13, younger brother Kam Kwan-lai and nephew Carrel Kam Lin-wang asked the court to strike out Kinsen Kam's winding-up petition. The ruling means winding-up remains an option, along with the possible sale of Kinsen Kam's 45 per cent share in the company to his younger brother, or a possible third option. Barrister Jat Sew-tong SC, who acted for Kinsen Kam, said after the ruling that he strongly believed customers would continue to enjoy the restaurant's roast goose no matter what the court eventually ruled. "I don't see the legal battle or the final ruling having any impact on the daily operation of the restaurant," he said. Jat said the next step was to prepare for the hearing, possibly next year, to determine the future of the holding company, unless the matter was resolved through mediation. The law firm for the younger brother said it had not received any instructions for an appeal. Jat argued against a move by Kam Kwan-lai and Carrel Kam, who asked the court to strike out Kinsen Kam's winding-up petition. In a nine-page written judgment, Chung said he agreed with Jat's argument that Yung Kee Holdings, which holds 80 per cent of restaurant operator Yung Kee Restaurant Group, did not directly own or operate the restaurant business. "Even if Yung Kee Holdings is wound up, the liquidator will not be able to sell the entire restaurant business," the judge said. "I also agree with the petitioner that any such difficulty ... is ultimately a matter of details for the liquidator and or the potential purchaser of the Yung Kee Restaurant Group shares to consider, and cannot advance the respondents' case in this application." The judge cited Jat's argument that a sale upon winding-up could be a better option for Kinsen Kam than selling to his brother because, given the restaurant's reputation, "more than a few famous, sizeable food and hotel operators could be interested in paying an even higher price than what the respondents may be willing to pay". He noted that Kinsen Kam had accepted that winding-up was sought only as an "alternative relief". The court also accepted that the restaurant business had not been adversely affected despite the legal battle and any concerns of the patrons or staff were far from widespread, and likely to be temporary. "For the reasons given by the petitioner, I agree with the petition and disagree with the respondents," the judge concluded. He ordered the losing party to pay costs. During the hearing, the court heard that companies under the Kam family had no less than HK$880 million in cash, a whole commercial block in Central worth at least HK$1 billion, and HK$127 million in other net assets. In 2008 and last year, the restaurant made more than HK$50 million a year.
Number of Asia millionaires rose 26 per cent last year - Fight for Asian talent costing Swiss banks - Top bankers needed to lure clients in booming Asia. Swiss banks face the highest wage demands in three years from bankers skilled at winning wealthy clients in Asia, where the number of millionaires rose 26 per cent last year. UBS, Credit Suisse Group and Julius Baer Group, three of Switzerland's biggest fund companies, are competing for so-called relationship managers as heightened scrutiny of Europeans' tax affairs drives them to seek rich customers living in the world's fastest-growing economies. Retaining or hiring senior advisers in Asia could cost two to three years of bonuses, said John Koh, managing director of WMRC, a recruitment firm in Singapore. Base pay increases of about 30 per cent are available for switching firms and bankers with eight to 10 years of experience who have brought in assets of US$300 million to US$500 million can earn S$500,000 (HK$2.83 million). Entry-level advisers were paid about S$120,000, he said. "We're back to levels seen in maybe 2006 or 2007, with lots of people in the market at reasonably expensive prices," said Boris Collardi, CEO of Zurich-based Julius Baer. The trick was to find people who "pay for themselves" by attracting assets. Higher salaries would depress profits from Asia, where UBS reported 3.77 billion Swiss francs (HK$27.88 billion) of revenue last year and Credit Suisse had 3.44 billion francs, said Roman Scott, managing director at Calamander Capital in Singapore. Every 1 per cent increase in wages, which accounted for two-thirds of the banks' total costs, would reduce pre-tax profit by 0.7 per cent, he said. "Costs may be higher in Asia, but it's a gamble the banks have to take," Scott said, adding that profitability in Asia was now similar to more mature markets, such as the United States and Europe. "You may get lower margins and profits, but at least the volume of the market is growing." UBS, Switzerland's biggest bank, plans to increase its headcount in Asia-Pacific to 9,500 in three years from 7,300. Credit Suisse employed 6,400 people in Asia at the end of last year, 13 per cent of its workforce. Credit Suisse, ranked by Scorpio Partnership as the world's fifth-largest manager for millionaires, expects to add about 60 so-called private bankers in the region this year. "I would not necessarily want to be a newcomer and set up now because entry costs are going up," said Marcel Kreis, head of Credit Suisse's private-banking unit in Asia-Pacific, which attracted a record 11.5 billion francs in net funds last year. Julius Baer, which managed 175 billion francs at the end of April, expects Asia to account for as much as a quarter of the bank's assets within five years, up from less than 16 per cent last year. The company plans to increase its 400-person staff in the region this year. "Everyone is fighting for the same shallow reservoir of talent," said Hanspeter Brunner, head of Switzerland-based BSI's Asian unit, which by March had increased its headcount to 180 in Singapore from 30 last year. "The region is leading global growth and that has cost consequences." Pay increases helped push up cost-income ratios at Asian fund managers to 86 per cent last year from 61.8 per cent two years earlier, according to data compiled by industry consultants at Boston Consulting Group. The ratio at Swiss banks rose 12.9 percentage points to 66.7 per cent in the same period. The gain occurred as the number of millionaires in Asia-Pacific reached 3 million last year, matching those in Europe for the first time, according to a report published last month by Capgemini and Bank of America's Merrill Lynch brokerage unit. The assets of the millionaires rose 31 per cent to US$9.7 trillion, the study showed. Reyl & Cie, a Geneva-based money manager with about 4 billion francs of client assets, aimed to attract S$1 billion within a year, said Charles Bok, head of the firm's Singapore office, which opened last month. "Competitors are busy chasing talent and we have to differentiate ourselves with a more entrepreneurial approach from the classic big banks," Bok said. Singapore "allows us to take advantage of Asia's unprecedented growth and is a fiscally and legally stable door to China", he said. The cross-border market for millionaires in Hong Kong and Singapore will grow at an annual rate of 6 per cent to about 800 billion francs in 2012, Zurich-based UBS estimated in November. The bank boosted the maximum bonus for managers winning assets in those two centres to 200,000 francs, and said in May that it was reviving efforts to recruit and train people in Asia. Deutsche Bank, Germany's biggest bank, had been hiring more graduates in Asia instead of paying up to recruit veterans, The Wall Street Journal reported this week. CEO Josef Ackermann was quoted as saying that competition for talent could cause a bubble in bankers' pay. "The Swiss are going to Hong Kong and Singapore to access these growth markets, but the difficulties they have are high set-up costs and the problems of acquiring talent and establishing a brand name," said Stephen Wall, a director at London-based Scorpio. "There's inevitably pressure on banks' global profitability, but in the long run the big players will expect to see a turnaround in cost-income ratios relatively swiftly." Swiss banks are expanding in Asia as attacks on bank secrecy by the US, Germany and France threaten their domestic position as managers of 27 per cent of the world's privately held offshore wealth. The Swiss Parliament approved a settlement last month with the US to hand over account details on UBS clients. That followed a decision last year to offer greater assistance in catching tax evaders, to avoid being blacklisted as a tax haven. While sacrificing cost-income ratios to win business in Asia was not a "sustainable model", banks could not overlook the region's potential, said Lok Yim, Deutsche Bank's head of private-wealth management for China, Hong Kong, Taiwan and the Philippines.
94 units in Larvotto Hong Kong, each worth more than HK$30 (US$3.8) million, were sold in just two days.
Sexy models were mobbed at the opening of the Book Fair yesterday, causing chaos that organizers had tried to head off. Girlie displays and scrambles around them were akin to scenes at last year's fair, and they spelled failure for a concerted push against them by the Trade Development Council, backed by education groups and serious book lovers. The council declared that there was no space in the fair for langmo (literally, teen models, though many are in their twenties) trying to promote risque "photo album" books. At least 12 applications from models and their managers for promo slots were rejected. But the models were as large as life, beating the ban by turning up at the Hong Kong Convention and Exhibition Centre in Wan Chai not as "authors" but as ordinary visitors. Except they were far from ordinary. In skimpy outfits, some paraded in the exhibition hall to promote their albums. Young fans of the models - and of teen singing idols who also got in on the act - expected a show, queuing long before the doors opened at 9am. Some had been in line since Tuesday night. And when the doors did open, they rushed inside for albums of their favorite models and free gifts from singers. A 16-year-old fan of pop singer Theresa Fu said she had been outside since 10pm the night before and was spending HK$500 on Fu's book and limited-edition items. Chanting for Theresa, the fans had to wait another hour for Fu. But when she did finally walk in, she set off pandemonium by handing out free keepsakes. Elsewhere, three models from Taiwan attracted dozens of male oglers, who took photos while reaching for gifts from the girls. The best-known langmo, Chrissie Chau Sau-na, was not at the center of the action. But the subject of a sensational pictorial book that featured in the fair last year was nearby in Golden Bauhinia Square for an autograph session. A representative of her publisher said later that the first day of the fair was a triumph, with 7,000 copies of Chau's new album sold in the morning alone. Although it was stymied, the council's attempt to have the focus squarely on the other types of books was welcomed by most visitors, who said the fair is for writers, not scantily clad girls. A 75-year-old visitor named Chan said the models "have utterly nothing to do with books." Mother of two Josephine Mak was put off by models "practically wearing nothing" and said they should be kept out of the fair altogether. Mak was at the fair with a plan to spend up to HK$3,000 on classics, saying schools fail to teach children to appreciate literature. Model books aside, exhibitors expect a rise in sales this year. "We anticipate a 10 percent increase since it has been nearly two years since the economic meltdown," said Keith Wong Yiu-wing, a marketing executive at Page One. For those looking beyond langmo, the week-long fair features public forums with British novelist Frederick Forsyth, author and actor Stephen Fry and historian Andrew Roberts. A record 510 exhibitors are taking part and about 900,000 visitors are expected.
China*: China's yuan weaker against USD Thursday - The central parity rate of the yuan, China's currency Renminbi, weakened to 6.7859 per U.S. dollar Thursday from 6.7802 per U.S. dollar Wednesday.
New loans for China's SMEs up 23% in Q1 - The total new loans for China's small and medium-sized enterprises (SMEs) grows faster than that for big companies, as the government measures to allow easier access to financing have begun to take effect.
Rail workers use cranes and construction vehicles to build the Xining-Golmud Second Line of the Qing-Tibet Railway on the Bayante Bridge, Huangyuan country, Xining city, Northwest China's Qinghai province on July 21, 2010. The line is expected to be completed by the end of 2010, ahead of the plan deadline by 21 months. It will be an electric railway with a cargo transportation capability of over 50 million tons a year and its passenger trains will attain speeds of up to 160 km/h.
Investors eye real estate market - China's property market has seen soaring investment from foreign institutional investors, driven by strong expectations of renminbi appreciation this year. According to international real estate advisor CB Richard Ellis, the value of en bloc property transactions in 15 Chinese cities has hit 49.9 billion yuan ($7.36 billion) in the first-half of this year, among which 19.4 billion yuan came from foreign institutional investors, 10.2 billion yuan from Hong Kong, Taiwan and Macao, and the remaining 20.3 billion yuan from mainland investors. Total investments in the first six months of this year were almost five-fold of those from the same period of last year. "Affected by the financial crisis, foreign investors were inactive last year and domestic investors dominated the market. But due to better liquidity and expectations of renminbi appreciation, the situation is just the opposite this year," said Danny Ma, senior director of CB Richard Ellis Research China. Industry experts say the renminbi will probably appreciated 3 percent this year. LaSalle Investment Management, a US-based real estate fund, for instance, has been actively seeking opportunities in China, particularly in second-tier cities. Though the fund raised $2 billion last year, it made no investments at all in 2009. But top management said that they will definitely reach a deal in China this year. "We are now in talks with several projects in the commercial and industrial sectors," Eric Au, China director of LaSalle told China Daily on Thursday. For Matt Brailsford, Deputy Managing Director of Savills Beijing, their foreign clients have shown much stronger interest in investing in China's properties, mainly in the office and retail sector. "But there is no big increase of new faces in market, most of them remain those from Hong Kong and the United States," said Brailsford. Eric Pang, head of Beijing Investment at Jones Lang LaSalle, said investments will be much more active in the second half. "At the beginning of May, 12 commercial plots located in the core Central Business District area opened to public bidding, and a large number of reputable institutions and developers are expected to participate in the tendering process," said Pang. "To us, this therefore indicates a strong rebound in sentiment in the Beijing commercial investment market."
Aluminum Corp of China Ltd, China's biggest aluminium maker, and Europe's Sapa AB said on Wednesday they have agreed to form a joint venture to serve China's rolling stock market. The two companies had signed a memorandum of understanding, and aimed to finalise plans for construction of a facility in southern China by the fourth quarter, Sapa, the world's largest aluminium extrusion company, said in a statement. They said the venture would be a 50-50 endeavour, but did not disclose financial details. The joint venture's aluminium extrusion and fabrication facility would include the latest technology for press and fabrication capabilities, according to the two sides. Products could be launched by as early as the first quarter of 2011 using existing subsidiaries, Sapa added. "The Chinese rolling stock industry has seen a very strong development both in terms of volume and technology," said the companies. "The joint venture will be able to meet current needs as well as serving the rapidly increasing technical demands of the rolling stock industry."
Workers at a parts supplier for Honda's mainland operations have returned to work, the Japanese carmaker and a worker said on Thursday, ending a week-long strike.
Shanghai drops offshore China's yuan trading hub dreams - Mainland city to complement HK in global currency drive - Shanghai has backed off from plans to establish itself as an offshore centre for yuan trading, leaving the field clear for Hong Kong to remain the dominant market for offshore trading of the Chinese currency. Vice-Mayor Tu Guangshao told a finance forum yesterday that the mainland's richest city would hone its image as an onshore rather than an offshore centre, playing a complementary role to Hong Kong as the two cities jointly reinforce the yuan's internationalisation drive. "Hong Kong's efforts to build an offshore yuan centre give the currency a huge boost as it goes global," Tu said. "I believe Hong Kong has reasons to do so and it has its own advantages." He added that Shanghai should focus on the domestic market and co-operate with Hong Kong to chase a win-win scenario. Tu's remarks represented a dramatic and rare about-face by Shanghai that is attempting transform itself into an international financial centre. In March, Su Ning, a deputy governor of the People's Bank of China, said the central government was considering setting up a yuan offshore centre in both Shanghai and Hong Kong. That statement triggered concerns about intensified rivalry between the two cities. An offshore yuan trading centre allows non-Chinese companies, institutions and residents to actively trade the currency and settle trade deals. Domestic firms and individuals conduct transactions in an onshore centre. Shanghai unveiled ambitions early last year to transform itself into a global financial centre, posing a big threat to Hong Kong amid the mainland's increasing economic might. The central government and Shanghai officials have been actively playing down the bitter rivalry. Shanghai Communist Party boss Yu Zhengsheng said the mainland city still had a lot to learn from Hong Kong in terms of financial services, insisting Shanghai would not catch up with Hong Kong until 2020. Hong Kong Financial Secretary John Tsang Chun-wah said at the forum that the offshore centre in Hong Kong and the onshore centre in Shanghai would serve as the two engines to largely drive the internationalisation of the yuan. The clearer roles to be played by the two cities in that drive followed a landmark deal signed by the mainland and Hong Kong monetary authorities on Monday, that allows financial institutions to open yuan accounts in Hong Kong banks while individuals can transfer yuan to and from these accounts. The relaxation is a further step towards allowing Hong Kong-based fund houses to set up yuan investments and for brokers to trade yuan bonds and shares for clients. Since China started to allow the yuan to be used for trade settlement in July last year, 70.6 billion yuan (HK$80.9 billion) worth of trade deals were transacted in the mainland currency with 75 per cent being conducted in Hong Kong, according to Hu Xiaolian, a deputy governor of the People's Bank of China. Louis Tse Ming-kwong, director of VC Brokerage, said Hong Kong now has about 70 billion yuan worth of deposits. "A wide range of yuan products in Hong Kong particularly the products that could attract yuan back to the mainland market are desirable," said Tse Yung-hoi, deputy chief executive of BOC (SEHK: 3988) International Holdings. "Yuan trade could be invigorated with more production innovations." Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) , expected that small-size initial public offerings denominated in yuan would likely be floated in Hong Kong this year. Hong Kong stock brokers believed investors would like to invest in yuan shares but doubted such offerings would happen in the short term. Kenny Lee Yiu-sun, chief executive of brokerage firm First China Financial Group, said there were a lot of technical issues that needed to be solved before yuan-denominated shares could be offered in Hong Kong. Beijing has not yet relaxed the cap for individual investors, who can only exchange up to 20,000 in yuan everyday, a rule that restrict investors from making big bet on yuan-denominated initial public offerings, Lee said. He believed yuan retail bonds would be launched before yuan shares. "Many retail investors would buy the yuan bonds and hold them until they are mature. This would make retail yuan bond easier to be launched,'' Lee said. Joseph Tong Tang, executive director of Sun Hung Kai Financial, said yuan IPOs were unlikely to be issued this year. "There are some mainland firms that would be interested in raising funds in yuan. However, they would need to wait until mainland authorities worked out the details of how the funds raised in Hong Kong could be transferred back to the mainland for their projects or other expenses," Tong said. "This will take time to study.'' Mainland regulators are also considering allowing Hong Kong subsidiaries of mainland brokerages and asset managers to raise yuan-denominated mutual funds in the city that could be invested in mainland-listed shares. The so-called mini-QFII (qualified foreign institutional investor) scheme also aims at helping the mainland's sluggish A-share market.
July 23, 2010
Hong Kong*: PCCW (SEHK: 0008) - billionaire Richard Li Tzar-kai's flagship media firm - could come to the aid of one of the tycoon's troubled personal investments. The Hong Kong-listed company is pitching in to help Pinebridge, Li's private equity house, hang onto its stake in debt-laden Bulgarian telecommunications company Vivacom, which is being restructured by its banks. While PCCW and Pinebridge have no formal relationship beyond being companies controlled by Li, they plan to rescue Vivacom by jointly investing €180 million (HK$1.81 billion) in return for a 51 per cent stake. It is unclear how much of this money will come from the Hong Kong-listed company.
Canto-pop singer Theresa Fu attends the opening of the Hong Kong Book Fair at the Convention and Exhibition Centre in Wan Chai on Wednesday. Hundreds of people - many of them teenagers - flocked to the first day of the Hong Kong Book Fair on Wednesday morning. The book fair opened at 9am at the Hong Kong Convention and Exhibition Centre in Wan Chai. It will run until next Tuesday. Large numbers of people waited outside the HKCEC before the fair opened, local media reported. The organiser, Hong Kong Trade Development Council (HKTDC), said it expected the fair would attract more than 900,000 visitors this year. A record 510 exhibitors and nearly 2,000 counters from 22 countries and regions are participating this year. The fair will feature more than 250 cultural events. The HKTDC has banned the presence of teenage "pseudo-models" promoting their photo books this year. But many teenagers anxious to buy these books and books by local celebrities flocked to the fair. Local media reported that many teenagers were also waiting for celebrities to sign their books. Others headed to the counters selling comic books and related souvenirs. Some serious book lovers complained that autograph-signing and promotional activities by teen models were a distraction. “Some people were shouting out their idols' names. Book fairs should allow people to read and buy their favourite books, silently,” a visitor, surnamed Chung, told local media. Another reader, surnamed Shek, also said the atmosphere was too noisy. Highlights of the fair will include public forums featuring well-known authors including Frederick Forsyth and Stephen Fry. These forums will take on Friday at 6-8pm, at HKCEC theatres 1&2, and on Saturday at 10am-1pm at the University of Hong Kong’s Loke Yew Hall. The fair also has new pavilions focusing on e-books, digital publishing and children’s books.
After the weather deteriorated on Wednesday afternoon and heavy rain lashed parts of the territory, the Hong Kong Observatory issued the strong wind signal No 3.
Flash cash - Hong Kong - Flashier versions of the HK$1,000 and HK$500 banknotes packed with security features that adjust before your very eyes will be circulating by the end of the year. Color-changing patterns and metallic threads, fluorescent flourishes, more iridescent images and heightened embossing are among easily apparent features. Less obvious devices to confound would-be counterfeiters include enhanced watermarks and concealed denominations. All the devices will be laid on and built into thicker and tougher paper than used for today's notes. New HK$20, HK$50 and HK$100 notes will be in circulation around the middle of next year. The security designs are based on two basic principles: easy to recognize yet difficult to duplicate, say Hong Kong Monetary Authority officials. So all of these features will be in the same places on the five denominations of notes from the three issuing banks - Hongkong and Shanghai Banking Corp, Bank of China (Hong Kong) and Standard Chartered Bank. Monetary Authority chief executive Norman Chan Tak-lam said that while there is less counterfeiting of currency, upgrading notes remains vital. "In the past six years, Hong Kong has seen a tremendous decrease in the counterfeit rate," he said. "There is less than one fake note in every million notes in circulation." "However, we have to stay ahead of the criminals to ensure the stability of our monetary system." Continuing the system that started in 2003, the three banks will issue their notes simultaneously - the second time a full range of new notes has been introduced. The HKMA plans to gradually introduce 100 million of the HK$500 notes and 70 million of the HK$1,000 notes. About 120 million HK$500 notes and 110 million HK$1,000 bills now in circulation will be withdrawn as they become worn, authority executive director Edmond Lau Ying-bun said. While there are concerns about possible confusion between different versions of notes, the authority believes seven to 10 years between the versions is a reasonable timeline and is adopted by most countries. It usually takes four years for old notes to largely disappear. There are 33 different notes in circulation now, but 97 percent of them are from 2003, Lau said. The authority is now moving on a campaign to raise awareness of the new notes. It starts on July 24 with exhibitions in various districts that will run to October 3. Seminars will also be conducted for banks, retailers and money changers, as well as special sessions for the elderly and people with visual impairments. The cost of each new note is around 60 HK cents, or 15 percent more than the previous version.
Octopus Holdings yesterday admitted it shared personal data of 2.4 million customers with Cigna and Card Protection Plan, two merchant partners involved in a rewards program. Octopus said it is setting up a special committee to review its protection policy. The committee will be led by Octopus Holdings independent non-executive directors and experts. They will carry out a full review of the company's data privacy and usage policies and practices. The committee will complete its review within three months and submit a report, including international experience on data protection, to the board of directors. It will also submit findings and recommendations on the issue of data sharing with merchant partners. Chief executive Prudence Chan Pik- wah said the company was taking additional steps to protect customer data. "Management will be working very closely with the special committee and will make all information available to facilitate a comprehensive review," Chan said. Starting today, Octopus will begin to communicate with the 2.4 million rewards members to inform them of the latest measures and how they can opt out of the scheme in which their personal information is shared for marketing promotion. Chan said members can go to the Octopus website to check the "opt-out" box in the "Contact Update" section. "They can also do so by calling our hotline or sending a letter," she said. Chan said pending the outcome of the review, OHL will not sign any new contracts involving information sharing. "Octopus Rewards will reinforce with both CIGNA and CPP the importance it places on the protection of customer data and privacy as well as the requirement to strictly adhere to the confidentiality clauses in the contracts," Chan said. Committee chairman Roger Luk Koon-hoo said company profits will not be a part of his panel's considerations. "The trust of our customers is of the highest importance and we appreciate the public's concern over the protection of any personal information they share with us. Our review will be objective and independent," he said. But legislator Wong Kwok-hing disagreed. "The committee is chaired by Octopus management staff and lacks credibility," he said. "Octopus is just dragging its feet. They broke their promise to submit to Legco information on Octopus partners by July 19. We have received nothing so far." Wong said OHL should immediately stop disclosing information on its 2.4 million rewards members to any of its merchant partners before the Office of the Privacy Commissioner for Personal Data finishes its review, which it expects to do within two months. The office said it received 23 complaints from rewards members over the past two weeks.
If you are going up to the Shanghai Expo before the end of October, you might want to visit Hong Kong Creative Ecologies - a showcase of Hong Kong's leading design work. The event, which is funded by Create Hong Kong, covers a wide range of our city's creative achievements, including some that few know about. Well-known creative work is represented. Alice Mak's McDull animated pig is there, as are architect Rocco Yim, and fashion designers Vivienne Tam and Barney Cheng. But perhaps the most interesting exhibits are from relatively unknown designers whose work is all around us. Examples include: Milk Design's Lee Chi-wing, who has designed such items as Cathay Pacific's Chinese-themed economy-class tableware; Tommy Li, who designed such visual brands as Maxim's cake shops and MTR shops; Arnold Chan of Isometrix, a lighting designer; and Chelsia Lau, who is Ford's chief designer - next time you see a Ford SUV, that's her styling. This is talent that we don't often hear about, even though we see much of their work every day. Hong Kong designers are creating furniture, computer animation, sporting headwear, interior decor, toys and even robots that help people stick to weight-loss diets - things that are sold around the world and often under major international brands. As well as its exhibits, the Creative Ecologies showcase includes conferences, shows and workshops. It is, of course, basically aimed at mainland and international visitors as a way to spread the word about our city's talent, but Hong Kong people should see it if they get the chance, if only to see just how wide-ranging that talent is. Bernard Charnwut Chan, chairman of the Antiquities Advisory Board, sees culture from all perspectives.
Insurers and banks alike were splashing out on yuan-denominated financial
products yesterday - one day after the SAR and Beijing inked the historic deal
allowing Hong Kong to become the first yuan clearing center outside the
Jobless still at 4.6pc - Hong Kong's unemployment rate stayed at a three- month high, dragging on consumption and the city's economic recovery.
China*: The mainland is making final preparations to launch cross-border exchange-traded funds (ETFs) as part of plans to widen channels for its growing yuan savings, its securities regulator said on Wednesday. The ETFs would be based on stocks listed on the Hong Kong stock exchange and the China Securities Regulatory Commission (CSRC) is finishing up work to smooth out technical issues involving the products, said Tong Daochi, director-general for international affairs at CSRC. ETFs are index funds that trade like stocks on major stock exchanges. “We are in the last mile of preparing the ETFs, which will be based on Hong Kong-listed stocks. We hope to finish this last mile as soon as possible,” Tong told a financial conference in Shanghai. “This is a very important product, because it’s the first cross-border product under the Qualified Domestic Institutional Investor (QDII) program,” he said. Last month, Barclays Capital, the investment banking arm of Barclays Bank, said that the Shanghai Stock Exchange had approved 19 of its fixed-income indexes, including the Barclays Capital Global Treasury Bond Index, to be used in ETF products developed by mainland fund management firms. In 2006, Beijing launched the QDII scheme, under which domestic funds are allowed to invest their clients’ money in overseas markets, and regulators are also discussing allowing foreign companies to list in Shanghai. The QDII scheme had a rough start as domestic fund managers rushed to tap the new markets and then suffered heavy losses as the global financial crisis broke shortly after the programme’s launch. Cross-border ETFs could be a prelude to the launch of an international board on the Shanghai Stock Exchange (SSE), said James Liu, executive vice president of SSE. Allowing foreign listings on the mainland market involves higher risks and more complicated issues than cross-border ETFs, said Liu. “This is a gradual process. We think we can do ETFs first, the risks involved are smaller,” he told the same conference. “But I won’t give you a timeline, I will never tell you if we can do it this year or not,” he said. Markets had previously expected the mainland will allow foreign companies to sell yuan-denominated shares on the mainland stock market as soon as this year. The securities regulator had said that the launch of the international board was delayed due to complicated legal and technical problems, such as cross-border governance issues. Last month, corporate consultant Ernst & Young said more than 23 multinational companies had expressed interest in a listing in Shanghai and the country may launch the new board in the first half of next year.
China's largest reported oil spill more than doubled in size to 430 square kilometres by Wednesday, forcing nearby beaches to close and prompting one official to warn of a "severe threat" to sea life and water quality. The oil slick started spreading five days ago when a pipeline at a busy northeastern port exploded, sparking a massive fire that took more than 15 hours to contain. Hundreds of boats have been deployed to help with the cleanup. At least one person has been killed in those efforts, a 25-year-old firefighter, Zhang Liang, who drowned pm Tuesday after a wave threw him from a vessel and pushed him out to sea, Xinhua news agency reported. Another man who also fell in was rescued. Beaches near Dalian, once named China’s most livable city, were closing as oil started reaching their shores, Xinhua reported. “The oil spill will pose a severe threat to marine animals, and water quality, and the sea birds,” Huang Yong, deputy bureau chief for Dalian, China Maritime Safety Administration, told Dragon TV. The environmental group Greenpeace China released several photographs this week showing oil-slicked rocky beaches, a man covered in thick black sludge up to his cheekbones. One worker, covered in oil, was being carried away by a colleague, but he was not identified. The amount of oil spilled in the explosion was still not clear Wednesday, though China Central Television earlier reported an estimate of 1,500 tons. That would amount roughly to 400,000 gallons (1,500,000 litres) – as compared with 94 million to 184 million gallons in the BP oil spill off the US coast. State Oceanic Administration released the latest size of the contaminated area in a statement Tuesday. Though the slick has continued to expand — it covered a 180-square-kilometre stretch earlier this week — officials maintain no more oil was leaking into the Yellow Sea. The cause of the blast was still not clear. The pipeline is owned by China National Petroleum Corporation, Asia’s biggest oil and gas producer by volume. Images of 30-metre-high flames shooting up near part of China’s strategic oil reserves late Friday drew the immediate attention of President Hu Jintao and other top leaders. Now the challenge is cleaning up the greasy brown plume. “Our priority is to collect the spilled oil within five days to reduce the possibility of contaminating international waters,” Dalian’s vice mayor, Dai Yulin, told Xinhua on Tuesday. But an official with the State Oceanic Administration has warned the spill will be difficult to clean up even in twice that amount of time. The Dalian port is the mainland’s second largest for crude oil imports, and last week’s spill appears to be the country’s largest in recent memory.
Flood waters are released from the Three Gorges Dam's floodgates in Yichang, Hubei province, Tuesday. Flooding in China that has killed more than 700 people this year and inundated countless communities looks set to worsen as the country gets deeper into typhoon season, the government warned on Wednesday. But officials, in the first high-level press briefing on weeks of deadly flooding plaguing much of the country’s southern half, said a disaster on the scale of historic 1998 flooding on the Yangtze River would likely be averted.
Lenovo Group (SEHK: 0992), the world’s No 4 PC brand, said it will roll out its own tablet PC, becoming the latest technology company to jump on the bandwagon for computers styled after Apple’s popular iPad. Lenovo was developing a tablet PC, known internally as LePad, that would run on Google’s Android operating system, Lenovo spokeswoman Wu Hwa said on Wednesday, adding that no launch date had been set and the name of the product may change. “We want the tablet PC to be compatible with our LePhone smartphone, which is why we’re using Android,” Wu said. LePhone is Lenovo’s smartphone offering in the mainland, sold by China Unicom (SEHK: 0762), which also runs on Android. Tablet PC shipments are expected to grow by an average 57.4 per cent per year between 2010 and 2014, research firm IDC said, making the sector a lucrative growth area for companies selling heavily commoditised laptops. The tablet PC has already caught the attention of major PC companies such as Hewlett-Packard, Dell and now Lenovo, as they look to diversify beyond laptop PCs that typically offer low profit margins. Apple’s iPad, launched in April, sold 3.27 million units in the second quarter, prompting research firm iSuppli to revise upwards its full-year shipment forecast for the product to 13 million units from 7.1 million units. “iSuppli believe that the only limitation on iPad sales now is production and not demand,” iSuppli analyst Rhoda Alexander said.
July 22, 2010
Hong Kong*: The city's top judges have signalled they may for the first time ask Beijing for an interpretation of the Basic Law to help settle a battle in a Hong Kong court. The case pits a US-based hedge fund against Chinese state-owned firms operating in Africa. Such a move would raise questions about the independence of the city's judicial system. At issue is whether the court has jurisdiction in a case involving a foreign country. FG Hemisphere Associates is trying to claim more than US$100 million from state-owned railway firms operating in the Democratic Republic of Congo. The Basic Law guarantees Hong Kong a large degree of autonomy, but not in foreign affairs and defence. While the Court of Appeal in February ruled that FG had the right to sue in Hong Kong, the state-owned companies and the Congolese government claimed "absolute immunity" in the Court of Final Appeal. The Court of Final Appeal indicated yesterday that it might refer the matter to the National People's Congress. The court's acting registrar, Master Simon Kwang Cheok-weung, said the court needed to consider the issue carefully and would hold a hearing on the case in March. Underscoring the political sensitivity of the case, Secretary for Justice Wong Yan-lung has argued from the start of proceedings that Congo and the companies have absolute immunity from local courts, meaning the courts do not have jurisdiction to hear the dispute. This would not be the first time since the handover in 1997 that the NPC's Standing Committee has interpreted the Basic Law. But the Court of Final Appeal has never asked for an interpretation. In 1999 the Standing Committee made a controversial interpretation of the Basic Law that effectively overturned a landmark ruling on the right of abode by the Court of Final Appeal, raising concerns about the rule of law in Hong Kong. In April 2005, shortly after Tung Chee-hwa resigned as chief executive, the Standing Committee limited the chief executive's tenure through an interpretation of the Basic Law. The litigation involves FG's claims over two arbitration awards of debts totalling more than US$100 million from China Railway Group (SEHK: 0390) (Hong Kong), China Railway Sino-Congo Mining and China Railway Group. The first two companies are subsidiaries of China Railway Group. Congo originally owed the arbitration awards to FG, but this debt was transferred from Congo to the China Railway companies, after Congo signed a US$9 billion deal in 2008 with China Railway Group and Sinohdyro, a state-owned dam builder. Under the deal, the Chinese firms would build infrastructure including railway for Congo in return for mineral resources. The contract size was scaled down from US$9 billion to US$6 billion last year. As part of the deal, the China Railway companies were to pay at least US$221 million worth of "entry fees" to Congo. FG is claiming a share of that for the debt it is owed by Congo. "FG is saying some of the money is in Hong Kong with China Railway. They are claiming assets due to them in Hong Kong," said Philip Nunn, who is representing Congo as a partner at law firm Fried, Frank, Harris, Shriver & Jacobson. A foreign state such as Congo is generally immune from the jurisdiction of the courts of another sovereign state. However, as governments and state enterprises have became more active in commercial activities, complete sovereign immunity is seen as fundamentally unfair in eliminating judicial recourse and favouring state companies. "The award can be registered as a debt in Hong Kong, unless Congo is able to claim absolute sovereign immunity [from Hong Kong courts]," said a lawyer who did not want to be named. In a judgment on December 12, 2008, Mr Justice Anselmo Reyes ruled in the Court of First Instance that Hong Kong's courts had no jurisdiction over Congo, and the African nation enjoyed immunity from enforcement of the awards. "The difficulty lies in determining Hong Kong's position following its reversion to the mainland on 1 July 1997," Reyes said in his judgment. "The validity of Congo's claim to sovereign immunity is within the competence and jurisdiction of the Hong Kong court. There is no good reason why I should stay such issue to the Beijing court." Reyes, however, noted that the Ministry of Foreign Affairs in Beijing did not accede to the Hong Kong government's request for a legal summons to be served in Congo. After FG appealed, the Court of Appeal overturned Reyes' judgment, ruling that Congo and consequently the mainland firms were not immune from FG's claims in the Hong Kong judicial system. The Court of Appeal said this was part of the common law that Hong Kong inherited from the British, which prevails in the absence of any legislative intervention by Beijing. The Court of Appeal decision was hailed as underscoring the independence of the city's legal system. "This was despite the intervention of the secretary for justice and letters ... from China's Ministry of Foreign Affairs stating China adhered to the absolute doctrine of sovereign immunity," said a commentary by UK law firm Allen & Overy. However Allen & Overy added: "How long this position may last is open to doubt: commentators have speculated that the decision may prompt the central government to intervene through legislation." The justice secretary's intervention is a matter of public importance, because the question of sovereign immunity affects a number of different legal acts, said one lawyer, speaking on condition of anonymity. "This is a case in which Hong Kong courts are showing true independence in consideration of legal issues." Ogilvy Renault, a Canadian law firm that acted as special counsel for FG, said the Court of Appeal's ruling, "constitutes an important precedent for international investors, as it affirms the independence and distinctiveness of the legal system of Hong Kong". Albert Chen Hung-yee, a law professor at the University of Hong Kong and a member of the Basic Law Committee, played down the political undertones of a possible referral to the NPC. "I don't think it's a question of the independence of Hong Kong courts," he said. "The Hong Kong courts are independent and will decide the matter independently. It's not supposed to be a political matter. It's a legal matter."
The Hong Kong Monetary Authority (HKMA) on Tuesday announced that new banknotes would be released later this year to further reduce the risk of counterfeit notes being used. HKMA chief executive Norman Chan Tak-lam said that for the past six years Hong Kong had seen a continuous decline in the use of counterfeit money. “Currently, there is less than one fake note in every one million notes in circulation,” Chan said. “We should not be complacent and must ensure that we are staying ahead of the counterfeiters,” he said. “There is a need to revamp the design of our banknotes and introduce the latest security features to minimise the risk posed by counterfeiting,” Chan said in a statement. The new series will consist of five denominations using the same colour scheme. A new HK$1,000 note will be circulated later this year, while a HK$500 note will be released in early 2011. New HK$100, HK$50 and HK$20 notes will be circulated by mid-2011. The new banknotes will include security features such as colour-changing patterns, watermarks and fluorescent serial numbers. They will also have Braille. The HKMA said the new notes would be issued by Standard Chartered Bank, the Hong Kong and Shanghai Banking Corporation and Bank of China. The new designs from the three banks will include depictions of Chinese inventions and calligraphy, local festivals, images of the Bank of China tower and local nature scenes. They have been approved by Financial Secretary John Tsang Chun-wah and will be printed in Hong Kong. Existing banknotes will continue to be legal tender. They would continue to circulate together with the new banknotes before being gradually withdrawn, the HKMA said.
Landmark China yuan deal brings new products for Hong Kong Standard Chartered & HSBC - People's Bank of China deputy governor Hu Xiaolian and Hong Kong Monetary Authority chief executive Norman Chan shake hands after signing the agreement. Standard Chartered and HSBC (SEHK: 0005) were the first banks off the starting blocks to offer yuan investment products after a landmark agreement between the Hong Kong Monetary Authority and the People's Bank of China was signed yesterday. The deal signed by HKMA chief executive Norman Chan Tak-lam and PBOC deputy governor Hu Xiaolian allows financial institutions to open mainland currency bank accounts and allows individuals to transfer yuan to and from them. This further relaxation of yuan trade is a key step towards allowing Hong Kong-based fund houses to set up yuan investments, brokers to trade yuan bonds and shares for clients, insurance companies to launch yuan policies and companies to raise funds in yuan shares or bonds. "I expect many more types of financial intermediary activities to be introduced to help Hong Kong's yuan business platform leap to new heights," Chan said. Hu said cross-border yuan settlement in the first half of this year reached 70.6 billion yuan (HK$80.9 billion) - nearly 20 times the 3.6 billion yuan recorded in the second half of last year - and 75 per cent of it was conducted in Hong Kong. Although Chan noted that the agreement did not relax the current exchange cap for individuals of 20,000 yuan per day, he said it was good enough to promote more yuan investment products in Hong Kong. This proved to be the case when, within hours of the signing, Standard Chartered Bank said it would offer retail and wholesale clients investments that link yuan deposits with interest rates, foreign currencies, commodities and equity indices. Interest on these products will be paid in yuan. "This is a great step forward for yuan liberalisation," Sundeep Bhandari, Standard Chartered's regional head of global markets, said. "We believe this will create considerable market opportunities especially as investors are keen to hold yuan as a long-term investment given the Chinese economy and positive implications for the currency." Meanwhile, HSBC said it would offer a product to provide enhanced yields on customers' yuan deposits in which the interest payment will be tied with the foreign exchange performance of the yuan. There would also be a 1.41 per cent rate paid on yuan time deposits placed for three months to one year. "We want to be quick off the mark to roll out new yuan-denominated offerings to ensure that we are well positioned to offer customers a one-stop solution in yuan products and services," Mark McCombe, HSBC's Hong Kong office chief executive, said. "It is recognition that China's currency has a mounting role in international trade and investment."
Poon Woon-kam, 96, is transported back to Hong Kong yesterday with the help of lawmaker Wong Kwok-kin (right). Government to challenge court ruling over welfare payments - The government has lodged an appeal against a High Court ruling last month that declared the residency requirement placed on those seeking welfare was unconstitutional. It comes as an ailing 96-year-old woman who had been living in Panyu, Guangdong, returned to Hong Kong yesterday to apply for welfare and the old age allowance commonly known as "fruit money". The Social Welfare Department said it had lodged the appeal after seeking legal advice, which concluded that "the court ruling involves issues of general importance". "The authorities therefore see a need to seek clarification from the Court of Appeal," a spokesman said. He declined to comment further owing to appeal proceedings having begun. He was speaking after a bed-ridden Poon Woon-kam was transported by mainland ambulance yesterday to the Huanggang border crossing, where she was transferred to a Hong Kong ambulance and admitted to North District Hospital. The Court of First Instance ruled on June 21 that the requirement that a permanent resident had to have lived in the city almost continuously for a year before being eligible to apply for welfare was unconstitutional. It said the rule, which allowed a grace period of 56 days during which an applicant might be away, violated the Basic Law, the Bill of Rights and a person's right to travel, and that it was unconstitutional and unlawful. The government introduced the requirement in 2004 to discourage people who had lived abroad for a long time from relying on Comprehensive Social Security Assistance (CSSA) immediately after returning. The rule came into effect at the same time as one requiring that a person be in Hong Kong for seven years before becoming eligible for CSSA. The court made the ruling in the case of George Yao Man-fai, 65, a Hongkonger who had been working on the mainland for a textile manufacturer. When he returned to Hong Kong after being fired, Yao was denied CSSA because he did not satisfy the requirement. The Society for Community Organisation, which supported Yao's case, said it was disappointed that the government had decided to lodge an appeal. "The residence requirement affects 30,000 unemployed people returning from the mainland and Macau, harming their right to receive social assistance," the society said in a statement. The society said it would seek to present its viewpoint in the appeal hearing as an "interested party". Hong Kong citizen Poon spent all her savings during her 13 years in Panyu, and a niece who had been caring for her said she was unable to any longer, so sent her to Hong Kong to seek financial aid, said Federation of Trade Unions lawmaker Wong Kwok-kin, who arranged the transfer.
As Tropical Storm Chanthu approached the territory on Tuesday, the Hong Kong Observatory issued typhoon standby signal No 1 at 12.15pm.
Ex-Prudential chief to helm AIA ahead of HK offering - AIG reshuffles leadership at Asian unit after aborted sale. Bailed-out insurance giant AIG is parting company with Mark Wilson, the well-liked boss of its pan-Asian life insurance unit AIA. Mark Tucker, the former chief executive of Prudential, which failed to buy AIA last month, has taken the helm to prepare the Asian insurer for a jumbo Hong Kong initial public offering that bankers expect will raise up to US$20 billion. Wilson reportedly clashed in May with Robert Benmosche, American International Group's headstrong chief executive, threatening to leave if the US$35.5 billion sale of AIA to Prudential went through. Some analysts have guessed that Tucker, who was the architect of Prudential's successful Asian business before he left last September, will use the funds from AIA's IPO to bid for his troubled former employer. Prudential is licking its wounds after its audacious plan to buy its Asian rival flopped spectacularly last month, when its shareholders baulked at AIA's high price tag. Some investors have demanded chief executive Tidjane Thiam's resignation. AIA has been on the block since autumn 2008. AIG originally intended to sell a 49 per cent stake. In June last year, it appointed bankers to launch it on the Hong Kong stock market instead - an idea scratched in favour of selling to Prudential. In the latest twist, AIG said in a statement yesterday: "After reviewing various options to monetise AIA's substantial value, we have concluded that an IPO is our best option." It said Wilson would stay at AIA until the end of this year and work closely with Tucker to "ensure a smooth transition". The nine banks that won lucrative roles on the earlier IPO plan would now have to re-apply for their jobs, because Tucker would want to choose the advisers himself, a person close to AIA said. Last year, AIG tapped Morgan Stanley and Deutsche Bank to lead AIA's IPO. In February, it added Bank of America, Citigroup, Credit Suisse, Goldman Sachs, UBS, China Construction Bank (SEHK: 0939) and Industrial and Commercial Bank of China (SEHK: 1398) as bookrunners. Similar-sized transactions in Hong Kong have earned the banks involved about 2 per cent of deal value, so AIA could shell out up to US$400 million for financial advice. Yet Benmosche said last October that the company, which owes US taxpayers about US$130 million, would slash its payments to outside consultants. Wilson is the latest top boss to leave AIG over the bungled Prudential deal. Last week, AIG chairman Harvey Golub quit after clashing with Benmosche. Golub reportedly had argued that selling to Prudential, which proposed to pay more than its own market capitalisation for AIA, would be too risky. Benmosche, meanwhile, was determined to proceed with the deal. Wilson was credited with keeping AIA buoyant while AIG teetered on bankruptcy. Between AIG's first government bailout in September 2008 and March last year, AIA's loss of customers was less than 1 per cent above normal levels, Wilson told the Wall Street Journal last July. Rumours have swirled for months that Tucker would soon take a top job at either his previous employer or AIA. British newspapers said last month he was being lined up to replace Prudential chairman Harvey McGrath. Tucker, a former trainee professional footballer, ran Prudential's Asian business until 2003 and became group chief executive in 2005. He built the British firm into Southeast Asia's second-biggest life insurer.
China*: China has shown off its growing military strength with naval exercises off its eastern coast, shortly before Washington and Seoul are expected to carry out their own drills which Beijing has criticised. State television broadcast images on Tuesday it said showed the East Sea Fleet on recent manoeuvres, including helicopters and a submarine launching a long-range missile underwater. It did not say exactly where or when the pictures were taken and it was not clear if they showed a drill that the Xinhua news agency said took place over the weekend. Xinhua said four rescue helicopters and four rescue ships were deployed in the two-day drill in the Yellow Sea, where the United States and South Korea are planning manoeuvres aimed at sending a message of deterrence to North Korea. Beijing has condemned those drills, which many in China feel are also aimed at their country. Zhu Chenghu, a strategic studies professor at the National Defence University, told the China News Service that the US-South Korean drills were clearly aimed at sending Beijing a message as much as they were directed at North Korea. “They will take place in the Yellow Sea, which is the entry point to China’s house, and they obviously want to show off their military strength,” he said. US Defence Secretary Robert Gates dismissed concerns on Tuesday, saying the drills were routine. Neither Xinhua nor state television mentioned the US-South Korean exercises. But the China Daily quoted experts downplaying the Chinese drill, which started on Saturday. “The nature of the drill is very different from that of the US-ROK joint military action,” Beijing-based military analyst Peng Guangqian was quoted saying. China’s exercises rehearsed how to defend against long-distance attacks, as well as exploring ways to integrate troops and civilians to tackle emergencies, Xinhua said. Tensions in the Korean Peninsula have risen since the sinking in March of a South Korean warship killed 46 sailors. An investigation launched by Seoul but including international experts concluded a North Korean torpedo had hit the ship. North Korea has denied responsibility and long-time ally China has not accepted the findings of the investigation. Beijing has repeatedly criticised the US-South Korean drills. “We resolutely oppose any activities in the Yellow Sea that may threaten China’s security,” Foreign Ministry Spokesman Qin Gang told a routine news conference last Thursday. China’s growing military clout and rising defence spending have raised concern in Asia, especially in Japan.
Overseas tourist arrivals in Hainan nearly tripled to 316,000 - BEIJING, July 20 2010 - southern China's Hainan province had received 1,096 visa-free tour groups, with a total 22,359 tourists, according to official figures released by the local government. In the first half of the year, the number of overseas tourist arrivals nearly tripled to 316,000. Earlier this year China's State Council announced a series of plans to turn Hainan Island into a top international tourism destination by 2020. With the recent addition of Finland, Denmark, Norway, Kazakstan, and Ukraine, the tropical island now offers visa-free access to tour groups from 26 countries. The new visa policies also cut the group size requirement from five to two, for visitors from Russia, South Korea, and Germany, and the maximum length of stay has been increased to 21 days from the previous 15.
Port authorities in Dalian have recruited 500 local fishing boats to tackle an oil slick which covers 183 square kilometres off the coast of Liaoning province. A pipeline explosion and fire hit the Xingang port, home to a 19 million barrel strategic petroleum reserve, during a tanker offloading last Friday, spilling 1,500 tonnes of crude into the sea to leave a slick covering 183 square kilometres. State news agency Xinhua said on Tuesday about 24 specialist clean-up vessels, together with a total of 800 fishing boats, were using dispersants and absorbents to clear up the slick. With nearly a third of the oil now collected, it would take at least another four to five days to complete operations, the agency quoted Luan Yuxuan, deputy director of Dalian’s Oceanic and Fishery Administration, as saying. Six Very Large Crude Carriers (VLCCs), with about 12 million barrels of oil, are set to be diverted, possibly to South Korea or any one of another half-dozen VLCC terminals in China, and corn deliveries have also been forced to dock elsewhere. But while large sections of Dalian’s port facilities – spread out along the tip of the Liaodong peninsula – have been shut, deliveries of imported soybeans remain unaffected, a government-backed think tank said on Tuesday. “The only impact we have felt so far is one of our ships had to pay a clean-up fee,” said a Dalian-based soya crusher, adding that its operations and imports had remained normal. But ships delivering corn cargoes to Dalian are being diverted to the nearby ports of Jinzhou and Bayuquan, where warehouse space is expected to be sufficient, the China National Grain and Oils Information Centre said. The Dalian customs authority has handled about 10 per cent of China’s soya imports so far this year, with US$175 million worth arriving in May alone – the last month for which figures are available. Besides the strategic reserve, one of four state storage bases already in operation, Dalian’s Xinjang port is home to commercial storage run by CNPC (SEHK: 0135) and Petrochina (SEHK: 0857, announcements, news) that may be even bigger. It is also a transfer spot for two major refineries, Dalian Petrochemical Corporation and WEPEC, both operated by PetroChina, with a combined processing capacity of 600,000 barrels per day (bpd). PetroChina has set up a contingency plan to cope with one week’s closure of the main oil port that receives crude shipments regularly and is also an export hub for petrol and diesel. The aftermath of the weekend fire could stoke pressure for stricter environmental standards in China, already reeling from a toxic copper mine leak in its south that burst into the headlines last week amid accusations of a cover up.
China should boost interest rates or allow its currency to strengthen to help curb inflation pressures, the Asian Development Bank said on Tuesday.
Second Zijin mine spill hits Guangdong - Toxic waste from a copper mine spill has been washed downriver into Guangdong province as scrutiny intensifies of the mining company's links to local government officials.
Beijing renewed Google's license to operate in China after the company agreed to respect censorship laws, an official said on Tuesday in the government's first public comment.
A strike by workers at a Honda parts supply factory in Foshan has entered its second week, but car production has so far not been affected, the Japanese carmaker said on Tuesday.
Taiwan opened to all China mainland tourists amid warming ties -Beijing is now allowing tourists from all parts of the mainland to visit Taiwan, in a move tipped to further boost the island's tourism industry amid warming cross-strait ties. Beginning yesterday, mainland tourists from four autonomous regions, including politically sensitive Tibet and Xinjiang, as well as Inner Mongolia and Ningxia, can join mainlanders from other provinces on group tours to Taiwan. The new arrangement also applies to people from Gansu and Qinghai provinces, the mainland's first tourism envoy to Taiwan, Fan Guishan, said. "With the opening of these areas, there are no more restrictions on mainland tourists who want to visit Taiwan," said Fan, who heads the mainland's first semi-official Cross-Strait Tourism Exchange Association in Taipei. Travel to Taiwan was opened to 25 mainland provinces, municipalities and the Guangxi autonomous region after the two former rivals signed a travel co-operation agreement in July 2008. That deal was made possible after Taiwan's mainland-friendly President Ma Ying-jeou took office that year and adopted a policy of engaging Beijing. The two sides also agreed to swap tourism offices in May this year to deal with rapid increases in the number of travellers, and other tourism matters. In the past two years, more than 13.3 million mainland tourists have visited the island, injecting US$2.6 billion into the Taiwanese economy, according to the association. However, statistics released by Taiwan's tourism bureau show that between July 2008 and the end of June this year, total tourism revenue brought by all mainland tourists, including those coming from a third territory, topped US$3.45 billion. Before the July 2008 agreement, Taiwan permitted only mainland tourists coming from a third country to visit. Since then, mainlanders have been able to visit directly, but only if they travel in groups. The two sides are still working on the timing of allowing mainland tourists to visit Taiwan individually. In the first six months of this year, some 673,000 mainland tourists visited the island, up 105 per cent from the same period last year, prompting Taiwanese authorities to predict that between 1.2 and 1.5 million mainland tourists will visit this year. To cope with the influx of mainland tourists, the mainland side has agreed to increase the number of travel agencies dealing with cross-strait travel from 146 to 164. The mainland authorities would further expand the number of agencies to speed up application procedures for travel to Taiwan, Fan said. Aside from opening the island to mainland tourists, the two sides have also signed direct flight agreements to carry travellers, a lucrative business that has sharply increased the profits of airlines. The two sides have each expanded their weekly flights to 135, but that has failed to meet the growing demand for cross-strait flights, leading to an agreement in May to each increase the number by 50.
Beijing on Tuesday branded a group of US lawmakers as protectionist for seeking to block an investment by the country’s fourth-largest steel maker on national security grounds.
SAIC Motor Corp said on Tuesday its estimated first-half net profit had more than quadrupled from a year earlier, although sales slowed slightly in the second quarter.
US investment bank Morgan Stanley has sold its serviced apartment project in Pudong, Shanghai, for about 1.2 billion yuan (HK$1.38 billion), making it the second-largest residential deal by value in the city so far this year. Morgan Stanley Real Estate Fund has sold the 284-unit Pinnacle Century Park adjacent to the Lujiazui financial district to JP Morgan Greater China Property Fund, according to people familiar with the deal. The price tag represents about 26,000 yuan per square metre, against the cost of 18,000 yuan per square metre that Morgan Stanley paid in 2006. One person involved in the deal said it was time for Morgan Stanley Real Estate Fund to take profit and redistribute the earnings to investors. The deal, in which property consultant DTZ acts as the agent, would be the second-largest residential sale by value in Shanghai after Goldman Sachs sold its Shanghai Garden Plaza for 2.24 billion yuan, or 23,039 yuan per square metre, to Shanghai Forte Land early this year, Savills said. Shanghai Garden Plaza has a gross floor area of 97,227 sqmetres. Mirae Asset Financial Group's sale of serviced apartment Shama Luxe Xintiandi to Shui On Construction and Materials (SEHK: 0983) for 929 million yuan, or 58,824 yuan per square metre, ranked third. Mirae Asset is the largest equity fund manager in South Korea. "Lots of international funds are still looking for acquisition opportunities, but they are not as active as two years ago," said Albert Lau, executive director at Savills China. He said the global financial crisis and the deepening debt problems in Europe had given investors more challenges in raising funds. Douglas Sung, head of portfolio management at JP Morgan Greater China Property Fund, did not deny the acquisition. "I'm busy and let's talk later," he told the South China Morning Post (SEHK: 0583). In 2008, JP Morgan Asset Management raised US$600 million for the Greater China property fund. The closed-end fund received capital commitments from institutional and high-net-worth investors from the United States, Asia, Europe and the Middle East. The fund will be invested across all real estate sectors in the mainland, Hong Kong, Macau and Taiwan. Its primary focus is developing new properties and investments will be made in the office, residential, retail and hospitality sectors by creating project-level joint-venture arrangements with multiple operating partners in Greater China. It seeks to capitalise on the mainland's rapid economic growth, urbanisation, rising income levels and strong demand for real estate. Morgan Stanley declined to comment on the deal.
Young migrant workers in Shenzhen are sorely underpaid but in no position to ask for more money, state media cited a survey as showing. Factories in Guangdong province have been hit by a string of stoppages over the past few months by workers demanding higher pay. In Shenzhen, the average monthly wage for young migrant workers is less than half that of those who hold full-time, long-term jobs in the same city, at 1,838.6 yuan (HK$2,110.32), according to the survey. "Many companies pay in line with the city's lowest minimum standard, and migrant workers can only raise their income by doing excessive amounts of overtime," the All-China Federation of Trade Unions said. Such a salary "can only maintain the very lowest standards of living in Shenzhen," it added. The survey, excerpts of which were carried in Communist Party mouthpiece the People's Daily yesterday, made no reference to the bout of strikes, the latest of which has affected a plant supplying parts to Honda Motor's operations. But the publication of the study in an official newspaper shows that the rising demands of a new generation of workers migrating from villages, or born to migrants in the cities, are weighing on policymakers. A similar report last month warned migrant demands are a test for stability. The survey pointed out that young migrant workers are in a weak position when it comes to pushing for higher pay. "They don't know much about protecting their rights and lack communication channels within companies," it said. "When their rights are infringed upon in most cases they choose to change jobs, so there is a lot of movement of labor." Young migrants thought they should be getting at least 2,679 yuan a month, but would need 4,200 yuan a month to be able to afford to have a family, the survey found. Though they are better educated than the generation of migrants before them, they are still doing the same manual jobs and few have risen to the ranks of management, it added. But only 1 percent would go back to the countryside. "Everything will get better and better, as long as we work hard and keep forging ahead," more than three- quarters of respondents said. The newspaper did not say how many people took part in the survey. Official trade unions come under the control of the ruling Communist Party, and rarely support strikes or confrontations with employers. Many private companies do not have unions, or if they do they are controlled by management.
Water influx into Three Gorges Reservoir sets record.
China National Petroleum Corp (CNPC) plans to develop Xinjiang as a major oil and gas production and processing base over the next 10 years, in line with the nation's plan to further boost the region's economy. Xinjiang Uygur autonomous region is expected to become the country's most significant base in oil and gas production, refining and chemicals manufacturing, oil storage, and engineering and technology services in the next 10 years, according to CNPC, the nation's largest oil company. Xinjiang will also become a strategic route for oil and gas imports from Central Asia and Russia, it said. Oil and gas production in Xinjiang is expected to reach 50 million tons of oil equivalent in 2015, and the figure will further rise to 60 million tons in 2020 and is expected to be sustained for 20 years, according to CNPC. The region's oil refining capacity is expected to reach 26 million tons per year in 2015, and 30 million tons every year by 2020, it said. CNPC will also accelerate the construction of strategic oil reserves and commercial oil stockpiles in Xinjiang. Its oil storage capacity in the region is expected to reach 15 million cu m in 2015. Development of oil and gas business in Xinjiang is "irreplaceably important" in the company's strategy, said CNPC President Jiang Jiemin. The company's sustainable development in Xinjiang is "very meaningful" in its endeavor to become an integrated international energy company, he said. By now CNPC has invested over 300 billion yuan ($44.25 billion) in Xinjiang. It has 11 subsidiaries in the region, covering both upstream, middle stream and downstream business. The company on Monday started work on a petrochemical project in Urumqi in Xinjiang to produce aromatic hydrocarbon. Total investment on the project is estimated at around 3.7 billion yuan. Aromatic hydrocarbon products are widely used in industries like automobiles, electronics, and machinery. CNPC also started work on two energy projects in Xinjiang last week, with total investment of around 9 billion yuan. The projects, one fertilizer plant and one natural gas pipeline network, will better use the rich natural gas resources in Xinjiang. Rich in oil and natural gas resources, Xinjiang in northwestern China will play an increasingly important role in domestic energy companies' future strategies, said analysts. Many domestic companies, such as China Huaneng Group, and China Guodian Group, have unveiled ambitious plans to further develop their business in Xinjiang. In May, the central government unveiled an ambitious plan to boost development in Xinjiang. The government in June levied a resources tax in the region, in a move to increase revenue for the local government.
Overseas casino operators in Singapore & Macao eye Chinese tourists - Casino operators just love Queenie Liu, the queen of the tables. The 30-year-old Shanghainese is no stranger to high stakes and spends $15,000 on average when she rolls the dice - at the expense of her high net worth husband who doesn't share her passion for gambling. "It's the excitement that I crave for. It's exhilarating. For me, it's not the money," she told China Daily in a telephone interview from her holiday home in Vancouver. Queenie is one of the VIP gamblers at the casinos in Macao, Malaysia and Las Vegas. She now plans to visit the two new casinos in Singapore - Marina Bay Sands (MBS) and Resorts World (RWS). "Fortunately or unfortunately, most of the big gamblers are of ethnic Chinese origin," she said. Casino operators from Singapore, Malaysia and Cambodia are getting ready to make hay from the surge in outbound tourists from China. So much so, that most of the operators are now wooing tourists through indirect sales and promotional activities routed through operators of group tours or junkets. The companies have to use the indirect method to increase footfalls as marketing of casinos and gambling are illegal in China, said Ben Lee, Chief Operating Officer - Gaming at Intercity Group. Intercity Group is planning to set up a $400 million integrated resort and gaming property in Siem Reap, Cambodia. "The biggest players in the region tend to be from China," he said. "Junkets get higher commissions in Singapore as gaming taxes are much lower at 12 to 22 percent versus Macao at 39 percent," said Aaron Fischer, Head of Consumer and Gaming Research at CLSA Asia Pacific Markets. Junkets are also a big incentive in luring gamblers to Singapore. "With its growing middle class population, China is an attractive market for us. We consciously cater to the needs of Chinese guests, from the way they like to be greeted to the way they like their food served," a spokesperson from Marina Bay Sands told China Daily. Genting, Asia's largest listed casino operator and owner of Resorts World Singapore (RWS) and Genting Casino, said it is on track to achieving its target of 13 million visitors in its first year of full operations by February 14, 2011. It has given out $100,000 in jackpot prize money alone. Businesses are betting that the economic growth in China and the region would boost demand for shopping, entertainment, gambling and tourism. Singapore expects the MBS and RWS casinos to generate spin-off businesses such as demand for luxury services and more deals for bankers in what is fast becoming Asia's premier wealth management center. Casinos in Singapore and Malaysia are successful without taking the market share from Macao, said Fischer. "Casinos in Southeast Asia offer variety. Also, visa restrictions do not apply to individual mainland Chinese travelers visiting Malaysia and Singapore when compared to Macao," he said. Chinese are allowed to travel to Macao once in two months. In addition, Chinese government officials are not allowed to gamble in Macao but they can visit Singapore, Malaysia or Cambodia. While Macao is seen as a pure gaming destination, casinos in Southeast Asia have the additional attraction of combining business with gambling.
July 21, 2010
Hong Kong*: Transport Secretary Eva Cheng Yu-wah said on Monday afternoon the government would adopt a “zero-tolerance” attitude to people driving under the influence of drugs. Cheng made the comments while proposing new measures to help improve road safety. “We will adopt a ‘zero-tolerance’ against six commonly used drugs,” Cheng told a press conference. The six drugs targeted are heroin, cocaine, cannabis, Ice (or methamphetamine), Ecstasy and ketamine. Under the new measures, police will be authorised to carry out “preliminary impairment tests” on drivers suspected of having taken drugs. In the 30-minute test, polic will check the size of drivers’ pupils. Drivers might also be asked to walk in a straight line, count or adopt a certain posture [to check their balance]. The results of the impairment test would indicate a person’s ability to drive, she said. Anyone who failed to pass would need to provide police with body fluid samples. “This is done to determine whether the drivers have taken drugs,” Cheng said. “Police could confiscate driving licences of people who fail to pass the test to ensure road safety,” she added. She stressed that the test, developed in countries such as the United Kingdom and Australia, was a fair way to determine a person’s ability to control a vehicle. “Any drivers discovered to have taken drugs, even if they did not cause any accidents, would be breaching the law,” Cheng said. The government has proposed that if any dangerous driving cases were related to drugs, the penalties would be increased by 50 per cent. Currently in Hong Kong, drink-driving is liable to a fine of HK$25,000 and three years in jail and 10 driving-offence points. Cheng said that in determining the penalties for drug driving, the government would use drink driving penalties as a reference. The government will consult the public on the proposed measures this summer. The new rules will be voted on in the Legislative Council in the next legislative year. The number of drug driving cases over the first five months of the year was almost triple the 12 recorded in the four years to 2009.
Secretary for Labour and Welfare Matthew Cheung Kin-chung said on Monday workers with low productivity could lose their jobs after the new minimum wage law comes into effect.
If you build it, will the cars come? Imagine: it's a Friday night in 2016 and the long-awaited 37.73 billion yuan (HK$43.23 billion) Hong Kong-Zhuhai-Macau bridge has been completed. A banker plans to pick up his clubs after work and drive to Zhuhai for a round of golf, stopping in Macau on the way for a quick meal. It should only take 30 minutes to motor from his office in Central to the mainland city - a trip that used to take three to four hours by ferry. But first he needs the right kind of car. And there aren't a lot of those around. Right now, only 20,500 private cars, 950 coaches and 15,900 goods vehicles in Hong Kong could make the trip; vehicles that don't have cross-border licences issued by Guangdong are not allowed over the border. Even fewer mainland drivers - a few thousand at most - are qualified to drive directly from Zhuhai to Hong Kong. The goal of the bridge was to integrate the three economies and allow people to travel easily between Hong Kong and the mainland. An initial 13,000 to 20,000 vehicles were expected to use the link every day - to eventually reach 60,000 cars daily by 2035. But it's likely the bridge will see just a fraction of that traffic. If the cross-border licence system continues as it is, and the tight restrictions for left-hand-drive cars entering Hong Kong also remain, it could end up being severely underused. Hong Kong inherited from its former British masters a system based on right-hand-drive vehicles, while those on the mainland are left-hand drive. The bridge is designed for left-hand-drive cars but Hong Kong currently does not allow left-hand-drive vehicles unless the Transport Department provides a waiver - only ambulances and diplomatic cars usually enjoy such privileges. The Hong Kong government mooted a possible relaxation of the regulations early last year by issuing some short-term or one-off cross-border licences. Now it's planning a trial scheme for ad hoc licences under a quota system for private cars at the Shenzhen Bay Port. A Transport and Housing Bureau spokeswoman said about 22,000 private cars hold cross-boundary permits, and it plans to allow more in the future. The trial scheme will be introduced for private cars in Hong Kong first, followed by private cars in Guangdong, she said, adding that details were still being discussed. "The trial scheme, if successful at the Shenzhen Bay Port, will pave the way for full-scale implementation at the Hong Kong-Zhuhai-Macau bridge in the future," she said. But David Tung, a broker, said it was "extremely difficult" to obtain a licence. "The application procedures are complicated and the criteria are so tough that I would say it is almost impossible for an ordinary person to succeed," he said. Tung runs his own brokerage and is a director of Hong Kong and mainland firms. Even with his background, he is not qualified for a cross-boundary licence. The minimum requirement is to be either a big investor, a big charity donor, or to have political connections. The investment amount depends on whether it is in the country or city. For rural areas, a firm must invest HK$3.2 million and have paid tax of 150,000 yuan a year to apply for a cross-border licence for its first car. It needs to invest at least HK$40 million for a second car and HK$80 million for a third. The threshold is higher if the company is investing in a city area, where a licence for a first car requires an investment of HK$8 million, rising to HK$64 million for a second car and HK$160 million for a third. For individual applicants, only those who hold a political position in the Guangdong provincial government or who have donated 10 million yuan or above are considered. Tung said he had been advised to get a cross-border licence second-hand or from the black market, but he dismissed the idea as too expensive and possibly illegal. A licence on the black market could cost HK$400,000 or more. "The government should make it easier for everyone to apply for a cross-border licence. It is important for closer economic ties between Hong Kong and the mainland," Tung said. Bank of East Asia (SEHK: 0023) senior adviser, Chan Tze-ching, also believes the cross-border licence system needs to be relaxed. "However, we should also recognise there are a lot of difficulties such as the fact that the mainland is left-hand drive while Hong Kong is right-hand drive. All the road signs and road designs are different," Chan said. "If there is any relaxation, the government must do it carefully." Paul Chan Mo-po, the legislator for the accountancy sector and a keen motorist, said Hong Kong should follow Europe's lead, where it is easy to drive across the continent - switching between right-hand-drive Britain and mostly left-hand-drive Europe. "When I travel to Europe, I can hire a car in Paris and then freely drive around to other European countries and even go to Britain," he said. "If it can be easily done in Europe, why not in Hong Kong?" A Hong Kong government official who is familiar with the issues said the difficulties in obtaining cross-border and short-term licences were being studied. Challenges included the fact that a large number of mainland cars could clog Hong Kong's already congested roads, and vice versa. This would lead to traffic jams and pollution problems, said the official, who declined to be named. There are also security and smuggling concerns. As such, the official said even if the licence regime was relaxed, it would be subject to a quota. Construction of the bridge, funded by the governments of the three jurisdictions, will start next year and is expected to be completed in 2016. According to the Highways Department, the project's economic rate of return for Hong Kong is 8.8 per cent over a 20-year period, or 12 per cent over 40 years. In April, the Hong Kong government signed a framework agreement with the mainland on Hong Kong and Guangdong co-operation. It is expected to be a key plank of Beijing's plan to establish the delta as one of the world's most competitive regions by 2020. The agreement points to the bridge allowing drivers to travel from Hong Kong to key mainland cities within an hour, and mentions a relaxation of licensing for cross-border vehicles, including private cars. But, three months on, there has been no progress on the licensing issue. Driving to Zhuhai in 30 minutes after work may be a bridge too far.
Tai Sze-chung, veteran vocal coach to Cantopop's biggest stars, has died from heart disease. He was 69. Tai’s daughter Wancy told reporters her father passed away early on Sunday from complications from an acute coronary heart problem. The Apple Daily reported on Monday that Tai was hospitalised after fainting at his home early on Saturday. News reports said he is survived by a wife and two daughters. Tai was nicknamed “godfather of the music industry” for his star-studded list of students. Among those he tutored were late Hong Kong pop diva Anita Mui, singers Faye Wong and actor-singers Andy Lau and Leon Lai.
Supporters of local festivals set to win recognition as national intangible cultural heritage hope the status will give the traditions more respect and help offset threats from urban renewal and dwindling interest among younger generations. The Yu Lan Ghost Festival is just one event fighting for its future. The festival is celebrated at 60 venues, often on soccer pitches or parks, by the Chiu Chow community, estimated to be 1.2 million-strong. But some sites, such as Yan Oi Court in the heart of Kwun Tong, are being lost after hosting celebrations for decades. The courtyard - a small triangular open space occupied by hawkers - has been the stage for the festival for the past 30 years, thanks to donations from believers. The place is too small for live Chiu Chow operas for ghosts, a key component of the festival, but the corner is as boisterous as any other celebration sites in Kwun Tong, an area with a concentration of Chiu Chow people. During the festival in the seventh lunar month, paper offerings are burned, free rice is distributed and masters are invited to perform rituals to console ancestors and wandering ghosts.
Forced tour group shopping unlikely to go away in a hurry - From grand pianos and garments to noodles and nightlife, the mainland is where the world goes for all things cheap. It is the ultimate paradox then, that the world relies on mainland tourists to spend lavishly overseas. Major retailers from Paris to Palo Alto, California, have Putonghua-speaking sales staff and shopping mall announcements are often multilingual, including Chinese. If the retailers are to be believed, mainland tourists are a godsend, snapping up pricey jewellery and cosmetics. Yet the mainland tour group appears to be an entirely different species. In Hong Kong, many are herded around by coach on a tight schedule of shopping and sightseeing in organised tours that are too cheap to provide adequate income to the travel agents, tour guides and coach drivers. The inevitable outcome is that tour guides and coach drivers, who are usually freelancers, expect to make money off their charges, mainly from commissions on tour group shopping. In 2007, for example, it was reported that a local travel agency, Pegasus International Travel, forced more than 70 mainland tourists, who were on a four-day tour from Shenzhen to Hong Kong, to shop all day in a jewellery shop in To Kwa Wan. On Saturday, the National Tourism Administration issued an advisory on travel to Hong Kong after a video of mainland tourists being insulted and "forced to shop" by a Hong Kong tour guide sparked outrage on the internet. Xinhua cited an unnamed spokesman for the administration as saying the regulator was concerned about measures taken by Hong Kong tourism officials over such practices.
Hong Kong General Chamber of Commerce aims to take leading role - Anthony Wu is intent on raising the chamber's profile. A month after the Hong Kong General Chamber of Commerce made a submission on constitutional reform to the government in August 2004, it posted the document on its website without notifying the media. The chamber's newly elected chairman, Anthony Wu Ting-yuk, said it spoke volumes about how low profile the city's biggest business organisation had been. Its submission urged the government to release a timetable for full democracy before 2007. "As our political system moves forward, the business community can no longer remain silent," he said. Wu took the lead in saying earlier that the formula of "one person, two votes" for the five new Legco district council functional constituency seats could be applied representing business interests. He said most negative public perception of the business community stemmed from property prices and the sales practices of some developers. "We must let the public know that we businesspeople have a social conscience," he said. "We will also try our best to educate our members to be more socially responsible." The chamber, which has about 4,000 members, proposed in January 2002 that Hong Kong and the mainland sign a regional trade agreement granting a zero tariff for "made in Hong Kong" goods. The idea came more than 18 months before the signing of the Closer Economic Partnership Arrangement. "But not many people know we were the first business organisation to promote the concept of Cepa. It underlines that we are not so good in publicising our ideas," Wu said.
Doubts raised over need for new container terminal - Growth forecasts don't justify HK$10b project, says official - The nine Kwai Chung container terminals handled 15.16 million teu last year, down from 17.7 million teu in 2008, and experts say the port has room for at least 23 million teu. The head of Hong Kong's container terminal operators' association says a tenth container terminal, estimated to cost about HK$10 billion, is not needed "in the foreseeable future", calling into question the future of the project. Alan Lee said: "I do not see any need for it in my lifetime. My lifetime might be about 10 or 15 years." He said the five-member group, which includes Li Ka-shing's Hongkong International Terminals, DP World and Cosco-HIT, would support construction of a new terminal provided the project was justified. "Our position is that we do not disagree with the building of container terminal 10 provided we see a need for it," Lee said. But he gave three reasons that questioned whether there would be sufficient growth in container throughput to support the massive investment needed. Lee said the global slowdown in trade caused by the financial crisis weighed on container volumes, resulting in a 20 per cent collapse in throughput in Hong Kong in the first half of last year. Additionally, he said, the shift by China's factories to smaller, higher-value products meant there would be fewer shipping containers needed compared with bulkier, lower-value goods. Thirdly, he said the move of manufacturing to the western side of the Pearl River would mean there would be less reliance on Hong Kong's port. Meanwhile, the government is pressing ahead with a preliminary feasibility study into plans to build container terminal 10 on the southern side of Tsing Yi island. Work on the two-year study is due to be completed in March next year. Latest estimates of the total cost of developing the container terminal, which is believed to involve some reclamation and the relocation of oil terminals at Tsing Yi, have not been released but observers believe the cost would top HK$10 billion. A study into port cargo forecasts released in 2008 projected that Hong Kong "would continue to have modest and steady growth" and "Hong Kong will need the first new container berth by 2015 at the earliest". Observers have their doubts. The nine Kwai Chung container terminals handled about 15.16 million teu (20-foot equivalent units) last year, down from 17.7 million teu in 2008. But outlining the capacity that was available at Kwai Chung, Lee said: "We still have room for 23 million teu." He said this handling capacity could be expanded by up to about five million teu, if there was more land available for container storage. Over the past 10 years, throughput growth at Kwai Chung has been mixed, while in two years, 2001 and 2009, there was a year-on-year drop in volumes. And although there was a strong rebound in container volumes at the Kwai Chung terminals in the first six months of the year, Lee doubted if this rate of increase would continue in the second half. "My forecast is about 7 per cent for the whole year at Kwai Chung, with 3 per cent to 4 per cent growth in the latter part of this year," Lee said. Hong Kong is also facing competition from ports in the Pearl River Delta. GHK (Hong Kong) managing director Jonathan Beard said current plans envisaged that more than 20 million teu of capacity would come on stream early next decade in Shenzhen, Nansha and Gaolan.
Smaller aircraft makers shaping up to compete with Boeing and Airbus - A Boeing 787 Dreamliner, now more than two years behind schedule, sits on the tarmac at Boeing Field in Seattle, Washington. The Dreamliner will take centre stage at the Farnborough show this week. Asian orders take off at airshow - The aviation sector descends on the Farnborough International Airshow near London this week amid fresh setbacks and an increase in competition for top aircraft makers Boeing and Airbus. Any new orders for aircraft placed at one of aerospace's biggest events are likely to be dominated by airlines from emerging economies across Asia and the Middle East where air traffic is growing rapidly, according to analysts. "In Asia and China in particular, there are massive orders coming through. Similarly in the Middle East. There is enormous growth coming through that part of the world as well," said independent aviation analyst John Strickland. "The economic climate has certainly slowed orders for established traditional markets such as Europe and the US." The Farnborough show is also traditionally the occasion for the announcement of orders for military jets, but with governments set to slash their defence budgets to help reduce huge public deficits, major deals may be scarce. US company Boeing and its European rival Airbus, meanwhile, are heading to the show aware of facing increased competition for their mid-sized civilian jets from smaller manufacturers, such as Brazil's Embraer and Bombardier of Canada. "Commercially, we've still got the big players Boeing and Airbus slugging it out," Strickland said. "We've also got emerging producers of small aircraft such as Bombardier, Embraer, and indeed new players coming up in Russia and China which are producing aircraft which in future decades can become bigger challengers to the established order of Boeing and Airbus." Before today's start to the biennial show, Boeing said it may be forced to delay to 2011 the delivery of its first 787 Dreamliner aircraft scheduled at the end of this year. The fuel-efficient mid-sized aircraft designed to fly long distances, and which has been beset by delays, will be on display at Farnborough alongside Airbus' long-delayed A400M military transport plane. Airbus recently suffered a blow of its own when the World Trade Organisation ruled that multibillion-dollar subsidies it received from the EU were illegal. Whether Airbus will have to repay any money is not yet clear. Meanwhile, the WTO is soon expected to deliver a ruling on the legality of US subsidies to Boeing. Howard Wheeldon, senior strategist at BGC Brokers, said he did not expect "many, if any really significant orders" for either Boeing or Airbus at the airshow. "Financing remains a big issue for airlines and my guess is that this is a situation that will get worse," Wheeldon said. But in June, Emirates boosted its reputation as the world's most bullish airline with an order for 32 "superjumbos", the biggest contract in civil aviation history according to a delighted Airbus. The US$11.5 billion deal, unveiled just as the global airline sector emerges bruised and battered from the worst global slowdown in decades, will take the number of A380s ordered by debt-ridden Dubai's flag carrier to 90. "We'll probably expect to hear the announcement of one or two more aircraft orders from Emirates" in Farnborough, Strickland said.
The Travel Industry Council yesterday downplayed a Beijing warning on travel to Hong Kong as a video posted on the internet showing tourists being berated by a SAR tour guide sparked outrage. Executive director Joseph Tung Yao-chung, in welcoming the National Tourism Administration's travel advisory, said it served only as a reminder to holiday makers while visiting Hong Kong. Council chairman Michael Wu Siu-ying, while admitting the SAR's image has been damaged, said he expects the "advisory" would not deter visitors. "It is not an advice not to come to Hong Kong." The council, following a spate of complaints involving "zero-fee tours," has faced mounting pressure to reform the industry. Zero or low-fee tours appeal to mainlanders, but tour operators say the small amounts they pay cannot cover the costs. The council has said it may take action against the guide, nicknamed Ah Zhen, who was filmed calling the mainlanders "cheapskates" for not shopping enough, and threatening to lock them out of their hotel rooms. Wu said the guide's license had been suspended for a month last year because of her poor altitude. The council has also asked Golden Win International Travel Services, which organized the tour, to submit a report within two weeks. But the fact that Benny Chau Man-wai, who sits on the council's mainland inbound tour affairs committee, is also managing director of Golden Win, has raised concerns over independence. The council's compliance committee will then meet to discuss whether whether to take disciplinary action against the agency. Ah Zhen has two weeks to submit her defense, failing which she will be considered to have given up the right to defend herself, and a hearing will proceed with or without her presence. Wu did not rule out the possibility of revoking her license. Wu said the committee only provides advice, and is not involved in supervising travel agencies. The Tourism Administration has warned mainlanders to beware of shopping "traps." A spokesman said it is seeking further information and will investigate the case.
Ip eyes District Council trade seats - Having secured two seats in the last District Council election, local think- tank Savantas Policy Institute's chairwoman Regina Ip Lau Suk-yee is considering running for the new District Council trade seats, along with the group's five newly recruited young bloods.
China*: China search market by revenue grew 53.2 per cent in the second quarter to 2.64 billion yuan (HK$3.02 billion), data from technology research firm iResearch showed on Monday. Baidu’s share of the market rose to 70.8 per cent in the second quarter from 67.8 per cent in the first quarter, as the firm ate into Google’s market share. Google, which has faced difficulty in the mainland since threatening in January to quit the market on censorship concerns and after a serious hacking episode, saw its market share fall to 27.3 per cent in the second quarter, down from 29.5 per cent in the first. Before its high-profile spat with Beijing, Google was slowly gaining ground on Baidu. In the fourth quarter of last year, Google’s market share was 32.8 per cent versus Baidu’s 64.8 per cent. Baidu said earlier this month it saw only marginal gains if the mainland ousted rival Google from the Web search market, and was banking instead on rapid internet adoption in that country. Baidu reports its second-quarter results on July 21. Baidu is expected to post robust quarterly results as its Phoenix Nest advertising word system began to gain traction in the middle of this year, after some teething problems earlier. Baidu, whose name comes from an ancient Chinese poem, previously gave guidance for revenue between US$268.1 million to US$274 million in the second quarter. Analysts polled by Thomson Reuters/I/B/E/S expect Baidu to report on average earnings per share of 29.7 cents and revenue of US$271.4 million, an increase of 84.5 per cent and 68.6 per cent over the previous year, respectively. Analysts with the best track records are even more bullish. Baidu's earnings could come in 2.9 per cent above Street estimates for the second quarter, according to StarMine's SmartEstimates which put more weight on recent forecasts by top-rated analysts. “My sense is their quarter is going to be very strong because of increased customer traction on Phoenix Nest, the Google sufferings in the Chinese market and the overall improving China economy,” said Paul Wuh, an analyst with Samsung Securities. Eric Wen, head of internet and media research at Mirae Asset expects Baidu to beat revenue consensus by 5 per cent and the firm's own guidance by 2-4 per cent.
Workers scoop up oil from a spill at the northeastern port of Dalian, Liaoning province, on Sunday. Port sealed as Dalian battles oil slick - Dalian has closed the Xingang oil port in its northeast, home to the country's largest oil reserve bases, after crude pipeline explosions spilled oil into the sea, but the main facilities there are undamaged. State oil major PetroChina (SEHK: 0857), which operates two major refineries in Dalian, has set up a contingency plan to cope with one week’s closure of the main oil port that receives foreign crude vessels regularly and also a main export point for petrol and diesel. PetroChina has started trimming refinery operations at one of the plants, the 200,000 barrel-per-day (bpd) West Pacific PetroChemical Corporation (WEPEC), by about “several thousand tonnes” per day. “The port was sealed right after the explosion. We have a one-week contingency plan, but are hoping that the oil spill can be cleaned up as soon as possibly,” the oil executive told reporters on Monday. The accident had not caused any direct damage to the oil terminal’s main facilities, the impact being limited to ancillary facilities such as control systems.
Three Gorges Dam faces stiffest test yet - Water levels in the dam reached 147 metres on Saturday. The massive Three Gorges Dam faces its biggest flood-control test after days of torrential rain created the sharpest surges on the upper Yangtze River for more than a decade. A flood crest hitting a maximum volume of 70,000 cubic metres per second is expected to pass through the dam on Thursday, said a report released yesterday by the Yangtze River Water Resources Commission. The peak is shaping up to become the biggest surge to hit the Yangtze since 1998, when flooding on the undammed river left 3,000 dead and 14 million homeless downstream. Floodwaters poured into the Three Gorges Reservoir at up to 47,000 cubic metres a second yesterday and are expected to rise above 65,000 cubic metres a second between today and tomorrow. High water levels have already forced the closure of locks at the dam. "The water level in the reservoir will continue to rise ... This is going to be the biggest challenge for the dam since its completion," said the China Three Gorges Corporation. Four sluice gates were opened yesterday to release water at 48,000 cubic metres a second. As a result, the dam's water level dropped to 146 metres, from 147 metres on Saturday, with more than 500 million cubic metres of floodwaters being discharged. The maximum water level of the dam, the largest hydroelectric project in the world, is 175 metres. It reached 171 metres during a test run last year, but officials held off from raising the level to 175 metres in order to relieve areas downstream that were then suffering from a severe drought. Lower reaches of the Yangtze were facing an "extremely severe" flood situation, Liu Ning, deputy head of the Office of State Flood Control and Drought Relief Headquarters, told Xinhua. The report said mid-stream areas were holding up fine for the time being due to the dam's flood control. Water levels at several big lakes downstream surged past their danger marks on Saturday as the meteorological centre said fresh downpours could further swell rivers flowing into the lakes. Poyang Lake in Jiangxi saw water levels 70 centimetres above its alert mark. At Dongting Lake, in Hunan, the water was seven centimetres above danger level. The Three Gorges Dam, costing 180 billion yuan (HK$206 billion), was finished in May 2006 and went into full operation last September. It is 2,335 metres long and 185 metres high. The project, aimed at generating electricity to power the economy and prevent flooding downstream, drew fierce criticism for uprooting more than one million people.
Beijing home prices rise to 22 times of income levels: report - Salesmen are seen waiting for customers at a real estate expo in Beijing in this file photo. A typical Beijing flat costs about 22 times average incomes in the city, state media said on Monday. A typical Beijing flat costs about 22 times of the average incomes in the city, state media said on Monday, highlighting the challenge the country faces providing affordable housing amid a property boom. A 90 square metre (968 square foot) apartment in Beijing cost 1.6 million yuan (HK$1.8 million) last year, the China Daily said, citing an independent report. That compared to an average household disposable income of around 71,000 yuan last year, according to city figures. The report was completed by the Beijing University of Technology and the Social Science Academic Press. It said the building of low-cost, government-subsidised housing had failed to meet demand and called on policy-makers to increase the supply of land for such projects. Authorities in the mainland have issued a slew of measures in recent months aimed at preventing the property market overheating and causing a bubble that could derail the world’s third-largest economy. Chinese property prices in June fell 0.1 per cent from the previous month, their first monthly fall since the first quarter of last year, according to official data. In remarks published on Monday, the Minister of Housing and Urban-Rural Development said the government will maintain its tightening campaign to cool real estate prices, while urging local governments to build more affordable housing. As mainland economic growth slowed in the second quarter, some analysts and investors expected Beijing might loosen its efforts to temper the real estate sector, which accounts for more than 10 percent of gross domestic product. But Jiang Weixin, the housing minister, told a meeting of more than 70 mayors that the risks of doing so were too high. “Once the policy is relaxed, property prices will rebound strongly. Our macro control efforts will then fail overnight, and the government will also lose the trust of its people,” he was quoted as saying by the China Business News. Jiang urged the officials to speed up efforts to meet the country’s target of building 5.8 million units of affordable housing this year. His ministry will make a two-week check on the progress of construction beginning on August 10, he told the mayors.
Green light for Chinese domain names - The web will soon be a lot more accessible for more than a billion people after the body that runs the internet's naming system gave the green light for the use of Chinese script.
Expo 2010 Shanghai is proving to be a boon for successful Chinese entrepreneurs eager to tap into the global market. The 184-day event, which is predicted to attract an estimated 4 million foreign visitors along with global media coverage, is considered to be a golden opportunity for Chinese companies to raise their brands to an international level and explore business opportunities. According to survey released last year by the information office of Shanghai Municipal Government, more than a quarter of the respondents were hoping to visit Shanghai during the Expo to seek future business. The online survey polled 503 foreigners in 44 countries and regions across the world, 30 percent of whom were senior corporate executives. Of the Expo's 58 partners and official sponsors, 47 are Chinese companies, 25 are from Shanghai, 15 are from Beijing and seven from other parts of the country. They contributed a total of more than 7 billion yuan ($1 billion) in sponsorship fees to the event, averaging more than 100 million each. While the sums are large, the contributors represent only a small portion of the number Chinese firms that want a slice of the Expo pie. Those who are not qualified to partner an official sponsor have sought other means of gaining brand exposure. "The Expo is a once-in-a-century opportunity for us to promote our brand on an international scale," said Zhang Yingguang, a public relations manager for Tsingdao Beer, the Chinese industry leader based in Qingdao, Shandong province. The company launched a flurry of billboard advertisements on the city's busiest streets, as well as in metro stations and commercial areas. The ads targeted foreigners by trying to teach them Chinese phrases about drinking. It also made a presence in the Zero Carbon Pavilion at the Expo, where it contributed lamps made out of beer bottles and launched a gourmet TV show with a local TV station.
China's Bright Dairy invests $58 in NZ's Synlait - July 19 2010 - WELLINGTON - China's Bright Dairy & Food Co is investing $58 million in New Zealand milk producer Synlait, which will use the money to lift exports of milk powder and infant formula to China. Bright Dairy, majority owned by Bright Food Group, will take a 51 percent stake in the milk processing arm of the privately-owned Synlait, which is a small player in the dairy export market dominated by giant co-operative Fonterra. "In China, the market for premium products from New Zealand and Australia is growing rapidly. Synlait Milk will help Bright Dairy establish a market leading position in the infant formula and milk powder category with a planned co-branded range," said Bright Dairy President Benheng Guo. The NZ$82 million from the deal, which is subject to regulator approval, will be used to build a new milk processing plant, doubling Synlait's production capacity. Bright Dairy, one of China's main dairy companies, is 65 percent controlled by the partially State-owned bright Food Group, which earlier this month was trumped in a $1.5 billion battle for the sugar arm of Australian conglomerate CSR Ltd. [Bright Food fails in bid for Sydney-based CSR] More than 90 percent of New Zealand's dairy products are produced by farmer-owned Fonterra, New Zealand's largest company which generates more than 7 percent of the country's GDP with annual sales of about NZ$17 billion. Synlait is split into two arms, milk production and farming, with the farming arm remaining in full private ownership. In November last year Synlait scrapped a planned NZ$150 million float of the milk production business due to a lack of investor support.
July 20, 2010
Hong Kong*: For the city's chief tourism promoter, the video clip of a tour guide haranguing mainland visitors for not spending in shops is the last straw. Tourism Board chairman James Tien Pei-chun yesterday called for a complete overhaul of the way mainland tours to Hong Kong are run and regulated in the wake of the scandal provoked by the video of the woman guide abusing her charges. The government should consider taking over the licensing of tour guides from the industry, he said. For the industry's chief spokesman, the solution lies with Beijing. (A National Tourism Administration spokesman said it was very concerned about the incident.) For tour guides, the answer is simple: stop the practice of making them earn a living solely from commission on what tour group members buy. They were all reacting to the fallout from the screening by television stations across the mainland, including CCTV, of the video clip of the guide telling a group of visitors, among other things: "Don't tell me you don't need [the jewellery], I say you don't need to eat. Tonight I will lock all hotel-room doors, because you don't need accommodation." Tien said: "This incident has embarrassed Hong Kong people and made us look bad." Since the Travel Industry Council's ability to regulate the industry had been persistently called into question, Tien told a radio programme, the government should consider taking over the licensing of tour guides from the council. The tour company who employed the guide in question - Golden Win International Travel Services - has been the subject of several complaints to the council. One of its owners, Benny Chau Man-wai, is a member of the council's mainland inbound tour affairs committee. The council's executive director, Joseph Tung Yao-chung, said it was open to all suggestions for improving the regulation of tour guides.
Counter staff in 7-Eleven stores have been told by their bosses not to open bottles of alcohol for customers because they do not have a liquor licence - instead they are insisting customers open bottles themselves. The move comes after the Sunday Morning Post (SEHK: 0583, announcements, news) reported how bar owners were angry about a third 7-Eleven opening in Lan Kwai Fong - to be located beside Al's Diner and directly opposite Stormies - because it would affect their trade and promote under-age drinking. It was also alleged that staff at 7-Elevens in the area were opening the beer for customers to drink there despite the fact they had no liquor licence.
Hong Kong finally has a minimum wage law after a 41-hour debate by legislators. The third reading of the minimum wage bill was passed at 6.30am yesterday, in an overnight session of the Legislative Council, with 45 votes for and only one against. The tourism sector's Paul Tse Wai-chun was the sole opposer. "It marks a very important milestone in the protection of our labour, particularly for ordinary workers in Hong Kong. I would say it actually opens a new page in our socioeconomic history," Secretary for Labour and Welfare Matthew Cheung Kin-chung said after the vote. He said the government would monitor developments in the jobs market closely because foreign experience had shown that the real impact of a minimum wage would emerge about two years after its implementation. "We will devise guidelines for particular sectors, and also start an education and publicity campaign, as well as work out the details for the disabled, in particular, because they are a vulnerable group," Cheung said. Unionists said the bill's passage was not the end of the battle, but the beginning of another fight as the Provisional Minimum Wage Commission had yet to recommend the minimum hourly rate to Chief Executive Donald Tsang Yam-kuen. Unions have demanded a rate of no less than HK$33, while employers' groups have suggested rates between HK$24 and HK$25. "All amendments moved by legislators have failed to be passed. In fighting for the basic demand for a HK$33 hourly rate and for workers to be able to live decently, we have no choice but to hit the streets every year from now on," Lee Cheuk-yan, secretary general of the Confederation of Trade Unions, said. The Chinese Manufacturers' Association said the minimum wage should "start with a level which is easily accepted by the market, followed by a review every two years", in a statement welcoming the new law. The commission is due to recommend the wage rate by the end of next month. Legislators will vote to accept of reject the rate decided by the chief executive. The law is scheduled to take effect in the first half of next year.
Buyers snapped up all 92 units of the first batch of Sun Hung Kai Properties (SEHK: 0016)' luxury development Larvotto to go on sale Saturday at an average price of HK$17,288 per square foot. Market sources said the flats, which went on sale at 9am, were all sold by the late afternoon amid what one agent said was "fierce demand". All are seaview apartments in blocks one and three of the development. The flats, ranging from 1,968 to 1,998 square feet, are priced between HK$31.11 million to HK$37.94 million, or between HK$15,811 and HK$18,992 per square foot. That compares to asking prices of HK$9,500 to HK$16,000 in Bel-Air Residence, the most expensive large housing complex in Island South. The development, jointly developed with Paliburg Holdings and Kerry Properties (SEHK: 0683), is in Ap Lei Chau and is the first project to be put on sale since the Hong Kong Monetary Authority instructed banks last October to lower the amount they lend to buyers of luxury homes priced higher than HK$20 million from 70 to 60 per cent of the property's value. Kerry is controlled by the Kuok Group, which is the controlling shareholder of the SCMP Group which publishes the South China Morning Post (SEHK: 0583s). There are 715 units in nine blocks in total in the development. Joseph Yuen, a 57-year-old garment manufacturer who said he had purchased one apartment, said he felt the prices were reasonable, but did not disclose how much he paid for the property. "I think the price is fine for this sort of apartment, it's very rare to have seafront apartments like this," Yuen said. He said the recent controversy surrounding Hong Kong's luxury property market had not deterred him. "There are two parallel markets in Hong Kong, a mass one and a luxury one, and in terms of the luxury one I think Larvotto is reasonably priced." Another man, who did not wish to be identified, said he thought the prices were "reasonable" and that he is still considering whether to buy a unit. One agent said that interest in Larvotto has been spread fairly evenly between local, mainland and foreign buyers for both residential and investment purposes. "The price is more attractive than other similar luxury developments, while the payment terms make for a good investment opportunity especially in this low-interest rate environment," the agent said. "Seafront properties are always going to be popular," he added. Another agent said that those who bought property as an investment still see "great upside potential" in the development.
China*: Premier Wen Jiabao has told a German trade delegation that China will not block exports of rare earth metals and disputed allegations that China's investment climate has worsened for foreign businesses. European and American business associations have expressed concern over the past year at mainland policies that favour procurement of goods and services with "indigenous innovation" as well as the promotion of national standards instead of international norms for technology and equipment. "Currently, there is an allegation that China's investment environment is worsening. I think it is untrue," Wen said. The German business leaders also called for equal access to resources, including rare earth minerals. Wen said China would never block the export of rare earth minerals, but the minerals should be exported at a reasonable price and volume, Xinhua reported. He said foreign firms would have the same treatment as Chinese firms if they manufactured in China.
US-Korean military drill revives painful memories - Whatever their stated purpose or the strength of the forces deployed, upcoming US-South Korean military exercises in the Yellow Sea will be greeted indignantly in Beijing because the presence of foreign warships so close to China's shores will revive painful memories of the country's invasion, political and military analysts say. The war games would be precedent-setting, military analyst Andrei Chang said, since the last time foreign warships staged a show of force in the Yellow Sea was during the Sino-Japanese war in 1894. Even though South Korea insists the drills are aimed at North Korea - which Seoul accuses of sinking one of its warships in March with the loss of 46 lives - Chang, editor-in-chief of the Canada-based Kanwa Defence Review, noted that US ships taking part would be armed with Tomahawk cruise missiles within whose range would lie Chinese cities including Beijing and Tianjin. China has voiced strong opposition to the exercises, mindful perhaps of demands from its own public to speak out. While South Korea and the US have insisted all along that the exercises would go ahead, on Thursday Seoul's deputy defence minister, Chang Soo-man, said the exercises would be in two stages, with the first in the East Sea, or Sea of Japan, on the other side of the Korean Peninsula. He also confirmed US aircraft carrier the USS George Washington, would only take part in the East Sea component of the exercise. A date for the Yellow Sea exercises, which had been expected this month, has not been set. The minister appeared to suggest the decision not to include the aircraft carrier in the Yellow Sea drills would mollify China. Shi Yinhong , a professor of international security at Renmin University who follows Korean affairs, agreed the decision on the carrier was designed to avoid upsetting Beijing. The PLA this month staged live-fire naval exercises in the East China Sea, close to the Yellow Sea, in an apparent protest against the possible presence of a US aircraft carrier on its doorstep. Chang noted that, in the event of a foreign military attack on North Korea, it would be "impossible for Beijing to be left alone" because most of North Korea's key infrastructure lies near its border with China. Gao Haikuan , a Beijing-based regional security specialist, said the US participation in the Yellow Sea drills would inevitably damage Sino-US relations. "The US should realise that such a military demonstration on our doorstep would not only stoke Chinese nationalist sentiment against America, but also set back the peaceful development of the Korean Peninsula," he said. The drill was reminiscent of the military confrontations between the US and the Soviet Union during the cold war and would only erode Beijing's trust in US President Barack Obama, Gao said. Chang, the defence analyst, said: "Besides its proximity to China, the Yellow Sea also symbolises the Chinese humiliations in the second opium war and the first Sino-Japanese war." Chinese historians say foreign warships invaded China from the Yellow Sea 88 times in the past 200 years. Among the most painful episodes were the second opium war from 1856 to 1860, and the first Sino-Japanese war from 1894 to 1895. In 1856, an eight-nation force led by Britain and France sailed to China via the Yellow Sea, marched on Beijing and burned down the Qing dynasty Old Summer Palace. In 1895, Japan occupied Taiwan after defeating the Qing dynasty's elite Beiyang Fleet in the Yellow Sea. The planned Yellow Sea drill is intended by the US and South Korea as a show of unity against a belligerent North Korea. It has already been delayed since June after Beijing's repeated objections. "Beijing has publicly condemned the joint operations five times over the past month. The domestic public outcry is stronger than it expected," Shi said. Chang believes Seoul has no intention of upsetting Beijing, but is acting out of a practical need to revise its battle plan for a possible invasion of North Korea, which was formulated in the 1980s and focused mainly on an attack by land. It paid little attention to North Korea's development of nuclear technology, Chang said. The North is believed to have enough plutonium for a handful of nuclear weapons, and the rockets to fire them. Chang thinks Seoul is eager to use the Yellow Sea drill to formulate new naval operating strategies. Shi said the tension caused by the Yellow Sea exercise could prompt Beijing to reconsider its current approach to foreign policy, which relied on forming strategic partnerships with other countries instead of, like the US, forging allies. "Beijing is very isolated when dealing with such a challenge because we are alone," he said. "But I think in the long term, it's possible for China to focus on cultivating allies to further enhance our diplomatic relations, which might balance the threat from the US."
Sweet future for a bitter brew - With Western technology to extract the active ingredients, famous brand Tong Ren Tang believes traditional Chinese medicine is ready to take on the world. Simmered seahorse and boiled bat droppings are just some of the ingredients the oldest and largest maker of traditional Chinese medicine is hoping to mix into potions that will sell on the shelves of drug stores in Europe and the United States. That goal will be assisted by the greater international exposure afforded the Tong Ren Tang Group by the recent move of its subsidiary, Tong Ren Tang Technologies, to the main board of the Hong Kong stock exchange, after a decade on the Growth Enterprise Market, the board for smaller companies. In a speech to mark the move, Mei Qun, vice-president and general manager of the group, said last week: "The challenge we face now is to enlarge market share in European countries and the US."
Shanghai port reported an 18.8-percent year-on-year rise in container throughput in the first half amid strong economic recovery and booming trade. The country's largest port handled a record 13.86 million twenty-foot equivalent units (TEU) containers, the Shanghai border inspection authorities said Thursday in a statement. The port's container throughput would likely beat the earlier projection of 25.5 million TEUs for the whole of 2010, it said. The Waigaoqiao port area saw container throughput up 13.5 percent to 7.23 million TEUs in the first half. The Yangshan port area recorded an increase of 30.6 percent to 4.7 million TEUs. Guangzhou port authorities, however, said Saturday they expected to see slower growth in the second half due to plunging demand for coal, iron ore and steel products. In June, the port bore the brunt of slowing global trade. Cargo throughput was down 1.1 percent year on year to 34.1 million tonnes.
July 19, 2010
Hong Kong*: The city's top container terminal operators, including Li Ka-shing's Hongkong International Terminals and Wharf's Modern Terminals, have thrown their weight behind calls for the creation of a shipping minister responsible for maritime affairs. The backing has come from the Hong Kong Container Terminal Operators Association, whose five members operate the nine terminals at Kwai Chung port. Association chairman Alan Lee said a shipping minister was needed to tackle long-standing issues that threatened the port's competitiveness in relation to others in the south. "We support 100 per cent this proposal [for a shipping minister] because there is a need for the government to have more focus on a threatened industry, in particular the container terminal business," Lee said. He said the challenges included the need for greater liberalisation of cross-boundary trucking services and the provision of additional back-up land for container storage. The shortage of back-up land had become more acute as Hong Kong terminal operators focused on increasing the volume of transshipment containers to stay competitive with mainland ports. This was because transshipment containers tended to stay longer at port than boxes with direct export and import cargoes. At the same time, the government had reduced the number of sites for container storage after recently allocating two areas in Kwai Chung to the logistics industry, which Lee said could not afford to develop them. By reducing the area for container storage the government was hurting the container terminals and not helping the logistics industry. The only people to benefit were the property firms, as they were the only sector that could afford the land, Lee said. He estimated transshipment accounted for about 60 per cent of Hong Kong's total throughput. That amounted to 11.4 million teu (20-foot equivalent units) in the first half, up 16.1 per cent from a year ago. But because these boxes were counted twice - on arrival and on departure - the overall throughput figures "were quite misleading". So, while Hong Kong is ranked as the world's third-busiest container port, the increase in transshipment meant "Hong Kong port is doing much worse than it appears to be". Lee said existing government and industry channels, including the Port Development Council, have proved ineffective in finding a solution to these difficulties. He said Secretary for Transport and Housing Eva Cheng, who has responsibility for the shipping and ports sector, was preoccupied by housing issues. He said the environment facing today's Hong Kong's container terminal operators "was very different to that 15 years ago", but "terminal operators cannot get things done". Pointing to cross-boundary trucking, Lee said it cost an extra US$300 to truck a container from Dongguan to Hong Kong rather than to Yantian container port in eastern Shenzhen. To offset this additional cost, truckers needed to make two cross-boundary trips per day, he said. Trucking companies should also be allowed to use mainland drivers to pick up empty containers or drop off laden ones. "There is little container terminal operators can do because the government needs to talk to mainland officials," Lee said. He said that compared with the United States and Canada or Europe, where truck drivers from the different countries could transport cross-border cargo, Hong Kong was the only place in the world where local truck drivers could make cross-boundary trips but mainland drivers could not. "I understand these are political issues and the [Hong Kong] government and the Legislative Council do not want to talk about it. But not talking about it does not help Hong Kong," Lee said.
Checklist fails to identify dangerous trees - Central has the most sick trees in the city, with clusters along busy roads and in parks, according to a list of inspected trees released by the government yesterday. Tree expert Jim Chi-yung inspects a Chinese Banyan in Supreme Court Road, Admiralty. Critics questioned the usefulness of the list, as it fails to say which trees are in danger of collapsing or to disclose details of 800 trees. The government said these 800 had already undergone improvement measures. The list details 1,154 trees inspected over the past few months, including 500 old and valuable trees, about 400 growing on stone walls and 252 in areas with high traffic and pedestrian flow. It includes their location, species, condition, the government department responsible for each, mitigation measures carried out, and photos of every one. The list was drawn up by the Tree Management Office, established after a government review of tree management following the death of student Kitty Chong Chung-yin, who was crushed in Stanley in 2008 by a falling coral tree that was listed on the registry of old and valuable trees. At least 28 old and valuable trees in Central were identified to have three or more problems, including decay, abnormal leaf colour, cavities, cracks, fungus, and signs of pest and disease. They are mostly located around the Central Government Offices, in Hong Kong Park and the Zoological and Botanical Gardens, and along Garden Road. The worst case is a pink and white shower tree in the Zoological and Botanical Gardens, which has severe decay and is under close observation.
Selling their labour for next to nothing ... Jack Tsang (left) says it's hard work keeping KFC clean, while Alan Tsang (above) gives out flyers and complains about cheap labour, and project leader Hank Cheng (below) is all for the proposed law. While politicians debated the legislation for a minimum wage, most low-paid workers were too busy at their jobs to think much about it. Restaurant cleaner Mrs Lau, 62, rinsing dishes at fast-food chain Cafe de Coral (SEHK: 0341) for the HK$22 an hour she has earned for the past 17 years, did not know she might be getting a pay increase. "Who would say no to more money? I'm sure all my fellow workers like money," she said on learning of it. Despite that, she remained wary about the authorities' determination to help low-income workers. "Really, who cares how much we earn? I've been getting HK$22 for so many years, I've become OK with it." If the rate is set at HK$25, her pay will rise by about HK$700 to HK$5,900 a month if she continues to work nine hours a day, six days a week. At a minimum rate of HK$33 an hour, she will make about HK$7,700 - or HK$2,500 more per month. "It will not make me rich, but it's definitely better to have a minimum wage," she said. "I can buy more fresh seafood for my family's dinner then." Despite fears expressed by the catering industry, she wasn't afraid she would lose her job as a result of the new law. "No," she said. "All employees will be happier and we will work even harder. Why would we lose our jobs?" At KFC's Causeway Bay branch, 18-year-old trainee Jack Tsang said he had been too busy sweeping floors for HK$21 an hour to follow the Legco discussion. But he strongly supported the passing of the law, regardless of what level the minimum is set at. "Of course it's better. Many people are making really too little money for their hard work," said Tsang, a Form Five student doing his first summer job. "This work is really tough," he said while clearing food trays and then sweeping the floor. "I hadn't imagined this work would pay only HK$21. I hope the law takes effect soon." In the same district, 17-year-old Alan Tsang was giving out flyers on the street for Japanese fast-food restaurant Yoshinoya for HK$21 an hour. The part-timer will earn at least HK$1,000 more a month if the rate is set at HK$25. "There should not be any doubt whether this law is good for the general public. Too many people are selling their labour for next to nothing," he said. Hank Cheng, 21, a project leader for a company that conducts surveys, said he supported the law because it would provide better protection for his team members. "They'll get a lot more than the HK$4,000 they get now. And that'll not be a problem." Before the end of the summer break, the Provisional Minimum Wage Commission will recommend the minimum hourly rate to Chief Executive Donald Tsang Yam-kuen, taking into account the standards of living, conditions in the labour market, and the need to foster employment and social harmony.
Hong Kong invention speeds up phone downloads - A model demonstrates how the new device speeds up mobile internet access at the Chinese University campus in Sha Tin. Smartphone users tired of watching YouTube videos with an intermittent freeze can expect faster download times thanks to a piece of technology developed by Chinese University. The technology, likened to a "turbo motor" by its inventor, Professor Jack Lee Yiu-bun, associate director of CUHK's Centre for Innovation and Technology, is slated to catapult the world into faster mobile internet access. And while it won't change the way smartphones work or the way Web content providers run their sites, it will keep impatient users happy. "Instead of building a turbo motor for every car on the road, we built a turbo motor for the road," Lee said, explaining that his innovation speeds up the operations of mobile internet access networks, allowing for quicker download speeds. Mike Wang Jianya, Nokia Siemens Networks' general manager for Taiwan, Hong Kong and Macau, playfully refers to the device as a "magic box" that, placed in a network, accelerates the speeds of internet applications by a factor of three, according to recent tests. Nokia Siemens Networks collaborated with the university on the project. The device can operate across several different technology systems and also allows internet applications to make full use of bandwidth, which may not only save time for mobile phone users but cut production costs for Web content providers. Lee, who started his project to speed up mobile network internet access three years ago, says his invention is still undergoing tests and improvements. He would like to introduce a version for field trial in a year or two. The number of people accessing the internet through mobile phones is growing at around 500 per cent each year globally, Lee says. The market for mobile internet access in Asia and specifically Hong Kong is strong and growing, according to Wang. He noted that many of Nokia Siemens Networks' research and development departments, once centred in western Europe, had now started moving branches to mainland cities like Beijing, Shanghai and Chengdu. As part of the collaboration between the mobile phone giant and Chinese University, the company has provided equipment to give CUHK students a week-long live demonstration of commercially available technology that allows internet access at very high speeds.
Agricultural Bank of China rises 2.2pc, improves on stock's Shanghai debut - Chief Executive Donald Tsang Yam-kuen shakes hands with ABC chairman Xiang Junbo (left) and HKEx chairman Ronald Arculli (right) at the listing ceremony yesterday. Agricultural Bank of China executives breathed a sigh of relief yesterday as the stock performed better on its Hong Kong debut than its A shares in Shanghai the previous day. But investors' hopes for a big first-day advance fizzled. The shares closed 2.2 per cent higher at HK$3.27 against an offer price of HK$3.20, meaning that for every 1,000 shares, investors earned HK$70. The stock hit a high of HK$3.31 during the day. The gain compares to the A shares' 0.75 per cent rise on Thursday. The stock lost 0.4 per cent on its second day of trading in Shanghai yesterday, closing at 2.69 yuan (HK$3.08). ABC was the most heavily traded stock on the Hong Kong exchange yesterday, accounting for 17 per cent of the market's total volume of HK$61.32 billion. Chairman Xiang Junbo said he was pleased with the stock's debut given the weakness in global markets. Analysts have been quick to point out that ABC's first-day performance is the poorest out of the four major mainland lenders. But Ben Collett, head of equities at Louis Capital Markets in Hong Kong, said the comparison was not entirely justified. "ABC shares were priced too high for the sort of fantastic IPO performance that it would have hoped for," he said. "A price of 1.5 times book value would have been more appropriate for double-digit gains on the first day." ABC shares were priced at roughly 1.65 times book value, while Bank of China is trading at around 1.7 times. The upward movement of the shares on their first day of trading would support the likelihood that the 15 per cent "greenshoe" over-allotment option will be exercised, so long as the trend continues over the next few weeks. This would give ABC the accolade of having the world's largest initial public offering at HK$172.3 billion, overtaking that of Industrial and Commercial Bank of China (SEHK: 1398) at US$21.9 billion in 2006. ABC this week reported a 40 per cent year-on-year increase in net profit for the first half of the year to 46 billion yuan, helped by robust loan growth. The bank will use the funds raised in its IPO to replenish its capital base. Other big mainland lenders have said they would also raise funds in the coming months following last year's state-directed lending spree in order to meet the required capital levels. Questions have been raised over the quality of ABC's loan book, particularly the 325 billion yuan "special mention" loans, which could end up being classed as non-performing, but those concerns have been ameliorated somewhat by the promise of a massive retail base of 320 million customers. At the end of 2007, the bank's non-performing loan ratio was 23.5 per cent, but a government bailout brought that down to 2.9 at the end of last year. "Concerns about the bank's fundamentals will continue to weigh on the stock, but these will be priced in and the stock will and should trade at a discount to its peers," Collett said. Xiang told reporters at the listing ceremony yesterday that he anticipated the bank's provision coverage ratio to increase to 150 per cent this year, without providing further details. Separately, investment banks advising on the deal could see their fees hit, as Bloomberg reports that ABC is negotiating a 36 per cent reduction in underwriter fees, or U$75 million, citing unidentified people. ABC reportedly claimed that the fee cut is justified on the basis that it negotiated directly with corporate investors, who accounted for more than half of the buyers of the Hong Kong offering.
Hong Kong police seized illegal betting records worth HK$361 million during the World Cup soccer - nearly a five-fold increase on the amount found during the previous World Cup tournament in 2006. During a month-long operation, police carried out 96 raids at 1,295 entertainment centres and 139 other locations, arresting 166 males and 69 females, aged 16 to 79. Officers seized 77 computers, a computer server and other betting tools valued at HK$34 million. Some HK$74.5 million in betting records were seized and 196 people arrested during the previous World Cup. Of the HK$361 million in betting records seized during the latest tournament, 40 per cent, or HK$143.8 million, was seized in two cross-border operations carried out jointly with officers in Guangdong.
Hong Kong airlines are to operate 14 weekly flights to Shanghai's domestic Hongqiao Airport - slashing passenger transit time to the city centre - in a move that will help them compete with Taiwanese carriers. The announcement comes just a month after Taiwan launched direct flights between Taipei's domestic Sonshan Airport and Hongqiao. It has become a popular service as it reduces transit time to Puxi in Shanghai by about an hour compared with flights to the city's Pudong International Airport.
Hong Kong's travel industry is reeling after a wild rant by a shopping-mad tour guide went viral on the internet and hit television screens across the mainland. More than a dozen television stations picked up a video posted online and have played it constantly during the past two days. Among them are Guangdong Television, Guizhou Television and Liaoning Television, which serve mass-market areas that Hong Kong looks to as sources of visitors. The seven-minute clip of the female guide, nicknamed Ah Zhen, berating a group of mainland visitors as cheapskates and threatening to lock them out of their hotel rooms because they did not spend much at a jewelry store, provides a shocking view of what Hong Kong can offer visitors. It follows a series of complaints about visitors being strong-armed by tour guides to go shopping. Travel Industry Council chairman Michael Wu Siu-ieng said last night that investigators have an idea of the guide's identity and there will be a meeting today to look further into the incident. The video clip went on a mainland website at the end of March but was largely unnoticed until it went on YouTube this week. Ah Zhen is heard scolding the tourists in fluent mandarin after they board their bus. "Don't tell me you don't need to shop," she says. "So later are you going to say you don't need to eat? "I will lock you out of your hotel rooms as you don't have enough to stay there. "It's okay for you to stay poor at home, but when you travel outside don't be like this. In this world there is no such thing as a free lunch?" She goes on to talk about how the visitors found money for their airfares and then chides them: "We don't do this for charity. Let me be responsible for charity. I donated 10,500 yuan [HK$12,027] for Sichuan earthquke victims." She then points to shops offering top- quality goods, before adding: "Why did you bother to come to Hong Kong?" She laments that the group does not look good against another group of tourists, who spent HK$137,000. "For a group of 24 people you only just spent HK$13,000. How can you just walk out of the shop like that?" The man who shot the video said on a mainland online forum that he joined the Hong Kong tour on March 25 and the incident left him feeling bad. Recent incidents of tourists facing harassment include a case last month when an elderly mainland man died after a quarrel with a bogus tour guide during a shopping stop. Earlier this month, four people from Henan complained they were abandoned in Guangzhou after refusing to pay an extra HK$2,000 for not shopping in Hong Kong during a tour. Tourism-sector legislator Paul Tse Wai-chun said the guide's behavior was unacceptable and asked the Travel Industry Council to think about tough penalties. "It's not enough if only the travel agent is penalized. Sometimes they just give guidelines to tour guides and leave it to guides whether to follow them or not."
The Hong Kong government and local restaurants on Friday launched a variety of gourmet dishes inspired by geological concepts such as volcanicity and superposition, to promote the city's geological treasure. As a paradise for shopping and gourmet, Hong Kong should also stand out as a city of contrast and color, local authorities said. Visitors are offered with an enriching experience with the introduction of geopark gourmet dishes. About 40 guests sampled the dishes including "volcanic lava lao sha pau" which is actually local popular dessert "custard bun" and "golden hexagonal columns" which are actually deep-fried shrimp rolls. Edward Yau, Secretary for the Environment, noted that a major part of the geopark initiative is to connect geology and nature conservation with sustainable socio-economic development and management. "A geopark will not have a soul if local communities are not involved. Empowering them will increase their sense of ownership to conserve the resources while revitalizing the local economy," Yau said. "Hong Kong is famous for its city area, for its shopping, and also for things associated to the urban areas," said Jim Chi-yung, member of the Task Force of Hong Kong Geopark, "But tourists may not realize that we have an extremely beautiful countryside that is very sparsely populated and very natural, particularly the mountains, the hills, and the geological features, as well as the natural eco-systems." Since its opening in November 2009, Hong Kong's first National Geopark in Sai Kung attracted more than 500,000 visitors till the end of March this year. With diversified rocks such as sedimentary and volcanic rocks, the park offers visitors a refreshing experience in addition to Hong Kong's well-know metropolitan life. The park, covering a total of 5,000 hectares and including eight major scenic areas, has also aimed at being upgraded as one of the world-level geoparks.
China*: An oil leak from a foreign-flagged tanker triggered a massive explosion of an oil pipeline off Dalian harbour, Liaoning province last night. The blast happened at about 6.50pm and a fire was still raging at midnight, Xinhua reported. CCTV said the explosion took place when a 300,000-tonne oil tanker was unloading oil. No casualties were reported but there were no further details about the severity of the leak. The CCTV report said the explosion was close to a cluster of storage tanks. Two thousand firemen were at the scene. Dalian is one of the most important ports in northern China. Separately, a leak from a zinc and lead mine is threatening to contaminate Qiandao Lake, a famous resort near Shanghai and a major source of drinking water. The accident happened at noon on Thursday when pipes under a waste-water treatment pool, owned by the Hangzhou Qiandao Lake Mine Products Company, cracked after becoming blocked due to heavy rain. Part of the pool collapsed, causing 6,000 cubic metres of mine tailings to flow into a nearby creek that leads into the lake, China News Service reported. The leak not only affected local residents' supply of drinking water but also posed a serious threat to the lake, it said. Xinhua said the pollutants had not yet reached the lake.
Provincial officials in defence of Cantonese - Guangdong to boost local cultural heritage. Debate over the future of Cantonese in Guangdong and the perceived threat from Putonghua has intensified, with officials and influential figures saying that the local culture and dialect should be respected. Guangzhou residents are taking the initiative to protect their mother tongue, with a call for people to gather next Sunday and recite Cantonese - a subtle form of protest - winning widespread support. Against this background, top provincial leaders started a two-day meeting yesterday to discuss "cultural development in Guangdong", a propaganda department official said. It's a development that underlines the significance of regional tensions on the mainland and anger at edicts from Beijing seen to undermine local culture. The official said the government would release a policy outline and new regulations afterwards to boost "Cantonese cultural heritage". The authorities also plan to hold a public forum, the official said, describing it as "one of the hottest topics that have grabbed our leaders' attention". The forum, also scheduled to take place next Sunday, will be organised jointly by the general office of the Guangdong government, the provincial Development and Reform Commission and the propaganda department. Scholars, teachers, students and businesspeople will all be invited to attend. "Of course we will discuss how to protect Cantonese at the forum. This is such a hot topic recently," the official said, and noted that even provincial party secretary Wang Yang had spoken out on the issue earlier this month. Wang was said to have pledged that "we won't let Cantonese culture die in our generation". The spark that set off the debate was a controversial proposal by Guangzhou's political advisory body this month that the provincial capital's main television channel switch programming from Cantonese to Putonghua to make the city a friendlier place for visitors from other provinces during the Asian Games in November. The idea touched a raw nerve with many residents, who already felt their culture and language was under threat from the central government's promotion of Putonghua and an influx of migrants from other provinces. Many people complain that Beijing's policy of mandating the use of Putonghua for all formal occasions as well as in schools has marginalised Cantonese - a major Chinese dialect with a long history. The advisory body proposed the switch even though more than 80 per cent of the 30,000 people who responded to its own survey said they were against the idea. It has sparked off heated debate throughout the province, with many Guangdong people calling for action to protect their mother tongue. They regard the proposal, together with other, similar policies, as an attempt to suppress local tradition and character. Guangdong people, although part of the Han Chinese family, are proud of their unique heritage and their long history of defiance of central authority. Many argue Cantonese is a more orthodox and traditional language than Putonghua - previously known as Mandarin - which is a mixture of the northern Chinese dialect, Manchurian and Mongolian. Prominent public figures have joined in the debate. Flu expert Dr Zhong Nanshan - the mainland's severe acute respiratory syndrome hero and a widely respected Guangdong native - said he strongly opposed the use of Putonghua to replace Cantonese. "Cantonese is not just a kind of dialect. It also carries the [essence] of southern Chinese culture and our identity as Cantonese people," he was quoted as saying by GZTV Evening News - the station's most popular programme - on Thursday. The move to "protect Cantonese" has quickly turned into a unifying force for Guangdong people amid the identity crisis they face. A call by some internet users for Guangzhou residents to gather to defend their mother tongue spread fast and has been echoed widely in internet forums. Those behind the call asked people to take part in several "cultural events" next Sunday. The first would be held near a subway station exit, with participants engaging in a mini-game to teach people Cantonese colloquial phrases and sayings. There would be a rally later to call for the preservation of Cantonese culture. As many as 20,000 people are said to have told the organisers they will attend. The organisers said they would seek approval for the rally from Guangzhou's Public Security Bureau. A bureau spokesman said it had not received any application yet.
Rich Chinese homebuyers head abroad - The mouthpiece of the mainland's Ministry of Commerce has resorted to giving tips to cashed-up mainland there. Its advice: invest in the downtrodden United States property market. The strong yuan and Beijing's tough measures to cool property prices has sent a growing number of affluent mainlanders to look for bargains overseas. The International Business Daily, which is owned by the Ministry of Commerce, published a two-page report on whether it is the right time to buy US property, and offered tips on which cities to explore. "Five years ago, Chinese Americans came to China to buy homes; but now the situation has been reversed," the newspaper said. The US National Association of Realtors said China was the fourth-biggest source of foreign homebuyers in the United States, followed by Canada, Mexico and Britain, in the year ending March 31. Property agents expect more rich mainlanders will join the buying wave as a way to diversify their investments and take advantage of falling property prices in the US and other countries such as Britain. Kent Fong Chi-kit, co-head of investment at property agency Cushman & Wakefield, said most bought properties for immigration purposes and for long-term investment. "Our office in the US has brought along developers and investors from the mainland to woo buyers amid slackening demand at home. There are tens of thousands of foreclosed properties for sale," he said. Most of those properties were surrendered to banks because owners failed to pay monthly mortgage instalments after the US economy became mired in the global financial crisis in late 2008, he said. California - where median prices have plunged 44 per cent from the peak in early 2007 - is one of the most popular states among mainland buyers, said Fong. "Mainlanders certainly will make use of this opportunity to secure some great deals," he said. Andy Tan, associate director for residential sales at Savills' Shanghai office, said the US property market was well established on mainland investors' radar. "They are going abroad largely owing to the [mainland government's] tightening policy that is curbing price growth at home, and the strength of the yuan," he said. As the US requires buyers to pay a capital gains tax of 23 per cent when they resell, he said more mainland buyers were also opting for properties in London where no capital gain tax is charged. Buyers found prices in London attractive because the value of the British pound had dropped 20 per cent this year, he said. A buyer from Beijing recently bought a property through his firm comprising a 5,000 square foot country house and a cottage in Surrey for £4.5 million.(HK$53 million).
The 16 state enterprises allowed by Beijing to continue their real-estate operations have spent a total of 29.5 billion yuan (HK$33.85 billion) on land since March, the 21st Century Business Herald reported. In a bid to rein in land prices, Beijing in March ordered 78 state enterprises to stop their property dealings. The 16 enterprises still in real estate have shown no signs of easing up on their land purchases, the report said.China State Construction Engineering Corporation, parent of China Rail Cons (1186), was the biggest spender, doling out nearly 10 billion yuan. The builder and materials trader won auctions for 10 plots worth 13.2 billion yuan in the first half - equivalent to spending 73 million yuan each day. Overseas Chinese Town (Asia) bought two sites in March and July for a total 8 billion yuan. China Poly Group Corporation spent around 5 billion yuan on land in the past three months. On the downside, the 78 enterprises told to exit the real-estate sector are doing so slowly, the report said. China Minmetals Corporation put its property arm on the market on June 12. It was only the 10th firm to do so at the time. Intertwined relationships among state firms is making securing independent buyers difficult. Also, the outlook for the mainland property market remains bleak. ING's latest findings show that 77 percent of Hong Kong investors agree there is an asset bubble in the mainland. Senior investment manager Michael Chiu expects Beijing to impose more property curbs, thereby worsening investment sentiment. "There will be a 10-to-15-percent drop in Chinese house prices from the peak on easing volume in the third quarter," said Chiu.
July 16 - 18, 2010
Hong Kong*: Lawmakers yesterday blocked five proposed amendments to the minimum wage bill tabled by fellow members, after the Legislative Council passed the second reading of the main bill with an overwhelming majority. They also decided that the new law would not cover foreign domestic workers, who are currently subject to a separate statutory minimum wage, and that employees' travelling time would be counted as working hours if they commuted to workplaces where they did not usually go. The second reading was passed by 53 votes to one. The only lawmaker opposing it was independent Paul Tse Wai-chun, who represents the tourism sector. After 20 hours of debate, which started on Wednesday, legislators have decided on nine amendments and still have 26 to go. Secretary for Labour and Welfare Matthew Cheung Kin-chung said: "The legislation of a minimum wage bill ... signifies a new thinking for the administration over its governing. "It is a big breakthrough in the improvement of labour rights and a landmark in the protection of grass-roots workers." Despite voting for the bill, some lawmakers with commercial backgrounds voiced concern over the negative impact on businesses.
The 16-metre-long Nine Dragon Wall has been a Wan Chai landmark since 1983. Government arts and heritage officials have been asked to help find a new home for a 16-metre-long, glazed-tile wall in Wan Chai - modelled on the Nine Dragons Wall near to Beijing's Forbidden City - which is being relocated because of redevelopment. China Resources (SEHK: 0291) Property offered the wall - built for HK$2 million in 1983 - to the government as a gift, but officials said it could not be stored. The wall, which stands on the ground floor of the China Resources Building, on Harbour Road, will have to be removed from the site in September to make way for rebuilding and refurbishment of the public park that stands in front of it. It was created in a Beijing workshop, then shipped to Hong Kong when the company set up its base here 27 years ago, Daniel Kwan Pok-man, the company's deputy general manager, said. "The company wanted a strong presence in Hong Kong as a reminder of its roots. The wall has become well known among Hong Kong people. Many people have come to have their photographs taken alongside it," Kwan said. The wall, which is four metres high, features glazed tiles depicting nine different colored dragons flying in heaven. One end of the wall shows a scene at sunrise and the other end shows night time with moonlight shining over the sea. The wall was modelled on the design and proportions of the original Nine Dragons Wall in Beihai Park, to the northwest of the Forbidden City, and created during the Qing Dynasty. It was assembled with 4,700 glazed tiles made in a burning process under 1,300 degrees Celsius.
The Housing Authority yesterday announced it planned to raise public housing rent by 4.68 per cent, the first such increase since 1997, but in a move to ease the burden on tenants, suggested waiving one month's rent - which would nearly offset the rise. The increase, which could take effect as early as September, means the city's 680,000 public housing tenants will have to pay HK$11 to HK$157 more a month. The average rent rise is HK$62. The decision follows a Census and Statistics Department survey which found that the average income of public housing tenants last year was HK$13,852, a 4.68 per cent rise when compared to HK$13,233 in 2007. The calculation did not include the rich and those living on social welfare. Anthony Cheung Bing-leung, chairman of the authority's subsidised housing committee, said the increase had to be imposed as it was stipulated by the Housing Ordinance.
Organic watermelon growing trials bear fruit - The AFCD will hold a fair at Tuen Mun Farmers' Market tomorrow to introduce the two organic watermelons. Two organic watermelons have gone on sale after being grown successfully in trials. The "Super Sweet Black Angel 168" from Australia and the "Red Lady" from Taiwan were introduced to farmers along with other organic crops after being tested by the Agriculture, Fisheries and Conservation Department. The Black Angel - characterised by its crimson flesh - and the sweet, seedless Red Lady do not come cheap. They sell for about HK$100 each, a 50 per cent premium on other types. Farmers said demand had been strong with one reporting that supermarkets asked him for more. The Red Lady has a brix rating - a measure of the amount of sugar in fruits and vegetables - of 13 while the Australian variety has 11.3. One brix is equivalent to one gram of sucrose in 100 grams of solution. "The success of the large-scale watermelon growing trial by some 40 farmers encourages other local farmers to upgrade their facilities to be organically certified," department agricultural officer Chan Siu-lun said. The department has been observing overseas experience and collecting seeds from overseas agents to grow organic crops at its Tai Lung experimental station. It then promotes suitable species to farmers and provides them technical support. Ng Ping-leung, 46, a pig farmer turned organic farmer, said the government had provided sufficient resources and technical support for him to grow organic products. Ng has grown more than 300 watermelons this year and is optimistic about sales as the watermelons he supplied to supermarkets and restaurants sell out quickly. "They came back to me and asked for more," he said.
Agricultural Bank of China's A shares rose a scant 0.75 per cent in Shanghai yesterday in a lacklustre debut that could overshadow its H-share performance when trading starts in Hong Kong today. The stock closed at 2.70 yuan (HK$3.09), 0.02 yuan higher than the initial public offering price of 2.68 yuan. The first-day gain was lower than expected as analysts predicted the A shares could gain more than 5 per cent on debut. The closing price represented a 3.3 per cent discount to ABC's H shares, which were sold at HK$3.20 each. ABC's first-day gain on the Shanghai Stock Exchange was the smallest among the mainland's Big Four lenders. However, its president, Zhang Yun, said management was satisfied with the price "because it reflected investors' confidence in the bank's long-term outlook". ABC raised US$19.2 billion in its Hong Kong-Shanghai dual listing. It could surpass Industrial and Commercial Bank of China (SEHK: 1398) as the world's largest IPO if the 15 per cent over-allotment is exercised, raising a combined US$22.1 billion. The bank said yesterday that the retail tranche of 1.27 billion H shares was 5.87 times oversubscribed. ABC chairman Xiang Junbo said the listing of the worst-performing lender among the Big Four was a significant achievement by Beijing in its efforts to reform the banking sector.
Former Liberal Party chairman James Tien Pei-chun has expressed interest in running for a Legco seat representing the district councils if it is opened to non-district councillors. Tien, who lost his Legco seat in New Territories East in the 2008 election, said he would not rule out seeking such a comeback under the newly passed constitutional reform package, which will create five new district council seats in Legco. "This is very attractive, especially for business sector people who have the resources to run a territory-wide campaign," Tien said. "If the election expenses ceiling is HK$10 million, it means the candidate can run newspaper adverts many times." Independent Regina Ip Lau Suk-yee is also considering running for a district council seat on The Peak.
China*: A strike by about 180 workers at a Foshan factory that supplies parts for Honda cars entered its fourth day yesterday in the latest stoppage by workers demanding a bigger piece of the country's growing economic wealth. The strike, at Atsumitec Auto Parts in the city's Nanhai district, began on Monday afternoon, after management announced changes to workers' shifts that would cut their overtime hours and increase their workload, according to a 30-year-old worker who said he was one of the strike organisers. Since May, both Honda, Japan's second-largest carmaker, and Toyota, its largest, have been hit by a slew of strikes over pay mainly at their parts suppliers in China. The auto giants subsequently raised pay levels. Local mainland media have been banned from covering any strikes as the authorities fear more workers may follow suit. The recent wave of labour disputes has highlighted a broader demand for wage increases among mainland workers. In Foshan, the strike organiser, who refused to be identified for fear of retribution, said the changes in their work hours would cut their overtime pay, on which they rely heavily, as the basic salary is 1,070 yuan (HK$1,226) per month. Attempts to negotiate with the management on Monday failed, triggering the strike just before 4pm. Workers have demanded an extra 500 yuan on top of their basic monthly salary. Eight workers had been chosen to represent 205 staff members in the factory in negotiations with the management. Among those participating in the strike were front-line workers and division heads, the organiser said.
They make up three-quarters of Shenzhen's workforce - and unlike their parents, many would like to settle down there. Yet like their forebears, they are forced to work long hours to earn the means to support families back home in their villages. And they are not the delicate flowers, unable to work under pressure, that some employers and sociologists have painted them as; rather, they are suffering the effects of excessive overtime, poor factory conditions and a lack of companionship outside the workplace. So say many of the twenty-somethings among 5,000-plus workers questioned for a myth-busting survey about the lives and labours of Shenzhen's migrant workforce. The survey was prompted after 13 suicide attempts by young Foxconn workers in the first five months of the year, which raised questions about working conditions at its factories. The younger generation of migrant workers, contrary to popular belief, were found to be just as hard-working and no more selfish than their elders in the survey. Ninety per cent of the twenty-somethings polled said they worked long hours. And more than half said they were forced to work far longer than the legal limits allowed because they were on very low basic salaries. The average salary for a young migrant worker in Shenzhen is 1,800 yuan (HK$2,050) a month - including overtime. That's about 47 per cent of the average income in the city last year. About four-fifths of that income is spent on basic daily expenses such as food, accommodation and transport, the workers said. And, like previous generations, they are working hard to subsidise their families in rural areas: 90 per cent of those polled said they sent money home every year - an average of 4,200 yuan each, or a fifth of their average annual income. The study documented the impact on the lives of young migrant workers of their extra hours, poor working conditions, low incomes and limited social contact and their lack of access to social welfare. "Overtime has become an extensive phenomenon among the younger generation of workers ... That's because many manufacturers only pay them the statutory minimum wage and workers are forced to work overtime to have more income," the survey said. "Even with overtime pay, most young workers can only manage to live a life of struggle." More than 40 per cent of young workers did not have regular social contact outside the workplace and were unable to express their frustrations, the survey found. And more than half of them lived in cramped, basic dormitories provided by their employers, with more than six people sharing a tiny room. Of those with children, 70 per cent were forced to live apart from their offspring. Young workers' low salaries also hindered their efforts to settle down in cities and many could only manage to visit their rural families once a year. Seventy per cent of the young workers interviewed said they spent 2,500 yuan on the annual journey. Like their parents, young migrant workers are unable to enjoy social welfare because of the mainland's hukou residential permit system. More than three-quarters of those polled want the same treatment as city dwellers, and they want the hukou system scrapped altogether. Last month, Peking University sociologist Lu Huilin urged the authorities to change the country's current development model, saying it sacrificed the dignity of millions of workers. "[The mainland] used a lot of cheap labour to pursue economic growth while ignoring workers' basic human rights and social equity," he said. "Young migrant workers resist the [sweatshop] system by instinct ... If you don't change it, problems will emerge in an endless stream." Unlike their parents' generation, the survey also found young migrant workers desired more personal growth and development and were more willing to settle down. It said young workers valued career prospects and on-the-job training much more than their parents' generation, and many expected to start their own businesses using the skills gained from their jobs in Shenzhen. The poll was conducted by Shenzhen's labour union federation and Shenzhen University.
July 15, 2010
Hong Kong*: DBS Hong Kong will repay HK$651 million to 2,160 customers who bought its high-risk derivative products, becoming the first lender to refund both the original investment as well as interest in the scandal that started with Lehman Brothers minibonds. However, not everyone will get refunds on the Constellation Notes, complex and risky credit derivative products. The bank is refunding money only to the 60 per cent of its investors it had assessed as being able to accept only a low or medium level of risk. The remaining 1,240 customers will not get a refund because the test showed they were aggressive investors who wanted high-growth products, according to a settlement agreement the lender made with the Securities and Futures Commission and the Hong Kong Monetary Authority. SFC chief executive Martin Wheatley said the DBS agreement "will serve as useful guidance for other banks and intermediaries who also sold this product in the resolution of complaints from lower-risk customers". Thirteen other banks and four brokers sold Constellation Notes for DBS. DBS, as well as many other banks, usually classify customers into different groups by asking them to fill in questionnaires to gauge the risk levels they can shoulder. DBS divided investors into five grades, from the most conservative to the most aggressive. But regardless of the grading, all of them were sold the Constellation Notes. The notes, like the minibonds issued or guaranteed by Lehman Brothers, are not corporate bonds but complicated investment products linked to the credit of Lehman Brothers. They became worthless when Lehman Brothers filed for bankruptcy in September 2008. More than 20,000 customers complained that staff at banks or brokers had misled them into buying the products. This led regulators to investigate and eventually resulted in different forms of settlement. DBS has the highest repayment ratio among all lenders. A year ago, 16 banks which sold Lehman minibonds agreed to repay 60 per cent of the initial investment to investors below the age 65, and 70 per cent to those above that age. Almost 25,000 of their customers have accepted a total of HK$5.2 billion in settlement. Three brokers - Sun Hung Kai, KGI Asia and Grand Cathay Securities - repaid 100 per cent of the initial investment to minibond holders, but they did not pay any interest. Democratic Party legislator Kam Nai-wai said the DBS settlement was fair and should be a benchmark for other settlements. DBS said it resolved the investors' claims without admitting liability. Settling was "in the interests of our relationships with our customers and in the broader interests of the Hong Kong financial system", it said.
Police raided the offices of Henderson Land (SEHK: 0012) and a related law firm yesterday in a sharp escalation of the government's investigation into flat sales at the developer's 39 Conduit Road tower. Officers from the force's commercial crime bureau seized documents concerning 20 uncompleted sales at the luxury block in Mid-Levels that led to suspicions of market manipulation, and invited representatives of the developer to assist with the investigation. But police said no one was arrested. Police Commissioner Tang King-shing said companies and people related to the aborted sales could also be targets of the investigation. "This is a very complicated case and many people are involved. The investigation does not only cover the companies involved but also those possibly related. We will conduct the investigation with a multi-dimensional approach," he said. Henderson said it welcomed the investigation. "We will do our best to offer assistance so that the truth will be revealed," a spokeswoman said. The raids came a day after Chief Executive Donald Tsang Yam-kuen promised legislators he would make use of the opportunity arising from the controversy to address the problem of unfairness and lack of transparency in property transactions. Legislators, lawyers, public commentators and the Lands Department have questioned the collapse of the 20 sales - including a duplex which went on sale for a record-breaking HK$88,000 per square foot - that were among 24 deals publicised by the developer and which were credited with boosting the luxury property market. They have also asked why the buyers forfeited only 5 per cent of the purchase price and were not asked to compensate Henderson for any losses on resale. The Lands Department, under public pressure, has requested information from Henderson about the sales since March, including why it refunded deposits of more than HK$175 million to buyers in the aborted deals. The fact that the buyers were all shell companies registered in the British Virgin Islands and represented by a single law firm, Lo & Lo Solicitors, has also intensified speculation the transactions may have been "created" to boost prices of flats in the block and of the company's shares. Henderson has released repeated public statements maintaining that the practice of using shell companies is common within the industry, but it could not stop investigations by the police and the Securities and Futures Commission.
Champion jockey Douglas Whyte claimed the title for a 10th straight season in the most unlikely of places at Happy Valley last night - sitting out the action as Brett Prebble's last chance to dethrone him ticked past. In racing terms, the 2009-10 title was a race in which Whyte missed the jump, worked his way through the field, then took a severe check or two at the top of the straight, but finally arrived as the winner on an anti-climactic winless night. With three races to run, the equation was still doable for Prebble, if he could take the last three events in which he had strong chances - he finished with two seconds and a win, but Jumbo Gold's second to Soaring River was the end of the chase and Whyte didn't even ride in the race. "It's an unusual feeling - I don't think I've ever won a championship from the room like that as a spectator and I don't think it will ever happen again - you know me, I would always prefer to be out there in the action," Whyte said.
Democrats are weakening HK, tycoon says - Outspoken property magnate Ronnie Chan says protesters espousing Western-style democracy are driving local politics to a dead end. It's a Thursday afternoon at a five-star hotel in Nanjing and Hong Kong tycoon Ronnie Chan Chichung, in his capacity as executive committee chairman of the Better Hong Kong Foundation, is chairing a discussion with mainland vice-mayors on their cities' competitiveness. Vice-mayors - who evidently climb the career ladder by relying on various skills other than public speechmaking - take turns to speak, displaying a range of flat tones, accented Putonghua and emotionless facial expressions. Chan, who is chairman of Hung Lung Properties, nevertheless listens patiently, smiles encouragingly, and takes occasional notes. When he speaks, his Putonghua carries little evidence of his Hong Kong origins. He makes various supportive comments: "Guangzhou has improved significantly over the past years. Its public hygiene has improved a lot"... and ... "I am impressed by the progress Nantong has made in recent years." The agreeable Ronnie Chan on show in Nanjing is very different to the tycoon so well known here for his critical observations on Hong Kong, the property market, and democracy; and for occasionally crossing swords with Western journalists. Hours after the vice-mayors' forum, the tycoon is back to form in an interview with the South China Morning Post (SEHK: 0583). Chan says Hong Kong politics are heading for a dead end, propelled by protesters who espouse Western-style democracy and the judiciary. The democrats, he says, have switched from opposing Beijing to opposing the Hong Kong government because they "bully the weak and are afraid of the strong". He says the judiciary "wrongly think they are so almighty that they can rule on everything", and he welcomes the early retirement of Chief Justice Andrew Li. He is unapologetic for holding and expressing strong views. "I haven't been buying land for 10 years in Hong Kong. I have no conflict of interest on the subjects I comment on. Still, I'm a Hong Kong person. I want Hong Kong to be good," he says. Hung Lung has recently been active developing commercial properties on the mainland, its latest development a shopping mall in Shenyang. Hang Lung's flagship commercial building in Shanghai, the high-end Plaza 66 shopping mall, is a household name on the mainland. Setting aside the recent warming relationships developing between the Democratic Party and Beijing, Chan said the democrats by and large were "self-interested, quick to use people's complaints to attack the government, making the government weak". "They used to oppose the central government for the sake of opposing. Now they are opposing the Hong Kong government, because they bully the weak and are afraid of the powerful," he said. He said the democrats were turning Hong Kong into an irrational society. "Popularism will lead to socialism," he said. "Hong Kong will be over if we go for socialism. The democrats only promote the upside of universal suffrage, they don't discuss the downside. All the countries with the highest debts are Western countries whose governments are elected by the people. Western democracy is a dead end." He agreed Hong Kong did not offer young people the same opportunities that it did decades ago but thinks the right way forward is to seek opportunities on the mainland. "China's development is a rare opportunity which only happens once every few hundred years," he said. The last time the world had such a chance was in the United States between 1890 and 1914, he says. "In 1890, the US had only 36 million people, in the 1960s, it had 63 million. The significant rise of population was because many people moved from Europe. There were people who refused to move to the US. They stayed in the UK and France. Of course there were risks in moving to the US but history proves that those people made the right decision." Referring to a common complaint of twenty-somethings in Hong Kong, he says: "The so-called `Post 80s'. Who are they? They complain that Hong Kong has no opportunities and they are poor. This way of talking is wrong. All they have to do is go to the mainland and learn Putonghua. I don't know what they are doing in Hong Kong protesting against the high speed railway in the name of protecting a village. My son works in Shanghai. We are the best-positioned people to cash in on the mainland's development." Chan is particularly scathing of the judiciary, saying he hopes that High Court chief judge Geoffrey Ma Tao-li, who will succeed Andrew Li Kwok-nang as Chief Justice of the Court of Final Appeal when he retires at the end of August, will lead the court to back to the "right track". "In Hong Kong our legal system wrongly thinks it is so almighty that it can rule on everything," he said. "It rules on social issues and moral issues, such as gay marriage. It is wrong to do so. Unlike Supreme Court judges in the US, our judges are non-partisan. We are using the British legal system, the new chief justice should follow the practice of his counterparts in the UK, only ruling on legal issues." Chan says the 1999 right of abode case - in which a Court of Final Appeal decision granted residency to mainland children with at least one Hong Kong parent, only for the ruling to be overturned when the National People's Congress reinterpreted the Basic Law - was a "classic example". "Andrew Li should be retiring early. Courts in other countries would not rule this way. [Ma] should not repeat what had happened in Hong Kong over the past 10 years. Cases similar to the right of abode one should not be repeated." Chan has disagreements with Hong Kong's land policy, which he says has propped up property prices by suspending land auctions until recently. He adds that Hong Kong does not need subsidised housing. "The government can do a lot through administrative measures," he says. "One way of ensuring developers build for the lower income group is to order them to construct small units and ban car parks and club houses from those projects." But he defends the government against accusations that it has colluded with big business and widened the wealth gap. "It is ridiculous to say the government favours the business sector. It doesn't," he said. "And what is wrong with creating a favorable business environment? People doing business create employment and pay tax." He says instead that a major cause of the wealth gap is a lowering in the quality of Hong Kong people themselves. "Some people have no chance of getting married in Hong Kong so they go to the mainland. As a result, we have many people [in Hong Kong] whose education level is low. Because they have received little education, they can't find a job in Hong Kong."
About 60 Hainan businesses ranging from agricultural, pharmaceutical and hi-tech firms to those in tourism, water treatment and property development are seeking listings on the mainland or in Hong Kong, a provincial official said. Wang Niansheng, an officer with the provincial government's finance department, said it was trying to help the companies comply with listing standards at the mainland and Hong Kong exchanges. Funds raised in the proposed listings will be used to finance projects in Hainan, he said. There are now 22 Hainan-based listed companies. Of those, two are listed on the Hong Kong stock exchange while the rest trade on the mainland bourses, he said. The two companies listed in Hong Kong are Melian Airport and China BlueChemical, which is the country's second-biggest maker of nitrogenous fertilisers. In the past six months, Hainan Strait Shipping and Hainan Honz Pharmaceutical both listed on the Shenzhen stock exchange, he said. Over the next five years, Wang said he expected Hainan to need total investments of more than one trillion yuan (HK$1.15 trillion) to develop the island into an international tourism destination by 2020. Projects in the pipeline include the proposed Rail Express, which would shorten the travelling time from Haikou in the north to Sanya on the island's southern tip to 90 minutes from present three hours. Other developments include the Dongfang power plant phase one, a theme park and a convention and exhibition centre. Lawrence Fok, chief marketing officer of Hong Kong Exchanges and Clearing (SEHK: 0388), said companies from Russia, Mongolia and France had listed in Hong Kong. Last year, companies raised a total of HK$240 billion through initial public offerings in Hong Kong, and a total of HK$390 billion was raised by already listed firms, he said. Since 1993, Fok said mainland companies had raised about HK$250 billion through initial public offerings. "Hainan companies can also make use of this platform to strengthen their size and expansion," he said. But he said companies face the challenge of getting the right investment bankers to facilitate their listing plans. "I once heard from a mainland firm that complained it could not secure any investment bankers as its listing sponsor. But I told the firm it could be because its new shares were not likely to get good prices at that moment," Fok said.
China*: The top environmental watchdog has urged all listed companies to release key pollution information each year and vowed to step up oversight of industrial polluters after another heavy metal poisoning scandal. After the nation's largest gold producer, Zijin Mining, allowed toxic chemicals to spill into a major waterway in Fujian , the Ministry of Environmental Protection lashed out at local watchdogs for failing to hold big businesses responsible for environmental problems. "Some local environmental protection agencies have failed to carry out thorough investigation of listed companies," it said in a directive posted on its website on Tuesday. "And in some extreme cases, provincial watchdogs have acted beyond their authority to issue environmental endorsement for companies preparing for listing." It did not identify the provinces or companies involved. According to a regulation jointly issued by the ministry and China Securities Regulatory Commission, enterprises in heavily polluting industries must seek environmental approval before listing and are subject to regular scrutiny afterwards. The ministry said it would establish an environmental review and reporting mechanism for listed companies and would soon publish a list of companies that had met environmental standards since 2005. Analysts welcomed the move, aimed at increasing the transparency of listed enterprises, saying it would raise environmental awareness among polluting companies and encourage the public to help the government supervise big business.
Agricultural Bank of China's A shares could rise more than 5 per cent on their trading debut in Shanghai today. Its performance would probably set the tone for ABC's H shares in Hong Kong - which start trading tomorrow - and the overall mainland market, analysts said. If the over-allotment options were exercised, the only unlisted bank among the mainland's Big Four lenders would set an initial public offering record by netting US$22.1 billion in the Hong Kong-Shanghai dual listing. In Shanghai, its offering price of 2.68 yuan (HK$3.01) translates into 1.7 times its forecast book value for 2010, according to Haitong Securities analyst She Minhua. A shares of Industrial and Commercial Bank of China (SEHK: 1398), the country's biggest lender, currently trade at two times book value while China Construction Bank (SEHK: 0939) has a book value multiple of 1.8. "Investors take it for granted that ABC should be as expensive as its rivals," She said. "It is likely that the shares will rise on the first trading day." The bank's IPO price was set lower than expected as Beijing tried to ensure a successful listing of the once debt-ridden lender. During its price consultation process in late June, the bank was reportedly looking to offer its 22.2 billion A shares at no less than 2.7 yuan a piece. It later set a price range at 2.52-2.68 yuan to attract buying. ABC offered its H shares at HK$3.20 each and it will make a Hong Kong debut tomorrow. The offering of ABC, which netted 68.3 billion yuan from the Shanghai exchange, would further soak up funds on the weak market, analysts said. There is speculation that institutions will be encouraged by the regulator to bolster ABC's shares since it is seen as a political imperative to launch a successful IPO of the giant lender. "If ABC's shares rise, other banks could also jump," Bohai Securities analyst Zhou Xi said. "The heavyweight banks' performance would therefore decide the movement of the overall market." ABC said it would use the IPO proceeds to replenish capital. The money could also be used to cover its potential bad loans, supporting loan growth and network expansion, analysts said. The bank had 325 billion yuan of "special mention" loans at the end of last year, almost equal to its 343 billion yuan of shareholder equity.
China and Argentina have agreed to invest about US$10 billion over several years to renovate the Latin American country's dilapidated railway system and build a subway in Cordoba, its second-largest city. Argentine President Cristina Fernandez is in Beijing to boost ties, promoting her land-rich nation as a natural partner for commodity-hungry China, and seeking to resolve a Chinese freeze on imports of Argentina soybean oil that has threatened a key hard-currency earner for Argentina. The bulk of the railway cash will be dispensed in three stages, with US$2.5 billion over the first four years going to repair two branch lines with more than 1,500 kilometres of track, the Argentine government said on an official website. Argentina's once-extensive rail network was largely dismantled during the privatisations of the 1990s. But as agricultural output soars, farmers and grain processors - who send more than 80 per cent of grains by costly road transport - have been calling for investment to revive far cheaper transport by railway.
China leads global IPOs - A woman outside Agricultural Bank of China Ltd's Shanghai branch. Agricultural Bank of China Ltd has raised $19.2 billion in the world's biggest IPO in four years. China will continue to lead the global initial public offering (IPO) market in terms of the funds raised and the number of deals, international accounting firm Ernst & Young said in a report on Tuesday. Mainland companies dominated the global IPO market by raising $188 billion in 495 deals on the top four bourses - New York Stock Exchange, Nasdaq Stock Market, London Stock Exchange and Hong Kong Stock Exchange - in the past decade, the report said. "China will maintain its lead in the IPO market as more mainland companies tap overseas capital pools even as they expand their business locally," said Terence Ho, strategic growth markets and China IPO leader at Ernst & Young. Hong Kong remains the main choice for mainland companies as a listing destination, while American bourses are the choice for small and high-growth information technology companies, Ho said. The domestic capital markets are also becoming more attractive with more Chinese companies looking to raise funds at home than abroad. Many red-chip companies, which have businesses in the mainland but are listed overseas, are also expected to return to the home market after Shanghai launches the international board. During the first half of this year, 175 mainland companies raised $32.1 billion from domestic and overseas floats, exceeding the $28 billion raised during the same period last year, the report said. The Shanghai Stock Exchange is growing fast with its market capitalization rising tenfold in the past decade to $2,196 billion as of May 2010. The latest report from Ernst & Young also found that BRIC (Brazil, Russia, India and China) countries accounted for nearly 68 percent of the total $248 billion of funds raised in the past decade from the top four bourses. Russia was ranked the second in the global IPO market with funds of $39.1 billion raised from 39 overseas IPOs in the past decade. "While a majority of the Russian companies chose to list on the London Stock Exchange, many are also considering floats in Hong Kong and also expressed interest in Shanghai's international board," Ho said. Global IPO activity in the second quarter has shown signs of a strong rebound driven primarily by the emerging markets, who will continue to lead the global capital market recovery, said Gregory Ericksen, Ernst & Young's global vice-chairman for strategic growth markets.
Minmetals on a rare earth trail - Rare earth being loaded onto a ship for export at Lianyungang port in Shandong province. Metals trader to invest 1b yuan in Jiangxi over next two years - BEIJING - China Minmetals Corp is planning to invest 1 billion yuan ($148 million) for rare earth processing projects in Ganzhou city of Jiangxi province over the next two years to gain mining rights for the valuable resources. "The nation's largest metals trader has been eyeing rare earth mines for some time now. The move is also in line with the local government's requirements for rare earth miners," said official sources. According to a document issued by the Ganzhou municipal government in 2008, a company that invests more than 1 billion yuan in the city over three to five years is eligibal for local mining rights. However, Minmetals' proposal still needs to be cleared formally by the local government, the sources said. He Jinglin, Minmetal's media manager, said he could not comment on the matter, as he was not aware of the same. "Minmetals does not own any rare earth mines and that has hampered it in its quest to boost resources in the south. At the same time the company also has ambitious plans to be present across the complete industry chain," said Liu Minda, an analyst with Huatai Securities. Ganzhou owns 88 of the country's 104 mining licenses for rare earth. It has verified reserves of 2.89 million tons of ion-absorbed type rare earth elements, accounting for 40 percent of the nation as a whole, said Lin Xiaobing, a spokesperson for the Ganzhou Committee of Industry and Information Technology of Jiangxi. China stopped issuing new mining licenses for rare earth elements, used in military weapons, electronics, and automobiles, until June 30, 2011. State-owned Minmetals made its first strides in the resource-rich region in October 2008 by teaming up with two Ganzhou companies to establish a joint venture - China Minmetals Rare Earth Co mainly for rare earth separation. However, Minmetals has not yet directly participated in the mining sector - the most critical part from a strategic perspective. Instead, it has only joined with Ganzhou Rare Earth Mineral Industry Co, a local government-backed entity that owns the sole mining rights in the city for rare earth exploration. "Minmetals' quest to own sole mining rights in Ganzhou has not been accomplished yet," the officials said. The company had earlier said it intends to spend at least 4.5 billion yuan over the next five years to explore minor metals including rare earth in Hunan province. Minmetal's moves are also in tune with the government's plan to keep rare earth mining within the ambit of SOEs. Last month, it had identified several large State-owned miners for rare earth exploration in a bid to consolidate reserves. China, which produces 95 percent of the world's rare earth metals, has reduced production levels for 2010 and cut export quotas by 72 percent for the second half to 7,976 metric tons to protect the minerals from being over-exploited.
The owner of the Taco Bell, Pizza Hut and KFC fast-food restaurant brands said Tuesday that its second-quarter profit fell slightly because a one-time gain a year ago outpaced its revenue growth. Yum Brands Inc gave an upbeat forecast, citing ballooning growth in China, and raised its full-year outlook. But its shares fell in aftermarket trading when investors saw revenue was flat at Yum restaurants in the US that have been open at least a year. There were "some whisper expectations" of higher sales at established restaurants in China, said Larry Miller, a restaurant analyst with RBC Capital Markets. The market's tepid reaction also might reflect disappointment in the company upgrading its full-year earnings projection by just 4 cents per share, from $2.39 to $2.43, he said. Still, Miller said it was basically an "all-around good quarter" for the company. Analysts were expecting $2.42 per share for the current fiscal year. Louisville-based Yum said it earned $286 million, or 59 cents per share, for the three months that ended June 12. That compares with $303 million, or 63 cents per share, a year earlier -- when it recorded a $68 million one-time gain for increasing and consolidating its stake in its KFC business in Shanghai in China. Excluding such one-time items from both quarters, the company earned 58 cents per share for this year's second quarter, compared with 50 cents per share a year earlier. Analysts expected the company to earn 54 cents per share in the most recent quarter on revenue of $2.54 billion. Yum said its revenue rose 4 percent to $2.57 billion. The company, whose brands also include Long John Silver's and A&W All-American Food, operates more than 37,000 restaurants around the world. The company's operating profit soared 33 percent in China, where it opened 59 new restaurants during the quarter, for a total of 155 so far this year. Sales there grew 15 percent while sales at restaurants open at least a year -- a key barometer for restaurant performance -- rose 4 percent. "The China business is firing on all cylinders," said Yum spokesman Jonathan Blum. Across Yum's US business, its operating profit rose 10 percent as commodity costs fell and revenue rose at Pizza Hut and Taco Bell, offset by a decline at KFC. Pizza Hut -- where revenue at restaurants open at least a year rose 8 percent -- benefited from a $10 pizza promotion. "It's certainly not as profitable as selling high-priced pizzas, but they're selling a lot of them," Miller said. Taco Bell posted a 1 percent boost in the key revenue figure, while it fell 7 percent at KFC. Net income in the international division, which doesn't include China, rose 7 percent, adjusted for currency fluctuations. And revenue at restaurants open at least a year edged up 1 percent. Yum Chairman and CEO David C. Novak predicted that Yum will open about 1,400 international units this year, consistent with the pace of restaurant openings in the past five years. Yum expects to open some 475 restaurants in China this year, plus about 1,000 more in its separate international division, Blum said. The shares fell $1.31, or 3.1 percent, to $40.40 in after-hours trading.
July 14, 2010
Hong Kong*: Just months after bitter street protests against the project, the controversial express rail link to Guangzhou is moving swiftly ahead in West Kowloon with HK$18 billion worth of contracts awarded. MTR projects director Chew Tai-chong said these represented 27 per cent of the HK$66.9 billion price tag for the 26-kilometre line, the world's most expensive railway per kilometre. The MTR Corp has been entrusted by the Hong Kong government to design, build and operate the city's section of the railway. It will eventually link with the mainland's 18,000-kilometre network of high-speed railways carrying trains that reach speeds of 350 km/h. "We are continuing to award projects," Chew said at the High Speed Rail Asia 2010 conference in Hong Kong yesterday. The expedient start to the project belies the controversy surrounding the link, which sparked some of the most bitter protests seen in Hong Kong in recent years. Protesters took to the streets and clashed with police in January as they voiced concerns about the high price tag and the environmental impact of the project. There was also criticism that the terminus for the line was in Shibi, Panyu - a 45-minute metro ride from the present city centre of Guangzhou in Tianhe.
Yung Kee restaurant founder Kam Shui-fai with sons Kinsen Kam (right) and Kam Kwan-lai (left). Court hears roasting of geese lays golden eggs - According to the Kam family, which runs the celebrated Yung Kee restaurant, no less than HK$880 million in cash, a whole commercial block in Central worth at least HK$1 billion, and HK$127 million in other net assets. Profits are pretty good too, despite a continuing legal battle among the Kam siblings: in 2008 and last year, the restaurant made more than HK$50 million a year. And as barrister Jat Sew-tong SC, acting for one of the brothers, reminded the Court of First Instance, that doesn't include goodwill and the cash value of the Michelin-starred Chinese restaurant's trademark. Jat was acting yesterday for eldest brother Kam Kwan-sing, widely known as Kinsen Kam, who is seeking to wind up holding company Yung Kee Holdings Ltd. The company wholly owns another company, Long Yau, which has four subsidiaries, one of which runs the restaurant. Jat was arguing against a move by younger brother Kam Kwan-lai and nephew Carrel Kam, who asked the court to strike out Kinsen Kam's winding-up petition. Clifford Smith SC, for the younger pair, said there was no reason to subject the successful and profitable business to a winding-up order. "It is a highly profitable business making a lot of money this year and a lot of profit accumulated due to the profitability of the companies," Smith said. He warned that the business success of the restaurant might not continue if it was taken over by a new third party after the company was wound up. Smith also said the recent row over the family business had shaken customers' confidence and sparked fears that their favourite eatery could close. He said the restaurant had recently received inquiries from customers worried about the validity of rice dumpling coupons it had sold. A customer who planned to book for 110 people for the Mid-Autumn Festival at a value of more than HK$80,000 had become worried and asked the restaurant about the situation. But Jat said winding up the holding company "does not per se affect the business or goodwill of the restaurant". "The application by another side to strike out is misconceived and must be dismissed because the company is a holding company," he told the judge. "Apart from holding a 100 per cent shareholding in Long Yau, it has no other substantial asset or operative business. "The petitioner [Kinsen Kam] does not seek to wind up Yung Kee Restaurant Group Limited, which is operating the Yung Kee Restaurant business." Jat also said Kinsen Kam had proposed selling his shares but his brother failed to respond to the offer. "Although [the younger brother] asserts that he is willing and able to purchase my client's 45 per cent shares in the company - `subject to finalisation of arrangements as to the basis of valuation and the mechanism through which the buy-out is to be effected' - there is no evidence to show that he in fact has and will continue to have the necessary financial means to purchase my client's shares at the value assessed by the court at trial," Jat said. Jat believed the goodwill of the restaurant could attract many hotels and business groups willing to offer far more than the younger brother was willing or prepared to pay. "It must be remembered that my client's shares are worth hundreds of millions, if not billions," Jat said. The recent family row had not affected the restaurant's business, he said, as sales in the first five months of the year were even better than for the same period in the past few years, and sales of rice dumpling coupons had also gone up. And there had been no adverse impact on staff morale, with no staff at the supervising level having left, he said. Judge Andrew Chung On-tak reserved his judgment.
The Hong Kong unit of the Bank of China has been authorised to provide yuan cash settlement services for Taiwanese lenders operating in the city. Bankers said the announcement by the People's Bank of China showed Hong Kong had a role to play in the closer ties between the mainland and Taiwan after the two sides signed a landmark trade pact - the Economic Co-operation Framework Agreement - last month. It would also benefit Hong Kong's development as an offshore trading centre for the yuan, as Beijing continues the internationalisation of the currency, they said. Taiwanese government officials said the advantage of the scheme is that local banks will be able to procure yuan notes more cheaply for their retail customers and reduce the number of fake notes in circulation. At present, the island's banks buy yuan through Bank of America and HSBC which results in only a limited supply of banknotes being available in Taiwan. "In the future, Bank of China (Hong Kong) will be able to supply us with new notes at a lower cost and the supply will be steady," George Chou, deputy governor at the Taiwan's central bank, told Bloomberg. There is no cap on the amount of exchange between banks, but Taiwanese individuals will be allowed to exchange only up to 20,000 yuan (HK$22,900) at a time. "The arrangement will facilitate travel across the Taiwan Strait and lay the foundations for a cross-strait currency settlement mechanism and enhanced cross-strait cooperation on currency administration," the People's Bank of China said. The issue of when banks in Taiwan will be allowed to start taking yuan deposits and provide remittance and trade settlement services in yuan remains to be negotiated, the central bank said. He Guangbei, vice-chairman and chief executive of BOCHK (SEHK: 2388), said his bank would comply with all regulatory requirements of the mainland and Hong Kong in preparing the new services, but had no clear timetable for the launch, only saying it would be ready as soon as possible. "We trust that the service of supplying and repatriation of yuan cash notes for the Taiwan region will further facilitate exchanges ... across the strait, and strengthen economic and commercial ties between the two places," He said. Financial Secretary John Tsang Chun-wah said the arrangement showed Hong Kong's established yuan clearing platform was able to facilitate cross-strait co-operation. "This also underscores that Hong Kong, as a leading international financial centre in the region, can play an important role in cross-strait financial co-operation and development," Tsang said. Monetary Authority chief executive Norman Chan Tak-lam said the mainland this month will further lift the restrictions on yuan transfer between Hong Kong bank (SEHK: 0005) accounts, allowing brokers to trade yuan shares and bonds for clients, and fund houses to issue yuan funds.
Companies to get free rein on yuan exchange - HK July 14 2010 - A new clearing agreement to be signed next week will allow Hong Kong financial firms to sell yuan-denominated insurance, securities and fund products in the city, sources say. The move will further enhance Hong Kong's role as an offshore yuan center. The deal will be signed by People's Bank of China vice governor Hu Xiaolian and Monetary Authority chief Norman Chan Tak-lam. Under the agreement, yuan deposits can be transferred freely among different bank accounts and firms can conduct yuan exchanges with no fixed cap. Companies will be free to open yuan- denominated accounts under the agreement, even if they do not conduct business across the border in yuan. But the daily exchange cap for individuals will remain at 20,000 yuan (HK$22,952). Coming on the heels of the announcement that Hong Kong will be the yuan clearing center for transactions between Taiwan and the mainland, economists feel the new plan is a "major breakthrough," as it will boost yuan-based business in the city. The agreement will allow more flexibility for the yuan to flow to global markets, thereby reducing reliance on the US dollar. ICBC (Asia) (0349) director Stanley Wong Yuen-fai said Hong Kong will now act as a yuan hub that is similar to Tokyo's yen clearing role. He believes total yuan savings in Hong Kong may increase as local branches of Taiwan banks have to open accounts and possibly maintain savings in the light of the yuan's appreciation potential. He noted that yuan-denominated insurance will likely be the first product to hit the market given that it is a long- term investment. Head of research at Redford Securities, Kenny Tang Sing-hing, feels yuan-denominated bonds and non- deliverable forward forex products will be among the first products to be sold. According to BOCHK, total cross- border yuan settlements in Hong Kong reached 7.5 billion yuan in June. The news came as Bank of China (Hong Kong) (2388) was appointed by PBOC to be a new provider of yuan banknotes and related services to local branches of eligible Taiwanese banks. Under the Taiwan-mainland trade agreement, Taiwanese can exchange 20,000 yuan worth of cash each time but there is no limit between BOCHK and Taiwanese bank branches.
HK's rich tend to be older than Asian peers - Hong Kong's affluent people are among the oldest in the region with many being members of the so-called DINK (double income, no kids) brigade, according to a HSBC survey.
Repulse Bay parcel could fetch HK$1b - Owners at the top end of market opting to cash in on surging prices for luxury homes. The five-storey house (centre) and five-storey residential block at 20 and 22 South Bay Road that have been put up for tender.
Macao's visitor arrivals in package tours surged by 132.9 percent year on year to 569,803 in May this year, according to the figures released on Tuesday by the city's Statistics and Census Bureau (DSEC). The figure showed that visitor arrivals in package tours in May from the Chinese mainland (422,204), Japan (22,645), Taiwan (21, 293) and Hong Kong (20,368) rose substantially by 168 percent, 85. 9 percent, 38.1 percent and 14.5 percent respectively, and those from the Republic of Korea (14,714) and India (11,375) also registered notable increases. Officials from the DSEC explained that visitor arrivals in package tours surged dramatically year on year as visitors in package tours for May last year was adversely affected by the A/ H1N1 influenza pandemic. In the first five months of 2010, visitor arrivals in package tours increased by 23.2 percent year on year to 2,575,916. Meanwhile, the number of local residents traveling outbound in package tours in May increased by 43.6 percent year on year to 19, 101. The Chinese mainland, Japan and Taiwan were the most popular tourist destinations, according to the Bureau.
China*: Beijing has accepted reality and lowered the mainland's minimum protein level for raw milk in what is seen as a move to discourage dairy farmers from adding the toxic industrial chemical melamine to their milk in order to pass protein tests. The new national safety standard for dairy products, in force since the start of last month, lowered the minimum protein level required for raw milk from 2.95 per cent to 2.8 per cent, a dairy official said in Beijing yesterday. The old standard had been in place since 1986 but most of the milk produced in some provinces failed to make the grade. The mainland's dairy industry was rocked by scandal two years ago when it was discovered that farmers had been adding melamine to raw milk to increase nitrogen levels and fool protein tests. At least six children died from kidney failure and 300,000 others suffered from kidney stones caused by the melamine. Beijing blamed greedy farmers and dealers and executed two dealers last year to discourage the practice. Wu Heping , secretary general of the Heilongjiang Dairy Industry Association, told a Ministry of Health press conference that the standard had been lowered to "respect the reality of the domestic dairy farm industry". He said that between 75 per cent and 90 per cent of raw milk in some provinces had failed to reach the old protein level standard in 2007 and 2008. "Raw milk produced by healthy cows whose protein level is lower than 2.95 grams per 100 grams does exist," Wu said. Most mainland dairy farms are small businesses with about three-quarters of farmers owning fewer than 100 cows. Almost a third own fewer than five. Wu said a survey of one large dairy firm's raw milk found that protein levels from farms with fewer than 100 cows averaged 2.84 per cent. "[A lowered standard] is more convenient to regulate the quality of raw milk," Wu said. "The protein level of raw milk mainly stays in the neighbourhood of 2.8 and 3.4." Chen Junshi , a researcher at the Chinese Centre for Disease Control and Prevention's Institute of Nutrition and Food Safety, said the lowered protein level requirement for raw milk would not affect the standards for liquid milk and milk powder bought by consumers. The mainland protein standard for pasteurised cow milk is 2.9 per cent. Industry insiders doubt that the central government's move will achieve its desired effect, because there is still a financial incentive for dairy farmers to add melamine to raw milk. Guangzhou dairy industry association president Wang Dingmian said it was putting the cart before the horse. "It is not a very wise incentive," Wang said. "There is still raw milk with a protein level below 2.8 per cent and the farmers still have every motivation to add melamine so that they will not have to throw away the milk." Wang also said that prices for raw milk varied in practice and better quality raw milk with higher protein levels fetched higher prices, giving farmers another incentive to add melamine. Wang said the best way to deal with the problem would be to upgrade the industry and give cows quality feed, which would raise protein levels in raw milk. Despite repeated pledges by the authorities to crack down on melamine-tainted milk, it is a problem that keeps resurfacing. In February, hundreds of tonnes of stored toxic milk powder was discovered. Some of it was sold to make dairy products such as milk candy. And just last week, 76 tonnes of contaminated milk powder was found in Gansu and Qinghai , 39 tonnes of which had been bought from Hebei . Chen Rui, an assistant director of the Ministry of Health's Food Safety and Health Inspection Bureau, admitted that the discovery of more tainted milk powder showed that the government needed to improve monitoring and enforcement.
Taiwanese President Ma Ying-jeou's popularity has rebounded with the signing of a landmark trade deal with the mainland, a survey shows. About 47 per cent of Taiwan's public supports Ma's performance and 68 per cent back his efforts to improve relations with the mainland, the autonomous but government-backed Research, Development and Evaluation Commission found in a survey this month. Surveys earlier in the year by a range of institutions had put his overall approval rating at between 20 and 30 per cent. The commission's survey results reflect approval for Ma's Economic Co-operation Framework Agreement (ECFA) with the mainland last month, the biggest ever tie-up between the two sides, said the ruling Kuomintang's spokesman Su Jun-pin. The commission is Taiwan's oldest and most reliable polling agency, but faces growing pressure to flatter whichever party is in power, said Raymond Wu, of the Taipei-based political risk consultancy e-telligence. Its findings still point to a thumbs-up for the ECFA, he said. "The sense of malaise and wait-and-see is no longer prevalent," Wu said. "People are approaching post-ECFA with a sense of cautious optimism." Ma's ratings had fallen as the financial crisis ate into the local economy shortly after he was elected in 2008 and as a series of domestic flaps weighed on his image early this year.
Workers drain away polluted water near the Zijin copper mine in Shanghang yesterday. Zijin Mining (SEHK: 2899)'s share price plunged 12 per cent yesterday on concerns the nation's largest gold producer faces hefty compensation claims and production delays after a toxic chemical spill into a major waterway. The Xiamen, Fujian province-based company said on Monday night that a leakage of pollutants from a pond on July 3 in its Zijinshan copper mine due to continuous heavy rain resulted in acidic copper-containing waste water entering the Ting river. Zijin said 9,100 cubic metres of waste water was estimated to have entered the river before the leak was brought under control on July 4. After emergency measures, water quality in the river returned to the government's category III standard - which meant it was suitable to be used as a tap water source - on July 8, and that water supply of Shanghang county and downstream regions was not affected, it added. Despite saying dead fish were found downstream causing "a certain economic loss", and that the incident would have a "substantial effect" on the mine's copper production, Zijin did not provide further details. Spokesman Zheng Yuqiang said he had no knowledge of any proposal for compensation to the fishing industry, adding that the cause of the incident was still under investigation. "If we are found to be responsible for the incident, we will bear responsibility," he said. When asked why Zijin only reported the incident nine days after it happened while its shares kept trading with the price-sensitive information kept from investors, Zheng said: "We did not want to cause chaos in society while the impact of the leakage was not clear." According to a speech by Shanghang deputy mayor Lan Fuyan on Monday and posted on the county government's website, the county government has offered to purchase all of the area's farmed fish at 12 yuan (HK$13.75) per kilogram. The compensation will be paid by the government and claimed back from responsible parties later. Assuming the amount of affected fish was equivalent to the preliminary estimate of 1.89 million kilograms as reported by Xinhua on Monday, the compensation could amount to 22.68 million yuan. Lan said the mine had been ordered to cease production to fix the leak caused by the damage to the waterproofing in the pond. A Credit Suisse research report estimated that for each month of production disruption at the mine, Zijin's copper output would be cut by 1.7 per cent and the company's net profit by 0.9 per cent. Zijinshan is estimated to account for 32 per cent of Zijin's copper output this year, and 53 per cent of gold output, according to a Merrill Lynch report. Zijin is forecast to post a net profit of 5.4 billion yuan this year, up 52 per cent from 3.55 billion yuan last year, based on the average estimate of 16 analysts polled by Thomson Reuters. Zijin's shares yesterday ended 12.2 per cent lower at HK$4.90.
Employees work inside a Foxconn factory in the township of Longhua in the southern Guangdong province. Foxconn International Holdings Ltd urged a Hong Kong judge to throw out a lawsuit filed by BYD Co, mainland's largest maker of rechargeable batteries, that accuses Foxconn of unlawful interference with its business, defamation and conspiracy to injure. BYD's claim should be struck because the company failed to provide any "material" facts or allegations to back its case, Winston Poon, Foxconn's lawyer, said at a hearing today in the Court of First Instance in Hong Kong. "Not only are the matters immaterial, they are also vexatious," Poon said. "They will waste the court's time and money." BYD, backed by billionaire Warren Buffett, countersued after a 2007 lawsuit filed by two Foxconn units that claimed BYD recruited Foxconn employees and stole Foxconn's trade secrets. BYD doubled its revenue from the sale of mobile phones in each of 2005, 2006 and 2007 as a result, according to court documents. BYD had failed to persuade a Hong Kong judge to throw out the Foxconn lawsuit and let the case be tried in Shenzhen, where BYD is based. Judge Thomas Au in Hong Kong ruled June 27, 2008, he wasn't convinced Shenzhen was a preferable venue. Liu Xiang Jun, former chief operating officer of one of the Foxconn units, joined BYD in 2005. He was convicted in Shenzhen of infringing Foxconn's business secrets, according to court documents. Si Shao Qing and Zhang Jian, who had worked for the same unit, were also convicted of infringing Foxconn's business secrets. Foxconn, the world's largest contract-manufacturer of mobile phones, faces competition from BYD for orders of mobile phone components from customers including Nokia Oyj.
The mainland, which has seen a string of food safety scares in recent years, is likely to experience similar problems in the future due to its vast size, a top official was quoted as saying. The comments by senior health ministry official Su Zhi came after authorities seized tonnes of milk powder tainted with melamine, the chemical responsible for the deaths of six babies in 2008, in at least three provinces. "With such a huge territory and population in China, it's hard to avoid all food safety threats and to put all unscrupulous businessmen under scrutiny," Su was quoted by the China Daily as saying at a food safety forum. Su pledged that the government would investigate every possible breach of food safety regulations and punish those responsible for wrongdoing that could endanger people's health. He refused to say whether the tainted products seized recently were left over from the 2008 scandal, which caused 300,000 babies to fall ill and rocked the country's dairy industry. Melamine is used to make plastics but has been widely added to dairy products to give the appearance of higher protein content. In 2008, the toxic chemical was found in the products of 22 dairy companies. The discovery led to worldwide recalls of dairy products. Melamine ingestion can cause kidney stones and urinary tract infections. A total of 21 people were convicted for their roles in the 2008 scandal and two were executed. The government has repeatedly said that all tainted products were seized and destroyed after the scandal and that there was no further public health threat, but reports of tainted items have continued to trickle out. Authorities recently seized 76 tonnes of contaminated milk powder, state media reported last week. Two officials from the dairy company at the center of the latest find were detained.
COSCO China acquires rights to Athens port - Despite financial turmoil surrounding Greece, COSCO Pacific, a port operator subsidiary of China's State-owned shipping giant China Ocean Shipping (Group) Co (COSCO), has signed a $4.2 billion deal to take over management of an Athens container port. COSCO signed a 35-year lease in June and will spend $707 million to upgrade port facilities, build a new pier and almost triple the volume of cargo the port can handle. The move is part of an effort to create a network of ports, logistics centers and railways to distribute Chinese products across Europe - in essence a modern Silk Road - hastening the speed of East West trade and creating a valuable economic foothold on the continent. The Piraeus port in Athens can currently load and unload 1.8 million containers a year. With a strategic position near the Straits of Bosphorus, the port also provides a way into the Black Sea region, central Asia and Russia. COSCO aims to make the container port a hub to rival Rotterdam - Europe's largest port. Many see the latest COSCO investment as just the beginning of a far broader scheme to access European markets. By the end of the year China is expected to make a joint bid with a Greek company to create a 200 million euro ($252.2 million) logistics hub at Attica, near the port, to distribute goods from China into the Balkans and the rest of the continent. The Chinese are also in talks to buy a share in the struggling State-owned railway in Greece. Agreements in June - This June, Zhang Dejiang, China's vice-premier, lead a delegation of 30 leading businessmen to Athens, signed 11 investment agreements worth hundreds of millions of euros in Greek shipbuilding, logistics, infrastructure construction and telecom projects. Greek officials said the deals were the biggest single investment China has ever made in Europe. Five Greek ship owners signed deals to build as many as 15 bulk carriers at COSCO shipyards, the construction arm of the Chinese shipping heavyweight. Separately, George Economou, owner of DryShips, a Greek company listed on the New York stock exchange, signed a letter of intent to set up a joint venture with COSCO's bulk carrier division. The shipping agreements highlight a growing trend by Greek maritime companies that trade with China to build new vessels at Chinese yards, analysts said. Some industry analysts say that the Chinese investment is something the cash-strapped Greek government welcomes with open arms. Many in Greece believe the arrival of COSCO is exactly what its ailing economy needs. "This is the locomotive for our development," said Nikolaos Arvanitis, president of the International Maritime Union - the organization that represents the world's largest shipping companies, including COSCO. "Greece needs investment. The Chinese came with good will and we are open to other people who want to come and invest here," told a European newspaper. "Our old ways of working were very primitive. Now we can really drive forward and improve Greece's economy. There is nothing to be afraid of - the Chinese are here to develop our infrastructure, and we will benefit. It is a win-win project," a worker with the port said to the local media. Yet COSCO's physical presence in Greece remains limited. Staff in the offices of COSCO's shipping company, in a office block overlooking cruise ships at the passenger terminal, said that of their 45 members of staff, only the director and financial director were Chinese. In the port terminal offices, of 250 members of staff only 10 administrative and managerial staff were Chinese. "We have a saying in China - construct the eagle's nest, and the eagle will come," Wei Jiafu, COSCO's chief executive, said in a recent television interview with Greece's Skai Television. "We have constructed a nest in your country to attract such Chinese eagles." "COSCO wishes to see more Chinese companies invest in Greece and bring their goods and services to central Europe through the port of Piraeus creating more opportunities for the local economy," Wei said.
Chinese director Feng Xiaogang (C) and cast members attend the premiere press conference of movie "Aftershock" in Beijing, capital of China, July 13, 2010. The film directed by Feng reflects the devastating earthquake in Tangshan of north China's Hebei Province in 1976. The epic, costing more than 100 million RMB yuan (about 15 million U.S. dollars), is due out on July 22 in both IMAX and common format.
Elle Style Awards honor Chinese fashionistas - A glamour-filled ceremony was held Sunday in Shanghai to honor Chinese winners of the Elle Style Awards, also known as the Oscars of the fashion world, Sohu.com reports. Actress Fan Bingbing was named Elle Female Style Icon of the Year. Accepting her award, the prolific actress told the audience, "I'm on my summer vacation right now. I wish myself a good vacation." "Crouching Tiger, Hidden Dragon" actor Chang Chen won the title of Male Style Icon of the Year. Pop singer Li Yuchun, who was named Singer of the Year, entertained the audience with a live performance. Other honorees included TV Actor of the Year Wen Zhang; TV Actress of the Year Hai Qing; Silver Screen Star of the Year Zhang Jingchu; Designer of the Year Anna Sui. The annual Elle Style Awards are sponsored by the stylish magazine Elle China. Actress Fan Bingbing (center) accepts the Female Style Icon of the Year award at the Elle Style Awards 2010 in Shanghai on Sunday, July 11, 2010.
July 13, 2010
Hong Kong*: The government may introduce rules requiring developers to make public the expected date of completion of flat sales and to specify transactions that have collapsed. The measures are being considered after the high-priced sales of 20 luxury flats at 39 Conduit Road trumpeted by the developer, Henderson Land (SEHK: 0012), fell through. They were outlined by officials of the Transport and Housing Bureau yesterday to legislators who are demanding explanations from the government and the developer about the failed sales, which included a record-setting penthouse. At a special meeting of the Legislative Council's housing panel, lawmakers were told there was nothing wrong in the developer retaining only a 5 per cent deposit on the failed sales because this was the amount specified in the agreement for sale and purchase, which fully complied with the government's standard. The government is facing mounting pressure from lawmakers to legislate to stop misleading acts by developers in property sales. Neither Secretary for Transport and Housing Eva Cheng nor any Henderson representatives attended yesterday's meeting although they were invited.
At least four consortiums consisting of Chinese private investors have approached American International Group to acquire its Asia insurance division AIA Group, according to mainland banking insiders familiar with the situation. The investors approached AIG and the US Treasury Department soon after Prudential aborted an acquisition plan in June when shareholders of the British insurer baulked at the US$35.5 billion cost. The sale of AIA, with 320,000 agents and 23 million customers from China to Australia, was to be AIG's biggest step in repaying US taxpayers for its 2008 bailout. While it should not come as a surprise that Chinese investors are eyeing the AIA assets, some analysts were baffled by why so many had emerged. All of them have indicated they have strong support either from mainland insurers or banks. Of the four consortiums, one is led by Shan Weijian, chairman of the Pacific Alliance Group. Shan worked at Newbridge, the Asia unit of US-based TPG Capital, before he joined PAG in June. He is best known for Newbridge's purchase of a 17.89 per cent stake in the Shenzhen Development Bank in 2004 for US$155 million. In May this year, Newbridge exchanged the stake for 299.1 million shares in Ping An Insurance (SEHK: 2318), the mainland's second-largest insurer. It sold 160 million shares, or a 5.6 per cent stake in the insurer, later that month, netting about HK$9.7 billion.
Convenience store chain 7-Eleven is paying its workers as little as HK$20 an hour, according to a survey of seven of the city's biggest retail chains. The finding comes as legislators prepare for tomorrow's debate on a bill creating a framework for a minimum wage. The People's Alliance for Minimum Wage, which conducted the survey, called the pay shameful and demanded the minimum wage be set no lower than HK$33 an hour. The alliance sent members posing as job seekers to the seven chains, asking about vacancies and pay levels for posts such as cashiers, sales assistants and warehouse workers. Of 110 outlets checked in May and last month, 7-Eleven was found to be the worst payer, offering staff on average HK$23.40 an hour. The second worst were Circle K convenience store and Wellcome supermarket chains, which both offered HK$23.90 an hour. At one 7-Eleven outlet in Yuen Long, the pay offered was only HK$20 an hour and the rate at a Circle K outlet in Kowloon City was HK$21. 7-Eleven and Wellcome are part of the Dairy Farm Group. Caroline Mak Sui-king, a regional director of Dairy Farm, is also a member of the Provisional Minimum Wage Commission - the body that will recommend to the government the city's first statutory minimum wage. Circle K is under Convenience Retail Asia, a member of the Li & Fung Group. Alliance spokesman Poon Man-hon said: "It is regretful the government appointed Ms Mak to the commission. How could we trust her to set a reasonable minimum wage for workers?" Mak could not be reached for comment yesterday. Also sitting on the commission is Dr Michael Chan Yue-kwong, chairman of fast food chain Cafe de Coral (SEHK: 0341). He previously said his firm would have to issue a profit warning if the minimum wage was HK$33 an hour. A Dairy Farm spokeswoman yesterday declined to comment on the alliance's study. "Our companies offer competitive salaries according to the market situation. We also offer such benefits as medical insurance, training, and guaranteed fixed bonus, as well as other incentives." A spokesman for Circle K or the Li & Fung Group could not be reached for comment. Poon led about 10 activists in a protest outside a Wellcome outlet in Causeway Bay yesterday. The protesters staged a drama, mocking the business sector for treating workers like slaves. Meanwhile, a study by the General Union of Security and Property Management Industry Employees shows that some caretakers and security guards are being paid as little as HK$19 an hour. Half of the 354 respondents surveyed made from HK$6,000 to HK$7,000 a month, some working 12 hours a day. And concern groups of disabled workers oppose a measure under the bill that would allow employers to pay disabled workers less than the minimum wage. In a petition, 12 groups said the measure would easily be abused by employers.
The developers of Larvotto in Ap Lei Chau are releasing the first batch of 50 flats at prices higher than the values in the secondary market of units in Bel-air Residence in Pok Fu Lam. Sun Hung Kai Properties (SEHK: 0016) is to set a benchmark for a major luxury housing estate in Island South by releasing a project in Ap Lei Chau at an average price of HK$17,288 per square foot. The first batch of 50 flats at Larvotto - a joint-venture development by SHKP, Kerry Properties (SEHK: 0683) and Paliburg Holdings - would go on sale on Saturday. Prices of the flats, sized from 1,968 to 1,998 square feet, range from HK$31.11 million to HK$37.94 million, or between HK$15,811 and HK$18,992 per square foot. "The launch price is a bit aggressive," Paul Louie, the regional head of property research at Nomura International, said. The asking prices are higher than the HK$9,500 to HK$16,000 per sq ft in the secondary market at the 2,746-unit Bel-air Residence in Pok Fu Lam, which is the most expensive large housing estate in Island South. Louie believes the 715-unit Larvotto project would appeal to mainland buyers, who account for sales of more than 20 per cent of apartments worth more than HK$20 million. It would be the first major development put on sale since the Hong Kong Monetary Authority told banks last October to reduce the amount they lend to buyers of luxury homes priced above HK$20 million from 70 per cent to 60 per cent of a property's value. The move followed a surge of about 40 per cent in prices in the luxury sector last year, driven by low interest rates, limited supply and money flowing in from the mainland. Eric Yuen Chi-fung, head of research at Guoco Capital, believes buyers of properties worth above HK$20 million would not rely heavily on mortgage financing. "The good sales response to new projects has indicated a strong comeback in confidence," he said. "Developers will surely take advantage of the buoyant sentiment in both the primary and secondary market to launch their projects." On Sunday, SHKP and the Urban Renewal Authority said they had sold 90 per cent of the 377-unit Lime Stardom in Tai Kok Tsui at an average price of HK$8,045 per sq ft. Yuen expects the Larvotto developers could bring in total revenue of HK$18 billion to HK$20 billion if the whole project achieved an average selling price of HK$18,000 to HK$20,000 per sq ft. In 1999, debt-ridden Paliburg was forced to sell a 70 per cent stake in the site, then designated for industrial use, to SHKP and Kerry Properties. SHKP and Kerry, which each hold a 35 per cent stake in the project, agreed to pay a land premium of HK$3.9 billion or HK$4,300 per sq ft for the conversion of the site from industrial into residential land use in 2005. Kerry is controlled by the Kuok Group, the controlling shareholder of the SCMP Group, which publishes the South China Morning Post (SEHK: 0583, announcements, news) . With construction costs and interest expenses, Yuen said he believed the total development cost of the project, with a total gross floor area of one million sq ft, would be around HK$8,000 per sq ft. Separately, Sino Land will release another batch of 50 standard units at The Hermitage in Tai Kok Tsui at an average price of HK$11,871 per sq ft. It will also release a special unit - of 1,476 sq ft with a 860 sq ft roof top and a private pool - at HK$36.98 million or HK$25,060 per sq ft.
Cathay faces bumpy ride as cash cow is blown off course - There may not have been a pot of gold at the end of the rainbow, but for Hong Kong flag carrier Cathay Pacific Airways the flight path to Taiwan was certainly paved in dollars.
Just months after government measures dampened enthusiasm for flat-buying, the market is roaring back - so much so that some properties are back to 1997 levels. Taking advantage of the upturn in sentiment, developers will release nearly HK$4 billion worth of flats this weekend. Sales and prices have improved since Sun Hung Kai Properties (SEHK: 0016) paid a higher than expected HK$10.9 billion for a site in Ho Man Tin early last month. New rules requiring greater transparency in developers' price lists have also helped sentiment. The number of weekly property transactions has rebounded to 300 from 180 in April and home prices have started to edge up. More than half of the 964 flats at The Hermitage in Tai Kok Tsui - the first project launched under new guidelines issued by the government - were sold within a week. Under the rules, developers must release price lists three days before flats go on sale to allow homebuyers time to study prices. Previously, developers released some prices 24 hours before the launch of a sale, leading to accusations they were manipulating prices. Last week, a 393 sq ft flat at City One, Sha Tin, changed hands for HK$1.85 million or HK$4,673 per sq ft - 8 per cent higher than the vendor bought it for in 1997. "It probably shows the market correction has come to an end," Eric Yuen Chi-fung, head of research at Guoco Capital, said. Yuen said the developers' less aggressive pricing strategies had also encouraged buyer interest. "The market is still dominated by local buyers and they will return when projects are offered at a reasonable level," he said, adding that mainlanders accounted for about 10 to 20 per cent of total sales. Prices of the first batch of flats at The Hermitage were released at an average of HK$11,000 per square foot. "The good sales response has removed earlier concerns that the new guidelines could dampen buying interest," Midland Realty chief analyst Buggle Lau Ka-fai said. "The strong sales response reflects that buyers remain bullish." Sun Hung Kai Properties plans to release all 377 flats at Lime Stardom, a joint venture housing project with the Urban Renewal Authority, in Tai Kok Tsui at an average of HK$8,045 per sq ft on Saturday. The flats, ranging from 345 sq ft to 1,058 sq ft, are worth more than HK$1.7 billion. "It is unusual for a developer to release all units in one go," one agent said. "Potential buyers will have more time to study the price list." Separately, Sino Land will release an additional 120 properties, worth about HK$1.7 billion, at The Hermitage, at an average of HK$11,637 per sq ft on Saturday. Henderson Land Development (SEHK: 0012) will also release 16 villas at Legende Royale, the phase three development at The Beverly Hills in Tai Po at HK$7,935 per sq ft as early as tomorrow. The total value of the 16 villas, from HK$23 million to HK$47 million, will be about HK$500 million. Lau said low interest rates and an attractive rental return had also lured investors.
PCCW turns to free-TV market to generate new sources of revenue - Richard Li Tzar-kai's ascent to business tycoon status was arguably sealed in August 2000, when his start-up internet holdings company, Pacific Century CyberWorks (SEHK: 0008), acquired Hong Kong telecommunications giant Cable & Wireless HKT for US$38 billion. After wrapping up that deal, Li described the "new PCCW" as "a first-of-its-kind company", which would be "an internet/communications powerhouse that will enrich our shareholders, customers, staff, and the entire Hong Kong community". Ten years since Li made that bold declaration, PCCW has indeed been transformed. The carrier harnessed a broad network coverage and steady infrastructure expansion to develop, offer and package services in four market segments: fixed-line telecommunications, broadband internet access, mobile telephony and internet-based pay television. Its terrestrial broadband network already covers more than 90 per cent of Hong Kong's 2.3 million households. What PCCW calls its "quadruple-play" offering was developed during the decade's sweeping economic upheavals, rapid advances in information technology, regulatory changes, increased competition, and the controversy surrounding the recent failed bid by Li and other controlling shareholders to privatise the carrier. But there is plenty more to do for PCCW. With the government's move to open up the free-TV market, the carrier has applied for a licence - through subsidiary HK Television Entertainment Co - with an eye to extend its services platform. To enable the largest number of viewers to enjoy its proposed free-TV service, HKTVE has applied to broadcast on a spare, territory-wide ultra-high frequency channel.
China*: China plays its own ratings game - If you don't like the rating you get, get another rater. And that's exactly what Beijing has done. Dagong Global Credit Rating Co, a little-known Chinese rating agency, has given its own government a higher debt rating than the US, Britain and Japan in its first sovereign ranking report of credit ratings for the world's major economies. And although Dagong may not be up there with the big boys like Moody's Investors Service or Standard & Poor's, it is already getting top marks from Beijing. Its report evaluating 50 countries, coincides with a push by China to boost its influence in global markets. State-run media have hailed Dagong's report as a landmark step by the first non-Western rating agency to assess the world's sovereign credit and risks. The firm said yesterday it rated US government debt AA with a negative outlook, and China AA-plus with a stable outlook. China's rating for yuan debt is higher than Japan's and Britain's AA-minus. Norway, Denmark and Switzerland were among the top seven countries with the highest "AAA" ratings. The foreign-currency rating of China, which has US$2.45 trillion of reserves, is the top-ranked AAA, the agency said, without giving details of its ranking system. Dagong's rating of 27 countries differed markedly from Moody's Investors Service, Standard & Poor's and Fitch Ratings, the statement said. Dagong's China rating is higher than Moody's A1 rating for China, which is four notches below Moody's Aaa US rating. S&P rates China A-plus.
General Electric has secured a massive supply deal with China's jumbo jet maker as the mainland took a big step towards assembling large passenger planes that could challenge Boeing and Airbus. The agreement, under which GE will provide avionics systems for China's future C919 passenger jet, was signed just two weeks after GE chief executive Jeffrey Immelt complained about the difficulties that multinationals had doing business on the mainland. "China is the world's fastest-growing aviation market and we need to ensure GE and the United States are part of this growth," John Rice, vice-chairman of GE said at the signing ceremony in Shanghai yesterday. "Our participation helps GE to grow high-tech jobs and capabilities, while serving the aviation market with the latest commercial technology. The C919 programme will support hundreds of jobs in the US, China and the UK." GE will set up a joint venture with Chinese partners to produce the central information system, also known as the backbone of an aeroplane's networks and electronics. The US conglomerate will own 50 per cent of the venture, while a clutch of China's state-owned companies, including Aviation Industry Corp of China, will hold the remaining 50 per cent. It was another multibillion-dollar coup for GE after it and French industries group Safran won a contract to equip C919 jets with engines last year. "The deal is yet another example that the fast-growing China market is important for foreign businesses such as GE," Professor Zhou Dunren of Fudan University and an economist on American studies, said. China needed GE technologies to assemble the jumbo jetliner, he said. The mainland set up Commercial Aircraft Corp of China (Comac) in May 2008, aiming to produce the nation's first 200-seat jetliner and plans a maiden flight in 2014. It was reported that Premier Wen Jiabao hoped to create a huge industry chain by producing the airliners. Wu Guanghui, vice-president of Comac and chief designer of the plane, said yesterday that major supply deals had all been sealed after concluding the agreement with GE. "The bidding process for major parts came to an end," he said. "We have ensured that all the major technologies and systems to be used in the plane are the most advanced in the world." Jin Zhuanglong, chief executive of Comac, said the company intended to ensure that the C919's maiden flight would be in 2014 before delivery to buyers in 2016.
Research In Motion, maker of BlackBerry e-mail devices, said it was preparing to launch an applications store and consumer internet services on the mainland, as part of a big push into the world's top mobile market. The App World applications store would follow RIM's May launch of BlackBerry service on the mainland through China Telecom (SEHK: 0728), one of the country's three key carriers, and as RIM develops service for the homegrown 3G standard used by the leading mainland carrier, China Mobile (SEHK: 0941). The applications store and consumer internet service were just two of the initiatives RIM was undertaking to tap into the mainland's 700 million-plus subscriber mobile market, said Greg Shea, head of RIM in China. In other initiatives, RIM is also working with the mainland's internet content providers and site operators, including search leader Baidu, online game leader Tencent Holdings (SEHK: 0700) and online commerce leader Alibaba (SEHK: 1688) Group, to create versions of their sites to work on BlackBerries. "We will soon be launching the internet service" for consumers, Shea said. "We will also launch an App World China - that will be soon as well. We think sometime after we put in internet service and these other initiatives, we'll see that magic moment when we see that acceleration" in sign-up of new customers. Before its recent China Telecom tie-up, RIM offered BlackBerry services mostly to corporate customers in the country through China Mobile.
China buyers head for Paris market - Prices increase as Chinese investors target homes in prime districts for family use - China homebuyers have started to arrive in Paris, joining Hong Kong and Singaporean investors buying in the French capital's city centre, estate agency Knight Frank says. "It is the first year we have begun detecting mainland Chinese demand, albeit in its infancy," said Mark Harvey, an international residential consultant at Knight Frank's Paris office. "They are primarily looking at secondary market properties in prime areas like the 7th, 8th and 16th arrondissements." Mainlanders bought property for family use, targeting apartments in the €3 million (HK$29.3 million) to €6 million price bracket, he said. "They (the Chinese) are buying for personal reasons where an offspring is studying or working in Paris," he said. "They are always cash buyers, but very low-key." Estate Agency HomeHunts said most of its clients wanted holiday homes, although two families wished to relocate permanently. "We currently have a number of Chinese clients looking for properties in both the French Riviera and Paris," HomeHunts' director Tim Swannie said. "We sold a property last year to a young Chinese couple. It was on the [Antibes] and it was a three-bedroom villa, which required modernising. The price was €2.4 million." HomeHunts' Hong Kong-born Riviera office manager Amy Bault said most people from the mainland bought apartments off-plan. She also said buyers found ways around the mainland's strict capital controls. "The [capital controls] do affect them tremendously, but those with money already have offshore accounts, so this should not be a problem any more," she said. Corruption in China enabled other mainlanders to circumnavigate rules, she added. Bault said mainland buyers were also attracted to French culture and lifestyle. "They look up to French culture. They see it as romantic and innovative." The arrival of mainland homebuyers follows the purchase of French vineyards by Chinese businessmen in 2008. Incoming Chinese buyers are helping to drive up Paris property prices. "The Paris market is performing well with demand for prime residential property far exceeding supply," Harvey said. "Prices are back to pre-crisis levels, driven by renewed international demand and sluggish inventory levels. "Lower-end properties, valued at below €400,000, in key areas offering solid rental returns are also performing well. It is driven by domestic and international investors seeking a refuge and investment diversification." According to MeilleursAgents. com, prices in Paris rose 1.5 per cent in May, which followed a 2.1 per cent increase the April. In the most expensive area, the centrally located 6th arrondissement, favoured by mainland buyers, homes are €10,819 per square metre following a 4.4 per cent rise in values over the three months to May.
Hu Jintao(R), General Secretary of the Communist Party of China (CPC) Central Committee, meets with Kuomintang (KMT) Party honorary chairman Wu Poh-hsiung in Beijing, capital of China, July 12, 2010. Hu Jintao, General Secretary of the Communist Party of China (CPC) Central Committee, said on Monday he hopes that the newly signed cross-Straits trade pact will take effect as soon as possible to bring out practical benefits for people of both sides. Taiwan may finish legal procedures for ECFA soon.
CNPC, BP to increase output at Rumaila oil - China National Petroleum Corp, BP Plc and a local partner may increase production at Rumaila, Iraq's biggest oilfield, by 14 percent by the year-end after assuming full management of the block this month. Daily crude production may rise to 1.17 million barrels from more than 1.03 million barrels currently, CNPC said in a statement on its website today. BP and CNPC signed a 20-year service contract with Iraq in November to increase Rumaila's output to 2.85 million barrels a day, making it the world's second-largest producing oilfield, the London-based producer said on Nov 3. Iraq is seeking to raise oil production to 6 million barrels a day by 2015 to boost its war-ravaged economy. A venture formed by CNPC, BP and Iraq's state-owned South Oil Co formally took over operations and management of Rumaila on July 1, the Beijing-based company said. The contract was the only oilfield deal awarded by Iraq in June in the first bidding round since the US-led invasion in 2003.
The Song Dynasty ink-on-silk painting "Life Along the Bian River at the Pure Brightness Festival". A detailed, interactive and multi-layered digital rendition of the priceless work of art, created by a Chinese scientist with Microsoft Research Asia in Beijing, can now be seen and studied at the Palace Museum in Beijing. A software engineer in Beijing has revealed a breakthrough in technology that could have a profound effect on museums globally and which puts Beijing firmly on the map of cutting edge development. Xu Yingqing, 50, a lead researcher with Microsoft Research Asia in Beijing, has created a detailed, interactive and multi-layered digital rendition of the Song Dynasty ink-on-silk painting "Life Along the Bian River at the Pure Brightness Festival". The image of the priceless work of art created by Zeduan Zhang and rarely shown in public can now be seen and studied in unique detail in the Hall of Martial Valor at Beijing Palace Museum, also known as the Forbidden City. "It provides a virtual three-dimensional walkthrough of the painting with sound," he said. "The level of detail for a work of art like this has never been created before. The technique can also be applied to other paintings and even vases and the Terracotta Warriors. It will enable artists and art historians to study works at a level never before accomplished."
July 6 - 12, 2010
Hong Kong*: Hong Kong's lowest-paid workers will have reason to thank former toilet worker Yin Man-on, 76, when the minimum wage bill goes before the Legislative Council later this week. Yin worked 14 hours a day for HK$7 an hour at a public toilet where he also lived, and his story sparked the movement for a statutory minimum wage almost a decade ago. Then 67 and identified only as "Uncle Yeung", he said in January 2001 his boss, a contractor working for the government, allowed him to leave the public toilet only for two one-hour meal breaks and threatened to fire him if he was caught leaving at any other time. "I feel as if I am locked up here like a prisoner," he said. Within months, the government had reformed its tendering system, stipulating that contract workers should be hired with "reasonable working hours and wages". But it took another nine years for the passage of minimum wage legislation, due in a few days, with the specific rate yet to be announced. Over a HK$33 set lunch in a Yuen Long restaurant, Yin said it would be nice if the wage rate was the same amount as the meal. "Then, if I was fit to work, I could afford this meal by working just one hour rather than the five hours I would have had to when I was being paid HK$7 an hour. But I can't work any more," he said.
Molly Gong Chung-sum (left) and sister Kung Yan-sum at the launch of The Lily, Chinachem's first residential project after the legal battle was won over Nina Wang's estate. Chinachem Group, once counted among Hong Kong's leading property developers, is bidding to recapture its former glory days, now that the legal tussle over the estate of its late chairman, Nina Wang Kung Yu-sum, has been settled in its favour. With the long-running legal battle finally out of the way, the group's executive director, Dr Kung Yan-sum, and his sisters are embarking on fresh managerial directions for the group, although analysts question their lack of experience in property development. In a departure from group practice, its managerial team appointed a public relations agency to organise a press conference for the recent launch of its project, The Lily, and invited dozens of reporters from Hong Kong, Beijing, Shanghai and Guangzhou to attend. Such a step is unremarkable in the industry, but for Chinachem it was a first. "They used to think they could attract buyers simply by selling the flats cheaper," an agent said. "They would not spend a lot on advertising previously." In another departure, Chinachem will now turn to professional advertising specialists to design advertisements and plan its advertising campaigns. "Previously, estate agencies were required to help them plan a marketing strategy with advice about what kind of gifts to offer like travel tickets or furniture and how to manage press conferences. The in-house art department of the agency was also required to design an advertisement for the project," a property agent said. The changed strategy of Chinachem's management has become the talk of the property sector, particularly since none of the Kung family members have experience in the property market. Kung Yan-sum and his sister Molly Gong Chung-sum are doctors, while the youngest sister Kung Yan-sum is a housewife.
China*: Beijing has issued the strictest discipline regulations yet to a range of government officials and managers at state-owned companies, asking them to disclose information such as salary and bonus levels, marital status and their children's professions in an attempt to fight corruption. The new regulation requires deputy department directors and above, and those in "middle and higher" management posts at large state-owned companies to also report their property assets and other investments, as well as income from giving lectures, writing, consultations and even painting. Issued by the State Council and the Communist Party's Central Committee, and published yesterday by Xinhua, the rules potentially bring non-members of the party into the government's monitoring system. Under the regulations, officials' spouses and children who still live with them also have to disclose their property, investment and business operations. Other information required to be reported includes change of marital status, overseas trips on a private passport, children marrying foreigners, spouses or children relocating overseas, spouses or children having overseas businesses and children's court case records. There have been many corruption cases involving officials' family members, and most analysts agree that a regulation requiring disclosure of their assets would be welcomed, although opinion on its likely effectiveness is divided. The new regulation requires officials to disclose investments in stocks, privately held companies, futures, mutual funds and insurance products, and those of their spouses and children still living with them. The regulation also spelled out tough punishment - those who fail to submit the disclosure report on time, provide false information or fail to disclose information face disciplinary measures ranging from reprimand to dismissal. The deadline for the annual report is January 31, according to the regulation. The party leadership has embarked on many attempts to crack down on corruption, but it remains rampant and has become a major source of public discontent and social tension. Mainlanders have been frustrated by the increasingly institutionalised graft among the party's rank and file, and the leadership's repeated failures to deal with it. The debate over whether Beijing should establish a system of disclosure has raged for years, and public pressure has been rising recently. The central government issued regulations - in 1995 and in 2001 - requiring officials to declare income, but these were limited to salaries and allowances, and the information was not made available to the public or the media. In March, it said that it would step up efforts to crack major corruption cases, especially those involving collusion between senior officials and businesspeople. Of 340,000 building projects investigated since last July, 140,000 were found to have corruption-related "problems", Wu Yuliang, secretary general of the Central Commission for Discipline Inspection, said last month.
China's foreign-exchange reserves, the world's largest, rose at the slowest pace in 11 years in the second quarter as expectations for a yuan appreciation diminished and the European sovereign debt crisis saw capital move out of emerging markets. The country's holdings rose US$7.2 billion to US$2.454 trillion at the end of June from the end of March, the People's Bank of China said yesterday, the smallest increase since the second quarter of 2001. Reserves dropped 2 per cent in May, according to data posted on the central bank's website, the first monthly decline since February 2009.
July 4 - 5, 2010 - Happy July 4th
Hong Kong*: Booming tourism helped drive Hong Kong’s retail sales up 19.7 per cent in May from a year earlier, the government said on Friday. Total retail sales for the month hit HK$25.9 billion, the Census and Statistics Department said, the ninth consecutive monthly rise. For the first five months of the year, retail sales climbed 18.3 per cent year-on-year. Motor vehicles and auto parts led the gains, rising 63.4 per cent, followed by jewellery, watches and clocks (up 34 per cent), and electrical goods and photographic equipment (27.5 per cent). Despite the stronger figures, a government spokesman warned that a slight rise in the city’s unemployment rate and volatility in the global economy could weigh down retailers’ fortunes. “Local consumer demand will be subject to uncertainties in the prevailing global recovery stemming from the evolving sovereign debt crisis in Europe,” he said. “[But] the expected strength in in-bound tourism should continue to render support for retail businesses.”
Crown Motors (CML) said on Friday some of its Lexus LS460 and LS600h models sold in Hong Kong would need to be recalled.
Gaming revenues in the gambling haven of Macau fell 20 per cent in June from a record high in May as World Cup fever kept high-stakes gamblers away, an analyst said on Friday. Macau’s casinos raked in about 13.6 billion Macau Patacas in June, a 65 per cent year-on-year increase, but lower than the record-breaking 17.1 billion Patacas figure for May, according to data from Macau’s Gaming Inspection and Co-ordination Bureau. Macau has now outpaced gaming revenue in Las Vegas – largely thanks to huge sums spent in the city’s VIP gaming rooms. It is the only location in the mainland where casino gambling is legal and thus attracts huge numbers of players from other provinces of the country. “We believe July [will] see a similar temporary softness in VIP gaming as the World Cup approaches its final stages. That said, we expect market growth to resume sequentially in August, which is traditionally the summer travel season,” Deutsche Bank AG analyst Karen Tang wrote in a note to clients.
China*: China said on Friday its economy rebounded even more strongly from the global slump last year than previously thought, raising its official growth estimate to 9.1 per cent.
The central parity of the Renminbi (RMB), or China's currency yuan, strengthened to 6.7720 per U.S. dollar on Friday, a new record high, according to the data released by the China Foreign Exchange Trading System.
Speed rail shaves time off
Shanghai-Nanjing - The Shanghai-Nanjing high-speed rail service, aimed at
boosting development in one of the country's major economic zones, opened to
passengers on Thursday. High-speed trains prepare to take of from Shanghai to
Nanjing on Thursday. The new express rail service between the two cities, with
speeds of up to 350 km per hour, has become the fastest inter-city line in the
country. The new service, with trains running at up to 350 km per hour, has
halved the travel time between Shanghai and Nanjing, capital of the neighboring
Jiangsu province. The service, which covers the 301-km route in just 73 minutes,
carving 80 minutes off the previous time, has become the fastest inter-city
train in the country. In the initial operation phase, high-speed trains will run
92 round trips on the route. The Ministry of Railways plans to raise the number
to 120, but no timetable has been set. Ministry spokesman Wang Yongping said the
new line will "help boost regional modernization" and the number of rail
travelers in the region. Among the 21 stops on the route are the eight most
prosperous cities in the Yangtze River Delta region, including Suzhou and Wuxi,
which contribute 61 percent to Jiangsu province's GDP. Wang cited a railway
expert as saying that building the Shanghai-Nanjing inter-city railway was no
easier than building the Qinghai-Tibet railway. The Qinghai-Tibet rail line
crosses 550 km of permafrost. Temperature changes could potentially alter the
shape of the permafrost, threatening the stability of the rail bed and
increasing the possibility of accidents. Its operation, which began in 2006, was
hailed a technical milestone. In the case of the Yangtze River Delta region, the
alluvial plain is prone to subsidence, which is not an ideal geological
condition for building high-speed railways.
GM’s China sales overtake US for first time - General Motors says its first-half sales of vehicles in the mainland overtook the US for the first time amid a fitful recovery in American demand. The 1.21 million GM-brand vehicles sold in the mainland in January to June – a near 50 per cent gain over a year earlier – compared with 1.07 million sold in the US market, according to figures released separately by GM’s US and international headquarters. The shift reflects GM’s growing reliance on stronger growth in emerging markets, especially the mainland, to offset sluggish sales back home. The recovery in US auto sales this year has been fitful, with month-to-month sales falling as many times as they rose. Sales of GM’s four core brands rose 36 percent in the first half of the year over a year earlier in the US, but were down 12 per cent in June from the month before, at 195,000, the company said. In the mainland, where first half auto sales figures for the entire industry are not due until next week, demand has begun to moderate but remains strong. Passenger car sales rose 55 per cent in January-May to 5.7 million vehicles, while total vehicle sales rose 53 per cent to 7.6 million. Last year, the mainland sped past the US to become the world’s largest auto market, with 13.6 million vehicles sold, as consumers with rising incomes responded to government tax cuts and subsidies aimed at encouraging purchases of small, energy efficient vehicles. By contrast, US sales of cars and light trucks plunged 21 per cent last year to 10.4 million as a shaky economy kept buyers away from showrooms. Last year, GM’s global sales overtook the home market as US demand languished. Sales in the mainland by GM and its partners surged 67 per cent over a year earlier to a record 1.8 million vehicles. But while GM’s US sales fell 30 per cent from a year earlier, they still exceeded its mainland sales at 2.08 million units.
Google CEO Eric Schmidt downplayed fears over the internet giant's position in China on Thursday, amid a row over censorship and the blocking of a search feature there.
Ma defends cross-strait trade agreement - Taiwan's President Ma Ying-jeou speaks to media on the recently-signed Economic Co-operation Framework Agreement between Taiwan and the mainland in Taipei on Thursday. Taiwan President Ma Ying-jeou on Thursday defended his landmark trade deal with the mainland against claims that it would lead to a Beijing takeover, as the opposition girded for elections that could determine the fate of the ambitious opening. The Economic Framework and Co-operation Agreement, signed on Tuesday in Chongqing, is the most significant step to date in Ma’s signature programme of improving relations with Beijing. It promises greater economic convergence between the once-bitter foes and raises prospects for closer political bonds across the 160-kilometre wide Taiwan Strait, long a regional flash point. While lauded by both Beijing and Washington – like Ma, they see the agreement as dampening the chances for conflict across the narrow waterway – Taiwan’s pro-independence opposition has blasted it as part of a effort by Beijing to bring the island back under mainland control 60 years after they split amid civil war. Ma appeared eager to calm those fears on Thursday when he addressed a packed news conference in Taipei. “We understood that the mainland must have political considerations, political motives” in signing the trade agreement, he said. “But the mainland side has indicated there is no rush to move into the political issues. We hope to gain enough time so people across the Taiwan Strait can have enough economic, cultural or other exchanges to better understand each other.” Ma is risking the future of his presidency – and the fate of his China opening – on the deal. He maintains that democratic Taiwan needs the agreement to prevent its economic marginalisation amid the emergence of regional trading blocs, including a Free Trade Agreement between China and Southeast Asian countries that went into effect earlier this year.
Agricultural Bank of China's Shanghai initial public offering drew 30 billion yuan in bids from potential strategic investors on its first day of book building, a source said.
US trade panel rejects plea to fine China steel products - A US trade panel overnight on Thursday turned down an industry request to slap duties on hundreds of millions of dollars of a steel product from the mainland. The rare “no” vote by the US International Trade Commission bars the Commerce Department from imposing final duties of up to 437 per cent on mainland-made “wire decking” used in storage rack systems and other applications. The ITC voted 4-2 that US producers were “neither materially injured nor threatened with material injury” because of the imports from the mainland. The decision is a big disappointment for US companies that filed a petition 13 months ago accusing mainland producers of selling in the United States at unfairly low prices and benefiting from government subsidies. Those companies were AWP Industries of Kentucky, ITC Manufacturing of Arizona, J&L Wire Cloth of Minnesota, Nashville Wire Products Co of Tennessee and Wireway Husky Corporation of North Carolina. Last month the Commerce Department announced final anti-dumping duties in the case ranging from 14.24 per cent to 143 per cent and final countervailing duties ranging from 1.52 per cent to 437.11 per cent. The ITC can block duties if it determines US producers have not been materially injured or threatened with material injury by the imports. The Commerce Department broadly estimated wire decking imports from China at US$235.9 million last year, down from US$316.9 million in 2008. But it noted those figures included some metal furniture parts not covered by the wire decking case.
More than 21,000 firemen battling forest fires in N China.
July 3, 2010
Hong Kong*: Not only did the annual march for democracy see a drop in turnout, but the Beijing-loyalist camp also had fewer participants in its celebration parade for the handover anniversary. Due to maintenance work at Hong Kong Stadium, which housed an estimated 40,000-strong audience at last year's ceremony, organisers had to move the venue to the smaller Happy Valley Recreation Ground and could only accommodate 5,000 people - 3,000 performers and 2,000 other participants. Following a march by the People's Liberation Army and a flag-raising ceremony at the recreation ground, 30 local and mainland groups performed as they marched to the Southorn Playground in Wan Chai. Ballet and Latin dancers, artistic cyclists, martial-arts athletes, actors dressed as legendary Chinese characters, cheer squads and police bands - along with other performers - made for a colourful sight on the roads of Causeway Bay and Wan Chai. Many spectators on both sides of the roads waved national and Hong Kong flags. "Proceed in harmony, advance in unity" was the theme of the parade. "We have no better choice since the stadium is not available..., " Federation of Trade Unions president Cheng Yiu-tong, head of the parade's organising committee, said. "We're focusing more on the programmes than the number of participants this year. Members of the public can still watch the street shows even if they can't get tickets to the ceremony." Official celebrations started with a flag-raising ceremony at Golden Bauhinia Square in Wan Chai in the morning. Disciplined services performed a marine parade and fly-past. At the government's reception for the 13th anniversary of the handover, Chief Executive Donald Tsang Yam-kuen hailed the Legislative Council's passage of the constitutional reform package, which he endorsed on Tuesday. "It is the best gift as we celebrate our reunification," he said. "It lays down a milestone in our democratic development and is indeed the result of concerted efforts by many Hong Kong people." He said the government still had a lot to do to address economic and livelihood issues. It would listen carefully to the community and respond to its aspirations and needs.
Chief Executive Donald Tsang (right) toasts Major-General Liu Liangkai (centre), political commissar of Hong Kong's PLA garrison and Executive Council convenor Leung Chun-ying to celebrate the SAR's 13th birthday.
Democratic Party under fire at rally - Disenchanted protesters attack march's co-organiser, accusing party of selling out After years of attacking government policies and demanding universal suffrage, the Democratic Party has come under attack itself for the first time from protesters in the annual July 1 march, which it helped to organise. The party and its ailing co-founder Szeto Wah - who turned out in a wheelchair under blazing sun despite fighting late-stage lung cancer - were subjected to verbal abuse and got into a minor scuffle with protesters lashing out at the party for backing the government's political reforms.
The Police Band marches in Golden Bauhinia Square. Amid uncertainty about the pace of democratisation - and fierce heat - the number of participants in yesterday's annual July 1 march fell by at least a quarter from last year. But if the number that took to the streets a few days after passage of the hotly disputed political reform package was smaller, the noise they created was just as great. Demands included calls for universal suffrage and better labour rights, while some marchers accused others of betrayal.
Sorry, no yuan! That's the message from several Hong Kong money changers as speculators scramble to stock up in anticipation of the currency rising further. A local bank manager is not surprised that yuan stocks have ran out as supply is tight. "People are banking on reports that the United States is pressing for a 10 percent yuan appreciation, despite Beijing saying any appreciation will be gradual," he told The Standard on condition of anonymity. "People want to make a fast buck since interest in the Hong Kong dollar is low. So the yuan is a sure bet for anybody." A source at the Hong Kong Monetary Authority said the shortage at money changing counters could be due to another factor - hoarding. "Money changers are expecting the yuan to appreciate faster and sooner, and so they are holding on to their stocks," the source said. "The fact that there is no cap on conversions to yuan has put them a difficult position in both quoting and selling of the currency. "They obviously do not want to sell large amounts of yuan." Local banks have confirmed they have an unlimited supply of yuan, which they get directly from the mainland central bank, the People's Bank of China. Yesterday's exchange rate was 864 yuan for HK$1,000 - two dollars lower than on Tuesday, when speculation on possible appreciation was at its highest. But people are continuing to snap up the yuan, a supervisor at the Hui's Brothers foreign exchange company in Wan Chai said. "The stronger the yuan, the bigger the demand," he said, adding that the situation will remain the same for another week. The supply from the mainland, Shenzhen in particular, has been low since the opening of the G20 summit last week, he added. A money-changing agent in Shenzhen confirmed supply to Hong Kong is running low as most people hold on to the yuan thinking it will appreciate further. On Lockhart Road, money changers at Hang Fung Foreign Remittance asked a reporter from The Standard to return today when asked to sell 10,000 yuan. Another money changer near the Wan Chai MTR station said it had run out of yuan for the day. "The stronger the currency, the keener the demand," he added. On June 19, just ahead of the G20 summit in Toronto, Canada, the People's Bank of China announced it will further reform the yuan exchange rate regime to make it more flexible. The decision has been welcomed by many nations and organizations, including the International Monetary Fund. Zhang Tao, international department director with the People's Bank, said the reform of the yuan exchange rate regime will help restructure the nation's economy and promote all- around sustainable and balanced growth. "In doing so, we can guide resources to the services sector and boost our internal demand, to promote industrial upgrading and the transformation of the economic growth pattern," Zhang said. The stability of the yuan exchange rate played a significant role in mitigating the impact of the 2008 financial crisis on the mainland as other currencies, including the US dollar, depreciated. A senior official of the People's Bank said further yuan exchange rate reform can help Beijing work closely with its partners in the long term for mutual benefit and further development.
Visitors look at the winning "Eating in Hong Kong" entries (top) at the Hong Kong Museum of History yesterday, which included studies on dried goods (above left) and dai pai dong. Three Form Six students have won a prize for a study of a form of Hong Kong dining that had largely disappeared before they were born. Few of the open-air food stalls known as dai pai dong - found almost everywhere 60 years ago - remain, many having been moved indoors while others just vanished as their licences expired or hygiene rules were enforced. Apple Chan Sau-wan, Karen Ng Ka-wai and Susan Yung Wai-hung wanted to know whether the remaining few would stay and whether those moved to indoor food centres still merited the traditional name. So the three Hong Kong Chinese Women's Club College classmates got together for the study that has just won them first prize from more than 100 entries in the student division of the fourth historical photos study competition on the theme of local dining. "Written material on dai pai dong is scarce, so first-hand interviews with those in the business had to be done," said Chan. "I found their descriptions of the old times quite poignant, perhaps because all but those in Central and Sham Shui Po were forced to move indoors, for the sake of hygiene." Chan said it was dubious whether moving the stalls to indoor cooked-food centres changed them to ordinary restaurants. "Yet it's pleasing to see the government saw sense a few years back and seems more lenient with giving out licences," she said. Jointly organised by the Hong Kong Museum of History and the We Love Hong Kong Association, the contest required participants to pick one photo among 30 - all of the old local dining scene - and write a story behind the photo, doing their own research and interviews. In the open division, Jasmine Yiu Ka-man, a social science undergraduate, and Rita Chan Sau-wa, a Chinese major, spent four months on a study on dried seafood with which they beat 11 other entries. The study recounts how the salted fish market in Sheung Wan was transformed into a dried seafood area. The studies dug out and gave meaning to so much precious information that "it would be such a great waste if we didn't publish them and preserve them for posterity", said judge Joseph Ting Sun-pao, Chinese University's honorary senior researcher, at the awards ceremony yesterday. A merit went to a study into the history of egg tarts, which found a possible link between the Chinese word for bread - bao - and Portuguese pau. Ting said the link was interesting but needed more study.
Confusion reigns as food label law comes into effect - Retailers unaware of change, unsure if products need tag. Traditional Chinese biscuits on sale with inadequate labelling at the Lin Heung Tea House in Sheung Wan were typical of many products still on display.
Potential buyers are offered snacks while waiting during the sales of flats at the Hermitage - Hundreds queue overnight for 130 flats on sale. Hundreds of potential buyers queued overnight to invest in the first residential development launched since tighter measures on marketing tactics were introduced - a sign people are more confident of a fairer sale. The Hermitage, a new residential project in Tai Kok Tsui, was offered for sale at 11am yesterday on a first-come, first-served basis in the shopping centre of the MTR Olympic station. Eva Yeung was among the many buyers and agents who started to queue on Wednesday at the sales office, 19 hours before the official sale kicked off. "It is tiring but I bought the unit I wanted within my budget," she said. Yeung bought a 1,400 square foot flat for HK$15 million or HK$10,714 per square foot through a company. "It will be either for my own use or for investment," she said. Under one of the new rules introduced by the government, developers are required to release a price list three days before a sale.
Yuan investment channels beckon - The government is holding talks with Beijing to open channels for investment opportunities in the mainland for yuan held in Hong Kong. Foreign direct investment, the Qualified Foreign Institutional Investor scheme and re-insurance are potential channels being studied, Julia Leung Fung-yee, Under Secretary for Financial Services and the Treasury, told The Standard. But she declined to comment whether the so-called "mini QFII" - a program that allows locals to invest in A shares - is being discussed. Leung said the volume of trade settlement in yuan surged to 7.2 billion yuan (HK$8.27 billion) in May, from 400 million yuan in February. Transactions are expected to grow even faster after the People's Bank of China expanded the pilot scheme last week to cover 20 provinces and cities in the mainland, as well as worldwide for overseas counterparts, Leung said. This allows more flexibility in both current and capital accounts to pay for services imported to China, the under secretary said. "For example, tour agents and investment banks will be able to accept yuan as tour fees or underwriting fees, instead of just Hong Kong dollars or foreign currencies," Leung said. "Even H-share holders can receive yuan in dividend payment as the current regulation allows. Of course, that all depends on a company's policy and arrangement," she added. Leung said the lack of yuan products for investment is the reason for the slow yuan deposit accumulation rate. Yuan deposits in Hong Kong in May were about 84.7 billion yuan, up only 4.7 percent from the previous month, Hong Kong Monetary Authority data showed. Building up an asset base for yuan investment is crucial to boost yuan liquidity, said Leung. Besides opening investment channels in the mainland, the under secretary said financial institutions are ready to offer new yuan products. As for yuan-denominated insurance policies and equities in Hong Kong, the under secretary said insurance products should be more readily available as less liquidity is required and risks are easily hedged. "It's only the beginning of the yuan- product era," Leung said.
China*: Foreign banks are marching into China's rural areas with remarkable enthusiasm, convinced that if they help bring banking to the underserved countryside, Beijing will allow them to expand in the more lucrative urban areas. One after another, HSBC Holdings (SEHK: 0005, announcements, news) , Standard Chartered, Bank of East Asia (SEHK: 0023) and others have announced plans to establish a presence in the underdeveloped countryside. Among the most ambitious is Spain's Banco Santander Central Hispano, which will ally with China Construction Bank (SEHK: 0939, announcements, news) to set up 100 rural banks in three years. The surge in interest comes despite the conventional wisdom that rural banking is a risky business with low profits. Reflecting concerns about the bad loans at rural lenders, Agricultural Bank of China was forced to set a lower-than-expected price range on Monday for the Shanghai part of its initial public offering. The question is, will the skill and experience of foreign banks enable them to discover market opportunities and create higher profit margins than their domestic rivals? HSBC's first rural bank, the first on the mainland set up by a foreign lender, started operations in December 2007. The bank broke even this May, beating HSBC management's forecast that it would take three years. HSBC's fourth rural bank is about 65 kilometres from downtown Beijing in Miyun county. Gosen Ma Jianqiang, president of Beijing Miyun HSBC Rural Bank, is proud that it has recorded no bad loans since it opened in February last year. Miyun is one of the counties the China Banking Regulatory Commission singled out for the trial launch of rural banks to better serve farmers and the agriculture sector.
A senior military official said yesterday that China would welcome a visit from US Defence Secretary Robert Gates at an "appropriate" time, which may be an indication that Beijing is ready to resume bilateral military exchanges. "Our stance remains that when both sides consider it's appropriate, [China welcomes] his visit," said General Ma Xiaotian , deputy chief of the People's Liberation Army general staff, in Beijing. Ma's remarks came one month after Beijing turned down a US proposal that Gates visit China, a move that Washington considered a snub to its fence-mending efforts. The PLA at that time reportedly told the Pentagon that it was not a convenient time for Gates to visit, without elaborating. Beijing has halted high-level military exchanges since January to protest against Washington's decision to proceed with US$6.4 billion worth of arms sales to Taiwan, which China considers a renegade province. The 1979 Taiwan Relations Act commits the US to the defence of Taiwan and authorises arms sales to aid its defence. After his visit request was turned down, Gates warned at a security conference in Singapore that the lack of contact between China and the US would damage security in Asia. With nuclear-related problems in North Korea and Iran showing signs of escalation, Washington has been pressing Beijing for its assistance to resolve the issues. Beijing voted for a watered-down version of a United Nations Security Council resolution against Tehran but has remained committed to its North Korean ally. Ma has said that arms sales to Taiwan are one of the three major obstacles in bilateral military ties. Professor Gao Haikuan , a security specialist with the mainland-based Chinese Association for International Friendly Contacts, said Ma was sending out a positive signal without giving a definite answer. "His remarks make things look flexible now," Gao said. " ... But it all depends on how the Pentagon handles bilateral relations from now on. If they do something to make China unhappy, China may change its mind again." A case in point is a joint military drill between the US and South Korea later this month, which could further complicate bilateral military ties as the Pentagon is considering sending an aircraft carrier to participate in an exercise in the Yellow Sea. The drill is intended as a warning to Pyongyang, which Seoul has accused of sinking its corvette, the Cheonan, in March, killing 46 sailors. The hermit state denies it torpedoed the vessel. Beijing has warned that it is "extremely concerned" about the war games. In an apparent move to protest against the possible presence of a US aircraft carrier on its doorstep, the PLA is staging live-fire naval exercises in the East China Sea, close to the Yellow Sea. They began on Wednesday and will end on Monday. Military ties between the two powers have not developed as well as relationships in other areas. At the G20 summit in Canada last week, President Hu Jintao accepted US President Barack Obama's invitation of a state visit. In a bilateral meeting on the sidelines of the summit, Obama told Hu that Washington was looking forward to an invitation for a visit to Beijing by Gates in the coming months. Hu's acceptance of the state visit invitation came just a week after Beijing's decision to allow the yuan to float freely against the dollar. Obama sidestepped the currency issue during his meeting with Hu.
The Yangtze River Delta entered the "bullet train" era with the launch of Shanghai-Nanjing high-speed rail services yesterday, but the much-lauded multibillion-yuan project failed to wow many passengers. There were widespread complaints about the price of tickets - up 50 per cent - and that the massive investment had resulted in only negligible improvement in most journey times. "This is a con. This isn't really high speed - it is just an excuse to charge more money," said one unimpressed traveller. "They have just added the `high-speed' label to the ordinary express trains and then bumped up the price of the tickets." Others questioned why the supposedly new trains - capable of travelling at up to 350km/h - were virtually indistinguishable from the ones already in service. "I thought they would be new trains, but I'm sure these are just the ones we normally take," said Hong Jianhua , a regular traveller between the two cities. "Even the furniture is all quite worn already." Newspapers in both cities ran stories yesterday rhapsodising about how direct trains could now make the 301-kilometre trip in just 72 minutes. However, only two trains a day are scheduled to run at full speed. Trains stopping at intermediate stations can take up to two hours and seven minutes - just one minute quicker than the cheaper D-class express trains already manage. Standard-class tickets on D-class routes cost 93 yuan (HK$106.60) for the full trip, considerably less than the 146 yuan it costs to ride the new high-speed service. Staff on two trains taken by a South China Morning Post (SEHK: 0583, announcements, news) reporter yesterday explained that the longer-than-expected journey times were due to waiting times at intermediate stations. For the most of the journey, the trains maintained speeds of between 160km/h and just above 200km/h - comparable to the D-class service and well below the advertised 350km/h. The 300km/h mark was passed only a few times on each trip, and both times only for a few minutes. When the train did travel at top speeds, there was a significant increase in carriage noise and vibration - to the noticeable annoyance of some passengers. Xu Yumin , a high-speed rail safety officer for the Shanghai Railways Bureau, told Nanjing's Modern Express that the trains were only able to run at around 200km/h for most of the journey. "There are 66 points on the track which require changes of speed," Xu said. The paper also quoted Wang Feng , deputy director of the bureau, as saying that the trains had reached a top speed of 353km/h during test runs but this was not going to be repeated for the whole journey during regular service. "Everybody believes that the Shanghai-Nanjing high-speed line is a new route which can bring Shanghai and Nanjing closer together," Wang said. "In reality, it is not like this. Cities along the line such as Zhenjiang and Changzhou have decided to take the line into the town, through their old stations. The route is not perfect, which is the main reason." Shanghai's cavernous new Hongqiao Railway Station also had its first day of operations yesterday. The new station is linked to the second terminal at Hongqiao International Airport. A majority of the amenities were not ready in time for the main opening. Not a single shop had opened in the huge arcade beneath the station, and drinks vending machines did not appear to have been switched on.
Xinhua news agency launched a 24-hour global English-language television news service yesterday aimed in part at counterbalancing foreign views of the country. The CNC World news channel is the latest effort by Beijing to expand the reach of its propaganda outlets worldwide. CNC, which stands for China Xinhua News Network Corporation, would broadcast the channel to "the Asia-Pacific region, Europe, North America and Africa by satellite, cable, cellphone and the internet", Xinhua said. "CNC will present an international vision with a China perspective. It will broadcast news reports in a timely way and objectively and be a new source of information for global audiences," Xinhua president Li Congjun was quoted as saying. The news channel will draw on Xinhua's presence "in more than 130 nations and regions" and makes it the first international news agency to run a television news network, it said. The government has earmarked 45 billion yuan (HK$51.7 billion) to fund the expansion of groups including Xinhua, state television station CCTV and China Radio International, according to previous reports. Xinhua alone is "striving to build a modern, comprehensive news media group, comprising wire services, newspapers, websites, economic information services, databases and search engines, cellphone and mobile network services, and television", the news agency said. Beijing tightly controls media outlets, either directly or through self-censorship by organisations fearing shutdowns.
China's Li Ning aims for top-end market with new logo and higher prices - Li Ning, the chairman of Li Ning, displays the new logo of the sportswear company. The change is an attempt to distinguish the firm from Nike. Li Ning (SEHK: 2331), intent on transforming itself into a high-end global brand, has unveiled a new logo in an attempt to distinguish itself from Nike. "We hope to become China's No1 in eight years," chief executive Zhang Zhiyong said. "Our plan is to become one of the top five [sports] brands in the world by 2018." For years, Li Ning's logo has been accused of bearing a resemblance to Nike's famous "swoosh". Zhang said the main reason for changing the logo was to distinguish itself. "Consumers only come into contact with your logo and slogan," he said. "In terms of our logo, we took into consideration our future global expansion." Herald van der Linde, HSBC (SEHK: 0005) Asia-Pacific deputy head of equity research, agreed, saying it would be difficult for Li Ning to emerge as a global brand if it failed to distinguish itself from other products. "A lot of Chinese brands look like Nike, no matter if they tick right or tick left," he said. Li Ning's new logo is an adaptation of the company's former one but features a cleaner cut and resembles the Chinese character for "ren", which means people. The sportswear brand upgraded 500 retail shops in first-tier cities by the end of last month, and will refurbish 1,000 stores by the end of the year. Li Ning is the second-largest sports brand in the country, after Nike, according to Deutsche Bank research. But Zhang said Li Ning falls behind international sports brands in first-tier cities and is also less popular among those below the age of 25. Li Ning is planning to tackle this challenge by moving to the upper end of the market and raising prices, he said. According to Deutsche Bank, Li Ning's average retail selling price is 300 yuan (HK$345) for footwear and 200 yuan for apparel. The company plans over the next three years to increase the average price of footwear to between 400 and 650 yuan and apparel to an average of 300 yuan. Ma Mengran, 15, a student shopping at the sportswear firm's newly refurbished store in Wangfujing, Beijing, said she had no preference between foreign brands and Chinese brands as long as they were of good quality. Asked if Li Ning was worried about Nike's purported plans to lower prices and expand in second and third-tier cities, Zhang said the company had concerns. But that strategy would hurt Nike's high-end brand image, he added.
July 2, 2010
Hong Kong*: A nutrition labelling law comes into force July 1st, but food products with incomplete nutrition labels could still be seen yesterday. Checks by South China Morning Post (SEHK: 0583) reporters found that almost all products carried labels indicating their nutritional content, but not all labels contained the "1+7" information as stated by Hong Kong law, which comes into effect today after a two-year grace period. Under that requirement, food labels must specify the product's energy content plus levels of seven core substances - protein, saturated fats, trans-fats, cholesterol, carbohydrates, sugars and sodium. Food items failing the standard were found in ethnic minority stores and a supermarket - some displayed as part of a clearance sale. The most common omission on labels was the trans fats content, followed by sugar and sodium. More than 80 per cent of food products in Hong Kong are imported, and labelling on some adheres to standards in their country of origin - which does not necessarily conform to Hong Kong's "1+7" requirement. Yesterday afternoon, almost none of the grocery stores at Worldwide Plaza in Central which sell imported foods from Southeast Asia were ready for the new law. Many were still selling prepackaged food without labels or with labels which did not contain all the information required under the new law. These products ranged from peanuts, sweets, fried pork skin to fish crackers. "We are planning to remove the unqualified products from shelves tonight," Morii Ting, manager of a store selling food mainly from the Philippines, said. "Less than 10 types of product haven't met the standards." Shopkeeper Myrna Florec said she would only sell items with proper labels from today. But when asked what kind of information should be included in a label, she said: "I've no idea. I'm not a chemist ... I get my products from the wholesaler. The government should just target the manufacturers instead of ordinary people like us." But almost all products sold in Indonesian groceries in Causeway Bay had adapted to the rule. And Harmander Brar, the manager of Brar Group, which operates a chain of supermarkets selling imported Indian food, said about 80 per cent of his products had been labelled. He told the Post last month that he had spent at least HK$500,000 on a seven-member "label creation" team that had been at work for six months. Brar said some products would have to be taken off shelves until he obtained nutritional information from Indian manufacturers. "They may refuse to give us information, as Hong Kong is only a very small market," he said. If labels could not be created, he might give the products to restaurants. Meanwhile, one supermarket chain yesterday sold at half price a handful of products which did not conform to the new law. City'super sold "House Vermont curry paste", "Azuma Arare 5-coloured rice crackers" and "Carmencita Catalan cream". Baby food was selling at less than HK$10 a bottle. Many products in the supermarket had exemption labels on them - meaning fewer than 30,000 are sold each year and they are not required to display nutritional content. One shopper in Wan Chai said she did not know how to read the labels, and didn't care. "I can't read the English on the labels. Even if they were in Chinese, I wouldn't know what the numbers meant," she said. She added that nutrition information would not change her shopping habits. "Snacks are by nature unhealthy. If you want to be healthy, fresh food is the only option."
An application to restructure Asia Television's shareholding in moves worth about HK$280 million has been received, the Hong Kong Broadcasting Authority confirmed yesterday. The authority was responding to inquiries on whether it received a bid by mainland property tycoon Wang Zheng to buy a stake in the free-to-air local broadcaster. The station declined to comment. But ATV director Rebecca Wang, who represents Taiwanese snack tycoon Tsai Eng-meng on the board, confirmed the deals. She said the board on Monday passed a resolution in favor of Wang Zheng's move - despite opposition from the two main shareholders - after ATV was notified by the authority that it had been contacted by the mainland tycoon earlier. According to a report by Sing Tao Daily, sister publication of The Standard, Wang has joined forces with Wong Ben- koon, chairman of Prosperity International (0803), to acquire a 41.66 percent stake in ATV for HK$200 million. Sources said Wang's move was aimed at helping the station pass the mid- term license review. Wang and Wong will acquire the stakes currently owned by CITIC Group, Phoenix Television (2008) chairman Liu Changle, and Chan Wing-kee, sources said. Wang's representative at ATV said the Prosperity International chairman is interested in the station because he is optimistic about its prospects. Wang informed the authority on June 18 about the acquisition move and named Wong as one of the buyers. Wang also told the authority that he had signed a letter of intent with majority shareholder Payson Cha Mou-sing and his family to buy their 17.5 percent stake for HK$83 million. However, at ATV's board meeting, Cha reportedly had no inkling about Wong's participation. Cha and Want Want China Holdings (0151) chairman Tsai - the second largest shareholder - were both said to be dissatisfied with Wong's sudden appearance as a potential buyer. The two main shareholders reportedly asked for more information about Wong, and Tsai said he would probably take legal action against the move, one source said.
The university's swine flu drug uses antibodies taken from the plasma of recovered patients to treat those in critical condition. Local researchers have proven antibodies from the plasma of recovered swine flu patients are an effective treatment for those with severe complications from the virus that sparked a global pandemic last year. This emerged yesterday as Mexico lifted its alert for swine flu, officially ending the health emergency in the country where it began 14 months ago. A joint study by the University of Hong Kong (HKU), the Hong Kong Red Cross and the Hospital Authority - details of which have yet to be published - has concluded antibodies from the plasma of recovered patients can kill the H1N1 virus in severely ill patients. Researchers say a similar treatment may also be effective against other viruses, including new ones. About 30 swine flu patients in critical condition underwent the treatment after they did not respond to the antiviral drugs Tamiflu and Relenza and most were cured. Some were treated with the plasma, known as convalescent plasma, while others received a more concentrated hyperimmunoglobulin made from it. HKU clinical assistant professor of medicine Dr Ivan Hung Fan-ngai, who led the study, said antibody therapy could be the "last defence" against swine flu. "We used the antibodies on severe swine flu patients who did not respond to antiviral treatment, neither oral nor intravenous," he said. "Some of them died subsequently, but we have enough evidence to conclude that the antibodies are an effective cure, as most patients have since recovered."
Former Legislative Council president Rita Fan Hsu Lai-tai, subject of speculation that she might run for chief executive, has urged aspirants for the top job to respect incumbent Donald Tsang Yam-kuen. Fan, the only Hong Kong member of the National People's Congress Standing Committee, made her call as she openly queried remarks by another likely contender, Executive Council convenor Leung Chun-ying, on government policies. Fan also said she remained doubtful of Leung's suitability for the top job - a view she first aired six years ago. But when Fan was asked recently about renewed speculation that she would run for chief executive, she said she would not respond to such rumours. Speaking at a gathering with journalists, Fan was asked about possible discord among members of Tsang's cabinet in the final half of his five-year term. "Succession takes place everywhere," she said. "Other governments can transit without any mess ... Why? It needs tolerance and you have to leave some room for people. "But at the same time, those who aspire to move up should also respect our chief executive. After all, he is Hong Kong's chief executive and the leader of the special administrative region government." In April, Leung wrote in a newspaper article that those who said the government had no duty to help people buy a home "had probably lived on Mars in the past 40 years" - a comment seen as aimed at government officials. Responding to this, Fan said yesterday: "These comments seem to be well received in the media. People taking a political career have to consider citizens' reactions when they speak." In her 2004 Legco election campaign, Fan said at a public forum that she did not find Leung a suitable candidate for the top job. Asked whether that opinion still holds, she said: "Have I ever told you that he is a suitable candidate for the chief executive?" She also said that a chief executive candidate had to be trusted by both the Hong Kong public and the central government. "Hong Kong citizens have discerning eyes ... They hold political ethics in high regard. If one's motives are doubted, then he will lose more than he gains." An aide to Leung said the executive councillor did not have any comment on Fan's remarks. Leung and Chief Secretary Henry Tang Ying-yen are both widely seen as prospective contenders for chief executive in 2012. Over the past several years, there has been speculation that Fan might run for the post, which she has repeatedly denied. But discussion was renewed last week when Democratic Party lawmaker James To Kun-sun said he had heard that Fan was gathering a team. Fan said a government official had sought her view more than a year ago on whether Tsang might quit prematurely. Fan told that person, who was not a principal official, that she thought Tsang should not follow his predecessor Tung Chee-hwa's footsteps to resign because it would be unfavorable for Hong Kong's governance. No local or Beijing official had asked her whether she intended to run for chief executive, Fan added.
United States fashion chain Forever 21 will pay a monthly rent of HK$11 million to lease a six-storey retail arcade in Causeway Bay, the largest retail leasing transaction in two years. The store's turnover has to reach at least HK$60 million a month in order to cover the monthly rent and generate reasonable profit, said Helen Mak Hoi-lun, the director of retail services at property consultant Colliers International. That means the retailer has to sell four to five clothing items every minute over a 24-hour period at an average price of HK$300. It will have to sell at least 6,667 clothing items a day. Forever 21's aggressive push into the city's tough retail sector reveals it is confident in the market outlook. CB Richard Ellis, which represents the landlord, said Forever 21 has leased the 51,188-square-foot space in the Capitol Centre, adjacent to Jardine's Bazaar. Current tenants include fashion retailer Giordano (SEHK: 0709) and drugstore Watson's. The monthly rent is double the HK$5.5 million currently paid by Giordano. Giordano sub-lets some of the space to Watson's and restaurants but will vacate the premises next year. Forever 21 will move into the premises in August next year. The US retailer was founded in Los Angeles in 1984 by a Korean-American. With its trend-setting styles and budget-conscious price tags, it has expanded rapidly over the past two decades and now has stores in Asia and the Middle East. In 2005, it had more than 355 retail stores. It has opened 90 new stores a year on average since 2008. Foreign fast-fashion retailers such as Zara and H&M are aggressively expanding in Hong Kong and are willing to pay top rents. H&M is paying a monthly rent of HK$6 million for its 60,000 sq ft store in Silvercord on Canton Road in Tsim Sha Tsui. But not all foreign brands have been successful in Hong Kong's pricey and competitive retail market. Britain's B&Q and Australia's Spotlight, both home-improvement retailers, closed their stores in the city two years ago after opening in 2007. "We are currently working with a number of international fashion brands which want a presence in Hong Kong. The main challenge is their space requirement as they prefer 10,000 square feet or more," said Joe Lin, a senior director of retail services at CB Richard Ellis. "But retail space in prime shopping malls is very limited in Hong Kong." The shortage of retail floor space in Causeway Bay and the highly visible location of the Capitol Centre have drawn leasing interest from companies from around the world. Causeway Bay is a key shopping destination for both locals and mainland tourists. Growth in retail rents for the district, as well as in Tsim Sha Tsui, was the sharpest in the city for the first half, Lin said. He estimated retail rents in Causeway Bay had surged 8 per cent so far this year. According to a report by Colliers International, Hong Kong is the world's third-most expensive city in which to rent street-level shops. The average retail rent on Russell Street in Causeway Bay is US$1,205.46 per square foot a year. The survey of rents in 127 premier retail streets around the world showed only Paris and New York were more expensive than Hong Kong.
Hang Seng School of Commerce's reputation for turning out straight-A students was further strengthened yesterday - the city's only student to score six straight As came from Hang Seng, as did 16 of the 21 students who bagged five As. And the Sha Tin school's winning streak was evident not just among students scoring five As, of which there were 10 more than last year. Some 575 A grades were earned by students at the school this year, an 89 per cent rise on the 305 As it scored in 2006, the first time it had pupils scoring six As. School president Chui Hong-sheung said Hang Seng was known for transforming average-scoring students into high achievers, and he was inspired by the results. "Our teachers are willing to teach all those who are willing to come. We have one student who scored 23 [out of 30] in the Form Five public exam and got five As in his A-levels here," Chui said. The only other school to get some of the media spotlight was the Diocesan Girls' School, which produced two five-A students this year. The other three five-A scorers came from Ying Wa Girls' School, St Joseph's College and Po Leung Kuk Tang Yuk Tien College in Tuen Mun.
Two medium-sized residential sites in Kowloon were triggered for auction yesterday, a move that showed developers were eager to replenish their land banks in urban areas. The Lands Department said a residential site in Hung Hom would be sold for a minimum guaranteed bid of HK$1.77 billion and another residential site at Argyle Street, Ma Tau Wai, for HK$2.85 billion. Surveyors estimated the two sites together would contribute more than HK$6 billion to government coffers. Their optimism about the upcoming land sale rose after Sun Hung Kai Properties (SEHK: 0016) paid HK$10.9 billion for a luxury residential site in Ho Man Tin early last month. It was the second-highest price ever for a development site sold by auction. Pang Shiu-kee, the managing director of SK Pang Surveyors, estimated the Hung Hom site would sell for an accommodation value of HK$7,000 per square foot or HK$2.5 billion. He predicts a price of more than HK$10,000 per square foot or HK$4 billion for the Ma Tau Wai site. "Considering the two sites' locations, developers big and small will join the auction," he said. If a luxury residential site at Mount Nicholson, to be sold by auction on July 28, fetched a high price, the two Kowloon sites could attract higher bids, Pang said. The auction of the two sites will be held on August 17. Alvin Lam, a director at Midland Surveyors, said the unexpectedly strong outcome for the Ho Man Tin site showed that developers were willing to pay a higher price for development sites in good locations. Lam expects keen bidding for the Hung Hom site as flats on the high floors would enjoy sea views. The site, located in front of the residential project Harbour Place, will provide a total gross floor area of 365,750 square feet. The height limit of 100 metres allows for residential blocks of 33 storeys. The reserve price of HK$1.77 billion represents an accommodation value of HK$4,839 per square foot. Paul Louie, the regional head of property research at Nomura International, said the government had lowered its asking prices for sites under the application list in order to make it easier to trigger a sale. "We can see more sites released for auction," he said. The second site, which will provide a gross floor area of 394,285 sqft, is at 204 Argyle Street, close to Kowloon Hospital.
Promoters at the opening ceremony of online retail shop hongkongdg.taobao.com, which aims to promote Hong Kong brands and designer collections on the mainland. The Hong Kong Trade Development Council (HKTDC) Design Gallery and leading mainland online shopping website Taobao.com have jointly launched a retail channel, hongkongdg.taobao.com, to promote Hong Kong brands and designer collections on the mainland. The online shop will sell 100 per cent Hong Kong designs, ranging from fashion and accessories, jewellery and watches, to homeware and lifestyle goods, gifts and stationery. More than 50 brands are now available on the shop, including Chow Sang Sang Jewellery and Chow Tai Fook Jewellery, which enjoy high popularity among mainlanders. Hong Kong movie star and singer Andy Lau Tak-wah has designed exclusive gifts for online shoppers under his brand Andox and Box. HKTDC deputy executive director Margaret Fong said at the online shop's opening ceremony that online shopping on the mainland was estimated to grow more than 80 per cent a year, reaching 250 billion yuan (HK$287 billion) last year. "This presents immense business opportunities for Hong Kong companies," she said. HKTDC has outlets in Wan Chai and at the airport, and a third one at Beijing's Wangfujing commercial district. Fong said the shop was set up mainly to promote Hong Kong designs not to make profits, and there was no sales target in the near term. Daniel Zhang, chief financial officer of Taobao and general manager of Taobao Mall, said Taobao's sales reached 208 billion yuan last year, accounting for 80 per cent of the online shopping market on the mainland. "I believe the new HKTDC channel will help Hong Kong brands and small businesses expand into the mainland and allow more mainland consumers to buy Hong Kong products with greater ease," he said. Zhang said the website had been in experimental operation for a while and had received a warm response from shoppers. Based in Hangzhou, Taobao was set up by internet conglomerate Alibaba (SEHK: 1688, announcements, news) Group in 2003 as a platform to provide customer-to-customer service. It was serving more than 190 million registered users as of April this year. Taobao Mall www.mall.taobao.com was set up as a subsidiary channel of Taobao in 2008 to offer online business-to-customers services. It also has agreements with Nike, Motorola, Dell, Lenovo Group (SEHK: 0992), Uniqlo and Li Ning (SEHK: 2331). According to a report by research firm Zero2IPO, revenue of the mainland's online business-to customer websites reached 22.4 billion yuan last year. Zhang did not give figures for Taobao Mall's revenue. There were 384 million internet users on the mainland at the end of last year.
Emperor plans to increase exposure in the first-hand property market, says Vanessa Fan. Emperor International Holdings, a property-to-hotel developer, posted a net profit of HK$2.80 billion in the fiscal year ending March 31, compared with a HK$1.54 billion loss a year earlier, a turnaround helped by proceeds from a residential project in Xiamen and a greater share of the profits from its hotel division. Sales increased more than three times to HK$1.45 billion from HK$348.17 million. The board of directors recommended 4 HK cents per share as final dividends on HK$1.44 earnings per share. Shares in the company dropped 4.0 per cent to HK$1.67 yesterday after the results announced. The company, which used to rely heavily on rental income, plans to further increase its exposure in the first-hand property market, said Vanessa Fan, managing director for Emperor International Holdings. The company will increase its market share in the first-hand property market by offering more residential units to the market this year. It will kick off the sale of at least two residential projects in Hong Kong this year, at a time when the recovery in the first-hand property market in the city is gathering pace. Harbour One, which fetched HK$960 million in the first batch of sales in May, will offer the remaining 54 units as early as this year. The Java, a 75-unit property project in North Point, will start its sale next month. In additional, the company also plans to launch the pre-sale of a multi-storey commercial/residential block on Prince Edward Road West in the fourth quarter of this year. The project will be completed in 2012. Regarding the "nine measures" by the Hong Kong government to improve the accuracy and transparency of first-hand residential property transactions, the company believes that those measures could boost the confidence of potential buyers of uncompleted flats. The company predicts retail will contribute a more substantial portion to the company's total rental income. It has a growing shop portfolio along Tsim Sha Tsui's Canton Road, which is becoming more popular with mainland tourist. And it has a strong presence on Russell Street, Causeway Bay, which according to a recent market survey ranks third-highest in the world in retail rents. Sales from its hotel division increased to HK$ 687.1 million from HK$52.7 million a year earlier due to the contribution from the 291-room Grand Emperor Hotel in Macau since August 2009. Emperor Entertainment Hotel Limited, a 55 per cent owned subsidiary of the company, has recorded HK$ 834.7 million revenue from its gaming facilities, including a 60-table gaming hall and 330 slot machines.
China*: Japan is further opening its doors to mainland tourists by allowing tens of thousands of mainlanders working in, or who have migrated to, Hong Kong to apply for temporary visitor visas to the country from tomorrow. The new policy allows mainland passport holders living in Hong Kong to obtain individual sightseeing visas to Japan locally. Applicants in general will be given a visa to visit Japan for up to 15 days, although visas for as long as 90 days may also be granted. The scheme applies to mainlanders and their dependents who are either working in Hong Kong or under the various migrant schemes, such as the Capital Investment Entrant Scheme, Quality Migrant Admission Scheme and Admission Scheme for Mainland Talents and Professionals, as long as their residency is valid for at least a year. Acting consul-general of Japan, Daisuke Matsunaga, said tens of thousands of mainlanders in Hong Kong would be eligible under the new policy. "It is part of our 'new growth strategy', which aims to increase the number of foreign tourists to Japan," Matsunaga said. He said Japan attracted about 6.8 million foreign visitors to the country last year, of which about 1 million of them were from the mainland. The Japanese government was aiming to boost the total number of inbound visitors to about 25 million per year by 2020. "In 2008, we have 3.4 million Japanese people going to China, which is a lot more than those from China to Japan. Therefore, we want to have more Chinese visitors." To apply for a visa in Hong Kong, applicants must submit documents including a certificate of employment and a guarantee letter written by someone who has been living in Japan for at least three years. The guarantor will bear no legal responsibility. Japan is also relaxing some other visa application requirements for all mainlanders from today. Now, middle managerial staff in the government or firms can obtain a temporary visa, instead of just targeting wealthy and high-income earners. In 2000, the Japanese government began allowing tour groups from the mainland to travel in the country for up to 15 days. Last July, tourist visa restrictions were relaxed to allow individuals in Beijing, Shanghai and Guangzhou earning at least 250,000 yuan (HK$285,000) a year to submit applications. In the first nine months after doing this, it issued 16,000 visas.
China state media yesterday slammed US President Barack Obama for suggesting Beijing turned a blind eye to North Korea's actions, calling his remarks "irresponsible and flippant." At the Group of 20 summit in Canada at the weekend, Obama said Beijing must not show "willful blindness" over Pyongyang's "belligerent behavior." He also noted having spoken bluntly to President Hu Jintao on the matter. The Global Times hit back at the US leader, saying he should have taken Beijing's concerns into consideration before "making irresponsible and flippant remarks about China's role in the region." Noting Beijing's role as host of the on-off six-nation talks on North Korea's nuclear disarmament, the English- language daily said: "It is thus not China that is turning a blind eye to what North Korea has done and has not done ... Instead, it is the leaders of countries such as the United States that are turning a blind eye on purpose to China's efforts." The United States and Seoul have led a push for a UN censure of Pyongyang for the sinking of a South Korean warship in March that killed 46 sailors, but the Security Council has yet to issue a formal condemnation. Beijing, a close ally of the impoverished North, has been reluctant to endorse a United Nations condemnation over the sinking until it has assessed the evidence in the incident for itself. The Global Times acknowledged that Beijing's efforts to convince North Korea to give up its nuclear program have not all been effective, but said maintaining contact with Pyongyang is vital. "The US cannot ignore the fact that China remains the most important channel of effective communication in this situation," said the paper, run by Communist Party mouthpiece People's Daily. "Closing the channel would leave the situation deadlocked. That is by no means what the world wants."
Grand Canal extension stops short of the sea - In 605AD, a Sui dynasty emperor named Yang Guang decided that China should have a 2,000-kilometre canal between Beijing and Hangzhou that should be deep enough for large cargo ships, and more than 40 metres wide. The decision immediately drew criticism from some senior officials, who estimated it would take decades, if not centuries, to build the canal. By one account, the emperor had their tongues cut off, and the project - now called the Grand Canal - was completed in five years. For more than 1,000 years, nearly half of China depended on the canal to transport food, commodities and even armies. But the rise of railways and major roads and a severe drought in the north in recent years rendered it largely defunct. Then in 1995, as the canal was approaching total disuse, the government decided unexpectedly to lengthen it. The extension, largely using a river connecting Hangzhou and Ningbo, was to be only 230 kilometres long.
ZTE Corp (SEHK: 0763) led domestic sales of CDMA-standard wireless network equipment in the first half of this year with a 43.54 per cent market share, driven by the aggressive infrastructure expansion of China Telecom Corp (SEHK: 0728). That demand has pushed Shenzhen-based ZTE, the country's largest publicly listed telecommunications systems manufacturer, "to make large-scale investments in CDMA technology", Li Jian, the firm's general manager for third-generation CDMA and fourth-generation LTE-standard wireless products, said yesterday. The firm's main domestic customer for CDMA equipment is fixed-line network giant China Telecom, which has signed up an average of about three million new mobile subscribers a month since the launch of its wireless network last year. "This year, ZTE has undertaken the migration of legacy CDMA systems from other manufacturers in 12 of the 14 prefecture-level cities for China Telecom," Li said. Wang Xiaochu, the chairman of China Telecom, said in March the carrier would continue to ramp development of its wireless infrastructure, as "demand for mobile internet services continue to increase". China Telecom had 71.5 million mobile telephone service users as of May, when the country's total 2G and 3G subscribers reached 776 million. Market leader China Mobile (SEHK: 0941), which runs a nationwide 3G network based on the mainland-developed TD-SCDMA standard, had 548.982 million wireless subscribers as of May. Rival China Unicom (SEHK: 0762), operator of the more mature WCDMA-standard 3G network, recorded 155.287 million mobile users. ZTE, which posted a 39.68 per cent year on year increase in net profit to 109.86 million yuan in the first quarter, also claimed leadership in worldwide CDMA network sales. Li said the company seized a 43.2 per cent global market share due to a steady increase in shipments to more than 120 mobile network operators in 70 countries. Matt Walker, principal analyst at market research firm Ovum, said ZTE, like domestic rival Huawei Technologies, had received Beijing's support to grow significantly in overseas markets. Last year, for example, ZTE received two separate lines of credit from government financial institutions to help it pursue projects abroad - US$15 billion from China Development Bank and US$10 billion from the Export-Import Bank of China. The company last month landed a C$350 million (HK$2.6 billion) contract to design, build and operate a CDMA wireless network for Canadian operator Public Mobile.
July 1, 2010
Hong Kong*: Troubled teenagers are more prone to become pathological gamblers and drug abusers, a study by the Chinese University of Hong Kong shows. The survey of more than 700 so- called "marginal teens" and about 4,700 secondary students found 22 percent of the former could be classified as pathological gamblers, compared with 1 percent in the latter group. Most of the gamblers were several thousand dollars in debt. And in one extreme case, a teenager with triad connections owed over HK$1 million. These youngsters also tend to think all the time about placing bets, and lie to their families and friends about their gambling habits. Nearly 60 percent of pathological gamblers among the marginal teens are also into drugs. Psychological factors, including poor parenting and low self-control, play an important role in the development of pathological gambling behavior, the researchers found. Marginal teens live in a "world of gambling," social worker Chen Chi-sing said. "They spend a lot of time hanging around on the streets. When they go out with their friends, they usually indulge in gambling." Pathological gambling is difficult to address because it is hard to define exactly when a passion becomes a problem, since society normally accepts such behavior - such as playing poker. "It is not like drugs, when you take that first pill it means you've got a problem," Chen said. "Society actually accepts many gambling activities and sometimes people do not realize they are gambling at all." Chan Kam-ming of the Hong Kong Council of Social Service said the number of teenagers placing bets online has risen from up to 3 percent in the early 2000s to some 10 percent in recent years. He suggested the government set up an online task force to tackle the problem.
The government has appointed a new commission to manage harborfront development on Tuesday, with property consultant Charles Nicholas Brooke named as chairperson. The Harborfront Commission will replace the Harborfront Enhancement Committee. The commission consists of 28 members with 12 organizations such as the Real Estate Developers Association and the Society for Protection of the Harbor represented. It would make recommendations on the development of Victoria Harbour to the government and the chairman said it would also aim to encourage government partnerships with the private sector. “Not only will we will play an overseeing role, but we will be responsible for monitoring planning, design and development [of harborfront projects] for the management,” Brooke told local radio. The previous committee was set up in 2004 and helped in reducing the extent of reclamation plans proposed by the government in Kowloon Bay and Central.
China Resources Enterprise has bought an 80 per cent stake in Hong Kong coffee chain Pacific Coffee for HK$326.6 (US$42.1) million, in a move by the retail firm to enter the coffee store business in the mainland. Consumer-sector focused China Resources Enterprise (SEHK: 0291) said on Tuesday that it had acquired an 80 per cent stake in Hong Kong coffee chain Pacific Coffee from Chevalier Pacific Holdings for HK$326.6 million. The remaining 20 per cent of Pacific Coffee, which has 95 stores mostly in Hong Kong, would be held by investment holding firm Chevalier. “Coffee consumption is experiencing rapid growth in China, fuelled by a growing coffeehouse culture among Chinese consumers,” Chen Lang, managing director of China Resources Enterprise, said in a statement. “Our goal is to build Pacific Coffee into the No 1 coffeehouse brand in China.” Pacific Coffee would compete with US speciality coffee chain Starbucks, which said recently that it could in the future have “thousands of stores” in Greater China, up from around 700 now.
Seasoned barristers and friends yesterday broke into applause in a scene rare for the sombre halls of the Court of Final Appeal as two lawyers in a case involving alleged witness tampering had their names cleared six years after they were first arrested. The Court of Final Appeal unanimously dismissed prosecutors' attempts to overturn barrister Kevin Egan's acquittal by a lower court and quashed solicitor Andrew Lam Ping-cheung's conviction. Mandy Chui Man-si, a co-defendant, was also acquitted. The ruling brings to a close six turbulent years of legal battles and appeals, first at the District Court, then the Court of Appeal, and finally, the city's top adjudicator. The Court of Final Appeal's judgment came after seven days of appeal hearings last month and this month. Immediately after Mr Justice Kemal Bokhary announced the decision and the panel of judges rose, the three appellants and others in court erupted in applause. Lam appeared moved to tears as he embraced those around him. "Of course I'm very delighted that in Hong Kong we have a judicial system which is fair and reasonable," the lawyer, who had not slept for six days before the judgment, said outside court. However, he added that within the system there might be room for improvement. Lam said the case had affected him tremendously. "My licence to practise law was revoked, my family is affected, my social life is totally a mess. And of course, my financial position has been damaged and ruined," he said. Lam went to St John's Cathedral 50 metres from the court to pray after the ruling. "It was thanks to my faith that I got through those six years." He headed to a doctor afterwards to consult him about a heart condition he attributed to the long battle.
At the same time, Lam and Mandy Chui Man-si, a girlfriend of Derek Wong, appealed against convictions for perverting the course of justice. They were alleged to have made a fraudulent claim that Becky Wong was unlawfully detained by the ICAC against her will during the investigation. Lam was jailed for six years and Chui for two-and-a-half years. Both sentences were quashed. "The evidence favors a finding that Lam did not know or believe that Becky Wong was not unlawfully detained," Justice Patrick Chan Siu-oi said. Lam said he would apply to get his licence back but was now less keen on criminal law. Egan and Chui declined to comment. Law Society president Huen Wong said the society would meet today to study the judgment and decide whether it should discontinue disciplinary proceedings against Lam and reinstate his licence. Lam's licence was suspended pending the final outcome of his case, Wong said. It was not suspended as a result of disciplinary proceedings against him, which up till now have not been heard. One man in court yesterday said he predicted the outcome. Sammy Au Chung-tak, Chui's fung shui master, said he knew Chui would win. "Mandy's ba zi," he said, referring to a fung shui system, "is averse to fire. Today's ba zi has the element of earth and metal, which helps reduce the fire element, which represents the legal proceedings". Au said Chui had performed many charitable acts, including opening a charitable organisation to help the elderly six months ago. Mr Justice Patrick Chan Siu-oi, Mr Justice Roberto Ribeiro, and non-permanent judges Mr Justice Henry Litton and Mr Justice Murray Gleeson also sat on the panel hearing the case.
Hong Kong Law Society president Huen Wong at a press conference on Tuesday in Central where he announced the reinstatement of suspended lawyer Andrew Lam Ping-cheung. The Law Society of Hong Kong has reinstated solicitor Andrew Lam Ping-cheung’s legal licence and stopped disciplinary proceedings against him, Law Society president Huen Wong said on Tuesday. Lam's licence had been suspended in 2006 after his conviction for conspiring to pervert the course of justice. On Monday, that conviction was quashed by the Court of Final Appeal. Wong made the announcement after members of the society met on Monday to study the court's judgment. “The society suspended Mr Lam’s licence in 2006 on the grounds that he was convicted," Wong said. "Now that the court has quashed his conviction, it was reasonable for us to resume his licence.” Lam was very happy with the decision of the society, he said. The case stemmed from an alleged conspiracy to put pressure on a potential prosecution witness to not help the ICAC with a market manipulation investigation. Lam's conviction was quashed by the Court of Final Appeal after it found there was insufficient evidence to link him with the conspiracy.
Amid intensifying criticism being levelled at the Democratic Party for its support of the government's reform proposal, the League of Social Democrats said it could not control any radical action by its supporters during the annual July 1 march. The warning by league lawmaker Wong Yuk-man came as Democratic Party chairman Albert Ho Chun-yan said he was prepared for a bad reception at the march, which his party will attend. At a press conference, the league announced that it was reviewing whether to treat the Democratic Party as an ally in light of the latest developments. League chairman Andrew To Kwan-hang said the democratic party should consider whether to take part in the march. "We are fighting for the introduction of universal suffrage in 2012 and abolishing functional constituencies. The government has already surrendered - why is it still going to march?" To said. He accused the party of "trying to play victim" in recent days, citing vice-chairwoman Emily Lau Wai-hing's condemnation of people who swore at moderate democrats during RTHK's City Forum programme on Sunday. "Perhaps the party thought it could score some political points if its members tripped over during the march," Wong said. "The league has not ordered our supporters to rush them, but when the people are angry, we can't guarantee anything." Wong said he personally "does not oppose" league supporters mobbing Democrats taking part in the demonstration to express their anger. "I expect the July 1 march will be very chaotic. The Communist Party will be very happy," he said. Flanked by his party colleagues, lawmakers from the Civic Party and other independent pan-democrats in a separate press conference, Ho said he was prepared for the worst but trusted the public to hold an orderly demonstration. "People will be angry and criticise us, and I am prepared for this. We will call for our supporters to be relaxed about the criticism," Ho said. There was tension in the air when, one by one, those present at the press conference called for restraint. Unionist Lee Cheuk-yan, a march organiser, said any violence would mean people had fallen into Beijing's trap of splitting the camp.
China*: Baidu, mainland’s leading search engine, will start hiring software engineers directly from the United States early next month, as it seeks to expand its technological capabilities and raise its global profile. Baidu stands to be the biggest beneficiary in mainland’s search sector after Google relocated its mainland servers to Hong Kong following a high-profile spat with Beijing over censorship and hacking. Baidu would hire 30 mid-to senior-level software engineers from Silicon Valley at a job fair on July 10 to drive new technology projects, its first direct hiring from the United States, a Baidu spokesman said on Tuesday. “Baidu believes that talent is the key to our success as a company, and we go where ever the best talent can be found, whether here in China or in Silicon Valley,” Zheng Bin, Baidu’s human resources director said in a statement. “As we develop more and more advanced search technologies, our need for world-class talent will only continue to increase.” Baidu is a household name in the mainland but not well known overseas. Baidu Japan, the firm’s venture into the Japanese search market, has been loss-making ever since its inception. The hiring is significant as it shows that Baidu, traditionally domestically focused, is eager to raise its profile overseas and plug into talent outside China. The move also comes as other mainland internet firms, such as Tencent Holdings (SEHK: 0700), mainland’s largest internet firm by market value, are starting to invest overseas. Analysts expect Baidu to win as much as half of Google China’s search revenue, which could add as much as US$330 million annually to Baidu’s top line, representing a more than 50 per cent increase on last year's revenue of 4.45 billion yuan (HK$5.09 billion). The migration to a new search keyword system has also fuelled revenue growth, leading to the need for more software engineers, said a Baidu spokesman. In an archetypal rags-to-riches tech story, Baidu was founded by Robin Li, who started the firm in a three-star hotel room in Beijing. The search giant, whose name is taken from an ancient poem, now dominates the world’s biggest internet market, with more than 60 per cent market share by revenue and about 75 per cent by traffic. Baidu shares are up 80 per cent since the start of the year compared with the Nasdaq’s 2 per cent fall. It now trades at a rich forward this year price earnings ratio of 61 times, more than triple that of Google.
Chen Yunlin, chairman of China's Association for Relations Across the Taiwan Strait (ARATS), front right, shakes hands with his counterpart, Chairman of Taiwan's Straits Exchange Foundation (SEF), Chiang Pin-kung after a signing ceremony in Chongqing on Tuesday. China and Taiwan signed a tariff-slashing trade pact that boosts economic ties and further eases political tensions.
An epidemiology centre opened in Shanghai on Tuesday to train experts in detecting ways to prevent chronic and epidemic diseases.
Three more senior aviation officials have been detained in a widening investigation of corruption in the country's air-transport sector following the suicide of a top official last week.
Google said on Tuesday it will stop automatically rerouting users of its mainland search site to Hong Kong after Beijing said the company would lose its mainland licence.
U.S. slaps punitive penalties on Chinese woven electric blankets - The U.S. Commerce Department Monday set final antidumping duties on imports of some 55.92 million dollar woven electric blankets from China, a move might escalate trade disputes between the two countries.
Foxconn is to build a new plant in Zhengzhou City, capital of central China's Henan Province, municipal authorities said Tuesday. Foxconn and senior officials of Zhenzhou and Henan are working on the details of an agreement to build the plant, said a spokesman for the municipal government. Zhengzhou has allocated land for the plant. The first phase construction will cover 133 hectares, he added. Henan has launched a massive recruitment drive for the new plant. Recruitment advertisements have been posted in many residential communities in Zhengzhou as well as on the official websites of other Henan cities. The new plant is to employ 300,000 people in the long run. About 100,000 people are to be recruited in the near future, an official with the provincial employment promotion department said while declining to give his name. "Workers can expect a monthly income from 2,500 yuan to 3,000 yuan with wages of no less than 2,000 yuan per month." The pay is about the same as that of Foxconn's plants in Shenzhen City in south China's Guangdong Province.
June 30, 2010
Hong Kong*: Standard Chartered said it was on track for a strong first-half performance as its key Asian markets fared better than the west and it grabs market share.
Democratic Party chairman Albert Ho Chun-yan said on Monday party members would join the July 1 protest – along with other pro-democracy protesters and groups.
Graftbusters yesterday lost a six-year legal battle against two lawyers dubbed "The ICAC Killers" for their record of winning acquittals in cases brought by the anti-corruption agency. Friends and relatives of solicitor Andrew Lam Ping-cheung and barrister Kevin Egan were quick to celebrate after the Court of Final Appeal quashed convictions for perverting the course of justice. The Independent Commission Against Corruption had contested a Court of Appeal decision to quash a conviction against Egan. He had been convicted of revealing the identity of a female witness under protection by the ICAC. The witness, Becky Wong Pui-sze - the secretary of Semtech International Holdings chairman Derek Wong Chong- kwong - joined the protection program voluntarily after being arrested in 2004 along with her boss and seven others in a corruption case involving HK$570,000. Derek Wong has since absconded. The case related to a share- manipulation probe involving Semtech. Investigations included ICAC officers searching seven newsrooms - including those at Sing Tao, Apple Daily and Oriental Daily - in July 2004 and seizing computers. Egan gained access to Becky Wong and made a report of false imprisonment against the ICAC to seek her release. The Court of Final Appeal ruled that Egan's acquittal should stand, saying "the evidence presented by Egan was not addressed by the majority in the Court of Appeal." At the same time, Lam and Mandy Chui Man-si, a girlfriend of Derek Wong, appealed against convictions for perverting the course of justice. They were alleged to have made a fraudulent claim that Becky Wong was unlawfully detained by the ICAC against her will during the investigation. Lam was jailed for six years and Chui for two-and-a-half years. Both sentences were quashed. "The evidence favors a finding that Lam did not know or believe that Becky Wong was not unlawfully detained," Justice Patrick Chan Siu-oi said. The judge added that the presumption by the Court of Appeal that Lam was party to a conspiracy was inappropriate. Lam said later as he headed for a celebration at the Foreign Correspondents' Club in Central that having spent the "golden age of life fighting for justice in court" he was delighted with the judgment. "I believe in the rule of law practiced in Hong Kong," he said, adding: "Financial support from friends and my endurance helped pull me through the years." He told The Standard he is considering a claim against the ICAC for loss of earnings in the past four years, though he is not confident of success. Lam also said he would apply for the restoration of his license to practice as soon as possible. But he will not take up criminal cases - not to mention ICAC cases. "I've been restless enough going through the trial of this criminal case," he said. The Law Society of Hong Kong will today discuss whether to restore Lam's license. Egan, a former ICAC inspector, said he has no intention of changing what he has been doing for two decades and will continue to handle criminal cases involving the commission.
Graftbusters need to stay on the straight and narrow, legislators said after yesterday's ruling in the Court of Final Appeal. James To Kun-sun, a solicitor and deputy chairman of the legislature's panel on security, said: "The image of the Independent Commission Against Corruption has been affected by the case ... not because it spent lots of manpower and resources on it but because it did something unjust." He described as "malpractice" an ICAC decision to destroy a recording that solicitor Andrew Lam wanted kept as it might have proved his innocence. The recording was said to be of a conversation between Mandy Chui and Semtech chairman Derek Wong's secretary. To also said that as Lam and Kevin Egan were known for representing people in trouble with the ICAC, the agency's handling of the case might leave people with an impression that it was snapping at their heels. The case could also have lawyers worrying that they would face trouble if they represented people charged by the ICAC, he added. Lau Kong-wah, chairman of the panel on security, said yesterday's decisions were "a blow" to the ICAC, "but I believe our society will respect the ruling." But another solicitor and panel member, Paul Tse Wai-chun, said he did not see indications that the ICAC failed to meet its responsibilities in the case. The ICAC has lately come under criticism over its approach to some cases. Among them, TVB general manager Stephen Chan Chi-wan and four other people were arrested in March for alleged corruption over service contracts on entertainment shows, but the case does not appear to have moved forward.
The League of Social Democrats has promised not to intimidate or heckle the Democratic Party during Thursday's pro- democracy march. But it expects the march to be "very chaotic" given disharmony in the pan-democratic camp due to Democrat support for the government's political reform package.
China*: The yuan hit a record high yesterday at 6.7968 against the US dollar before softening after the central bank set the strongest exchange rate in five years.
Trade officials from China and Taiwan were finalizing details on Monday on a landmark trade pact that will bind the economies of the political rivals closer than ever.
US President Barack Obama launched a stern challenge to the mainland overnight on Sunday, using the big stage of the G20 summit of world powers to demand Beijing’s help in rebalancing the world economy. The G20 leaders, representing both the world’s established economic giants and its dynamic emerging powers, agreed a package of measures to cut deficits, stimulate growth and return stability to financial markets. But Obama went further than the carefully worded joint statement, using his post-summit press conference to remind the mainland that the United States expects it to allow its currency to rise and to reduce its huge trade surplus. “My expectation is that they’re going to be serious about the policy that they themselves have announced,” Obama said, welcoming Beijing’s announcement last week that it will allow more flexibility in the yuan exchange rate. As the world limps out of the worst recession since the 1930s, American policymakers fear the recovery will revive the one-sided trade across the Pacific in mainland goods kept cheap by the low level of the yuan.
China's Communist Party grew even bigger last year as more people sought membership seen as a ticket to the ruling class elite and a means for getting ahead.
Agricultural Bank of China has set the price range for the Shanghai portion of its IPO at 2.52 to 2.68 yuan (HK$2.88-HK$3.06) per share, two sources said on Monday.
Taiwan’s Hon Hai Precision Industry Co group will build new factories for its LCD panel maker Chi Mei Innolux in the cities of Chengdu and Wuhan to mitigate rising labour costs in the mainland’s factory belt. A source with direct knowledge of the company’s plans said on Monday that the company would also expand production at existing plants in Ningbo, Nanjing and Foshan. The moves come amid a string of labour unrest in the coastal industrial hub of the Pearl River Delta, where increasingly assertive migrant workers are demanding better conditions and higher wages.
*News information are obtained via various sources deemed reliable, but not guaranteed