China.Hawaii Chamber of Commerce ®
Hong Kong.Hawaii Chamber of Commerce ®
Asia Pacific California Chamber of Commerce ®

"Hawaii-China Guan Xi, We Get Things Done" - Trade Advocacy Organization

      061101-donald tsang.jpg (11044 bytes)   

 video  

 USA Small Business Administration (SBA) Selected Johnson Choi/HKCHcc 2008 United States National Champion

Click on the Logo to Join HKCHcc on   and follow us on 

 

Chinese business etiquette

Newsletter

Biz: China Hong Kong Hawaii SF

Seminar Material

What people said about us 

China Earthquake Relief

Tax & Government

Hawaii Voter Registration

Biz-Video

Hawaii's China Connection

Doing Business in Hong Kong & China

Share Hong Kong, China & Hawaii Biz*            

View HKCHcc and Hawaii Chinese Organizations Listing & Event Calendar
In Depth Look of Hong Kong - Past, Current & Future
In Depth Look of China - Past, Current & Future
To succeed in business in Hawaii, you must understand the islands
How to Do Business with China, through Hong Kong & Setting up Business in China?
Hawaii Failed Business Image and Continue Missed Opportunities

Skype - FREE Voice Over IP  View Hawaii's China Connection Video Trailer

Hong Kong, China & Hawaii News Archive for Year 2002  Archive Jan 1, 2003.........:>
January - April 2003  May - July  2003  Aug - Sept 2003  Oct - Dec  2003 January - Mar 2004  April - June 2004  July - Sept 2004
Oct - Dec 2004 Jan - Feb 2005  Mar - Apr 2005  May - Jun 2005 July - Aug 2005 Sept - Oct 2005 Nov - Dec 2005 Jan - Feb 2006 
Mar - Apr 2006 May - Jun 2006 Jul - Aug 2006 Sept - Oct 2006 Nov - Dec 2007 Jan - Feb 2007 Mar - Apr 2007 May 2007 June 2007
July 2007 Aug 2007 Sept 2007 Oct 2007 Nov 2007 Dec 2007 Jan 2008 Feb 2008 Mar 2008 May 2008 June 2008 July 2008
Beijing Olympics Aug 2008 Sept 2008 Oct 2008 Nov 2008 Dec 2008 Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 June 2009
July 2009 Aug 2009 Sept 2009 Oct 2009 Nov 2009 Dec 2009 Jan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 June 2010 Jul 2010
Aug 2010 Sept 2010
China Projects Bidding Information - update daily    Scholarship & Grants  News Archives in PDF Format

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!

Are you ready to export your product or service? You will find out in 3 minutes with resources to help you - enter to give it a try

  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

Johnson Choi on Hong Kong investments with Hawaii filmmakers - Asia in Review host Jay Fidell in a discussion with Johnson Choi, President of the Hong Kong.China.Hawaii Chamber of Commerce on his recent (July 2010) trip to Shanghai and Hong Kong and on Hong Kong investments with Hawaii filmmakers http://vimeo.com/13994279 or download video click: http://www.hkchcc.org/johnsonchoithinktec0710.mp4

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

(approximate $ exchange rates: US$1 = HK$7.8, US$1 = RMB$6.8)

View China 60th Anniversary Video and Photo online

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

Wine-Biz - Hong Kong Brand Hong Kong Video

Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) http://www.tid.gov.hk/english/cepa/index.html

About APEC http://www.apec.org/apec/about_apec.html APEC 2011 November 2011 Honolulu Hawaii USA

Presentation: Inside APEC http://www.hkchcc.org/insideapechkchccpresentation080810.ppt (Microsoft Power Point 16 Meg File Size)

October 1, 2010

Hong Kong*: The government land auction on Wednesday surprised the market after one residential site in Chai Wan was withdrawn and another in Fanling was sold at a record price.

Consumer confidence in Hong Kong enjoyed a slight rebound in the third quarter, according to a new survey released by the Bauhinia Foundation Research Centre on Wednesday.

HK film eyes Oscar nomination - A local film that raised public concern about preserving the historic old Wing Lee Street, in Sheung Wan, was picked yesterday to represent Hong Kong among films from which five nominees will be chosen to battle for the Oscar for best foreign-language film at next year's Academy Awards. Echoes of the Rainbow, starring Simon Yam Tat-wah and Sandra Ng Kwan-yu, won a Crystal Bear Children's Jury prize at February's Berlin Film Festival, in Germany, and also four prizes - including best screenplay and best actor - at the 29th Hong Kong Film Awards. The 1960s-set film - sponsored by the Hong Kong Film Development Council - tells the story of a shoemaker and his family, whose eldest son becomes ill with leukaemia. It was voted for unanimously by all 11 board members of the Federation of Motion Film Producers of Hong Kong to run for the 83rd Oscars. Plans to redevelop the rundown street used in the film were shelved following the film's success. The American Academy of Motion Picture Arts and Sciences will hold a screening of foreign films in the US next month before selecting the five final nominees for the ceremony on February 27. Producer Mabel Cheung Yuen-ting said: "I am very honoured the film will represent Hong Kong. But there's still a long way to go." Federation chairman Crucindo Hung Cho-sing said he was confident the film would be among the final five nominees. "It had good box office, was well-received by audiences and did well at festivals. It reflects the real life of lower classes in the 1960s and truly represents Hong Kong," he said.

Following the lead of Hong Kong, Beijing and other key mainland cities, Macau yesterday unveiled a string of measures to rein in property speculation. The measures centre on increasing housing supply as well as raising the transaction costs for speculators, Lau Si-lo, Macau's Secretary for Transport and Public Works, said. Lau said land supply would be increased and new sites would be designated solely for the building of flats of 700 to 800 square feet. The government will help developers in transforming industrial sites for residential development. From next month, buyers of properties worth more than 3.3 million patacas will have to pay a minimum down payment of 30 per cent of the purchase price. Monthly mortgage payments should not be more than half of the buyer's income. The stringent down payment requirement applies also to non-Macau residents. Transaction fees will jump from 0.5 per cent to 3 per cent of the property's price.

Jewellery and watch retailer Chow Tai Fook plans to double its outlets on the mainland to 2,000 in the next decade, with half of the new shops located in small cities. The Hong Kong-based company, which is privately held by tycoon Cheng Yu-tung, opened its 1,000th store on Qianmen Street in Beijing yesterday. Managing director Kent Wong Siu-kei said the jeweller would open another 1,000 outlets on the mainland before 2020. Half of them will be in first- and second-tier cities, with the rest to be located in third- and fourth-tier cities close to rural areas. "The market [in smaller cities] is vast considering the growing revenue in rural areas and the central government's continuous efforts to drive up domestic consumption," he said. Chow Tai Fook, which began as a small jewellery shop in Macau, has become the biggest jewellery retailer in the nation under the leadership of Cheng, who is also chairman of New World Development. The company's closest competitor on the mainland by sales is another Hong Kong jewellery retailer, Chow Sang Sang. Chow Tai Fook already has a network established in the mainland's first- and second-tier cities. It operates about a third of its shops directly, while the rest are run as franchises. "We estimate the market for jewellery and gold trading [on the mainland] will grow 20 per cent annually over the next five years," Wong said. Jewellery and watches are among the most sought-after goods for mainland tourists visiting Hong Kong. The company recorded double-digit growth in same-store sales from January to August this year. It said its most popular product by trade volume is gold, followed by gems, jade and pearls. Asked if fast expansion on the mainland would affect the company's Hong Kong business, Wong said it would likely benefit the brand. With more mainland outlets, he expects more mainland customers to seek out the brand when they visit Hong Kong. Tax-free goods and a good shopping environment would bring more mainland customers to the retailer's Hong Kong outlets, he said. He noted the culture of giving jewellery on the mainland was similar to that in Hong Kong. Mainland couples exchange wedding rings, he said, while diamond rings and accessories made of gold are given to mark an engagement. "Cheap prices are no longer the most important thing to lure buyers here. Mainland tourists are paying more attention to the shopping environment and services," Wong said. Chow Tai Fook's new shop in Beijing has a floor area of 28,000 square feet, the biggest of all its mainland shops. It spans two adjoining four-storey buildings, with one for jewellery and the other for watches. As well as its outlets on the mainland, the company also owns almost 100 shops in Hong Kong, Macau, Taiwan and Malaysia. It plans to enter the Singapore market soon.

US brand to target China riches via auctions from Hong Kong - Sotheby's realty arm eyes luxury market - Samson Law, managing director of Sotheby's International Realty in Hong Kong. A surge in demand for luxury homes and apartments in Hong Kong has lured US-based estate agency franchise Sotheby's International Realty to enter the market. Local property broker Samson Law Lai-choi, owner of estate agency Hong Kong Homes, has secured a 25-year master franchise agreement to develop the Sotheby's brand in Hong Kong. "Everyone knows the name Sotheby's," Law said. "We have already recruited 20-plus sales staff and aim to increase this to 40 within one year." Local rivals said they were not in awe of their new big-brand international competitor. "Hong Kong is a mature market. It will prove difficult for a newcomer to make an impact. It is going to be a tough job for them," said Joseph Tsang Hon-ping, international director and head of capital markets at Jones Lang LaSalle's Hong Kong office. "We had been approached by the US company for business co-operation opportunities a few years ago. But we did not feel comfortable with the business model." Other property agents said they did not feel threatened by the newcomer. "We have more than 10 branches in the Mid-Levels and Island South. Can a company with only an office address compete with us? It will not be easy," Vincent Chan Kwan-hing, executive director of Midland Realty, said. Louis Chan Wing-kit, executive director of Centaline Property Agency, said there was room in the market for more players, and new entrants would not affect its leading position. He said Centaline was responsible for settling some 25 per cent of luxury transactions valued at HK$20 million or above. "We have established a very strong network of street shops and a database. That results in an operational cost of more than HK$100 million every month." Data from Centaline shows there were 5,913 properties sold for HK$10 million or above in the first eight months. This represented an increase of 63.34 per cent compared with the same period last year. The value of properties sold amounted to HK$132.8 billion, up 78.85 per cent. With commissions on luxury sales of 1 to 2 per cent, sales in the first eight months were worth HK$1.3 billion to HK$2.65 billion for the agents. Law, who also owns Proway, a company providing relocation services, said his contract with New Jersey-based Realogy Corp, which owns Sotheby's franchising rights, was signed in April but it will be officially opened next month. The opening was delayed, he said, because of lengthy negotiations with the franchise owner over differences in business operation between Hong Kong and the United States. He said he would continue running Hong Kong Homes and Proway but looked forward to adding the Sotheby's franchise to his stable. "We will not try to follow the approach of local agents such as Centaline and Midland and open street shops as it would not be easy to compete with them on this basis," he said. Instead, he planned to build on Sotheby's high-profile auctions to market the firm's property services to wealthy clients. "More than 60 per cent of buyers at Sotheby's auctions are mainlanders. We will be allowed to set up a booth in the auction hall areas to market our service. That will help us reach out to the market," he said. Law said there would be no conflict of interest between Hong Kong Homes and the Sotheby's franchise since the former would focus on leasing while Sotheby's would focus on sales. He declined to provide details of the total investment he would make to support the franchise. The path to next month's opening has not been easy, Law said. "We had targeted to begin operating the business in July but were delayed because we were obliged to have a long negotiation with the franchise owner about operating styles in Hong Kong," Law said. "For example, we wanted all photos of properties that we publish to carry a watermark to prevent other agents from using the photos and breaking our copyright over them." But this is not the practice in the US, where an agent gets exclusive rights to market a property and then subcontracts the selling rights with others that share the commission if they sell the property, he said. But in Hong Kong, vendors can appoint several agents to sell a property. They compete with each other and do not have to share commission, he said. "There are differences in how the business operates and it took time to explain this," Law said. "Can we do it? Ask me again in three years and I'll tell you."

 China*: China's central bank on Wednesday pledged to increase flexibility of the yuan exchange rate as US lawmakers were set to vote on legislation that could punish Beijing for alleged currency manipulation. The People’s Bank of China promised to continue to implement an “appropriately loose monetary policy” and “increase currency flexibility”, according to a statement on its website. The statement also vowed to “gradually improve the exchange rate setting mechanism”. The central bank’s wording was almost identical to that used in a similar pledge in June, since when the yuan has strengthened less than two per cent against the greenback. The US House of Representatives was to vote later Wednesday on legislation to expand the powers of the US Commerce Department by allowing it to impose tariffs when another nation is found to be manipulating its currency’s value. The measure enjoyed strong support from President Barack Obama’s Democratic allies and their labour union supporters, as well as his Republican foes, and was expected to win approval, according to several leadership aides. US lawmakers have redoubled their accusations that Beijing keeps the yuan – and therefore Chinese exports – artificially cheap, driving US manufacturers out of business and costing thousands of US jobs. If the measure clears the House, the Senate could take up a companion bill. The vote comes after weeks of intense lobbying by Washington for Beijing to let the currency appreciate, with Obama making his case to Premier Wen Jiabao on the sidelines of the UN General Assembly last week. Before its June vow to let the yuan trade more freely, the currency had been effectively pegged at about 6.8 to the dollar since mid-2008.

Hang Lung plays 'green' card in shopping malls - Developer seeks certification on energy features - A drum dance marks the groundbreaking ceremony for the environmentally friendly Olympia 66 centre in Dalian, Liaoning, on Monday. Building "green" features into new shopping centres on the mainland is becoming standard practice for developers seeking a selling edge in the highly competitive market, consultants say. Among the drawcards of such environmentally sensitive projects is a big reduction in energy bills, achieved by using special glazing that controls heat transfer through windows, as well as improved insulation methods. "In dollar terms, we will achieve savings of about 10 million yuan (HK$11.57 million) on electricity bills at the Olympia 66 development in Dalian," said Vincent Tse, managing director of buildings for China at Parsons Brinckerhoff, which is a consultant to the project. Hang Lung Properties (SEHK: 0101) appointed Parsons Brinckerhoff as a consultant on its mega shopping centre in Dalian, Liaoning, to help it qualify for gold-level certification under the Leadership in Energy and Environmental Design (Leed) scheme. The international benchmark for sustainable architecture is issued by the US Green Building Council. A gold-level certification assures tenants and property portfolio managers that the building uses resources more efficiently when compared to conventional buildings and may also provide healthier work and living environments, which contributes to higher productivity and improved employee health and comfort. Olympia 66 would be equipped with ground-source water heat pumps that extract and dissipate heat from the building into the ground in summer and vice versa in winter, Tse said. "As Dalian is a port city, temperatures often drop below zero in winter. Using ground-source water [heat pumps] will help consume less energy," he said. The seven-storey, 221,900 square metre Olympia 66 will be completed in 2015. Last week, Hang Lung announced that its Palace 66, which opened on July 26 in Liaoning's Shenyang, had attained a gold-level Leed Core and Shell Development Certification. It is the first completed shopping centre on the mainland to have attained such certification. The developer has embarked on a HK$40 billion plan to build seven shopping centres outside Shanghai. That includes malls in Jinan, Shenyang, Tianjin and Wuxi. In Shanghai, it owns Plaza 66, which was completed in 2001, and The Grand Gateway, which was opened in 2005. To improve access to Olympia 66, the developer is in talks with the city government to build an underground tunnel to link the mall with the nearest station along the metro system, now under construction. "We have made the suggestion to the city government and reserved an exit for future use," said Chapman Lam, divisional director for transport engineering at MVA Hong Kong. MVA is the transport consultant for Olympia 66. Lam said the metro was due to open in 2013. "Without the tunnel, shoppers would have to walk for several minutes on the ground level from the metro station to Olympia 66. It would be an unpleasant walk in winter, even for a short distance, as temperatures in Dalian are freezing." William Ko, executive director of Hang Lung, said it was too early to estimate the volume of shopping traffic likely to be attracted to Olympia 66. By way of example, he said, its 130,000 sqmetre The Grand Gateway in Shanghai drew about 500,000 visitors last weekend.

Photo taken on Sept. 29, 2010 shows the exterior appearance of the Canton Tower in Guangzhou, south China's Guangdong Province. The 600-meter-high Canton Tower began its business operations on Wednesday.

A photomontage shows the 610-meter-high new Guangzhou TV Tower illuminated in Guangzhou, South China's Guangdong province, Sept 19, 2010. The tower, officially called “Guangzhou Tower”, with a 450-meter tower and a 160-meter mast, formally opened to the tourists on Sept 29.

A staff member shows two commemorative gold bars for Chang'e-2 lunar probe in Beijing, capital of China, Sept. 28, 2010. A press conference for the commemorative gold bars for Chang'e-2 lunar probe was held here Tuesday. China is preparing for the launch of Chang'e-2 lunar probe.

China's BYD shares up on talks on Warren Buffett stake - American billionaire Warren Buffett waves as they receive a gifts from Tibetan women at an event by Chinese carmaker BYD in Beijing on Wednesday. Billionaire investor Warren Buffett has discussed the possibility of raising his 10 per cent stake in car and battery maker BYD, a Chinese newspaper reported on Wednesday, sending BYD shares up over 4 per cent. In the past week, analysts and investors have speculated that Buffett, who is making a closely watched tour of China with former Microsoft Chairman Bill Gates, might instead sell down his stake after the automaker hit several bumps on the road. That included sliding sales, delayed plans to export its electric cars and a legal dispute with the Chinese government over land it wants to develop. “We wouldn’t comment on what we are going to do,” Buffett said on the sidelines of an event in Beijing when asked about the prospect of increasing his BYD stake. BYD shares rose as much as 4.4 per cent in Hong Kong, outpacing the broader Hang Seng Index’s 1.3 per cent rise. China Business News cited BYD sources as saying Buffett had a closed-door meeting on Tuesday night with BYD officials in which the possibility of increasing the 10 per cent stake in BYD held by Buffett’s Berkshire Hathaway was the major topic. But it was unknown whether they had reached any conclusion, the report added. “This is a good thing for BYD,” said Zhang Jing, an analyst at Phillip Securities (HK) Ltd. “If Buffett raises his stake at the current high price levels, that would be a vote of confidence, for sure.” Gates and Buffett, the world’s second- and third-richest men, respectively, have travelled to several Chinese cities this week, meeting with Chinese businessmen and researchers, and will attend a dinner on Wednesday evening during which the two will speak to some of China’s growing crop of rich entrepreneurs about charity. Buffett, 80, is visiting China almost two years after Berkshire’s affiliate MidAmerican Energy bought 10 per cent of BYD. That investment has yielded enviable returns, with the stake now worth US$1.45 billion, over six times the original US$230 million purchase price. Still, that value is far below the peak of US$2.5 billion reached last October. Buffett and Gates were in Beijing on Wednesday to attend a BYD ceremony for the launch of the company’s first premium multipurpose vehicle (MPV). The car, the M6, will allow the car maker to tap the fast-growing premier MPV market, now dominated by General Motors and Honda Motor. BYD’s portfolio now includes sedans only. BYD shares have risen about 19 per cent in the past two weeks on Buffett’s visit. The stock’s performance lags that of its main rivals, however. Earlier on Wednesday, car maker Brilliance China (SEHK: 1114) hit a record of HK$5.52 on expectations of higher car sales in the coming months, Geely rose nearly 4 per cent and Dongfeng Motor Group (SEHK: 0489) surged nearly 7 per cent. “The stock looks expensive but Coca-Cola also grew up from a small company,” said Zhang. Shares of BYD, which stands for “Build Your Dreams”, are trading at around 25 times this year projected earnings.

China Telecom (SEHK: 0728) is stepping up its expansion across Asia, ahead of its two bigger mainland rivals, with a slate of new infrastructure investments in Hong Kong and Singapore. Deng Xiaofeng looks to growth in data centres. China Telecom (SEHK: 0728) is stepping up its expansion across Asia, ahead of its two bigger mainland rivals, with a slate of new infrastructure investments in Hong Kong and Singapore. The country's leading fixed-line network operator has made an initial investment worth HK$200 million to build two new internet data centres in the two cities, and link these to its existing network of 260 data centres across the mainland, according to Deng Xiaofeng, chairman and chief executive of subsidiary China Telecom (Hong Kong) International. Data centres are specialised facilities, where operators house large enterprises' server computers and storage systems, with dedicated power, cooling, security, technical support and high-speed internet connections. "With the current growth in e-commerce, China Telecom is committed to connecting Chinese enterprises to the world and supporting multinational corporations develop their business in the Asia-Pacific region, especially in China," Deng said. Its target customers include enterprises in the banking and financial services, transport and logistics, internet and media sectors. According to research firm Frost & Sullivan, total revenue from the data centre co-location and managed hosting services market in the Asia-Pacific will amount to US$9.18 billion this year and reach US$10.68 billion next year. Leading data centre hubs in the region are Japan, Australia, Singapore, Hong Kong and, to a lesser degree, mainland China, India and Malaysia. The largest of these hubs, Japan, accounted for more than 71 per cent of the estimated US$8 billion in data centre services revenue in the region last year. The internet, media, telecommunications and information technology industries together account for up to 45 per cent of data centre services demand in the Asia-Pacific. These sectors are expected to continue to be the biggest users of data centre space over the next four to five years. Demand for data centre hosting currently exceeds supply, according to Frost & Sullivan. "In fact, over 80 per cent of the major data centres in the Asia-Pacific are running at close to 90 per cent capacity and space is at a premium," it said. Amid the growing regional opportunity, Deng said China Telecom "will increase investments in designing and building data centres". He said there could be further expansion first in Hong Kong and Singapore, before China Telecom decides to invest in new data centres in other Asian countries. China Telecom has set up a 27,000 square foot data centre in Chai Wan, at premises run by iAdvantage, a unit under Sun Hung Kai Properties (SEHK: 0016)' technology arm SUNeVision. In Singapore, the carrier has established a 3,500 square foot operation inside a facility run by data centre partner Equinix. Following the 2008 telecommunications industry restructuring on the mainland, China Telecom, China Mobile (SEHK: 0941) and China Unicom (SEHK: 0762) are all to become integrated fixed-line and wireless network operators. Deng said China Mobile and China Unicom are also keen to expand their services outside the mainland, but China Telecom has been well ahead in developing its business across Asia.

China has decided to suspend bank loan for third home buyers as the government rolled out further measures to check soaring property prices, saying officials will be held responsible if they fail to implement the policies.

Japan Foreign Minister Seiji Maehara said Wednesday that China had revealed its "essential character" to the world in a bitter territorial dispute with Tokyo. Maehara said: “The escalated action China has taken... is quite regrettable”, referring to the dispute, which started with Japan’s arrest of a fishing boat captain in disputed waters on September 8. A Japanese coastguard vessel and a Chinese fisheries patrol ship sail side by side in the waters near disputed Senkaku or Daioyu Islands in southern Japan. “I think not only the Japanese, but people in the whole world saw a part of China’s essential character,” the recently appointed foreign minister told a small group of reporters, without elaborating. Since the spat started, Beijing has issued diplomatic protests and snubs but also taken economic steps, such as slowing trade and tourism and, according to industry sources, the exports of crucial rare earth metals. “It is harmful to the world that the world’s second- and third-largest economies are clawing at each other’s throats as economic activity contracts,” said Maehara, who took his post less than two weeks ago. “It’s important that the two countries build a win-win situation while considering the mutual benefits in a cool-headed way,” he said. “Over the long term, I’m optimistic, although I don’t know how much time it will take” to restore ties, added Maehara, a China hawk who has also warned about the level of China’s defence spending. Maehara reiterated that the disputed islets – called Senkaku in Japan and Diaoyu in China – “are Japan’s own territory”. To back up his point, he referred to a 1953 article by China’s state-run People’s Daily that said Japan’s Okinawa islands “include the Senkaku islands” and an official map of China from 1960 that excluded the islands. Amid the spat between the Asian giants, their worst in years, and before Japan released the skipper last week, China detained four Japanese nationals, accusing them of illegally filming a military facility. Maehara repeated Japan’s position that the arrests are unrelated to the wider row, but added: “What I am most interested in is about the situation of the four Japanese.” He said that Japanese diplomats were due to hold their second meeting with them later in the day.

China has ended a de facto ban on exports to Japan of rare earth minerals, a Japanese trading firm source said on Wednesday, easing concerns about fallout from an ongoing feud.

More than 200,000 Apple iPhone 4s have been snapped up in China within days of going on sale while waiting lists stretch to the end of October, state media reported on Wednesday.

Sept 30, 2010

Hong Kong*: The Executive Council yesterday approved a medical insurance scheme that will bring fundamental change to private and public health care.

Wong fails to win back control of Gome board - Retailer's shareholders reject removal of chairman, director - A video image of Gome chairman Chen Xiao addressing shareholders yesterday. The resolution to remove Chen was rejected by 51.89 per cent of shareholders. Jailed billionaire Wong Kwong-yu's bid to regain management control of Gome Electrical Appliances Holding (SEHK: 0493) failed yesterday, with shareholders rejecting a bid to sack the company's chairman and install Wong's sister. Wong's attempt to remove Chen Xiao as well as another director and replace them with his sister Huang Yanhong and lawyer Zou Xiaochun were voted down by shareholders of the nation's second-largest electrical appliance retailer. The failure by Wong to get his nominees on the board is seen as a victory for US private equity fund Bain Capital, the second-largest shareholder of the company, which supported the board. The resolution to remove Chen was rejected by 51.89 per cent of shareholders in a Hong Kong meeting. The move further shores up Bain's presence in the company, in which it now holds a stake of nearly 10 per cent, but has raised concerns on the mainland about foreign influence over one of the country's top retail brands. Wong did not lose all the battle. A general mandate that would have allowed the current board to issue new shares without shareholder approval was voted down. Issuing new shares would dilute Wong's 32.5 per cent stake in Gome and threaten his position as the company's largest shareholder. More than 100 investors attended the meeting in a Causeway Bay hotel, while others cast their votes by proxy. Votes representing 1.6 billion shares or 81 per cent of the total shareholdings were cast. Shareholders rejected Wong's proposal to remove Chen and executive director Sun Yiding as executive directors from the board and supported the re-election of the three representatives of Bain Capital as non-executive directors. Wong's family issued a statement saying it was disappointed to lose the fight over the directors. "We remain resolute in our belief that without the contributions of the founding shareholders [the Wong family], the company has strayed from the path of profitable growth," the family said. "Nothing has changed about our concerns regarding the unrepresentative nature of the board, and we reserve all our rights to take appropriate action to protect our interest and those of other shareholders." Gome's board said the result was "a clear endorsement of the management's track record over the past two years" and trust in the ability of the management. It said stability was in the best interest of all shareholders and it would maintain dialogue with all shareholders including Wong.

Hong Kong's MTR Mass Transit Construction blasting is so quiet tai chi classes can go on - Construction of the new shaft at Sai Ying Pun MTR station. A new technique using water to dampen the impact of underground blasting for a new MTR station has ensured people exercising and practising tai chi up above every morning in King George V Memorial Park, in Sai Ying Pun, on Hong Kong Island, have been left - literally - unmoved. Every week since last August, the MTR has carried out two or three underground explosions - as part of plans to blast about 400 small holes alongside the park to help build a shaft for the new Sai Ying Pun station. Yet Walter Lam Wai-tak, MTR senior construction engineer for West Island Line, said the new technique of using water - instead of old tyres and sand - to absorb and cushion the effect of vibrations and dust had proved so successful that people up above in the park had been hardly able to feel the impact of the blast. "We put a glass of water on the ground the other day during the blasting; we thought there might be some ripples, but there was none," Lam said. "The best thing about using water is that, except for noise, it greatly reduces dust and dirt, which mix in the water for easy discharge." He said the new blast-dampening method cost about the same as old methods. But blasting, which would finish next month, took 2-1/2 hours to fill the shaft with water, and 11 hours to pump out the water afterwards. Reuben Chu Pui-kwan, president of the Hong Kong Institution of Engineers, said: "Contractors are struggling to come up with environmentally-friendly construction methods when they bid for the contracts; they can't cost too expensive either; the market is now very price-sensitive."

Mercedes enjoys 67pc rise in sales as demand for luxury cars returns in Hong Kong - Michael Lee, the chief executive of Zung Fu, and Claus Weidner officiate at a ceremony yesterday to launch a promotion program. Mercedes-Benz is riding the post-financial crisis rebound in demand for luxury cars in Hong Kong and Macau, with sales up 67 per cent in the first eight months to almost 3,000 units. "When the crisis hit, the competition became quite tough, resulting in a situation where everybody was focused on price," Mercedes-Benz Hong Kong chief operating officer Claus Weidner said yesterday. "Now we're seeing a good development, where people are focusing again on quality and related factors," he said. Mercedes-Benz Hong Kong, a unit of Daimler established in 2006, is the exclusive importer and wholesaler of the luxury cars to the local market, while Jardine Matheson's Zung Fu is the sole authorised retail dealer for the brand. Hongkongers' renewed appetite for top-end cars is good news for Mercedes, whose best-selling E-class vehicles retail locally from HK$465,000 to HK$1.48 million. The German marque's most expensive model, the CL65 AMG, touts a 12-cylinder engine and sells for HK$3.75 million. Mercedes' market share in Hong Kong and Macau is around 13 per cent in the year to date, according to sales figures provided by the company. Weidner said local sales of luxury car brands like Mercedes weathered the crisis better than "volume" brands, which have likewise benefited strongly in this year's rebound. New car registrations in Hong Kong rose to 22,359 units in the first seven months of the year, up 65 per cent on a year ago, Transport Department data show. By value, sales of cars and car parts rose 57 per cent to HK$7.95 billion between January and July, up from HK$5.07 billion a year ago, Census and Statistics Department figures show. Hong Kong and Macau remain small but rich markets for luxury carmakers, where they enjoy much higher penetration rates than most regions. But the bigger growth opportunities are on the mainland. Mercedes has been manufacturing selected models locally in China for five years, via a 50-50 joint venture between Daimler and Beijing Automotive Industry Corp. But imports still account for the majority of the German brand's mainland sales. Mercedes-Benz sold 87,400 units on the mainland in the first eight months of the year, up 131 per cent from the same period a year earlier. However, unlike in Hong Kong, the brand's market share stood at less than 1 per cent. The majority of passenger car sales on the mainland are those with engines smaller than 1.6 litres.

Shares in Television Broadcasts (SEHK: 0511) saw their biggest drop in 17 months yesterday as investors digested news that 102-year-old Sir Run Run Shaw would sell his stake in the broadcaster he co-founded more than 40 years ago. Shares in the city's biggest free-to-air broadcaster dived as much as 11.8 per cent before closing with a loss of 5.8 per cent at HK$43.80 on concern about the company's future after Shaw. The stock surged 16.8 per cent before its suspension on Monday on speculation Henderson Land Development (SEHK: 0012) vice-chairman Peter Lee Ka-kit, the elder son of billionaire founder Lee Shau-kee, was planning to buy the stake. Shanghai Media Group (SMG), the mainland's second-largest media company, is also reportedly eyeing the broadcaster, partly because of TVB's lucrative production of Chinese television programmes. The broadcaster has confirmed that Shaw Holdings, owned by the family of Shaw, is in talks regarding a possible sale of shares. Peter Lee had earlier confirmed he was studying a plan to buy a stake in TVB. TVB, one of the world's biggest distributors of Chinese-language television programmes, has operations in more than 30 countries. Its Taiwan branch, TVBS, saw revenue of HK$347 million in the first half of this year, an increase of 16 per cent from a year earlier. For SMG, acquiring a controlling stake in TVB would give it access to the Taiwan market. Following the signing of the economic co-operation framework agreement between Taiwan and the mainland, there has been speculation the mainland will attempt to acquire media companies on the island. Shaw gave up his executive duties last year to become the non-executive chairman. He is the biggest shareholder in TVB with a 32.5 per cent stake, comprising shares held personally and the 26 per cent holding owned by Shaw Brothers (Hong Kong). Two years ago, Lee Shau-kee offered HK$3 billion to support Yeung Kwok-keung, the chairman of Country Garden Holdings, in an acquisition of Shaw Brothers. The plan was scuttled by the global financial crisis. Lee said to the press then: "Shaw will sell the stake in TVB sooner or later. That's for sure." Peter Lee might pay up to HK$9.2 billion to acquire the 26 per cent shareholding of Shaw Brothers, according to reports. SMG is said to have made an offer of up to HK$10 billion to TVB managing director and wife of Shaw, Mona Fong Yat-wah, who is in charge of the broadcaster's day-to-day operations. Rita Lau Ng Wai-lan, the secretary for commerce and economic development, said under the regulations, any transfer of shares should be submitted to the Broadcasting Authority within 14 days. Earlier this year, the government lifted the ban on the number of free television programme service licences. There are now only two free-to-air broadcasters in the city, TVB and Asia Television.

Government-subsidised housing may be revived by redeveloping old public estates now under the management of the Housing Society, Eva Cheng said yesterday.

Mark Six entries set to double in price - The cost of a Mark Six lottery entry will be doubled from HK$5 to HK$10 from the November 9 draw.

Gourmands who look forward every year to eating a particular crustacean only available in autumn may be disappointed, with hairy crabs from Jiangsu province likely to be big in price and small in size. The wholesale price of crabs from Taihu and Yangcheng lakes in Suzhou - famous for their oil - had soared by 20 per cent to about 300 yuan (HK$350) per catty after they were delivered to Hong Kong, Lin Jianhua, assistant counsel of the Ocean and Fishery Bureau of Jiangsu province, said. Fluctuating temperatures and flooding were the main reasons for the expensive price and smaller size of the farmed hairy crabs, which usually grow better in cooler weather. Jiangsu recorded the coldest April in 100 years and in August temperatures soared. The fluctuation in temperatures delayed the growth of the crabs, which meant they were 10 per cent smaller than normal, said a group of exporters who were in Hong Kong yesterday. Supply was further cut short as frequent flooding in the south damaged the crabs, they said. In 2005, the province exported a record 500 tonnes of hairy crabs to Hong Kong, compared with 230 tonnes last year when demand fell after the global financial crisis. Up to 350 tonnes will be exported to the city this year. Increasing demand in the mainland will fuel further price increases. Although Hongkongers had enjoyed hairy crabs for years, consumers in Beijing and Hangzhou did not start eating them until recently, Lin said. The price of hairy crabs had been rising 15 per cent a year during the past few years, as the mainland market expanded, he said. "The price will increase further ... ordinary people may not be able to afford them in the future when the crabs become a brand like Gucci bags," he said. To distinguish the prized hairy crabs from the fakes, people should look for clean bodies and large legs. Crustaceans weighing more than 150 grams were a better option because the crabs could only grow that big when they were kept in clean water, Lin said. After they were cooked, the colour of the oil would look like a cooked duck egg yolk, but oil from a poorer quality crab would look yellowish or white, he said. The best crabs would be available from October 20 to November 10, he said.

 China*: Communist Party leaders will meet in the middle of next month for their most important annual gathering, with all eyes on presidential heir apparent Xi Jinping. But top of the official agenda will be a strategic development blueprint for the next five years. The Politburo has decided the plenary session will be convened from October 15 to 18, Xinhua reported yesterday. The decision was made at a Politburo meeting reviewing its work since the plenary session a year ago, Xinhua reported, citing the general office of the party's Central Committee. Hu Jintao , general secretary of the Central Committee, presided over the Politburo meeting, Xinhua reported. The plenum is scheduled to approve a draft of the nation's 12th Five-Year Programme - the only item on the agenda, according to the official announcement. The drafting of China's Five-Year Programme for National Economic and Social Development, as it is now formally known, usually begins more than two years ahead of its delivery. The current five-year plan ends this year and a draft of the next one - which will map out the mainland's economic and social development from 2011 to 2015 - will be considered by the Central Committee members. Members at the Politburo meeting discussed proposals for the plan and agreed to submit it to the plenum for final approval, Xinhua said. In a separate report, Xinhua said the new five-year plan would focus on "speeding up the shift of development model". It said that "reform and innovation" will be highlighted. The plenum will also confirm the long-anticipated promotion of Vice-President Xi to become a vice-chairman of the party's Central Military Commission. If confirmed, Xi will also automatically assume the same position in the government's CMC at the National People's Congress plenary session in March. Both are organs that oversee the People's Liberation Army. Analysts said the confirmation will pave the way for Xi to succeed Hu as chief of the ruling party in autumn 2012 and as president in the spring of 2013. Holding a military post is not a prerequisite for becoming head of the party and the state, but the promotion would help clarify uncertainty over leadership succession, analysts said.

China's science prowess questioned - Despite US fears, academics say graft, mindset stunt mainland research - Emerging powers China and India are quickly closing the technology gap with the United States, a US congressional briefing has been told. Updating a report, the American National Academy of Sciences, National Academy of Engineering and Institute of Medicine were glowing in their description of the strides taken by China in the past five years, contrasting it with the economic turmoil and educational stagnation that has eroded the leadership of the US in science and technology. However, mainland academics said China's gains could be somewhat illusory due to corruption and a focus on research-paper quantity rather than quality. China was now second in the world in its publication of biomedical research articles, the report said. It was also second only to the US in the number of people engaged in scientific and engineering research and development. The spending gap between the two also was disappearing, with Beijing increasing its research and development (R&D) investment as a proportion of gross domestic product by an average of 5.7 per cent a year between 2001 and 2007, when US investment fell by 0.5 per cent a year. It noted that Tsinghua and Peking universities were the two largest sources of doctoral students in the US. And with emerging economies enjoying increasing prosperity (SEHK: 0803) and greater freedom, fewer foreign students were staying in the US after completing their studies. "Although no nation has escaped the recent financial crisis unscathed, some have fared better than others and have focused additional sums on competitiveness," the report said. The committee said its overall conclusion was "that in spite of the efforts of both those in government and the private sector, the outlook for America to compete for quality jobs has further deteriorated over the past five years". US President Barack Obama responded by again pledging to revive the education system. He said his goal was for the US to have the highest rate of college graduates in the world by 2020, Bloomberg reported. The US now ranks 12th among 36 developed nations. Some mainland academics said the report painted an overly rosy picture of science and technology development in China and that it still lagged far behind the US. Dr Fang Shimin , a biochemist and veteran science critic based in Beijing, said a lot of the mainland's investment in science and technology was lost to corruption. "The input and output ratio of China's R&D investment is considerably lower than the US," Fang said. "A substantial amount of the scientific research funds are being spent on meetings, trips or buying expensive equipment that is rarely used. They may have been pouring money into some sectors, but [the investment] is uncompetitive." He said many mainland universities and research institutes were churning out papers of little real value, because the system evaluated a scientist's work by the number of papers published. "Some even resort to stealing others' work or simply make up the data to get a paper published," he said. "Most of these junk papers can only be published in domestic journals and are not cited even once." Fang said that while China had replaced the US as the world's top technology exporter, most of its exports were invented and designed by US firms. "China really has to thank companies like Apple for this," he said. "Every iPhone or iPad shipped to the world has been counted as a Chinese export, but no sensible mind would think they were Chinese technology. "The Chinese leaders are engineers, not scientists, and when you have a bunch of engineers drawing the scientific development blueprint for a country, you get something unimaginative and pragmatic." Fang said the central government ignored the importance of basic research and without that sound foundation, China would continue to be decades behind the US and other Western countries. Professor Guan Zhongcheng , a researcher at the Chinese Academy of Sciences' Institute of Policy and Management, agreed with Fang. He said China was more than two decades behind the US but had caught up in a few areas, such as materials science, chemistry and mathematics. "People in the West tend to think that, now China has money, its science will develop accordingly. That may not be the case," Guan said. "Developing science differs from developing an economy. I think the Western world will continue to play a leading role in science and technology for the foreseeable future." The US report is an update of "Rising Above the Gathering Storm" - a 2005 study of America's competitiveness that triggered rare bipartisan support for a doubling of federal research funding. In the latest report, the US Committee on Prospering in the Global Economy of the 21st Century, whose chairman is former Lockheed Martin chief executive Norman Augustine, found US competitiveness in science and education had weakened, partly due to the economic crisis and partly because some of the recommendations made five years ago - such as strengthening primary and high school education - were not implemented or promptly financed. "It would be impossible not to recognise the great difficulty of carrying out the Gathering Storm recommendations, such as doubling the research budget, in today's fiscal environment," it said. "We also sense that in the face of so many other daunting near-term challenges, US government and industry are letting the crucial strategic issues of US competitiveness slip below the surface." Apart from the economic turmoil at home, the report also blamed falling education standards, particularly in science, mathematics and engineering, as factors eroding US competitiveness. "It is difficult to dismiss evidence such as a survey that found almost 30 per cent of US adults do not know the earth revolves around the sun ... and only about half the population is aware that dinosaurs and humans never co-existed," it said. The report made four new recommendations to revive US education and science research, including strengthening high school education in science and mathematics, double federal investment in basic research, encouraging more US citizens to pursue careers in science and introducing reforms in tax, patent, immigration and litigation policies. It also pointed out that despite the problems, the US still attracted talent from around the world and boasted the best research universities. The report comes as two key bills for science funding are set to expire and several science programmes have had their budgets frozen.

October 1 China's likely launch date for second probe - A launch rocket carrying the Chang'e orbiter blasts off in an earlier mission. China is making final preparations to launch its second lunar probe, possibly as soon as Friday, when the nation marks 61 years of communist rule, state media reported yesterday. A launch rocket carrying the Chang'e 2, which will go into orbit within 15 kilometres of the moon, has been set up in Sichuan province. Chief program engineers have arrived at the satellite launch centre in the city of Xichang to carry out final tests, and staff at the centre have said that, barring complications, the launch could come on October 1, China Daily said. Friday is National Day. Meteorologists had forecast clear skies in the Xichang area from tomorrow, the report said. Space program officials had said previously that the mission would be launched in October, but no precise date had been given. The Chang'e program, named after a mythical Chinese goddess who flew to the moon, is seen as an effort to put the country's space exploration program on a par with those of the United States and Russia. China launched Chang'e 1, which orbited the moon and took high-resolution pictures of the lunar surface, in October 2007. China hopes to bring a moon rock sample back to earth in 2017, with a manned mission foreseen in around 2020, according to state media.

Sept 29, 2010

Hong Kong*: Hong Kong saw the largest increase in US dollar millionaires in the world last year - up 104.4 per cent to 76,000, a new report released on Tuesday showed. The report by Merrill Lynch Wealth Management and consultancy Capgemini said the combined wealth of US dollar millionaires in Hong Kong rose almost 109 per cent to US$379 billion (HK$ 2,940.7 billion). The Asia-Pacific’s population of high net worth individuals also rose 25.8 per cent to three million last year - catching up with Europe’s high net worth individuals for the first time. Wilson So, interim head of Asia-Pacific Wealth Management at Merrill Lynch Global Wealth Management, said this showed the enormous growth potential of the Asia-Pacific region. “The Asia-Pacific’s high net worth individuals population matching Europe’s for the first time highlights the region’s growth potential - with China and India at the forefront and Japan remaining an important market,” he explained. So said he expected the Asia-Pacific’s millionaires holdings of shares and fixed-income investments would increase by 2011. But their cash-based and real-estate holdings were expected to decline.

GOME shareholders vote against motion to oust chairman Chen Xiao - The video grab shows the scene of GOME's special general meeting held in Hong Kong, south China, Sept. 28, 2010. GOME, the largest home appliance retailer in China, held a special shareholders' general meeting Tuesday in Hong Kong, to vote on eight proposals, among which five raised by Huang Guangyu, the jailed founder of GOME and the company's largest single shareholder. China's largest home appliance retailer GOME unveiled results of special shareholders' general meeting in Hong Kong on Tuesday evening, which showed that nearly 52 percent of shareholders voted against the motion to remove current GOME Chairman Chen Xiao. Secretary of GOME Board, Hu Jiabiao, said about 6.52 billion votes, or over 48 percent of total votes, were in favor of No. 5 resolution, while more than 7 billion votes, or nearly 52 percent of total votes, were against the resolution. No. 5 resolution was proposed by Huang Guangyu, the jailed founder of GOME and the company's largest single shareholder, to remove Chen Xiao in a months-long power struggle. Chen, 51, was appointed as GOME Chairman on Jan. 16, 2009 shortly after being appointed as Acting Chairman on Nov. 27 of 2008, after former GOME Chairman Huang was detained by Beijing police in suspect of illegal business dealings, insider trading and corporate bribery. Huang, however, won in another important motion about an earlier general mandate permitting Chen-led director board to issue more shares, up to 20 percent at most. Some 7.42 billion votes, or nearly 55 percent, were in favor of it while the other 45 percent were against it. The resolution, No. 4, was also raised by Huang, who, along with his wife Du Juan, currently held 32.47 GOME stake. Huang opposed any major move to issue more GOME shares since such deal might dilute his stake in GOME, which could erode Huang's controlling capability in GOME. The Huangs feared that they might lose their right to veto important company proposals if more GOME shares be issued. No. 4 resolution was the only motion, raised by Huang, which gained majority of support in the voting at the special general meeting held earlier in the day. The other three motions raised by Huang were about removal of Sun Yiding from his duties as GOME Executive Director, nomination of Huang's younger sister Huang Yanhong as Executive Director, and nomination of Huang's confidant Zou Xiaochun as Executive Director. While the three motions raised by Chen had all won approval, in which Chen nominated three persons as non-executive Director of GOME. Chen, who has about 1.25 percent of GOME's shares, and Huang have been struggling to control the company since Huang was detained and jailed. Huang was arrested by Beijing police in late 2008 in suspect of illegal business dealings, insider trading and corporate bribery. In May this year, he was sentenced to 14 years in prison. Huang had built GOME into China's biggest appliance retailer and was listed by the Hurun Report as China's richest man in 2004, 2005 and 2008. Huang and Chen-led board had been openly at odds with each other since May this year. In a dramatic development of the power struggle, Chen-led GOME board filed a writ of summons against Huang at HK's High Court last month, for Huang's alleged breach of fiduciary duties in early 2008 as a former board director. The battle for corporate control has triggered heated discussions in China. Some experts justify Chen's taking over as a sign of progress in China's corporate system, while most Internet users and some businessmen say Chen betrayed his boss to steal the company. However, analysts said that, since neither Huang nor Chen could assure the 50 percent of the shareholder base plus one vote needed to claim victory, it would remains a puzzle until the result of the vote announced. Shares of GOME, closing at 2.49 HK dollars on Tuesday in Hong Kong, has dropped about 20 percent this year. (1 U.S. dollar equals 7.759 HK dollars).

Actor Jet Li (R) poses for photo with his wax figure in Madame Tussauds Hong Kong in Hong Kong, south China, Sept. 28, 2010. The unveiling ceremony of Jet Li's wax figure was held on Tuesday.

A controversial board appointed by the government to advise RTHK has rejected calls to open its meetings to the public, but it has agreed to post its discussion papers and minutes on the RTHK website for the public to view. The decisions were reached at the advisers' first meeting yesterday, after the formation of the board was announced last month. Nine of the 11 members showed up for the three-hour meeting, at which the advisers were also briefed on the general editorial policy of RTHK, and the public broadcaster's general operations. Two members - Ringo Lam Wing-kwan, an IT expert, and Jolly Wong Ka-chi, a consumer rights advocate - were out of town and missed the meeting. Board chairman Lester Huang, a solicitor, said after the meeting that they wanted to strike a balance between efficiency in the meetings and demands for openness. "By posting all documents, agendas and minutes on the Web, it will enable members of the public to follow our work," Huang said. Details still needed to be worked out. However, this failed to satisfy some critics. RTHK Programme Staff Union chairman Janet Mak Lai-ching expressed disappointment. "There are many other government advisory boards like the Town Planning Board that open up their meetings. I cannot understand why the RTHK advisers must keep the public away." Mak, in protest, tried to force her way into the meeting room but was stopped and asked to leave. Save RTHK, a concern group that supports the independence of the broadcaster, said the advisory board should be dismissed. A spokesman for the group, Law Yuk-kai, said: "They like to boast that they are only [there] to give personal opinions. If so, why can't they allow members of the public to go in to listen to what they say? Why must they be so secretive?" "Their act will only fuel speculation that it will become a backstage ruler and press RTHK to become a government mouthpiece." Law and 10 fellow group members staged a rally at RTHK before the meeting yesterday. They chanted slogans and displayed two banners that read: "No to black box operation. No to backstage lord." Huang rejected criticism that the board would become a "backstage ruler" and said: "We are accountable to the public and not any government official." The advisers have decided to meet four times a year. Their next meeting will be on November 4.

Henderson Land Development (SEHK: 0012) vice-chairman Peter Lee Ka-kit and Shanghai Media Group, the mainland's second-largest media company, are on a collision course over competing plans to acquire a stake in TVB (SEHK: 0511). The operator of Hong Kong's biggest free-to-air TV network yesterday confirmed that Shaw Holdings, owned by the family of 102-year-old media mogul Sir Run Run Shaw, "has been in preliminary discussion with representatives of interested parties regarding a possible sale in the shares of Shaw Brothers (Hong Kong)", a substantial shareholder of TVB. Shaw Holdings controls Shaw Brothers, which has a 26 per cent shareholding in TVB. The family of Shaw, who co-founded TVB in 1967, has a total shareholding of 32.5 per cent in the broadcaster. In a filing with the Hong Kong stock exchange last night, TVB said the total number of shares involved in that preliminary discussion would represent "less than 30 per cent of the share capital of the company". The broadcaster also said there were no agreements related to intended acquisitions that it could disclose. Lee, the elder son of Henderson Land chairman Lee Shau-kee, had earlier confirmed he was studying the possibility of buying that stake and that he was in contact with Shaw Brothers. Henderson Land spokeswoman Bonnie Ngan said Lee's investment was not related to the developer or its listed unit, Henderson Investment (SEHK: 0097). "Peter Lee has launched a preliminary study on TVB ... but no decisions have been made yet," she said. Speculation that Henderson Land chairman Lee might pay up to HK$9.2 billion to acquire the 26 per cent shareholding of Shaw Brothers saw Henderson Investment shares jump 25 per cent to 90 HK cents yesterday, its highest close in more than two years. The rumoured offer by Lee translates into a market capitalisation of HK$35 billion for TVB, equivalent to nearly HK$80 per share. TVB shares traded at HK$46.50 yesterday before they were suspended. TVB has applied to resume trading today. Meanwhile, state media reported that SMG had approached TVB managing director Mona Fong Yat-wah, the wife of Shaw, with a HK$10 billion offer through its Shanghai Cultural Development Foundation. SMG, which has long been in close co-operation with TVB, has been rumoured over the past two years to be interested in buying a stake in the Hong Kong broadcaster. A spokesman for SMG could not be reached. But a person close to the SMG-led discussions said: "[The decision to acquire a stake in TVB] should be made by China Media Capital [CMC]," not the non-profit Shanghai Cultural Development Foundation. SMG is the controlling shareholder in CMC, a 5 billion yuan (HK$5.79 billion) fund focused on investments in media that was launched in June. Last month, CMC acquired control of three Chinese-language TV channels formerly owned by Rupert Murdoch's News Corp. "It's not the issue of money that SMG is considering," the person with knowledge of the SMG plan said. "It's complicated because many technical details are involved, such as the landing of the TVB signal on the mainland." Gaining a steady stream of revenue, however, will likely be what wresting control of TVB is all about to those with the cash to buy out Shaw's family. "From the perspective of Henderson or any other large company, TVB represents a cash cow because it remains the dominant broadcaster in Hong Kong," said Trevor Cheung, an analyst at BNP Paribas Securities. TVB's first-half results show net profit rose to HK$584 million, up from HK$330 million a year earlier. Turnover increased 20 per cent to HK$2.10 billion from HK$1.75 billion. Cheung said it was just a matter of time before Shaw would consider selling his stake because there was no clear succession for him at TVB, and members of his family may want to pursue other plans.

Compensation offer for tenement residents - URA unveils HK$10m plan for Wing Lee Street - Tenants may have the option of moving to Des Voeux Road West. Residents of a street made famous in an award-winning film are set to become the first people living outside an Urban Renewal Authority project area to be offered compensation by the authority. The offer will be made to residents of 12 tenements living in Wing Lee Street, Sheung Wan, if the buildings are excluded from the planned Staunton Street redevelopment and preserved for historical reasons. A change of plan protecting the 12 tenements from redevelopment will be discussed by the Town Planning Board next month. If it is approved, residents will be able either to move to private flats rent-free for the first six months or get subsidies to refurbish their old flats. Owners will also be able ask for HK$200,000 subsidies to renovate common areas of their buildings, according to special arrangements announced by the authority yesterday. The cost of the compensation, never before offered to tenants outside a redevelopment boundary, is estimated at less than HK$10 million. The project went back to the drawing board in March when the authority and the Development Bureau bowed to public pressure to save all 12 tenements in Wing Lee Street, which forms part of the Staunton Street redevelopment project. Support for preserving the entire street has been growing since a film, Echoes of the Rainbow, partly shot in Wing Lee Street, won a prize at the Berlin film festival in February. The filmmakers said the street was the last of its kind in Hong Kong. Nine of the 12 tenements would have been demolished under the original plan. The Town Planning Board is expected to hold a meeting next month to discuss whether the street should be excluded from the redevelopment plan. If this happens, the tenements will no longer be considered part of the project. "You wouldn't see us as generous if you saw the living environment of the tenants," the authority's chairman, Barry Cheung Chun-yuen, said of the compensation proposal. "The special measures are designed to improve their living conditions." He added that the extra cost was minimal and the authority had to bear its social responsibility. Half of the 34 flats rented out in Wing Lee Street are partitioned into small units or single bed spaces. The authority has acquired only three of the 12 tenements so far. Among the measures announced yesterday, tenants will be given three options to choose from if the buildings are preserved. First, they can choose to move to a resettlement block in Des Voeux Road West. They will be asked to sign a two-year rental contract and have the rental of the first six months waived. A flat of 330 square feet will cost HK$1,800 a month, similar to the rent for a public flat. The contract can be renewed if the tenants are not able to find public housing or a private flat long-term. They will also be given a relocation allowance of HK$7,400 and will get a rebate of six months' rent or 25 per cent of the total rent paid to the authority when they move out of the resettlement block. Those who choose to stay in Wing Lee Street can apply for a subsidy of HK$40,000 to HK$80,000 to renovate their flats. They will also be given a subsidy equivalent to two months' rent to pay for temporary accommodation while the renovation is done. Those who opt to move elsewhere will be given a relocation allowance of HK$7,400 and a subsidy ranging from HK$40,000 to HK$80,000 to improve their living environment. Asked if the plan would set a precedent that would increase the authority's financial burden, lawmaker and its non-executive director, James To Kun-sun, said he had no such worries. "The tenants have been expecting to move ... since the redevelopment was announced in 1998. I don't think future projects will go back to the drawing board."

Revised Chinese Bible's launch marks end of three-decade quest - Donald Tsang officiates at the launch of the Revised Chinese Union Version Bible at St John's Cathedral in Central. The revised Chinese Bible was launched yesterday after 27 years of strenuous work by an international team of scholars and experts. This brings the 90-year-old version up to date. The Chinese Union Version (CUV) Bible has been hailed as the most-read Chinese Bible since its publication in 1919. At present, 90 per cent of about 70 million Chinese Christians around the world are believed to use it. "The CUV appeared in 1919 and has been read for over 90 years, becoming the preferred Bible for many Chinese Christians," Chief Executive Donald Tsang Yam-kuen said. "Revising the CUV has been a huge task, taking almost 30 years to complete. I believe the revised CUV will enable us to have a better understanding of God's word." Tsang, along with major participants in the revision project around the world, officiated at the volume's launch at St John's Cathedral yesterday. Nora Lucero, global board chairwoman of the United Bible Societies, said: "I must stress that the [revised] CUV is not a new translation." She said the original CUV had an "elegant and dignified literary style that people love", and the revision was "carried out with utmost caution and aims to produce a text acceptable to Chinese readers from mainland China". Speaking at the launch, Ma Yuhong , from the State Administration for Religious Affairs, said the administration hoped the revision would gain broad support. "We respect the Hong Kong Bible Society's initiation of the revision, and hope this project will receive support from all Chinese communities around the world," she said. "Our policy is to respect and encourage communication between Christian groups through common undertakings such as this project." Ma also said that if a simplified Chinese version was published in the future, it would not be an official mainland launch. "I think an official launch in China would not be likely." But an edition of the revised CUV's New Testament with Psalms and Proverbs in simplified Chinese will be published on the mainland by the end of this year, with an initial print run of 5,000 copies, according to the Reverend Xu Xiaohong , general secretary of the official Three-Self Patriotic Movement of Protestant Churches in China. "I think many mainland Christians will stick to the old version for sentimental reasons. That's why we will print the revised New Testament alongside the original version for them to compare," the 46-year old said. Xu, who survived the Cultural Revolution and was secretly baptised soon after the arrest of the Gang of Four, said the revised edition had come at the right time - as people faced mounting pressures and needed spiritual consolation more than ever. "The post-1980 and post-1990 generations, especially those born as the only child in the family, can't take the pressures of life like the older generations," Xu said. For Hong Kong Bible Society board chairman the Reverend Paul Kan Kei-pui, the revised CUV will hopefully forge closer ties between Chinese Christians. "This volume will strengthen our overseas bonds and also our China connections. After all, it is a product of our own making."

Hang Lung acts to avert rising yuan costs - Hang Lung chairman Ronnie Chan (third from left) officiates yesterday at the groundbreaking ceremony for Olympia 66, one of the firm's six mainland commercial projects. Hang Lung Properties (SEHK: 0101) is taking steps to minimise possible construction cost increases caused by the appreciation of the yuan against the Hong Kong dollar on HK$30 billion worth of upcoming commercial projects on the mainland. Ho Hau-cheong, assistant director for finance and administration, said as well as relying on 2 billion yuan (HK$2.31 billion) of rental income from two of its properties in Shanghai, the company would consider taking out bank loans denominated in yuan if it needed more financing. Hang Lung's Plaza 66 and The Grand Gateway in Shanghai contributed HK$1.91 billion of rental income for the year to June. This would grow further with the recent completion of Palace 66 in Shenyang, he said. The company could also "buy yuan in Hong Kong when the price is right", he said, following an agreement signed in July by the Hong Kong Monetary Authority and the People's Bank of China to lift limits on companies buying and selling yuan in the city. Speaking after the groundbreaking ceremony for Hang Lung's shopping mall in Dalian, chairman Ronnie Chan Chi-chung said the capital expenditure for the current fiscal year would be HK$5 billion, and a further HK$3 billion to HK$4 billion in the next fiscal year to June 2012. "Whether the firm needs to raise fresh fund depends on the property sales in Hong Kong," he said, adding that it had HK$20 billion worth of housing to be sold in the city. Chan said in his chairman statement in the annual report that the firm had six new commercial projects on the mainland that would require more than HK$30 billion in construction costs. The projects are in Dalian, Shenyang, Tianjin, Jinan and two in Wuxi. "Sooner or later we will have to take on some debt. But because two of the six [Shenyang Forum 66 and Wuxi Centre 66] are enormous and will likely take 10 to 15 years to build in phases, annual capital expenditure will be manageable," he said. Yesterday, he officiated at the groundbreaking ceremony for Hang Lung's 221,900 square metre Olympia 66 shopping mall in Dalian. The seven-level development will involve an investment of 4.5 billion yuan, including the 1.23 billion yuan land cost. It will be the city's largest high-end shopping mall and is due to be completed in 2015. Hang Lung bought the site - a former sports stadium - in May last year. It is in the city centre next to Olympic Square and Wusi Road, a prime shopping area.

 China*: More investment urged to flow to central regions - The country's central region welcomes more new and hi-tech investments, a senior central government official has said. "China will continue improving its investment environment and further open up its market in the central region to attract more investments from home and abroad," Vice-Premier Wang Qishan said at the Central China Business Summit 2010, part of the Expo Central China 2010, in Nanchang, Jiangxi province. Earlier this month, the State Council released a document to accelerate the nation's industrial upgrade and the transformation of its economic growth mode. As stipulated in the document, the central and western regions will be given preferential policies in finance, taxation, industrial investment, land use, commerce and trade, as well as science and education. The Ministry of Land and Resources will give the region "preferential policies" in land use quota, Zhang Hongtao, chief engineer of the ministry, said on Saturday. The central China region consists of six provinces located in the country's central hinterland, namely Shanxi, Anhui, Jiangxi, Henan, Hubei and Hunan, with a total area of 1.03 million square kilometers and a population of 370 million. The area boasts abundant land and mineral resources as well as low-cost labor. It takes up one-fifth of the nation's aggregate economic volume but is also home to numerous traditional industries. This year is the last year of China's 11th Five-Year Plan period (2006-2010). In August, as part of the plan to meet the proposed target of cutting energy consumption per unit of GDP production by 5.2 percent from 2009 to 2010, outdated production lines in 18 industries, including iron and steel, coke, ferroalloy, and calcium carbide, were ordered to close by the Ministry of Industry and Information Technology.

China's high-speed train sets new speed record of 416.6 kilometers per hour. A high-speed train in eastern China set a new speed record during its trial service Tuesday, highlighting China's leading position in the fast-train industry. The China-made CRH380A train hit a maximum speed of 416.6 kilometers per hour -- a world train speed record -- on its run between the metropolis of Shanghai and Hangzhou, capital city of east China's Zhejiang Province. The train is designed to run at a speed of 350 kilometers per hour on the 202-kilometer-long railway between the two cities. Some 80 million passengers are expected to travel the route every year. A one-way journey previously took two hours. But the new train shortens that to less than 40 minutes. "China has 7,055 kilometers of high-speed railway in service. It is the world's longest and the fastest, and boasts the most comprehensive technology," said He Huawu, chief engineer of the Ministry of Railways. "We have an ambition to lead the world in high-speed railway construction," he said. China sets its first world speed record on June 24, 2008. Then, the Beijing-Tianjin CRH3 high-speed train hit a top speed of 394.3 kilometers an hour. After that, more fast-train lines were put into service - the Wuhan-Guangzhou line linking central and south China, the Zhengzhou-Xi'an line connecting central and western China, and the Shanghai-Nanjing line in the country's east. Liu Zhijun, Minister of Railways, said the opening of the Shanghai-Hangzhou line relieves transportation pressures in the Yangtze River Delta, one of China's most dynamic economic areas. "It is also significant for regional economic, cultural and social development," Liu said. Because of railways' importance to economic development, China aims to expand its high-speed rail network. By 2012, China will have a railway network of 110,000 kilometers, 13,000 kilometers of which will be high-speed rail, according to the MOR. The 1,318-kilometer Beijing-to-Shanghai high-speed railway is scheduled to open in 2012. Total investment in the line is estimated at 220.9 billion yuan (32.5 billion U.S. dollars). Once complete, travel time between the country's two most important cities by train will be cut in half to less than five hours. China's rapid development of high-speed railway technology at a reasonable cost is also drawing the world's attention. Many nations - including the United States, Brazil and Argentina - have expressed hope Chinese contractors can join high-speed railway construction projects in their countries.

China is making final preparations to launch its second lunar probe, possibly as soon as Friday, when the nation marks 61 years of communist rule, state media reported Tuesday. A launch rocket carrying the Chang'e-2, which will go into orbit within 15 kilometres of the moon, has been set up in the southwestern province of Sichuan, the official China Daily reported. Chief programme engineers have arrived at the satellite launch centre in the city of Xichang to carry out final tests, and staff at the centre have said that barring complications, the launch could come on October 1, it said. Friday is China’s National Day, in celebration of Mao Zedong’s proclamation of the founding of the People’s Republic in 1949. Meteorologists have forecast clear skies in the Xichang area from Thursday, the report said. Space program officials had said previously that the mission would be launched in October, but no precise date had been given. The lunar probe will conduct various tests in preparation for the expected launch in 2013 of the Chang'e-3, which aims to be China’s first unmanned landing on the moon, state media have reported. The Chang'e programme, named after a mythical Chinese goddess who flew to the moon, is seen as an effort to put China’s space exploration programme on a par with those of the United States and Russia. China launched Chang'e-1, which orbited the moon and took high-resolution pictures of the lunar surface, in October 2007. The country hopes to bring a moon rock sample back to earth in 2017, with a manned mission foreseen in around 2020, according to state media. China became the world’s third nation to put a man in space independently – after the United States and Russia – when Yang Liwei piloted the one-man Shenzhou-5 space mission in 2003. The Americans have achieved the only manned lunar missions, making six trips from 1969 to 1972.

Russia, China fete completion of oil pipeline - Russian President Dmitry Medvedev and Vice President Xi Jinping shake hands before a meeting at the Shanghai Expo site on Tuesday. The leaders of China and Russia celebrated on Monday the completion of a cross-border oil pipeline, a symbol of growing ties between the two emerging economic powers, particularly in the energy sector. Visiting Russian President Dmitry Medvedev and his host President Hu Jintao attended a launch ceremony for the long-awaited pipeline linking the world’s biggest oil producer with the largest energy consumer. The deal reached last year – which will see China receive oil for 20 years in exchange for US$25 billion in loans – is a “milestone” for energy cooperation between the two neighbours, Hu said. The countries are still finalising a deal that could see 70 billion cubic metres of Russian natural gas sent to China each year, and have also announced plans to jointly build a five-billion-dollar oil refinery in northern China. “Both sides believe that the current strategic partnership between China and Russia stands at a new starting point,” Hu said after talks with Medvedev, hailing a “new era” in ties. “The smooth completion of the pipeline project is a model of the two countries’ mutually beneficial win-win cooperation and a milestone for Sino-Russian energy cooperation,” state media quoted Hu as saying. The two leaders signed a series of economic and political agreements, including pacts on cooperation in future gas supplies, energy efficiency, renewable energy, nuclear power and the prevention of illegal fishing. Medvedev – who also met Premier Wen Jiabao on Monday – said the documents would give a “new impetus” to the Sino-Russian relationship. Energy supplies account for the bulk of Sino-Russian trade but Moscow also wants to secure Beijing’s help in modernising the Russian economy and is seeking broader Chinese investments and know-how in various sectors. “Today, Russia and China are largely solving similar tasks as they move along the path of comprehensive modernisation,” Medvedev told China’s official People’s Daily, in comments released by the Kremlin. “Never before have our ties been characterised by such a high level of mutual trust,” Medvedev said, adding that his government welcomed Chinese investments in high-tech industries including aircraft construction. Trade between Russia and China totalled 25.5 billion dollars in the first six months of this year, according to official data. The deal on the oil pipeline – which runs from eastern Siberia to the northeastern Chinese city of Daqing – is part of efforts by Moscow to seek new markets for its crude exports, especially in fast-growing Asia. Beijing is also looking to secure much-needed resources to fuel its booming economy, now the second largest in the world behind the United States. Relations between Moscow and Beijing – once bitter foes during the cold war – have a turbulent history, but have improved dramatically in recent years. Both countries view themselves as counterweights to US global dominance, but Moscow has viewed China’s rapid economic rise with some unease. Nikolai Tokarev, head of the Russian oil pipeline monopoly Transneft, said commercial supplies from the pipeline would begin from January 1, and that 15 million tons of crude would initially reach China each year. Russia’s Gazprom, the world’s largest gas producer, signed a framework agreement with China National Petroleum Company (CNPC (SEHK: 0135)) last year on shipments of natural gas to China, but the two sides have yet to sort out a pricing deal. Russian Deputy Prime Minister Igor Sechin, the country’s powerful energy czar, said the agreement would be finalised by mid-next year, with the first deliveries in 2015. “Co-operation between Russia and China in the gas sphere is strategically promising. In this sense, Russia is a natural partner for China,” Sechin said. Medvedev arrived in Beijing from the northeastern city of Dalian, where he paid respects to Soviet-era soldiers who died defending the port from Japanese invaders and said the ties between the two countries were “sealed by blood.” He was to wrap up his three-day visit to China with a tour of the World Expo in Shanghai on Tuesday.

China on Tuesday called on Japan to take "candid and practical" actions to meet Beijing "half way" to resolve a bitter, weeks-long spat between the Asian neighbours. Foreign ministry spokeswoman Jiang Yu made the comment after Tokyo insisted it owns a disputed island chain at the centre of the row, which began with the September 7 collision of a Chinese fishing boat and two Japanese patrol ships. “China highly values China-Japan relations. But safeguarding bilateral relations requires the two sides to meet halfway and requires Japan to take candid and practical actions,” Jiang told reporters. “Japan should take concrete steps to eliminate the negative impact of this incident on bilateral relations.” She urged Tokyo to “stop its stalking or disruption of Chinese fisheries law enforcement management boats” patrolling the disputed waters in the East China Sea, but beyond that, offered no other specifics on what steps should be taken. When asked about the prospects of a meeting between Premier Wen Jiabao and Japanese Prime Minister Naoto Kan at an Asia-Europe meeting in Brussels next week, Jiang replied: “I have no information on that.” Beijing reacted angrily after Tokyo arrested the trawler’s captain, summoning its ambassador several times and calling off several planned diplomatic meetings. Japan has since released the skipper involved in the incident near the island chain known as Senkaku in Japan and Diaoyu in China. But industry sources say China has also halted exports to Japan of rare earth minerals, crucial for a range of high-tech products, a claim Beijing has denied. China has since last week held four Japanese nationals for allegedly filming a military installation. They are employees of a construction firm bidding for a contract to clean up Japanese chemical weapons from the second world war. On Tuesday, Japanese Foreign Minister Seiji Maehara told parliament that “no territorial issue exists” over the rocky islets, claimed by Tokyo, Beijing and Taipei. Maehara also said the arrest of the captain, which Beijing had said was illegal, was entirely appropriate, Kyodo News and other media reported.

Gome shareholders voted on Tuesday on whether to oust the company's chairman in a corporate showdown staged by the jailed tycoon who founded China's biggest appliance chain.

China Unicom, the country's No 2 mobile operator, said on Tuesday that it had sold US$1.8 billion in convertible bonds, sending its shares to a three-week low.

Ningbo Port fell below its initial public offering price on its first day of trade in Shanghai on Tuesday after it raised US$1.1 billion in the country’s sixth-biggest IPO this year.

Buffett kicks off China tour with morale-boosting session - Billionaire investor talks up BYD carmaker in Shenzhen - American investor and BYD shareholder Warren Buffett and BYD chairman Wang Chuanfu present a mock key to the one-millionth BYD car buyer in Shenzhen yesterday. American billionaire investor Warren Buffett kicked off a whirlwind multi-city mainland tour yesterday with a morale-boosting visit to BYD's annual meeting of car dealers in Shenzhen. Buffett, whose 9.9 per cent stake in BYD has declined by about HK$7 billion from its peak value a year ago to about HK$13 billion, issued a vote of confidence in the carmaker and proved a natural showman in front of an audience of more than 1,000 car dealers. The world's second-richest man and chairman of Berkshire Hathaway spent the afternoon on stage in a hotel conference room shaking hands, presenting sales awards and posing for photos with more than 50 BYD car dealers, electric taxi drivers and other honorees. "Normally, I would deliver this short talk in perfect Chinese, but I don't want the interpreter to lose her job," Buffett said with his trademark humor. "BYD is a young and promising company experiencing dynamic growth, a leader in innovation and technology. BYD is the right choice for me." It was a salesman's pitch delivered to a room full of salesmen, but BYD's rank and file could perhaps use the reassurance. Buffett's visit comes as the Shenzhen-based carmaker faces significant headwinds - from declining sales of its most popular model and continuing delays to the commercial launch of its much-touted electric and hybrid cars. BYD's overall sales fell 19 per cent last month from a year earlier, while sales of its best-selling F3 sedan plunged 40 per cent. The company last month slashed its full-year sales target by 25 per cent to 600,000 units. Chairman Wang Chuanfu, who shared the stage with Buffett, announced last month that BYD would be forced to delay mass-market sales in China and the United States of its highly anticipated, all-electric E6 sedan because of a shortfall in battery production capacity. BYD originally planned to start selling the E6 in California by the end of this year, but pushed the target back to the second half of next year. Yesterday, BYD executives said they would designate 30 mainland dealerships to launch nationwide sales of its plug-in hybrid sedan, the F3DM. The car came on the market in 2008 but has so far sold only a few hundred units. The appointment of dealerships signals full-scale commercial sales may begin soon. "The main challenge with the electric and hybrid models is that, apart from at home, there is almost nowhere to charge them," said one BYD dealer from Hubei province. Neither the E6 nor F3DM has been launched on the mass market yet. Stephen Wade, a US businessman who owns car dealerships in Utah and California and who travelled to Shenzhen for yesterday's event, sees great prospects for BYD's electric cars. "I'm impressed with BYD's energy and with the ideas they represent," Wade said. He is potentially interested in bringing BYD's cars to the markets where he has dealerships. "I notice in my Toyota dealership, when [petrol] gets to US$4 a gallon we are selling Priuses as fast as we can get them ... This BYD play is not just about the cars, it is about the future of energy," Wade said. The Hubei dealer described Buffett's visit as a "great honor", but conceded that a recent slide in BYD's share price was an issue. Buffett will meet Microsoft Corp founder and fellow billionaire Bill Gates in Beijing to promote charitable giving by the mainland's newly minted rich. He will also attend an event in the capital tomorrow marking the launch of a new BYD multi-passenger car. Buffett then travels to Changsha in Hunan province on Thursday to witness BYD's new all-electric bus, the K9, as it comes off the production line for the first time. Buffett paid HK$1.8 billion in September 2008 for his BYD stake, which peaked in value at HK$19.89 billion in October last year, but the stock has lost some of its lustre recently. BYD's shares rose 4.2 per cent yesterday to close at HK$57.65.

Sept 28, 2010

Hong Kong*: Developers rushed to tap a revival in market sentiment yesterday with fresh launches prior to the chief executive's policy address next month. Nan Fung Development released the first price list of 30 homes - mostly studio flats - at Queen's Cube for an average of HK$15,570 per square foot. And Sun Hung Kai Properties (0016) announced the prices for 28 villas at Valais. Cheung Kong Holdings (0001), meanwhile, put 302 more flats at Oceanaire on the market, while KWah International's (0173) Shiu Fai Terrace project will be available in mid-October. Registration for Nan Fung's 96-home building in Wan Chai starts tomorrow and sales begin on October 6. Prices range from HK$5.97 million for a 401-square-foot flat to HK$9.32 million for a 582-sq-ft one, or HK$14,888 to HK$16,843 psf. Nan Fung director Victor Mak Yat-king said potential official curbs should have limited effects on sales, since he expects more than 60 percent of buyers to be long-term investors targeting rentals. At nearby Zenith, investors accounted for about 60 percent of buyers, said Midland Realty senior sales manager Barry Tun. Transactions in September have doubled from August to 10, with prices rising by 6 percent to HK$10,600 psf. An investor recently bought a 650-sq-ft flat for HK$6.2 million, or HK$9,508 psf, eyeing a rental yield of about 4.3 percent. In the same district, 5 Star Street - to be completed by year-end - will cost from HK$17,000 to HK$22,000 psf and York Place from HK$14,000 to HK $16,000 psf. In Sheung Shui, SHKP will start selling the first 28 villas at Valais for an average of HK$8,388 psf on National Day. The cheapest five are HK$8,100 psf, or around HK$20.5 million. Sun Hung Kai Real Estate Agency executive director Victor Lui Ting said there is plenty room for price increases. In Ma On Shan, Cheung Kong will sell 288 apartments and 14 houses at Oceanaire for an average of HK$6,811 psf and HK$8,353 psf, respectively. Another 424 homes will go on sale from Thursday. The cheapest flat costs HK$3.8 million. KWah's 16-story building in Happy Valley will provide 24 apartments. Typical flats measure 3,600 sq ft. Special apartments are 7,200 to 7,300 sq ft. Chief Executive Donald Tsang Yam-kuen's policy address is on October 13.

Television Broadcasts (0511) may soon have a new owner as Henderson Land Development (0012) chairman Lee Shau-kee's son Peter Lee Ka-kit is in talks about buying stakes in the station. Henderson Land spokeswoman Bonnie Ngan Suet-fong confirmed that the younger Lee, who is vice chairman of the developer, is working on the deal with representatives of Shaw Brothers. But she stressed that Lee Shau-kee is not personally involved in any negotiations. "Peter Lee is still studying TVB and is the only one who has touched base with Shaw," said Ngan. "No decisions have been made so far." She said the plan to take a stake in TVB is not related to the blue-chip developer or listed unit Henderson Investment (0097). Ngan added that Lee Shau-kee is not involved in any of his son's discussions. However, sources said the Lee family intends to take over Shaw Brothers to obtain the 114 million shares, or 26 percent stake, in TVB, along with four plots of land in Clearwater Bay. The total market price is around HK$7.3 billion, 20 percent less than the HK$9.2 billion Lee Shau-kee was reportedly willing to pay. The talks boosted the group's shares. Henderson Land Development surged 2.91 percent to close at HK$54.85, while Henderson Investment climbed 25 percent to 90 HK cents yesterday. TVB last night confirmed preliminary talks have taken place but no agreement has been reached. Shares will resume trading today. Analysts say this is a good opportunity for the Lees to expand into the media industry, as a battle will soon take place among free-to-air broadcasters after the third license is issued. "Run Run Shaw probably feels he is too old to do battle, and may not want to spend too much money in it," said Ricky Tam Siu-hing at Champlus Asset Management. "Selling his stake in TVB will solve the problem." Hong Kong TV dramas have always been popular in the mainland, with the bonus of high profitability in the industry, added Tam. This will help Henderson Land to expand across the border.

Tenants of shabby tenements on Wing Lee Street - made famous by the award- winning film Echoes of the Rainbow - have been offered 400-square-foot flats in Sheung Wan at less than a quarter of the market rent. Some flats in the Urban Renewal Authority's 23-story Sheung Wan block even have harbor views. A property agent said rents for similar apartments are around HK$7,700, but Wing Lee Street tenants can move in for just HK$1,800 a month. In offering the HK$10 million resettlement package to 30 households, URA chairman Barry Cheung Chun- yuen said the rent is at a similar level to public housing, but insists it will not set a precedent or increase the authority's financial burden. "It's the first time - as well as an exceptional case - for us to relocate residents who are not affected by redevelopment projects," Cheung said. "We see the arrangement as a social responsibility to urgently improve residents' poor housing conditions." He does not regard the offer as "too generous." The URA block, Shun Shing Mansion on Des Voeux Road West, offers around 100 flats for those affected by redevelopment schemes on Hong Kong Island such as those in Graham and Lee Tung streets. The authority revised its redevelopment plan for Wing Lee Street in March after Echoes of the Rainbow poignantly portrayed the 12 tenement buildings. Under the new approach, the authority will preserve all buildings on Wing Lee Street and maintain the terrace ambience of "Old Hong Kong." Cheung said the resettlement plan will become effective after a Town Planning Board meeting next month is expected to remove Wing Lee Street from the list of redevelopment schemes. Apart from the favorable rent, households who choose to move to the block will not have to pay rent for six months and will be given a relocation allowance of about HK$7,400 for each family. Their rental contracts will be renewed every two years. The authority will not ask residents to move out until they are allocated public housing. Meanwhile, tenants who choose to remain where they are will be given up to HK$80,000 to maintain their flats. Kwong Shum Sui-heung, who rents a flat on the street for HK$4,500 a month, said her family of four visited the URA block in Sheung Wan but decided not to move there. "The authorities pledged to allocate us public housing when they first decided to redevelop the area 13 years ago," she said. "Another temporary relocation will only increase our financial burden. We have no choice but to wait." Ho Hei-wah, a member of the Steering Committee on Review of the Urban Renewal Strategy, said owners who prefer to stay put have received the least benefits in the resettlement package. "Most of the tenement buildings are more than 50 years old. The one-off renovation subsidies are far from enough to maintain a safe building structure in the long run," he said. Rayson Yip Ching-long, who owns a printing company on the street, said he welcomes the provision of subsidies for renovating his "heavily dripping balcony" but hopes the URA will acquire his place at a reasonable price to help him buy a replacement unit for his business. About 20 households in the street held a meeting last night to discuss options. A URA spokesman said its staff will visit residents tomorrow.

Foreign Affairs vice minister Wang Guangya will succeed Liao Hui as director of the Hong Kong and Macao Affairs Office of the State Council after Friday's National Day, a source said. Beijing will announce the appointment soon, according to the source. Liao will retain his role as deputy head of the Politburo working group on Hong Kong and Macau matters. The Hong Kong and Macao Affairs Office coordinates with the governments of the two SARs on various issues. It also helps coordinate collaboration between the mainland and the SARs. Under the hierarchy in Beijing, there are three tiers of authorities overseeing SAR matters. The highest level is the Hong Kong and Macau affairs working group under the Politburo. Next comes the Hong Kong and Macao Affairs Office of the State Council, followed by the central government liaison office in Hong Kong. Liao has been director of the Hong Kong and Macao Affairs Office, based in Beijing, since the 1997 handover. Wang has a track record in strengthening relations with third-world countries from his term as China's permanent representative to the United Nations from 2003 to 2008. Born in Jiangsu province in 1950, Wang joined the Ministry of Foreign Affairs in 1975 and worked in the department of translation and interpretation for the first two years. Over the past three decades, he assumed various posts in the ministry. He was a member of China's delegation to the United Nations and director-general of the department of international organizations and conferences. He was promoted to vice minister in 2008.

Executive councillor Lau Wong-fat has admitted failing to declare several property transactions made through his own and family businesses but denied he deliberately concealed the deals. Lau, who also represents the Heung Yee Kuk in the Legislative Council, made the remarks through an assistant in response to media reports. His assistant said Lau had made declarations in the past through his company secretary, and the oversights may have been due to staff negligence. Lau, on a visit to Taiwan yesterday with district council chairmen, said he will provide a fuller explanation when he returns to the territory tomorrow. "I will explain in Hong Kong," he said, pointing to a media report that claimed he failed to declare some transactions. "I will find out what has not been declared." Executive councillors are required to declare land and property they own in Hong Kong or overseas, including premises they occupy. Land or property in the names of spouses, children, other individuals or firms that are actually owned by councillors must also be declared. Premises not owned by councillors but in which they have a beneficial interest - such as income from rent - also needs to be shown. Such declarations are made public on the Executive Council's website. Carofaith Investment, in which Lau has shares, was reported to have acquired three houses in Palm Springs in Yuen Long in April but had still to declare an interest - a blank that went against the rule that such declarations should be made within 14 days of a transaction. Between February 20 and February 24 Carofaith Investment bought two houses in Palm Springs and 24 Yoho Midtown flats in Yuen Long with China Tiger Capital Management, which is associated with Lau's family. Officials in the Executive Council Secretariat are said to be following up on the issue.

Hong Kong exports surged 36 percent in August - Exports show strong surge - The value of Hong Kong exports surged 36 percent in August - the strongest jump in 18 years - thanks to robust demand in the mainland and a gradual recovery in orders from Europe and the United States. It was the tenth straight month that the value of exports rose. The exports, comprising re-exports and domestic exports, soared to HK$290.1 billion in value from a year ago. Imports climbed 28.4 percent to HK$302 billion last month, according to government data released yesterday. The growth was beyond the market's forecast and was an "exceptional surprise," said Hang Seng Bank (0011) senior economist Irina Fan Yuen-yee. "This may indicate the peak season for buyers to take orders for Christmas," Fan said, adding that last year's low base was also a factor in the surge. HSBC Global Research economist Donna Kwok said: "Although we'd already penciled in a strong result for August given the positive turnaround in Hong Kong's HSBC Purchasing Managers' Index for new orders and China's imports upside, the strength of this stellar result took us by surprise." Exports to the mainland jumped 44.7 percent - the highest among all countries last month - while those to India and Singapore rose 40 percent and 34 percent, respectively. "The current robust growth momentum of Asian markets should continue to render firm support to Hong Kong's exports in the coming months," a government spokesman said. Exports to Asian countries totaled HK$187.42 billion, accounting for 64.6 percent of total exports value in August. Exports to the United States grew 10.2 percent. Despite the impressive figures, the government warned that "uncertainty in the external environment remains elevated, as the strength of the recovery in advanced economies has weakened lately." Hang Seng Bank expects the value of exports to be flat or even decline in the fourth quarter year-on-year. A survey by the Hong Kong Trade Development Council also showed manufacturers are more pessimistic about orders in the fourth quarter. The value of total exports this year as at August 31 increased by 26.4 percent, while imports jumped 30.4 percent compared with a year earlier. Hong Kong's trade deficit narrowed to HK$11.9 billion in August from HK$21.8 billion in the same month last year.

Many teachers and principals are scrambling to salvage their livelihoods as Hong Kong's falling student rolls threaten to make them redundant - but they are not alone. Businesses that traditionally thrived on a large student population are also being forced to look for new ways to make up the sharp fall in profits. Firms that produced school uniforms are diversifying, turning to workers' uniforms and even party costumes. School bus operators are increasingly transporting tourists and wedding guests. One textbook publisher is turning some of its staff members into teaching specialists. The Education Bureau estimates the city's Form One population will fall from 75,400 in the past academic year to 53,900 in 2016-17. Across six forms, the drop of 97,600 students by 2016 will mean a big chunk sliced off the business pie. Teachers will bear the brunt of the shrinking enrolments: 2,500 in secondary schools will be surplus by 2012, the Hong Kong Federation of Education Workers estimates. But the falling school rolls are also creating "fatal" shocks to other trades, according to businesspeople involved. Fast-diminishing profit margins are squeezing small players out of business. Ben Mak Ka-lung, deputy regional director of Oxford University Press China, says the industry is reeling from these grave blows. "The number of senior secondary publishers has been reduced from 48 a decade ago to 16 this year," he said. "Education reform has brought a change in emphasis from rote- to inquiry-based learning. We need to make a heavy investment to produce supplementary teaching materials to nurture students' critical thinking. "But the bigger investment is not matched by an expanding clientele. You need to spend more money to produce a product that is bought by fewer people." The publisher has a third of the textbook market share, specializing in major subjects including languages, maths and science. Although it sells to about 900 secondary and primary schools, Mak says the profit margin has been cut by 30 per cent from a decade ago. The publisher expanded its revenues by rolling out a new program in 2007, sending staff members to Oxford University in Britain to take training in teaching English phonetics. Schools that subscribe to the program benefit by having them help out in their classrooms. "A package costs HK$150,000 to HK$200,000 for two years," Mak said. "The number of primary school subscribers rose from two in 2007 to 24 this year. Ten staff specialise in doing this now. They go to school to train teachers and co-teach with them."

Henderson Land Development (SEHK: 0012)’s vice-chairman is in early talks to buy some or all of the 26 per cent stake of Television Broadcasts (SEHK: 0511) Ltd held by TVB’s parent, a Henderson spokeswoman said on Monday. Trading in shares of TVB, Hong Kong’s dominant TV broadcaster, was suspended on Monday after jumping 17 per cent at the open after reports that Henderson Land Chairman Lee Shau-kee, was in talks to buy TVB’s controlling shareholder Shaw Brothers (Hong Kong) Ltd. Hong Kong media had reported that Lee, Hong Kong’s second-richest man, could pay up to HK$9.2 billion (US$1.2 billion) for Shaw Brothers’ TVB stake. Henderson spokeswoman Bonnie Ngan said the discussions were purely private between Lee’s son, Henderson Vice Chairman Peter Lee, and Shaw Brothers, and that the elder Lee and Henderson had no involvement. “Dr Lee [Shau-kee] never had a meeting or has never been involved in discussions,” she told reporters. “Peter Lee is the only one who has touched base with Shaw. The discussions are very preliminary and nothing has been confirmed yet.” Shanghai Media Group, China’s No 2 media company, has also expressed interest in the stake, the Oriental Daily News reported. The British-educated Peter Lee is the elder of Lee’s two sons and has been primarily responsible for the development of Henderson Land Group’s China business since he joined the firm in 1985, according to Henderson Land’s website. Following the jump in its stock, TVB was valued at about US$2.2 billion. A spokeswoman said TVB had no immediate comment. Shaw Brothers also declined to comment. TVB is Hong Kong’s dominant free-to-air TV broadcaster, controlling more than 80 per cent of the Cantonese language prime time market in Hong Kong. The company was founded and is still chaired by Sir Run Run Shaw, now 102 years old. Mavis Hui, an analyst at DBS Vickers, said TVB could be an attractive buy given its positive outlook. “TVB continues to stay in cyclical recovery for its core markets,” she said. “Advertising spending in Asia will likely grow further in the second half of this year and next year under normal market conditions and TVB should remain a beneficiary. Its operations in China will still need time to expand gradually, though.” In early September, TVB reported a 77 per cent rise in its first-half net profit attributable to shareholders to HK$584 million, boosted by strong advertising revenue and its majority audience share in the free TV market. Shaw Brothers (HK) Ltd owns Shaw Brothers Studio, which produced one thousand films over three decades.

Motorists would be spared a proposed toll increase for the Eastern Harbor Tunnel, and could even pay less, if the owner accepts projections that the crossing would carry extra traffic after the government increased charges for the congested Cross-Harbor Tunnel. The Transport and Housing Bureau has yet to release the study on toll rationalization for the three harbor tunnels, but people familiar with the report said the government was inclined to adopt a model that would see a toll rise for the cheapest Cross-Harbor Tunnel and toll cuts for the other two crossings. For example, an increase of HK$5 for private cars in the Cross-Harbor Tunnel - where the toll is now HK$20 - would be used to reimburse a toll cut of HK$5 for the same type of vehicle in the Eastern Harbor crossing, so the latter would not suffer any loss. Officials have been trying to persuade the New Hong Kong Tunnel Company, the operator of the Eastern Harbor crossing, to drop a toll rise proposal in favor of the rationalization plan by the government, which they said may give the company just as much, if not more return. The plan's feasibility depends largely on whether the company accepts the government's projections. However, financial expert Raymond So Wai-man is sceptical about such a projection, saying the Eastern Harbour Tunnel has failed to absorb the queues for the Cross-Harbor Tunnel even when it charged less than the more popular government-owned tunnel. New Hong Kong Tunnel applied for a toll rise of 40 per cent this month. If approved, private car and taxi drivers will pay HK$10 above the HK$25 currently charged. The increase is expected to bring the company extra income of about HK$250 million a year, after taking into account a 13 per cent drop in patronage.

Two Chinese renewable energy companies set price ranges on Monday to raise up to US$1.3 billion from Hong Kong initial public offerings, as the country's field for publicly traded groups in this sector becomes crowded. China Suntien Green Energy Corporation is set to raise up to US$369 million in an initial public offering, according to a term sheet seen by Reuters on Monday. The company, which operates a wind farm and a natural gas business, is the clean energy unit of Hebei Construction Group, the state-owned investment arm of the Hebei provincial government. The Suntien offering will join China’s second-largest wind turbine maker Xinjiang Goldwind Science & Technology in the Hong Kong IPO queue. The company revived its initial public offering plan, a term sheet said on Saturday, seeking to raise up to US$917 million. This compared with an earlier fundraising target of up to US$1.2 billion, scrapped in June because of deteriorating market conditions. “There are a lot of IPOs happening this month and investors are on the lookout for good investment themes that will generate the most money. Renewable energy is one of those themes that should attract investor interest,” said Tony Tong, Head of Market Strategy for China Everbright (SEHK: 0165) Group. Tong added China’s policy in support of clean energy was another reason investors were bullish about renewable IPOs. China plans to spend US$736 billion over the next decade to harness wind, solar, nuclear and other clean energy technology in a bid to reduce the nation’s dependence on cheap but dirty coal. China burns coal to generate more than 70 per cent of its power needs. China Huaneng Group and Datang Corporation, the country’s top power producers, also plan to float shares of their renewable energy units in Hong Kong in offerings that could raise more than US$2 billion by the end of this year. Goldwind is selling 395.3 million shares at HK$15.98 to HK$17.98 each, which represents a multiple of about 15 times to 16.9 times forecast this year earnings. By comparison, Chinese turbine maker Dongfang Electric trades at 28 times forecast this year earnings, while China High Speed Transmission, a maker of wind gear for wind turbines, trades at 14 times. Goldwind’s offering price also represents about a 22 per cent to 30 per cent discount to its mainland A-share price. Goldwind has also signed up five cornerstone investors, including International Finance Corporation, for a combined $190 million worth of shares, with a commitment not to sell their investments for six months. Suntien is selling 1 billion shares at a price ranging from HK$2.06 to HK$2.66 per share, the term sheet showed, or 35 per cent of the company. The company plans to list on October 13. Macquarie Group is the sole global coordinator.

Around 150 street sleepers and unemployed people enjoyed a free dinner and gifts at the Henry G. Leong Yau Ma Tei Community Center. About 150 elderly, homeless or deprived people were treated to a big free meal last night, thanks to a religious group wanting to inspire them to find meaning in life. More than half the participants were street sleepers invited from parks and 24-hour fast-food restaurants in Tsim Sha Tsui, Yau Ma Tei and Mong Kok. Despite many of them not having eaten for days, a spokesman said most of them kept their composure when they were led to sing along with and dance to religious songs before the meal, though some were less patient and became annoyed. There was a choice of mooncakes or T-shirts, which were donated, as gifts for them. Though a lot of their clothes were not clean, many of the recipients opted for mooncakes to stave off hunger pangs, with some devouring the cakes within minutes. There was chaos when meals comprising vegetables, chicken wings, fried rice and noodles were distributed. Participants jostled for more food, but order was restored thanks to the organisers. Participant Lai Chi-yuen, 33, had been released from prison several days before, and had yet to find a home and a job. "The food is delicious," he said, tucking into some fried rice. "I don't have to live on the streets since I'm staying at a friend's place. But I feel his generosity is wearing thin and I may have to sleep on the streets soon," the Form Three graduate and social assistance recipient said. "I'm going to find a job but it's going to be tough. I will try to be a driver since I have a licence. Hopefully I won't have to doss on the street." One of 10 volunteers, Mui Ka-wood, 51, had been a street sleeper for several months before getting social workers' help with his application for social assistance. His mother's death devastated him when he was a security guard four years ago. As a result, his career was lost. He now depends on welfare because he cannot find a job. Pastor Metis Cheung Yuk-shan, of the Revival City International Church Alliance, organiser of the event, said she hoped to let the underprivileged know they were "useful and viable" in life.

The HK$7 billion budget for building the South Island Line (East) may blow out by up to 55 per cent due to big rises in the price of construction materials, the MTR Corporation (SEHK: 0066) says. This means the cost of the four-year railway project, due to be launched next year, could be as high as HK$10.8 billion. The design manager for the South Island Line, Peter Leung Man-fat, said the original estimate was based on the government's tender price index in 2006. But he said the building cost had yet to be finalised as the tender process was continuing. The MTR Corp said it had to wait for completion of the tender process before it could decide on how the cost would be split between the MTR and the government. The big rise in price has shocked lawmakers, who warned that they will press the company to explain it. Wong Sing-chi, a member of Legco's transport panel, said he would write to panel chairman Cheung Hok-ming asking for the MTR to explain the situation. "It is more about the credibility of the MTR, which presented the building cost as HK$7 billion to gain our support to build the project in the very beginning. But all of a sudden, it tells us the actual price is 55 per cent more, which is unacceptable," Wong said. Panel member Albert Chan Wai-yip said the company owed the public an explanation and he would follow up the issue. Another big MTR project, the West Island Line, faces the same problem. Its projected cost has risen from the budgeted HK$8.9 billion to HK$15.4 billion, also due to the rising cost of materials and design changes made for environmental reasons. The seven-kilometre South Island Line (East) section will run between Admiralty and South Horizons, via new stations at Ocean Park, Wong Chuk Hang and Lei Tung. It is expected to be completed in 2015. The MTR's Leung said the company would proceed with its plans for public facilities along the South Island Line despite the price rise. Under the plan, the MTR will build a 2,000 square metre pet park near Ap Lei Chau Bridge, a new promenade and a footbridge to connect the two with Wong Chuk Hang station, Leung said. The idea of building a pet park in Wong Chuk Hang emerged after discussions and consultations with the district council and residents, he said. Management of the park, which would be built on government land, would be handed over to the Leisure and Cultural Services Department. After receiving residents' views, the MTR has decided to alter the design of the 2km viaduct in the Wong Chuk Hang area. It will be smaller and will have slimmer pillars that integrate the overhead line support system and parapet with a noise barrier.

Mainland helicopter market gets set for lift-off but barriers remain - Aerochine Aviation managing director Diana Chou poses with helicopter models at her Central office. The prospect of ferrying deep-pocketed mainland businessmen by helicopter to their villas in Hainan, or flying high rollers to casinos in Macau, is giving a lift to the mainland's aviation industry. Among businesses responding to the demand are helicopter service and aircraft management companies, industry watchers say. "The market potential of helicopters on the mainland is tremendous as entrepreneurs demand a more efficient way to travel across the country," Aerochine Aviation managing director Diana Chou said. Chou, who has run a sales agency for several private jet manufacturers on the mainland for more than 10 years, set up Aerochine last year to tap into the demand she saw for the helicopter market. She also became the sole representative of Bell Helicopter for the mainland, Hong Kong and Macau. Her company is involved in consultancy work for mainland big spenders setting up helicopter companies. Chou said there were 10,000 helicopters in service in the United States, compared with just 300 on the mainland, where numbers are limited by infrastructure and air traffic controls. But Beijing has started to relax the restrictions on general or non-airline aviation, including helicopters and light aircraft, after realising the contribution general aviation could make to the economy. By the end of this year, two trial schemes will come into effect, in Guangdong province and the mainland's northeast. Certain unrestricted fly zones will be set up to allow general aviation flights to take off after simply notifying the regulator, instead of applying for clearance days in advance. "The number of helicopters in the country could increase fivefold to 1,500 in 10 years if other factors also come in," Chou said. HNA Group's Beijing Capital Airlines announced in June plans to set up a heliport on the outskirts of Beijing. Moreover, some property developers were expected to set up helicopter companies on the mainland to cash in on the lucrative market, Chou said. "Unlike the private jet business, helicopter service providers must be locally registered and maintain their helicopters locally," she said. "It will not work if you try to run a helicopter business on the mainland from headquarters in the United States or Europe." First-tier cities such as Beijing, Shanghai, Zhuhai and Shenzhen are the most likely to the first locations for the fledgling helicopter business, Chou said. Another prospect may be Hainan. "Hainan is a natural market for helicopters because it is an island without land transport to the mainland," she said. The central government has also granted it tax-free status and concessions to stimulate the aviation and tourism industries, prompting many property developers to invest in the island. "The parcels of land bought may not be close to the two airports on the island, creating a good market potential for helicopter services," she said. However, there are still some constraints on the growth in demand for helicopters, including the limited number of heliports and helipads around the country. There is only a handful of such facilities in the Pearl River Delta, including one at Shenzhen International (SEHK: 0152) Airport, one at Zhuhai's airport and a police-civil heliport facility in Dongguan, Shenzhen, according to Chou. In addition, a shortage of pilots and qualified mechanics on the mainland will also curb the growth of the industry. Foreign pilots are required to fly with a local escort beside them on every domestic flight, making it difficult to solve the supply problem simply by importing pilots, she said. A high tax of about 23 per cent levied on helicopter sales was also an obstacle for the industry. A Bell 429 helicopter equipped to carry eight passengers was US$6.5 million, but after tax this increased to US$8 million, Chou said. A Bell 412, which can carry 15 passengers, would cost US$12.3 million, tax included. As with the private jet market, the helicopter market would take a few years to lift off on the mainland, Chou said. "But before long, you will see a helicopter taxi providing shuttle services for commuters to get to downtown Beijing," she predicted. "Just like what you see now in New York and London."

US shipping competition bill gains local (Hong Kong) support - The Ocean Carrier Antitrust Bill introduced in the US Congress will affect Cosco Container Lines transpacific shipping business. Shippers in Hong Kong and around Asia have backed a bill introduced in the US Congress last week that seeks to outlaw the ability of container shipping lines to collectively set freight rates on US services. Aside from ending shipping lines' competition law immunity, the Ocean Carrier Antitrust Bill introduced by congressman James Oberstar would limit the surcharges shipping lines impose as well as ban other "deceptive" practices. It would also seek to propose a dispute resolution mechanism to enable wrangles between shippers and shipping lines to be settled quickly. If passed into law as the Shipping Act 2010, the provisions contained in the bill would apply to all container shipping lines operating services to the United States, including those across the Pacific Ocean. It would particularly impact the 15 members of the Transpacific Stabilization Agreement (TSA), including Orient Overseas Container Line, Cosco Container Lines, and Evergreen Marine, which transport about 85 per cent of the containerized goods shipped across the Pacific. Canada is also likely to follow the US lead if Oberstar's bill is voted onto the statute books. "[If there are] any changes to US law, then Canadian law will follow," said Robert Ballantyne, president of the Canadian Industrial Transportation Association, who added that port operators, including those in major gateways such as Vancouver and Montreal, would not want to be disadvantaged. Ballantyne said the only areas where shipping line cartels could still exist, assuming the law changes in North America take place, would be on intra-Asian trades and relatively minor routes such as between Asia and Latin America. Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council, confirmed that the group, which represents cargo owners and manufacturers, supported the bill. "We don't think the shipping industry should be any different from any other industry," he said. The European Union ended shipping lines' competition law immunity in 2008 even though the carriers said there were competition issues and that it would reduce their return on investment which had been substantial. There was also support for the law change from the Asian Shippers' Council which has been a staunch opponent of the cartel-like behavior of the container carriers. Introducing his bill in Congress last week, Oberstar said competition law immunity was initially given to container lines to stabilize their economic position through controlling rates and capacity. But he added that even under the current regulatory regime, antitrust immunity had outlived its usefulness and stifled competition. Most large container lines belong to shipping conferences such as the TSA and the Westbound Transpacific Stabilization Agreement. As a result, eliminating immunity for the shipping conferences "will increase competition by requiring ocean carriers to compete in the market place with the best price and service to get shippers' business", the six-page bill said. But the World Shipping Council, which represents the shipping lines, has already voiced its opposition to the bill which was lodged in the dying days of the current congressional session. As a result the bill is seen in some quarters as stimulating debate about reform of the container shipping industry similar to the discussions going on over changes to current legislation being considered by US Federal Maritime Commission chairman Richard Lidinsky. The introduction of the bill also coincided with a move by the Westbound Transpacific Stabilisation Agreement to form a 16-member advisory board of shipping lines and exporters of cargo that aimed to strengthen overall long-term relations between carriers and shippers.

 China*: China, Russia look to "new era" of strategic relations - Russian President Dmitry Medvedev Monday signed a series of political and commercial deals on his second state visit to China, a sign of closer strategic ties between the two world powers.

A Chinese commerce official on Sunday called on foreign investors to maintain their confidence in the country, promising China would make continuous efforts to improve its investment environment. Qian Fangli, deputy director of the Department of Foreign Investment Administration under the Ministry of Commerce (MOC), made the statement at a forum during the Expo Central China 2010 that opened Sunday. Although operation costs in China were rising because of higher labor and raw materials costs, foreign investment continued growing rapidly " because improvements in China's investment environment helped lower their investment costs and boost confidence," Qian said. Further, she noted that the Chinese government would continue to improve policies to encourage foreign investors. But she did not provide further details. In the first eight months of this year, foreign direct investment in China totaled 65.96 billion U.S. dollars, up 18.06 percent from one year earlier, according to MOC statistics. The Expo Central China, scheduled to run from Sept. 26 to Sept. 28, invited economists, entrepreneurs and officials to attend. The expo seeks to promote development in central China, which spans six provinces -- Shanxi, Anhui, Jiangxi, Henan, Hubei and Hunan.

The first subway in west China was launched on Monday afternoon in Chengdu, capital of Southwest China's Sichuan province. Chengdu Subway Line One runs between northern and southern Chengdu over a distance of 18.5 km with 17 stations, said Yu Bo, chief engineer of Chengdu Metro Co, Ltd, builder and operator of the line. The subway's construction began in 2005 with an investment of about 8 billion yuan ($1.19 billion). The subway operates from 7 am to 9 pm with an interval of 10 minutes between trains. It is designed to carry 180,000 to 200,000 passengers per day. Chengdu will accelerate its subway construction in the next few years. It plans to have a 298 km subway system, carrying more than three million passengers per day by 2020, Yu said.

Shining light on China's solar energy - A building fully-equipped with solar power facilities in Dezhou. The city in East China's Shandong province was the venue for the 4th International Solar Cities Initiative Congress from Sept 16 to 19. Dezhou saves 640,000 tons of coal a year by using green resource - Dezhou, a city located in the northwest of Shandong province, used to be famous in China for its braised chicken products. Today, it is branding itself as China Solar City, a national center using green energy. From street lighting to tourist carts, solar energy has now become an integral part of the city's economy. More than 120 solar power companies have invested in Dezhou, making it a hub for clean-tech manufacturing, said Li Xixin, vice-mayor of the city. Because of the use of solar power, 640,000 tons of coal-equivalent are saved each year. Carbon dioxide (CO2) emissions are also reduced by 1.71 million tons per annum, he said.

A US congressional panel's approval of a bill on China's currency is "redundant", China’s vice commerce minister said on Monday, the latest salvo from Beijing in the face of US pressure on its currency policy. Vice Commerce Minister Chen Jian also told a media briefing during a visit to Taiwan that China would set policy on its currency according to its own needs. “We’ll make a decision based on our own economic development levels and the world economic situation. If it takes the yuan to appreciate for our economy to develop, we will do it even though it would have negative impact,” Chen said. “But it is redundant for the US congress to pass the proposal.” The US House of Representatives Ways and Means Committee approved a bill on Friday, expected to be voted on this week, that would let the United States apply duties on goods from countries with undervalued currencies. The vote is a first step to fulfilling long-standing threats to penalise Beijing for keeping its currency artificially weak, which critics claim creates an unfair trade advantage for China. It comes a day after US President Barack Obama pressed Chinese Premier Wen Jiabao on the issue in talks on the sidelines of the United Nations General Assembly meeting. The yuan rose against the dollar on Monday even though the central bank lowered its mid-point after nine days of stronger fixings in the face of growing US pressure on Beijing to let the currency rise faster. Chen added that the yuan’s recent rise would hurt China’s exporters, but the effects would diminish over the long term. He was speaking in Taipei after a forum on developing cross-strait trade.

China and Russia signed agreements Monday to boost energy co-operation, while Moscow said it is ready to supply its energy hungry neighbor with all its natural gas needs. Dmitry Medvedev and Hu Jintao inspect a guard of honor at the Great Hall of the People in Beijing on Monday. No dollar value was given to the agreements signed during a state visit by Russian President Dmitry Medvedev, but they include documents on cooperation in coal, natural gas, nuclear energy and renewable energy.

China will continue to limit most families to just one child in the coming decades, state media said Monday, despite concerns about the policy's problematic side effects.

Some Chinese customs offices have started stricter checks on shipments to and from Japan, causing delays, in what may be retaliation against Japan's recent detention of a Chinese fishing boat captain, the Mainichi newspaper said on Monday. Fishing trawler captain Zhan Qixiong was released and arrived back in China on Saturday after his boat collided with Japanese patrol ships on September 7 near disputed islets, known as the Diaoyu in China and Senkaku in Japan. China demanded an apology and compensation from Japan, which Japanese Prime Minister Naoto Kan rejected, illustrating the fragility of ties between Asia’s two biggest economies troubled by Chinese memories of wartime occupation, military mistrust and maritime territorial disputes. Customs authorities in Shanghai on September 21 notified a Japanese major transport company that they would sample check all air cargo instead of the usual 30 per cent, the Mainichi said, citing unidentified sources familiar with the matter. The newspaper said inspections are becoming more stringent at customs in Beijing and other locations as well, and that goods being affected include auto and consumer electronics components. China became Japan’s biggest trading partner last year and bilateral trade reached 12.6 trillion yen (US$150 billion) in the January-June period, a jump of 34.5 per cent over the same period last year, Japanese data shows. The latest development comes when there is concern that Beijing is holding back shipments of rare earth minerals vital for electronics and car parts, although China has denied that there is a ban on exports to Japan.

Sept 27, 2010

Hong Kong*: The much-maligned Science Park has long been criticised as a white elephant, accused of offering subsided office space for private companies that have little or nothing to do with science and technology. Now the park may have hit the jackpot, thanks to a hi-tech project with the stock exchange that is not only cutting edge, but also potentially enormously profitable for everyone involved. The catch is - it may be a pact with the devil. Hong Kong Exchanges & Clearing has acquired from the park an 11,000 square metre site at Tseung Kwan O Industrial Estate for a price of just HK$26 million. Here, the next-generation data centre will be built to handle the exchange's securities and derivatives markets as well as serving as a hub for the settlement, hosting and clearing of all orders. The state-of-the-art computer science involved will rival or exceed any computing infrastructure now available in Hong Kong or elsewhere in southern China. But what is really driving the need to build such a high-powered data hub? The simple answer is: high-frequency trading (HFT). And that's the catch. The controversial use of automated trading programs has been blamed for contributing to the "flash crash" in May in which the Dow Jones Industrial Average dropped about 600 points in minutes. Critics say the practice contributes little or nothing to the functioning of capital markets, while making them more volatile and unstable; it also makes it easier for practitioners to manipulate markets and game the system. HFT advocates, however, say it increases liquidity, speeds up price discovery, narrows the spread between the bid and offer prices, and lowers trading costs. These surely benefit everyone, they claim. Some even argue that HFT helped markets recover quickly during the flash crash. Even among academics, there is no consensus on whether HFT is good or bad for the market. HFT enables buy and sell orders to be executed dozens of times in the blink of an eye. There are many strategies. Perhaps the simplest is to exploit tiny differences in the bid and offer prices - the spread. Such programs take an insignificant slice of profit each time, but the slices added can amount to serious money. On the Nasdaq, HFT traders get a peek at prices about 30 milliseconds before everyone else, enough for their computers to guess which stocks may soon be in high demand. The trading system's runaway growth has meant that up to more than half of all trades in the US and the largest European equity markets are now done by such computer programs. What is perhaps most disconcerting is that they automatically execute orders long before any trader can even process the information. Asia has been slower to catch on. And that is one reason the Hong Kong exchange is keen to jump on the HFT bandwagon. Similar computing initiatives have been launched by the exchanges in India, Singapore and Australia. Chris Tam, head of trading and operations at Future Gate Capital Management (Asia), said the Hong Kong stock exchange project would attract more funds into the city. "Right now, after the financial crisis, there's a lot of liquidity flowing to Asia, where investors are beginning to see the benefits of putting in capital to develop the infrastructure [for HFT]," said Tam, whose firm manages HFT funds for asset managers. For the Hong Kong exchange, higher trade volumes mean more settlements, which means more revenue. And what can better quickly increase trading volumes by a significant order of magnitude than HFT? Because of the controversy surrounding HFT, the exchange and the Science Park prefer to emphasise the computing advances to be achieved at the hub - scheduled for completion in mid-2013 and costing about HK$1 billion, paid for by the exchange - rather than its capacity to handle HFT. An exchange spokesman said it made sense to centralise all the data services now provided by several data centres across the city. But he admits "co-location" is also a key factor. The term refers to the shortening of time that computers need to communicate with each other if they are physically close. By having all its computers in one place, not only will the exchange's systems work faster and more efficiently, but commercial traders can also place their own systems closer to the exchange's, thereby saving microseconds - in HFT, every microsecond counts. HFT has been around for several years, but it is only recently that it has built up to such high volumes in major Western markets. Crowding and competition - when everyone is using similar strategies - has cut into profit, and that is one reason HFT traders are migrating to Asia. And now, they are coming to a stock exchange near you.

A Hong Kong-born mother-of-two has become an internet sensation after "screaming" her way through an audition for Britain's top-rated television talent show The X Factor. Beautician Rachel Chu, 44, left judges open-mouthed in front of millions of television viewers with a spirited but desperately off-key rendition of the Whitney Houston song Saving All My Love For You. After bringing her performance to a mercifully early end, the show's creator Simon Cowell told divorcee Chu: "I'm not being rude, but this is absolutely, one million per cent, not for you, darling." Chu, who says her biggest influence is Lady Gaga and that her ambition is to release a hit single, seemed genuinely shocked when Cowell said her singing should be done "behind walls - your walls" in future and told her: "You were screaming the song." Fellow judge Nicole Sherzinger, singer with the Pussycat Dolls, told her: "I don't know if you and music were in the same room sometimes", while third panel member Louis Walsh said: "Everything was out of tune. We like you. We just don't like your singing." Since her appearance, which opened the show eight days ago, Chu's extraordinary performance has been watched by more than 80,000 people on YouTube. Chu, who grew up in Wo Hop Shek village in Fanling before moving to Manchester with her family in the 1980s, has been inundated with requests for autographs since the television broadcast made her a star.

Stuart Gulliver, who emerged from Friday's management shake-up at HSBC Holdings (SEHK: 0005) as the chief executive-designate, faces a pay cut of close to 40 per cent compared with his earnings last year once he starts his new job in Hong Kong in January. Gulliver (pictured) currently heads HSBC's global banking and markets operations and received total remuneration last year of £9.83 million (HK$120 million), including a base salary of £800,000 and a whopping £9 million deferred bonus. As chief executive, Gulliver will see his base salary rise to £1.25 million. But under HSBC's current compensation policy, his future bonus is capped at four times his annual salary - meaning his maximum pay will be around £6.25 million, not including an annual pension allowance of around £600,000. "Stuart Gulliver's total compensation is expected to be less than he currently receives," HSBC said in a statement announcing the appointment. This is despite the added responsibility of the chief executive role. The discrepancy in pay is due to different bonus plans. Gulliver, who joined HSBC in 1980 and has worked in Hong Kong, Tokyo and Kuala Lumpur, is largely credited with spearheading the rapid expansion of the bank's capital markets business since he took over the segment in the early 1990s. Last year saw HSBC's profit from the segment soar as global markets rallied in a broad recovery from the September 2008 onset of the financial crisis. Gulliver's "compensation arrangements take into account wholesale banking market practice", according to HSBC's annual report. In turn with the market rally, he saw his bonus balloon to £9 million last year, more than double that of outgoing chief executive Michael Geoghegan during the same period. Still, other factors are likely to weigh on the overall value of Gulliver's take-home package. Markets don't always outperform like they did last year. Indeed, Gulliver received no bonus in 2008, while Geoghegan received a £4 million bonus - which he donated to charity. At the same time, Gulliver's move to Hong Kong from London will entitle him to a generous expatriate housing and living allowance. And not to be overlooked is the significant potential impact of differing rates of income tax on take-home pay. Britain's income tax rates are around 50 per cent at the upper levels, while Hong Kong's are capped at a more bearable 15 per cent. Gulliver's appointment came amid a broader shake-up at HSBC in the wake of the announcement earlier this month that chairman Stephen Green was leaving to take up a post as Britain's trade minister. The Financial Times last week reported there had been a boardroom dispute at the bank, with Geoghegan threatening to resign if he was not made chairman. Speaking in a media conference call following the bank's announcement, Geoghegan dismissed the report as nonsense and said he had made the decision to retire 10 days ago. Geoghegan will step down as chief executive at the end of the year but remain a consultant to the bank until next March, HSBC said. Green will be replaced as chairman in December by current chief financial officer Douglas Flint, who, like Green, will be based in London.

Does earning a higher salary make you happier? It's an issue that tugs at many of us: the trade-off between a satisfying job and a satisfying pay cheque. Students have to ponder the question when considering a college degree or embarking on a career. Workers are concerned about it when weighing a promotion that would bring longer hours and more stress along with higher pay. In many ways, achieving the right balance depends on one's values, priorities, family obligations and spending habits. But, according to a recent study, there is something of a magic number when it comes to income and happiness. Beyond a household income of US$75,000 a year, money "does nothing for happiness, enjoyment, sadness or stress", concludes a study by scientific journal Proceedings of the National Academy of Sciences in the United States. It's not so much that money buys you happiness but that lack of money buys you misery, said Daniel Kahneman, a professor emeritus of psychology at Princeton and one of the authors of the study. "The lack of money," he said, "no longer hurts you after US$75,000." The study, which analysed Gallup data of 450,000 randomly selected people, did find that one's "life evaluation" - a self-assessment of one's life - continued rising well above the magic figure. But this is not the same as experiencing day-to-day happiness. "Many people want to make a lot of money, but the benefits of having a high income are ambiguous," said Kahneman, also a Nobel laureate in economics. When you are wealthy, you are able to buy more pleasures, but another study suggests wealthier people "seem to be less able to savour the small things in life", he said. Even so, some people seem almost hardwired to want to make money. A 2007 article in The Journal of Happiness Studies reported that college freshmen who stated that they wanted a high salary by and large achieved that goal 20 years later. The article said "individuals with strong financial aspirations are socially inclined, confident, ambitious, politically conservative, traditional, conventional, and relatively less able academically, but not psychologically distressed". People who sought high incomes were more likely to major in things like business, engineering and economics, it said, while people for whom high income was not paramount gravitated towards the liberal arts and social sciences. "Wanting money is not a recipe for disaster, but wanting money and not getting it - that's a good recipe for disaster," Kahneman said. People who want to become performing artists are likely to be unhappy, because most will fail, he said. Becoming a wealthy rock star is a common dream when you are young, but when you are in college, you should try to take a longer-term view, he said. These days, of course, many people are worried about whether they will get a job at all. Understandably, more people are placing the financial rewards of a career first, said Nicholas Lore, founder of the Rockport Institute, a career coaching firm, and author of The Pathfinder. This could backfire, though, as people who initially pursue a career because of the salary often find the work unsatisfying. Lore recently coached a lawyer who decided to forgo his high pay in favour of teaching law, an investment banker who decided to switch to a green-energy company and a dentist who decided to become a schoolteacher. It all depends on priorities, Lore said. Some people are willing to make lifestyle changes because the intrinsic rewards of following a passion or making a difference are more important than a high salary in an unenjoyable career, he said. In the end, people should pursue what they are interested in, said Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us. Pursuing careers involving highest salaries tends to be a fool's game. "It's very hard to game the system, in the sense that situations and conditions change so quickly that a field that is hot today might be only lukewarm in five or 10 years," he said. "It might even be non-existent." Let's say you see that accountants are getting decent salaries, directly out of college, he said, but you don't really like accounting. "Chances are you're not going to be very good at accounting," and your salary will reflect that, he said. "Generally, people flourish when they're doing something they like and what they're good at."

Hawthorn Tree to close Hong Kong Asian Film Festival - Directed by Zhang Yimou, Under The Hawthorn Tree, is a pure love story that strikes a chord with the audience. Director Zhang Yimou's latest romance film "Under the Hawthorn Tree" will be screened at the closing of this year's Hong Kong Asian Film Festival, mtime.com reports. The Hong Kong film "Dong Feng Po," starring Ella Koon and Lawrence Chou, has also been chosen to show at the festival. This year's HKAFF runs from October 22 to November 8. Actress Karena Lam's film "Lover's Discourse" (Lian Ren Xu Yu) and Hong Kong actor Juno Mak's "Fuchouzhe Zhi Si" (translated as "The Death of Avenger") will be the opening films. The Hong Kong Asian Film Festival has been a platform for showcasing new Asian films since 2004.

Memorial ceremony held in Taipei for Confucius' birthday.

 China*: Nineteen Chinese sailors are languishing in a Somali pirate stronghold after being held for nearly three months - the longest any have been held since the PLA joined the international fight against Indian Ocean piracy 20 months ago. Their plight has received little attention beyond initial reports of the capture of their ship, the Singaporean-flagged chemical tanker MV Golden Blessing, on June 28. But London-based shipping industry officials say Chinese ransom negotiations with pirates are fraught and there is no clear sign when the crew will be released. They are among 354 crewmen from 16 ships being held hostage in Somalia. The sailors are from countries including South Korea, Vietnam, Indonesia, the Philippines and India. "The pirates seem to know that Chinese crew are lucrative targets now ... one of the problems is that the Chinese side paid too much the first time around," one official said. "That makes all other deals so much harder." A subsidiary of state shipping giant Cosco paid more than US$4 million to free 25 mainland crew and their ship, the De Xin Hai, in December after the men had spent more than two months in detention on the Somali coast.

Apple yesterday launched the latest version of its iPhone in the mainland and boosted its presence in the world's biggest Internet and mobile market by opening another two stores in Beijing and Shanghai. Apple store staff celebrate yesterday with the first customer in Shanghai to buy a new iPhone 4. Dozens of people queued up at the new store in the capital for the first official iPhone 4, some waiting for more than 24 hours, even though the smartphone has been available on the grey market for months. At the front of the queue was Yu Zhonghui, who began lining up at 5am on Friday. "I thought I was going to be bored standing in line but I'm having a great time," Yu said, according to the Global Times. "It's like a party." Han Ziwen, a bookstore owner who had queued for 60 hours to get his hands on the iPad, also lined up for an iPhone 4. "The iPad and iPhone 4 will certainly have a great impact on the publishing industry," Han was quoted by the China Daily as saying. "My bookstore will either be destroyed or have to find a new way forward. I have to witness the process." The new Apple stores in Beijing and Shanghai bring the company's total to four in the mainland - two in each city. It plans to have 25 shops in the country by the end of next year. The iPhone 4 - something of a status symbol in the mainland - is available in Apple stores, as well as at China Unicom (SEHK: 0762) retail outlets for buyers who sign a two-year contract with the operator, according to Apple. The 16-gigabyte version of the smartphone, which will have wireless Internet capability, will cost 4,999 yuan (HK$5,800) at Apple stores with the 32-gigabyte selling for 5,999 yuan, the California manufacturer said. China Unicom, the country's second-largest mobile phone operator, reportedly took nearly 50,000 pre-orders for the iPhone 4 on September 17, the opening day for reservations. With the two-year contract, the 16-gigabyte will sell for 5,880 yuan while the 32-gigabyte version will cost 6,999 yuan, the China Daily said. The iPhone 4 made its debut in the mainland just a week after Apple officially launched the iPad in the country, with some customers queuing up for several days to ensure they got their hands on the device. Both products have been available for several months on China's grey market, which has been booming thanks to great demand. The earlier version of the iPhone only officially went on sale in the mainland last October, more than two years after its US launch. The price of the iPhone 4 in the grey market has more than halved to 5,500 yuan since Apple announced the official price, the China Daily said, citing retail electronics vendors in Beijing.

Medvedev visits China to push for investment - Russian President Dmitry Medvedev travels to China today to expand economic ties with the world's largest energy consumer and try to engage Beijing in a range of trade projects.

Chinese billionaire's call to alms - Business is booming for Chen Guangbiao's recycling firm - the more he makes, the more he gives away - 1.3 billion yuan so far - Chen Guangbiao carries a victim of the Sichuan earthquake from the rubble - one of dozens of people he helped. Chen Guangbiao has his eye on a mission: while most people on the mainland try to earn a lot of money for themselves, the 42-year-old peasant turned entrepreneur of a successful construction-material-recycling company wants to make as much money as he can for others. He wants to hit it big - "really big", he says. His company and his fortune are expanding rapidly, and so is his charity work. "I want to root out poverty," he says. Over the past decade, the self-made businessman, who was born in a poor village in Jiangsu , says he has already donated 1.3 billion yuan (HK$1.5 billion) to charity, or one-fourth of his estimated fortune of 5 billion yuan. He has often given away up to half of his monthly income to the poor and spent a good part of his company's annual profits on victims of natural disasters such as floods or earthquakes. Sometimes he just turns up in those areas, pressing cash into the hands of the needy. His only motivation: "I just want to help," he says.

Martial arts taught in Confucius Institute of Iran - Qiu Xueqin, the director of the Confucius Institute at Tehran University, plays Taiji in a park in Tehran, capital of Iran, on Sept. 24.

Blue crab tournament in East China - A man shows his 1.2 kilogram crab after winning a blue crab tournament in Sanmen county, East China's Zhejiang province,September 26,2010. The county, dubbed the "hometown of blue crabs" boasted a cultured area of 85,000 mu (5,667 hectares),accounting for ten percent of the whole nation, with production at 11,200 tons which created an income of 490 million yuan ($73 million) in 2009.

Sept 26, 2010

Hong Kong*: PCCW (0008) may be planning to spin off Now TV - whose assets are worth more than HK$1 billion - and float its shares on the Hong Kong stock market, sources said. The television unit of Hong Kong's biggest telecommunications provider is likely to list on the Growth Enterprise Market, the sources told Sing Tao Daily, sister publication of The Standard. This is because Now TV has failed to meet the main board requirement of posting a net profit for three consecutive years. There was no comment yesterday from PCCW chairman Richard Li Tzar-kai, while a spokesman said the company would not respond to market rumors. But it will make a public announcement "if there is any matter that needs to be published." Group managing director Alex Arena said the telco giant from time to time studies ways to add more value for shareholders, but he did not say whether this included spinning off any of its businesses. PCCW shares reached a two-year high of HK$2.94 in late August, but closed at HK$2.74 on Wednesday. The stock has risen 48 percent since the end of last year. There has long been talk in the market about PCCW spinning off its television business, but the speculation has intensified recently. One source close to senior management said he believes listing Now TV is "in the pipeline." It is only a question of timing, the source said. Another source said spinning off the television unit is a bid by Li to underline the group's potential worth and further increase value for shareholders, after he failed to privatize PCCW. Moves by the firm to establish itself as a leader in the multimedia sector and a reshuffle of top management in its media unit all show PCCW's determination to separately list its media business, the source added. Now TV hosts one of the world's largest commercial IPTV services and is a leading pay-TV provider in Hong Kong, with over 170 channels offering local, Asian and international programs. But it was dealt a body blow when it lost the English Premier League 2010-13 broadcast rights to rival operator iCable.

Arrivals surge to record high: Hong Kong received 3.46 million visitors in August, a 21.9% jump from a year ago - Hong Kong welcomed a record 3.46 million visitors in August, a 21.9 percent jump from a year ago, thanks to a huge surge in arrivals from the mainland and South Korea, the Tourism Board said. Mainlanders topped the arrivals with 2.37 million visitors, the most ever and also a 30 percent surge from a year ago, accounting for 68.6 percent of the total number of tourists during the month, the board announced in a statement. The sharp increase came during the peak summer travel season, and was boosted by the implementation of individual visit arrangements for Shenzhen residents, making it more convenient for them to travel to Hong Kong. Growth in arrivals from South Korea outpaced those from Japan in August. Appreciation of the won helped increase the number of tourists from South Korea by 36 percent to 90,000 compared with a year ago. There were 116,658 tourists from Japan, but the growth in numbers was a modest 5.2 percent. "Tourists from South Korea have been active during the last two years," said a local tour guide. "Although the yen has appreciated, Japanese are less willing to spend money traveling because of their continuously weak economy." He added that Korean tourists are spending more money than Japanese during their stay in Hong Kong. Other short-haul visitors between June and August contributed to growth. There were 9.21 million visitors to Hong Kong during the three-month period, up 31 percent from the previous year. There was stable growth of 5.9 percent for long-haul visitors in August, but arrivals from Russia and India soared 84 percent and 41 percent respectively, thanks to the improved economic conditions and better flight capacity. There was also an increase in business travelers. During the first eight months of the year, visitor arrivals jumped 24 percent to 23.4 million. Among those, 13.26 million were overnight visitors, up 22 percent from a year ago. This represented 56 percent of all visitor arrivals.

Needy families living on public assistance can expect to pay less for gas from next year. Monopoly piped-gas supplier Towngas is considering giving them the same 50 per cent discount it now offers about 80,000 old people, disabled customers and one-parent families. They would also get free servicing and spare parts. The offer would apply to everyone receiving Comprehensive Social Security Assistance - currently nearly 480,000 people. A company spokeswoman denied that the proposal was politically motivated. "The concession scheme has nothing to do with anti-business sentiment. "Our company is a caring company and has been offering various kinds of concession schemes since 1995," she said. Towngas, or the Hong Kong and China Gas (SEHK: 0003) Company to give it its full name, is controlled by Henderson Land Development (SEHK: 0012). The discount will apply to the first 500 megajoules of gas consumed. The additional relief scheme was mentioned in a document sent to the Legislative Council economic development panel this week. In the paper, the company said the concession would last for two years initially, and those benefiting from it would have to reapply when the two years were up. It expects to take approximately three months to prepare and set up the new scheme, and suggests launching it in January. The spokeswoman said it was too early to estimate how much it would cost the company, as the scheme was in the initial planning stage and details had yet to be worked out. Democratic Party legislator Fred Li Wah-ming, who sits on the Legislative Council's economic development panel, welcomed the proposal, but said: "It would be better if the scheme covered all low-income families in Hong Kong, not only those on CSSA." However, Sze Lai-shan, of grass-roots group the Society for Community Organisation, criticised the gas supplier for a lack of sincerity in helping the needy. She said: "If it is a caring company, it should not have increased its tariff in the first place. Now it has increased the tariff and after that it said it would offer some concessions. Why did it not simply freeze or cut the tariff?" Towngas raised its basic tariff by 0.6 cents per megajoule from April to a range of 20.95 cents to 21.97 cents. Sze conceded that the new scheme was better than nothing. The 2.8 per cent increase followed a 1.4 per cent tariff rise in 2008. Towngas earned HK$5.17 billion last year and HK$4.3 billion in 2008. Towngas was founded in 1862 and was the first public utility in Hong Kong. Over the years, it has evolved from a gas company supplying fuel for street lamps to become a main energy supplier, with more than 1.7 million customers in the city.

Michael Geoghegan will retire as HSBC Holdings (SEHK: 0005, announcements, news) ' chief executive early next year and will be replaced by Stuart Gulliver, the bank announced in London yesterday. Douglas Flint will succeed Stephen Green as chairman later this year. Gulliver, like Geoghegan, will be based in Hong Kong. The announcement followed media reports that Geoghegan had threatened to resign because he was passed over for the role of chairman - HSBC has traditionally promoted its chief executive to the role. Geoghegan strenuously denied them following yesterday's announcement. The bank said earlier this month that Green would step down to become trade minister in the British government. In its statement yesterday, HSBC said: "The appointment of Douglas Flint, made by a unanimous decision of the board, is the culmination of a comprehensive succession process begun in the first half of the year." It also said: "As a result of Stephen Green's decision to step down earlier than planned, Michael Geoghegan suggested and the board agreed to accelerate HSBC's management succession plan and appoint his successor, so that a new leadership team would be in place in 2011." Geoghegan will step down on December 31 but stay on as an adviser until March 31.

Automobile Association president Wesley Wan Wai-hei, his girlfriend and newborn daughter spent the Mid-Autumn Festival without electricity - because his ex-wife allegedly had it cut off. And she didn't stop there, says Wan, son of former People's Political Consultative Conference delegate Tommy Wan Tai-min. He alleges his former wife, Doreen Tong Do-ye, called a pest control service to his Chung Hom Kok home last week, and has also tried to change the couple's correspondence address with the Water Services Department. Wan says Tong arrived at his home with the pest control firm - after he had the locks changed - causing disruption to him, his girlfriend and their three-week-old baby. The claims were made by Wan's barrister, Albert Yau Kai-cheong, at the Court of First Instance. Wan and his girlfriend, Lok Mei-mei - the younger sister of TVB (SEHK: 0511) production resources controller Virginia Lok Yee-ling - filed for a court injunction against Tong to stop her from trespassing on their property, changing the locks or carrying out any renovation or pest control there. Fortune Wealth Asia, of which Tong is the director, owns the property and was also named a defendant. Outside court, Yau said Tong had arrived at the couple's home with pest control workers on Wednesday, Thursday and Friday last week. Lawyers for Wan and Lok yesterday asked the court to stop Tong from meddling with their utilities and turning up with pest control workers. Tong agreed not to have their utilities disconnected or service interrupted. But with the locks already changed, and Tong unable to enter the couple's home, no orders were made regarding pest control. Tong claims she was worried about the property. "After a visit on Wednesday, my client became concerned about the state of the property," Tong's barrister, Anthony Chan Ho-ki, said. "She says there was a fire hazard and so she phoned about the electricity." But Mr Justice Arjan Sakhrani said: "You can't have a property where one day the electricity gets shut off, then the water gets shut off, and the gas gets shut off." Wan and Tong married in 1989 and divorced in 2006. Wan and Lok met in 2008, according to media reports. The couple and Tong will air their arguments about the injunction in court on December 2. Wan and Tong are involved in a separate legal battle over ownership of the property where Wan and Lok reside. A Family Court judge earlier said she had no jurisdiction to try the case. Tong will appeal that decision in the Court of Appeal at the end of November, the court heard yesterday.

Wong Ching, the mainland property tycoon whose relative has taken over ATV, says he has written cheques worth more than HK$55 million to settle debts that Tsai Eng-meng, the Taiwanese snack tycoon shut out of the battle to control the struggling station, says it owes him. Speaking in public for the first time after his camp won control, Wong Ching said he had written a cheque for more than HK$50 million to settle the amount in convertible bonds that ATV was due to repay by the end of August, with another for HK$5.6 million as interest. This month the Broadcasting Authority announced that it had approved that Wong's relative Wong Ben-koon, chairman of Prosperity (SEHK: 0803, announcements, news) International Holdings, take a 52.4 per cent stake, from three existing shareholders: 10.75 per cent from Panfair Holdings, owned by the brothers Payson Cha Mou-sing and Johnson Cha Mou-daid; 26.85 per cent from Dragon Viceroy; and 14.81 per cent from China Light Group. Tsai, who co-owns the rest of the shares with the Cha brothers through Antenna Investment, has said that he had no idea about the deal with Wong Ben-koon, and that one of ATV's directors, James Shing Pan-yu, had written that ATV would not repay the convertible bonds. Shing is also a relative of the Wongs. The approval of Wong Ben-koon's takeover came as a shock to other shareholders too. Wong Ching, now a volunteer at the broadcaster, said: "ATV will produce more shows with conscience and style next year." He said he had no intention yet of converting some HK$200 million bonds into shares.

The Hang Seng Index has had a sterling September, and with four trading sessions still remaining, it has already matched a performance record set more than three years ago. The main stock index finished in positive territory yesterday, notching its 15th gain out of 17 trading days so far this month. That guarantees it will be the first month since July 2007 to have six negative sessions or less. The Hang Seng Index has been on a winning streak this month, but the thin trading volumes suggest investors are sticking to the sidelines, according to analysts. It can set the record for the best month in 17 years if it finishes in the black just twice more in September. Investors may be relishing the ride, but they are still not yet ready to pop the champagne. "To make the market go up or down is irrelevant," said Martin Marnick, a director at Anand Rathi in Hong Kong. "The volumes have been pitiful, and what that means is the actual price can be moved around with very little money." Turnover on the main board has topped HK$80 billion just twice so far this month, in line with the year's sluggish standards. Thin trading levels suggest that investors are still sticking to the sidelines and not yet ready for a breakout run in the market.

Hong Kong jewellers are enjoying a business boom, thanks to a stronger yuan and a longer break for the Mid-Autumn Festival on the mainland. Some jewellery shops have reported sharp increase in sales as more mainland shoppers opted to spend three days of their mid-autumn break in the city. Although the mainland officially allocates only one day to celebrate the festival, the government has allowed workers to take Wednesday to Friday off in exchange for extra shifts before and after the break. Ricky Ng, the general manager of TSL Jewellery Hong Kong, said the company's more than 20 outlets across the city were packed with mainland shoppers from Wednesday noon. Many of the shoppers were from eastern and northern China and they splashed out on necklaces, rings and watches. Ng said the company's sales in the first two days of the mid-autumn break rose 20 per cent year on year. "The longer holiday enabled people to take short trips, and Hong Kong is one of the ideal destinations for such trips," he said, adding that about 60 per cent of the company's customers were from the mainland. Another jeweller, Kennedy Wong Ying-ho, the chairman of 3D-Gold and Hong Kong Resources Holdings, said daily sales at its 275 3D-Gold shops in Hong Kong, Macau and mainland exceeded HK$10 million on Wednesday and Thursday - twice as much on a normal business day. He attributed the significant growth to the recent appreciation of the yuan, which rose last week to its strongest level since 1994. "Its impact on people's spending power is immediate," he said. "Every time the yuan gets stronger, our customers get more generous." Mr Wong, who bought 3D-Gold in 2008, said it would open 10 more shops on the mainland before the National Day golden week break, which starts next Friday. New shops in Hong Kong were also planned for early next year. "Consumer sentiment has been improving since the second half of last year," Mr Wong said. "Our business grew more than 40 per cent in the first half of this year and we expect growth of 20 to 30 per cent in the second half." Meanwhile, other retailers in the city are also benefiting from the business boom. Apart from luxury goods, iPhones, mooncakes, health-care products are also popular with mainland shoppers. Maureen Fung Sau-yim, the general manager for leasing at Sun Hung Kai Real Estate, expects to see a record number of visitors at its shopping centres during the break. "This year is special," Fung said. "The two major festivals are close to each other, which may bring more customers to Hong Kong." She said she expected business at her company's malls to rise 30 per cent during the period. According to the Hong Kong Tourism Board, there were 3.46 million tourist arrivals last month - up 21.9 per cent from August last year. The number of mainland visitors reached a record 2.37 million, about 30 per cent higher than last year.

Henderson Land (SEHK: 0012) said it has sold a flat at its controversial 39 Conduit Road development in Mid-Levels West for HK$60,000 per square foot. That would make it the most expensive apartment in Hong Kong in terms of price per sq ft. The most expensive residence in the city is still a house at Severn 8 on The Peak, which was sold for HK$60,215 per sq ft in March. Henderson announced the deal on its website, saying the flat sold for HK$338.16 million on September 18. Although the duplex unit's address is the 61st floor, it is on the 38th and 39th floors of the 46-storey project. Henderson has come under fire over the way it has numbered the floors. The flat has a gross area of 5,636 square foot. Excluding common area, the saleable area is 4,318 sq ft. The developer did not disclose the identity of the buyer. A spokeswoman for Henderson Land said they had offered only one concession to the buyer - the company will pay half of the stamp duty, about HK$718,000. The buyer has to complete the deal in 125 days. "The price seems pretty reasonable, but is still on the high side," said a property agent. "The buyer has a lot of choices for this type of money." The asking price for a 4,000 sq ft house at Severn 8 is about HK$260 million. In March, a 4,620 sq ft special flat at Branksome Crest with a private swimming pool in Mid-Levels sold for about HK$210 million or HK$45,455 per sq ft - significantly less than the price for the Conduit Rd development, which lacks a private swimming pool. Henderson Land re-launched 39 Conduit Road in August after police raided the developer's offices after flat sales at the project were cancelled. The developer sold 24 flats at its launch last year. One flat sold for HK$71,280 per sq ft - billed as a world record. However, the company said in June that 20 of the deals had been cancelled, sparking accusations of market manipulation.

Hong Kong factory bosses have rejected appeals by the China Labor Bulletin activist group to debate a controversial plan that would allow Guangdong workers to collectively negotiate wages and benefits. The CLB, a non-government body headed by democracy advocate Han Dongfang, wants a public debate with industrial organisations over the controversial plan. Nearly 60 employer groups have opposed the proposal so strongly that the Standing Committee of the Guangdong People's Congress decided not to submit the draft rule to next week's congress meeting. Han, in a publicly released letter, said that he regretted the legislature's decision and warned that postponing the submission would do nothing to reduce industrial tensions in the province. Representatives of the Federation of Hong Kong Industries and the Hong Kong Young Industrialists Council said yesterday that they were not interested in debating the draft legislation. "As employers, we look at the long-term interests and investment desires of Hong Kong investors across the border whereas the [CLB] looks from the workers' perspective and fights for the bargaining power of migrant workers," the federation's deputy chairman Stanley Lau Chin-ho said. Hong Kong Young Industrialists Council president Jack Tsui Ming-cheong said there was little to gain from a debate. "We are speaking two different languages and unlikely to reach any consensus," he said. Influential trade unions in the city also declined to debate the plan. Controversy flared last month when the Guangdong provincial government revealed details of proposed rules that would allow workers to elect representatives to sit on the board of a company and negotiate over wages, bonuses, paid leave, work hours, insurance, work conditions and safety standards. The proposals call for one in every three directors to be a worker representative, and for them to have access to all corporate information other than that involving technological secrets or personal privacy. By setting up a negotiation mechanism, the Guangdong provincial government aimed to minimise labour disputes following a wave of strikes and protests in July that hit big corporate names such as Honda and Foxconn. Han pointed out that the mainland's economic growth hinged on spurring domestic consumption, and that raising workers' wages was the best way to meet the goal. However, the proposals drew fire from an alliance of Hong Kong's four largest employer groups - the Federation of Hong Kong Industries, the Chinese Manufacturers' Association of Hong Kong, the Hong Kong General Chamber of Commerce and the Chinese General Chamber of Commerce - and 53 smaller trade bodies. Hong Kong factory owners employ about 10 million migrant workers in Guangdong but have faced rising labour and other costs over the past few years. They were concerned that participation by workers in company decision-making would ignite more disputes and risked leaking commercial secrets. They warned that the planned legislation would spark an investment flight. Guangdong raised the minimum wage by about 20 per cent in May while severe labour shortages forced employers to improve working conditions, salaries and other benefits. However, Han argued that many smaller firms, particularly Hong Kong enterprises, had countered higher wages by raising workloads and work hours. "How many among you in the past 30 years have violated workers' rights and interests by ignoring national labour laws and regulations?" Han asked Hong Kong businessmen. CLB spokesman Geoffrey Crothall said the group wanted a dialogue with the trade bodies.

While the rain may have deterred some from catching the Mid-Autumn Festival's full moon, it might also have helped reduce by a quarter the amount of rubbish thrown away. Victoria Park is strewn with burnt-out candles, discarded lanterns and fluorescent sticks early yesterday after Mid-Autumn Festival celebrations on Wednesday night. And fewer mooncakes went to waste this year, environmental group Green Power says. Its survey found the number of mooncakes thrown away after the festival declined for the first time since 2004. Less rubbish was generated during the festival this year - 63 tons was collected at parks, beaches and other public sites, the Leisure and Cultural Department said, down from 86 tons last year. Fewer people turned out to see the full moon at public sites this year, the department said, probably put off by Wednesday's persistent grey sky, showers and thunderstorms. The department also noted that most revellers used the collection bins set up in parks and on beaches for the festival.

HSBC (SEHK: 0005) chief executive Michael Geoghegan is to step down at the end of the year as part of a major shake-up of the bank's top management, reports said on Friday. He will be replaced by Stuart Gulliver, head of the group’s investment bank, the Financial Times and BBC reported. Finance director Douglas Flint will take over as chairman from Stephen Green, who announced this month he was leaving to become Britain’s trade minister at the start of next year, the reports said. An HSBC spokesman said: “No decision has been made.” But a person close to the bank’s board told the newspaper the decisions were now 90 per cent certain and another was cited as saying it was a “done deal.” The succession will reportedly be finalised at a board meeting in Shanghai next week. The bank’s main regulator, Britain’s Financial Services Authority, still has to approve the appointments, according to the newspaper. HSBC shares in Hong Kong were down about 0.5 per cent at HK$80.70 (US$10.40) in afternoon trading on Friday. The dramatic overhaul at the top of HSBC caps a tumultuous period for the bank since Green announced he was quitting, with neither of the two men widely expected to become the next chairman ending up in the job. Hong Kong-based Geoghegan, 56, was regarded as a frontrunner and HSBC has a history of elevating its chief executive to chairman. The FT reported this week that he had threatened to quit when the bank’s board indicated it might pass him over and instead hand the chairman’s job to HSBC non-executive director John Thornton. The bank has dismissed the suggestion: “It is nonsense that [Geoghegan] threatened to resign unless he was appointed chairman.” On Friday, a Hong Kong-based bank spokesman declined to comment further.

Wanted: 1,000 professors for Hong Kong universities at US$156,000 annual salary - If you factor in United States foreign earned income exclusion and selecting a State with no State income tax as your tax home - you need to earn more than US$250,000 in the United States to match the Hong Kong professor's salary. Not to mention you can get a live in maid to do all your cooking and house cleaning for US$500/month. Hong Kong's thirst for academic talent is stirring global interest. The city's universities need 1,000 more professors to cope with the launch of a new four-year degree system, and the intense competition is pushing up academic salaries, university administrators say. Extensive recruitment drives have been launched by local universities over the past few years and most have yet to meet all their needs. But with two years to go before the launch of the new four-year system, the pressure is mounting to fill positions. A three-year senior secondary system was launched last year and the first batch of graduates from this system will enter university for four-year degrees in 2012 - the same year as the last graduates under the old four-year senior secondary system arrive for their three-year degrees. Professor Tony Chan Fan-cheong, president of the Hong Kong University of Science and Technology and convenor of the Heads of Universities Committee, says the institution is short of 100 professors, and the sector needs up to 1,000 academics. "We need to get the extra faculty so that we can maintain the current student-professor ratio [at 12 to one]," he said. "The demand for such a large pool of academic talent in such a small place as Hong Kong has stirred up quite a lot of attention in the academic world. As every university is fighting for talent now, some overseas professors are getting several offers. They have more bargaining power to demand better salary packages." Chan said the recruitment of top overseas talent was a big challenge for the university. "We plan to raise HK$1 billion for the establishment of 10 endowed chairs. Half [of the funding] at renowned North American private universities like Harvard and Stanford relies on such endowment funds. The recurrent interest generated from the funds can pay for the professors' salaries. "As we are a young institution that doesn't have the long history enjoyed by Harvard, it's challenging for us to raise money to set up the funds. Currently, we have only a few endowed chairs and we plan to increase the number to 10. They will be involved in both teaching and research." A Chinese University spokeswoman said it was still short of about 200 teaching staff for the launch of the four-year system. "We need around 400 extra people for 2012. Over the past three years, we have recruited around 200 academics from Hong Kong and around the world to join our faculty. Over 90 per cent of them have overseas qualifications. We will continue our recruitment drive to get quality teaching staff in the next two years." A University of Hong Kong spokeswoman said it needed 200 more professors by 2012. "We will try our best to offer the best employment terms and work environment to get talent," she said. In Hong Kong, average monthly salaries for professors top HK$100,000 while associate professors can make at least HK$70,000 and assistant professors can expect about HK$40,000 or more. In the United States, based on 2007 figures, the average monthly salary for a professor was HK$64,000. Associate professors got about HK$45,200 and assistant professors just under HK$38,000. But it depends on the university. An assistant professor might have got between HK$40,100 and HK$48,500 at the University of Utah but HK$47,600 to HK$68,700 at Cornell University. Chan said preparing new courses was another key part of the preparation for the new four-year structure. "Our 400-strong faculty has come up with more than 200 new courses spanning various fields of general knowledge like humanities, language, history and artistic education. All four-year students will be required to take 34 credits for general education." Professor Lee Chi-kin, vice president (academic) of the Hong Kong Institute of Education, said teaching degrees would be extended from four to five years from 2012. "We plan to offer new programmes on psychology and special education," he said. "We will also roll out a new programme incorporating primary and secondary education. Students will be required to do placement at both primary and secondary schools. Graduates can opt for either secondary or primary work."

 China*: China to be No 1 in internet-based TV services - China is poised to become the world's biggest market for internet-based television services next year, surpassing global leader France. The combined mainland, Hong Kong and Macau market overtook the United States as the second-leading user of so-called internet protocol television (IPTV) services in the second quarter, according to industry group Broadband Forum. "China dominates the Asian IPTV market with more than 6.7 million subscribers," Broadband Forum marketing director Laurie Adams Gonzalez said on the sidelines of the group's meeting in Hong Kong. The Broadband Forum is a non-profit, international consortium with about 200 members, including leading telecommunications service providers, network equipment manufacturers, semiconductor companies and software suppliers. It develops key technical specifications through consensus, defines next-generation solutions and provides input to industry standards bodies. Members in Asia include China Telecom Corp (SEHK: 0728), China Mobile (SEHK: 0941), PCCW (SEHK: 0008), ZTE Corp (SEHK: 0763), Samsung Electronics, Singapore Telecommunications, Chunghwa Telecom and Fujitsu. The Broadband Forum reported on Monday that the number of fixed-line broadband subscribers worldwide passed the 500 million mark in July, up from about 467 million at the end of last year. British research firm Point Topic said China, including the special administrative regions of Hong Kong and Macau, contributed to that milestone by being the world's fastest-growing broadband market. It accounted for about 120.6 million lines, about a quarter of the total. Gonzalez credited the steady expansion in and adoption of broadband infrastructure for the strong uptake in IPTV services, of which there were a total of about 38.5 million subscribers worldwide as of June. IPTV uses a high-speed broadband connection to the internet, instead of cable, to deliver video services. "China ... represented the market with the most IPTV net additions in the second quarter, recording a total of 421,000 new subscribers," Gonzalez said. She said the market was expected to add IPTV subscribers at five times the rate of the industry leader France, so "it is likely to be the leading IPTV market next year". France had about 9.4 million IPTV subscribers as of June, while third-ranked US had 6.5 million. PCCW, which runs Hong Kong's biggest fixed-line telecommunications network, reported earlier that subscribers to its internet-based Now TV grew 4 per cent to more than 1 million in the first half of the year.

President Barack Obama heaped praise on Premier Wen Jiabao, saying he has been an outstanding partner for the United States President Barack Obama last night heaped praise on Premier Wen Jiabao, saying he has been an outstanding partner for the United States in dealing with the global financial crisis. "China's work with the US and within the Group of 20 nations was absolutely critical in helping the world's economy recover," Obama said before he and Wen conducted a one-on-one meeting at the United Nations in New York. "Obviously we continue to have more work to do on the economic front. More discussions with China are needed to achieve balance and sustained economic growth." Wen said the common interests of the United States and China far outweigh any differences. Political pressure is building on Obama to take a more aggressive stance on China's currency policy, which he has said is valued lower than the market would indicate and gives China an advantage in trade. The talks on the sidelines of the annual UN General Assembly come as US lawmakers appear closer than ever to acting on long- standing threats to penalize China for keeping its currency artificially low. Wen staged a preemptive defense of China's policies on Wednesday, flatly rejecting any link between the level of the yuan and US trade deficits. "The main reason for the US trade deficit with China is not the renminbi exchange rate, but the structure of trade and investment between the two countries." Wen's talk came after a US House of Representatives committee scheduled a vote for today on a China currency bill that would treat China's "undervalued" currency as an export subsidy and allow the US Commerce Department to impose countervailing duties on Chinese products to offset the undervaluation. Critics inside and outside Congress say China deliberately undervalues its currency by as much as 25 percent to 40 percent to give mainland companies an unfair trade advantage, hurting US exports and employment. Obama said on Monday that China had not done enough to raise the value of the yuan, keeping up the tough rhetoric on Chinese policy six weeks before congressional elections. Pushing back against the US pressure, Wen said China, too, had big job considerations and the 20 percent appreciation of the yuan demanded by US lawmakers would cause many bankruptcies in the Chinese export sector, where firms operate on thin margins. "The conditions for a major appreciation of the renminbi do not exist," Wen said, adding the appreciation demanded by US lawmakers would not bring jobs back to the United States because American firms no longer make most of the labor-intensive products China exports.

Beijing won't bend on the yuan to curry favor with Washington - Wen Jiabao and Barack Obama meet at the United Nations. Beijing will not buckle on the yuan's exchange rate to please Washington, analysts say, despite US President Barack Obama increasing the pressure in a meeting with Premier Wen Jiabao in New York on Thursday. China must do more to revalue the yuan, Obama told Wen in what was described as a "candid" two-hour meeting. Wen had adopted a tough stance on the yuan issue in speeches on the sidelines of the United Nations General Assembly before the meeting with Obama. Yesterday a US congressional panel turned up the pressure, approving a bill that would let the US slap duties on goods from countries with undervalued currencies. In a move likely to increase trade tensions with China, the House of Representatives Ways and Means Committee backed the legislation on a voice vote and cleared the way for the full House to take it up next week. The measure may never become law, however, as it faces an uncertain future in the Senate. Critics inside and outside Congress say China enjoys an unfair trade advantage by undervaluing the yuan against the dollar by 25 per cent to 40 per cent, hurting US exports and employment. The committee's chairman, Sander Levin, said the bill would give the US new tools to address China's "currency manipulation" because diplomatic pressure hadnot yielded satisfactory results. The Wen-Obama talks, the highest-level meeting between the two sides in months, came amid increasing frustration in Washington over China's trade policies and the long-running debate over the yuan's exchange rate. It also came at a time of heightened political sensitivity ahead of US midterm elections, with Obama's Democrats losing ground due to the economic downturn and increasing unemployment. Thursday's meeting also came amid signs that both administrations are seeking to repair ties ahead of a state visit to the US by President Hu Jintao in January. Jeff Bader, senior director for Asia on the US National Security Council, said the meeting was dominated by the economy. Obama raised with Wen the "need for China to do more than it has done to date" on the yuan. Tim Condon, chief economist with ING's Asian research, said political tensions had risen again over the yuan's exchange rate. Tom Orlik, China economist with Stone & McCarthy Research Associates, said that with the midterm elections approaching, there was pressure on the Obama administration to demonstrate that it was making progress on the exchange rate issue. "But it is not clear that Washington DC has any real tools to exert pressure on a recalcitrant Beijing," Orlik said. In speeches ahead of the Obama meeting, Wen warned against letting the issue be politicised, saying that there was "no basis for a drastic appreciation of the yuan". During Thursday's meeting, Obama mentioned the two World Trade Organisation complaints his administration had lodged against China in recent days - in what may be seen as a veiled threat of more US action if the yuan does not rise. Condon said the easiest way to soothe the US was for Beijing to restore the yuan appreciation trend that was halted in mid-2008 when China wanted to impart some stability to a world that was rapidly becoming unstable. "Had the People's Bank of China continued to appreciate the yuan at the average pace of July 2005 to July 2008 it would be on course to move below 6 by the end of the year," he said. Jianguang Shen, China economist with Hong Kong-based Mizuho Securities, said China would not be able to appreciate the yuan by 20 per cent against the US dollar, as some in the US have demanded, although a "domestic consensus is being formed to quicken the pace of yuan appreciation if a more market- oriented mechanism is allowed to work".

The Chinese trawler captain Zhan Qixiong arrived safely in Fuzhou, capital of southeast China's Fujian Province early Saturday morning by a chartered plane after he was illegally detained by Japan. The Chinese trawler captain Zhan Qixiong(R) reunites with his wife and son at Changle International Airport, in Fuzhou , capital of Southeast China's Fujian province, Sept 25, 2010.

Models display entries at a school uniform show on Saturday. The finals of the first national competition held in Beijing showcased 30 sets of school uniforms for primary pupils, middle and senior high school students and university students. Clothes designed for high school pupils by students from Tsinghua University won the championship.

Basketball drives up Nike China orders by 25% - Nike is counting on China and other emerging markets to provide the most growth over the next five years as the sportswear giant gets 65 per cent of sales outside North America. Nike, the world's largest maker of sports shoes, reported orders for the mainland surged 25 per cent - outpacing all other regions on demand for basketball-related sportswear. Total orders for sports shoes and clothes for delivery between September and January grew 10 per cent to US$7.1 billion, the Beaverton, Oregon-based company said in its earnings statement yesterday. The growth on the mainland compares with 15 per cent in North America and declines of 7 per cent in western Europe and 8 per cent in Japan. Chief executive officer Mark Parker is counting on the mainland and emerging markets to provide the most growth over the next five years as Nike gets 65 per cent of sales outside North America. The company had widened its lead on the mainland over Adidas by expanding in cities beyond Beijing and Shanghai, said analyst Shaun Rein. "As consumers are getting wealthier here they are buying special items for the gym, for the weekend, for going out," Rein, managing director of China Market Research Group in Shanghai, said yesterday. "Nike are doing the best because they have the best brand loyalty." The mainland accounted for US$460 million of the Nike brand's sales in the company's fiscal first quarter, about 9 per cent of total revenue. "The big story there continues to be basketball, which shows no sign of slowing down," Charlie Denson, president of the Nike Brand, said. The company earlier reported first-quarter profit that surpassed some analysts' estimates as sales in North America continued to rebound on a growing apparel business. Nike sales in North America contributed US$1.9 billion to the total in the three months through August. Net income rose 8.9 per cent to US$559 million, or US$1.14 a share, in the quarter, the company said. Profit per share was expected to be US$1, according to the average of 16 analyst estimates compiled by Bloomberg. Nike's per-share profit from continuing operations has beaten the average analyst estimate for 17 straight quarters. Sales in North America are recovering from a decline during the recession. "Their product is performing really well in North America," said Chris Svezia, an analyst for Susquehanna Financial Group in New York, who has a neutral rating on Nike shares. "I can't remember the last time they grew North America at those levels. That's pretty stellar." Revenue from the Nike brand in North America, the company's largest market, increased 8 per cent to US$1.9 billion as apparel sales rose 16 per cent to US$515 million. Nike increased spending on marketing ahead of the Fifa soccer World Cup, contributing to a 7.8 per cent gain in first-quarter revenue to US$5.18 billion. Analysts predicted US$5.21 billion on average. Sales of the Nike brand on the mainland, the second-largest market, rose 11 per cent to US$460 million. Revenue from emerging markets, including countries in Asia, Africa and South America, advanced 30 per cent to US$591 million.

Japan was to release a Chinese fishing boat captain on Friday at the heart of a fierce territorial row with China that has threatened ties between Asia's two biggest and increasingly interdependent economies. A prosecutor from Naha city on Japan’s southern Okinawa island said the decision to release the captain, whose trawler collided this month with two Japanese patrol boats in waters near islands both sides claim, reflected consideration for Sino-Japanese ties. “It is a fact that there was the possibility that Japan-China relations might worsen or that there were signs of that happening,” Chief Cabinet Secretary Yoshito Sengoku told a news conference. “Our ties are important and both sides must work to enhance our strategic and mutually beneficial relations.” The expected release follows the detention of four Japanese nationals who were being investigated on suspicion of violating Chinese law regarding the protection of military facilities, although Sengoku denied a link between the two matters. Japanese prosecutors have not said when the captain will be released, but China said it was sending a chartered plane on Friday to take him home.

Obama hails co-operation after Wen talks tough on the yuan - US President Barack Obama said yesterday US-China co-operation had helped ease global financial turmoil. But both he and Premier Wen Jiabao steered clear of the spat over China's currency policy, which the United States says hurts American workers. Obama's comments came a day after Wen struck a tough note on the yuan ahead of a crucial vote by the US Congress on the thorny issue between the world's two biggest economies. Obama, standing by Wen on the sidelines of the UN General Assembly meeting in New York, said co-operation between the US and China "has been absolutely critical" to easing the financial crisis. He praised Chinese leaders for working with the US on economic, nuclear non-proliferation and Asian security issues. But, Obama said: "Obviously, we continue to have more work to do on the economic front. It is going to be very important for us to have frank discussions and continue to do more work co-operatively in order to achieve the kind of balance of sustained economic growth that is so important." Wen said: "Our common interests far outweigh our differences." Wen warned in a Wednesday night speech that the yuan must not be turned into a political issue between the countries. However, he expressed optimism that China and the US could resolve major sources of friction now that tensions have begun to ease. His speech, delivered on the sidelines of the UN global summit, focused on trying to ease American anger against Beijing ahead of his meeting yesterday with Obama. But he also rebutted US claims that the tightly regulated and allegedly undervalued currency gave its exporters an artificial advantage over US manufacturers. He also flatly rejected calls for a sharp appreciation of the yuan, saying "China cannot afford" such a dramatic change. If Beijing were to allow the yuan to appreciate by 20 to 40 per cent, as some US politicians have demanded, a wave of job losses and business bankruptcies would engulf the mainland, causing "major turbulence" in society, Wen told business leaders gathered at the Waldorf-Astoria Hotel in New York. "The conditions for a major appreciation of the renminbi do not exist," he said, adding that such an appreciation would not bring jobs back to the US, because American companies no longer made such labour-intensive products. "The main reason for the US trade deficit with China is not the renminbi exchange rate, but the structure of trade and investment between the two countries," he said. Wen said he knew Obama was worried about unemployment in the US. But Obama did not have to find jobs for a labour force of 800 million people, including millions of new college graduates, army veterans returning to work and a large rural population living under the poverty line, he said. "I told him, `the pressure on my shoulders is a lot heavier than the pressure on yours'." The currency dispute escalated as it became clear that Democratic leaders in the House of Representatives would proceed with a bill that classified currency undervaluation as an export subsidy, which would allow Washington to retaliate. The bill, whose scope has been shrunk in an attempt to stave off a legal challenge, is going to committee today, while a vote by the full House could take place as soon as next week. Obama said on Monday that the yuan "is valued lower than market conditions would say it should be". He said: "So it gives them an advantage in trade. We are going to continue to insist that on this issue - and on all trade issues between us and China - that it's a two-way street." House Speaker Nancy Pelosi said on Wednesday: "It is time for Congress to pass legislation that will give the administration leverage in its bilateral and multilateral negotiations with the Chinese government. "If China allowed its currency to respond to market forces, it could create a million US manufacturing jobs and cut our trade deficit with China by US$100 billion a year, with no cost to the US Treasury." The politically sensitive US trade deficit with China rose to US$26.2 billion in June, the largest one-month leap since October 2008. Wen said China had never pursued surplus in trade and his government had tried to improve the situation by launching an unprecedented stimulus programme recently to bolster domestic demand. Still, he was optimistic in his speech, saying the countries' common interests far outweighed their differences. Ahead of a US mid-term election on November 2, legislators have seized on the exchange rate as a cause of hardship for local manufacturers. Wen sounded a warning not to turn trade and the yuan into political issues. China did not cause the US financial problems, he suggested; on the contrary, he offered this recollection in a backhanded compliment to his host: "Coming back to New York, a city that has gone through so much but always brims with vitality, I cannot help [but] think of the beginning of the financial crisis", which caused "shrinking in China's external demand and a slowdown in growth". The premier touted China's role in pushing the global economy towards recovery, adding that its exports benefited the US companies that set up shop there as well as American consumers. He said China and the US were "not rivals in competition but partners in co-operation", in an attempt to play down economic, military and diplomatic tensions. In one of the most significant developments that show both sides are trying to put months of tension behind them, Wen suggested Sino-US military exchanges had resumed, confirming a South China Morning Post (SEHK: 0583, announcements, news) report last month. Beijing had suspended military ties with Washington to protest against the Obama administration's decision to sell arms to Taiwan this year. Wen confirmed Beijing had invited US Secretary of Defence Dr Robert Gates to visit China this year - one of the most significant planned exchanges between the two militaries that had been halted.

A bruising year for China in East Asia is about to get even tougher. Today's summit meeting between 10 Southeast Asian leaders and US President Barack Obama, the first such meeting in the US, will cement two trends increasingly evident in recent months - the region is determined to have the US around to balance China's rise, and Washington is finally fully awake to the potential in a region it has previously neglected. The meeting also takes place against the backdrop of rising Sino-Japanese tensions over Tokyo's continued detention of a Chinese trawler captain who rammed two Japanese coast guard ships near the Diaoyu Islands. Some in the wary region see those tensions as confirming a new era of assertiveness by Beijing. Most worrying for Beijing is the fact the disputed South China Sea will be a key part of the agenda when Obama meets his counterparts from the Association of Southeast Asian Nations on the fringes of the United Nations General Assembly in New York today. As well as security issues, they will discuss greater economic co-operation and the creation of a formal strategic partnership - a relationship Asean has forged with both China and Japan during similar summits in recent years. A communique after the meeting is expected to reinforce the need for peaceful, multilateral solutions to the rival South China Sea claims by China and the Asean countries of Vietnam, Malaysia, the Philippines and Brunei. That statement will highlight just how the region's strategic balance has shifted in less than a year. Just 10 months ago, backroom pressure from Beijing was enough to keep the South China Sea off the Asean agenda, despite signs of growing tensions over the strategic waterway that links East Asia to Middle Eastern oil and European markets. China instead started quietly insisting any claimants settle directly with Beijing - a move which played to China's rising strength. And despite rising Asean concern - and Obama's Secretary of State Hillary Rodham Clinton declaring in late July that Washington wanted to foster multilateral solutions as a priority - that remains Beijing's official position. But a year that has seen extensive People's Liberation Army exercises in the South China Sea, and Chinese vessels capturing hundreds of Vietnamese fishermen in disputed waters, has alarmed the region. Behind the scenes, a Chinese note to the UN appeared to confirm a sweeping Chinese claim to virtually the entire sea, while Chinese officials told US State Department and National Security Council officials that the sea was now a "core interest" of Beijing - diplomatic code that puts it on par with Tibet and Taiwan in terms of sensitivity. A chorus of concern from Asean leaders about a harder edge to China's diplomacy resonated with an Obama administration looking to re-engage the region. Today's communique is expected to underscore the importance of a 2002 declaration signed between China and Asean that calls, among other peaceful gestures, for the creation of a legally binding code of conduct in the area. Keen observers of the Sino-US relationship said today's statement would push Beijing into a difficult position because it would confirm formal US involvement in what had been a regional issue. "Beijing is very unhappy because it doesn't want its territorial disputes with some Southeast Asian countries to turn into a complicated and multilateral issue," said Dr Richard Hu, director of international relations at the University of Hong Kong. "Indeed, the joint statement will also send a message to the world that `the US is formally back in Asia as well as back in the game - which aims at rebalancing China's influence in Southeast Asia'." Jia Qingguo , a professor at Peking University's school of international studies, said Beijing had long been ready to deal with Washington's long-term intervention in the Asia-Pacific region, but recent PLA actions may have played into US hands. "We know the US is everywhere ... Maybe our current high-profile military demonstrations in the Yellow Sea, and the East and South China seas made our neighbours nervous, which provided the US the best opportunity to come back," Jia said. Another Peking University professor, Yu Wanli, said Beijing needed to clarify to the world its precise position on the "core interest" remark, saying that no leader had used such a phrase in a speech or official document. "Maybe it was a misinterpretation from the earlier meeting between Chinese and US officials in Beijing," Yu said. "I think Beijing needs to clarify its standpoint to the outside world." Both Hu and Yu said today's joint statement would not harm Sino-US or Sino-Asean ties. "It's just a joint statement ... not a practical action to challenge and contain China," Hu said. Many envoys from countries large and small talk of China's "premature overreach" in the past year, adding that Beijing would have been far more successful had it waited for another decade or so to play a tougher hand with East Asia, given its growing economic and military clout - and the relative decline of the US. Ian Storey, a scholar at Singapore's Institute of Southeast Asian Studies, said there was a lot of talk that China would be "recalibrating" its approach. "We haven't seen any sign of it yet," he said. "Maybe the summit will be enough to produce just that kind of reaction. Certainly many countries want to show China that this is simply about balance, not about shutting China out ... everyone knows China is still very important to the future of Asean." China has grown to become Asean's biggest trading partner. While playing catch-up on trade, the US remains by far the biggest investor within Asean, with three times as much capital invested by US firms in Southeast Asia than across the whole of China. The pressure is likely to remain on China for some time yet, however. Much of the push to drive the South China Sea issue has come from Vietnam in its year as chair of Asean. It is, after all, the only other country that claims all the Paracel and Spratly islands. Soon it will pass the baton to Indonesia, the largest nation in Southeast Asia and one that has long voiced concerns about China's South China Sea claims.

Philippine President Benigno Aquino has been invited to visit Beijing, an aide confirmed yesterday. "He was invited by the Chinese ambassador to the United Nations to visit China, but no date has been set. He got the invitation yesterday [Wednesday]," Ricky Carandang, head of the president's communications group, said.

US billionaire Warren Buffett could deliver some tough talk to BYD when he visits the Chinese carmaker next week, including potential plans to sell down his stake in the former high flyer that has hit a speed bump. BYD was China’s fastest-growing car maker last year but has encountered a host of problems this year, including sliding sales, a delay in plans to export its electric cars, and a legal dispute with the government over land it wants to develop. Buffett’s Berkshire Hathaway bought 10 per cent of the company in 2008 – an investment that has yielded handsome rewards with the stake now worth US$1.6 billion, nearly seven times the original US$230 million purchase price. Still, the current value is well off a peak of US$2.5 billion reached last October, leading some to speculate that Buffett may be tempted to cash out part or all of his investment for a return that is still impressive by any measure. “Buffett’s visit to BYD may not be good news for the company,” said Andrew To, sales director at Tai Fook Securities. “The old man may actually be tempted to sell down as the value has been inflated by several times.” Buffett and Bill Gates, the 55-year-old co-founder and chairman of Microsoft, will arrive in China on Monday for a four-day visit, including three stops related to BYD in the cities of Beijing, Changsha and Shenzhen. Buffett and Gates, America’s two richest men and the world’s top two donors to charity, will also host a private meeting in Beijing to discuss philanthropy development in China. But Buffett, who made his billions as a shrewd investor, could be more focused on BYD, whose shares soared after Berkshire Hathaway’s initial investment on hopes the battery maker turned car manufacturer could become a future electric vehicle leader. Buffett admitted previously that his bet on BYD was less focused on the company’s products and more on its founder and chairman, the entrepreneurial Wang Chuanfu, known for devoting his time to the company and passionately pursuing new products. BYD’s shares now trade at more than 20 times projected earnings, nearly double the multiple of rivals Dongfeng Motors and domestic leader SAIC Motors. Some analysts are questioning the company’s ability to deliver its new energy vision, and others say it may be straying too far from its roots as a battery specialist. Chinese media recently reported that BYD had acquired 18 per cent of Zhabuye Lithium, which has mining rights in the country’s biggest lithium mine, for about US$30 million. Other reports said the company planned to make electrical appliances such as air conditioners and TVs. “The company should do whatever it is good at,” said Johnny Wong, an analyst at Yuanta Research. “The share price will fall further if they really enter the home appliance sector, in which competition is keen.”

Tokyo warns of economic fallout from row - Japan warned on Friday that a deepening row with China could hurt both of Asia's two biggest economies and sought to draw a line between a feud over disputed islets.

China seeks binding climate treaty - China wants the world to seal a binding climate change treaty by late next year, blaming US politics for impeding talks and making a deal on global warming impossible this year.

Taiwan plans to loan for the first time a treasured painting to the mainland in yet another sign of warming ties between the former bitter rivals. Previously, mainland requests to borrow nationally important cultural relics have been rejected as Taiwan feared the works might be confiscated. But the National Taiwan Museum plans to loan a 17-century portrait and other art treasures to the Hubei Provincial Museum in central China and another museum in Fujian province for exhibitions next year. "We support the government's existing policy to promote cultural exchanges with the mainland," said Li Tzu-ning, an official at the National Taiwan Museum. The portrait is of Koxinga, a general in China's late Ming Dynasty (1368-1644). In return, the museum in Hubei will loan more than 100 cultural relics to the National Taiwan Museum, in Taipei, for an exhibition slated for November, Li said. But the National Palace Museum, Taiwan's top museum, has maintained it is unlikely to loan items to the mainland in the absence of guarantees that they would not be retained. It holds more than 655,000 artefacts spanning 7,000 years from the Neolithic period to the end of the Qing dynasty in 1911. They were removed from a Beijing museum in the 1930s to prevent them falling into the hands of invading Japanese troops and were then taken to Taiwan by the Nationalists as they fled communist forces on the mainland. "We have no such concerns as the painting we plan to loan to the mainland is not from there," Li said.

Russian State Ballet Troupe stages "Swan Lake" in SW China.

Sept 25, 2010

Hong Kong*: A month after eight Hong Kong tourists were shot dead in the Manila hostage crisis, many in the local travel trade believe Hong Kong's black outbound travel alert for the Philippines should be lifted. But the government is not expected to make any move until the full investigative report is determined to have been thorough and credible, a deciding factor in rebuilding the public's confidence in the Philippines. The Aquino government could appeal if the Hong Kong travel advisory is not lifted, Philippine tourism secretary Alberto Lim was reported as saying. The travel alert for the Philippines has been in force since the hostage crisis on August 23. It means residents should avoid all travel to the country. In the first four or five days after the incident, bookings were cancelled for some 400 to 500 rooms in hotels and resorts in Cebu and elsewhere in the country, Holiday World Tours managing director Paul Leung Yiu-lam said. Holiday World, which has a branch in Manila, has substantial inbound and outbound tour business in the Philippines. "The Philippines may not be a major destination for Hong Kong people but it's still business," Leung said. "I do feel it's time for the black outbound travel alert to be lifted. The incident has already happened. It's not still going on, so the situation is not that serious." Leung is also chairman of the Hong Kong Association of Travel Agents. Although tours are currently not available, major travel agencies continue to offer airfare and hotel packages to destinations in the Philippines. Lim said Hong Kong makes up 4 per cent of the country's tourism market, smaller than the mainland, South Korea, Japan or the United States.

A group of Hong Kong activists on Thursday set sail again for an island chain in the East China Sea claimed by Beijing and Tokyo, a day after their ship was stopped by marine police.

Hong Kong customs officers have seized one of the most advanced and controversial amphibious tanks under development in Asia. Investigations suggest the disarmed K-21 light tank and components were being shipped from Saudi Arabia back to South Korea through Hong Kong - without import and export licences for strategic items. "It is alleged that the consignment is an exhibition item," a senior customs officer said yesterday. "Initial investigations indicate that it is not an out-of-service tank and it appears to be quite new and built for the purpose of exhibition." Investigations were continuing and the case would be handled in accordance with Hong Kong laws, the officer said. The seizure at Kwai Chung container terminal comes just after South Korea's defence ministry announced an investigation into potentially fatal design flaws in the light tanks, which were launched late last year. It had hoped the vehicle would prove a hot defence export item after being developed over a decade by the ministry and South Korean defence firms. A South Korean soldier died in July after he was trapped in one of the 26-tonne vehicles, when it sank during a river crossing. Some media reports suggest a faulty pump was to blame in what was supposed to be a routine operation. It is armed with a 40mm cannon, a 7.63mm machine gun and can fire guided missiles at other tanks. It also has an advanced battle management system that allows it to receive a constant flow of information from sensors on soldiers in the field. Despite the design problems, the technology of the K-21 would be of interest to many military forces, according to locally based attaches. "It does seem strange that such a new weapon is being moved about without proper licences," one envoy said. "This case will be watched very closely." Officers from customs' strategic trade investigation division are handling the case. So far, no one has been arrested. South Korean officials said they had yet to be informed of the seizure and could not comment. The tank and parts in two containers were loaded on a ship in Saudi Arabia earlier this month and the vessel reached Hong Kong on Saturday. The goods were unloaded at Kwai Chung container terminal. "The tank was discovered as it was stored in a soft-topped container and its shape could be easily seen from the top of the container," another customs officer said. It was to be loaded onto another vessel and leave Hong Kong today. "Investigations indicate its final destination is Pusan, South Korea," the officer said. As stipulated in the Import and Export Ordinance, a licence issued by the director general of trade and industry is required for the import/export/re-export/transshipment of every shipment of strategic commodities. The maximum penalty for failing to obtain a licence is an unlimited fine and seven years' imprisonment. Enforcement over such items resulted in 53 people or companies in 41 cases being prosecuted last year, with fines totalling HK$2.22 million. The cases mainly involved liquid crystal polymer, carbon fibre, integrated circuits and information security devices. In 2000, five Soviet-made armoured military carriers were seized at the Kwai Chung terminal. They had been ordered by state-run China Aviation Industry Supply and Marketing and were bound for Tianjin. In 2006, customs officers confiscated a Soviet-made MiG-29 fighter jet that was being shipped to the United States.

The firefly species which has been found in the Wetland Park and Mai Po wetland. Scientists say it is unusual to find tropical species in sub-tropical Hong Kong. Hong Kong experts have discovered a firefly species that is new to science. Yet to be named, the firefly had been known to live in the Wetland Park in Tin Shui Wai for at least seven years before being identified as a new species this year. "I was researching birds in the park in 2003 when I saw the fireflies in the mangroves. I wasn't aware they were new and the species that we know in Hong Kong did not depend on mangroves," said Josephine Cheng Chui-yu, the Agriculture, Fisheries and Conservation Department's wetland park manager. The department started to notice the bugs in the mangroves had a different flashing pattern and frequency, after Cheng joined its beetle working group and alerted staff to her observations. With the help of an Australian and a mainland expert, the team after research made a preliminary conclusion that the species was a new one to science. Belonging to the genus Pteroptyx, the firefly has a body length of about 8mm to 10mm, with dark brown top. A distinctive feature is the hooked wing covers of the male, which serve as a clamp to enable it to hold the female during mating, while at the same time keeping other males away. The genus thrives in the tropics, usually in mangroves in Southeast Asia, so it was unusual that a species existed in sub-tropical Hong Kong, Cheng said. The species will add to about 2,000 known firefly types found around the world. There is a population of about 80 of the new species in the Wetland Park, and 200 more in Mai Po, a protected wetland area nearby. Cheng said it would not be a problem to protect the creatures, as the two habitats were designated conservation areas. The wetland park is staging an exhibition of the larvae and adult specimens of the fireflies until the middle of next month.

 China*: China warns Japan of tourism fall-out over ship row - A Chinese official on Thursday blamed Japan for the escalating row over a detained Chinese trawler captain and warned it could affect tourism. Beijing denies blocking rare earth exports to Japan - China has blocked all exports of rare earths to Japan, stepping up the pressure on Tokyo to release a Chinese boat captain detained in disputed waters, a report said on Thursday.

China is to give another US$200 million in emergency flood aid to Pakistan, Premier Wen Jiabao announced during a visit to New York for a UN anti-poverty summit.

Wen pushes back as US currency bill looms - Premier Wen Jiabao addresses a dinner at the Waldorf Astoria Hotel on Wednesday. Premier Wen Jiabao pushed back on Wednesday against US pressure to revalue the yuan, as US lawmakers threatened to penalise China for keeping its currency artificially low. Wen, who is due to meet US President Barack Obama in New York on Thursday during the U.N. General Assembly, said in a speech to US business officials the yuan exchange rate had no relation to US trade deficits and should not be politicised. He added that a 20 per cent appreciation of the yuan, also called the renminbi, as demanded by US lawmakers would cause many bankruptcies in the Chinese export sector, where firms operate on thin margins. “The conditions for a major appreciation of the renminbi do not exist,” Wen said, adding the appreciation of China’s currency demanded by US lawmakers would not bring jobs back to the United States because US firms no longer make such labour-intensive products eager to address high unemployment in an election year.

Wong Kwong-yu, the founder of Gome Electrical Appliances Holding (SEHK: 0493), is stepping up his efforts to recoup control of the mainland's second biggest home appliances retailer by hiring a high-powered global law firm. Wong, who has been sentenced to 14 years for bribery and insider dealing and is currently being held at a Beijing detention centre, has retained Washington and London-based Hogan Lovells. The firm's US practice is known for representing former WorldCom boss Bernie Ebbers in shareholder lawsuits deriving from the American technology company's spectacular collapse in 1998. Ebbers was separately sent to prison for 25 years for accounting fraud. Hogan Lovells was hired on Wong's behalf by his wife, Du Juan, a fortnight ago and is officially acting for family company Shinning Crown Holdings. Du, who was also convicted of insider trading, was freed from jail last month after her original sentence was commuted to three years with a three-year reprieve. Wong topped Hurun's mainland rich list until 2008. He was detained in November 2008 on charges Beijing authorities vaguely termed as "economic crimes", then imprisoned in May this year following a closed-door hearing in a Beijing court, which found him guilty of bribery and insider trading and fined him 600 million yuan (HK$696 million). Since he was incarcerated, the fallen tycoon has been fighting with the board of the company he founded in 1987. Wong, who owns 32.5 per cent of Gome Electrical and resigned as its chairman in early 2009, has complained, through representatives, that the company's growth strategy is wrong. He has asked shareholders to remove Chen Xiao, who replaced him as chairman, from the board and has sought to prevent the management from issuing new shares, out of fear his stake could be diluted. "We are just here to safeguard the majority shareholder's rights," said Neil McDonald, the Hong Kong-based Hogan Lovells partner who is representing Wong via the tycoon's family company. At an investor meeting set for September 28, shareholders will be asked to vote on Wong's request to remove Chen and withdraw the board's ability to issue new shares. Wong also wants shareholders to appoint his sister, Huang Yanhong, and Zou Xiaochun, who is the legal representative for Gome Holdings, another family company, to the board of listed Gome Electrical. In advance of that meeting, the public battle between Wong and Gome Electrical is intensifying. Some Hong Kong media have claimed that Wong offered to pay associates commission to buy Gome Electrical shares and then vote for his proposals at the September 28 meeting. The electronics retailer issued a statement yesterday that it had asked the Securities and Futures Commission to examine the situation. McDonald declined to comment on behalf of Wong. Zou told the Post in an interview that the imprisoned tycoon feels the company's current board, which also includes three representatives from private equity house and 10 per cent shareholder Bain Capital, is ignoring his ideas about how the business should be run. A Gome Electrical spokesman declined to comment. "Gome has Wong's DNA," Zou said. The mainland lawyer also claimed that Gome Electrical's current management wants to remove Wong from the company, without specifying how exactly the board may do so. "No [stock market] listed commercial company can expel a founding shareholder," Zou contended. On September 15, Bain Capital converted its 1.6 billion yuan of Gome Electrical bonds into shares, giving it a near 10 per cent holding in the company. The conversion also lowered Wong's stake to 32.5 per cent from 36 per cent. Wong wants 376 Gome stores that he owns injected into the listed company. That transaction could effectively boost his shareholding in Gome Electrical.

Shanghai (right) and Beijing still have some way to go to match London, New York, Hong Kong and Singapore as property markets. Four steps for Beijing and Shanghai to hit next level - China's growth story in the past decade has impressed the world on many fronts. A decade ago, the real estate sector of the country's first-tier cities - Shanghai and Beijing - had all the characteristics of "emerging" markets. Today, as the world's fifth-most active real estate investment markets, they have risen to be firmly placed in the "transitional" category, leaving other BRIC (Brazil, Russia, India and China) cities behind, and on a fast track to advanced maturity. Nevertheless, there are significant gaps to be filled in for the two cities to qualify as truly advanced and to be compared with cities such as London, New York, Hong Kong and Singapore. To leapfrog into this league, it is essential for Shanghai and Beijing to excel in the characteristics that collectively define "maturity": transparency, connectivity to global capital markets, building quality, and depth of corporate tenant base. Making progress in the first characteristic - transparency - will help improve market efficiency, encourage stable long-term investment and equip China's domestic players to compete in international real estate markets. A transparent real estate market is characterised by a free flow of high-quality market information, robust regulatory enforcement and fair transaction processes. By this yardstick, Shanghai and Beijing have left behind their opacity and have today attained "semi-transparency" status. One indicator of transparency is the availability of market information. The proliferation of a domestic professional services community, including real estate services providers, has contributed to a notable improvement in this aspect. Meanwhile, consistent and open implementation of real estate regulation and improving tax compliance are all forging the integrity of an increasingly mature market. Further improvements will potentially propel Shanghai and Beijing to the highest levels of transparency over the next 10 years. To achieve this, it is important for China to accelerate the creation of a real estate investment trust (reit) sector based on international corporate governance principles and to develop performance benchmarks for investors to measure returns. Real estate occupancy costs will need to be more transparent and, for a healthy nationwide development, China's second- and third-tier cities will also need to step up their regulatory enforcements and tax compliance. The second characteristic of maturity is the connectivity to the global capital markets. High transparency encourages cross-border investment; and the more a city is connected to its external physical and business networks, the better it tends to perform. China has no shortage of domestic funds to sustain development, but the country will not realise its fullest potential single-handedly. Many foreign investors are still hesitant about entering the market because of perceived risks and uncertainties. As a result, China's real estate investment market is largely driven by domestic activities, with US$6 billion of direct commercial real estate investment coming from domestic sources in the past four quarters. And during 2007-2009, China-based property investors accounted for only 0.3 per cent of global cross-border flows into direct commercial real estate. Developing further international connections will offer more diversity in vehicles and facilitate capital inflows, and help prepare China's money to find strong footholds abroad. As China seeks diversification by investing overseas, capital outflows are set to increase - but will be limited due to restrictions on capital flows. The international strategy of China Investment Corp is, nonetheless, leading the way through its focus on indirect vehicles. With the right space for development, China can become a market-moving and game-changing force in international property markets. In order to attract all these investments, strengthening the hardware is a fundamental element, which is the third characteristic of a mature market. An ambitious "green" building agenda will support the government's emission and energy targets and reduce the operating costs of individual assets. With only 70 certified green commercial buildings in China - compared with 4,000 in the US and 3,000 in Britain - there is huge potential for green buildings. Bringing in international experience in professional property management and comprehensive land-use master planning will contribute to the sustainability of China's cities. The fourth characteristic the need for a strong corporate tenant base. Being able to attract and retain major multinational corporations will secure Shanghai and Beijing's positions as mature real estate markets with a constant demand for quality buildings. To help move the cities to the next level, according to the World Economic Forum, restrictions on capital flows, tariff barriers and red tape involved in starting a business will have to be improved. As with many aspects of China's economy, the transformation of Shanghai and Beijing has been uniquely Chinese, shaped by a unique combination of massive infrastructure investment, highly effective government policies, long-term planning and impressive speed of real estate delivery. These characteristics are less common in other real estate markets. The world is watching. As the second-largest economy globally, any move by China will influence the world market in one way or another. This is not only a chance for China's first-tier cities to catch up with other leading cities, but also an opportunity for the world - international capital markets, other emerging real estate markets as well as other Chinese cities - to learn from this phenomenal transition. Colin Dyer is the president and chief executive of Jones Lang LaSalle.

China will invest up to 24 trillion yuan (US$3.6 trillion) in urban infrastructure by 2020 - A resident in Shenyang, capital of Northeast China's Liaoning province, shoots on Wednesday the carriages of the city's first subway line. More than 100 local residents were invited to experience the line's trial run that day. China may need to invest up to 24 trillion yuan ($3.6 trillion) in urban infrastructure by 2020 to accommodate the increasing number of rural residents moving to the cities, according to a new report by a government think tank. China's urbanization rate is currently around 47 percent and is increasing by about 1 percentage point each year. If the nation continues its urbanization-friendly policies, the rate could rise to 65 percent by 2020, according to the report released on Tuesday by the China Development Research Foundation. To accommodate this increase in the urban population, the report said the country may need to invest at least 16 trillion yuan in roads, railways, power plants, water systems and social services. But it added that this could be a conservative estimate. "If the ratio of urban infrastructure investment to the country's gross domestic product reaches 4 percent, which is the average rate in developing countries, then the total investment could amount to 24 trillion yuan." New transportation networks, including roads, bridges and subways, will account for about 56 percent of the estimated investment, the report said. Financing the expected urban expansion poses a major challenge. The report said that in 2008, about 32 percent of the funding for urban infrastructure came from the government, 30 percent from bank loans and the remainder from the relevant enterprises. However, at present, all local government finance channels rely on land prices, as they either sell land to raise money or use land to secure loans. Such a financing model will not be sustainable, the report concludes. Once the property market cools, it will have a detrimental effect on the ability of local governments to raise funds. To meet the projected financing requirements, the report suggests non-State investors should provide a larger proportion of funds for future urban infrastructure projects.

Fireworks are seen during the opening ceremony of the 5th Special Olympics Games of the People's Republic of China in Fuzhou, southeast China's Fujian Province, Sept 19, 2010. This Special olympics involves 11 major games such as track and field, swimming, weightlifting, etc. There will be 39 delegations taking part in the game, involving provinces, autonomous regions, municipalities, Xinjiang Production and Construction Corps, Hong Kong, Macao, Taiwan and delegations from South Korea, United States and Singapore.

Smoke rises during the military exercise preview of the "Peace Mission 2010", in Matybulak Range of Kazakhstan, Sept. 22, 2010. "Peace Mission 2010," a joint anti-terrorism exercise involving five Shanghai Cooperation Organization (SCO) members, held preparatory drills Wednesday.

A remote-sensing satellite "Yaogan XI" is launched from the Jiuquan Satellite Launch Center of northwest China's Gansu Province at 10:42 a.m. (Beijing Time) on Sept. 22, 2010. The satellite was sent into space aboard a Long March 2-D carrier rocket, according to the center.

Sept 24, 2010

Hong Kong*: HK activists set sail for disputed islands - A group of Hong Kong activists set sail for the Diaoyu Islands in the East China Sea on Wednesday, amid an escalating row between China and Japan over the territory.

AIG secures HK exchange nod to list AIA - American International Group inched closer in its ambitious plan to list its Asian life insurance business, AIA Group Ltd, after securing approval from the Hong Kong stock exchange.

HSBC's chief executive Michael Geoghegan has threatened to quit if he is not promoted to chairman, as the battle for the top job at the bank intensifies, a report said on Wednesday.

In a world of zero interest rates, some things are bound to go wrong. In Hong Kong's case, make that very wrong.
On the surface, everything is great. The city's US$215 billion economy is growing 6.5 per cent, confounding the sceptics. It's good to be the gateway to China's boom while the most developed economies fret about a double-dip recession. Yet that proximity comes with a price, and a growing one. Few doubt that Hong Kong has a property bubble on its hands. Home prices have surged about 47 per cent since the start of 2009. Who's buying? Wealthy mainlanders. The other force inflating Hong Kong's bubble is near-zero US interest rates, the product of a currency peg to the dollar. Taken together, they are putting Hong Kong on the frontline of economies grappling to navigate this world of zero. A year ago, many thought a flat selling for HK$24.5 million was the peak. A one-bedroom, 816 square foot flat in the city's Kowloon district going for such a sum had insanity written all over it. Think again; Hong Kong property is still on the rise. Earlier this month, Hong Kong Monetary Authority chief executive Norman Chan Tak-lam said risks in the property market may exceed those in 1997, the height of a previous bubble that was followed by a six-year slump that sent values more than 50 per cent lower. The market, the Ming Pao Daily quoted Chan as saying on September 13, has been rising "quite rapidly" and may collapse if prices keep going up. Chan joined the Financial Secretary, John Tsang Chun-wah, in cautioning about asset imbalances that have the government raising down payment ratios and pledging to increase land supply to rein things in. Far more aggressive action may be needed.

Cheung Kong begins low with prices for Ma On Shan units - Developer aims to build enthusiasm for first Oceanaire batch. Mainland investors prefer properties close to transit hubs such as Ma On Shan Station. Cheung Kong (Holdings) (SEHK: 0001) will offer the first batch of its Ma On Shan residential project at lower than expected prices in a bid to drum up home sales during the "golden week" holiday starting next Friday. The first batch of 108 flats at Oceanaire, about five minutes' walk from Heng On Station on the Ma On Shan rail line, will be launched at an average of HK$6,438 per square foot on a staggered payment basis. Buyers have to pay 30 per cent of the flat's value as an initial deposit and the remaining 70 per cent can be deferred until the development is due for completion in November next year. The asking prices are from 2 per cent to 28 per cent higher than the average HK$5,000 to HK$6,300 per square foot asking price in the secondary market in the area, according to Centaline Property Agency. "The offer price is below our expectation of HK$8,000 per square foot," said Janny Leung, an assistant sales manager at Midland Realty's Ma On Shan branch. Prices of the flats, which range in size from 974 to 1,267 sq ft, go from HK$4.87 million to HK$9.1 million, or between HK$5,003 and HK$7,316 per square foot. Buyers who pay in cash will receive a 6 per cent discount on the listed price. This means the cheapest unit would cost HK$4.58 million or HK$4,703 per square foot for cash buyers.

Young couples priced out of home market - Soaring prices mean Ann Kan and her fiance have to settle for a public housing flat. Low-income families are being left behind in the battle to buy their own homes as soaring house prices push the cost of public and subsidised flats beyond their reach. The story of Ann Kan, a young clerk who hoped to buy a flat with her fiance, is typical. "We are getting married in November and still do not have a flat to move into although we began trying to buy something half a year ago," she said. The couple had hoped to buy a flat in a private housing estate with a budget of HK$300,000 as a down payment, she said. "We had also applied to buy a Home Ownership Scheme flat (which offers flats at subsidized prices through the government's Assisted Housing Scheme) in June." "But we didn't get a chance to buy a flat because our ballot number was too low," she said. "So then we considered buying a flat in an old private housing estate - but the prices were all too high and on top of that we would need to pay management fees and other expenses. "Second-hand HOS or public housing flats are now also too expensive. We could not afford to have a baby if we bought a flat and we would rather have a baby." The young couple have decided to apply for public housing scheme and, until they are successful they will live separately with their parents. Other young couples have also found themselves priced out of the market and forced to apply for assisted housing. "Increasing property prices have forced them to buy HOS or public housing in the secondary market recently," said Sunny Lee, a property agent who focuses on the sale of subsidized housing. "That's why we saw so many record-breaking transactions," he said. A 778 square foot flat in Yiu Chung House in the Yiu On Estate in Sha Tin was sold for HK$2.07 million on the open market this month, a record for a public housing flat. The vendor bought the flat for HK$1.8 million in February. Just a few days later a new record was set when an 800 sq ft flat in Lung Wah House in the Lower Wong Tai Sin Estate was sold for HK$2.3 million. The price was equivalent to that of a small flat in an old private housing estate. Just six years ago, public housing flats cost less than HK$1 million, according to data from property agency Centaline Property Agency. In the first eight months of this year 172 public housing flats were resold at prices above HK$1 million, an 118 per cent increase on the 79 deals recorded in the same period last year. Public housing unit sales totalled HK$352 million, 13.9 per cent more than the HK$309 million recorded in the same period last year and the highest sales volume in the 10 years since records started being kept. Lee said many young couples were now buying public or HOS flats in the secondary market. "Their average household income is about HK$25,000 a month and if they bought private housing their monthly mortgage payment would amount to about half of their salary," he said. "So private housing is just too expensive for them. At the same time it is difficult to obtain an HOS flat as there are too many applicants and a limited number of flats. This forces them to buy subsidised flats in the secondary or open market." Monthly mortgage payments for public housing range from HK$4,000 to HK$6,000, while payments for HOS flats range between HK$5,000 and HK$6,000. "Many young couples find subsidised housing is relatively affordable, compared with private housing. The efficiency rates of the subsidised flats are also higher than private housing." Lee estimates the prices of HOS flats in the secondary market have risen by 20 to 30 per cent this year. After such a sharp increase in the prices of subsidized housing, finding an affordable flat will be tough for many low-income families.

 China*: Mainland companies are thinly represented in a new survey on corporate governance in Asia, with only one firm making it into the Asian 20 in the category focusing on firms of more than US$10 billion in market capitalisation. And only one Chinese company makes it into the category focusing on companies with less than US$10 billion in market capitalisation. The mainland ranked 7th overall in the survey with a score of 49 per cent, which was four marks better than its performance in the last survey in 2007. India also scored 49 per cent, down from 56 per cent in 2007. The survey was produced by CLSA Asia Pacific Markets and the Asian Corporate Governance Association (ACGA). Industrial and Commercial Bank of China (SEHK: 1398), the world's biggest bank in terms of market capitalisation, ranked 18th out of the top 20 companies in the above US$10 billion category. Hong Kong had six companies in the list, making it the region's best performer in terms of numbers, with Hong Kong Exchanges and Clearing (SEHK: 0388) topping the list. Mainland paper maker Nine Dragons was ranked 20th on the list of companies with less than US$10 billion in market capitalization.

Wen threatens new action in Japan row - Premier Wen Jiabao speaks during a meeting with representatives of Chinese nationals and Chinese Americans in the United States on Tuesday. China’s premier threatened "further actions" if Japan fails immediately to release a trawler captain, as Beijing staged its highest-level intervention yet in a bitter row between Asia’s biggest powers. Japan in turn called for talks to resolve the feud, but rejected China’s territorial claim to disputed islets near where the Chinese skipper was apprehended by Japanese coast guard crews two weeks ago. “I strongly urge the Japanese side to release the skipper immediately and unconditionally,” Premier Wen Jiabao said in New York, according to the official Xinhua news agency. “If Japan clings to its mistake, China will take further actions, and the Japanese side shall bear all the consequences that arise,” he said, urging Tokyo to “correct its mistakes to bring relations back on track”. The dispute between Asia’s rising giant and its most advanced economy has drawn concern in Washington, and both Wen and Japanese Prime Minister Naoto Kan are due to hold talks at the UN this week with US President Barack Obama.

China will build four industrial zones for ocean engineering equipment and develop several enterprises to service the field over the next 10 to 20 years, each with a projected revenue of 10 billion yuan ($1.49 billion), a senior official said. The nation's long-term goal is to form a complete industrial chain in this sector, Zhang Xiangmu, director-general of the equipment industry department at the Ministry of Industry and Information Technology (MIIT), said on Tuesday at the International Forum on the Development of Ocean Engineering. "The world ocean map will undergo fundamental changes in the next 50 years. Major coastal nations are all developing and exploring ocean-related industries," Zhang said. The International Energy Agency said that China, which used an equivalent of 2.26 billion tons of petroleum in 2009, has overtaken the United States to become the world's largest consumer of energy. The ocean has now become the new frontier for energy- thirsty nations like China, which are investing in the research and development of this resource. In the past decade, 60 percent of new oil and gas fields were located in the ocean, which is expected to provide 35 percent of the world's total oil output and 41 percent of its natural gas by the year 2020. "Global investment in the research and development of ocean oil and gas exploitation has reached $50 billion to $60 billion each year and the number is expected to exceed $80 billion during the next five years," Zhang said. According to Zhang, 85 percent of the 116 industries in China are related to ocean engineering, a promising sector for national growth and job opportunities. "Whoever has the best ocean engineering technology will have the upper hand in ocean development. This is strategically vital to our nation," Zhang said. "As of 2008, the value of the ocean engineering equipment market totaled $50 billion yuan and it is expected to exceed $100 billion in the next decade. We must speed up our efforts to explore the ocean's resources," said Chen Mingyi, honorary chairman of the Fujian Shipbuilding Industry Association.

Sept 23, 2010

Hong Kong*: Sun Hung Kai Properties (SHKP) has raised its sales target by 12 per cent to HK$26 billion for this fiscal year, shrugging off worries about government measures to cool the red-hot property sector.

Tai Hang residents take part in the village's Fire Dragon Dance, staged every year since 1880, when a village leader had a dream that parading a mock serpent stuck with burning incense sticks would rid its people of plague. The dance, featuring a dragon 70 metres long made from specially imported grass, and 36,000 incense sticks, will be staged again on Moon Festival September 21st.

Hong Kong bid for Asian Game 2023 to spend US$3.87 billion on new venues - Hong Kong could make a financial loss of about HK$13.8 billion if its bid to host the 2023 Asian Games succeeds, calculations from a government consultation document released yesterday show. Tsang Tak-sing and his permanent secretary, Raymond Young Lap-moon (left), yesterday. The document estimates total capital and operating costs of HK$13.7 billion to HK$14.5 billion at current prices and revenue of HK$700 million to HK$860 million from ticket sales, merchandising and sponsorship. The estimates exclude the HK$30.17 billion construction cost of eight new venues, as the government said they were in the pipeline whether the city hosted the Games or not. They also do not take into account expected economic benefits of HK$400 million to HK$600 million from up to 69,000 tourists and the creation of up to 11,170 jobs. The cost estimate for the city's second bid for the Games - a bid for the 2006 event, lodged in 2000, lost to Doha - includes HK$10.5 billion in capital spending on upgrading sports venues and operating costs ranging from HK$3.2 billion to HK$4 billion. The planned new venues include the nearly HK$20 billion Kai Tak multipurpose stadium complex, five sports centres, a sports ground and a redeveloped tennis centre, which are set to be completed by 2023. The cost of building a 3,000-flat athletes' village is also excluded as the government has yet to decide if local developers or government-linked organisations will build them. Secretary for Home Affairs Tsang Tak-sing described pouring billions into the Games as an investment that would boost the city's sports development, social cohesion and international status. "Drawing experience from [last year's] East Asian Games, we will continue to adhere to the people-based principle and take into account the interests of the whole community. We will not bring in extravagant infrastructure that creates no long-term benefits," Tsang said. "The East Asian Games has not created any `white elephant' facilities and organising the Asian Games will not produce any either." Tsang and Asian Games Bid Team head Eddy Chan Yuk-tak said that despite the huge expenditure involved, there were many tangible and intangible benefits that would be brought to Hong Kong by the Games. Tsang said bidding for the Games was "an opportunity not to be missed", and the government would listen to public opinion during the six-week consultation up to November 3. It would then decide by the end of January whether to file a formal bid to the Olympic Council of Asia. Kuala Lumpur, Hanoi, Taipei, Dubai and New Delhi were possible rivals for the Games, a government official said. Based on population projections, Hong Kong would need 19 more sports venues to meet demand by 2020, meaning it would have to build new venues in any case, the official said. Members of the Legislative Council's home affairs panel indicated some reservations about the Games and criticised the government for not providing a detailed budget. "You are pushing us to decide and the consultation only lasts for a few weeks," unionist legislator Wong Kwok-hing said, adding that although he supported the plan, the city had to consider if it had the capability to host the event. Democrat Kam Nai-wai questioned the estimates. "Will we underestimate the spending? Have we calculated the cost of building the transport facilities we will need?" He also wondered whether allowance had been made for rising costs, pointing to the increase in the cost of the high-speed Hong Kong-Guangzhou railway from HK$30 billion to more than HK$60 billion. The Civic Party's Tanya Chan called on the government to unveil more financial details. She said the government should tell the public if the sports facilities for ordinary residents would be affected if the application failed. "What I really fear is that hosting the event will be like burning money for fireworks," she said. But the proposal won stronger support from sports circles. Football Association chairman Brian Leung Hung-tak said the bid would provide more facilities for the sport, adding that Hong Kong could never have won last year's East Asian Games soccer gold medal if the event had not been held in Hong Kong. Timothy Fok Tsun-ting, president of the Sports Federation and Olympic Committee of Hong Kong, said holding the Asian Games would not only improve local athletes' standards, but also the public's interest in sport. Hong Kong proposes featuring 35 sports in the 2023 Games - including seven non-Olympic sports such as bowling, cricket, wushu and squash - and expects to draw 11,000 athletes. In its earlier bid, the government estimated hosting the 2006 Games would incur a loss of HK$730.5 million. Doha spent HK$21.7 billion on its Games, while Guangzhou has invested an estimated 200 billion yuan (HK$230 billion) on the next Games, which will take place in November.

Hong Kong's slice of mainland mooncake market grows - Bakers savour 14b (US$2 billion) yuan market for seasonal delicacy - A customer bags purchases at an outlet for Tai Pan mooncakes in a Beijing mall. The company plans to expand distribution to more cities on the mainland.

Twelve firemen were injured as they battled to reach crewmen trapped by an explosion on a cargo vessel - only to be caught by a second blast. The 50-meter Yue Hai 638 - sheltering from tropical storm Fanapi at the Yau Ma Tei anchorage early yesterday - caught fire after an explosion in one of nine containers just before 1am. The Fire Services raised the No 3 fire alert about half an hour later. About 140 firemen were soon at the scene, with many going on board to fight the fire and help save the six trapped crewmen. But then came the second explosion, which forced rescuers and the now-freed crewmen to jump off the boat. No one was left trapped, but the 12 firemen and six crew received varying degrees of burns or were injured by flying debris. That blast lit the sky, with ash and smoke billowing up. People on Hong Kong Island were among those who saw a huge fireball. The situation was said to be under control and the fire out a minute before 6am, so fire crews started to stand down. But then came a third blast at 6.45am, and full operations resumed. Part of the area was cordoned off for several hours in case of more blasts. Of the 12 injured firemen, five remained in hospital last night. One was in serious condition, three were stable and one was satisfactory. Fire Services chief Lo Chun-hung said his men took "appropriate measures" when boarding the vessel. But a department spokesman added later that the firemen would have been equipped differently had they known of dangerous goods on board. According to Hua Sheng (Hong Kong) Shipping, the Yue Hai 638 arrived from Guangzhou with scrap metal and miscellaneous goods. Executive Eric Lui Tze-hung said the company was working with an old business partner in the re-export trade, and documents were clear about the cargo being mainly scrap metal. But inspectors from the Marine Department said they will be on board the blackened vessel today to determine what else it might have been carrying.

Thousands of airline passengers were halted in their tracks or left up in the air last night as more than 80 flights were delayed on the ground and above Hong Kong International Airport. That came after a fully-loaded German cargo plane broke down and blocked one of the two runways just as it was cleared for takeoff from Chek Lap Kok. The breakdown meant the Airport Authority had to close the southern runway immediately from 6pm. It was still closed at midnight. Eight-two flights that were estimated to have at least 8,000 passengers were affected in the first three hours of the runway closure. Thirty-one departures and 51 arrivals were delayed. A Cathay Pacific spokesman said most of its flights were delayed by between one and two hours. Many of the people sitting or standing around at the airport said they had not been notified of a reason for the delay. "I've been waiting for my departure for nearly four hours," said one man. "No one has told me anything about the closure of a runway." All flights had to use the northern runway, with about 30 flights taking off each hour. The Air Cargo Germany Boeing 747 had been taxiing for takeoff when the pilot reported a mechanical failure. A maintenance team from the Hong Kong Aircraft Engineering was working to repair the cargo plane where it stood on the tarmac. And a spokesman for the Airport Authority said an emergency response center had been activated to coordinate procedures to clear the runway. In April, the airport's northern runway was closed for two hours after a Cathay Pacific flight from Indonesia reported an engine failure and made an emergency landing. Eight people were injured in the post-landing evacuation. A third runway is under review as part of the authority's Airport Master Plan 2030 Study. That is expected to be completed by the end of this year. The review will examine airport facilities with a view to maintaining Hong Kong's status and competitive edge as an international and regional aviation hub. It is expected to take from 10 to 12 years to build a new runway. There have been suggestions the present two runways will have reached operational capacity in 10 years.

Eighteen people were injured in a fire at Yau Mat Tei on Tuesday morning, a Fire Services Department spokesman said.
The No 3 fire at the Ma Tei Typhoon Shelter was finally extinguished at 5.59am, the spokesman said. The 18 who suffered burns included 12 firemen and six seamen from the cargo vessel. They were sent to Prince of Wales, Queen Mary and Ruttonjee hospitals. Two firemen received serious burns to their faces. The fire started about 1am after a container on a mainland cargo vessel, carrying metal waste, exploded. The Fire Services Department deployed more than 100 firemen to the scene. At 1.30am, the blaze became more dangerous and so was upgraded to a No 3 fire. Chief Fire Officer David Lai Man-hin said 18 people were injured because the container exploded again while firemen were trying to put out the fire. “We need to conduct a comprehensive investigation to find out its cause,” Lai added.

TVB general manager Stephen Chan Chi-wan arrives at the Eastern Court in Sai Wan Ho on Tuesday morning to face charges of conspiring to defraud the broadcaster. Chan and fellow defendants Tseng Pei-kun and Wilson Chan Wing-shuen were released on bail.

TVB (SEHK: 0511) chairwoman Mona Fong Yat-wah, the wife of Run Run Shaw, may be called to testify in a corruption case featuring the broadcaster's general manager, showbiz personality Stephen Chan Chi-wan, according to the provisional list of witnesses. TVB general manager Stephen Chan Chi-wan (front), accompanied by actor Wong Hei (back), leaves Eastern Court after Chan and two others were allowed bail and freedom to travel. The case will be transferred to the District Court on October 19.

Hong Kong’s dominant air carrier Cathay Pacific Airways (SEHK: 0293) said on Tuesday it has agreed to buy six Boeing 777-300ER aircraft for about US$1.61 billion (about HK$12.48 billion). The news follows an announcement by Cathay last Thursday that it planned to buy 30 Airbus aircraft for about US$7.82 billion amid a revival in international traffic.

Hosting the 2023 Asian Games will cost HK$10 billion, the low end of the spending spectrum, with the government presenting the public consultation paper to the Legislative Council today. The price tag was disclosed by a sports official close to the administration. At a special home affairs panel meeting, the government will brief lawmakers on the estimated cost of staging the Games, as well as the benefit to sports development and the community. The government has tried to limit the cost in the hope of obtaining budgetary approval from the council's Finance Committee and winning the support of the public. Speculation had put the cost as high as HK$50 billion for building facilities and improving infrastructure if Hong Kong wanted to stage a successful Asian Games. But the HK$10 billion estimate will be made on the assumption that no new facilities will be built specifically for the Games. Existing facilities will be renovated instead. The athletes' village, the home for an estimated 15,000 athletes and officials during the Games period, will become a joint venture with property developers, and will not be included in the budget. "Many of the 2023 Games events can be held at the Kai Tak sports hub, which has been planned by the government for many years and is not [being] built because of the Asian Games bid. Its construction cost, therefore, will not be included as part of the 2023 Games bid," an official close to the government said. "Some new sports facilities which will be opened soon - or are under planning for the next 10 years in various districts - may also be upgraded to meet the Asian Games standard, but since they are under the government's regular capital expenditure they will not be included in the bid budget." The government spent HK$1 billion on renovating sports facilities to host the East Asian Games last year. The Kowloon Park swimming pool, the Hong Kong Coliseum and Queen Elizabeth Stadium have all had facelifts. A new HK$600 million cycling velodrome will open in Tseung Kwan O in 2012. The Kai Tak project, which features a 45,000-seat stadium and multi-purpose sports centre, would be the major venue for the 2023 Games. The next Asian Games, in Guangzhou in less than two months, cost the mainland authorities an estimated 200 billion yuan (HK$230 billion). But a senior official for the Guangzhou event said the core expenditure, which included construction of facilities and Games operations, would be less than 15 billion yuan. The Hong Kong Olympic Committee has been given until January to submit a formal bid document to the Olympic Council of Asia but the committee needs to obtain financial backing from the government beforehand. Democratic Party lawmaker Emily Lau Wai-hing said HK$10 billion was a huge amount and the government needed to show evidence of how the public would benefit from the games. Civic Party legislator Tanya Chan said of the HK$10 billion cost: "It's about half of that for the HK$21.6 billion West Kowloon Cultural District ... we will need to see how the HK$10 billion will be used." Professor Chau Kwong-wing, chair professor at the University of Hong Kong's real estate and construction department, said the government should have a transparent, fair and competitive environment for developers to bid to build the athletes' village.

Some of the world's biggest firms were among almost 30 foreign groups vowing major investments in Taiwan amid growing interest in the island since it signed a trade pact with China.

Midas prospectus points to possible base switch to HK - Chief financial officer Tan Kai Teck (left), chief executive Patrick Chew and general manager Wang Jia Xin offer details of the listing. Although Singapore-based Midas Holdings is seeking a secondary listing in Hong Kong, it said Hong Kong may ultimately become its primary listing. The company said in its prospectus that the listing authorities in the city might determine that Midas' primary listing was in Hong Kong if, among other things, most trading occurred on the Hong Kong bourse. "There is no assurance that our secondary listing status will continue in future. In such an event, the waivers from strict compliance granted to our company on the basis of a secondary listing will be revoked," the prospectus said. However, Patrick Chew Hwa Kwang, chief executive and co-founder of the company, which makes extruded aluminium alloy products, said Singapore would remain the group's primary listing for the foreseeable future. "As our business and operations are principally located in China, we believe the Hong Kong listing will enhance Midas's profile in China and Hong Kong, thereby strengthening its long-term growth prospects," he said. The Hong Kong listing would provide an additional channel to raise capital and gain access to a wider range of institutional and retail investors, Chew said. Midas, which has a market capitalisation of US$725 million, plans to offer 220 million shares on the Hong Kong main board at a maximum offer of HK$6.10 each, raising a maximum of HK$1.34 billion. Trading of Midas' Hong Kong shares start on October 6, with 90 per cent of the offer shares allocated to institutional investors. "Market feedback is positive," a market source said. In the first quarter, 96.7 per cent of Midas' revenue came from its aluminium business, of which 69.6 per cent served China's train market, the prospectus said. The company accounted for 66 per cent of the mainland market for extruded aluminium products in high-speed trains and metro train carriages. During the first quarter, Midas' revenue grew 47.5 per cent to S$46.05 million (HK$267.53 million), while basic earnings per share rose 2 per cent to S$1.03. "Our order book is 1.5 billion yuan [HK$1.73 billion], which provides good visibility for our revenue and bottom line for the next two years," said Midas chief financial officer Tan Kai Teck. The firm plans to boost annual production capacity from 20,000 tonnes at the end of last year to 50,000 tonnes at the end of this year, and from 300 tram cars to 1,000 tram cars over the same period, Chew said. "China is currently undertaking the most aggressive expansion of railway infrastructure in history, with two trillion yuan to be spent from 2010 to 2012," he said.

Buildings lie empty as owners refuse to sell - Lights remain off at properties in prime locations - A handful of buildings are lying empty in some of the city's most prime locations. They are vacant not because they're difficult to sell - far from it. The buildings' owners simply don't want to sell. Caine Terrace, a luxury residential complex on Kennedy Road in Mid-Levels, is one such property. It's been vacant for about 20 years, according to Ricky Cheung Wai-kei, Ricacorp's Wan Chai manager. A company called Colworth bought the property in 1993 for HK$240 million, according to a Land Registry search. Cheung said he contacted the company three weeks ago but was unable to persuade the firm to sell. "Their reply was that they don't have any plans to sell at the moment," Cheung said. Ken Lam, who lives at Merry Garden on Kennedy Road near the empty complex, is keen to see it come to life again. "It would be even better if it was redeveloped; that would lift the price of my home," Lam said. "Caine Terrace is a very nice location. Sometimes I walk past, the gate is always open." Also eerily quiet is a nine-storey building at No22 Leighton Road, in the heart of bustling Causeway Bay. Mona Kwok, an agent with Ricacorp, has had the building in her sights for years. She said a company called Laypark has owned the property - which has been vacant for more than seven years - since 1987. Despite offers from investors, the wealthy family behind Laypark has held onto the property, Kwok said. Kwok's colleague, Eric Yuen, said one of the family members behind the company wanted to keep the property for his grandson, who is 10.

 China*: The PLA has cleared a final hurdle to taking a historic leadership role in the fight against piracy off the Horn of Africa - but is making it clear that there will be limits to its involvement with other navies. A well-connected scholar and retired People's Liberation Army Navy major general said yesterday that Beijing had now given political approval to the PLA's offer to head monthly meetings of the anti-piracy co-ordination grouping Shade. The group is currently headed by the EU, Nato and the US-led Combined Maritime Forces. The scholar said China's involvement was "certain". But as the details are worked out, he outlined differences and ongoing mistrust with Nato in particular. Tang Yinchu , a senior consultant at the China Institute of International Strategic Studies, said that the chairmanship of Shade, which stands for Shared Awareness and De-confliction, would not mean China would lead other countries, nor would it be led, in any form, under any conditions. "Our rule of thumb for overseas operations is independence and sovereignty," he said. "We won't tell other countries what to do, or be told what to do, and that principle will never change in our future anti-piracy operations." He said that the policy partly stemmed from China's deep mistrust of Nato, which bombed the Chinese embassy in Yugoslavia in the late 1990s and now plays a major role in the co-ordination of international counter-pirate patrols. "We will never fight in the same trench with Nato, whose expansion to the East has almost arrived at China's doorstep," Tang said. Differences in approach were likely to keep co-operation at relatively low levels, such as logistics issues and sharing intelligence on pirates.

Beijing rules out meeting with Japan PM - China on Tuesday said a row over Japan's detention of a Chinese trawler captain had damaged ties and made it "inappropriate" for the countries' premiers to meet this week at the UN.

The Philippine government yesterday released a harshly worded report that laid bare the chain of mistakes by the government, police and media during the August 23 hostage-taking. President Benigno Aquino said the report by the Incident Investigation and Review Committee recommended that 12 individuals and three broadcast networks be held liable for the botched rescue that left eight Hongkongers dead. "This report is part of the justice to be given to the victims ... This is a manifestation of the concrete actions we have taken to render justice to all the victims of this tragedy," Aquino said. A copy was delivered to Beijing earlier in the day. The Philippine government released only 61 pages of the 84-page report, omitting the "conclusions on accountability", recommendations, highlights and epilogue. Aquino said those would be released after he had decided how to act on the report. While many questions remain, the report concluded that the seven tourists and their guide were killed aboard a hijacked bus in Manila by hostage-taker Rolando Mendoza, "based on case materials reviewed so far", the report stated. Hong Kong officials were not convinced. A statement from the office of Chief Executive Donald Tsang Yam-kuen said: "The report admits that the causes of death of the eight victims and the causes of injury of the seven others need to be further ascertained. Therefore, final conclusions have yet to be drawn. We expect the Philippine authorities to step up their efforts to complete the work as soon as possible. "While we are not yet in a position to comment on the relevant conclusions, we acknowledge that the committee has been serious in handling the matter." The report criticised the "total lack of a genuinely serious and well-planned out negotiation strategy" and the "inefficient, disorganised and stalled assault" - critical mistakes that it said led to the deadly end to the hostage stand-off. The report outlined in chilling detail the events and identified both systemic and individual failures. At the top of the list was the failure of Manila Mayor Alfredo Lim to properly activate the crisis management committee, and more specifically to designate sub-groups to co-ordinate intelligence-gathering, psychological assessment of Mendoza and manage the media. Authorities also failed to appreciate the nature of the demands of Mendoza, a sacked policeman. "How or when the demand for `an order for reinstatement to the service' was convoluted to `a letter promising to review Mendoza's case' by the Ombudsman could not be satisfactorily explained by the authorities," the report said. The Ombudsman's letter and the way it was presented to Mendoza was another key turning point in the crisis. The hostage negotiators showed "lack of judgment" in including Mendoza's brother, Gregorio, with the negotiating team. Mendoza fired a warning shot after becoming visibly agitated by his brother's words during the encounter. Top officials became distracted by Gregorio, who they accused of being a conspirator and an accessory to his brother. "Precious time to salvage the negotiations, already critical at this later hour, was lost. The windows of opportunity were closing. This incident led to a chain of events that became the tipping point that pushed Mendoza to become fatally hostile." Gregorio's arrest by police led Mendoza to begin shooting. The report criticised the decision by Lim and ground commander Rodolfo Magtibay to leave the command post to eat, an absence that "created a vacuum in command or decision-makers. This resulted in the inability of those present to handle crisis events as they unfolded". The report took aim at top police brass for their failure to implement a presidential order that the Philippine National Police Special Action Force, the country's elite unit, be deployed in the assault. The poorly trained SWAT team of the Manila police was used instead. "Foremost of [the reasons for the assault's failure] was the clear and patent insubordination of General Magtibay [in failing] to follow categorical orders from the president himself," the report stated. Former National Police chief Jesus Verzosa and Manila police director Leocadio Santiago "miserably failed" in their duty to ensure Aquino's order was implemented. The investigating panel recommended criminal or administrative charges against a dozen police and government officials, and journalists. These are: Lim, Verzosa, Magtibay, Santiago, chief hostage negotiator Police Superintendent Orlando Yebra, interior undersecretary Rico Puno, SWAT team leader Chief Inspector Santiago Pascual, Ombudsman Merceditas Gutierrez, Deputy Ombudsman Emilio Gonzalez, journalists Erwin Tulfo and Michael Rogas, and Manila Vice-Mayor Isko Moreno. Aquino said he would decide whether to follow the recommendations when he returns from a seven-day working visit to the United States. "As I am now leaving on an important mission, I want to emphasise that I do not want make decisions regarding such important matters without a thorough review. I will study their findings upon my return, and decide accordingly."

Japan said on Tuesday it and China should avoid fuelling nationalism over a sea dispute and called for the row to be resolved without affecting business between Asia's two biggest economies. A man holds a copy of Global Times at newsstand in Beijing reporting tensions between China and Japan on Tuesday. China has suspended high-level exchanges with Japan and promised tough countermeasures after a Japanese court extended the detention of a Chinese captain whose trawler collided with two Japanese coastguard ships this month. The dispute has flared since Japan arrested the captain, accusing him of deliberately striking a patrol ship and obstructing officers near uninhabited islets in the East China Sea which they both claim. China calls the islets Diaoyu and Japan calls them Senkaku.

China halts ticket sales for Japan pop group - Two mainland concerts next month by Japanese pop band SMAP could fall victim to a diplomatic row between the two countries after ticket sales were suspended at the weekend.

Ground for highest building in design in Chinese mainland broken.

Combo Photo shows the site of Shanghai Tower before construction on Nov. 27, 2008 (L), and under construction on Sept. 20, 2010 (R), in Shanghai, east China. The ground for the highest building in design in Chinese mainland, the 632-meter high, 128-storey skycraper dubbed Shanghai Tower was broken recently. The building will be completed and put into use in 2014.

An intercity train between Nanchang and Jiujiang in East China's Jiangxi province runs on its first journey, Sept 20, 2010. The intercity high-speed rail line connecting two major cities in the province began operation on Monday, as part of the long-term plan of the railway network in China. The new train service would cover the 135-km journey in 45 minutes.

CNNC to infuse 800 billion yuan by 2020, list arm to fund key projects - China National Nuclear Corp (CNNC), the country's largest nuclear power company, plans to invest 800 billion yuan ($117.6 billion) into nuclear projects by 2020, in line with the country's move to accelerate the development of the industry. Total investment in nuclear power plants, in which CNNC will hold controlling stakes, is expected to touch 500 billion yuan by 2015, Sun Youqi, vice-president of CNNC said during a press conference over the weekend. In order to fund the company's expansion target, CNNC plans to list its subsidiary, CNNC Nuclear Power Co Ltd, said Chen Hua, assistant president of CNNC. "We plan to rope in strategic investors by the end of this year. Our company will get ready for listing in the first half of next year," said Chen, who is also the president of CNNC Nuclear Power Co Ltd. Zu Bin, a spokesman for China Nuclear Engineering Group Co, another major nuclear plants builder, also told reporters at the same conference that his company was also scheduled to go in for an initial public offering in Shanghai next year. Meanwhile, Sun said CNNC's growth strategy would be in accordance with the development of the nuclear power sector in China. The country's nuclear power industry, which dates back to 1955, has seen accelerated growth since 2005, he added. At present, China has 11 operational nuclear power reactors with a combined capacity of around 9,100 megawatts (mW). Still, nuclear power only accounts for around 1 percent of the country's total energy capacity. Nuclear power capacity is expected to touch 70,000 to 80,000 mW by 2020, accounting for around 5 percent of the total installed power capacity, according to industry insiders. Development of the nuclear power industry will be an important component of the country's energy industry strategy during the 12th Five-Year Plan period (2011-2015), Li Junfeng, deputy director-general of the Energy Research Institute of the National Development and Reform Commission (NDRC) had told China Daily earlier. "As for clean energy sources, they will be prioritized in terms of scale, with nuclear coming first, and wind and solar following," he said. CNNC, which operates seven reactors currently, is building 10 reactors. The company has 12 reactors having received NDRC's initial clearance, Sun said. Sun said CNNC would also like to tap the overseas market in future, mainly focusing on international cooperation in uranium resources.

Sept 22, 2010

Hong Kong*: More Hong Kong mothers are seeing double these days, with a big jump in the number of twins born. Twin births have increased by more than 70 per cent since 1996, the latest figures from the Census and Statistics Department show. And it's partly because mothers are giving birth to more test-tube babies. More than 1,100 pairs of twins were born in Hong Kong last year - that's 2.81 per cent of the city's total births. In 1996, only 513 pairs of twins were born - or 1.62 per cent of the total. Doctors say one reason for the increase is the growing popularity of reproductive technology. During in vitro fertilisation, eggs are fertilised outside the body then returned to the woman's uterus, Dr Robert Law Chi-lim, a spokesman for the Hong Kong College of Obstetricians and Gynaecologists, said. In order to increase the chances of success, doctors usually implant more than one fertilised egg into the womb, he said, which results in a higher rate of twin births. About 20 per cent of women who give birth after undergoing IVF treatment have twins, according to medical literature. And more women actually want to give birth to twins, according to Dr Chan Leung-kwok, a private obstetrician specialising in reproductive technology. He said more of his clients requested twin births to "save time". Career women, in particular, were keen to avoid multiple pregnancies affecting their jobs. "Many women, especially the working ones, want to do everything in one go. They want to raise multiple kids simultaneously," he said.

Boats compete on the second day of the Royal Hong Kong Yacht Club's autumn regatta. After a weekend of varied weather, 90 boats took advantage of stiffer breezes yesterday courtesy of Typhoon Fanapi, which hit Taiwan and was heading to the city.

Macau's buildings safe, but culture collapsing - Patrick Rozario, of Grant Thornton, in the former family home in Macau, Casa Garden, which is now on the World Heritage List. The European-style mansions scattered throughout Macau reflect its 400 years of Portuguese heritage, but in a sad reminder of the city's changing face the families who lived in them are mostly long gone. Macanese - those born through mixed marriages between Portuguese and local Chinese - numbered more than 100,000 in the 1960s. Now only about 20,000 call Macau home as Hong Kong and places further afield attract a growing diaspora of the city's colourful minority. Unlike Hong Kong, Macau has successfully preserved many of the buildings of its past. Keeping the people - and the cultural heritage that goes with it - is proving tougher. Mainland tourists now flock to Macau to admire the green and pinks of the Portuguese architecture, the big windows of the public buildings and European-style gardens. Off the main streets the smell of Portuguese and Chinese fusion food emanates from countless restaurants. But like that other famous tourist trap Venice, the original inhabitants are in danger of becoming an endangered species. The UN's cultural organisation Unesco has classified the Macanese language - Patua - as a critically "endangered language".

Number of working poor up by 12pc in past five years, survey finds - The number of working poor in Hong Kong - poor families with at least one working member - has reached a record high.

Mining, energy firms aim to raise billions from HK public offerings - Mongolia's south Gobi Desert area has one of the world's few unexploited reserves of coking coal. Hong Kong's initial public offering market is set to sizzle this month, with four companies, including Mongolia Mining and Trony Solar, aiming to raise a combined HK$15.3 billion. Mongolia Mining, which mines coking coal in the landlocked nation and sells to the world's biggest steel industry in China, is aiming to raise around US$700 million to fund capacity and infrastructure expansion, people familiar with the deal said. The firm operates the Ukhaa Khudag mine about 245 kilometres from the Mongolian-Chinese border. It is located within the Tavan Tolgoi coal region, one of the world's few unexploited major sources of coking coal. It plans to expand output from 3.8 million tonnes this year to 7 million tons next year, 10 million tonnes in 2012 and 15 million tonnes in 2013. It has proven and probable reserves of 286 million tons. Including possible reserves, total resources amount to 500 million tons, according to a JP Morgan research report. JP Morgan and Citi are the deal's joint bookrunners.

Flights arriving and taking off from Hong Kong International Airport set a monthly record of 27,135 last month, up 14.5 percent from a year ago, on robust demand during the peak summer season. The Airport Authority said a record 880 aircraft landed or took off each day. Cross-border land and sea transit traffic linking up with Chek Lap Kok also saw record highs. Meanwhile, passenger and cargo volumes continued to improve, though edging down slightly from July. "We anticipate the coming months will continue to see growth, as travel usually peaks at year-end, and in particular, during festivals or holidays such as the Mid-Autumn Festival and the National Day Golden Week," authority chief executive Stanley Hui Hon-chung said. Last month, the airport handled 4.7 million passengers and 346,000 tonnes of cargo, up 9.2 percent and 17 percent from last year. In July, there were 4.73 million passengers and 363,000 tonnes of cargo. The number of residents flying in and out surged 19 percent, while visitors climbed 12 percent from last year. The authority said passenger traffic to and from the mainland and Southeast Asia was the highest among major regions. Stronger air passenger figures spilled over to boost land and sea transport. A total of 227,000 passengers - up 33 percent year on year - used the SkyPier ferry terminal to travel between the Pearl River Delta and Chek Lap Kok. A further 163,000 people used cross-border coach and limousine services, up 41 percent. On the cargo front, a 29 percent rise in exports helped boost total cargo growth, with exports to Europe and North America showing stronger pick-ups than other regions.

An underwater restaurant at Ocean Park is expected to hook the public and help boost food sales by 50 percent. Neptune's will be among several new food and beverage outlets when one of the world's largest aquariums opens at the end of the year. Grand Aquarium is the flagship attraction of Aqua City, under the HK$5.5 billion master redevelopment plan unveiled four years ago. Joseph Leung Kai-shing, the park's executive director of revenue, said Neptune's "will be an experience like no other in Asia for guests to dine beside such a giant tank with more than 400 fish species." Leung expects the 250-seat restaurant to produce significant revenue for the park as it targets high-spending customers with deluxe Japanese cuisine using sustainable seafood. Staff strength has been increased from 30 in 2005 to 183 to keep pace with rapid expansion. Stephen Chow Wai-ming, operations manager for food and beverage, said with the opening of Neptune's and the Lagoon kiosk in the 20,000 square-meter Aqua City, there will be 29 kiosks and six restaurants by the end of the year. Expansion is expected to be completed within two years with the number of large entertainment activities doubling to about 70. Upcoming projects include the Rain Forest, Thrill Mountain and Polar Adventure. Meanwhile, Leung said the number of retail souvenir stores will increase from the existing 14 to 24, offering a selection of more than 10,000 marine-themed souvenir items. Marine conservation remains the key message the theme park is seeking to spread through merchandise. "To educate our guests, we are attaching more interesting messages to our souvenirs," Leung said. The 33-year-old park attracted more than five million visitors based on annual attendance in 2008, ranking it 15th in the world, according to a report by the Themed Entertainment Association. Expansion of the attraction is going hand in hand with the construction of three high-end Ocean Park hotels, which are due for completion from 2013 to 2015.

Hong Kong Chief Executive Donald Tsang (C) and his wife pose for photos with performers during an evening gala celebrating the upcoming mid-autumn day in Hong Kong, south China, Sept. 19, 2010.

China's Hot money branches out into new fields - Bottles of 1990 Chateau Margaux on show at a recent auction in Hong Kong. An increasing number of Chinese business people have become wine collectors for investment purposes as well as pleasure. In addition to investing in stocks, real estate and antiques, Chinese billionaires are discovering a new source of big returns - the wine market. The yield rate from some famous French vintages during the first half of this year has exceeded 30 percent, far above any alternative. The price of historic and exclusive Chateau Lafite Rothschild, from Bordeaux in France and the most popular wine brand in China, is rising monthly. In July, one bottle of the 2007 vintage cost 4,500 yuan. It jumped to 5,000 yuan in August and is expected to exceed 6,000 yuan with the Mid-Autumn Festival and National Day holiday around the corner. "The wine market is new in China and has the most potential," said Jiang Yu, a private vineyard owner who used to be a professional real estate investor. He followed his nose and the money into the more profitable wine industry after the Chinese government tightened property policies this year. Jin Cunxing from Wenzhou, in East China's Zhejiang province, who is also a former property investor, traveled to Bordeaux six months ago to buy hundreds of bottles of Chateau Lafite Rothschild. He said: "I don't know where all these Chinese buyers have come from. The peak season isn't here yet but the price of vintage wines has increased 30 percent this year." Since there is no general agent for importing foreign wines in China, the number of wine dealers has taken off very fast. According to Guangzhou Boboqiu Wine Co Ltd, one of the biggest vintage wine importers in China, more than 20 dealers entered the business just between June and August this year. Xu Weibo, general manager of Hong Kong Fine Wine Auction Limited, told China Daily that the company, founded in November 2009, aimed to provide a marketplace for wine enthusiasts, collectors and sellers to acquire or sell fine and rare wines on the Internet. It estimates up to 60 percent of wine traded on its website ends up on the Chinese mainland. Xu is a wine collector for investment as well as pleasure. When he swirls wine in a goblet, you could say he is actually managing his assets. "We have invested in some 60 different fine wine brands around the world worth a total of HK$100 million ($13 million)," said Xu. "I believe the average annual rate of return will range from 20 percent to 30 percent." With more than four years of wine investment experience, Xu said investors should first master good knowledge of wine culture and collection as well as wine investment skills, and then enter the business cautiously. "In the wine world, the ones that are worth collecting and investing in only account for 0.1 percent of the total," he said. There are mainly two ways to carry out wine investment: buy the actual product or buy wine futures (also known as "en primeur"). Both of them tend to be long-term investments in the western world but the current behavior in China is more like hot money speculation. En primeur is a method of purchasing wines early while a vintage is still in a barrel, offering the customer the opportunity to invest in a particular wine before it is bottled. Payment is made at an early stage, a year or 18 months prior to the official release of a vintage. In general, wines are much cheaper during the en primeur period than they will be once bottled and released on the market. Also, the winery could hedge their costs by the income from selling en primeur. Investing in en primeur is getting more and more popular in China. There is now a saying among Chinese buyers: "Buy two cases of en primeur. Drink one and have another two for free." It means the appreciation of one case vintage could pay for two extra cases. In July, speculators put the price of Chateau Lafite Rothschild en primeur 2009 at nearly 1,000 euros ($1,288) per bottle, double the release price. As the big returns became clear, Chinese local wine manufacturers also rushed into the "liquid gold" business. Chateau Changyu Afip Global, a subsidiary company of the biggest wine producer in China and Asia - Yantai Changyu Pioneer Wine Company Limited - has just sold its 2009 en primeur at 270,000 yuan per barrel. A total of 300 barrels were sold directly to the Industrial and Commercial Bank of China (ICBC) private banking customers as a financing product with an annualized yield of 5 percent. Analysts said that its yield to maturity might exceed 20 percent after 18 months when the wines are being bottled. It is a rich person's game. ICBC private banking customers must have at least 8 million yuan each in their ICBC's personal accounts. The first en primeur in China, Changyu en primeur 2006, which was sold at 180,000 yuan per barrel, is worth 288,000 yuan now. Its biggest buyer, TxB International Fine Wines, a German company, turned in a handsome profit by purchasing 20 percent of the total production of 100 barrels. After Changyu, Chateau Junding, located in Penglai, Shandong province, also began to sell en primeur in cooperation with ICBC, China Citic Bank and China Merchants Bank. Although the popularity of wine investment has grown by leaps and bounds in China, some analysts are worried that Chinese wine investors are creating a global bubble, forcing buyers all over the world to pay more. Andy Xie, a Shanghai-based independent economist formerly with Morgan Stanley, said in a recent column for Century Weekly Magazine that "as the French fine wine index (Liv-100 index) is up by roughly 37 percent from a year ago, 24 percent year-to-date, there is little doubt that Chinese buyers, not Wall Street traders, are the force behind this positive trajectory for French fine wine". He added there was a particular bubble surrounding Chateau Lafite Rothschild's second label, Carruades de Lafite, or little Lafite in Chinese.

 China*: ABC shares drop below IPO price - The first-ever depreciation of Agricultural Bank of China (ABC) stock led declines in China banking shares, pulling down the Shanghai Composite Index to its lowest weekly point since July.

Somewhere in Beijing, a bustling city of 20 million residents, there is a lonely cell that one man has turned into his own personal war room. He is Wong Kwong-yu, the 42-year-old founder and former chairman of Gome Electrical Appliances Holding (SEHK: 0493) and once the richest person in China. From this room, Wong, known as Huang Guangyu on the mainland, is fighting to maintain his grip on Gome, the nation's second-biggest home appliances retailer, against the current management led by chairman Chen Xiao. The Guangdong-born businessman is now serving a 14-year jail sentence after being convicted of bribery, insider trading and illegal business dealings in May. His appeal was rejected last month. Zou Xiaochun, Gome's corporate lawyer and Wong's nominee, told the South China Morning Post (SEHK: 0583) in an interview in Beijing that Wong had expressed "great concerns" in a letter to him over the company's performance and that his interests as Gome's major shareholder would be diluted. In what is expected to a showdown over control, Wong has forced the board to call a special general meeting on September 28. He proposes to replace Chen and another top executive, Sun Yining, with his sister Huang Yanhong and Zou. He is also seeking to cancel a mandate to issue new shares. Huang appears to be pivotal in Wong's plan to tighten his grip on Gome. She joined the company in 1994 as an accountant and was later promoted to finance department director. She and her husband Zhang Zhiming, a former general manager of Gome, left Gome in 2005 to take charge of a real estate company also controlled by Wong's family. Even if Wong's plan succeeds, the jailed billionaire, who has been detained since November 2008, will find it tough keeping track of the corporate wheeling and dealing. He does not have access to a mobile phone or the internet, but relies on mail to communicate with the outside world. Zou is not allowed to meet personally with Wong and the last time he saw him was in August. Wong's personal lawyers are the only ones allowed access. Zou says the last time he received a letter from Wong was "just a couple of days ago". Wong is also allowed to read and sign company documents and pass on messages through his personal lawyers under surveillance.

Lloyd's Register helps set the standards for a rising mainland - Lloyd's Register has provided classification services to shipyards such as Shanghai Waigaoqiao Shipbuilding since 1978. China's rapid industrialisation over the past 35 years has brought with it opportunities and pitfalls for the foreign companies seeking to tap into the mainland's burgeoning market. And while some have succeeded and some have failed, few have started with the mandate to make what mainland companies produce actually safer. Among those that have is Lloyd's Register, which initially specialised in overseeing the construction of ships to ensure they were built to international safety standards. Recently the British company has become one of the few international classification societies to expand its safety and quality assurance services into sectors such as rail and energy. This shift coupled with the global shipbuilding boom between 2003 and 2008 - and which has started to revive this year - has generated a rich seam of business for the company. The firm employs about 650 people in China of which more than 60 per cent work on the marine side of the business including surveyors who oversee the building of new ships and repairs to existing vessels. John Rowley, the president of Lloyd's Register Asia, said: "Our revenue in China has more than tripled to over US$100 million in the past five years. All our businesses have done well, but the marine business has led the way largely as a result of the global shipbuilding boom." He is also forecasting a similar performance between now and 2015. "I would expect both our revenue and staff numbers to double again over the next five years, as we continue to expand our customer base." Rowley is excited about the rail and energy sectors. The firm teamed up with China Classification Society, the mainland's shipbuilding construction safety watchdog, earlier this year to jointly pursue safety and quality assurance opportunities in the rail sector. "We set up the joint venture specifically to help provide quality assurance services in the rail industry, particularly for metro and high-speed rail," he said. One key focus for the venture is the manufacture of the trains. "The investment in China in rail over the next five years will be four-and-half-times the amount of money invested over the last five years." Rowley said that while 600 billion yuan (HK$691.8 billion) would be spent on rail projects this year, when it came to investment in high-speed railways China would have developed a network from virtually zero three years ago to 12,000 kilometres by 2015. He said the joint venture is also seeking to follow China's rail sector abroad as it exports technology to other regions including Hong Kong, Saudi Arabia and Brazil. One of the areas being developed is the validation of schemes used in global carbon credit initiatives. Rowley said this clean development mechanism is a US$2.7 billion global industry as companies seek to offset their carbon emissions by investing in or offering monetary credits for others to invest in projects that reduce carbon emissions. "Over 70 per cent of the market is in China. Our role is to validate the projects exist and produce the credits they are supposed to," he said. All this is a long way from 1978 when Lloyd's Register was invited into China to support the design, construction and delivery of the cargo ship Regent Tampopo, which was the first ship built for export by a mainland shipyard. But it has also capitalised on this expertise, supporting Shanghai Waigaoqiao Shipbuilding, China's biggest shipyard in tonnage terms, by overseeing 21 ships that have either been delivered, are under construction or have been ordered at the yard. The shipyard, which only delivered its first ship in 2003, is Lloyd's Register's biggest new construction client in terms of gross tonnage. These achievements were recognised in July when Lloyd's Register won a British government award against the likes of Standard Chartered Bank and Marks & Spencer.

China banks will be able to control risks better if capital adequacy ratios are higher than those set by the Basel Committee, according to China Construction Bank (0939) chairman Guo Shuqing. It is "understandable" and "reasonable" for regulators to have "extra requirements" on the capital base of large-scale banks, Guo told Sing Tao Daily, sister publication of The Standard, in an interview in Beijing. This is because these lenders have a heavier responsibility for clearing functions and play an important role in keeping the financial system and economic operations stable. But Guo noted that it takes a long time for regulators to either discuss or raise capital requirements. The Basel Committee on Banking Supervision - Basel III - last week asked all commercial lenders to raise their common equity CAR, Tier 1 CAR and total CAR to 4.5 percent, 6 percent and 8 percent, respectively, before 2015. Basel III also requires a capital conservation buffer of up to 2.5 percent by 2019. There was market talk that the China Banking Regulatory Commission is planning an even higher requirement. The figures floated were 6 percent for common equity CAR, 8 percent for Tier 1 CAR and 10 percent for total CAR; plus, an additional 5 percent on overall CAR for major banks and 4 percent for the rest as protection against economic fluctuations. The CBRC denied the rumors and stressed its requirements stand at 8 percent for core CAR, 11.5 percent for total CAR for large lenders and 10 percent for other banks. The average total CAR of mainland banks reached 11.1 percent by the end of June, with an average core CAR of 9 percent, according to CBRC. Guo also warned that merely increasing CAR will not solve all problems faced by banks related to risk control and management. On the surface, many believed the 2008 financial crisis was a result of pressure caused by a lack of liquidity and lower CAR, but in fact financial and asset bubbles caused by over-developing structured products were a major cause, Guo said. Chinese banks, he added, should provide more investment products and not rely on deposits and loans, in order to meet economic restructuring demands. CCB is pursuing an expansion strategy based mainly on opening branches and outlets, but not mergers and acquisitions. And it will maintain stable and steady growth internationally. "The most basic thing is to understand both the market and customers. "How can we expand in markets that we are not familiar with? It is very dangerous to expand blindly."

Yen route not for yuan - China will not repeat Japan's mistake of the 1980s - China will not repeat Japan's mistake of the 1980s and let its exchange rate surge in response to foreign pressure, said Li Daokui, an adviser to the People's Bank of China. Li, an economics professor at Tsinghua University in Beijing, said arm- twisting from abroad over the yuan is only beginning. "External pressure for China to appreciate the yuan is going to increase in the next several years," Li told a forum yesterday. But he said the exchange rate is only one of many tools China could deploy to adjust the structure of its economy and reduce its external payments surplus. For instance, as a large country, China's scope to boost domestic demand is vast. "So it is no longer necessary for China to achieve trade balance only by appreciating the yuan. We can also improve our trade structure by increasing imports, which is what we are doing now," Li said on the sidelines of the conference in Beijing. As a percentage of gross domestic product, China's current account surplus this year is likely to be less than half the 11 percent peak it reached in 2007. Li, a member of the central bank's monetary policy committee, said the economic circumstances in China today are different from those in Japan in 1985. The yen rose sharply after Japan and other leading economies sealed the Plaza Accord in 1985 to bring about an orderly decline in the dollar to reduce a bulging US current account deficit. As money poured into Japan to chase the yen higher, loose monetary policy inflated an asset price bubble that burst at the start of the 1990s, ushering in two decades of stagnation and a battle against deflation that is still not won. Policymakers and researchers in the mainland are acutely aware of Japan's experience. "China will not go down the path Japan took and give in to foreign pressure on the issue of the yuan's exchange rate," Li said. He urged US lawmakers, who are considering legislation to punish China for what they see as an unfairly cheap yuan, to stop pointing fingers at Beijing over the exchange rate. "The US should pay much more attention to its own problems. What has the US done while we have been reducing our trade surplus?" Li said.

Alibaba says no to Yahoo's CEO - Chinese e-commerce giant Alibaba Group on Sunday turned down the suggestion by Yahoo chief executive officer Carol Bartz that she be allowed to join the board of Alibaba, replying that Bartz should focus on improving Yahoo's own business first.

Shenyang, the capital of Northeast China's Liaoning province, will open its first subway line in October. Final technical tests and adjustments are now underway. The Subway Line 1, consisting of 22 stops, with total distance of 28 kilometers will be an east-west subway, stretching from Shenyang Economic Technology Development Zone to Liming Square. The Shenyang subway line will be the first underground line in China's northeast area.

Staffers at AirBridgeCargo Airlines shake hands with their Chinese partners in a welcome ceremony at Xinzheng Airport in Zhengzhou city, capital of Central China's Henan province, on Saturday, Sept 18, 2010. The Moscow-based airline operates scheduled cargo services on routes between Asia and Europe, all via Russia. As the pictured Boeing 747 freighter left for Frankfurt via Moscow at 3 pm on Saturday, Zhengzhou became the airline's fourth hub in China, after Beijing, Hong Kong and Shanghai.

An AirBridgeCargo Airlines freighter taxis at Xinzheng Airport in Zhengzhou city, capital of Central China's Henan province, on Saturday, Sept 18, 2010.

Sept 21, 2010

Hong Kong*: Academics have waded into the row over reducing class sizes in secondary schools, saying research shows the benefits of smaller classes. Chan Kam-wing, co-director of the Centre for Development and Research into Small Class Teaching at the Institute of Education, said a study jointly conducted in the 1990s by Cambridge University and the Institute of Education at the University of London showed that secondary-school students in smaller classes took a more active part in lessons. He made the comments to counter Education Secretary Michael Suen Ming-yeung's claims that the benefits of small classes taper off as children enter secondary school. "They have better concentration than those coming from larger classes," Chan said. The largest such survey - conducted in Tennessee in the 1980s - also showed that students in smaller classes were less likely to drop out of secondary school, Chan said. Suen wrote an article this month titled "Is Reducing Class Size a Good Way to Save Schools?" in which he said research commissioned by the government showed that the efficacy of small classes was only evident in primary education. "Having too few people in a class will diminish their group interaction and affect their all-round development," he wrote. The research cited by Suen - carried out from 2004 to 2008 by Professor Maurice Galton from Cambridge University's faculty of education, who surveyed more than 20,000 Primary One to Four pupils - concluded that small-class teaching was most effective in Primary One. With the effects varying depending on the abilities of students and teachers, pupils in smaller classes performed similarly or worse than those in bigger classes, the report said. Shiu Ling-po, associate professor of educational psychology at Chinese University, said the evidence cited by Suen was misleading. "Without doing any research on its effects on secondary schools, Suen dismissed its benefits to secondary students," he said. "There's a group theory in psychology which says that people in smaller groups have a better sense of belonging. It's common sense that students in a crowded classroom ... show less concentration." The maximum class size in secondary schools is 34. The Professional Teachers' Union, which has threatened mass strikes and demonstrations if the government continues to block smaller classes, eventually wants classes of around 25. Suen said small classes across the board would double annual expenditure for secondary schools to HK$40 billion. But Professor Tse Shek-kam from the University of Hong Kong's education faculty said there was no need for this. "You can just do it in schools in districts that are heavily affected by the falling student population or in schools that specifically cater to students with special learning needs," he said. "You don't need to do it in top-band schools as students in those schools have always performed well in big classes." The union says a drop in the number of students by 97,600 across six forms by 2016 will yield "whopping" accumulated savings of HK$13.85 billion that would allow class sizes to be cut in secondary schools. However, the Education Bureau has said expenditure would not be decreased because of the drop. "Even if the total number of students in a class drops from 34 to 21, the class still has the same funding," it said.

Old maps aid Beijing's claim, collector says - Marcopolo Tam points to the Diaoyus on one of his antique maps. A Hong Kong-based map collector has offered to lend his 100 antique maps to help China prove to the international community the Diaoyu Islands have long been its territory. Marcopolo Tam Siu-cheong, who owns more than 100,000 antique maps, has in the past week sorted out about 100 from his collection that show the islands. He bought the maps, dated from 1700 to 1930, on trips to Britain, the United States, France and Japan in the past 28 years. "In the past, much discussion has cited Chinese maps to show the Diaoyu Islands as part of the nation," Tam said. "By displaying this collection I would like to point out that foreign navigation maps made during the past 300 years have also shown the sailing route by Chinese fishermen from Taiwan to the Diaoyu Islands." Showing the names "Tiao Su" and "Tiaou-su" on old maps, he argued the French and German translations of the islands' name had borrowed the pronunciation of Fujian dialects, which suggested the islands were first named by Chinese people. "Although this is not direct evidence proving the islands are under our sovereignty, it can be one of the evidences showing Chinese people discovered, named and used the islands - three important criteria laid out in international laws to decide the sovereignty of a place," he said. Tam, a retired banker and a former member of the Central Policy Unit, said he would be willing to lend his maps to the central authorities if Beijing decided in future to take the territorial dispute with Japan to the International Court of Justice. He said such maps were available in antique shops around the world and he believed other collectors had maps showing the Diaoyus.

Bell returns, silent, to TST home - The historic bronze bell has been returned to the Tsim Sha Tsui clock tower, but sadly it will no longer ring out across the harbour as it once did for decades. The bell, which pealed the time from the tower when it was part of the Kowloon-Canton Railway terminus, was silenced by a technical fault in 1950. And while it's coming home after spending the past 35 years residing variously in Hung Hom, Sha Tin and Fo Tan, it will sit at ground level for people to look at, not listen to. The return of the bell coincides with this year's 100th anniversary of the Kowloon-Canton Railway (KCR), which was completed in 1910 but is now part of the MTR network. Kenneth Tam, chief heritage manager with the Antiquities and Monuments Office, said he was very excited to be involved with the bell's return to its original home. "I'm very proud to be associated with the actual transportation of it," Tam said. "We had to plan how to lift it and it was done very carefully." The tower is the only remaining part of the KCR terminus built on the waterfront in 1916. The terminus was moved to Hung Hom in 1975 because of growing passenger numbers. In 1950, the bell stopped ringing because of a fault that left the four clocks no longer synchronised. It was moved to Hung Hom before going to the KCR's head office at Sha Tin and then the Fo Tan railway house. In 1978, the Tsim Sha Tsui terminus was demolished to make way for the Cultural Centre, but the clock tower was retained. The Architectural Services Department added reinforced concrete slabs to stabilise the tower because it no longer had the terminus building as a structural support. The bell now sits on the ground level on a purpose-built hardwood frame made from the original timber sleepers of the KCR line. Tam said the clock tower may open to the public later this year but there was no definite plan. "For the time being, because we cannot have the door open all day, people will have to view it from the window from the outside," he said. "We want the public to come in but we need to think of a better way because it's quite restricted." About 10 years ago, the tower was open to the public but the stairs could not handle the weight and deteriorated. The stairs have since been restored but they are still not stable enough for large numbers of visitors.

The 1.5-ton bronze bell sits in its new home at the base of the clock tower yesterday. Visitors will be able to see it through a window.

Noise, ownership issues bedevil land supply plan - A government plan to increase land supply by converting industrial sites for residential use will take years to realise because of environmental problems at most sites. Apart from noise pollution from nearby traffic and industrial activities, five of the nine industrial sites available for conversion would involve relocating bus depots to improve living conditions, the Planning Department told Town Planning Board members yesterday. While supporting in principle the rezoning of the 29.5 hectares of industrial land, board members questioned whether the extra land would be available in a timely manner. They also expressed worries about the practicability of the rezoning proposals. Financial Secretary John Tsang Chun-wah last month released a rezoning study on converting industrial land for flats to help ease demand in the city for affordable housing. Recommendations of the study, conducted last year, were presented to the board yesterday. The document suggested that nine industrial sites from seven districts - Fo Tan, Siu Lek Yuen, Fanling, Tsuen Wan East, Tuen Mun, Yuen Long and Tai Kok Tsui - could be selected for residential use. In the meeting yesterday, board member Raymond Chan Yuk-ming raised several concerns, including when the sites would be made available for flats, how the extra land supply would affect the property market, and whether the government would resume the bus depots or would encourage the bus companies to take part in residential developments. Board member Ho Puay-peng also queried the practicality of relocating five bus depots, of which two are owned by Kowloon Motor Bus Company. Planning Department assistant director Phyllis Li Chi-miu said two sites next to the former Fo Tan Cottage Area, the former Tai Wo Hau Factory Estate in Tsuen Wan East and a site next to Long Ping West Rail Station in Yuen Long were expected to be on the market first because most of the sites were owned by the government or under single ownership. "Other sites, like Siu Lek Yuen and Tuen Mun, which involve relocation of privately owned bus depots, would largely rely on private initiatives to drive the residential developments," Li said. She added the government would help the bus companies identify other temporary sites for their depots. But a KMB spokeswoman said the company did not have plans to relocate the depots. Swire Pacific (SEHK: 0019), which owns a beverage plant in Siu Lek Yuen, also said it did not plan to redevelop the plant into residential buildings. "We will continue to monitor the market situation," the company said. In addition to the multiple-ownership problems constraining many of the industrial blocks in Siu Lek Yuen, Tuen Mun, Tai Kok Tsui and Tsuen Wan East, the department said traffic noise pollution could be a nuisance for any future residents in Siu Lek Yuen, Fo Tan, Fanling and Tai Kok Tsui because they were close to bus depots, the Ma On Shan Line, the Fanling Highway and the elevated West Kowloon Corridor. "They should be converted only after the environmental problems are solved," Li said. She said the department would conduct a feasibility study on the conversion before submitting individual rezoning plans for the board's approval.

Gwen Kao starts Alzheimer's charity - Nobel winner's wife aims to raise awareness, aid dementia patients' carers - Gwen Kao yesterday. She said she understood the pressure on carers because of her experience looking after her husband. The wife of Alzheimer's-afflicted Nobel physics laureate Charles Kao Kuen is setting up a charity to raise awareness of the disease and promote better support for people who care for sufferers. Gwen Kao Wong May-wan will chair the Charles K. Kao Foundation for Alzheimer's Disease, a non-profit organisation she hopes will help find a cure for the condition. Kao, known as the father of fibre optics, was diagnosed with the disease in 2004. Wong, who earlier this year publicly urged the government to provide more resources for day care for dementia patients, said the idea for the foundation came after Kao's Nobel award last year put him at the centre of international media attention. "I thought I could make use of the publicity and turn it into something more meaningful," she said. "There is a lack of knowledge of the disease. People don't know what to do with it; doctors don't get training in how to treat it, resulting in many people sweeping it under the carpet. "People in the early days just tranquillised the patients. It's a bit like what cancer was decades ago, when it seemed to be a hidden, shameful ailment. But it's come into the open now and cures for some common forms of cancer have been found. "Only if everyone is aware of this terrible disease will we find a cure." The foundation, to be inaugurated on Tuesday, World Alzheimer's Day, will launch programmes to support care givers, raise public awareness and encourage co-operation among organisations to ensure resources are shared efficiently. Wong, with the help of three close friends, will also lobby for government support even though "a lot of it should be the government's responsibility, actually". The friends have recruited many other volunteers willing to help in different areas. The Jockey Club is providing the venue for the inauguration. William Lo Wing-yan, one of the three friends who will be governors of the group, said they had not yet set objectives for the amount to be raised but early indications were hopeful. Lo, founder of the internet service provider Netvigator, worked with Kao when he was a consultant to Hong Kong Telecom. The other two friends are Angelina Lee Pui-ling and Alan Tong Sai-wong. Other governors include Chinese University vice-chancellor Professor Joseph Sung Jao-yiu and University of Hong Kong vice-chancellor and president Professor Tsui Lap-chee. Wong said Kao had "forgotten how to do many of the tasks he used to do with his eyes shut", but he knew the foundation under his name was being set up. "When I talked to him about it he would say `Good! Good!'" Wong said that in looking after her husband, she sometimes felt frustrated and was under much pressure. "Sometimes I'd throw dishes to release the pressure ... that's why I understand how carers must feel. They need professional advice and support," she said. More than 70,000 Hongkongers had Alzheimer's but there were only a few thousand carers, she said. The couple, who settled in the San Francisco Bay Area, had intended to be in Hong Kong just for a series of celebration events to mark Kao's Nobel prize. But Wong said they had readjusted once more to life in their former long-term home. A set of postal souvenirs in honour of Kao will also be issued on Tuesday as a tribute. Kao jointly won the prize in October last year for his role in developing fibre-optic communications.

Skyscraper plans for Government Hill site - There was widespread relief last year when Chief Executive Donald Tsang Yam-kuen unveiled initiatives to preserve Government Hill, the centre of administration since early colonial times. Yesterday the government revealed a plan to sell a third of the site to a developer for a 32-storey office tower and underground mall. There are now fears that the landscape could be spoiled and that a planned public garden might end up as the new property's backyard. The west wing of government headquarters at the junction of Queen's Road Central and Ice House Street will be put up for sale after civil servants move to the new headquarters at Tamar at the end of next year. Acting permanent secretary for development Gracie Foo Siu-wai said the wing would be demolished to make way for the 150-metre office tower and podium, while a mall and car park would be excavated beneath Lower Albert Road. "This is a response to the market's need for quality office buildings. "The west wing has low architectural and heritage value and we should take the opportunity for redevelopment," Foo said, citing a government-commissioned study on the heritage value of the headquarters complex. But Bernard Lim Wan-fung, president of the Hong Kong Institute of Urban Design, said the government had failed to address the historic significance of the site. "Officials must take care that the future design will pay due respect to the historic site ... but I see no such consideration in the brief presented today," he said. "The new building can't be just like another office block in Central, with a dull glass facade. For example, why can't the west wing facade be preserved and the tower built behind it?" The west-wing site, one-third of the entire complex, will be sold by tender or auction.

Pipe-laying barge managed by Hong Kong shipping company - Flying the Bauhinia flag in the Arctic, the 63,594 deadweight tonne barge Fortuna is the first pipe-laying ship on the Hong Kong register. A Hong Kong-based ship management company is targeting the specialist offshore sector after it took over the day-to-day technical management of a US$140 million pipe-laying barge, the first such ship to be built in China. The Hong Kong-registered vessel, Fortuna, is the second ship in the past month to fly the territory's Bauhinia flag in Russia's harsh Arctic environment after being deployed to exploit gas resources in Sakhalin in the Russian Far East. Peter Cremers, chief executive of the Anglo-Eastern Group, said the 63,594 deadweight tonne ship was the first pipe-laying vessel on the Hong Kong shipping register and was "quite sophisticated", operating like a floating factory. He said sections of pipe are brought to the barge where they are welded together, tested, and then laid in a continuous process that enable about one kilometre of pipeline to be laid on the seabed a day. About 80 of the 311 people on board are employed by Anglo-Eastern Ship Management to maintain the barge on behalf of its Luxembourg-based owner, Maritime Construction Services, which is linked to a Russian offshore company. Cremers said the introduction of the Fortuna into the Anglo-Eastern fleet, combined with moves by other owners to give the day-to-day management of their high-tech ships to the company, led Anglo-Eastern to launch "a dedicated offshore ship management division". "With China doing a lot of offshore projects, we are well situated to do offshore [business] in China as a ship manager," he said. The Fortuna was built by Shanghai-based company Zhenhua Port Machinery Co which is also expanding into the offshore sector from its core crane-making business. Anglo-Eastern currently manages more than 350 vessels, with most of these comprising dry bulk ships, tankers and container ships. He said other types of offshore vessels being targeted by the company are large tanker-type ships used as floating storage and oil production vessels, cable laying and diving support vessels. Cremers said the management of offshore vessels would bring offshore technology to Hong Kong. "We see this as a growing market and hope this will be the beginning of a growing fleet of offshore vessels to join Anglo-Eastern," he said. But while more offshore vessels could be added to the firm's fleet, the Marine Department was not targeting the offshore sector as it seeks to expand the number of ships registered in Hong Kong. Chick King-fai, general manager of the Hong Kong shipping registry, said: "In view of the lack of expertise in the Marine Department to ensure the safe operation of offshore vessels such as oil rigs, we have not accepted the registration of these vessels under the Hong Kong Shipping Register."

Miss Chinese American beauty pageant staged in Washington.

 China*: The European Union (EU) is very likely to pressure China on currency appreciation at the upcoming Sino-EU summit in Brussels. The EU hinted in a document released at the end of a one-day summit on Thursday that currency policy was high on the list of strategic interests the EU planned to pursue when Chinese and EU leaders meet in October. "In view of the EU-China summit in particular, the European Union should actively pursue its strategic interests, (including) the dialogue on exchange rate policies," the document said. President of the European Council Herman Van Rompuy said at a press conference on Thursday the EU had already come up with unified ideas on what would top its agenda regarding the EU-China relationship though it was yet to work out an overall strategy. "We have precise ideas on how to position ourselves vis--vis China (as reflected in the document)," said Van Rompuy. "So thanks to today's discussion, when the president of the European Commission and I meet the Chinese Premier in Brussels, three weeks from now, we will not speak just for Brussels, we can speak on behalf of the 27 (EU member states)." Apart from currency policies, a spate of other issues such as the promotion of bilateral trade, market access for goods and services, investment conditions, and the protection of intellectual property rights are high on the EU's list of strategic interests. The EU also wants to discuss the opening up of public procurement markets and stronger discipline in the field of export subsidies when Premier Wen Jiabao visits Brussels. Belgian Ambassador to China Patrick Nijs told China Daily that the EU-China summit is taking place in a new context, brought about by the Lisbon Treaty.

Join the Oktoberfest in Shanghai - Deputy Mayor of Shanghai Zhao Wen (third from left), Consul of Consulate General of Germany in Shanghai Thomas Prinz (middle) and Resident Manager of the Renaissance Yangtze Shanghai Hotel Uwe Guemmer (second from right) strike the beer barrel on the opening ceremony of the 13th Shanghai Oktoberfest.

Cities brace for mass anti-Japan protests - East China Sea row may spur anniversary rallies - A policeman looks at a mural at the September 18 museum in Shenyang, Liaoning. Seventy-nine years ago today, Japan laid siege to Mukden, now Shenyang, and began the military occupation of the northeast, which kicked off the Sino-Japanese war. September 18 normally goes unnoticed in China. Not this year. All eyes are on the streets of Beijing and Shanghai today after intense speculation that mass rallies are planned to protest against Japan's arrest of a Chinese trawler captain in disputed waters in the East China Sea last week. The timing is significant because today is the 79th anniversary of an incident that led to the Japanese invasion of Manchuria. In the past, the anniversary was marked by small demonstrations and memorial activities scattered across China.

Beijing warns on risks of US dollar volatility threaten recovery - Amid US ire over yuan policy, PBOC says sharp greenback fluctuations threaten recovery - China's central bank has warned that volatility in the US dollar could impede the global economic recovery and threaten financial stability. The People's Bank of China said a rapid appreciation of the US dollar could shake capital and commodity markets and impact the economies of resource-reliance countries. A rapid depreciation of the greenback could boost commodity prices, create asset bubbles and threaten economic and financial stability, the central bank said in its yearly financial stability report. The report comes amid rising tensions with Washington over Beijing's currency policy. China had until this June kept the yuan pegged to the dollar at roughly 6.83 for almost two years as it attempted to shield the country from the impact of the financial crisis. It has now resumed exchange rate reform under which the yuan rate will become more flexible. The yuan has advanced 0.9 per cent in the past six days, taking its gains since the fixed rate ended to 1.4 per cent. However, the US administration and lawmakers with their eye on upcoming congressional elections are calling for steeper gains. In congressional testimony on Thursday, US Treasury Secretary Timothy Geithner said the United States will use all available tools to urge China to let its currency appreciate more quickly, including congressional pressure and a twice-yearly report on foreign-exchange markets. Foreign Ministry spokeswoman Jiang Yu said appreciation of the yuan could not solve the US trade deficit with China "and cannot fix the US unemployment problem". "Pressure cannot solve this issue, rather it may lead to a contrary" result, she said. China surpassed Japan as the world's second-largest economy last quarter. The US trade deficit with China reached US$119 billion in the first half of 2010, putting it on a course to exceed last year's total of US$227 billion. Lu Zhengwei, an economist with Industrial Bank, said: "What we can expect from the new foreign exchange policy is that China will allow the yuan trading band against the US dollar to expand in the near future." The daily trading band will be widened to 1 per cent from 0.5 per cent this year, Lu forecasts. Chinese officials have repeatedly stated that yuan exchange rates would be more flexible and two-way fluctuations would be most likely. Hu Xiaolian, a deputy governor of the central bank, said in July that "under a managed floating exchange rate regime, the yuan can appreciate or depreciate, subject to economic and balance of payments situations". Mainland economists have been asked to toe the official line on yuan and not express their personal views because the issue is politically sensitive, according to two academics. "China has domestic pressure for yuan appreciation but the country does not want the world to think it is bowing to international pressure to allow the currency to rise," said a researcher with a government think tank. Geithner showed renewed frustration with China's control over the yuan during a pair of congressional hearings totalling four hours. He said the administration would take a "careful look" at proposed legislation on trade sanctions that companies could pursue in response to China's currency policy, including a bill proposed in the House by Ohio Democrat Tim Ryan and Pennsylvania Republican Tim Murphy. "I'm not arguing for patience," Geithner told the House Ways and Means Committee, saying Chinese officials have not lived up to their international commitments. "They agreed to abide by a set of rules and it is our job to hold them to those rules."

Dell set to invest US$100b on China - Dell, the world's second-largest supplier of personal computers, plans to open a new complex in western China and also intends to open an additional office in Xiamen. Computer maker Dell plans to spend more than US$100 billion on the mainland over the next decade to accelerate expansion in its second-biggest market after the United States. That commitment includes Dell's total investment in facilities, employment, research and development, and purchases from mainland suppliers. Dell, the world's second-largest supplier of personal computers, will open its second flagship manufacturing and customer support complex in Chengdu next year. The company also plans to open an additional office at its first computer manufacturing centre in Xiamen and hire up to 500 new staff later this year to support its growth in North Asia. "These investments are indicative of how Dell sees the importance of China, which will soon become the world's biggest personal computer market," Bryan Ma, associate vice-president of Asia-Pacific devices and peripherals research at International Data Corp (IDC), said yesterday. IDC forecasts mainland personal computer volumes to surpass those of the United States by 2012, "if not sooner", Ma said. It has estimated total personal computer shipments on the mainland will reach 97 million units in 2012, up from 81 million units next year and 67 million units this year. Shipments in the US, by comparison, are predicted to hit 93 million units in 2012, from 86 million units next year and 78 million units this year. Demand for computer systems in western China is expected to grow an average of 21 per cent annually through 2014. "We're planning for the future, and we're excited about our strategic investments in China that will help us better serve the region's increasing need for technology solutions and services," Dell chairman and chief executive Michael Dell said. The Texas-based computer maker is developing its new manufacturing and customer support facility inside the West Chengdu High-Tech Park. Its new complex is expected have a staff of up to 3,000 over time after starting operations next year. Amit Midha, the president of Dell China, said: "The strong Chengdu workforce and our new operations there will better position Dell for additional growth opportunities in western China." Dell estimated its revenue on the mainland had "increased 11 times" from financial years 2000 to 2010. In the firm's latest financial quarter, it reported mainland sales grew 52 per cent year on year. According to IDC, Dell has moved ahead of Hewlett-Packard, the world's leading personal computer supplier, to become the mainland's No2 brand. It estimated Dell took a 9 per cent domestic share in the second quarter to edge HP, which had an 8.2 per cent share. Lenovo Group (SEHK: 0992, announcements, news) led the market with a 28.7 per cent share. Stephen Felice, the president of Dell's global consumer and small and medium business operations, has said the firm's annual mainland sales are approaching US$5 billion. Dell said the expansion in Chengdu supports the government's western China development strategy, which aims to boost the development of trade and other commercial initiatives in the country's inland western region.

Water Melon Lantern Festival kicks off in E China.

Sept 20, 2010

Hong Kong*: The race to become new chief executive of the Hospital Authority has been narrowed to two local doctors, authority chairman Anthony Wu Ting-yuk said yesterday. The pair, widely believed to be the authority's director of quality and safety, Dr Leung Pak-yin, and cluster services director Dr Cheung Wai-lun, will attend a second-round interview early next month, Wu said. Leung specialises in infection control and is former controller of the Department of Health's Centre for Health Protection. Cheung has worked in several administrative posts within the authority, including head of the New Territories West group of hospitals and the authority's director for professional services and operations. "The shortlisted two are both locals. They are doctors and are the best and the most appropriate candidates," Wu said after a board meeting yesterday. A seven-member selection panel was unanimous in picking the final two, he said. The candidates are running to fill the position of Shane Solomon, who suddenly quit in July, less than halfway through his second three-year contract. The 54-year-old Australian is returning home because his father-in-law is seriously ill. Solomon was the first non-local and non-doctor to take up the position of chief executive. His tenure has been marked by unprecedented openness about medical blunders. A worldwide headhunting process was launched after Solomon announced his decision. Four candidates attended the first round of interviews, including two foreigners. Wu declined to reveal the identity of the final two but said they were equally qualified in terms of experience and leadership. "Over the past few years, the Hospital Authority has nurtured a number of people who are fit to take the posts of senior management." He said the panel would make the final decision based on the candidates' track record in teamwork, communication skills and management performance. "If the race is too close to call, we do not rule out the possibility of a third-round interview," he said, adding that he hoped the hiring process would be finished before Solomon ended his tenure by the end of this year. The new chief executive will also be hired on a three-year contract. Wu said the pay had yet to be determined, but the authority would take reference from Solomon's salary level, which was HK$4.25 million a year. Solomon said his advice for the new chief executive would be to work hard and to listen carefully to frontline staff and the community. He should respond to their concerns and take appropriate action. The president of the Public Doctors' Association, Loletta So Kit-ying, said no matter who was picked at the end, she hoped the chief executive would continue to communicate with unions and "seriously deal with employees' concerns".

Big pink diamond worth up to US$19 million set to break world auction record in Hong Kong - The Perfect Pink (right) a 14.23 carat fancy intense pink diamond estimated to be worth up to US$19 million, and The Bulgari Blue (left) a two-stone fancy vivid blue and colourless diamond ring, by Bulgari. "The Perfect Pink" - a rare 14.23-carat pure pink diamond - will go under the hammer in November in Hong Kong. It's expected to fetch up to US$19 million and smash the world record auction price per carat for any gemstone. Unearthed in South Africa, the gem is described as "perfect in terms of size, colour, clarity and cut" and "virtually unheard of". Its estimated minimum price, US$14 million, is higher than the most expensive gem sold at auction, a 5-carat pink diamond graded "fancy vivid", which sold for more than US$10 million in Hong Kong last year - that's more than US$2.1 million per carat. The Perfect Pink's colour is "fancy intense pink", according to the Gemological Institute of America, a grade below "fancy vivid", but its size has raised expectations that it will be a record breaker. Eighteen pure pink diamonds with more than 10 carats have been sold previously, but all were graded below The Perfect Pink, a Christie's auction house spokesman said. Size makes The Perfect Pink rare and therefore desirable. A diamond that large must have come from a stone that would have weighed at least 35 carats, Christie's Hong Kong's jewellery specialist, Chiang Shiu-Fung, said. The Christie's spokesman said: "It is perfect in terms of its size, colour, clarity and cut. Large, polished pink diamonds with this color intensity are virtually unheard of since fewer than 10 per cent of them weigh more than 0.2 carats." The gem, with an array of other stones, will be displayed at the Hong Kong Convention and Exhibition Centre between November 25 and 29 and go under the hammer on the last day. Meanwhile, 55 of the rarest pink diamonds to be put up for tender are on display at a Tsim Sha Tsui shopping mall. The highlights are a 2.02-carat round purplish pink diamond, and a 1.43-carat princess-cut purplish red diamond. They were unearthed from the Argyle mine in Australia, says Josephine Archer, the Argyle Pink Diamonds' business manager. The display marks the arrival in China of the company, which puts its gems up for tender every year. "It's a reflection of the growing appreciation for rare coloured diamonds in this market," she says. After Hong Kong, the stones will be displayed in Shanghai and New York in October before they are sold. The gems are displayed at Chow Tai Fook's branch in mall K11, Tsim Sha Tsui.

Members of The Hong Kong Federation of Trade Unions (HKFTU) protests on Eastern Tunnel raised 40 percent outside the Eastern Tunnel Office at Yau Tong. New Hong Kong Tunnel Company, the operator of the Eastern Harbour Tunnel, on Friday applied for a 40 per cent increase in tolls. If its application is approved by the government, tolls for private cars and taxis will increased from HK$25 to HK$35, and from HK$15 to HK$20 for trucks. For minibuses and light goods vehicles, tolls will be raised from HK$38 to HK$53. A spokesman for the Transport and Housing Bureau said they had already received the operator’s application for a toll increase. The government would first consult the opinions of the Transport Advisory Committee and the Legislative Council, before getting approval from the Executive Council and the chief executive. Legco transport panel deputy chairman Andrew Cheng Kar-foo said the increase of the toll fee would make the Hung Hom Cross-Harbour Tunnel more congested. He suggested other tunnels, such as the Western Harbour Tunnel Company, should offer concessions to drivers during peak hours. The last time for the Eastern Harbour Tunnel to raise its tolls was on May 2005. In 2009, a total of 22,990,195 vehicle trips were made through the Eastern Harbour Tunnel and the average daily throughput was 62,987.

HK pays final tribute to Manila victims - Mourners pay tribute to Ken Leung Kam Wing, Doris Leung Chung See and Jessie Leung Song Yi who were killed during the Manila hostage incident at their funeral in Hung Hom on Friday.

Hong Kong to lead the development of financial collaboration, says Guangdong Governor - Hong Kong will lead the development of financial collaboration with Guangdong, the province's governor said yesterday after the two sides met and signed four co-operation agreements. Speaking after meeting Chief Executive Donald Tsang Yam-kuen at the Hong Kong-Guangdong co-operation joint conference in Guangzhou, Guangdong governor Huang Huahua said financial co-operation would be the highlight of the two sides' future development. "The next step, we will have financial co-operation," he said. "The key is to develop financial co-operation led by Hong Kong ... with the support of cities such as Guangzhou and Shenzhen in the Pearl River Delta." Tsang said Hong Kong's financial co-operation with Guangdong would be unlimited. "A large amount of enterprises in Guangdong are funded by capital from Hong Kong," he said. "Therefore, there are more opportunities for co-operation on [renminbi] settlement and clearing, particularly because Hong Kong now has stronger ability in renminbi financing and settlement and most clients of these services are enterprises in Guangdong." He said the two sides were also working on renminbi settlement of payments for direct investments by next year. Tsang said he hoped to bring well-established Guangdong businesses which wanted to issue renminbi-denominated bonds to Hong Kong, while Guangdong would seek to list Hong Kong equity funds on the Shenzhen stock exchange. Raymond So Wai-man, dean of the school of business at Hang Seng Management College, said Guangdong also acknowledged that co-operation was important for the Pearl River Delta region to counter competition from the Yangtze River Delta region. Officials signed four agreements on scientific research, agricultural products, marine search and rescue as well as one relating to the implementation of the Framework Agreement on Hong Kong-Guangdong Co-operation signed in April. Tsang also announced that the State Council had confirmed the feasibility of a new pilot scheme which will allow private Hong Kong cars to be driven across the border on temporary single-entry permits.

Photo taken on Sept. 17, 2010 shows the student record of Eileen Chang when she was in Hong Kong University, in Hong Kong, south China. The "Eileen Chang Uncovered" exhibition was held in Hong Kong from Sept. 17 to 19, displaying scripts and documents of Chinese writer Eileen Chang.

 China*: Beijing said on Friday it had the right to do what it wants in gas fields in the East China Sea where Japan has challenged Chinese drilling, adding another layer of friction between the two big Asian powers. Japanese media reported outgoing Foreign Minister Katsuya Okada as saying equipment which appears to be for drilling has been brought to a Chinese facility in the Chunxiao gas field in the Sea, though drilling has not been confirmed. Chinese Foreign Ministry spokeswoman Jiang Yu neither confirmed nor denied the reports, but said Beijing was within its rights, whatever was going on there. “China exercises full sovereign rights and jurisdiction over the Chunxiao gas field, and the Chinese side’s activities in Chunxiao are entirely reasonable and legitimate,” Jiang said, in comments carried by the official Xinhua news agency. Jiang added that China had “sent a maritime monitoring vessel to strengthen law enforcement activities in our related seas and to protect China’s maritime rights and interests”. The exchange over the disputed gas drilling adds another element to an increasingly testy argument between China and Japan about territorial rights in the seas, especially around a group of uninhabited islets, called the Diaoyu islands in China and the Senkakus in Japan. The dispute over the islands has flared for more than a week since Japan arrested the captain of a Chinese fishing boat seized after it collided with Japanese coastguard ships near the islands. Beijing has repeatedly demanded that Japan free Zhan Qixiong, whose 14 crew members were released on Monday. Last week, Beijing bared its anger by cancelling planned talks over the disputed natural gas reserves in the same seas. Tokyo objects to Chinese development of the Chunxiao gas field in seas close to Japan’s claimed boundary in the East China Sea. China disputes that boundary claim. Estimated known reserves in the disputed fields are a modest 92 million barrels of oil equivalent, but both countries have pursued the issue because there may be larger hidden reserves. Though China’s drilling is in an undisputed area, Tokyo fears it could drain Japanese gas through a honeycomb of seabed rocks. Disputes have arisen over China’s development of four gas fields in the Xihu trough, a seabed depression parallel to the Chinese coast, about 500 kilometres southeast of Shanghai. Japan says the median line between the two countries’ coasts should mark the boundary between their exclusive economic zones. China says the boundary is defined by its continental shelf, extending its zone beyond the median line.

Hundreds queued up on Friday for the first official iPads sold in the mainland, the world’s biggest internet market, after months of grey-market action among avid buyers unwilling to wait for the Apple tablet. The first customer who bought the iPad shows the device as store staff greet him at an Apple store during the launch of the device on Friday in Shanghai. Apple stores in Beijing and Shanghai as well as authorised retailers around the country began offering the Wi-Fi model of the touchscreen device, millions of which have already been sold in the United States and a dozen other nations. Analysts predicted strong demand for the iPad despite a paucity of Chinese content and the country’s huge unofficial market for Apple products, which are slipped in from Hong Kong, Singapore and the United States and resold. At the US tech giant’s Beijing store, Han Ziwen, 35, said he had camped out for 60 hours to ensure he was first in line when the flagship outlet’s doors opened at 8am. Wearing a T-shirt emblazoned with “I buy iPad No 1”, the bookstore owner held two of the sleek computers above his head in a victory sign as hundreds of people standing in the driving rain cheered. Han bought a 16-gigabyte and 32-gigabyte version of the iPad costing a total of 8,776 yuan (HK$10,120) – more than what vast majority in the country earn in a month. But he said: “For me, they are not expensive.” In Shanghai, up to 200 people queued outside the underground Apple store which opened in July. The first buyer, Ma Ya, a 46-year-old art dealer, said he had been waiting since 1pm on Thursday for his chance to snare a new iPad – his second.

China has given approval to four Taiwanese banks to set up branches on the mainland, a major step toward financial co operation between the sides. The late Thursday announcement by the China Banking Regulatory Commission came just days after a landmark trade agreement took effect to bring their two economies closer. “This signals the advent of a new era for cross-strait exchange and cooperation in the banking sector,” the agency said on its website. The regulator said the Land Bank of Taiwan and First Commercial Bank were given approval to set up branches in Shanghai, while Taiwan Co-operative Bank and Chang Hwa Bank were permitted to open in nearby Suzhou and Kunshan respectively. Many Taiwanese high-tech and other firms have set up large production bases in those cities. Taiwanese have invested more than US$150 billion on the mainland, but political tensions between Taiwan and Beijing had barred Taiwanese banks from setting up operations there. Relations between Taiwan and Beijing have improved greatly since Taiwanese President Ma Ying-jeou took office 28 months ago, spurred by closer commercial and cultural ties. Under the trade agreement signed by the two sides in June, the Taiwanese banks will be allowed to extend loans in yuan to Taiwanese companies if their first year’s operations yield profits. After two consecutive years of staying profitable, their services can be extended to mainland firms as well. Chen Yuh-chang, head of Taiwan’s Financial Supervisory Consumers, said three other Taiwanese banks are still awaiting mainland’s approval to set up branches. Chen said the Taiwanese regulator is screening the applications of the Bank of China and Bank of Communications (SEHK: 3328) to establish representative offices in Taiwan.

SouFun Holdings, the mainland’s No 2 online real estate website, priced shares of its initial public offering at the top of the expected range overnight on Thursday, according to an underwriter. The company sold 2.9 million American Depositary Shares for US$42.50 each, raising US$124.7 million. The company had planned to sell shares for US$40.50 to US$42.50 each. SouFun sells marketing and listing services. As of June 30 SouFun covered 106 mainland cities, according to its prospectus. Beijing-based SouFun’s competition includes top-ranked China Real Estate Information, which raised US$216 million in a Nasdaq IPO last October. CRIC’s shares closed on Thursday at US$8.81, or 26.6 per cent below their US$12 IPO price. SouFun’s IPO comes as another major mainland internet company, Dangdang.com, an online retailer known as the mainland equivalent of Amazon.com, pursues its own US listing after years of false starts. SouFun is 51 per cent owned by Australian phone company Telstra. Telstra purchased its stake in SouFun in 2006 for US$254 million. It said last month it would sell that stake to private equity firms General Atlantic and Apax Partners ahead of the IPO for more than US$400 million. Both firms are existing SouFun shareholders. SouFun posted net income attributable to shareholders of US$5.3 million on total revenue of US$68.2 million in the six months ended June 30. Underwriters were led by Deutsche Bank and Goldman Sachs. The shares are expected to begin trading on the New York Stock Exchange on Friday under the symbol “SFUN”.

Dell is making a US$100 billion bet that the mainland will remain one of the fastest-growing markets for personal computers over the next decade. Dell said on Thursday it plans to open a manufacturing, sales and service centre in Chengdu next year that could eventually employ more than 3,000 workers. The new operations centre is a response to rapid growth in business in western China, Dell said.

Chinese surveillance ships have been dispatched to safeguard China's rights and interests in Chinese waters, and enforce the law, Foreign Ministry spokeswoman Jiang Yu said Friday. Jiang made the comment when asked to confirm whether Chinese surveillance ships had recently demanded Japan stop marine surveying activities and China's fishery administration ships had stepped up law enforcement activities. "Relevant Chinese departments have also sent fishery administration ships to China's territorial waters to provide protection for Chinese fishermen," Jiang said. Media reports said that China has transported materials to Chunxiao oil and gas field in the East China Sea and was likely to carry out maintenance operations there. When asked to confirm the reports, Jiang said, "China possesses full sovereign and jurisdictional rights to the Chunxiao oil and gas field and China's activities in Chunxiao are completely reasonable and lawful." The Chunxiao oil and gas field, 450 kilometers southeast of Shanghai, was discovered in 1995.

Sept 19, 2010

Hong Kong*: Hong Kong's two power companies have been ordered to reduce emissions of major pollutants by up to 64 per cent in the next five years. While the measures should improve general air quality, they will do nothing to reduce roadside pollution. And they could push up power bills. The targets the government has set the companies - CLP Power (SEHK: 0002) and Hongkong Electric (SEHK: 0006) - require much greater use of natural gas, which is dearer than coal. The companies will be required to raise the share of natural gas used for generation from 39 per cent this year to 52 per cent in 2015. The government said gas prices would determine whether consumers have to pay more for electricity. The new pollution caps mean overall cuts in emissions of 50 per cent for sulphur dioxide, 35 per cent for nitrogen oxides and 34 per cent for respirable suspended particulate.

Hong Kong's Cathay Airlines seals deal to buy 30 Airbus 350s Aircraft worth US$7.8b for 2016-19 delivery - Cathay's Tony Tyler (left) and Airbus' John Leahy present a model of the A350-900 in Hong Kong after signing a deal for 30 of the aircraft. Cathay Pacific Airways (SEHK: 0293) finalised its single largest aircraft acquisition yesterday by confirming an order to buy 30 Airbus 350-900s at an estimated price of US$7.82 billion. The new aircraft will mainly be used to replace its existing Boeing 747-400s. The confirmation, following a letter of intent signed for the acquisition of the aircraft in August, came as the major shareholders of Cathay - Air China (SEHK: 0753, announcements, news) and Swire Pacific (SEHK: 0019) - approved the deal yesterday. On top of the firm order for the 30 aircraft, Cathay has the option to acquire 30 more. A350-900s are capable of flying more than 8,000 nautical miles non-stop, which will enable Cathay to use them on routes to North America and Europe. The new aircraft, which can carry up to 314 passengers, will be delivered to Cathay from 2016 to 2019, replacing Cathay's 21 B747s, which will be phased out in six to seven years. The B747s, delivered to Cathay from 1989 to 1995, are 15 to 21 years old. "They are great aircraft but as they are getting older, we have to retire them," Cathay chief executive Tony Tyler said yesterday. If there were any delay in production of the A350 - not uncommon in development of new planes, such as experienced with the A380 and B787 - Cathay would have to keep the old aircraft longer, Tyler said. They would still be within the normal 25- to 30-year lifespan. Meanwhile, Cathay would continue to look at other aircraft types and get more planes if the market was strong, he said. The final assembly line for the A350 in Toulouse broke ground in January last year and the first A350-900 will begin assembly next year. Qatar Airways is scheduled to receive the first aircraft in 2013. Airbus has received more than 538 firm orders for the new aircraft from 34 customers, its chief operating office, customers, John Leahy, said. The operating costs of the aircraft were 25 per cent lower than those of the B777, which has the same number of seats and a similar range. Leahy, who flew in from Beijing to attend a press conference in Hong Kong yesterday, said Airbus was in talks with mainland carriers over new orders on a range of products, including the A320, A380 and A350. "Hopefully, deals will be finalised by the end of this year." He did not elaborate. Airbus is reportedly in negotiations with mainland carriers over new orders for 150 planes worth US$16 billion, according to a French newspaper. Some 5 per cent of the A350 airframe will be manufactured in China, including spoilers and droop panels that were sourced out to the mainland's CAC Commercial Aircraft on Wednesday. Shares in Cathay rose 1.7 per cent to HK$20.70 yesterday.

Hostage-taker shot all eight tourists, says Philippine panel - Philippine investigators have concluded that all eight Hong Kong tourists who died when a sacked policeman hijacked a bus were killed by him, Justice Secretary Leila de Lima said.

TVB (SEHK: 0511) general manager Stephen Chan Chi-wan and two others were charged on Thursday with corruption and conspiracy to defraud, the Independent Commission Against Corruption (ICAC) said. In addition to Chan, Edthancy Tseng Pei-kun. 28, Chan’s former assistant and a director of the Idea Empire Advertising and Production Company, and Wilson Chan Wing-suen, 63. the head of TVB business development of marketing and sales, were charged. The ICAC said the three would appear in Eastern Court at 9.30am next Tuesday to face the charges. All three were arrested for suspected graft six months ago along with two others – TVB performer Leung Chi-cheong and former executive producer Wilson Chin Kwok-wai – and have been free on bail since then. The bail conditions for Leung and Chin were lifted on August 10. The three charged – Stephan Chan, Tseng and Wilson Chan – reported to the ICAC as part of their bail conditions on Thursday. On Thursday afternoon, the ICAC announced that it had formally charged them. “Stephen Chan and Tseng face two counts of conspiracy for an agent to accept an advantage, contrary to Section 9(1)(a) of the Prevention of Bribery Ordinance and Section 159A of the Crimes Ordinance,” the ICAC said in a statement. The two corruption charges alleged that between July last year and January this year, Stephen Chan and Tseng conspired together so Chan could accept about HK$127,000 from Idea Empire Advertising and Production Company. In return, Chan was said to have participated in an event and a show – which was related to TVB’s business. Another charge alleges Stephen Chan and Tseng had conspired to defraud TVB and celebrities between January and February. They are alleged to have falsely represented the attendance of the celebrities at an event promoting the release of a book by Chan, the ICAC said. However, the pair did not disclose that the event was arranged by the Idea Empire Publisher Company under sponsorship from a business corporation – with an obligation to invite some of the celebrities to attend. Another charge alleged that Tseng and Wilson Chan conspired together to defraud TVB between September and December last year. They are alleged to have dishonestly misappropriated HK$550,000 from HK$5.2 million due to be paid to TVB from a business corporation under a commercial contract. They are alleged to have dishonestly and falsely created a service agreement between TVB and Idea Empire Advertising and Production whereby TVB was to pay HK$550,000 to Idea Empire Advertising and Production Company. Stephen Chan is an outspoken media figure and is well-known for his show Be My Guest. When Stephen Chan left the ICAC headquarters about 4.40pm, he was flanked by over 50 journalists. Chan, smiling, admitted he had been charged by ICAC, but did not elaborate. He said he would talk to the media later.

Tseng Pei-kun, former personal assistant to TVB executive Stephen Chan Chi-wan, arrives at ICAC headquarters in North Point yesterday in connection with a corruption case.

Suspended TVB general manager Stephen Chan Chi-wan leaves the Independent Commission Against Corruption headquarters in North Point after being charged with conspiring to defraud the broadcaster. Chan has been accused of forcing five TVB artists to appear at a corporate-sponsored event and of illegitimately pocketing HK$127,000.

Despite his initial intentions, Philippine tourism chief Alberto Lim won't be in Hong Kong to promote holidays soon. A week after the August 23 tragedy, Lim proposed a promotional blitz and a "special package" to lure tourists to the Philippines. But during a congressional hearing on Tuesday he told opposition congresswomen Milagros Magsaysay: "We believe that we should not immediately go to Hong Kong and ask that market to come back. "We should express sympathy as the first step in curing the problem. It is something that has to heal naturally." Hongkongers and mainlanders account for nearly 10 per cent of visitors to the Philippines. Boracay and Cebu have both reported slumps in arrivals from Hong Kong since the shootings. However, the tourism office at the budget terminal at Diosdado Macapagal Airport at Clark, Angeles, north of Manila, recorded 2,238 arrivals from Hong Kong from August 24 to 27 - up from 1,067 in the same period last year.

 China*: The earnings of major foreign banks in the mainland plunged last year even as their local rivals turned big profits, underlining the challenges facing overseas firms in the country, a report said on Thursday. Profits at the mainland unit of HSBC (SEHK: 0005) plummeted 60 per cent compared to 2008, while Standard Chartered’s mainland unit saw earnings fall 34 per cent, The Wall Street Journal said, quoting a report by accountants KPMG. Profits at JP Morgan Chase’s unit fell 21 per cent, the accounting firm said. The figures apply only to the banks’ mainland subsidiaries, it said. Foreign banks have long struggled to carve out market share in the mainland due to various limitations placed on them by local regulators. Beijing has faced a growing chorus of accusations by foreign companies, business groups and governments that overseas enterprises were encountering an increasingly skewed playing field in the country’s huge market. As foreign rivals lagged, profits of Industrial and Commercial Bank of China (SEHK: 1398), the country’s biggest lender, increased 16 per cent last year, while China Construction Bank (SEHK: 0939)’s profits rose 15 per cent. The drop in foreign bank profits was led by a decline in income on loans as the gap between lending and deposit rates narrowed, the paper said. Mainland’s banks compensated for the drop with a huge increase in loan volume, while foreign banks lent more slowly due to pressure from their overseas headquarters, it said. Bank performance in the country is likely to recover somewhat this year as the impact of the global financial crisis recedes, the newspaper said.

China's Yuan appreciation will not help Sino-U.S. trade deficit: China FM spokeswoman - China Thursday reiterated that the appreciation of the Chinese currency, or Renminbi, will not help to balance Sino-U.S. trade nor resolve unemployment problems in the United States. Foreign Ministry spokeswoman Jiang Yu told a regular news briefing that pressuring for the yuan's appreciation could not resolve any problems and might be counterproductive. Jiang's remarks came in response to U.S. Treasury Secretary Timothy Geithner's reported criticism of China's exchange rate policies. Saying Sino-U.S. economic and trade cooperation was mutually beneficial, Jiang reiterated that China had consistently advocated properly handling problems in bilateral economic and trade relations through equal consultation. Time and time again and with the excuse of the self-proclaimed "for the benefit of America," some U.S. lawmakers and business groups clamor for increased pressure on China to revalue its currency. When times turn tough, the weary argument finds even more traction. This time, as many as 132 Democrats are finding their "right time" to lodge such an assertion as the U.S. trade deficit with China rises rapidly and the unemployment rate hovers at close to 10 percent across America. A tough stance on China's exchange rate now could play well during the coming mid-term elections.

Authorities from the mainland and Taiwan launched a maritime search and rescue exercise in the Taiwan Strait on Thursday. The exercise scenario was a collision of two passenger-cargo vessels in the waters between Xiamen and Jinmen. The drill involved 14 rescue vessels, three helicopters and more than 400 people. Rescue personnel from the mainland and Taiwan received a distress call from a ship in the Strait simultaneously and dispatched rescue and medical units to the site after coordination and consultation. The exercise aims to test the abilities of emergency response and communication, maritime search and medical personnel to safeguard transport in the Strait, said Zhai Jiugang, director of the chief duty room with China Maritime Search and Rescue Center (CMSRC). Authorities on both sides could evaluate their ability to work out an emergency plan for maritime rescue in direct shipping routes between the mainland and Taiwan, Zhai said. Mainland participants included the CMSRC, the Association for Shipping Across the Straits, and Xiamen City government. Participants from Taiwan included the Chinese Search and Rescue Association and the government of Jinmen County. The exercise was the first of its kind jointly conducted by authorities on both sides of the Strait since the mainland and Taiwan realized the three direct links of post, trade and transport at the end of 2008. Shipping associations on both sides agreed in 1997 to cooperate in maritime rescues in the Strait and to establish a 24-hour rescue hotline. In October 2008, the maritime rescue department of Xiamen conducted a rescue exercise on the shipping route between Xiamen and Jinmen. The mainland-based Association for Relations Across the Taiwan Straits (ARATS) and the Taiwan-based Straits Exchange Foundation (SEF) signed a maritime shipping agreement the following month, pledging to establish a cooperation mechanism for maritime rescue. Since the realization of three direct links, passenger and cargo ships operating between the mainland and Taiwan have increased to record levels. Maritime safety has become a major concern on both sides. In the first half of this year, Fujian Provincial search and rescue reported 9,467 ships sailing through the Strait, carrying 760,262 passengers, 2.78 million tonnes of cargo and 310,829 containers.

Milestone as organ traffickers jailed for first time on mainland - Seven traffickers in human organs were jailed yesterday by a court in Beijing. It is the first time anyone on the mainland has been punished for a practice often ignored by authorities.

No China-Japan talks at UN amid boat dispute - Chinese and Japanese leaders are not planning any talks next week on the sidelines of the UN General Assembly partly because of escalating tension over a collision near disputed southern islets, a top Japanese spokesman said Thursday. Meanwhile, Japan’s embassy and consulates in China issued a warning to its citizens in the country to watch their words and actions so as not to provoke Chinese after nationalistic protests and reports of vandalism at a Japanese school. The diplomatic spat broke out last week when Japanese authorities arrested the captain of a Chinese fishing boat after it collided with two Japanese patrol boats near islands in the East China Sea claimed by both countries. Chief Cabinet Secretary Yoshito Sengoku told a regular news conference on Thursday that neither Tokyo nor Beijing is seeking to arrange talks for the two leaders during their visit in New York next week to attend the UN meeting. Kan’s predecessor had met with premier Wen Jiabao at last year’s General Assembly, and leaders of the two nations usually meet at international gatherings. So while it was assumed Kan and Wen would meet, no meeting or agenda had been set. “At the moment, nothing has been decided, as neither side is making a move to set up [a meeting],” Sengoku said. He cited “the problem involving the Senkaku [Diaoyu Islands],” as part of the reason why both sides are not arranging talks. He also cited scheduling conflicts on both sides. Japan stepped up its presence over the disputed islets, with Transport Minister Seiji Maehara inspecting patrol boats on Ishigaki, a Japanese island near the disputed islets, on Thursday. He also visited coast guard personnel to praise their effort to seize the captain. Japan’s defence ministry arranged a press tour to the area Wednesday, showing journalists a pair of P3C surveillance planes flying over the islets. The islands are controlled by Japan, but also claimed by Taiwan and China. A ministry official said that the surveillance is part of a daily routine, not a newly added duty since the ship collisions.

Yahoo rejects offer to buy back stake, says Alibaba - Mainland’s e-commerce giant Alibaba Group said on Thursday it had offered to buy back part of a 39 per cent stake held by Yahoo but it had been rejected.

BMW gets mainland approval for auto financing unit - German luxury car maker BMW said it had received approval to set up an auto financing unit in the mainland, becoming the latest automaker to tap auto financing business.

Anti-Japan anger rose close to boiling yesterday, just days ahead of the 79th anniversary of the Japanese invasion of Manchuria, with protests expected in Beijing and possibly other cities. Reports claim Beijing has given the nod for massive protests in different parts of the capital on Saturday, with demonstrators using the internet to call on others to march to Japan's embassy. The new tensions come on top of anger over the arrest and continued detention of a Chinese trawler skipper held by Japan after his boat hit two Japanese coast guard vessels off the disputed Diaoyu Islands. Reports say Beijing is on full alert, while Tokyo has beefed up security at its facilities across the mainland. Other Japanese buildings are reported to have been damaged following an attack on a Japanese international school in Tianjin. The Japanese embassy has cautioned its nationals to be careful in their encounters with Chinese and not to make their nationality too obvious. In Hong Kong yesterday, activists scuffled with police as they forced their way into Exchange Square in Central, on their way to the Japanese consulate. About 20 activists from groups including the Action Committee for Defending the Diaoyu Islands encountered security officials as they ran up the escalators on the ground floor. A Japanese representative was sent outside the building to accept a petition from the protesters, who resorted to a sit-in. Chinese diplomats met Japanese ambassador Uichiro Niwa for the fifth time since the trawler clashed with patrol boats last week. The trawler and its crew of 14 were detained while the captain, Zhan Qixiong, was arrested. The crew and trawler have since returned to China. Beijing said Niwa was summoned to a meeting with its officials on Tuesday, during which the Chinese side reiterated its demand for Zhan's immediate release. However, according to Tokyo, it was Niwa who asked for the meeting at the foreign ministry, during which he criticized Beijing for causing a diplomatic deadlock and for suspending talks on energy exploration in the East China Sea. Japan's embassy cited Niwa as saying China is "linking a number of unrelated issues to the fishing boat collisions." Japan has refused to release Zhan, who can be detained under a court order until Sunday - a day after the anniversary of the 1931 invasion of Manchuria by Japanese troops. Zhan was unable to attend the funeral of his grandmother, who died shortly after she was told about his arrest. His detention has triggered a diplomatic standoff, with both sides accusing the other of causing the rumpus. The trawler which Zhan operated, and which was freed on Monday, returned to a Fujian port yesterday amid cheers of citizens and the sound of firecrackers. An official ceremony was organized to welcome the boat. The Japanese school in Tianjin, which was struck on Sunday by ball bearings fired from an unknown source, has postponed its sports day scheduled for Saturday. The decision was made after a request by mainland police, reports said. In Guangzhou, beer bottles were thrown at the Japanese consulate.

Sept 18, 2010

Hong Kong*: Hong Kong's leading business chamber has called for the rate of profits tax to be reduced to 15 percent and for decisive action to improve the environment ahead of next month's policy address. The Hong Kong General Chamber of Commerce also said the government should help small and medium-sized enterprises more. The chamber said Chief Executive Donald Tsang Yam-kuen should cut profits tax by 1.5 percentage points to 15 percent. Chamber chairman Anthony Wu Ting-yuk said: "The government has accumulated HK$151 billion of reserves. Reducing profits tax back to 15 percent will send a clear signal to the international business community that we are determined to stay competitive in the face of intense regional competition." The chamber urged the government to create incentives to replace old buses and lorries, promote green transportation and adopt higher fuel standards. "It is very important for Hong Kong to remain as Asia's world city and as a commercial center to attract talent," Wu said. "Therefore we are very concerned that the government should take some fast action to improve the environment." Chamber chief executive Alex Fong Chi-wai said quality of life issues, including air pollution, have affected Hong Kong's attractiveness as a place in which to do business and to live. "It is crucial that we, as a community, tackle the quality of life issues decisively, with a sense of urgency," Fong said. The chamber said long-term support should be considered to assist small businesses' financing needs. "Hong Kong's economic recovery is still subject to many uncertainties. We must not lower our guard," Wu said. Chief economist David O'Rear said trade next year is expected to see only modest growth. "Therefore we expect between 3 and 4 percent in real growth in the Hong Kong economy in 2011." While unemployment is 4.5 percent, O'Rear said: "We are still losing jobs, we still have 40,000 fewer jobs than we did two years ago." Wu said he understood the rationale behind calls for a resumption of the Home Ownership Scheme. "Our main suggestion is regular supply of land," he said. "A very transparent and certain land supply policy will help directly to manage it [property prices] better."

Hong Kong's richest man, Li Ka-shing, wants to give away millions. But don't all rush at once with your hands out begging. There is a catch - you will have to come up with a project to benefit the community, not your pocket. The tycoon, through his self-named charitable foundation, wants to tap into the creative spirit of Hongkongers in "Love Ideas, Love HK", which is the first programme of a "Love HK Your Way" philanthropic campaign. Individuals will be able to ask up to HK$25,000 for projects, while educational groups and charities can seek up to HK$300,000 in grants. It is part of a HK$300 million initiative but the total amount to be given away won't be known until projects are approved. Ideas for projects have to be submitted through the website www. loveideas.hk. People will be able to vote in November on the projects and those getting the most votes will be given grants. Inspired by programmes overseas, Li set the wheels in motion for "Love Ideas, Love HK" in May. "The focus of `Love Ideas, Love HK' is inclusion and the power of unity," Li said. "It is the spirit of engagement and invites creativity and participation from young and old." Li, 82, has said on previous occasions that he expects to be more generous in the coming 10 years than he was in the past three decades. Projects are expected to cover fields such as education, health care, culture and the community. Applicants have until October 17. A large number of submissions are expected and the foundation will vet applications. A spokesman said the foundation reserved the right to recover grants awarded if a project turns out to be a scam or commercial venture. About 500 projects are expected to be voted on by the public in the "Love Ideas, Love HK" programme and the top 20 per cent, or about 100 projects, are likely to receive funding. Voting will be held between November 1-21 and the approved projects will be announced three days later. Once grants are awarded, people have three months to start projects and one year to complete them. Depending on the initial response to "Love Ideas, Love HK", more rounds may be held. Since 2008, Li has given between HK$5.2 billion and HK$5.3 billion to charitable causes. This is more than 26 times the roughly HK$200 million his two flagship companies, Cheung Kong (Holdings) (SEHK: 0001) and Hutchison Whampoa (SEHK: 0013), together contributed internationally during that time. According to the foundation's website, Li set it up in 1980, mainly to benefit education reform and medical research. In the last three decades, about HK$11.3 billion has been doled out, including HK$7.3 billion on the mainland, HK$2.6 billion in Hong Kong and the rest elsewhere in the world, the spokesman said.

Rent-to-buy housing plan on Tsang's agenda - New option eyed for those too rich to enjoy public flats but too poor to buy. Chief Executive Donald Tsang Yam-kuen is expected to unveil next month a new subsidised-housing plan under which people will be able to rent to buy, with rent paid counting towards the purchase price. The latest in a series of measures floated in response to concerns about soaring property prices it would, like the shelved Home Ownership Scheme (HOS), be aimed at people earning too much to qualify for public housing and too little to afford to buy a flat. The proposal came to light two days before the end of a public consultation on whether the government should subsidise people's flat purchases. It also came as Hong Kong General Chamber of Commerce chairman Anthony Wu Ting-yuk - who earlier suggested a similar scheme - called on the government to resume regular auctions to increase land supply. Observers said the impact on the market would depend on how many new flats were built but it was unlikely to have a big effect as the flats would not be directly available for sale. An official familiar with the discussion on subsidised housing said qualifying buyers would be able to rent the flats for a specified period - probably three to five years - after which they would have to buy or move out. Rent paid would count towards the purchase. "The advantage of the scheme is that aspiring homeowners would not need to rush to buy a flat when property prices were soaring because they would enjoy a breathing space of a few years," the official said. The government preferred the idea to providing low-interest loans which could further fuel the overheating property market. It is understod to be reluctant to relaunch the HOS - shelved in 2002 as part of efforts to boost a market slumping at the time - so the flats would probably be built by statutory bodies like the Housing Society rather than the Housing Authority. There was no word on how prices would be set, whether there would be discounts or how big these would be. At present, a family of four qualifies to rent a public flat if household earnings do not exceed HK$16,916 a month. Professor Eddie Hui Chi-man of Polytechnic University's building and real estate department said the government could consider building 2,000 to 3,000 flats a year, or even fewer during a trial run. It would not need to offer big discounts if the scheme achieved its aim of helping people save money, he said. Dr Lau Kwok-yu, associate professor in City University's public and social administration department, said the government needed to give more details of the social and financial costs and benefits of its proposed housing scheme, and compare them with other programmes such as the HOS, before launching it. "Without the information, it's difficult to comment about whether the idea is good or not," Lau said. "What if some occupants' incomes decline and they cannot afford to buy the flat or afford to rent other flats in the market?" Dr Lawrence Poon Wing-cheung, chairman of the Hong Kong Institute of Surveyors' housing policy panel, said the government should check tenants' incomes regularly "to avoid certain people getting a lifelong subsidy based on a single assessment at a certain time".

The traditions of the Mid-Autumn Festival date back thousands of years, to feudal times in China when the hauling in of the annual harvest was cause for great feasting and celebration. And in Hong Kong today, the festival still marks a time for family gatherings, for feasts (including mooncakes of course) and for taking lanterns to beaches, parks and hilltops around town. When the moon is full, the most popular destinations for families to gather with their lanterns are the walks around The Peak or up to Mount Butler, Victoria Park, the Tsim Sha Tsui waterfront or the sands of Shek O and Repulse Bay. Lantern shops in districts such as Sheung Wan do a roaring trade with tastes that were once only concerned with traditional good-luck charms such as gold fish turning to more modern fixations such as cartoon characters and luxury cars. "We find that when people want traditional lanterns such as rabbits or star fruit, they want them made in the traditional ways, with paper and bamboo," says Gordy To Ching-sung, whose family has run the Chun Sing Hong lantern shop at 138-142 Queen's Rd West (tel: 2547 4653) for the past 30 years. "A lot of kids today like more modern designs such as Thomas the Tank Engine or Hello Kitty and those are made out of plastic. It is a huge event for us, but we always have to keep our eye on the weather. We pray for clear skies and then everyone can get out and have a good time." Like people all over Hong Kong, Chau Hin-wah celebrates the Mid-Autumn Festival by heading home for a family gathering. There is, he says, plenty of food, lanterns for the kids and time to reflect on all the good things in life while surrounded by his nearest and dearest. But the festival - which takes place on September 22 followed by a public holiday the next day - plays a special part in Chau's professional life too. In his role as curator for intangible heritage at the Hong Kong Heritage Museum, Chau has immersed himself in the history of this ancient event and the ways it has been adapted by local society. A recent two-year study by the Shanghai Spiritual Civilisation Construction Committee and the Shanghai Folk Culture Association found that the Mid-Autumn Festival came in just behind the Spring Festival as China's most popular - the reason being that it helped give the public a greater understanding of their own culture. And Chau says the festival is popular among Hongkongers for the same reason. But what is really interesting is how people have adapted these traditions when they moved here from the mainland. "In Hong Kong we have our own special rituals," he says. "The Tai Hang Fire Dragon parade [from Tuesday to Thursday] is unique to this city and is quite wonderful. It wasn't originally associated with Mid-Autumn - the people in Tai Hang held the procession to ward off the plague. But it has evolved to become part of the whole celebration." The Tai Hang event has been held since 1880 and has been submitted for the national list of Intangible Cultural Heritage in China. "There is also a dragon dance in Pok Fu Lam, a similar kind of ritual that was taken there when people moved from Tai Hang into the area and it is celebrating 100 years this year," says Chan. Mid-Autumn lantern carnivals will also be hosted by the Leisure and Cultural Services Department at Tsing Yi Park, Victoria Park and the Tai Po Waterfront Park on Tuesday through to Thursday respectively, while other events such as lantern-themed exhibitions and concerts will be held in public and private venues such a shopping centres all over town that began on Tuesday until next Thursday. And as Chau continues to chart the history of the event in Hong Kong, he predicts it will keep evolving. "For much of history it has been a family matter," he says. "It's a time to be with your family in your home town or village. But it has become more public with time and with that I think we are seeing a growing sense of community and of celebration. As the city has expanded so has people's exposure to the event and it really has become part of the fabric of Hong Kong life."

The anti-corruption body has lost two senior and experienced graft-fighters within three months - one headhunted to be general secretary of the police watchdog and the other leaving for personal reasons seven years before his retirement age. This departure of the two assistant directors has been followed by a reshuffle in the operations department of the Independent Commission Against Corruption (ICAC), which means the four assistant directors all have less than a year's experience at directorate level. The 800-strong operations department is the core unit of the anti- corruption body, where investigators are employed on contract terms that are renewed every 2-1/2 years until they reach the retirement age of 60. Ricky Chu Man-kin, 56, left in July for the Independent Police Complaints Council (IPCC), although he will not start his new job until January. Principal investigator Steven Lam Kin-ming was promoted to assistant director after Chu left. Jeremy Lo Kwok-chung, 53, will leave on Thursday. A well-known graft-buster, he worked for years in the operations department fighting police corruption before being transferred to the community relations department last year. Lo led the investigation team in the case of former police senior superintendent Sin Kam-wah, who was convicted of accepting free sexual services from prostitutes in 2003. The case triggered widespread public concern about the conduct of some senior police officers and led to a clash between police and the ICAC. Lo confirmed yesterday that he had decided to leave on the expiry of his current contract. "Certainly I will miss the ICAC and my colleagues after working there for 30 years, six months and 19 days. This is the time for me to take a break," he said, adding that he was leaving for "personal reasons". Having joined the ICAC in 1980, Lo said he had witnessed improving relations between police and the graft-buster in the past 30 years. One memorable experience was collaborating with the police in the 1990s in a vice-related corruption case in San Po Kong. "We used the tactic of a Trojan horse with investigators hidden in a British Army truck near the vice establishment, so investigators could get in quickly," he said. A dozen police officers were charged in connection with illegal gambling, conspiracy to rob, theft and indecent assault in this case. Rita Liaw will succeed Lo as assistant director for community relations. James To Kun-sun, deputy chairman of the Legislative Council's security panel, said Chu was suitable to be general secretary of the police watchdog. "I don't have many worries about the succession in the operations department of the ICAC, as they still have capable investigators to deal with corruption cases," To said. He said the current assistant directors of the department, while inexperienced at directorate level, had more than 10 years' experience of fighting corruption and could handle complicated cases including those involving digitalized methods.

A faster, bigger and more expensive version of MyCar, Hong Kong's first locally designed electric vehicle, will hit the streets soon with a crucial component that was missing in the first model: air conditioning. Two years after it was launched in London, the team behind the two-seater MyCar are awaiting approval from the Transport Department before they release the new version in Hong Kong. The upgraded model, already available in Europe, is powered by a lithium battery, which means it can travel 160 kilometres before needing a recharge. The older model uses a lead battery which must be recharged every 100 kilometres. MyCar was developed in 2003 through a joint venture between EuAuto Technology and Polytechnic University. It has been on the market in Europe since 2008 and in Hong Kong since last year, but sales have apparently been slow. EuAuto Technology chief executive Chung Sin-ling said since its launch, Hong Kong airport had purchased several MyCars for its fleet but the government was yet to put an order in. "They do support MyCar, it's just that it is designed for Europe," she said. "That's why there was no air conditioning in the first version." She said the lithium model would be 50 kilograms lighter than the 700kg lead model and cost more because of the improved battery. It would also be able to reach speeds of more than 75km/h, faster than the previous top speed of 64km/h, and have more luggage space. "All this is from comments from users," Chung said. "We want to collect feedback because we want to involve the end users in the design." Chung could not confirm a price for the lithium model in Hong Kong but said in Europe the lead model sells for €10,000 (HK$100,334) while the lithium model costs €16,000. She hoped the new model would be released locally by mid-2011. "Lithium-battery costs are coming down so the pick-up rate will be better next year," she said. The Danish minister for science, technology and innovation Charlotte Sahl-Madsen visited PolyU in Hung Hom yesterday to test-drive the electric car.

HK$4b retail-office tower for Causeway Bay - Phoenix awaits order for compulsory sale of last properties in 46-year-old building. Phoenix managing partner Samuel Chu says of the redevelopment of Central Mansion: "The ugly duckling will have a big facelift." In breathing new life into an ageing, dilapidated building in Causeway Bay, the Hong Kong-based equity fund Phoenix Property Investors is living up to its name. Like the legendary phoenix, a nearly HK$4 billion retail-office building will rise on the site now occupied by the 46-year-old block, Central Mansion, at the junction of Cannon Street and Jaffe Road. "The ugly duckling will have a big facelift," said Samuel Chu, a managing partner and chief investment officer for the fund. Two weeks ago, Phoenix announced it had successfully acquired more than 90 per cent ownership of Central Mansion, signing agreements for sale and purchase with more than 200 individual owners. Their acceptances were sufficient to trigger the Land [Compulsory Sales for Redevelopment] Ordinance, opening the way for a compulsory takeover of all the flats, since the developer had achieved the threshold of 90 per cent of the owners agreeing to sell. The fund said it was in the process of applying to the Lands Tribunal for the compulsory sale to it of the remaining properties. Chu said the remaining owners had not agreed to sell their flats to the fund for a combination of reasons. "Some want us to pay a higher price. Some of the owners are not in Hong Kong and some units have unclear ownership," he said. Phoenix's purchase offer has turned more than 200 individual owners at Central Mansion into instant multimillionaires. The fund set aside HK$2.6 billion to acquire the 11-storey building, where there are 249 owners. At present, the ground level and basement are occupied by the President shopping centre. According to agents, the fund managed to acquire 90 per cent ownership within about a year of offering about HK$7 million per flat. Some shop owners received cheques for as much as HK$100 million. "It is at least 80 per cent higher than market level," the agent said. Chu expects it will take a year to buy the remaining properties in the building, and that the project will be completed in 2014. Central Mansion occupies a site area of about 15,235 square feet. It will be redeveloped into a 230,000 sqft Ginza-style complex with shops, speciality restaurants and a grade A office tower. Taking into account the construction cost, Chu estimates the total investment at up to HK$3.9 billion. "It will be our largest property investment in Hong Kong," he said. Besides Central Mansion, the fund owns two other development projects in Causeway Bay. These are the nearly completed Cubus, a Ginza-style retail complex in Hoi Ping Road, and a site in Tang Lung Street, which will be redeveloped into a commercial tower. In addition, it plans to launch an upmarket block of flats, Gramercy, on Caine Road, Mid-Levels, in the fourth quarter. The project comprises 106 flats ranging in size from 430 sq ft to 2,620 sqft each. Besides Hong Kong, Phoenix has invested on the mainland and in Taiwan and Japan. The fund is managing private equity capital of more than US$1 billion, of which more than 40 per cent is invested in Hong Kong property.

US$250 million theatre at Macau's City of Dreams - Performers take part in a preview of The House of the Dancing Water in the US$250 million theatre at Macau's City of Dreams yesterday. It is dubbed the world's most expensive performance, with a total investment of HK$2 billion and a daily operating cost of US$100,000. Building the theatre to house the show alone cost US$250 million. But Melco co-chairman and chief executive Lawrence Ho Yau-lung prefers to talk about the intangible benefits The House of the Dancing Water will bring his City of Dreams casino resort complex in Macau. Speaking on the eve of the show's opening, Ho said: "At the box office, we take it for the long term. We can recoup the cost in some years." Ho, son of tycoon Stanley Ho Hung-sun, remains tight-lipped on how much a full-house show can bring. Ho also keeps the number of seats secret. City of Dreams has a 420,000 sq ft casino with 400 gaming tables and 1,300 gaming machines, more than 20 restaurants and bars, a shopping centre and three hotels - Crown Towers, Hard Rock Hotel and Grand Hyatt Macau - with 1,400 rooms. Ho expects the company can recoup the HK$40 billion investment it made in 10 years. Melco International Development (SEHK: 0200), the holding company for casino assets controlled by Ho, had its losses narrowed in the first half after the opening of City of Dreams, booking a loss of HK$218.2 million, down from HK$811.36 million a year ago. Casinos in the West rely on theatre and music to lure visitors to their casinos, either to entertain family members while their relatives gamble or in the hope that the crowd will gamble after the performance. But the poor performance of Zaia, the Cirque du Soleil show at the Venetian casino complex, casts a shadow over the prospects of The House of the Dancing Water to lure visitors. Zaia opened in August 2008. Venetian's owner, Las Vegas Sands Corp, spent US$150 million to build the 1,800-seat theatre for the show. The average attendance at the theatre is 65 per cent. Mainland visitors - the majority of those going to casinos in Macau - have not been willing to pay up to HK$160 for tickets and compose only a small fraction of the audience. Most attendees are from Hong Kong, Taiwan, Japan and India. The show's lack of appeal to mainland tastes has been blamed for the poor attendance. Tickets to the Melco Crown show will sell for HK$380 to HK$1,280. Its creator is the Belgian Franco Dragone, who directed nearly all Cirque du Soleil's best shows until 1988. The show takes place in a giant swimming pool and involves 77 performers, many of whom perform acrobatics. Ho thinks a major mistake Zaia made was not having a Chinese name. He says the story of The House of the Dancing Water has plenty of elements to appeal to mainlanders. Casino revenues in Macau increased 67 per cent in the first half to 85.85 billion patacas, just shy of four times greater than the US$2.8 billion in revenue the mega resorts on the Las Vegas Strip booked in the period. High-stakes play drove the increase, as a wave of stimulus-fuelled liquidity from the mainland trickled into the city's baccarat tables. VIP revenue rose 85 per cent to 61.13 billion patacas, accounting for a higher-than-usual 71 per cent of all Macau's gaming revenue.

 China*: Iron ore imports into the mainland could fall dramatically by the end of this year as government curbs on electricity consumption by the country's steel mills start to bite and mills cut steel production. The forecast annualized level of imports this year was already down from 2009 before Beijing announced moves to reduce the amount of power allocated to steel producers as the government grappled with electricity shortages. Several mainland steel mills have already confirmed cuts in steel production in the coming months since the power reductions were announced. One Hong Kong shipbroker estimated the drop in imports would be equivalent to the mainland's total iron ore imports for a month. Paul Cao, a shipbroker with Arrow Asia, said: "About 26 million tons of crude steel production is going to be affected by the end of this year. This would be the equivalent of 42 million tonnes of imported iron ore." Cao, who based the estimates on his own research and findings from the mainland's steel industry, added that a drop in steel production could also lead to a fall in coal imports. The mainland imported 44.6 million tons of iron ore last month, down 13 per cent from 51.3 million tons in July, while the monthly import total for the first eight months of this year averaged 50.6 million tons, according to figures from the General Administration of Customs. Annualized figures, based on imports for the first seven months, show the mainland was on course to import about 618.2 million tonnes of iron ore this year, down from 628.3 million tons last year and 444 million tonnes in 2008.

Beijing has announced a tough new crackdown on food safety crimes and promised to order the death penalty for the worst offenders, state media said on Thursday. Xinhua news agency cited a joint notice issued by the Public Security Bureau and three top law agencies as saying severe or large-scale food safety cases must be strictly punished. “Those deserving death penalties should be resolutely sentenced to death,” Xinhua quoted the notice as saying. It also promised harsher punishment for government officials who accept bribes and protect or ignore food safety offenders. “Officials who are involved in food safety crimes should not be given a reprieve or be exempt from criminal punishment,” it quoted the document as saying. The notice didn’t appear to announce changes to the food safety law but said courts should order the highest penalties allowed. China overhauled its food safety management system after a series of scandals that frightened consumers at home and abroad, including a problem two years ago with tainted baby formula that killed six children and sickened 300,000. That scandal led to prison terms for dairy executives deemed responsible and a shake-up of the mainland milk industry. Two people were executed. But authorities in several cases this year have again found milk tainted with the industrial chemical melamine being used in products instead of having been destroyed as ordered. Other food safety problems have included seafood treated with cancer-causing antibiotics or antimicrobials, eggs colored with industrial dye, and fake alcohol that can cause blindness or death. The announcement was issued on Wednesday by the Public Security Bureau, The Supreme Court, the Ministry of Justice and the Supreme People’s Procuratorate, Xinhua said.

US takes two China trade cases to WTO - Trade tensions between the United States and the mainland ratcheted up another notch overnight on Wednesday, as Washington called on the WTO to probe unfair trade practices by Beijing.

Sept 17, 2010

Hong Kong*: More than 60 per cent of Hong Kong people are satisfied with the performance of local media, a record high since the handover, while the overall credibility rating of media has increased to the highest level since 1998, a survey has found. Two academics attributed the surge in Hongkongers' trust in their media to their coverage of last month's Manila hostage tragedy. According to a survey conducted by the University of Hong Kong's public opinion program from last Tuesday to Saturday, the credibility rating of local news media stood at 6.53, up from 6.18 in a poll in April. The 1,011 respondents were asked to rate credibility from 0-10, with 10 meaning absolutely credible. The new credibility findings were a record since September 1998. A total of 62 per cent of respondents said they were satisfied with the performance of local news media in general, a record high since the handover. Another 5 per cent said they were dissatisfied, while 30.3 per cent opted for "half-half". But 51 per cent of the respondents said they had the perception that local news media had practised self-censorship, up three percentage points from the survey in April. Professor Leung Tin-wai, head of Shue Yan University's department of journalism and communication, said that the increase in the Hong Kong media's credibility rating stemmed from its instant and detailed coverage of the Manila hostage crisis, in which eight Hongkongers were shot to death by a disgruntled former Manila policeman. "Reports by local media reflected the solidarity of Hong Kong people," he said. To Yiu-ming, an assistant professor in Baptist University's department of journalism, agreed that the reports by Hong Kong media had succeeded in drawing the city's public and its media closer. The survey had a 65.3 per cent response rate and a margin of error of plus or minus 3 percentage points, with a 95 per cent confidence level.

Factory and warehouse sites across the city could be used to build more than 22,000 flats as the government attempts to put the lid on runaway property prices. The Planning Department has identified 29.5 hectares of industrial and commercial land in Kowloon and the New Territories that could be used for private and public housing. Analysts welcomed the release of more sites but do not believe it will stop property prices climbing in the short term. Prices are approaching their 1997 peak. The amount of land to be converted to housing is substantially more than the 20 hectares mooted last month by Financial Secretary John Tsang Chun-wah and reflects growing official concern that flat prices are getting beyond what average Hongkongers can afford. The government has already tightened lending for investment properties and introduced other measures to cool the market. The Planning Department proposes to rezone industrial sites in Fanling, Tsuen Wan East, Tuen Mun, Siu Lek Yuen and Fo Tan to housing use. Others sites in Tai Kok Tsui and Yuen Long also could be converted to residential use. Surveyor Chan Cheong-kit expects the government will aim for a lower density living environment than other parts of the city. Still, the sites could accommodate 22,600 units with an average size of 700 square feet. There are expected to be hurdles in implementing the change. Many sites will not be ready for residential development for some time as they are owned by many different developers and private owners. "It will take at least three years to get the approval for residential development," Chan said, adding that the supply of housing would not increase significantly over that time period. The sites in Tuen Mun and Siu Lek Yuen are expected to be the first converted because they are held by a single owner. If the industrial buildings are on strata-titled sites it may take some time to convert to residential use. "The relaxation on land use will trigger individual owners of those industrial buildings to sell to developers at a higher price and they will wait for the acquisition," he said. Chan believes the rezoning will give developers incentives to convert industrial sites to residential development as the selling prices of residential flats are much higher than industrial properties. Raymond So Wai-man, dean of the School of Business at the Hang Seng Management College, said the property market will benefit from increased land supply but the impact on housing supply will not be significant in the short term. "The sites cannot be built immediately so property prices will not drop significantly unless interest rates increase and there is another downturn in the economy," he said.

KMB tries out electric 'green' bus - The gBus KMB is trying out is the first of its kind in Hong Kong. It costs about the same as a conventional bus but it doesn't pollute. Next time you hop on a bus in Hong Kong, it could be as green as a walk in the park. Dubbed the "gBus" for green and genesis, Kowloon Motor Bus (KMB) is currently trying out a bus that it claims emits zero emissions because it runs on electricity. The company plans to introduce the model to its fleet within a year. KMB has leased the bus from a company in Shanghai for six months to see how it takes to local roads. Kane Shum, principal bus engineer with KMB, said the bus runs on a super-capacitor system, which has several advantages. It can be recharged in short bursts at regular intervals without damage to the battery and it does not rely on chemical reactions to store electrical energy. "It also runs on an anti-current system so every time the bus driver brakes, it builds up the battery," he said. The super-capacitor system is ideal for buses because a bus route will typically stop often, creating the ideal conditions to recharge. For example, a 30-second charge will give the bus enough energy to travel a kilometre, so a bus driver would probably recharge it at every second bus stop. The trial bus is a left-hand-drive model, so it can't be used in public transport here, but the supplier is currently working on a right-hand drive version that should be suitable for Hong Kong. It is has a single deck, is 12 metres long and can carry up to 70 passengers. When fully charged (which only takes three minutes), the bus can travel with a full load with air conditioning for 5 kilometres, equivalent to the distance between Tsim Sha Tsui and Sham Shui Po. Carrying fewer passengers will mean it can travel for longer distances. The company has set up a charging station at its Lai Chi Kok depot and the bus will travel between there and Mei Foo during the trials. The bus will be tested under hot and wet weather conditions as well as undergoing loading and reliability tests. KMB managing director Edmond Ho said the bus would usher in a new era for public transport in the city by adopting new technologies to create a "cleaner and more environment-friendly Hong Kong". He said the electric bus would cost about the same as a conventional bus in the existing fleet, or about HK$2 million. Two months ago, KMB submitted an application to increase its fares from to by 8.6 per cent or an average increase of 52 HK cents per trip. A KMB spokeswoman said the plan to buy the new buses was not connected to the fare rise. When announced in July, that was blamed on higher costs and more competition.

Spring Air launches cheap flights to Shanghai - Spring Airlines, the budget carrier that grabbed headlines with its "one-yuan" tickets and offers to sell passengers homes as they cruise at 10,000 metres, is shaking up the Hong Kong-Shanghai route with fares that undercut heavyweights Cathay Pacific (SEHK: 0293) and Dragonair. The Shanghai-based carrier will launch a daily return flight between the city's Pudong airport and Hong Kong this month. Fares will be as low as 398 yuan (HK$457) return, less than a third of the current lowest air fare. It is the first budget airline to tap the lucrative route, which draws heavy demand from business and holiday travellers. The route has been called golden because of the relatively high fares - as much as HK$3,000 return in economy class - that airlines can charge for the 2-1/2-hour trip. Demand on the route has been underpinned this year by the World Expo in Shanghai. Analysts said Spring Airlines' daily service, using a 180-seat Airbus A320 airliner, would have a limited impact on other carriers at first. Cathay, Dragonair, China Eastern Airlines (SEHK: 0670), Shanghai Airlines and Hong Kong Airlines operate 30 flights a day to Shanghai. Spring Airlines also has limited scope to add flights because of a shortage of landing slots in both Shanghai and Hong Kong. Market sources said it had had to give up one of its landing slots at Pudong in exchange for the time slot for the new flight to Hong Kong. Still, one transport analyst said Spring Airlines' low fares would put pressure other carriers to cut fares, especially after the end of the World Expo in October. Dragonair played down Spring Airlines' move. "Dragonair believes that each airline has its unique position and target market," a Dragonair spokesman said. "We have been monitoring the market development ... Our fares are market-driven and depend on a number of factors, including seasonal cycles, holidays, promotions as well as market demand." At 398 yuan, Spring Airlines' fare is lower than that for a domestic flight between Shanghai and Shenzhen. This should allow it to attract some of the Hong Kong travellers who fly to mainland destinations through Shenzhen. Hong Kong travellers will also be able to fly via Shanghai to Tokyo. In July Spring Air launched flights between Shanghai and Ibaraki, 40 kilometres from Japan's capital. Spring Airlines is one of the few independent carriers on the mainland to have survived the market downturn. Several private airlines either collapsing or were swallowed up by state-owned airlines. Founded in May 2005, it has a domestic network covering more than 50 cities and operates a fleet of 20 A320s. It aims to increase its fleet to 100 by 2015, helped by an A-share listing next year. Low jet fuel prices and a revival in passenger demand have enabled budget airlines to expand. The Airport Authority has been trying to lure budget airlines to the city since 2008, when Malaysia-based low-cost carrier AirAsia began serving Hong Kong.

CKI still in race for high-speed rail - Cheung Kong Infrastructure Holdings (SEHK: 1038) (CKI), controlled by Li Ka-shing, had made it past the first round of bidding for the only operational British high-speed railway, High Speed 1, a person close to the deal confirmed. The Hong Kong-listed firm would not partner any company in bidding for the 30-year lease of the 109-kilometre rail link from London to the Channel Tunnel, the person said. The first round of bidding was completed last week, said another person familiar with the deal, based in Britain. "Given that the bidding process is expected to be completed by the end of this year, I don't expect there'll be many more rounds." The British government had set a deadline of March 31 next year for the completion of the deal, the British source said. The expected price range was £1.5 billion (HK$1.73 billion) to £2 billion, the person added. The successful first-round bidders have been asked to submit binding offers by October 29, according to a Reuters report. At least four parties passed the first round. They include a consortium comprising Eurotunnel, Goldman Sachs Infrastructure Partners, M&G's Infracapital, Britain's Universities Superannuation Scheme and the infrastructure arm of France's Caisse des Depots et Consignations, as well as another consortium comprising Morgan Stanley Infrastructure, 3i Infrastructure and the Abu Dhabi Investment Authority, according to Reuters. A third consortium includes the Ontario Municipal Employees Retirement System and the Ontario Teachers' Pension Plan. At the Infrastructure Investment World Asia conference earlier this month, CKI group managing director Kam Hing-lam had declined to say whether his firm was bidding for High Speed 1. However, he said: "[Britain] is a country where we have investments. We like to invest in a country where we have investments." In July, Cheung Kong (SEHK: 0001) Infrastructure, with other companies and organisations controlled by Li, emerged as the preferred bidder in its proposed £5.775 billion acquisition of the British electricity assets of French energy conglomerate EDF.

Magistrate Anthony Yuen Wai-ming - accused of being too lenient with cop slapper Amina Mariam Bokhary - got tough yesterday after having second thoughts in another case. "I put too much weight on the probation report and overlooked the facts of the case," Yuen explained about handing insider trader Pablo Chan Pak- hoe a 240-day community service order after he was convicted following a 15-day hearing. Having got that off his chest, Yuen then sentenced Chan to four months in jail and ordered him to pay a penalty of HK$120,000. That was the sum the Securities and Futures Commission said Chan gained from insider trading. Chan then said he wanted to appeal against the sentence and was granted bail of HK$50,000. The prosecution had argued during yesterday's review of Chan's sentence in Eastern Magistracy that a community service order should only be made for someone who shows remorse. But Chan did not - as shown by him only being convicted after trial. The defense argued that a community service order was the correct decision and that a probation officer was convinced Chan was remorseful. Chan also had a previously clear record and had vowed to be a law-abiding citizen. Yuen triggered a public outcry last month when he put Bokhary - niece of Court of Final Appeal Justice Kemal Bokhary - on probation for a year after a third conviction for assaulting a police officer. The prosecution in that case called for a harsher sentence, but Yuen refused to be swayed. The Department of Justice has since appealed against the sentence and the case is pending in the High Court. The defense in Bokhary's case submitted a psychiatric report suggesting she suffered from bipolar disorder and had a drinking problem for which she was to undergo treatment in a US clinic. Before sentencing, Yuen made reference to a probation officer's report, which said Bokhary had a good background, a well-off family, good education and outstanding academic achievements. Yuen said at the time that he was aware of the public reaction and angry claims that the law favors the rich. He also wondered how the public would react if a poor defendant suffering from a mental illness had similarly been spared a jail term and given a chance to rehabilitate. Eric Cheung Tat-ming, an associate law professor at the University of Hong Kong, said reviews of sentence in a magistracy are not rare. Nor is it unusual for a magistrate to have second thoughts on a sentence, though it is more common for those unhappy with a magistrate's ruling to take their appeal to a higher court. A review by the same magistrate "is a faster and cheaper way." Cheung also said that, although Yuen admitted putting too much weight on the probation officer's recommendation on the inside trader, this did not suggest he did likewise in Bokhary's case. Legislator and barrister Ronny Tong Ka-wah said he believed the magistrate was right this time. "Insider trading is a serious commercial crime and fraud- related," he said.

 China*: Huawei upbeat on US market prospects - For a company that frequently raises security concerns among politicians in the United States, Huawei Technologies is surprisingly positive about its prospects in the country.

Foxconn option for Henan's migrating millions - A new factory in Zhengzhou making Apple iPhones will employ 300,000 locals closer to home ... and it's a great deal for the IT giant - About 22 million residents have left the poor, inland province of Henan to become migrant workers in the mainland's coastal factories, but that could all be about to change. Zhengzhou , the provincial capital, recently took just a month to build a production line for Taiwanese IT giant Foxconn, which plans to move 300,000 jobs to the city.

In June, top Henan officials led a team to Foxconn's main Shenzhen plant to negotiate the transfer deal. In July, Hon Hai, Foxconn's parent, finalized plans for a new factory in Zhengzhou, costing about 2 billion yuan (HK$2.3 billion). Lu Zhangong, Henan party secretary - On August 2, Foxconn's first production line, employing 2,000 workers, started operation in Zhengzhou. Foxconn now wants to recruit 100,000 people in Henan by year's end - and a total of 300,000 in the next few years.

China advancing at an 'astonishing' pace on green technology outpace Western competitors, according to Europe's climate chief. Beijing's climate negotiators are moving too slowly, but the country's green-energy companies are advancing at an "astonishing" pace and threaten to outpace Western competitors, according to Europe's climate chief. Connie Hedegaard's comments came as part of a warning that Europe would not automatically sign up again to the UN's Kyoto Protocol, the main global deal to tackle climate change. "I was a bit disappointed in Geneva," she said of UN climate talks earlier this month. "China was represented by an undersecretary from the local embassy, that was not a good sign. China is a key player and they have to commit strongly." At the same time, she warned business leaders at the European Policy Centre against underestimating Chinese rivals in the race for global dominance of the green technology sector. "I really strongly believe that it's very foolish if one mistakes the way [China] are slow around the negotiating table with what is happening in reality in China," she said. Three Chinese wind-turbine makers are in the global top 10, up from zero 10 years ago, and China controls half the global solar market. "Coming from Denmark, where it took 30 years to build the world [wind power] brand Vestas, I'd say that's astonishing how you can build three companies in the top 10 globally in less than 10 years," she added. "It tells us something about how fast they are moving when they are moving." Hedegaard said progress looked "very difficult" in the lead-up to talks in Cancun, Mexico in November, and that nobody should expect the EU to sign an extension of the Kyoto Protocol unless loopholes were closed and other big players committed.

Sept 16, 2010

Hong Kong*: Suen moots return of early retirement scheme - Education Secretary Michael Suen Ming-yueng said on Tuesday the government might offer attractive severance packages to surplus teachers to encourage them to retire early.

Stephen Chan reports to ICAC - Former TVB general manager Stephen Chan Chi-wan is surrounded by the media after reporting to the ICAC in Quarry Bay on Tuesday. Former TVB (SEHK: 0511) general manager Stephen Chan Chi-wan - arrested for suspected graft six months ago - reported on Tuesday morning to the Independent Commission Against Corruption (ICAC) as part of his bail conditions. About 11am, Chan appeared at the ICAC headquarters in North Point and spent about 30 minutes there. He had been allowed bail set at HK$500,000. When he left the ICAC headquarters, Chan did not answer questions from reporters. Chan’s former assistant and company director of Idea Empire advertising and production, Edthancy Tseng Pei-kun, and TVB’s head of business development Wilson Chan Wing-suen also met with the ICAC on Tuesday morning. The ICAC had arrested Chan, Tseng, and three other TVB employees in March for alleged corruption. The former general manager and TVB variety show executive producer Wilson Chin Kwok-wai were alleged to have provided TVB performers for variety shows produced by the advertising company for a fee that was half that charged for similar shows. The advertising company director is Edthancy Tseng Pei-kun, 28, Stephen Chan’s former assistant and a former police tactical unit officer. Tseng and Chan are reportedly close friends. So far, no charges have been made by the ICAC. Local news reported that TVB was considering allowing Chan and some of the others to resume their duties. But TVB external affairs division assistant controller Tsang Sing-ming said the company had no comment to make on this.

Hong Kong's first green bus, the gBus, is in Hong Kong for a six-month trial, Kowloon Motor Bus managing director Edmond Ho said on Tuesday. The single-deck gBus is an electric bus powered by ‘supercapacitor’ technology and produces no roadside emissions. It has a maximum capacity of 70 passengers and runs at a maximum speed of 50 kilometres per hour. Introducing the gBus, Ho said that because of its rapid charging speed, the vehicle’s supercapacitor technology was well suited for Hong Kong. “Rapid charging can be conducted at bus stops when passengers board and alight, taking approximately 30 seconds for 1km of power. “When fully charged, the gBus can run continuously for 5km, which is equivalent to a journey from Tsim Sha Tsui to Sham Shui Po,” Ho said. KMB has set up a charging station at Lai Chi Kok Depot. The gBus will travel between Mei Foo and Lai Chi Kok Depot for trials for six months. These include pressure tests in hot and wet weather. The company would give the gBus a six month trial.

Media tycoon Jimmy Lai Chi-ying said on Tuesday Taiwan was set to be the “centre of cultural production” for the Greater China market as he gears up for the launch of his TV channels on the island. “With its rule of law and protection of intellectual property, Taiwan is destined to be the centre of production of films, TV programmes and cultural products for Greater China,” he said at the Asia Media Summit in Hong Kong. Publications by Lai’s Next Media (SEHK: 0282) Group, famous for its muck-raking style and anti-Beijing stance, have been banned in the mainland China. But instead of trying to push his way into China, Lai has extended the boundaries of his operations from Hong Kong to Taiwan since 2001 with the launch of the hugely successful Taiwanese editions of the weekly Next magazine and the Apple Daily newspaper. His group is in talks with Taiwan’s media watchdog for permission to run news, information and entertainment TV channels, according to media reports. The reports said discussions had been put on hold due to the authorities’ concern over his sensationalist style and focus on sex and violence. But Lai remained confident about his foray into television. “TV in Taiwan - that’s what we want to conquer in time, although it’s really difficult.” The tycoon said his focus on content production and Internet-based TV would eventually help him enter the market in China, where, like Taiwan, Mandarin is spoken. “The future for us is content production and having that content syndicated and sold to various media groups.” “Hopefully, when Taiwan becomes the centre of cultural production, we will have the Greater China market through Internet communication.”

Local banks have by and large met the new international capital requirements announced on Sunday, the Hong Kong Monetary Authority said. Authority deputy chief executive Arthur Yuen Kwok-hang said banks will be little affected and see little pressure to raise funds. Karen Kemp, executive director of banking policy at the authority, also expects banks to maintain their payout ratio amid competition. In line with expectations, the Basel Committee on Banking Supervision maintained on Sunday the capital adequacy ratio at 8 percent. Banks' Tier 1 ratios will have to grow from 4percent to 6 percent and common equity ratio from 2 to 4.5 percent by 2015. Yuen disclosed yesterday that local banks' financial ratios are "well above" the requirements. Their capital adequacy ratio stood at 15.7 percent at the end of June. Tier 1 capital was 12.1 percent and common equity around 10.4 percent. But he noted it is normal for individual banks to see a drop of 2 to 3 percent in capital adequacy ratio under new definitions. An extra capital conservation buffer of 2.5 percent in common capital must be in place by 2019. Yuen stressed that banks can still make loans and fall below this ratio, but then dividends and bonuses will have to restricted. There will also be a buffer ranging from zero to 2.5 percent subject to national discretion to curb "systemic risks" from excess credit growth. Australian brokerage Macquarie does not envision this buffer kicking in any time soon, with G20 nations still prioritizing growth. It noted banks will get a lift from the lower capital raising risk, including Bank of East Asia (0023), China CITIC Bank (0998) and China Minsheng Bank (1988). Hang Seng Bank (0011) general manager Andrew Fung Hau-chung said the new arrangements can boost market stability. Since they will come into force in phases over time, banks will have enough time to get prepared, Fung said. Financial Secretary John Tsang Chun-wah agreed that banks are capable of handling the new rules, given tight local requirements in the first place.

 China*: Wen to meet Obama next week in US - Beijing said on Tuesday that Premier Wen Jiabao would meet with US President Barack Obama on the sidelines of a UN meeting in New York, as ties between the two countries improve after months of tensions. “During the meetings, Premier Wen will meet with President Obama but we are still working on the specific timing of the meeting,” assistant foreign minister Liu Zhenmin told reporters. Wen will be in New York next week to attend both the annual UN General Assembly meeting and a special summit on the UN’s Millennium Development Goals. Liu said Wen would attend more than 20 meetings in his two days in New York, but did not elabourate on what other leaders he would meet. Relations between China and the United States soured earlier this year over US arms sales to Taiwan, trade and Tibet, but ties have recently improved ahead of a planned visit to the United States by Chinese President Hu Jintao.

Chinese trains on California tracks - High-speed trains park at a railway station in Beijing. The Ministry of Railways has signed a memorandum of understanding with the Bay Area Council to develop a high-speed rail system in California, United States. Governor Schwarzenegger tapping nation for high-speed rail network. The Ministry of Railways on Monday signed a Memorandum of Understanding (MOU) with the Bay Area Council for investing in California's future high-speed rail network. Under the MOU, the council will provide assistance and consultancy services on high-speed railway construction to the Ministry of Railways and other companies under the ministry. The Bay Area Council is a business-sponsored organization comprising 275 large companies in Los Angeles and the Silicon Valley in California. The agreement was inked during California Governor Arnold Schwarzenegger's visit to China. "We look to China to build our high-speed rail, to be part of the bidding process that we are going to go through," Schwarzenegger was quoted by Reuters on Monday in a speech made in Shanghai. "Many countries will be bidding to build our high-speed rail, (and we plan) also to look for financing from China," Schwarzenegger said. California was recently given permission to construct a high-speed railway between Los Angeles and San Francisco at an estimated cost of over $40 billion by 2020. Schwarzenegger, accompanied by Ministry of Railways officials, took a high-speed train in Shanghai on Sunday to gain first-hand experience. The former Hollywood star is heading a US state with a $19.1 billion budget deficit, and is looking for closer relations with cities such as Shanghai, which are transforming into global financial centers. On Monday, the Bay Area Council and Shanghai Private Equity Association inked an agreement to set up a Financial Services Knowledge Exchange focused on venture capital development in Shanghai. SVB ESG (Silicon Valley Bank Entrepreneur Service Group) will provide financial knowledge communication and expertise in venture capital, technology and life science in China through its representative office in Shanghai. Four agreements were also signed on carbon emission and high technology between California's delegates and their Chinese counterparts on Monday. Schwarzenegger also visited manufacturing base of Shanghai Zhenhua Heavy Industry Co in the city's Changxing Island, where the steel deck segments of the new eastern span of the San Francisco-Oakland Bay Bridge are being manufactured. The self-anchored suspension span is the largest engineering project in California's history with $6.3 billion investment and will be completed by 2013. ZPMC obtained a contract worth $250 million to fabricate the decks and the steel segments for the eastern span's main tower. California is one of the top exporters to China, with export volumes of more than $9.7 billion in 2009. Schwarzenegger is on a six-day trip to Asia, and since last Friday has been in China. He has visited Shanghai, Hangzhou of Zhejiang province, and Nanjing of Jiangsu province. He will also visit Japan and South Korea.

Klaus Schwab (1st L), founder and executive chairman of World Economic Forum, tastes a steamed stuffed bun at the cultural soiree of the World Economic Forum (WEF) Annual Meeting of the New Champions 2010, held at Italian style town of north China's Tianjin Municipality on Sept. 14, 2010.

Yuan at new high as pressure mounts on Beijing - The yuan hit a fresh post-revaluation high against the US dollar on Tuesday, with Beijing seen conceding to let the yuan rise as US lawmakers call for a vote on a bill to get tough with the country over its slow exchange rate reform. The People’s Bank of China fixed the yuan’s mid-point to the US dollar at its highest level since the yuan’s landmark revaluation in July 2005. The yuan has risen 0.8 per cent in four trading days as measured by the fixing, the biggest four-day gain since records of the reference rate started to be kept in 2007. But dealers said mainland’s looser grip on the yuan may have limits, possibly up to a maximum rise of 3 per cent by the end of this year from June 19 when the PBOC announced a depegging of the yuan to the US dollar, in particular as the yuan has already risen more than 20 per cent since 2005. “China has its own calculations of the yuan’s value,” said a senior dealer at a state-owned bank in Beijing. “US politicians are talking about a yuan undervalued by up to 40 per cent many years ago and they are saying the same while the yuan has already jumped more than 20 per cent since 2005.”

The good news first: people who invested in bonds issued by newly listed mainland developers are getting record high interest rates. But the bad news is that the risk of losses on these bonds is mounting as the housing market shows signs of slowing. Last Friday, Fujian-based Powerlong Real Estate Holdings became the latest mainland developer to launch a US$250 million bond, paying investors a 13.75 per cent annual coupon over five years. The developer said the proceeds from the bond would be used to fund new and existing property projects. Hong Kong-listed mainland developers are regular offshore bond issuers, constituting half of the size of the Asian high yield bond market. In the past two months, a total of US$1.3 billion was raised from bond issues by mainland developers Renhe Commercial Holdings (SEHK: 1387, announcements, news) , KWG Property Holding, Shimao Property Holdings (SEHK: 0813) and Powerlong, paying investors annual coupons ranging from 9.65 to 13.75 per cent. Property sales took a hit in May after the government acted to curb speculation in the sector. Land supply for housing construction rose and banks were told to cut back on lending, making it harder for individuals to get mortgages for second homes. Credit analysts said that prices of China property bonds plunged in May, especially the newly listed property developers, although many have since rebounded from their lows to par or above par in recent weeks. nother newly listed developer, Shanghai-based Glorious Property Holdings, had to call off the launch of a bond in April because the high-yield bond market was too volatile as a result of the government's cooling measures, according to chief executive Cheng Lixiong. Bond investors demanded higher interest from newly listed developers due to their low rankings and short track records, said Bei Fu, an analyst at Standard & Poor's. It might take years for these developers to establish relations with banks, which are less inclined to lend to companies that are highly geared and offshore bonds offers a good funding channel for these firms, but they have to be prepared to pay a high price. Although Glorious Property was not willing to pay the high price that bond investors demanded, Shenzhen-based Kaisa Group Holdings and Fantasia Holdings wanted to cash in on investors' interest before funding costs soared to a level that they could not afford. Fantasia's US$120 million five-year bond in May pays an annual coupon of 14 per cent, while Kaisa's US$350 million five-year bond in April offers 13.5 per cent. Fantasia chairman Pan Jun admitted that the company had paid a high price to borrow. "But our net profits will not fall if we use the money raised to buy cheaper land sites," he said in May, adding that Fantasia had probably got on the "last train" to tap the international bond market with credit becoming tight. Many newly listed developers such as Evergrande Real Estate Group (SEHK: 3333) and Kaisa Group had borrowed heavily before their flotations, and chose to repay a portion of their debt using just a small proportion of the net proceeds, while allocating the remaining to fund land acquisitions, construction and projects. Following listings, these developers have chosen to use proceeds of these bonds to partially fund debt payments. Fu at Standard & Poor's said mainland property developers tended to be more aggressive after gaining a Hong Kong listing, launching bonds to fund projects and land acquisitions, hence they may overlook risk management in favour of expansion. Both Moody's Investors Service and Standard & Poor's said they had no plans to downgrade any developers or their bonds that they had rated over the last few months. Although property sales have since recovered from May's slump, for bond investors, the outlook is not rosy, especially if they have holdings in the bonds issued newly listed mainland property firms. There are strong signs that the mainland property market has started to cool down. China's property prices rose at the slowest pace in eight months in August from a year ago, according to Vince Chan, a credit strategist at Amias Berman & Co. Property values in 70 major cities climbed 9.3 per cent year on year - less than the 10.3 per cent year-on-year gain in July, Chan said. CCBI Research said that an uncertain policy outlook remained the key risk for mainland developers, which are expected to launch more projects at discounts of between 10 and 20 per cent in order to boost sales. While Powerlong's bond made a promising debut on Friday and had been trading above par, Kaisa's bond fell below par yesterday. Mainland property bonds with weaker fundamentals such as Kaisa are much more vulnerable to macroeconomic and policy risks than their stronger peers, according to Chan. And mainland property bonds track their issuers' listed shares closely. Shares of Kaisa, Powerlong and Fantasia have been trading below their respective offer prices since their listings last year. The weak macroeconomic conditions together with a slowdown in sales has prompted fears that weakness in the property market will trigger bond investors to sell off their holdings in lower quality bonds such as those issued by the newly listed property developers. "There is policy tightening risk in the fourth quarter, which together with bonds trading at historical highs, could lead to some corrections in bond prices," said Keith Chan, a corporate credit analyst at HSBC (SEHK: 0005).

Cross-Strait Mid-Autumn opera show to greet Mid-Autumn Festival.

Sept 15, 2010

Hong Kong*: The flag fall price for taxis in the New Territories will rise by HK$2 next year to HK$16.50 if an increase agreed yesterday by Transport Department officials and taxi operators is approved. The HK$2 figure was agreed upon by 17 of 18 green-taxi operating companies at a meeting with the officials. The one dissenting company had been holding out for a rise of HK$3.50. Discussions have been going on since April. Drivers say they will make about HK$30 a day more on average. Operators of urban taxis also proposed a HK$2 flag fall rise last week. Lai Ming-hung, chairman of the Taxi and Public Light Bus Concern Group, blamed increased operating costs for the adjustment. "The main reason is that insurance premiums have increased from HK$8,000 to HK$18,000 since the last fare rise, which averages HK$20 a day." Ng Kwan-sing, president of the Taxi Dealers and Owners Association, said they had no choice but to propose an increase because of the higher costs, but he said a balance had been struck. "When urban taxis asked for HK$2, we could not ask for more as we still have to maintain our competitive edge," he said. But Wong Wing-chung, chairman of the Northwest Area Taxi Drivers and Operators Association, which proposed a rise of HK$3.50, to HK$18, said high fuel prices were a big burden on operators. Richard Tsoi Yiu-cheong, spokesman for the Coalition to Monitor Public Transport and Utilities, said recent fare rises, or proposed rises, for various forms of public transport, including trams, the MTR and buses, had a big impact on livelihoods. "The government should be careful in approving all the proposed fare rises." A Transport Department spokesman said it would consult the Transport Advisory Committee and the Legislative Council before seeking approval from the chief executive and the Executive Council.

Michael Tien poised for Liberal leadership role - The younger brother of former Liberal Party chairman James Tien Pei-chun looks set to play a bigger role in the party, which is thinking about changing its leadership structure. Some voices within the pro-business party say Michael Tien Puk-sun, who sits on the executive committee, should be given the title of vice-chairman to reflect his growing workload. One of the party's two current vice-chairmen, Tommy Cheung Yu-yan, says he has thought about resigning but has not made a decision. Cheung, lawmaker for the catering sector, was roundly criticised in March after he suggested that the city's first statutory minimum wage should be just HK$20 an hour. Party chairwoman Miriam Lau Kin-yee said no decision had been made but an extra post of vice-chairman could be an option. She sought to play down speculation that Tien would replace Cheung, though she admitted Cheung had been "quite reluctant" to serve as vice-chairman in the past two years. "He often said he gave a helping hand to the party after our party suffered from the withdrawal of several lawmakers in 2008," she said. Four Liberal Party legislators quit the party after it was routed in the 2008 Legislative Council election. Lau said: "We need to review our party manifesto, which states that there are only two vice-chairmen. "It seems odd that Tien often attends public forums and gives media interviews on behalf of our party but he is only a member of our 26-strong executive committee." The other vice-chairman is Vincent Fang Kang, lawmaker for the wholesale and retail sector. Lau said the Tien brothers would join party leaders at the end of the month for an informal discussion on how to adjust the leadership structure. The party's executive committee would make a decision at its meeting next month. Asked why James Tien was taking part in the talks, Lau said it was natural for the former chairman to do so because he was still concerned about the party's development. There is speculation that James Tien - who stepped down as party chief after losing his Legco seat in the 2008 elections - is grooming his brother as a future party chairman. Michael Tien, who could not be reached for comment yesterday, ran for a seat in Kowloon West in the 2008 election but was defeated. He is considering contesting a seat in New Territories West in the 2012 Legco poll. Cheung said in an interview with RTHK that he had thought about stepping down as party vice-chairman and whether he would do so depended on the availability of a suitable candidate to take up the post. He did not think there was disagreement between the catering industry and the Liberal Party on the minimum wage and said he had never been in a difficult position. The Liberal Party distanced itself from Cheung's remarks on the minimum wage. It proposed an hourly wage of up to HK$24 and said it had never suggested HK$20. Cheung later apologised for his comments.

A single mooncake can push you to your daily limit for fat and sugar - Everyone hopes for a big, bright, full moon for the Mid-Autumn Festival next week, but when it comes to mooncakes, dietitians say we'd be better off with a quarter. Warnings about the fat and sugar content of the seasonal delicacies are common, but this is the first time consumers have been able to make direct comparisons, thanks to the government's nutrition labelling laws that took effect on July 1. And a check of the labels shows the warnings are justified: some mooncakes contain almost one-and-a-half times an adult's recommended daily intake of sugar, while for others a single cake could account for a full day's fat consumption. Eating a whole lotus seed mooncake with two egg yolks from Maxims, Saint Honore, Kee Wah and Wing Wah would put an adult over the recommended sugar limit of 50 grams by up to 45 per cent. A whole Hang Heung mooncake contains 58.7g of fat, very near the daily recommended maximum of 60g. Flavia U, a former chairwoman of the Hong Kong Dietitian Association and a registered dietitian in Britain, said a mooncake contained as much energy as three bowls of rice, but people shouldn't worry too much provided they knew when to stop. "Eating just a quarter of a mooncake as a snack is perfectly acceptable," she said. Snowy mooncakes are generally perceived as healthier, but a Saint Honore yolk and mung bean flavoured mini mooncake contains 0.4g of trans-fat. This is especially a concern for children, as their recommended daily maximum intake of such saturated fat is about 1.65g. An adult, on the other hand, should not consume more than 2.2g of trans-fats a day. Dietitians advised that consumers should also read the small print on mooncakes carefully, because some labels listed the nutrition content per serving size, which could be as small as one-eighth of a mooncake. To calculate the nutrition level based on 100g of food, buyers can make use of an online calculator on the Centre for Food Safety's website. U said there was no need for undue worry. She said eating festive foods such as mooncakes was fine, as long as one knew when to stop. Next Thursday is the first Mid- Autumn Festival since the nutrition labelling law came into force. Under its requirements, food labels must specify the product's energy content plus levels of seven core substances - protein, total fats, saturated fats, trans-fats, total carbohydrates, sugars and sodium. "Ingredients such as flour may affect blood-sugar levels," U said. "But if the total carbohydrate level is below 20g per 100g of food, it is acceptable." She said that if diabetes patients wanted to have more mooncakes during the festival, they should eat less rice to compensate. "As long as one does regular exercise and maintains a healthy diet in general, eating festive food is perfectly fine." All 250 mooncake samples collected by the Centre for Food Safety passed chemical and microbiological tests under an annual surveillance programme, the centre said.

The Education Bureau wants secondary schools which do not have enough secondary one students to voluntarily cut a form one class, Secretary for Education Michael Suen Ming-yeung said on Monday. Suen stressed that Hong Kong secondary schools faced a serious long-term problem of declining school populations. “The latest projections released by the Census and Statistics Department show there will be a steady, sharp decline in the annual intake of Secondary 1 students in the coming few years,” he stressed. “It will fall by 21,500 students, from 75,400 in 2009 to 53,900 in 2016 – representing a decrease of 28.5 per cent. We anticipate that the falling trend will only ease after 2016,” added Suen. He said that this year, schools with more than 61 form one students could open three form one classes with about 20 students per class. The government will postpone closing schools with less than 61 form one students for at least a year. “This was to allow more time for these schools to discuss their future development,” Suen said. “But these schools should make sure they could provide curriculum courses for form one students when they are attending secondary six classes,” he said. The education secretary was speaking at a press conference after meeting more than 40 education representatives on Monday morning. Suen also suggested schools without enough children to fill their form one classes could reduce them from five to four classes. He said that currently there were 23 secondary schools which had joined the program. He expects more schools would voluntarily agree to cut one form one class in the next few months. Meanwhile, the Hong Kong Professional Teachers’ Union (HKPTU) suggested secondary schools adopt small-class teaching. But the union said this might be difficult to implement. Hong Kong Subsidised Secondary Schools Council chairman Liu Ah-chuen said the government should postpone closing down under-enrolled schools.

Consumer goods exporter Li & Fung (SEHK: 0494) said on Monday its shareholders have approved its plan to take logistics unit Integrated Distribution Services Group private. Shares of Li & Fung, supply chain manager for retailers including Wal-Mart Stores and Target, rose 2.9 per cent to their record high of HK$44.45 before the stock steadied at HK$43.75 by late afternoon, still up 1.3 per cent. That compared with a 1.9 per cent rise in the broader market. IDS shares rose two percent. “We are pleased with the outcome of the voting, which represents a major step towards implementing our strategy to extend our geographical penetration and enlarge our service offerings,” said Bruce Rockowitz, president of Li & Fung. In August, Li & Fung said it would pay up to HK$4.4 billion in cash and issue new shares to buy out logistics services firm Integrated Distribution Services (IDS), in which the family of Li & Fung chairman, Victor Fung, holds 45 per cent.

Some Yau Ma Tei residents have called for their old neighbourhood to be beautified to bring it more in line with the West Kowloon Cultural District. They also want the future arts hub to have more links with the old district. These were two of the views put forward in a forum organised yesterday by the West Kowloon Cultural District Authority for residents of the Yau Tsim Mong District. About 50 residents attended the 2 1/2-hour forum, and heard presentations describing the three shortlisted development concepts. One resident, Chan Chung-kit, said: "We should not only focus on the cultural quarter. We should also look at the overall town planning. The Yau Ma Tei area will not be much upgraded if we only create a beautiful cultural area there." He cited the cargo-handling area on the Yau Ma Tei waterfront, right beside the site of the arts hub, suggesting it be relocated. Another of the area's residents said: "There should be some residential developments in the cultural quarter, or else the place could become a no-man's zone when there are no performances." Professor Stephen Cheung Yan-leung, the panel chairman, stressed that the arts hub was not a property development project. Ronald Arculli, the authority's development committee chairman, said the authority could not be responsible for property projects in the area, which would be decided by the government. Yesterday's forum was part of the latest public consultation exercise, running until November 20.

 China*: Beijing has set up a website for citizens to express their views to top leaders - and users have wasted little time in firing unusually blunt criticisms at the government. Web surfers have left tens of thousands of messages on the site, with complaints over free speech, graft and government housing policies. "If you are concerned with the people's livelihood, then show some sympathy - kill corrupt officials and local tyrants," read one message to President Hu Jintao. Launched quietly last week, the site has been named Direct Line to Zhongnanhai, after the sprawling leadership compound in central Beijing. It is an offshoot of the website of the People's Daily, the Communist Party's print mouthpiece. While many of the entries praise Hu, Premier Wen Jiabao and the party, a roughly equal number are outspoken complaints over social issues and the government - and have been left on the site by censors. Beijing has a huge online censorship system that normally aggressively snuffs out internet content and commentary on topics considered sensitive, such as its human rights record and criticisms of the government. However, one entry did appear to suggest that censors were blocking some entries. "Brother Hu, isn't it interesting that I have left so many messages but they have all been harmonised. Can't you let us speak the truth?" it said. "Harmonise" is an online euphemism for censorship, drawn from the central government's practice of suppressing Web discourse considered objectionable, in the name of "social harmony". Perhaps the hottest topic on the site was the mainland's housing prices, which have skyrocketed over recent months. The government has moved to rein in prices, but many entries complained they are already out of reach, with some blaming collusion between corrupt officials and rapacious property developers. "When will prices come down? Prices of goods are rising, housing prices are rising. The only thing not rising is wages," an entry said.

Arnold Schwarzenegger praises workers of the central segment of the new San Francisco Bay Bridge being built in China - Arnold Schwarzenegger during his visit to Zhenhua Heavy Industries in Shanghai, where the new Bay Bridge is being built and shipped. - California governor Arnold Schwarzenegger expressed his gratitude with high praise to Shanghai workers yesterday as he visited a factory that is making the central segment of the new San Francisco Bay Bridge. "There was one thing that I demanded from my staff, and that was that when we go to China [we] have got to put a certain amount of time aside so I can go and visit the workers that are building our Bay Bridge, so that I have a chance to say 'thank you, thank you, thank you for the great work you are doing'," he said, to applause from the crowd. "You have done an extraordinary job because so many of you go to work every day and do welding, painting, lifting, designing, shipping, all of those things in order to help us in California rebuild our Bay Bridge." The movie star turned politician was swamped by hundreds of workers as they scrambled for a chance to shake his hand during the brief visit. Schwarzenegger was visiting the Shanghai Zhenhua Heavy Industries factory on Changxing Island, at the mouth of the Yangtze River, where a key section of the new San Francisco-Oakland Bay Bridge is being built. Zhenhua is constructing prefabricated steel parts for a 624-metre self-anchored suspension bridge and its 83-metre-high supporting tower - due to become the longest span of its type when completed next year - on the 13.5-kilometre link joining the two cities. The massive refit of the entire Bay Bridge - originally built in 1936 - began in 2002 and is intended to make sure it can withstand the next big earthquake to hit the area. "When this Bay Bridge is finished there will be 300,000 cars going over it every single day," Schwarzenegger told the workers. "I hope that you all have a chance to go to visit your finished product which you have designed and you have created. I hope that all of you have time one day to come to California to visit us, and I guarantee you that when you come to California you will say, 'I'll be back'." Yesterday saw the departure of the fifth shipment of components for the bridge project. The massive segments were loaded onto the deck of a cargo ship docked alongside the venue where Schwarzenegger met the workers, its horns blaring repeatedly as he pushed through the throng. Zhenhua is the world's leading manufacturer of heavy lifting cranes, and is estimated to have produced around 70 per cent of the cranes used in the world's container ports.

Palm computer for Chinese study at Confucius Institutes to come to market this year - A palm computer for online study of the Chinese language for students at Confucius Institutes around the world has been developed and will be available for purchase this year. The palm computer, with the full name "Mobile Confucius Institute Study Terminal," is loaded with special software for online teaching, study, communications and entertainment. Developed by Xiamen University, and several companies including Temobi (Xiamen) Science and Technology Development Co. Ltd., Huawei Technologies Company and Lenovo Group, the computer is a virtual college with libraries and classes, Zheng Tongtao, director of the Overseas Education College at Xiamen University in Xiamen City in east China's Fujian Province, said Monday. The terminal will be sold for about 2,000 yuan (about 294 U.S. dollars). The first Confucius Institute opened on Nov. 21, 2004, in Seoul, capital of the Republic of Korea. As of July 2010, 316 Confucius Institutes and 337 Confucius Classrooms had been established in 94 countries and regions.

The UN court that settles disputes among member states has sworn in new judges from China and the United States and to join the 15-member bench. Before taking her seat Monday, Xue Hanqin was China’s ambassador to Asean, the grouping of Southeast Asian nations, and previously was ambassador to the Netherlands. Joan Donoghue was the top legal adviser on international law to President Barack Obama and Secretary of State Hillary Clinton, including issues related to interrogations at the Guantanamo Bay detention centre. Donoghue also advised the government on human rights law, and has been involved in several cases at the International Court of Justice, the UN’s highest judicial body. It’s the first time the court has two women judges at the same time.

Premier Wen Jiabao speaks at the opening plenary of the World Economic Forum's Annual Meeting of the New Champions 2010, also known as Summer Davos in Tianjin on Monday. The risks of rapid bank lending to mainland’s local governments is increasing, Premier Wen Jiabao said on Monday. Banks have lent 7.66 trillion yuan (HK$8.78 trillion) in total to thousands of financing vehicles established by local authorities to circumvent a ban on direct borrowing. The money is used mainly to fund infrastructure investment, but, according to mainland’s banking regulator, only 27 per cent of the loans are definitely backed by solid assets. Speaking at the start of the World Economic Forum three-day “Summer Davos” in the northern port city of Tianjin, Wen said the mainland was comfortable with the overall amount of banks’ non-performing loans. He also sounded a positive note on the economy, which he said was in good shape and basically stable, helping power the world’s recovery from the devastating financial crisis. Wen also pledged to ensure an open and fair environment for foreign businesses operating in the Asian powerhouse. “China’s economic growth has provided major development opportunities for the multinationals and created huge demand for major economies and neighbouring countries,” Wen said. “It has become an important engine for the world economic recovery,” the premier said, praising his country’s massive stimulus package as “timely, fruitful, effective and suited to China’s realities”. “China’s economy is now in good shape, featuring fast growth, gradual structural improvement, rising employment and basic price stability,” he said. China’s economy slowed in the second quarter, growing 10.3 per cent compared with a blistering 11.9 per cent in the first three months, after Beijing introduced a slew of measures designed to avoid overheating. Japanese government data issued last month showed that its second quarter GDP on a nominal basis came in at US$1.288 trillion, below the mainland’s US$1.336 trillion, although Japan remained stronger over the first half. Wen reiterated that Beijing was “committed to creating an open and fair environment for foreign-invested enterprises”, while noting that foreign firms had “reaped good returns” in the country. Surveys by the American and European chambers of commerce in recent months have shown that overseas companies are increasingly unhappy with the way they are treated in the mainland. The European Union chamber said early this month that uneven enforcement of laws and unfair restrictions on foreign investment were deterring overseas companies from expanding their operations in the Asian country. Beijing last month urged officials to implement policies aimed at encouraging foreign investment, in an apparent response to the criticism by foreign governments and firms over perceived unfair policies.

In November last year, Alibaba.com (SEHK: 1688) said it planned to boost investment in the United States to foster the growth of small businesses and help create 100,000 jobs across the country. Arnold Schwarzenegger wishes they all could be California jobs. California's governor, the self-described "salesman-in-chief" of his home state, took a step closer to realising that aspiration after Hong Kong-listed Alibaba on Saturday committed itself to investing US$3 million in a programme that will enable 3,000 recent college graduates from the state to set up their own businesses. "We hope to stimulate job creation and continue the state's tradition as the cradle of some of the world's greatest innovations," Schwarzenegger said during the first leg of his latest trade mission to Asia. The new scheme, the Schwarzenegger Emerging Entrepreneur Initiative, follows Alibaba's major acquisition of two California-based e-commerce firms - Auctiva last month and Vendio Services in June - as part of the mainland firm's US$100 million investment program this year - Those acquisitions allowed Alibaba, in which financier George Soros is the third-largest shareholder, to increase its employee base in California to about 200, from 25. Schwarzenegger's eponymous entrepreneur programme will provide selected graduates with classroom instruction, Web-based consultation and free or reduced-cost software tools from Alibaba, to help them manage their businesses and source relevant products online. This initiative, the details of which remain under development, will be offered next year through15 state-owned colleges and universities throughout California. Addressing the audience at Alibaba's annual AliFest "Netrepreneur Summit" in Hangzhou, Schwarzenegger said he hoped the 100,000 jobs that the company wants to create would all "come to California".

Simply-packaged moon cakes receive warm welcome - Staffers put moon cakes on the shelves in a supermarket in Qingdao, East China's Shandong Province on Monday. Moon cakes are the typical food of the Mid-Autumn Festival, which falls on the fifteenth day of the eighth lunar month. This year moon cakes in bulk with simple packaging are very popular for their affordable price.

A staffer puts moon cakes in bulk on the shelves in a supermarket in Qingdao, East China's Shandong province on Monday.

People buy vegetables in a market in Hefei, capital of east China's Anhui province, Sept 11, 2010. The consumer price index (CPI) rose 3.5 percent year-on-year in August, 0.6 percent higher than in July, the National Bureau of Statistics announced Saturday.

World Bank President Robert Zoellick attends a welcome ceremony at Xianahui village in southwestern Guizhou province on Sunday. The ethnic Bouyei village has benefited from a program financed by World Bank loans to preserve its unique culture. Domestic consumption 'key to solve trade rows'

Sept 14, 2010

Hong Kong*: Truck-axle component maker Changfeng Axle (China) and medical device manufacturer MicroPort Scientific Corp plan to raise up to HK$2.43 billion through initial public offerings to fund expansion and product development. Fujian-based Changfeng is offering 200 million shares at HK$3.20 to HK$4.46 each, or eight to 11 times this year's projected earnings. The company makes axle components for trucks at three plants in Henan and Fujian provinces, and will complete a fourth one in Sichuan by year-end. Such components are located on the chassis, which connects a truck's frame and wheels, and are sold to truck-part makers and replacement parts sellers. Consultancy Frost & Sullivan has projected that the combined new-build and replacement axle market will grow to 61 billion yuan (HK$69.9 billion) by 2015 from 38 billion yuan last year, or 8.2 per cent a year. Changfeng will spend 802 million yuan this year and next on capacity expansion, of which HK$539.6 million will come from the listing proceeds and the rest from cash flow and bank loans. Capacity will jump 78.4 per cent to 1.42 million units by year-end from 796,000 a year earlier. Net profit leapt 147 per cent year on year to 147.54 million yuan in the first half as sales grew 110 per cent to 694.57 million yuan. The company forecast this year's net profit would not be less than 285 million yuan. Chief financial officer Chan Wai-shing said first-half gross profit margin rose to 35 per cent from last year's 34 per cent, thanks to new products launched in last year's second half. Meanwhile, Shanghai-based MicroPort Scientific, which says it is the mainland's largest supplier of coronary stents with a market share of 25.1 per cent, is offering 252.74 million shares at HK$4.60 to HK$6.10 each. A stent is a metal device inserted into a blood vessel to keep it open. The price range represents 25 to 33 times last year's profit. MicroPort forecast net profit to be at least 140 million yuan in this year's first half. Last year's net profit grew 4.2 per cent to 186.4 million yuan. MicroPort plans to spend about HK$935 million, or 75 per cent of about HK$1.25 billion of listing proceeds, to develop new products, conduct clinical trials and build a plant with annual capacity of 700,000 to one million units by end-2012. It produced 224,000 units last year and has 28 products under development. While tough competition has eroded stent prices, the company said it has had gross profit margins of 82 to 87 per cent since 2007. MicroPort, whose largest shareholder is Japan's Otsuka Pharmaceutical, said founder and chairman Chang Zhaohua and an unnamed former executive had paid 260,000 yuan to former State Food and Drug Administration head Hao Heping, to avoid delays in the approval of new products. Hao was found guilty of bribery and sent to jail for 15 years in 2006. Chang was not prosecuted. Subsequent internal investigations revealed deficiencies in its sales practices and expense reimbursement system, MicroPort said, adding that a consultant, Protiviti, this year confirmed they had been rectified. Both Changfeng and MicroPort will begin offering shares to Hong Kong investors today.

ICAC puts evidence on display - Among items on display at this year's ICAC open day is this lunchbox, containing evidence from an insurance scam. It is merely a simple lunchbox, but when ICAC investigators found it several years ago, it held 132 Hong Kong identity cards - key evidence that helped the graft-busters break up a medical insurance scam. The lunchbox is one of many exhibits that will be on display to the public during open days at the Independent Commission Against Corruption in North Point, on October 23 and 24. Visitors will get a 90-minute guided tour of the ICAC's facilities and exhibits, including interrogation rooms, weapons and evidence uncovered during investigations. The red lunch box with the stolen ID cards will be on display, as well. ICAC officers found it in the criminals' car during their investigations. They uncovered a scam in which three mainlanders had themselves surgically blinded in one eye in order to claim HK$18 million in bogus insurance claims, using ID cards taken from Hongkongers. Other evidence in the case will also be on display during the open days, including medical reports and insurance claims. Other exhibits will reflect some of the major cases the ICAC has dealt with over its its 36-year history. Visitors will be shown the identification-parade suite equipped with a one-way mirror, video interview rooms where suspects are questioned at a triangular table, and the exhibition hall itself. Visitors will be allowed to touch firearms used by anti-graft investigators. Those who wish to attend should apply before September 27 for tickets, which will be allotted through a random draw. This is a new arrangement: in the past, visitors were given tickets on a first-come, first-served basis on the open day. "Visitors will not need to queue up outside the ICAC headquarters several hours before the tour starts under the new arrangement," Bernadette Cook Liu Sau-fong, a regional officer with the ICAC's Community Relations Department, said. Last year, some visitors stood in the queue for six hours. The ICAC is expected to give out 3,000 tickets for the open day. Successful applicants may take four tickets. Starting from today, application forms for tickets can be downloaded from the ICAC website or obtained either from the ICAC headquarters and its seven regional offices.

Anti-business sentiment on the rise over widening wealth gap - Hong Kong's failure to tackle its rich-poor divide is fuelling hatred towards the city's business community, Executive Council convenor Leung Chun-ying said yesterday.

Activists from Hong Kong are set to depart today from Taiwan in an attempt to proclaim Chinese sovereignty over the disputed Diaoyu Islands. Another group was scheduled to start sailing in Xiamen last night bound for the area in the East China Sea. News of the sailings came after Beijing's top foreign policy official increased pressure on Japan by summoning its ambassador to again demand the immediate release of Chinese fishermen and their boat detained near the group of islands. It was the fourth time Uichiro Niwa had been called in. The official making the summons, State Councillor Dai Bingguo - and his timing, in the early hours of yesterday - indicated the urgency with which Beijing wants Tokyo to treat the issue. The Chinese trawler clashed with two Japanese patrol boats on Tuesday before the Japanese authorities took over control of the boat, with 15 fishermen on board, and arrested its captain. Dai said Japan should reach a "wise political resolution" or it would be wrongly evaluating the situation. According to a Foreign Ministry statement, Niwa said he would report Beijing's position to Tokyo. As tension escalated, activists from Hong Kong, Taiwan, Macau and the mainland are set to face resistance from the Japanese coast guard as they set sail for the disputed waters. The activists' boats, according to the organizers, will take action to proclaim China's sovereignty on the islands. Action Committee for Defending the Diaoyu Islands chairman Chan Miu- tak, the Hong Kong activist who was in Taiwan yesterday, said along with Taiwanese activists they are determined to proclaim Chinese sovereignty despite possible countermoves by the Japanese. Li Yiqiang, of the group that was to sail from Xiamen, said they plan to brandish banners protesting "Japanese aggression." He added if the trip goes as planned, they are expected to arrive tomorrow. Earlier, the Hong Kong activists were given the cold shoulder by Taiwanese fishermen when trying to rent a boat. The fishermen, who activists said came under pressure from Taipei, were worried they would be fined or have their licenses revoked. Also yesterday, Japanese coast guard officials took the trawler and its crew out to sea near Ishigaki island in Okinawa Prefecture for investigation, an action deemed by Beijing as "illegal, invalid and in vain." Japan's coast guard has said the Chinese trawler ignored warnings to leave the area, and refused to stop for an inspection last week. The trawler captain Zhan Qixiong, 41, was later arrested on suspicion of obstructing officers on duty, a charge that carries a maximum sentence of three years' imprisonment. In view of the incident, Beijing called off planned negotiations over oil and gas fields in the contested area of the East China Sea.

 China*: Japan on Monday freed the crew of a Chinese fishing boat held last week in disputed waters, leaving unclear what will become of the arrested captain at the centre of a territorial rift between the two neighbors. “The 14 illegally held Chinese boat crew members were released by Japanese coast guard authorities,” China’s Xinhua news agency said in a brief report which did not mention the arrested captain, Zhan Qixiong, as among those released. The 14 crew are on their way home by plane, Xinhua added, having been kept aboard their boat in a harbor on the southern Japanese island of Ishigaki. The row over the detained fishing boat has given an emotive focus to a long-running dispute between Beijing and Tokyo over who owns a group of islets in the East China Sea. On Friday, a Japanese court authorised a 10-day extension in detaining the arrested Chinese boat captain, named as Zhan. China had summoned Japan’s ambassador four times to protest the detentions, and warned Tokyo on Sunday against making “misjudgments” in a case which has set back efforts to ease decades of distrust. China also called off planned talks with Japan over an undersea gas bed dispute in another part of the East China Sea and warned that worse repercussions may follow. Relations between Beijing and Tokyo have long been dogged by mutual distrust and Chinese bitterness over Japan’s occupation of much of China before and during the second world war. Since big public protests in China against Japan and bitter diplomatic exchanges in 2005 and 2006, both sides have sought to improve ties. But they have stubborn disagreements over their sea rights, especially over a group of islets in the East China Sea, called Diaoyu in China and Senkaku in Japan. Beijing insists the islands have been Chinese territory since ancient times.

Arnold Schwarzenegger in China shopping for rail for California - California governor Arnold Schwarzenegger checks out a high-speed train at Hongqiao Railway Station in Shanghai yesterday. Schwarzenegger said he was hoping for some "creative financing" from Asia to help get California's proposed high-speed system up and running. California governor seeks expertise on high-speed lines and funding in Asia. California governor Arnold Schwarzenegger is window-shopping for high-speed trains on the mainland while peddling Californian exports and tourism. With California - latest budget US$19 billion - in the red, Schwarzenegger says he is hoping for some "creative financing" from Asia to help lower costs and get California's proposed high-speed rail lines up and running. Industry experts say cash-rich China may be best placed to help with funding, and less risk averse than other countries whose banks are still recovering from the financial crisis. That could prove a key advantage as China's high-speed railway builders bid to build a system in California against better established rivals in Asia and Europe. "That is something very attractive about the Chinese which the Europeans will find very difficult to compete with," said Michael Clausecker, the director general of Unife, the Association of the European Rail Industry. "Even in America, finance is a scarce resource. Rail investments need a lot of investment up front." China has invested huge prestige and tens of billions of dollars in its high-speed rail industry - building on mostly European know-how acquired in joint ventures with Siemens, Alstom and to a lesser extent Japan's "Shinkansen" bullet train operators. It is gearing up to fight for a chunk of what Unife estimates to be a €122 billion (HK$1.2 trillion) a year global market for railways. "Today, what I have seen is very, very impressive," Schwarzenegger said in Shanghai yesterday. "We hope China is part of the bidding process, along with other countries around the world, so that we can build high-speed rail as inexpensively as possible."

Guoman Hotels Group focuses on China in plans for 50 new hotels - Guoman's Sanjay Nijhawan says the British group will target the mainland's four-star segment. Guoman Hotels Group plans 40 to 50 new hotel openings in Asia over the next five years, with the majority in China, as it takes an aggressive step to tap the high-growth market, chief operating officer Sanjay Nijhawan said. The British hotel group that operates the luxurious Guoman-branded hotels in London's heritage locations such as Charing Cross said it would target the less competitive four-star segment on the mainland as tourism booms. "We believe China's four-star hotel sector has less competition," Nijhawan said, adding that opportunities beckoned in second-tier cities as domestic demand soared. The number of new openings in Asia by Guoman - which also owns the four-star Thistle brand - will surpass the 41 hotels the company operates in Britain. Its first hotel outside Britain, Guoman Hotel Shanghai, opened recently. The rising affluence of mainlanders has been a huge spur to tourism in the past decade. According to Jones Lang LaSalle, visitor arrivals on the mainland grew 10 per cent last year to reach 2.03 billion. Of the 2.03 billion tourists, the mainland received 126 million foreign visitors, down 2.7 per cent from a year earlier. "The key focus for any hotel chain in China has to be domestic," Nijhawan said. "For us, we have to utilise the booming domestic tourism." He noted that Asia - particularly China and India - as well as the Middle East will be the only markets that offer tremendous opportunities for established international hotel groups in the next 10 to 15 years. "China's economic growth will be enough to keep domestic tourism growing," he said. The British hotel group is following in the footsteps of Marriott International, the largest hotel chain in the United States, which announced in May it would nearly double the number of hotels on the mainland to 90 by 2015. Marriott also plans to bring a moderately priced brand to the mainland. Hotels were among the top beneficiaries of the 2008 Beijing Olympics and the ongoing Shanghai World Expo, and there were growing concerns that the industry's growth would slow in their absence. Lily Ng, a senior vice-president of Jones Lang LaSalle Hotels, said it was natural for visitor arrivals to decline after events, but she said the long-term outlook for the mainland's hotel sector would remain bullish. "Given the strength of China's economy, amid some short-term adjustments, its growth trajectory is likely to continue," Ng said. "The bigger function of the events is to promote the country and put it at the forefront of the global community, which has a further reaching and lasting impact on China's tourism and economy beyond the events." Nijhawan believed the rapid growth in domestic tourism would be more than adequate to offset the slowdown in foreign visitor arrivals. "We are quite excited about the opportunities in China," he said. "We have a very aggressive strategy because opportunities are tremendous." Guoman will also open another namesake brand hotel in Beijing next year. According to Jones Lang LaSalle, the new supply of internationally branded hotel rooms in Beijing will rise 10 per cent to 29,521 rooms this year. In Shanghai, the number of rooms is expected to jump 34.3 per cent to 32,045.

A US regional naval chief has warned of growing strategic uncertainty in the western Pacific, saying the "winds of change are blowing hard" - a thinly veiled reference to Beijing's rising military power. Vice-Admiral John Bird (pictured), the departing commander of the Japanese-based US 7th Fleet, said that a peaceful status quo was "far from guaranteed" amid growing high-stakes challenges. "It is not all clear sailing ahead ...We find ourselves today at a pivotal juncture in the western Pacific," he said in a strongly worded speech on Friday at the fleet's base in Yokosuka to hand command over to Vice-Admiral Scott Van Buskirk after more than two years heading the core projection of US power in Asia. "In this remarkable period of change and in an environment of anti-access strategies and excess territorial claims, America's stabilising influence and respect for international law will be critical," Bird said. "Our allies will depend on the US to be fully present in the Asia-Pacific region as a promoter of stability and to ensure the free flow of commerce for all." Bird did not mention China by name, but his references to access and territory will not be lost in Beijing or in an East Asia increasingly wary of Beijing's growing assertiveness. US defence officials have expressed repeated concerns at Beijing's increasingly strident objections to long-standing US military operations in East Asia, such as exercises with South Korea in the Yellow Sea as well as its development of ballistic missiles with manoeuvrable warheads designed to strike aircraft carriers - the traditional symbol of US military authority in the region. His comments provide a rare window into the thinking of US military operational chiefs just as the first signs emerge of a thaw in Beijing's nine-month freeze on military relations with Washington.

Race on by miners as rare earths get rarer - Canadian prospectors face cost hurdles in a market dominated by Chinese players. High processing costs mean rare earth deposits do not have a guaranteed viability. Rare earth elements are essential components in everything from iPhones to wind turbines, yet the average investor has never heard of them. That may soon change. The buzz around this obscure group of 17 metals is growing as green technology fuels demand at the same time as supplies are shrinking. China, which produces over 90 per cent of the world's supply, is chopping exports by almost half this year. A looming global shortage has pushed numerous Canadian miners into the spotlight, all of them eager to chase down the Holy Grail of a massive rare earth deposit. But finding a viable rare earth mine outside of China may be difficult. Processing costs are huge, making it difficult to compete with Chinese producers even as promising new deposits are identified. "We're going to run into shortages of rare earths within the next year or two," said Byron Capital Market analyst Jon Hykawy, adding that the heavy rare earths, used in electric vehicles, will likely run out first. "But simply identifying a potential mine is not a reason to celebrate victory," he said. "I would say it is very tough to make a go of producing rare earths without at least separation and purification as a part of the model." Analysts say it will take a deposit with the right mix of rare earth elements to make a non-Chinese mine into a profitable operation.

GOME boss cheered - The current management of GOME Electrical Appliances Holding (0493) has received a boost as an international leading advisor of institutional shareholders recommends support for the team led by chairman Chen Xiao at an upcoming special meeting.

Sept 13, 2010

Hong Kong*: Talks between ESPN Star Sports and PCCW (SEHK: 0008) on broadcasting rights remain deadlocked, but PCCW has promised sports fans that whatever happens "your screens won't go blank". An exclusive six-year deal between the companies to broadcast some of the world's biggest sporting events ended this month, and if a deal is not struck coverage will end. Two weeks ago the two sides suspended cancellation of programmes to undertake 11th-hour discussions on a new agreement. Hong Kong fans have already been hit hard, especially as, in November last year, PCCW's Now TV lost the rights to screen live English Premier League matches to Cable TV, leaving many subscribers who had signed long contracts in the lurch. PCCW said that if a deal in the current negotiations could not be reached, viewers would be given plenty of notice. Fans watching tonight's Formula One Grand Prix from Monza will not have to worry about the live broadcast suddenly cutting out midway through the race. A PCCW spokesman said: "It won't be the case that if an agreement isn't made that the programmes will just suddenly stop. Your screens won't go blank. At the moment everything will be shown as scheduled, and if there is going to be any change to this we will definitely let our customers know well in advance. ESPN Star Sports also remained tight-lipped, saying only that both sides were continuing talks. ESPN Star Sports coverage ranges from Formula One, cricket internationals and the major golf tournaments to the American professional basketball and baseball leagues. If the negotiations with PCCW collapse, ESPN Star Sports would have to strike a deal with Cable TV or Hong Kong Broadband Network.

Hong Kong Education secretary salutes teachers as he presided over the 15th annual celebration of Teachers' Day. About 1,300 teachers are commended by Education Secretary Michael Suen. The education secretary appealed to school leaders to offer support to their teachers as he presided over the 15th annual celebration of Teachers' Day. Michael Suen Ming-yeung led a charm offensive, shaking the hands of hundreds of teachers commended by their schools for the Salute to Teachers 2010. But he refused to rule out secondary school closures over the coming five years, with Form One student numbers projected to fall by 21.9 per cent from 69,000 this year to 53,900 in the 2016-17 school year. "I can't promise that there will be no shocks," Suen said yesterday. "Our target is to stabilise the situation as far as possible and to help schools and teachers to achieve sustainable development without adversely affecting the quality of teaching. "I hope that all in the education sector can work hand in hand to actively participate in the discussions and explore measures which will minimise the shock." Suen called on school managements to create room for teachers and offer them support and establish a people-based management culture with love and care. "To reach the goals of reform in the classrooms we are relying on the efforts and professional spirit of teachers," he said. Some 1,300 teachers from kindergartens and primary and secondary schools were presented with certificates during the event at the Hong Kong International Trade and Exhibition Centre in Kowloon Bay. The teachers, who had been nominated by their schools, included 40 who were being commended for the fifth year in a row. Leung Yu-ming, who teaches English and design and technology at Hong Kong Chinese Women's Club Fung Yiu King Memorial Secondary School in Ma On Shan, said he was nominated by his students. "It's a great honour," he said. "The greatest difficulty I face as a teacher is the high workload and the relatively low status of teachers. The workload has increased a lot over recent years because of the new senior secondary curriculum, external assessment of schools, extra paperwork and greater demands from parents."

Anger over delays on mainland flights - Dragonair bears brunt of long waits on tarmac - Hong Kong flights in and out of the mainland are facing increasing delays, and passenger anger at being kept waiting for hours aboard grounded planes is rising. Because so many of its flights are linked to the mainland, Dragonair is bearing the brunt of the problem - which is caused by growing air traffic and restrictions on air space because of military flights, VIP slot allocations and weather alerts. Flights to and from mainland airports have been delayed for up to eight hours. About four out of every 10 Dragonair flights are taking off late and the average delay for flights by all airlines has climbed to 48 minutes. Most are made to wait on the tarmac with passengers on board before being given clearance for take-off. The Hong Kong Civil Aviation Department confirmed that delays caused by "flow control" issues are on the rise. The number of flights affected between April and June was more than four times the number in the corresponding period last year. It has raised the matter with mainland aviation authorities.

It has already found itself in hot water with environmentalists for selling bluefin tuna. Last week, City'super looked as if it was wading into still worse trouble by selling dolphin meat. Packets of a HK$27 Japanese product with an English label saying its ingredients included "common dolphin" were spotted by the head of an environmental concern group in one of City'super's Hong Kong outlets. Gary Stokes - who organised a Facebook campaign in March that saw City'super remove bluefin tuna from its fridges - has sent a sample of the Matsunoshita Kodawari Deep Fried Koban Fish Cakes for DNA testing at a Hong Kong laboratory. However, City'super insisted the dolphin label was simply a case of ingredients being lost in translation when the sticker was put on the product before it was sent from Japan. Spokeswoman Winnie Mak said the ingredient was in fact dolphin-fish, or mahi mahi or dorado, a tropical fish that is no relation to the dolphin. "We have confirmed the ingredient is not dolphin," she said. To avoid controversy, all of the products were removed from the shelves of the four City'super outlets in Harbour City, ifc mall, Times Square and the New Town Plaza in Sha Tin last week and relabelled Mahi Mahi. Stokes, who heads the Oceanic Love environmental campaign group, said he would go ahead with the DNA testing to make sure the ingredient was what City'super said. "I have been in touch with the Centre for Food safety and they are looking into the matter and said they'd get back to me in a few days," he said. "If it is just a bad translation it should have been picked up." More than 150 people signed up for a Facebook group in March threatening to boycott City'super for selling critically endangered bluefin tuna. Sales were suspended. Despite the apparent success of the campaign, bluefin tuna is not subject to any trade ban and was openly displayed by merchants at last week's Asian Seafood Expo at the Convention and Exhibition Centre.

If you've got a spare HK$116 million lying around, this not-so-small sparkler could be yours. The two-stone ring with a rare triangular blue diamond on a gold band of baguette-cut diamonds is expected to sell for at least US$15 million when it is offered at auction at Christie's in New York next month. At 10.95 carats, it is the largest triangular-shaped fancy vivid blue diamond ever to come to auction. It is paired with a 9.87-carat white diamond cut in the same shape. The ring will be officially unveiled at Christie's Geneva gallery on Tuesday, with stops later in Hong Kong and London before returning to New York.

 China*: Beijing called off planned talks with Japan over an undersea gas bed dispute and warned of worse repercussions while Japan lodged a protest yesterday over another maritime spat between the two big neighbours. The Foreign Ministry in Beijing issued its vehement warning after a Japanese court on Friday authorised a 10-day extension in detaining a Chinese captain whose fishing boat collided with two Japanese coast guard ships in disputed seas last week. The arrest of the captain and continued detention of 14 crew members has given an emotive focus to long-running territorial quarrels between Beijing and Tokyo over East China Sea islets, called Senkaku in Japan and Diaoyu in China. Yesterday, Japan lodged a protest with Beijing after a Chinese State Oceanic Administration ship tried to stop a Japanese Coast Guard vessel from conducting an oceanic survey 280 kilometres northwest of Japan's southern Okinawa island. The spokesman said the Japanese vessel was operating in Japan's exclusive economic zone and remained in the area after finishing the survey. Asia's two biggest economies are also at loggerheads over gas beds under another part of the sea. In Beijing, Foreign Ministry spokeswoman Jiang Yu responded angrily to the Japanese court's decision. Beijing postponed a round of talks with Tokyo intended to eventually settle their dispute over East China Sea gas fields, she said in a statement on the Chinese Foreign Ministry website late on Friday. The talks had been set for mid-September. Jiang warned that worse may follow but gave no details. "Japan has ignored China's many solemn representations and staunch opposition, and obstinately decided to impose so-called judicial procedures on the Chinese captain. China expresses its strong dissatisfaction and solemn protest," Jiang said. "Japan's actions have violated international law and rudimentary common sense in international matters. They are absurd, illegal and invalid. "If Japan continues in this reckless fashion, it will taste its own bitter fruit," Jiang said. A source in the Japanese prime minister's office said it was "regrettable that a postponement [of the talks] was announced unilaterally," the Kyodo news agency said. Mainland media have warned that public opinion could become riled by the arrest and Beijing's official stand appeared partly intended to ward off accusations of weakness from angry citizens. On Saturday morning, more police officers than usual guarded the Japanese embassy in Beijing, but only a small group of about 10 people gathered briefly in the afternoon before dispersing. Tokyo maintains that the mainland's exploration for natural gas in the East China Sea threatens gas beds extending under what it deems Japan's maritime zone. Beijing denies there is such a problem and disputes Japan's definition of the boundary. In 2008, they agreed in principle to solve the dispute by jointly developing gas fields. Talks began in July on a treaty, but the postponement of the next round of talks will hold back prospects for progress in the dispute.

California Governor Arnold Schwarzenegger plugs Californian exports at a supermarket in Hangzhou, East China’s Zhejiang province, Sept 11, 2010. Schwarzenegger spent Saturday, the first day of his weeklong trade mission of nearly 100 business leaders, hobnobbing in Hangzhou with Jack Ma, founder of Internet trading behemoth Alibaba.com, and other Chinese entrepreneurs. Schwarzenegger also peddled Californian exports and tourism during his stay in Hangzhou.

Chinese army to attend Mexico's bicentennial - Members of the guard of honour of Chinese People's Liberation Army (PLA) take part in a rehearsal for a parade as part of bicentennial celebrations for Mexico's independence in Mexico City September 11, 2010.This is the first time Chinese PLA hornor guard go abroad to attend these activities.

A child cries as he receives a measles vaccination in Hefei, Anhui province, at the start of a mainland campaign to give the jab to nearly 100 million children this month.

Billions for Yangtze canals to take pressure off roads - The centuries-old canal network in the Yangtze River Delta will get a multibillion-yuan injection to allow goods to be moved more efficiently around the ports of Shanghai and Ningbo. Tom Lau Ko-yuen, managing director of port-operator PYI Corp, said the government aimed to use the canals to reduce worsening congestion on roads into the world's two busiest ports by cargo tonnage. The government planned to spend tens of billions of yuan on the project over 10 to 15 years, Lau said. Part of the plan involved creating eight new feeder ports in the delta. Last year, cargo tonnage along the Yangtze River - including Shanghai and Ningbo - accounted for 58 per cent of the country's cargo throughput of 6.9 billion tonnes and 36 per cent of the country's foreign trade of US$2.2 trillion, according to PYI. The Hong Kong-listed port and infrastructure firm forecasts tonnage along the Yangtze River, excluding Shanghai and Ningbo, will rise 9.7 per cent to 1.24 billion tonnes this year. The delta's maze of canals - which have been compared to those of Venice and the Netherlands in terms of their complexity - is expected to serve a vital role in boosting trade. At present, the canals are narrow and mostly used to transport low-value cargo such as sand, cement and stones. In partnership with local governments, the Ministry of Transport plans to deepen them to 12.5 metres and lift their bridges so bigger ships can pass, Lau said. By doing this the ministry hopes to shift more cargo, including containers, from roads serving the ports to waterways. Using the canals would be at least 25 per cent cheaper, Lau said. "The congestion caused by container trucks into Shanghai is worse than Hong Kong's Kwai Chung port," he said. "It is much more beneficial to move cargo through the water." To improve transport to Shanghai and Ningbo, the ministry plans to create eight feeder ports in Suzhou, Wuxi, Changzhou, Jinghua, Shaoxing, Hangzhou, Jiaxing and Huzhou. These feeder ports will transport cargo to Ningbo and Shanghai through the canals and rivers in the delta. With the completion of the Grand Canal during the Sui dynasty (AD589-617), Suzhou became a thriving commercial district as items such as silk were transported along the bustling waterways. Each feeder port would cost an estimated 300 million yuan (HK$343 million) and provide a planned annual container capacity of 300,000 20-foot equivalent units (teu), Lau said. So far, Jiaxing is the only completed feeder port and is undergoing trial operations. PYI holds 85 per cent of the Jiaxing port, which has a registered capital of 128.8 million yuan.

China is expected to become the world's largest credit card market by 2020, topping the US in terms of the number of cards in issue as an urbanisation drive boosts people's living standard, MasterCard said yesterday. The mainland is likely to have about 800 million to 900 million credit cards in circulation in 2020, surpassing the US which currently has 700 million, according to Chen Bin, a vice president with MasterCard Advisors. There are now 207 million credit cards in use on the mainland. MasterCard, the world's second-largest banking card processor, said the risks of credit card delinquencies are controllable on the mainland because of the government's tightened oversight on the business. Beijing has intensified the crackdown on credit card defaults since last year but the amount of unpaid debts continues to rise. A total 8.8 billion yuan (HK$10.09 billion) of credit-card debt was at least six months overdue on the mainland, the People's Bank of China said in May. That was 14.4 per cent more than the end of last year. The overdue amount accounted for 3.5 per cent of the total outstanding credit-card debt. The central bank has been coordinating with UnionPay, the mainland's sole domestic interbank card operator, to launch investigations into questionable credit-card transactions. A UnionPay official said investigations had found that some retailers were colluding with cardholders to commit fraud. The increasing use of plastic benefited UnionPay, which enjoys a monopoly on the mainland. Established international players such as Visa International and MasterCard are barred from tapping the mainland bank card market. They could only team with the Chinese counterpart to issue dual-currency cards bearing both logos.

Sept 12, 2010

Hong Kong*: Hong Kong has been given a target of slashing its carbon emissions by up to 33 per cent in a decade. The target forms part of long-awaited government proposals, released yesterday, that drew swift criticism for being too timid and taking the wrong tack. Up for public consultation are plans to generate half the city's electricity from nuclear power, and phase out coal-fired power stations, by 2030. The target, more stringent than the mainland's but less aggressive than that required of developed economies by the United Nations, would mean cuts in carbon emissions of between 19 per cent and 33 per cent from 2005 levels by 2020. That translates to a drop from the 42 million tonnes emitted in 2008 to between 28 million tonnes and 34 million tons. The latest lofty initiative from the Environment Bureau comes as action is still awaited on proposals for updating the city's air quality objectives after nearly two years of study, and four months of public consultation that ended 10 months ago. Introducing the latest plans, Environment Secretary Edward Yau Tang-wah (pictured) said it would not have been easy to attain even the national carbon reduction target since Hong Kong's economy is growing more slowly than the mainland's. "But we decided to choose an even more aggressive target as Hong Kong is a developed city and an international financial centre. We should be more forward-looking," Yau said. Green groups said the government should have opted for the still more stringent UN standards, and heavily criticised the plan's reliance on nuclear power. Greenpeace called it "the most irresponsible and dangerous path" to tackling climate change. Friends of the Earth environmental affairs manager Hahn Chu Hon-keung said Hong Kong, as an international city with a mature economy, had a duty to meet the stricter UN target, which would require a 25 per cent reduction in 1990 levels of carbon emissions, to 26.5 million tonnes a year, by 2020. But Yau said the target was already ahead of those set by the United States, the European Union and Japan. The plan released yesterday for a three-month public consultation after a much-delayed climate change study commissioned by the government over two years ago does not detail the costs of implementing it or the possible difficulties involved. Yau said it was difficult to predict the costs at this stage as investments and related measures had not been not confirmed. "We may not need to pay a high cost. We will benefit from the savings on electricity bill and the business opportunities of low-carbon industries that arise from it," he said. The measures, which cover power generation, buildings, transport and waste, include requiring 15 per cent of buses to run on hybrid engines and halving energy use in commercial buildings. But the change in power generation is the most drastic. Apart from increasing the proportion generated from natural gas from 23 per cent to 40 per cent, nuclear power would take over from coal as the major energy source. The bureau said nuclear power was chosen because it emits no greenhouse gas, is more reliable and cheaper. Nuclear power now imported from the mainland costs about 50 cents per kilowatt, compared to 40 to 60 cents for coal and 70 to 90 cents for natural gas. Its use could not be increased quickly, however, since new cross-border transmission lines could take eight years to build. The government could also face difficult negotiations with the city's two power companies. Energy Advisory Committee chairman Edmund Leung Kwong-ho said the public should not worry about the safety of nuclear power after seeing the Daya Bay nuclear power station in Guangdong operate safely for 20 years. Larry Chow Chuen-ho, director of Baptist University's Hong Kong Energy Studies Centre, said power companies would be very likely to raise electricity prices as they would have to invest in new gas-burning plants. If no change is made, the Hong Kong Observatory said the average number of very hot days per year - with temperatures of 33 degrees Celsius or above - could triple to 24 by 2090.

Sun sets on half of Star Ferry's harbour services - Commuters and tourists have just over six months left to cross the harbour via Hung Hom on the Star Ferry, before the company relinquishes half its celebrated routes. Burdened by years of financial losses, falling patronage, competition from rail operators and future harbourfront redevelopment that will cost the ferry operator an estimated HK$10 million a year until 2013, the Star Ferry Company will let its three-year licence for the two Hung Hom routes expire on March 31. The decision not to renew the licence after 11 years prompted the government to start inviting tenders for the operation of ferry services on the two routes, one between Hung Hom and Central and other between Hung Hom and Wan Chai. Star Ferry general manager Johnny Leung Tak-hing did not close the door to the services completely, saying the company would study the tender documents and see if the terms offered were more favorable. But it was hard to justify to shareholders losing HK$10 million a year, Leung said. Business is expected to suffer from two years of construction on the Tsim Sha Tsui pier bus terminal from next year and the redevelopment of the Wan Chai pier, where the Star Ferry earns HK$3.3 million a year from two rooftop billboards. Li Yun-keung, vice-chairman of the Star Ferry Company Limited Workers Union, said some 30 jobs would be at risk. "Even if a new company is willing to take over the routes and employ all of them, who can guarantee that the new company would not close after three years?" Li said. On average, 3,200 people take the ferry between Hung Hom and Central a day, down from about 3,800 before the Central pier was relocated in 2006. The then 48-year-old pier in Central was moved west from its prime location just opposite the Mandarin Oriental Hotel to make way for a bypass linking Central and Wan Chai. The new location is more isolated, with the International Finance Centre office tower and shopping mall a sweaty stroll away in summer, and a trek to the rest of Central taking even longer. The number of passengers taking the Star Ferry between Tsim Sha Tsui and Central has fallen 18 per cent to some 40,000 a day on average. Patronage on the two Wan Chai routes was unaffected by the pier relocation, with an average of 20,000 a day taking the Star Ferry to and from Tsim Sha Tsui. Profits from the two franchised Tsim Sha Tsui routes are used by the Star Ferry company to subsidise the loss-making Hung Hom business. "Before the Central pier was relocated, a lot of people took the ferry ... businessmen would just walk over to Prince's Building to work. Now it's mostly tourists," Leung said.

Fishy cargo turns out to be smuggled ivory - The HK$10.8 million haul of ivory at customs' Tsing Yi base yesterday. The conservation department said there was no indication of a large demand for ivory in the city. Suspicions over a consignment of pungent dried anchovies led customs officers to sniff out a much larger haul - the year's biggest seizure of illegal ivory in the city. The HK$10.8 million consignment of tusks smuggled from Africa was found concealed among cases of anchovies in two containers that arrived in Hong Kong on Sunday. Albert Chan Chi-hung, head of customs' ports and maritime command, said it was the first time anchovies had been found disguising contraband. "Smugglers might think customs officers would avoid searching dried anchovies because of their unpleasant smell," Chan said. "But they don't know that we are responsible officers." The third such seizure this year, the ivory is believed to have been destined for the mainland. The shipping documents indicated the anchovies were from Malaysia but investigation showed the containers had come from Tanzania. "Our suspicions were raised because it was rare for dried anchovies to be shipped to Hong Kong from Africa. There's no point in shipping dried anchovies all the way from there to Hong Kong," Chan said. The shipping charge would be more than the value of the dried fish. The two containers were opened for inspection at the Customs and Excise Department's Tsing Yi plant on Thursday when two men aged 46 and 48 came to pick up the consignment. The men, one of them a businessman, were arrested after officers found 87 packages containing tusks among the 277 packages in the containers. The haul contained 384 tusks of different sizes and weighed more than 1.5 tons. Officers said the consignment was worth about HK$10.85 million and was the biggest seizure of its kind this year. Investigations showed Hong Kong was not its final destination. After being questioned overnight, the two suspects were released on bail yesterday. Customs officers confiscated a tonne of ivory tusks worth HK$2 million on January 7 and seized another 5.8kg of ivory products worth HK$11,760 on February 8. Agriculture, Fisheries and Conservation Department figures show 755kg of ivory was seized in 2009 and 2.6 tons in 2008. A haul of 3.9 tonnes in 2006 was the biggest since a global ban on the trade was introduced in 1989. Chan said there was no evidence Hong Kong was used as a transport centre for ivory smuggling, but customs officers had stepped up inspections of imported cargos, especially those from Africa, to crack down on the illegal trade. He said ivory was usually smuggled into the mainland and other countries in Asia, such as Japan and Vietnam. The Agriculture, Fisheries and Conservation Department said there was no indication that there was a large demand for ivory in the city. It said ivory was used in sculptures. An endangered species protection officer with the department, Alfred Wong Kwong-chiu, said the seized ivory would be donated to local and overseas governments and non-governmental organisations for education, scientific research and enforcement identification. Anyone found importing, exporting or in possession of a protected species for commercial purposes faces a maximum penalty of a HK$5 million fine and two years' jail. Under the Import and Export Ordinance, any person found importing undeclared cargo is liable to a HK$2 million fine and seven years' imprisonment.

Hong Kong's Immigration Department announced Friday that Grenada has confirmed it will grant visa-free access to Hong Kong Special Administrative Region (HKSAR) passport holders visiting the country for a stay of up to 90 days. The arrangement will come into effect on Sept. 20, 2010. Likewise, from the same day, Grenadian nationals may visit Hong Kong visa-free for a stay of up to 90 days. "The arrangement means greater travel convenience for HKSAR passport holders and helps promote trade, business and tourism links between Hong Kong and Grenada," said a spokesman of HKSAR's government. Including Grenada, 143 countries and territories have granted visa-free access or visa-on-arrival to HKSAR passport holders.

Russian miner Petropavlovsk said it planned to list its non-precious metals division, including its iron ore operations, in an initial public offering (IPO) on the Hong Kong stock exchange in October. London-listed Petropavlovsk, which said it had reached an advanced stage in its preparations, did not give any guidance on the value of the IPO or say how much it intended to retain. A group of Hong Kong-based investors in June agreed to take a US$60 million equity stake, valuing the division at US$860 million. Jay Hambro, who will be executive chairman of the division, said last month a pre-IPO price of US$860 million set a good floor for a potential IPO valuation. He also said Petropavlovsk was keen to keep a controlling stake in the division. Under Hong Kong stock exchange rules, companies need to have 25 per cent of their shares as free float, implying Petropavlovsk would keep a stake of between 51 and 75 per cent. Andy Davidson, an analyst at Numis Corp, said the widely expected move was positive and had the potential to unlock significant value for Petropavlovsk. “We currently value the iron ore assets at 184 pence a share (US$573 million) out of our 625 pence NAV and believe the IPO has potential to double this, given the previous pre-IPO funding,” he said. Shares in London-listed Petropavlovsk were up 2.2 per cent in early trade, outperforming an unchanged British mining index and valuing the group at £2.14 billion pounds (HK$25.65 billion). Petropavlovsk said the division had been reorganised under a new subsidiary, IRC. It will also include the Vanadium Pentoxide joint venture, the Titanium Sponge project, infrastructure projects, and the group’s interest in the Giproruda Technical Institute. IRC will be headquartered in Hong Kong and will have Yury Makarov as its chief executive. Petropavlovsk’s iron ore business had been spun off as Aricom, where Jay Hambro was CEO, before being re-acquired last year. The operations, which are estimated to contain over 1 billion tons of iron ore, are in the Russian far east, close to the mainland, a key consumer of the steel ingredient. The company said it expected to buy the shareholdings of the Hong Kong-based investors in IRC at the time of listing to speed up the process and that the majority of investors will instead take part as lead investors in the IPO. The IPO requires final approval from the Hong Kong stock exchange’s listing committee.

Street performer cleared of blocking public place - So Chun-chau, or 'Mr Happy', drew a crowd of up to 80 onlookers while juggling on Great George Street in Causeway Bay. Causeway Bay may not be London's Covent Garden, but the public is expected to accept the level of inconvenience caused by a street performer juggling in a pedestrian zone, a magistrate said. Andrew So Chun-chau, 50, known as "Mr Funny", was acquitted at Eastern Court yesterday for obstructing a public place. On April 6, he attracted 50 to 80 onlookers while juggling on Great George Street. Deputy special magistrate Lau Wai-chung said So's actions and his interaction with the onlookers constituted obstruction in a public place, but it was reasonable to expect the public to tolerate it, and it was therefore legal. So has performed acrobatics and mime shows every Friday to Sunday in pedestrian zones in Causeway Bay and Mong Kok. The pedestrian zone is not just a pedestrian channel to walk through, Lau said, it is a lively area where civic conversation takes place. Defence counsel Joseph Lee Jo-ey had submitted that So did not obstruct a public place because he did not have control over the onlookers. They could come and go as they wished. But Lau said the defendant's actions drew the crowd around him, resulting in obstruction. However, the street performer is entitled to protection by Article 34 of the Basic Law, which guarantees the freedom to engage in literary and artistic creation, and other cultural activities. "The court cannot decide whether the defendant's actions constitute artistic creation, but his performance would fall under `other cultural activities'," Lau said. Lee had argued that Article 27, on freedom of speech, assembly and demonstration, and Article 16 of the Bill of Rights on freedom of expression applicable also offered legal protection to the defendant. But Lau said they were irrelevant to this case. Among the five prosecution witnesses who gave evidence during the trial, insurance agent Lung Chun-man said the onlookers surrounding the performer packed the area to the point that pedestrians could not get through. Others said it was possible to get through along the sides of the road or squeeze through the crowd by asking onlookers to give way. So was juggling balls and diabolo, and inflating balloons for children, Lau said. Onlookers cheered and clapped when he threw a diabolo more than 10 metres in the air, took two steps back and caught it. Apart from Lung, who said he was frightened by the stunt, there was no evidence to suggest that So's tricks caused fear or endangered the public, Lau said. Lung was the only witness who was not a police officer and had supplied information to the police on his own accord. The magistrate held that Lung had exaggerated, and did not accept his testimony. Outside the court, So said he was relieved by the decision. "My aim to perform on the street is to bring joy to the public," he said, adding that he is grateful for the public's tolerance. In 2006, So was charged with loitering in a public place for performing on Sai Yeung Choi Street in Mong Kok. The charge was later dropped.

Money no object for a space flight of fancy - Prospective space tourist Hogan Loh with spacecraft designer Burt Rutan. It will probably be the most expensive five minutes Hogan Loh will ever experience - but certainly among the most rewarding. The Hong Kong businessman always knew his lifelong dream of becoming an astronaut was a long shot, but he never gave up hope of one day going into space. While he never did become an astronaut, Loh expects to lift off some time in the not too distant future as a "space tourist". He is among several Hongkongers who have each booked a US$200,000 ticket to travel into space as early as 2013. Loh, who runs his own trading company, has loved flying since he was a teenager and is a past president of the Hong Kong Aviation Club. He will be among the first batch of Hongkongers to travel aboard Virgin Galactic's SpaceShipTwo (SS2), co-owned by the flamboyant British billionaire Richard Branson. The cost includes three days of pre-flight preparation at the launch base, Spaceport America, in New Mexico. The space flight will take about 2-1/2 hours. SS2 will reach a height of 110 kilometres above the earth and stay there for four or five minutes in zero gravity. The "tourists" will float around the cabin, viewing the earth through huge windows, before SS2 begins its re-entry. "It is not a small amount of money for a ticket, but this is the only chance for me to go into space. I do not want to miss it," Loh said. "It is expensive, but you need to consider the cost of developing such technology." SS2, the brainchild of aerospace engineer Burt Rutan, was unveiled in December. It is the first commercial spacecraft. Designed to carry six passengers and two pilots, SS2 is expected to take 100 people into space during its first year of operation. Test flights began this year, and the spacecraft is expected to start commercial operation by 2012. Loh and the other Hongkongers may only be able to lift off in 2013, as more than 300 space tourists from around the world have already booked a seat. Miramar Travel has been the sole agent for Virgin Galactic in Hong Kong since May last year.

Prices for flats in public housing estates are going through the roof, with a Yiu On Estate apartment in Ma On Shan selling for a massive HK$2.07 million. The deal, if completed, will beat the successive records that Hong Kong has seen over the past two months in the housing sector that is supposed to cater for the grassroots. Eddie Hui Chi-man, professor at Polytechnic University's building and real estate department, said such prices go against the raison d'etre of public estates. Hui noted speculation appears to have spread to available-for-sale public estate homes. "The prices are rather unreasonable and beyond the affordability of public estate residents." The investor who sold the apartment in Yiu Chung House, Ma On Shan, also set a record in April when he bought the unit for HK$1.8 million, or HK$2,314 per square foot, according to Century 21. In Sham Shui Po, a Lei Cheng Uk Estate apartment went for HK$1.98 million in late July, beating a record of HK$1.97 million for a unit at Chuk Yuen (North) Estate, Wong Tai Sin, a month earlier. In June 2004 two public housing units breached the HK$1 million mark for the first time. In the first eight months of this year, 172 deals that were registered cost at least HK$1 million each, according to Centaline Property. Of the 31 such deals last month, 12 were short sales. One seller made HK$480,000 within 200 days. Ricacorp head of research Patrick Chow Moon-kit said the price was "normal" and reflects an inflow of the less well-off to the private home market.

 China*: German industrial giant Siemens is in advanced talks with a mainland firm to set up a joint-venture plant in Shanghai to produce a key component for wind-turbine generators, in a bid to gain better access to the mainland market. Siemens, the world's largest supplier of offshore wind-power turbines, next month will open a wholly owned plant to make wind-turbine blades in Shanghai's Lingang new district, director of China offshore wind power Ole Hermansen told a Confederation of British Industry conference in Nanjing, Jiangsu province. "We also expect to have nacelle production up and running in the first half of next year," he said. "It will likely be a joint venture with a Chinese company in order to overcome restrictions on foreign companies ... It will be regarded as a local manufacturer and should have full access to the China market." A nacelle is mounted on top of a wind tower. Apart from supporting the shaft on which the blades are mounted, it encloses the turbine's major components, including the gearbox, drive train and controlling electronics.

Chinese Premier calls on teachers to dedicate selves to rural education - Chinese Premier Wen Jiabao sits among students during a reading class at a middle school in Xinglong County, north China's Hebei Province on Sept. 10, 2010. Wen Jiabao called on teachers to dedicate themselves to rural education, improving teaching standards and contributing to the modernization of the country's education program during a visit to a school on Friday, the nation's Teachers' Day.

A record number of tourists from the Chinese mainland are expected to travel during the holiday peak season that starts on Sept 22, with outbound trips being the top choice for many. The China Tourism Academy forecast that 210 million tourists will travel domestically in the upcoming Mid-Autumn Festival and National Day holidays. The academy did not forecast how many mainland tourists will visit Hong Kong, Taiwan and Macao as well as foreign destinations, but industry insiders said that long-distance foreign destinations in the United States and Europe will also benefit from the long holiday. This year, 1.3 billion Chinese will be able to enjoy two public holiday periods as long as 10 days. The Mid-Autumn Festival holiday falls on Sept 22 to 24, while the seven-day National Day holiday starts on Oct 1. Between them, there are six working days. "If people can get approval to take the week off between the two holidays, they can have a 16-day holiday, which is ideal for long-distance outbound tours," said Dai Bin, head of the academy. Travel agencies said sales of packages for long-distance outbound destinations have particularly benefited from the two holidays. "The long holiday allows more tourists to participate in our outbound tours to faraway destinations, such as Canada, South Africa and even Chile and Tahiti," said Shi Xiaojuan, assistant general manager of the China Travel Service Beijing office. Packages of trips to the US, Canada and Japan are all very popular. These were fully booked by as early as the end of August, she said. The long holiday also benefited domestic destinations.

Geely-Volvo deal a win-win - Eddie Chen (second right), vice-president and chief representative for Greater China, Invest Sweden, talks with his clients in the exhibition hall of the China International Fair for Investment and Trade in Xiamen.

China's imports leapt in August, boding well for a strengthening of domestic demand in an economy that has become a major driver of global growth. The unexpectedly big increase in imports also dented mainland’s politically contentious trade surplus ahead of US Congressional hearings next week on whether to punish Beijing for what many in Washington see as an unfairly undervalued yuan. Wang Hu, an economist with Guotai & Junan Securities in Shanghai, said the import figures along with robust car sales data suggested that the country’s economy had touched bottom in August. “As European and US economic growth has slowed since the second quarter, the mainland may again lead the global recovery,” Wang said. Imports jumped 35.2 per cent in August compared with a year earlier, easily beating July’s 22.7 per cent rise and market forecasts of a 26.1 per cent increase, General Administration of Customs data showed on Friday. Annual export growth slowed to 34.4 per cent in August from 38.1 per cent in July but was close to expectations of a 35.0 per cent rise. That left the mainland with a trade surplus of US$20 billion, still eye-popping but down from US$28.7 billion in July and well below the median forecast of US$27.1 billion. Growth had slowed over the first half of the year in response to government steps to rein in bank lending, deter property speculation and close obsolete, energy-guzzling plants in sectors such as steel and cement. Housing prices have been steady since June, the government said on Friday, a sign that its measures to cool the property market have been successful. Heavy industries have also been running down their inventories, further dampening growth, but the import figures suggest this trend was petering out somewhat, said Qian Wang, an economist with JPMorgan in Hong Kong. Financial markets were moderately impressed by the resilience shown by the mainland, which by some estimates has already overtaken Japan as the world’s second-largest economy. Asian stocks outside Japan were up 0.2 per cent, while the Australian dollar, which is sensitive to mainland’s growth prospects, finished at a four-month closing high. Shanghai stocks ended the day up 0.26 per cent. Dong Xian’an, chief macroeconomist with Industrial Securities in Beijing, said the data implied a strong rebound in domestic demand. “A possible reason is that China increased imports of raw materials in the last week of August driven by political pressure as well as low global commodity prices,” he said. Analysts polled by Reuters expect the mainland economy to grow 10 per cent this year before slowing to a 9 per cent pace next year. US lawmakers will hold hearings next week on whether to punish Beijing for what critics say is a policy of holding the yuan down to gain unfair trade advantage. Larry Summers, President Barack Obama’s chief economic adviser, visited Beijing this week for talks with President Hu Jintao and other high-ranking mainland officials. After the meetings, the mainland and the United States both offered an optimistic take on ties that have been jolted by economic and security tensions as well as disagreements over the yuan’s exchange rate. Coincidentally or not, the mainland’s central bank let the yuan climb on Friday to its highest level since it was depegged from the US dollar on June 19. Still, the yuan has gained less than 1 per cent against the US currency since then. Moreover, mainland’s rolling 12-month trade surplus widened in August to US$177.1 billion from US$172.8 billion, handing ammunition to critics who say the country is fixated on exports and is fuelling unhealthy global economic imbalances. “China’s strong export growth and high trade surpluses weaken the argument that China cannot cope with currency appreciation, and should reinforce the case of those policymakers who argue that such a move would help address China’s domestic policy challenges while also reducing the potential for trade tensions,” Brian Jackson, an economist with Royal Bank of Canada in Hong Kong, said in a note.

Year-high CPI brings fresh fears - Mainland inflation hit 3.7 percent in August - the highest so far this year - and is expected to remain high in the next one or two months, economists estimate. Concerns over inflation risk re-emerged after foreign news agencies reported that the National Bureau of Statistics will release macroeconomic data for August tomorrow, instead of Monday as originally scheduled. But economists said an interest rate increase in the near term is unlikely. The consumer price index will remain above 3.5 percent in September and October, a UBS report said. "[CPI may rise as] ... bad weather and international market factors push up food prices, especially vegetables and meat, while the base effect also plays a role," said UBS Securities China economist Harrison Hu Zhipeng. Inflation expectations may also rise if credit expansion leads to higher prices for services and homes, and as wages go up, said UBS Securities head of China economic research Wang Tao. Wang and Hu predict that the CPI will ease by the end of the year, and that full-year inflation will be 3 percent. "We think the government will not raise rates before it has a better understanding of third-quarter GDP growth and the outlook for the next few months," Wang added. HSBC Global Asset Management investment director Mandy Chan expects inflation to peak in the third quarter, with one rate hike of 27 basis points at the most. "The mainland market will improve, as the central government's key tone on macro policies in the second half will not be as severe as previously, while most enterprises posted good earnings for the first half," she said. Chan added that China is entering a new phase in its shift from an export- and investment-led economy to one driven by domestic consumption. Credit Suisse analyst Vincent Chan said China's export growth will probably slow to only around 10 percent per annum, while investment growth will ease to around 15 to 20 percent annually in the next five years.

Growth in mainland’s property prices slowed for the fourth straight month in August, data showed on Friday, suggesting that government efforts to prevent a bubble are paying off.

US defence secretary may visit Beijing - US Defence Secretary Robert Gates could travel to China this year, following signs from Beijing of a willingness to resume military ties suspended over an arms sale to Taiwan.

China will launch its second lunar exploration probe by the end of this year, boosting the country’s effort to rise as a space power eventually capable of landing on the moon, official media said on Friday. A senior engineer overseeing China’s lunar exploration program, Wu Weiren, said work on the Chang’e-2 lunar orbiter was “proceeding smoothly”, the People’s Daily reported. “It is now at the stage of pre-launch testing and preparations, and the plan is to carry out a trial flight mission by the end of the year,” the paper cited Wu as saying. The Chang’e is named after a mythical Chinese goddess who flew to the moon. A successful Chang’e-2 mission would mark another advance in China’s plan to establish itself as a space power in the same league as the United States and Russia. In 2003, China became only the third country, after the United States and Russia, to send a man into space aboard its own rocket. In October 2005, it sent two men into orbit, and in 2008 it staged its first “space walk”, when an astronaut floated outside a vehicle orbiting the Earth. Chinese space officials said they are considering a manned landing on the moon by 2025-2030, state media reported last year. China launched its first moon orbiter, the Chang’e-1, in October 2007, accompanied by a blaze of patriotic propaganda celebrating the country’s technological prowess. The project engineer Wu said the Chang’e-2 would fly as close as 15 kilometres above the moon, testing skills and technology intended to pave the way for an unmanned landing, which previous Chinese reports have said would happen in 2013. China is jostling with neighbours Japan and India for a bigger presence in outer space but its plans have faced international scrutiny. Fears of a space arms race with the United States and other powers have mounted since China blew up one of its own weather satellites with a ground-based missile in January 2007.

Representatives from the mainland and Taiwan will negotiate an investment guarantee deal to encourage investment from the mainland, officials and analysts said on Friday.

A large portion of institutional investors do not support the slate of director nominees offered by Gome’s jailed founder and largest shareholder, the home appliances retailer said on Friday, as it faces a key vote on the future of its business. Gome Electrical Appliances Holding (SEHK: 0493) has called a special general meeting on September 28 to discuss measures proposed by founder and ex-chairman Wong Kwong-yu, regarding the removal of the current chairman and other board members. Wong is known on the mainland as Huang Guangyu. The meeting will also vote on Wong’s call to cancel a mandate to empower the board of directors to issue additional shares representing up to 20 per cent of the company. “We have spoken with institutions representing 42 per cent of Gome shares and we have yet to talk with a single fund manager who will be supporting Mr. Huang’s nominees to replace our existing board directors,” a Gome spokesman said. The spokesman declined to be identified because of the sensitivity of the matter.

A major US trade union on Thursday said the central government was providing various types of subsidies to mainland firms making solar panels and wind turbines in violation of World Trade Organisation rules prohibiting such subsidies. US union accuses Beijing of rigging green energy trade - A major US trade union on Thursday accused Beijing of handing out hundreds of billions of dollars in illegal subsidies in a bid to dominate the green energy sector. The United Steelworkers union petitioned the top US trade official to investigate practices it claims contravene World Trade Organisation rules and cost US jobs. “Right now, China is taking every possible step – many of them illegal under international trade laws – to ensure that it will control that sector,” said union president Leo Gerard. “America can’t afford to cede more of its manufacturing base to China.” The union – one of the nation’s largest – accused the mainland of blocking access to materials used in green technologies, illegally linking subsidies to export sales, curbing imports and demanding foreign investors hand over technology secrets. It also accused the mainland of providing more than US$216 billion worth of subsidies to green technology makers “more than twice as much as the US spent in the sector and nearly half of the total ‘green’ stimulus spent worldwide”. The administration of President Barack Obama has 45 days to respond to the claims, which received immediate backing from some of his allies in Congress. “This is a clear-cut violation, and we hope the administration will take up this complaint immediately. There is no question that China is ignoring trade rules so it can cheat its way to first place in the clean-energy manufacturing race,” said New York Senator Charles Schumer, a Democrat. “This is just the latest example of China’s unfair trade practices, but it is one of the most damaging for US manufacturers. We will never meet our goal of increasing exports if we let China get away with this.”

China's young Shenzhen programmer that can turn an iPod Touch into a phone will arrive in Apple's homeland soon - Software writer Pan Yong, 22, holds the Apple Peel, which can turn an iPod Touch into a mobile phone, a US-based technology company says. Go Solar USA said in an online posting on Wednesday that it had signed a funding option agreement last week with Shenzhen-based Yosion - a two-brother team from Henan province - to introduce the device to US customers. In an e-mail sent to Mobile magazine, a US online publication that covers mobile technology, Go Solar's headquarters in New Orleans, Louisiana, said that the device had been submitted to the US Federal Communications Commission for approval. "We are so pleased to have reached this agreement with Yosion," Go Solar president Tyson Rohde said. "We see the Apple Peel 520 as a stunning breakthrough in mobile technology, and we're proud to work with Yosion to develop this product for the US market." The Apple Peel 520 encases Apple's powerful iPod Touch media player and gives it voice calling and text messaging functions by using a built-in SIM card slot and battery. Users need to install software written by 22-year-old Pan Yong that breaks into the iPod Touch's software to allow use of non-Apple applications, an action known as jailbreaking. Pan Lei, Pan Yong's elder brother and Yosion's spokesman, confirmed yesterday that it was discussing with Go Solar the possibility of bringing the gadget to the US market. "But no final deal has been made and the agreement is optional," Pan Lei said. "It will be fantastic if Go Solar can help us solve IPR [intellectual property rights] problems in the US and we would then like to co-operate with them, if their conditions are not too tough." Pan Lei said that after they uploaded video of the device online in July, at least 30 sales companies - a third were from overseas - had contacted them asking to be their agents. He said they were also seeking help from powerful domestic companies. "We are working on applying for legal licences [for the device] from mainland telecommunications regulators," he said. "We still want to enter the market, both in China and the US, via legal methods." It remains to be seen whether the Apple Peel 520, which will cost just 388 yuan (HK$443), can gain Federal Communications Commission approval and what its impact on the US mobile market will be if it does. Apple has not commented on the issue and could not be contacted yesterday. Go Solar says that at the right price, around US$60, the device could become the world's hottest iPod accessory. According to its figures, 275 million iPod Touches have already been sold. US tech website Zoknows gaming.com says Yosion will develop a new version of the Apple Peel that will not require jail breaking.

Jiangsu Int'l Costume Fair kicks off - Models present fashion creations designed by Hong Kong stylist during the 12th Jiangsu International Costume Fair in Nanjing, capital of east China's Jiangsu Province, Sept. 10, 2010. The costume fair, with the theme of "brand, fashion and industry innovation", kicked off at Nanjing International Exposition Center on Friday.

US: Aircraft carrier to join Yellow Sea drill - United States Navy ship, USS George Washington, lowers the anchor as it docks in the waters of Manila Bay September 4, 2010. US Defense Department spokesman Geoff Morrell said on Thursday aircraft carrier USS George Washington will be sent to waters off the Korean Peninsula to participate in war games with the Republic of Korea (ROK). "The USS George Washington will indeed exercise in the Yellow Sea," Geoff Morrell said. China has voiced objection to any military drills off its coast. The drills were postponed from its original schedule on September 5-9. However, Morrell didn't give a specific timetable, stressing that it's not an affront to China, but rather a warning to Pyongyang. "We have said that will take place. I don't think we have determined a date yet, but rest assured, the George Washington will operate in the Yellow Sea, as it does in other international waters," he said. Following the sinking in March of a ROK warship, Washington and Seoul announced new sanctions against Pyongyang and a series of joint military exercises in the waters off the coast of the Korean Peninsula. The hardline stance incurred fierce response from Pyongyang, which was blamed for the incident by Washington and Seoul. Pyongyang had threatened to mount a nuclear deterrence to counter the muscle flexing of the US and ROK.

Sept 11, 2010

Hong Kong*: Hong Kong-based private equity firm First Eastern Investment Group will take a stake in All Nippon Airways’ planned low cost carrier (LCC), the Nikkei business daily said on Thursday. First Eastern, run by influential businessman Victor Chu, will be the second-largest shareholder in the budget airline behind ANA, which is putting in nearly 30 per cent of the 10-50 billion yen (HK$925 million to HK$4.6 billion) needed to capitalise the venture, the newspaper said. The new carrier is expected to be approved by ANA at an extraordinary board meeting later on Thursday, the paper said, adding that the airline will also seek investment in the LCC from domestic travel agencies and trading houses. ANA has said it was considering the launch of a low-cost carrier amid growing competition from the mainland and South East Asian discount airlines that kicked off flying to Japan following an “open skies” pact liberalising civil aviation markets. LCCs have been on the increase throughout the world, but Japan has always been a difficult market due to higher labour costs, limited slot availability at key airports and expensive landing fees.

Oasis ruined by urn trade, Buddhists say - Monks and nuns demand action to stop developer selling niches at Lantau monastery - The Venerable Wing Sing says the Yin Hing Monastery is an age-old religious retreat that should not be used for commercial gain. Monks and nuns living in a cluster of Buddhist monasteries in an idyllic part of Lantau have combined in a rare public protest against a commercial columbarium operator they say is intruding into and destroying the "spiritual oasis" of Hong Kong. About 30 of them left their haven at Luk Wu yesterday for a press conference to air their grievances over the urn storage development at the Yin Hing Monastery. Led by the Venerable Wing Sing, vice-president of the Hong Kong Buddhist Association, they called on the government to enforce the law, noting that the Lands Department had already said such use was a breach of the land lease. "It is unacceptable that [the business] is changing the age-old monasteries and the sacred place because of economic reasons. I hope everyone can say some fair words for us," said the Venerable Wing Sing, who is in his 80s and was in a wheelchair. Luk Wu, a basin in the middle of Lantau with 30 abbeys - the oldest set up 130 years ago - has been the temporary home of respected monks from the mainland and other countries. Four buildings have been given grade two or three historic status. The monasteries are open to members of the public seeking a spiritual retreat. But the monks and nuns say the atmosphere has been destroyed since a company called Hong Kong Yin Hing Monastery bought the site in 2007 and started selling urns, bringing visitors in buses every day. The group said they had no idea why their neighbour sold the monastery site, although they heard that the former landlord could not afford to maintain the slopes. They said about 1,000 out of 5,000 niches had been sold and they feared the developer might want to buy their sites for the same purpose as they had been subjected to harassment over the past four years. The company did not respond to inquiries yesterday. But a staff member told a reporter posing as a buyer that the niches cost from HK$35,000 to HK$209,000. The Lands Department said it was in dispute with the company after issuing it a letter telling it not to use the land for a columbarium, but it could not comment further because of possible court action. "My own place has been broken into five times," a nun, Hin Hing, said. "I got calls at midnight and someone on the phone once said, `A shadow passed outside your house just now, are you OK, Master?' I was so upset." Although the other monasteries also sell urn spaces the group said they were not protesting about competition, saying they just kept a handful of spaces to sell to believers for a few hundred dollars each. "What we have is a very limited service for believers. We are not running a business," the Venerable Kiu Chiu said. In July the group gathered about 17,000 signatures from Buddhists to support their cause. The Yin Hing Monastery land lease says the 30,600 sq ft site should be used for a Buddhist temple with ancillary accommodation for priests, candidates for the priesthood, or devout lay Buddhists on religious retreat. The Food and Health Bureau said a visit in July found some niches were already in use and illegal structures had been erected on the site. Police declined to give details of any investigation or say whether anyone had been arrested.

HK model arrested at Nevada festival - Rosemary Vandenbroucke, 28, is facing a drug charge and driving offences after being arrested at the Burning Man festival in Reno, Nevada on Sunday. A Hong Kong fashion model was arrested on drug charges at the Burning Man festival in Nevada and crashed her rented motor home into Reno's landmark arch the next day, authorities said on Wednesday. Rosemary Vandenbroucke, 28, was arrested about 9.30am on Sunday (local time) with a small amount of ecstasy after an officer questioned her about a substance she was seen passing to another person at the Labour Day weekend festival in the Black Rock desert, Pershing County Sheriff Ron Skinner said. Vandenbroucke was charged with possession of a controlled substance and released on US$15,000 (HK$116,573) bail pending an October 19 court appearance. A conviction could result in up to four years’ probation. Arrest records show Vandenbroucke produced a French passport and provided a Hong Kong address. It was not immediately clear on Wednesday if she was still in the United States. Arrest records in Lovelock and Reno do not say whether she was represented by an attorney. Skinner said the arrest was one of about 30 made during the annual event that officials say drew more than 50,000 people to the desert about 110 miles north of Reno. About 30 other people were issued summonses for lesser offences, the sheriff said. Vandenbroucke also faces three charges stemming from the crash of the 40-foot rented motor home into downtown Reno’s “Biggest Little City in the World” arch about 3pm on Monday, city police sergeant Jim Stegmaier said.

HK stocks edge higher as Cathay, Li & Fung rally - Hong Kong shares rose on Thursday, with retailer Li & Fung and Cathay Pacific Airways attracting institutional interest and local property plays also finding favor.

Rare Large Dragon stamps to be auctioned in Hong Kong.

 China*: Make inexpensive vehicles for mainland, truck makers advised - Global commercial truck and parts makers have underestimated the growth of the mainland market as they have failed to churn out "value-engineered" products to meet local demand, according to business advisory firm AlixPartners. Established players such as Daimler and Volvo would do well to produce inexpensive vehicles for mainland clients by reducing the complexity of the products, AlixPartners said in a recent report. The mainland emerged as the only major market for trucks last year, recording a 22 per cent production rise. Worldwide, production volume declined 29 per cent. Lower-cost trucks made by Chinese companies including Dongfeng Motor (SEHK: 0489) and First Automotive Works have outdone big-name players in meeting domestic demand as well as that of emerging markets such as Africa and Southeast Asia, posing a challenge to the big-name foreign rivals, according to AlixPartners. "Localisation of products to specific markets is crucial to capture market share in this global environment," said Ivo Naumann, a managing director of AlixPartners and head of the firm's Shanghai office. "China has successfully entered the middle market for trucks, which are in huge demand in the fastest-growing economies of the emerging markets, including China." The mainland became the largest maker of middle- and heavy-duty trucks in 2007. Five Chinese manufacturers made the list of the world's top 15 commercial truck suppliers by production volume last year. Chinese players dominate the low and middle segments of the domestic and emerging markets. China exported 134,000 units of commercial vehicles in the first half of this year, up 25.2 per cent from a year ago. The advisory firm predicted the mainland's truckmakers would contribute more than a third of global production, which is estimated to hit 3.66 million units in 2014. Profitability for Chinese manufacturers remained consistent in 2009 when European and North American rivals were facing the economic downturn amid a decline in production. AlixPartners says truck makers should design lower-performance products affordable to Chinese customers. A heavy-duty truck made in China sports a price tag of US$50,000 while a high-end truck in Europe costs up to US$120,000. "Western suppliers did not engineer products specifically for local markets' needs, whereas domestic suppliers were able to re-engineer parts which allowed them to meet local demand and prices due to their significantly lower cost," it said.

Bank of China has obtained approval from the China Banking Regulatory Commission for a 60 billion yuan share placement in Shanghai and Hong Kong, the bank said on Thursday.

Japan's seizure of fishing boat 'absurd' - A Chinese fishing boat is accompanied by a Japanese coastguard boat into a port on Ishigaki island, southwestern Japan, on Wednesday. China on Thursday called the seizure by Japan of a Chinese trawler that collided with two Japanese coastguard vessels and the arrest of its captain "absurd", warning it could adversely affect ties. The foreign ministry in Beijing said a “law enforcement ship” had been deployed to the area of the East China Sea where the collisions took place, near an island chain claimed by both nations, to protect Chinese fishermen. The uninhabited islands – known as Senkaku in Japan and Diaoyu in China – lie between Japan’s Okinawa island and Taiwan. They are claimed by Tokyo, Beijing and Taipei and are frequently the focus of regional tensions. “The Japanese side applying domestic law to the Chinese fishing boat operating in this area is absurd, illegal and invalid, and China will never accept it,” foreign ministry spokeswoman Jiang Yu told reporters. “If improperly handled, [the incident] could have a serious impact on the larger interests of China-Japan relations,” she said.

A mainland court has sentenced a top provincial official responsible for rooting out corruption to death for accepting more than US$1 million in bribes. Xinhua news agency said on Thursday that 62-year-old Wang Huayuan was sentenced by a court in eastern Shandong province for abusing his position. Wang was given a two-year reprieve, which means if he shows good behaviour the sentence will likely be commuted to a life term. Xinhua said Wang took the cash in exchange for helping corrupt businesses avoid arrests. Calls to the Zaozhuang Intermediate People’s Court rang unanswered on Thursday. Wang was detained last year when Beijing launched a nationwide crackdown on corruption, gangs and violence. The campaign has yielded 256,000 arrests.

China head full speed into the digital age - China invented paper, may be the first country to abandon it. head full speed into the digital age - In the past three years, the mainland's digital publication industry - mobile phone publishing, online gaming, advertising, e-books - grew at an average pace of 55.7 per cent annually. Last year alone, total revenues for the industry were 79.94 billion yuan (HK$91.31 billion) and exceeded book publishing for the first time, according to figures released by the General Administration of Press and Publication (Gapp) in July. With 420 million internet users at the end of June, the digital publishing market is huge and growing fast on the mainland. New businesses have been spawned, especially for mobile phones. Meanwhile, rival government departments are wrestling for control of the digital world.

Sept 10, 2010

Hong Kong*: Speculation rife over HSBC chairman's successor - The abrupt departure of HSBC chairman Stephen Green to become Britain’s trade minister sparked widespread speculation on Wednesday over who will lead Europe’s largest bank.

Bus hostage reporters chose 'ratings above lives' - Philippine reporters may have interfered with a police operation when reporting on a bus hostage crisis that killed eight Hong Kong residents, a journalist told an official inquiry.

The newly-appointed Chief Justice Geoffrey Ma Tao-li on Wednesday said he would do his best to safeguard the rule of law and uphold Hong Kong's judicial independence. He was speaking at his first press conference since taking oath last week as Hong Kong’s second chief justice since the 1997 handover. Ma said it was a great honour to be appointed to the position. He admitted there were some controversial cases before the courts, but said he was confident the judiciary could deal with them fairly. “Judges would deal with different cases according to the law,” Ma said. They would not allow their judgment to be influenced by ‘political and economic factors’,” he added. Asked whether Hong Kong might need to ask the central government to interpret its laws, Ma replied that according to the Basic Law, the National People’s Congress Standing Committee had the power to interpret laws here. But he stressed that the standing committee would only exercise this power under special circumstances. Ma said the Basic Law stipulated that Hong Kong’s judicial independence would be upheld under the one country, two systems’ principle. Ma had worked in private practice since 1978 until he joined the Judiciary as a Judge of the Court of First Instance of the High Court in December 2001. He was appointed Chief Judge of the High Court in July 2003, where he led the High Court, both judicially and administratively. Ma has considerable experience in various areas of civil law.

Johnson Electric (SEHK: 0179) has appointed former Hong Kong Monetary Authority (HKMA) chief executive Joseph Yam Chi-kwong to its board as an independent non-executive director. Company secretary Susan Yip Chee-Lan said the appointment would take effect from September 30. “Mr Yam has not entered into any service contract with the company. He was appointed for a term of two years subject to retirement and re-election by shareholders at the next annual general meeting,” Yip said. Since Yam retired last December, he has taken up a number of positions. These include becoming the first Hong Kong resident appointed to a senior post at the People’s Bank of China, and becoming a non-executive director to the China Construction Bank (SEHK: 0939, announcements, news) Corporation.

Tai Hang site to draw upbeat developers - Agents expect strong interest in urban plot as market shrugs off cooling measures - Agents estimate the Tai Hang site, which LaSalle Investment Management bought for HK$423 million, could fetch up to HK$809 million. Despite home seekers becoming cautious over the past few weeks, fierce bidding at land auctions shows developers are expecting the market will maintain its momentum. Defying slow property sales in the secondary market last month, agents expect a residential site at 3-11 Warren Street in Tai Hang, owned by LaSalle Investment Management, to be another target for developers. The investment fund has appointed law firm Mayer Brown JSM to handle the sale and the tender will close on October 6. The 6,679-square-foot site could provide a total gross floor area of 67,398 sq ft. The fund bought the site for HK$423 million or HK$6,276 per sq ft in March last year. Agents estimated the site to be worth up to HK$809 million or HK$12,000 per sq ft. As there are only a few similar sites on Hong Kong Island available for sale, property agents said many developers are interested in the site. "It is located in a prime location and the buildings on the site have been demolished," said one property agent who spoke on condition he was not named. "The site can be developed immediately, which is very attractive to developers." Developers have become more aggressive in land acquisitions recently as they expect property prices will continue to rise, particularly real estate in urban areas, another agent said. Home sales at the major 35 housing estates monitored by property agency Midland Realty dropped 32.6 per cent to 882 last month from 1,309 deals in July. Average prices were flat. The firm believes the sharp fall in sales was due to the government's cooling measures on August 13. But the land sales market is heating up after a luxury site at Ede Road in Kowloon Tong attracted 16 bidders including Kerry Properties (SEHK: 0683), Chinachem Group, Wing Tai Properties, Wang On Group and Tai Cheung Holdings last week. Kerry Properties won with an offer of HK$1.285 billion or HK$16,587 per square foot, the highest land price in terms of floor area in Kowloon. Kerry Properties is part of the Kerry Group, controlling shareholder of the SCMP Group, which publishes the South China Morning Post (SEHK: 0583). Last month, a residential site in Hung Hom attracted aggressive bidding, with Cheung Kong (Holdings) (SEHK: 0001) winning the site with the 145th bid. Despite the market expecting more cooling measures, many developers such as K Wah International deputy general manager Quinly Wan Tsz-mie remains optimistic about the outlook. "I don't think the government wants to see a sharp fall in property prices. They just want prices to stabilise," she said, adding the company is interested in the Tai Hang site. "The bidding for the site at Ede Road was fierce as it was in a good location and the size was small. Many developers are optimistic on the market in urban areas," she said. Victor Lui Ting, executive director at Sun Hung Kai Real Estate Agency, said he is cautiously optimistic about the outlook. "The fundamental factors for the property market remain positive," he said. "Interest rates are low, the Hong Kong and mainland economies are improving and salaries are rising. These factors will continue to support the market." He said the slowdown in sales in recent weeks was to be expected given the new supply. "Many new large-scale projects such as Festival City in Tai Wai, Hermitage in West Kowloon and Larvotto in Ap Lei Chau have been released this year," Lui said. He said developers would bid aggressively for good sites as supply in urban areas was tight. Dennis Au, executive director of Wing Tai Properties, said land prices have increased at recent land auctions as demand for housing was strong. "With low interest rates, strong demand and a positive economic outlook, prices will go up 5 to 10 per cent by the end of this year," he said. "The government may release more cooling measures but the impact would not be significant."

Jewellery displayed at Sotheby in Hong Kong A model displays a diamond ring with an estimated value of 48 - 55 million Hong Kong dollars (6.2 - 7.1 million USD) at Sotheby in south China's Hong Kong, on Sept. 8, 2010.

 China*: Nissan Motor and its mainland partner Dongfeng Motor Group (SEHK: 0489) unveiled on Wednesday a new brand for their local passenger car venture, saying the first model would be introduced in 2012. The original nameplate, called “Venucia”, or “Qi Chen” locally, will sell vehicles developed and designed in the mainland specifically for the local market, a Nissan spokesman said. He said he could not yet disclose details such as planned vehicle types and price range. Venucia is the latest proprietary brand to emerge from mainland ventures partly held by foreign automakers, as local manufacturers seek to put their own stamp on the world’s biggest car market. Dongfeng Motor has plans for a new brand with a separate venture with Japan’s Honda. The Japanese company has already created the Linian brand with its other mainland partner, Guangzhou Automobile Group, with plans to begin selling the first model next year. Dongfeng and Nissan operate one of the most successful ventures in the mainland, called Dongfeng Motor Co, selling passenger cars under the Nissan brand and commercial vehicles under the Dongfeng nameplate. The passenger vehicle arm, Dongfeng Nissan, also said it had produced its 2-millionth vehicle on Wednesday after seven years of operation. The company said it was on track to meet its sales target of 600,000 units for this year, with sales up 35.5 per cent at 434,000 units in the January-August period. “In the future, we aim to sell more than 1 million vehicles annually and the new brand will play an important role by offering practical models with class-leading quality,” Fumiaki Matsumoto, managing director of Dongfeng Nissan Passenger Vehicle Co, said in a statement.

Ties improving, Hu tells White House team - US Deputy National Security Adviser Thomas Donilon meets President Hu Jintao, right at the Great Hall of the People in Beijing on Wednesday. China and the United States said on Wednesday that their sometimes rocky relationship is sounder after talks in Beijing, with both putting an optimistic face on ties that have been jolted by economic and security tensions. The friendly mood-music between two of the world’s biggest economies came during talks between President Hu Jintao and two White House advisers, Deputy National Security Adviser Tom Donilon and National Economic Council Director Larry Summers. Throughout this year, Washington and Beijing have gone through bouts of friction over internet policy, Tibet, US arms sales to Taiwan, China’s currency and Chinese territorial claims in the South China Sea. The gaping US trade deficit with China, worth US$226.9 billion last year, has fuelled trade disputes. President Hu is likely to visit the United States early next year, and he played down the rifts in remarks to Donilon and Summers, who arrived in Beijing on Sunday for meetings with senior economic officials and diplomats. “I’ve heard your discussions have gone well. I’m sure that this visit will certainly enhance mutual communication and mutual trust,” Hu told them at the start of the talks, while reporters were briefly allowed in the meeting room. “Since President Obama assumed office, China-US relations have on the whole maintained healthy development thanks to the efforts of both sides,” added Hu. The Obama administration was also looking to smooth ties with Beijing, Donilon told Hu. “Our discussions have been productive, detailed, far-reaching – covering the full range of security and economic issues,” said Donilon, who was seated next to Hu. Neither side has said what issues are being discussed during the three days of talks ending on Wednesday, which included a meeting between Summers and Zhou Xiaochuan, the head of China’s central bank, which steers currency policy. But the two sides have had plenty to talk about. Washington complains that China keeps its yuan currency too low against the dollar, giving its manufacturers an unfair advantage and making Chinese exports cheaper. China unofficially pegged the yuan to the dollar from mid-2008 to mid-this year, so the currency weakened against other trade partners as the value of the dollar slid. China ended that de facto peg on June 19, but has risen only about 0.4 per cent against the dollar since then. As well, Beijing has complained about US military activities near the Chinese coast, and in recent months held a succession of naval exercises accompanied by warnings from the Chinese People’s Liberation Army about Washington’s intentions. But Hu is looking to visit the United States early next year, an important but tricky political trophy for the leader as he enters his final two years as President. Both sides appear keen to keep a lid on tensions before that visit, as well as G20 and regional summits later this year when Obama and Hu will also have chances to meet. “China looks positively on the fresh progress made in China-US relations, and we are willing to work together with the United States in promoting the advance of healthy and stable China-US relations,” said Hu.

Shanghai Pharma targets US$1.2b IPO in Hong Kong - Shanghai Pharmaceuticals Holding, the mainland partner of Roche Holding, said on Wednesday it plans to raise at least 8 billion yuan (HK$9.14 billion) through a public share offering in Hong Kong. Shanghai Pharmaceuticals would sell up to a 25 per cent stake in the offering and would use the proceeds to acquire rival companies and sales networks at home and abroad, the company said in a statement to reporters ahead of a news conference. The company’s Shanghai-listed shares, which have risen 12.5 per cent in the past month, closed at 20.81 yuan on Monday before they were suspended from trading pending a material announcement. They are due to resume trading on Thursday. In March, Shanghai Pharmaceuticals acquired two listed companies in a restructuring that enabled Shanghai Industrial Holdings to exit the pharmaceutical business.

China to continue seeing large influx of foreign investment in coming years: commerce minister - Chinese Minister of Commerce Chen Deming speaks during the ministerial round table of the 2nd World Investment Forum, which is sponsored by the United Nations Conference on Trade and Development (UNCTAD), in the coastal city of Xiamen, southeast China's Fujian Province, Sept. 7, 2010.

Famed philanthropist Chen Guangbiao helps to direct traffic in downtown Nanjing, capital of East China’s Jiangsu province, Sept 7, 2010. Chen took the role of traffic ambassador in Nanjing recently and advocates road safety in the city. The billionaire has pledged to donate his entire fortune of more than five billion yuan ($735 million) to charity after his death in response to Bill Gates and Warren Buffett’s call for philanthropy.

China demands Japan free trawler captain - Japan coastguard personnel disembark the captain of the Chinese fishing boat that collided with Japanese patrol vessels at a port on Ishigaki island on Wednesday. Beijing on Wednesday demanded that Tokyo free the captain of a Chinese fishing trawler who was arrested after his vessel collided with two Japan coastguard vessels in disputed waters. In a worsening diplomatic row between the Asian giants, China summoned Japan’s ambassador for a second time since the incident on Tuesday near a disputed island chain in the East China Sea, the foreign ministry said. China “demanded that the Japanese side immediately release the ship and crew members on board and guarantee their safety”, assistant foreign minister Hu Zhengyue told Japan’s ambassador Uichiro Niwa, the ministry said. Beijing also sent embassy staff to Japan’s southern Ishigaki island where officials started questioning the Chinese skipper, and where his fishing vessel with its 14 crew was expected to arrive later in the day. Japan, which suspects the captain hit its patrol ships deliberately in the confrontation, is holding the captain on suspicion of obstructing officers on duty, which carries a maximum three years’ jail. The captain responded to interrogation obediently, Kyodo News agency reported, quoting Japanese coastguard officials. The incident started on Tuesday morning when Japan’s 1,300-ton patrol boat Yonakuni ordered the trawler to cease operations in the disputed waters.

Sept 9, 2010

Hong Kong*: Children in tough battle for places at top school - At the age of five, Haylie Wong has already started learning windsurfing from her mother, Olympic windsurfing gold-medal winner Lee Lai-shan. Lee, Hong Kong's first Olympic gold medallist, hopes the sport, along with piano and dancing lessons and other sports Haylie has been pursuing, will help her secure a Primary One place at St Paul's Co-educational College Primary School, a traditional elite school. Her wish to secure her daughter a place was shared by more than 2,000 parents who attended the school's admission briefing in Wong Chuk Hang yesterday. The school received more than 2,100 applications last year, and expects a similar number this year, but it will admit only 150 students. "The competition is keen, but worrying will not help," said Lee, who won her windsurfing gold at the Atlanta Olympics in 1996. "I will try to help my daughter attain all-round development in academics, sports and arts." Her husband, Wong Tak-sum, said he would teach basic etiquette to his daughter so that she could perform well in interviews. The couple would also apply to other schools to increase their child's chances. Another pupil, Jason Ho, has been attending ballet, music and painting classes, among others. He would soon start public speaking lessons, his parents said. "We are living in Tsueng Kwan O but we have reserved funds for moving to the Hong Kong Island if Jason goes to this school," his mother said. "To build up his language ability he has been going to a bilingual kindergarten, which is also helping him to prepare for primary school admission interviews." She had also prepared a 20-page portfolio for Jason containing reference letters related to his hobby classes and contest records. Headmistress Lydia Lam Lee Tuen-yee said the school picked pupils who were cooperative and had respect for others. "We test every applicant's personality in the first-round interview, conducted in a play group of three," she said. "Pupils who grab the others' toys or fight are not suitable for admission." Two hundred children are picked for the second-round interview, when the parents meet the headmistress. The school will admit the top 150 from two streams, one with links to the school such as family members who have previously attended the school, and the other without any links, with an approximate ratio of six to four.

Super frozen tuna adds to seafood mix - A seafood image adorns the wall on the opening day of the Asian Seafood Exposition at the Hong Kong Convention and Exhibition Centre in Wan Chai. Sushi and sashimi-loving Hong Kong may pride itself in the freshness of its seafood but super frozen tuna, one of the freshest, is not even on the menu. Billed as fresher than "fresh" tuna, super frozen tuna could make it to local restaurants soon if suppliers find enough demand in the city. Fresh tuna is sold in Hong Kong, where countless supermarkets and restaurants cater to the public's voracious appetite for the delicacy. Fukuichi Fisheries managing director Hiroshi Kondo said the Japanese supplier was looking at ways to export super frozen tuna to Hong Kong but needed to ensure the popular seafood product could be properly stored at minus 40 degrees Celsius. Most storage facilities in the city were only capable of temperatures of minus 20 degrees, he said at the inaugural Asian Seafood Exposition which runs until tomorrow at the Convention and Exhibition Centre. "One possibility we are thinking about is building our own freezer here," he said. "Or we could try to convert some freezers from minus 20 degrees to minus 40 degrees." Sri Lankan supplier Global Sea Foods, which exports super frozen tuna mainly to Europe and the US, is also keen to tap the local market, according to business development manager Tilarni Amath. Unlike fresh tuna, super frozen tuna is flash frozen at minus 60 degrees Celsius or below immediately the tuna is caught, gutted and cleaned. It remains stored at very low temperatures until it is sold, unlike fresh tuna, which can be up to two weeks old before it is consumed. The process of flash freezing at minus 60 degrees Celsius or below ensures freshness by preventing degradation by dehydration or bacteria growth. Reduced water loss helps prevent oxidation, which browns the flesh. Flash freezing delays the onset of rigor mortis, in which released chemicals stiffen flesh within hours of death. This means super frozen tuna maintains its deep red colour, and the taste and texture of freshly caught fish.

Shooter executed HK hostages one by one, driver tells inquiry - Gunman walked along bus, firing to left and right as he went. Bus driver Alberto Lubang gives evidence at the inquiry. The driver of the bus hijacked in Manila two weeks ago told a public inquiry yesterday how he watched in horror as the gunman walked through the vehicle and shot Hong Kong tourists one by one. During his testimony, Alberto Lubang drew a diagram of the 43-seater bus and indicated where each of the tourists had earlier been made to sit, one in every row. Armed with an assault rifle and a pistol, sacked policeman Rolando Mendoza took the busload of tourists hostage on August 23 in a desperate bid to clear himself of extortion charges and get his old job back. Eight tourists were killed and seven others were injured in the central Manila stand-off. Lubang told how at about 6pm that day, he watched Mendoza fly into a rage after the former policeman saw on a TV inside the Hong Thai Travel bus his younger brother being manhandled by policemen. Lubang said Mendoza kept screaming into a mobile phone for a radio reporter to tell the police to set him free "or else I will finish them all off". "Over and over he said that, for maybe 10 minutes," Lubang said. "I became extremely nervous." He recounted how he watched Mendoza in the rear view mirror execute the tourists using a police-issue Armalite. He heard one shot "and the one beside me, the one handcuffed near the door, just suddenly slumped over. I nearly lost it". The gunman then strode down the middle of the bus, where the 15 remaining passengers occupied one row each. "I saw in the mirror he was at the back, shooting each seated passenger one by one, left and right," he said. "Until he reached the middle where he nearly crouched, waiting for something." Lubang showed the panel how Mendoza shot each tourist at close range, placing the muzzle of the Armalite up to about 15cm from them as he fired.The driver went on to recount his dramatic escape out through the window beside the driver's seat shortly before police assaulted the bus. He said Mendoza had earlier handcuffed his left wrist to the steering wheel. As the killings began, he managed to use a nail file attached to the bus keys to open the handcuffs. He showed the file with a bent tip yesterday. But when someone produced a pair for him to demonstrate his escape, he said it was a different make of handcuffs. He didn't see any of the passengers cry out nor did he see anyone on the floor. Justice Secretary Leila De Lima, who is chairing the inquiry, said perhaps Lubang had been deafened by gunfire. The inquiry also heard for the first time a two-minute recorded radio interview with a Hong Kong woman, minutes before she died. In the interview conducted at about 7.12pm, Yeung Yee-wa, 44, told radio station RMN: "We all stay in the bus and we are OK." She said in a shaky voice that she had two children and one, her 15-year-old daughter, was in the bus with her. Asked if she was scared, she replied "ya, ya, ya." When told that police negotiators were outside, she said: "I don't understand. OK." The radio reporter told her to take care. At around 7.28pm, Mendoza started shooting and Yeung Yee-wa, her sister and brother-in-law were killed, while her daughter Tracey Wong Cheuk-yiu was injured. The inquiry continues today. In Hong Kong, meanwhile, Philippine investigators began meeting survivors yesterday. Li Yick-biu and Li Fung-kwan - who were released by Mendoza - met the Philippine officials at police headquarters in Wan Chai yesterday afternoon. Hong Kong police will seek the consent of other survivors, as well as advice from doctors and psychologists, before deciding to arrange any more meetings with survivors. A police officer familiar with the situation said copies of survivors' written statements taken by Hong Kong police were given to the investigators along with help with ballistic tests.

George Tan (left) and Rogerio Lam, outside court yesterday, are fighting over five pieces of antique Chinese porcelain. Echoes of the sensational and long-running Carrian case resounded in court again yesterday. Disgraced investor Rogerio Lam Sou-fung and the former head of the failed Carrian property empire, George Tan Soon-gin, began a legal battle over five pieces of antique Chinese porcelain. Lam says he lent the pieces to Tan in 1982 and is now demanding the return of two and the proceeds from the sale of three others - one of which was auctioned recently for more than HK$103 million. The hearing began in the Court of First Instance 14 years after Tan was jailed for three years on charges of conspiracy arising from the Carrian property empire collapse, and eight years after Lam was jailed for 20 months on various charges in a separate case. The claims about the antiques - a Song dynasty deep dish, a pair of quail dishes, one of a pair of stemcups with a rising sun design and a Guyuexuan vase - were made in a submission to the court from Lam's lawyer, James Campbell. Auction house Sotheby's HK has also asked the court to decide whether Lam or Tan should be given the proceeds from the sale of the vase. This case will be heard after the other concludes. Lam says he lent the pieces to Tan in 1982 after Tan saw them when he visited his home. According to the submission, Lam did not receive any benefit from lending the pieces. Tan, in borrowing them, had been able to show them off to clients at his office. "The conferring of benefits was all one-way." Lam is also seeking compensation for damage he says has been caused to some of the items. The pieces, Lam says, had been carefully preserved and passed down for many generations, through many dynasties. They were "passed to Mr Tan in virtually the same condition as when they left the hands of their makers, some thousand years before", the submission said. Making his first public appearance in many years, Lam was mobbed by photographers as he arrived at court. Lam, son of the late Hang Seng Bank (SEHK: 0011, announcements, news) founder Lam Bing-yim, was convicted in 2002 on two counts of using a false instrument for trying to use a bogus bank guarantee in two failed attempts to obtain loans of US$200 million from two banks. He was jailed for 20 months and barred from being a company director for five years. Tan was jailed for three years in 1996 after he admitted conspiracy involving US$238 million in secret loans obtained by Carrian from Malaysian Bank Bumiputra. In 1980, Lam offered HK$1.68 billion to buy Gammon House, now the Bank of America Tower, from the Carrian Group. He bought five of the building's 32 floors. The hearing continues before Madam Justice Carlye Chu Fun-ling.

The University of Hong Kong has overtaken its Japanese rival to become the highest ranking university in Asia, in an international league table released today. HKU is ranked 23rd in the world in the QS World University Rankings, up one place on last year, while the University of Tokyo has fallen from 22nd position to 24th. The 2010 ranking is the first to be published solely by higher education information firm QS Quacquarelli Symonds following a rift with its media partner, Times Higher Education. The magazine of the British newspaper is planning to release a rival league table on Thursday next week after teaming up with global publishing giant Thomson Reuters. Hong Kong has five universities in the table's top 200 for the second year running, with Polytechnic University leaping 29 places to 166th. Chinese University has also improved its position, rising four places to 42nd. But the Hong Kong University of Science and Technology and City University have fallen back on last year's ranking, both down by five places to 40th position and 129th respectively. QS managing director Nunzio Quacquarelli said the 2010 survey used the same data and methodology as previous QS/Times Higher Education World University Rankings but had significantly larger academic and employer surveys. "Hong Kong is continuing to perform extremely well," he said. "HKU is continuing to make progress because of its high faculty scores. It is also slightly better in our academic survey and in terms of international students." Hong Kong was able to maintain three universities in the top 50 because its universities were strong across all the five subject areas assessed in the ranking, he said. The mainland again managed just two universities in the top 100, Tsinghua and Peking, with Peking rising five places to 47th position and Tsinghua falling five places to 54th. At the top of the table, the University of Cambridge knocked Harvard out of first place, while MIT rose four places to oust Oxford and Imperial College London from joint fifth place. HKU has also taken first place for the past two years in a ranking of Asian universities - also published by QS - which is based on slightly different criteria. HKU vice-chancellor Professor Tsui Lap-chee said: "It is of course gratifying for us to know that the university has again been ranked among the best in the world and I am also heartened to see other Hong Kong universities in the top 50 as well." Tsui pointed out that rankings employed different approaches but said that because the QS rankings employed the same methodology as that which had been used in the QS/Times Higher Education World University Rankings for the past five years, it was possible to compare HKU year on year. "One conclusion we can draw from this longitudinal analysis is the consistency that HKU shows in its high scores on those criteria chosen by QS as important for the best universities worldwide," he said. A spokeswoman for City University said it had "once again performed very well", adding that it had decided not to submit data for the new Times Higher Education rankings because it was only in its first year and was as yet "untested".

AIA eyes September 21 approval for listing - The hearing date for AIA's flotation comes earlier than expected, meaning the offering could hit the market next month. American International Group planned to seek Hong Kong listing committee approval on September 21 to list its Asian life insurance unit, aiming to raise about US$15 billion, two people with direct knowledge of the deal said yesterday. AIG, which is nearly 80 per cent owned by the US government, is disposing of assets to repay taxpayers as part of the US$182.3 billion bailout package that rescued the insurer during the 2008 financial crisis. Last week, AIG filed an application with the Hong Kong stock exchange to list American International Assurance. While a listing committee hearing usually takes place about four weeks after the application, the hearing date for AIA's flotation comes earlier than expected, meaning the deal could hit the market next month instead of the earlier plan for November. AIA would hold an analyst briefing on Friday, another three sources familiar with the matter said, planning to kick off a roadshow in early or mid-October. AIA's share sale comes after AIG tried unsuccessfully to sell the business earlier this year to Britain's Prudential for US$35.5 billion. AIG had scrapped a plan to sell a strategic stake in AIA ahead of its IPO, a source familiar with the process said earlier. The focus for the IPO is on discussions on the sale of cornerstone stakes. The success of AIA's listing will hinge largely on demand from cornerstone investors, as was seen in the record-breaking IPO of Agricultural Bank of China in July. Citigroup, Deutsche Bank, Goldman Sachs Group and Morgan Stanley are the global co-ordinators for the IPO. Bookrunners include Bank of America Merrill Lynch, Barclays Capital, CIMB, Credit Suisse, ICBC International, JP Morgan and UBS. Separately, Hong Kong-listed China Strategic Holdings said this week that AIG might choose not to proceed with its agreement to sell the Nan Shan Life Insurance unit to China Strategic and partner Primus Financial Holdings after Taiwan regulators rejected the US$2.2 billion deal. "AIG has indicated its current view that it would be in the best interests of the parties to terminate the share purchase agreement," the company said in a filing with the Hong Kong stock exchange on Monday. Taiwan's regulators rejected the bid last week, saying China Strategic and Primus did not meet criteria on experience in the insurance business and ability to raise funds.

 China*: Sino-US military ties poised to resume - Beijing is set to resume military exchanges with Washington in the latest sign that Sino-US ties are improving after months of tension.

Steel shares surge as energy drive bites - The move to make the industry more energy-efficient is estimated to have affected 70 per cent of the nation's construction-steel capacity and 30 per cent of industrial-steel capacity. Steel shares have continued their surge on the back of rising steel prices as local governments on the mainland clamp down on the energy-intensive sector's production to meet their energy-efficiency targets. Some 18 provinces and autonomous regions were being audited by six working teams sent by the central government on their energy-efficiency improvement and pollution control measures, the official China Securities News reported last week. The steel sector, which accounts for a sixth of the nation's power consumption, bears the brunt of the campaign. Steel mills in Hebei, Jiangsu and Zhejiang have been the most affected as the governments there took the toughest measures, shutting down some plants through power cuts in some areas for up to three months and rationing power or substantially raising power prices in others. According to industry portal mysteel.com analyst Wang Jianhua, the move is estimated to have affected 70 per cent of the nation's construction-steel capacity and 30 per cent of industrial-steel capacity. The average price of wire rods, used in construction, in key cities rose 4 per cent to 4,462 yuan (HK$5,099) a tonne between last Friday and Monday, according to industry website lgmi.com. In hard-hit Hebei province, hoarding by traders saw prices of the material rise 17 per cent to around 4,850 yuan a tonne. Rolled steel, used in vehicle and home appliance manufacturing, saw more moderate increases, with hot-rolled steel rising 3.4 per cent and cold-rolled increasing 1.3 per cent in the period. Steel prices fell around 18 per cent between mid-April and mid-July amid oversupply and weaker demand due to macroeconomic tightening, but have rebounded just over 10 per cent since. Beijing has set a target to reduce the nation's energy consumption per unit of gross domestic output by 20 per cent between 2006 and this year. The figure fell 15.61 per cent between 2006 and 2009, but rose 0.09 per cent in the first half of this year, according to the National Development and Reform Commission. Mysteel.com's Wang expects the nation's average steel price to rise 10 per cent in the next two months and hit this year's high reached mid-April.

China Mobile down after Vodafone sale - 11:39am Shares in China Mobile fell 3.6 per cent on Wednesday after Vodafone Group disposed of its 3.2 per cent stake in the country’s largest mobile carrier for US$6.5 billion.

Sept 8, 2010

Hong Kong*: Li Ka-shing hails Shenzhen's 30 years of growth - Hong Kong tycoon Li Ka-shing on Monday said he was amazed at what Shenzhen had achieved in the last three decades. Li, who is the chairman of Cheung Kong (SEHK: 0001) Group and Hutchison Whampoa (SEHK: 0013), was speaking at a ceremony to mark 30 years since Shenzhen became a special economic zone (SEZ). He paid tribute to Shenzhen’s “courage and determination” during this time. Li also noted that Hong Kong and the southern mainland city had enjoyed a special relationship. “Shenzhen is geographically close to Hong Kong, but Hong Kong also has a very close partnership with the city.” he added. Li said Shenzhen was poised to develop into a truly international (SEHK: 0732) city. Before speaking at Monday’s ceremony, President Hu Jintao met with Chief Executive Donald Tsang Yam-kuen. Hu praised Hong Kong’s contribution to the development of the special economic zone. During his speech, Hu said Shenzhen had “contributed significantly to China’s opening up and reform”. In 1980, Shenzhen became the first area in China designated as a special economic zone that could accept foreign investment, under reforms pioneered by late leader Deng Xiaoping. It offered lower taxes and less red tape to attract the overseas investors whose factories – staffed by China’s abundant cheap labour – set the mould for the country’s explosive manufacturing-based economic growth.

Hu Jintao encourages Hong Kong tycoon to contribute more to modernization - Chinese President Hu Jintao (R) meets with Li Ka-shing, chairman of Cheung Kong (Holdings) Limited, on the sidelines of the celebration rally for the 30th anniversary of the founding of the Shenzhen Special Economic Zone, in Shenzhen, south China's Guangdong Province, Sept. 6, 2010. Chinese President Hu Jintao Monday encouraged Hong Kong's richest man to play a greater role in the country's reform and opening up as well as modernization. China's first special economic zone celebrates 30th anniversary Hu made the remarks in his meeting with Li Ka-shing, chairman of Cheung Kong (Holdings) Limited, on the sidelines of a rally in Shenzhen Monday to mark the city's 30th anniversary as China's first economic reform zone. Mr. Li is a witness to the development of the Shenzhen Special Economic Zone as well as an important participant in building it," Hu said. He called on Li to continue to use his influence to boost Hong Kong's cooperation with Guangdong and Shenzhen and to help maintain long-term prosperity and stability in Hong Kong. Hu said Li was an outstanding member of Hong Kong's commerce and industry community, who had contributed to the country and Hong Kong. The country's development had created a unique opportunity for Hong Hong and its businesses, said Li. "I will would work with all my heart and strength to boost cooperation between Hong Hong and the Mainland and to contribute to the prosperity of the country and Hong Kong," he said. Also present at the meeting were Vice Premier Wang Qishan, Liu Yunshan, head of the Publicity Department of the Central Committee of the Communist Party of China (CPC), and Wang Yang, secretary of the CPC Guangdong Provincial Committee.

It is premature to expect a substantial switch from dollar-based assets to the yuan's in the Exchange Fund, according to the Hong Kong Monetary Authority head. Chief executive Norman Chan Tak-lam said speculative and human factors have made foreign exchange "too variable." Some major investment banks were bearish on the US dollar last year. This prompted Chan to explain to the Legislative Council in November that international currencies could not all plunge at the same time. As the dollar picked up later in the wake of the European sovereign debt crisis, the authority shunned costly forex investments, Chan said. Hong Kong dollar and US dollar assets comprised 86 percent of the fund's total assets as of December. Chan reiterated that the authority is interested in the yuan market and has been in talks with relevant authorities to see how it can make investments. "We don't have any yuan funds, so where will they come from?" Chan said. "We're still discussing whether to use the [current] currency swap agreement, or buy via other means." One objective is to diversify the HK$2.2 trillion Exchange Fund, but Chan said any yuan investment target is still premature. He pointed out there are concerns such as official quotas, exchange risks and liquidity restrictions. The authority set up subsidiary Eight Finance last year and loaned it HK$2.8 billion for diversified investments, but Chan said its returns should also be viewed from a span of three to five years. He stressed the Exchange Fund should not be compared with private equity funds with different investment objectives, noting there are no "special ways" to boost investment returns. "You can either bet on foreign currencies or increase the portion of securities," he said. "Yet another way is doing both under higher leverages, boosting investments 10, 20 times by borrowing." But higher returns on equity must come with higher risks, Chan said.

Mortgage data pool looms - Homebuyers' mortgage histories are set to be shared among banks from next year - if the privacy commissioner gives the go-ahead. In defending the likely relaxation of private data, Hong Kong Monetary Authority chief executive Norman Chan Tak-lam told The Standard banks must be assured that buyers have the ability to repay home loans. Banks, he said, should be forced into auctions of properties whose owners cannot meet mortgage payments only as a last resort. The privacy commissioner is studying whether a common mortgage database can be set up for banks, Chan said, and lenders are working toward the same goal. "The ability of investors and speculators to meet mortgage payments is very doubtful when they have two or three outstanding mortgages and they want to buy even more homes," he said. A similar database involving consumer loans has been in force since 2003 following a change in the Code of Practice on Consumer Credit Data. Chan said the pooling of mortgage data - already being practiced in the United States and Europe - is imperative for the stability of the banking system. As mortgages make up half of all loans by banks, their risk management is absolutely essential. He believes it is premature to judge the effectiveness of tighter mortgage policies since they have only been in place since mid-August. On the record prices at recent land auctions, Chan said it is natural for a prime site to fetch more. He took issue with claims that the Kowloon record set in the auction of a Kowloon Tong site last week amid measures to cool the property market reflected policy failures. The HKMA will conduct stress tests this month on banks' mortgage portfolios. As the Hong Kong interbank lending rate is highly variable, the tests will be based on the best lending rate caps in a hypothetical case of interest rates being raised by 200 basis points. To pass the test, the debt service ratio of homebuyers - many of whom have gone into debt because they expected home prices to rise - must not surpass 60 percent after taking into account not only mortgages but all other loans. Chan pointed out that the situation reminded him of the Asian financial crisis, when homebuyers were "inexplicably optimistic" and "screened out" all negative news until price plunges became painfully obvious. Homebuyers at that time, he also pointed out, were in a better position than now since interest rates fell from a peak of 10 percent in 1997 to 2.5 percent five years later, massively reducing their burden. Chan stressed the situation this time will be very different: "It may well be a sudden hike in interest rates that leads to a fall-off in property prices." The US subprime crisis showed that lending to marginal borrowers could lead to a massive surge in non- performing loans during a crisis, Chan said. He believes the recent tightening by the Hong Kong Mortgage Corporation of downpayments from 5 to 10 percent of a property's value is "mild" and an "appropriate" move that needed to be taken for the corporation's own protection. "It is very dangerous for aspiring homebuyers to have little principal," Chan said. "When prices fluctuate, the principal is as good as gone." It has been shown worldwide that buyers who put little cash down are less willing and able to hold a property, so buyers should make bigger downpayments when risks are rising, he said. The corporation's mortgage guarantee to Home Ownership Scheme buyers will be introduced this month, but Chan expects demand to be limited.

The slight fall in opening-day turnover was just a hiccup, the Jockey Club chief executive said, as he expressed confidence the new racing season will be even more successful than the last one. More than 48,000 fans turned out to welcome the new season though turnover at HK$781 million was down 6 percent on last year's HK$833 million. However, Winfried Engelbrecht- Bresges noted that yesterday's figures were actually better than those 12 months ago. Gross margin was up by HK$3 million, betting duty paid to the government up HK$2 million to HK$104 million and the amount retained by the club for operating expenses and charities contributions up by HK$1 million. "Smaller fields than last year's meant there was a slight shortfall in turnover but this was a direct consequence of the shorter break between the seasons," he said. "There's no doubt the slight turnover dip reflects the fact that this year we had a shorter off-season break. "Runners were down by nearly 20 percent, but when you see the number of horses trialling you realize that in two to three weeks' time we will be back to normal in terms of fields and therefore turnover ... I believe it will be another good year ahead." In racing terms, the day at Sha Tin was a success, Engelbrecht-Bresges said, particularly when three-year-old Lucky Nine beat the older horses in the opener - the HKSAR Chief Executive's Cup. Chief Executive Donald Tsang Yam- kuen was on hand to present the cup, having earlier declared the season open by striking a ceremonial gong and dotting the eyes of a lion together with new Jockey Club chairman Brian Stevenson. The feature race matched the occasion, with a superb finish in which Lucky Nine, ridden by Brett Prebble, cut down last year's winner Nightlign, the mount of his archrival and champion Douglas Whyte, in a pulsating finish. Engelbrecht-Bresges earlier indicated the club will continue to press the government for changes in the way it taxes horse racing. "It is important that the government and legislators look at the wider picture when considering gambling issues," he told Jockey Club voting members. "Since the club was authorized to offer off-course betting in 1973, its total charitable donations has exceeded HK$27 billion, and it has contributed a remarkable HK$261 billion to the public purse," he said. "To sustain these contributions to the community, we need to establish a new framework that can enable the club to stay competitive, covering services, offerings, taxation and regulatory issues."

Hong Kong Property tycoons sit on massive land reserves - The theory is simple: property prices are high in Hong Kong because land is scarce. But it isn't. The top six developers, Cheung Kong (Holdings) (SEHK: 0001), Sun Hung Kai Properties (SEHK: 0016), Henderson Land (SEHK: 0012), Sino Land, Kerry Properties (SEHK: 0683) and New World Development, hold development projects that could provide flats adding up to 42.6 million sq ft of gross floor area when completed. This equates to about 43,000 flats with an average size of 1,000 sq ft. However, the property giants are moving at their own pace. This makes sense since they have no incentive to flood the market and drive the value of their assets down. But it points to some of the challenges the government faces in moderating price rises. "As developers have massive land banks in hand, they have full control of when and at what price level to sell flats," said Professor Eddie Hui Chi-man of Polytechnic University's building and real estate department. He said the situation in Hong Kong may become like that on the mainland where the central government is looking at land hoarding by developers. Selling more land in Hong Kong should have undercut prices - but there is a limit to what the government can put on the block. After selling seven sites at auction this year, including lots in Argyle Street in Kowloon and Hung Hom Bay last month and No1 Ede Road, Kowloon Tong, last Tuesday, there is not much left. The remaining 39 sites on the Lands Department's application list, available for developers to trigger for sale this financial year, can supply only 5.56 million sq ft of gross floor area. Given that some of the land will be for mid-sized apartments with an average size of 700 sq ft while the rest will be developed as luxury villas with an average size of 1,000 sq ft, these areas will provide about 6,700 flats. This is only a sixth of the combined land banks of the top developers. Under the list system, a site is auctioned if a developer bids enough to force a sale. Taking into account farmland, the amount of land controlled by the main developers is even greater. Four of the big six, excluding Sino and Kerry, have amassed 86.3 million sq ft of agricultural land. Assuming a plot ratio of two - owners of such land are usually allowed a gross floor area equivalent to 0.5 to three times the size of the sites - that could be converted to supply up to 172 million sq ft of residential floor area. But the developers still need to negotiate with the government on the land premium to be paid to convert the land to residential use. Including farmland and old building acquisitions, Credit Suisse estimated earlier that Cheung Kong, Sun Hung Kai Properties and Henderson Land have land banks big enough to keep them going for four years, five years, and eight years, respectively. Assuming land supply does not increase, Credit Suisse said: "We believe developers will continue to adopt the high-price, low-volume strategy." Economists and analysts say the developers' collection of land enables them to hold back projects to wait for higher prices. For example, Sino Land bought a site at the junction of Hoi Wang Road, Yan Cheung Road and Yau Cheung Road in the West Kowloon reclamation area in May 2007. After three years it has formed little more than the foundation. "They may launch the project as close to 2015 as possible for a higher average selling price as a high-speed railway station will be completed by then," said one analyst referring to the terminus for the planned Hong Kong-Guangzhou rail link in West Kowloon. If it is planning to do this, Sino Land is not saying. "At present, construction work has continued on schedule. The target date for the occupation permit is the end of 2011," a spokesman said. Ken Yeung, an analyst at Citigroup Global Markets Asia, said developers had been accumulating land since 2004 when the government stopped regular auctions to prevent slumping property prices from sinking further. Developers pay for land upfront, but low interest rates - and a bullish outlook for property prices - encourage them to sit on assets. "The interest cost is 2 to 3 per cent a year nowadays, which is about half of the cost before 2004," Yeung said. "The land price, on the other hand, has been leveraging rapidly in these few years." Noting that the Centa-City Leading Index, which measures average housing prices, had recently topped 80 points from about 30 in 2003, Yeung said: "This is like property prices climbing to HK$8,000 per sq ft from HK$3,000". As the building cost has been stable at about HK$2,000 per sq ft, that means land value has multiplied from HK$1,000 to HK$6,000." Not all land can be held indefinitely. For example, developers are bound by a government land lease to develop farmland within a specified period once it has been converted to residential use, says the Lands Department. The department does not have any plans to prevent the development of large land banks. "Land acquisition by developers is a market activity. For the sites disposed of by the government by public auction or tender, it is through an open and competitive process. Any interested parties may participate in such sales," it said. Last month, the government announced policies to regulate the market, which include banning confirmor transactions - resales before an initial deal has been completed - for new flats and increasing the down payment for sales above HK$12 million from 30 per cent to 40 per cent. The Lands Department will also put up for auction this month and next month three areas designated for small to mid-sized flats. These sites in Chai Wan, Hung Hom and Fanling together can provide 540 flats. Financial Secretary John Tsang Chun-wah said more land would be put on to the application list to provide more than 9,000 flats in the next financial year. When the cooling measures were announced, it led to a halving of flat sales over the following weekend and a fall in developer's stocks of 3 to 5 per cent last Monday. But the market soon heated up again after Cheung Kong paid HK$7.61 billion - about 30 per cent higher than forecast - to buy two sites in an auction on August 17. Polytechnic University associate professor Lam Pun-lee said the government should speed up its schedule to put land from the Kai Tak development and West Kowloon Cultural District for auction. "We learn from economics that expectations can also affect market behaviour," he said. "A clear signal that the government will soon sell a large area of land from these sites would be strong enough to adjust the property market." The government has yet to announce a clear plan and timetable for these sites. On Kai Tak, which will have more than 300 hectares of land, the financial secretary said only that it would eventually provide 16,000 flats and that land for about 4,000 flats should be available by 2015. For the 40-hectare West Kowloon Cultural District, the residential development is limited to 20 per cent of the gross floor area of the site. The West Kowloon Cultural District Authority launched a three-month public consultation on three new visions for the arts hub on August 20 and still has another round to go before a final blueprint is developed and submitted to the Town Planning Board for consideration next year. Hui said the shortage of new flats in recent years had boosted housing prices. "There are almost 40,000 new households formed each year in Hong Kong. Besides the 10,000-odd new public flats built by the government, we need 10,000 to 20,000 new ones from the private sector," Hui said. However, only 8,776 and 7,157 flats were completed in 2008 and last year respectively, down from about 26,000 flats between 2000 and 2004. Developers say they have no difficulty in accumulating more land resources. "As a developer, land bank replenishment is required," a Sino Land spokesman said. "Sales depend on the timing of issuing a pre-sale consent." Sun Hung Kai Properties said it had always been its strategy "to maintain a land bank adequate to accommodate four to five years of development needs". Cheung Kong did not reply to inquiries.

Local banks should be ready to grasp opportunities in the mainland - whether yuan-related or not - as the global economy will take longer than expected to recover, said Amy Yip Yok-tak, chief executive of DBS Bank (Hong Kong).
Hong Kong's yuan business has already taken off, but the speed of progress depends on opportunities opening up, Yip told The Standard ahead of her pre- retirement leave. Many yuan-denominated products were launched in recent months, including yuan equity-linked notes, structured deposits and yuan currency swaps, with DBS Hong Kong among the first to offer such products. "The Hong Kong dollar has undergone `yuan- ization' for some time," she added, as most local firms have yuan income overseas and many mainland state and private firms have opened offices here. "This is a trend that will continue to expand. It will not - and should not - be reversed." The regulator-turn-banker said China holds the key for the future of local banks. This includes both yuan and non-yuan businesses as local lenders such as DBS Hong Kong can provide services to mainland residents while opening access to China for locals and foreigners. Yip said DBS is interested in buying the interbank bond market in the mainland, and is awaiting an announcement on terms and conditions. "The devil is in the details," she said, noting the lender needs to be prudent. Yip, meanwhile, admitted that DBS Hong Kong's share of the local mortgage market has fallen to 11th from fifth. Although recent auctions have set records, they did not reflect the actual market, and the bank sometimes valued homes lower than their transaction prices. Many homeowners are continuously selling in the secondary market, according to Yip. DBS Hong Kong will aim for fee income growth, as its faces a squeeze in net interest margin and mortgage lending, said Yip, who retires at the end of the year. She is optimistic about the lender's earnings growth, adding that the impairment loss on goodwill it made in the first half for the purchase of Dao Heng Bank and Kwong On Bank in 2003 was the second one. The first was in 2005 when the amortization accounting policy changed.

Philippines police 'have no hostage negotiating team', inquiry told - Hong Kong Police Chief Inspector Wan Siu-Hung, left, and Superintendent Man Tat-Shing, second from left, listen to testimony given by Philippine Police Superintendent Orlando Yebra, right, who was a negotiator in the August 23 hostage stand-off in Manila, during a hearing at the Department of Justice in Manila, Philippines on Monday.

Masters to set up world's first fung shui body - Some of the city's best known fung shui masters are joining forces to set up the world's first industry association to regulate the profession.

The value of Hong Kong's clock and watch exports amounted to HK$24.5 billion in the first half of 2010 – up 24 per cent from the same period last year, Permanent Secretary for Commerce and Economic Development Yvonne Choi said on Monday. “Hong Kong is the second largest exporter of clocks and watches in the world,” said Choi, adding that the industry was helping Hong Kong recover from the global economic crisis. She said Europe, the US and the mainland continued to be Hong Kong’s top three export markets for watches and clocks. Choi made the comments at Hong Kong Watch and Clock Fair, which opened on Monday at the Convention and Exhibition Centre in Wan Chai. Some 700 exhibitors from 15 countries have joined this year’s fair. It will run until Friday.

Red carpet of 'Detective Dee and the mystery of Phantom Flame' at 67th Venice Film Festival.

 China*: China’s FDI to pass US$100b - Foreign direct investment into the mainland is likely to pass US$100 billion this year for the first time, official media said on Monday. Non-financial FDI hit a record US$92.4 billion in 2008 but fell to US$90 billion last year after the global financial crisis. Foreign investors are upbeat about the country’s economic outlook and Beijing’s efforts to improve the investment environment have boosted their confidence, the official Xinhua news agency quoted Shen Danyang, a spokesman for the commerce ministry, as saying. The mainland drew US$58.4 billion in FDI in the first seven months of the year, up 20.7 per cent from the same period of last year. Another official, Liu Zuozhuang, said the mainland’s outbound investments this year were likely to reach US$60 billion. The officials were speaking at a news briefing on Sunday. Last year, mainland companies’ outbound direct investment was worth US$56.5 billion, an increase of 1.1 per cent from 2008. “China is now the fifth largest investing nation worldwide, and the largest among developing nations,” said Shen, according to the China Daily. He said the flow would rise further in coming years. Despite intense interest in the nation’s ties with Africa and other distant developing markets, 71.4 per cent of mainland’s outbound investment was within Asia last year. Africa accounted for 2.6 per cent and Latin America 13.0 per cent, said the Ministry of Commerce, according to the China Daily.

Hu marks 30 years of 'miracle' Shenzhen - President Hu Jintao speaks during a ceremony to mark the 30th anniversary of the founding of Shenzhen Special Economic Zone in Shenzhen on Monday. President Hu Jintao hailed the export hub of Shenzhen as a "miracle" on Monday as China marked 30 years of reforms that provided the blueprint for the country's economic rebirth. “The Shenzhen Special Economic Zone created a miracle in the world’s history of industrialisation, urbanisation and modernization and has contributed significantly to China’s opening up and reform,” Hu said on a visit to the southern city which borders Hong Kong. “The central government will, as always, support the brave exploration of the special economic zone as well as its role of testing and carrying out reforms ahead of others,” he said, according to state-run television. Once a sleepy fishing village, Shenzhen is widely viewed as the cradle of China’s dramatic transformation into a world economic and trade juggernaut. In 1980, it became the first area in China designated as a special economic zone that could accept foreign investment, under reforms pioneered by late leader Deng Xiaoping. It offered lower taxes and less red tape to attract the overseas investors whose factories – staffed by China’s abundant cheap labor – set the mould for the country’s explosive manufacturing-based economic growth. Several other special economic zones followed, in the nearby cities of Zhuhai and Shantou in Guangdong province, the port of Xiamen in the southeastern province of Fujian and the southern island of Hainan. The reforms touched off an annual economic growth rate of 25.8 per cent over the last 30 years in Shenzhen, compared with about 9.8 per cent for the entire country, according to government figures. The population has ballooned to nearly nine million people, most of them members of China’s huge army of migrant workers, according to official data. Authorities expanded the area of the zone to just under 2,000 square kilometres (770 square miles) this year, nearly the size of Luxembourg, from the previous 396 square kilometres. Located in the Pearl River Delta, the heartland of China’s export-oriented economy, Shenzhen boasts one of the highest minimum wages in China at 1,100 yuan per month, compared with just 600 yuan in the poor central province of Henan. It is home to many high-tech firms, including Taiwanese IT giant Foxconn, which employs more than 400,000 people in the city to make products for Apple, Panasonic and other top brands. The city, however, is often pointed to as a symbol of some of the social problems attending these Chinese economic model’s reliance on cheap factory labor. Foxconn, for example, has come under heavy criticism over working conditions at its factories after 13 Chinese employees committed suicide this year at Foxconn plants and an affiliate, including 10 in Shenzhen. State media reports have also decried the city’s thriving prostitution industry, while a corruption scandal involving mayor Xu Zongheng tainted the city last year. Xu was removed from office. But Wang Rong, the Communist Party chief of Shenzhen, told a rally that the city would continue to play the role of “first mover” and strive to be the “vanguard of China’s scientific development.” Shenzhen would build itself into a “modern and international” metropolis, Wang said, according to the official Xinhua news agency.

Wen, Carter voice will to advance China-U.S. ties - Chinese Premier Wen Jiabao (R front) meets with former U.S. President James Carter (L front) in Beijing, capital of China, Sept. 6, 2010. Chinese Premier Wen Jiabao and former U.S. President Jimmy Carter Monday voiced optimism over the China-U.S. relationship and the will to work for stronger ties despite ups and downs. "Since the two countries established diplomatic ties 31 years ago, China-U.S. relations have weathered various tests and always moved forward," Wen said during a meeting with Carter in Beijing. Wen said it is crucial at this moment for China and the United States to develop a positive, cooperative and all-round bilateral relationship, which requires arduous, long-term efforts from both sides. At present the two sides should enhance mutual trust, strengthen cooperation and join hands in promoting the recovery of the global economy, he said. In the long term, the two countries should abide by the principle of mutual respect and treating each other as equals, properly address their disputes, increase common interests, actively push forward all-round cooperation and jointly push for sustained peace and sustainable development for humankind. "China is ready to work with the U.S. to fend off various risks and continually push forward the relationship," Wen said. Carter said he was proud of the decision he and late Chinese leader Deng Xiaoping jointly made 31 years ago to establish diplomatic ties between the two countries. He said he had confidence in U.S.-China relationship. He said he is willing to work for deeper understanding and friendship between the people of the two countries. Carter is in China for a conference on international sister cities in Shanghai and the fourth China Zhijiang International Peace and Culture Festival in Hunan Province this week.

China bucked international trends in both outbound and inward investment, official figures have revealed. China now ranks as the fifth largest global investor in outbound direct investment (ODI) with a total volume of $56.5 billion, compared to a ranking of 12th in 2008, the Ministry of Commerce said on Sunday. On top of this, foreign direct investment (FDI) this year was set to "surpass $100 billion", compared to $90 billion last year, ministry officials predicted. Globally, foreign investment decreased by almost 40 percent last year amid the financial downturn and is expected to show only marginal growth this year. The growth in both outbound investment from, and inbound investment to, China reflects the nation's rising economic power and attractiveness as an investment destination. The ministry made the announcements during a press conference held in Xiamen on the upcoming United Nations Conference on Trade and Development (UNCTAD) World Investment Forum and the 14th China International Fair for Investment and Trade. Both forums will start on Tuesday. According to the ministry, China's ODI grew by 1.1 percent from a year earlier to $56.53 billion, which includes investment of $47.8 billion in non-financial sectors worldwide, up 14.2 percent year-on-year. Last year was the eighth consecutive year that the nation's ODI had grown. In this period the average annual growth rate stood at more than 50 percent. "China is now the fifth largest investing nation worldwide, and the largest among the developing nations," said Shen Danyang, vice-director of the ministry's press department. In 2009, global ODI volume reached $1.1 trillion, and China contributed about 5.1 percent of the total. But "this is just a beginning." Although the figure is already "quite amazing," the volume is "not large enough" considering China's economic growth and local companies' expanding demand for international opportunities, Shen said. "The growth rate (for ODI) in the next few years will be much higher than previous years," Shen said, without elaborating. China's ODI growth witnessed strong momentum this year. From January to June, the ODI in financial sectors was up by 43.9 percent to $17.84 billion, and in July alone, the ODI recorded $8.91 billion, the highest this year. Liu Zuozhang, director of the investment promotion agency under the commerce ministry, told China Daily that China's ODI in non-financial sectors would probably grow to $60 billion this year. But while more Chinese companies were investing overseas, barriers and protectionism against Chinese investment were strengthened as well. Fan Chunyong, standing deputy chief of the China Industrial Overseas Development and Planning Association, said the challenge would not affect the upward trend of the ODI. "China's ODI will go up to $100 billion in 2013, and the Chinese accumulative overseas investment will reach $500 billion by then," said Fan. According to the ministry, by the end of 2009, 13,000 Chinese enterprises had invested in 177 nations and regions worldwide, and the largest volume of funds went to the Asia-Pacific region. Europe and Africa ranked second and third in absorbing Chinese investment. Figures also revealed that more Chinese enterprises were focused on developed nations and emerging markets. During the first half of the year, China's ODI to the United States and the European Union rocketed by 360 percent and 107.2 percent respectively year-on-year. And investment into ASEAN and Russia grew by 125.7 percent and 58.5 percent. Jinny Yan, economist from Standard Chartered Shanghai, predicted that the EU would continue to be a hotspot for China's outbound investment in the coming months thanks to the ongoing European debt woes. As for FDI, Shen predicted it would reach a record high of $100 billion this year as China's consumption capacity gradually picked up and the nation's efforts on creating an open and transparent investment environment paid off. Responding to recent complaints by foreign businesses on the "worsening" investment environment, he said it "highlights foreign businesses are attaching more importance to the Chinese market". A report by the European Chamber of Commerce released last Thursday said China had made progress on improving its investment environment, but still needed to do more, especially on market access and the regulatory environment. While global FDI slumped by almost 40 percent last year, China's FDI was down by a mere 2.6 percent, according to the UNCTAD. China remained the second largest recipient nation of FDI, following the US. During the first seven months, China's FDI increased by 20.7 percent to $58.35 billion, and FDI in July surged by 29 percent. Zhan Xiaoning, director of the investment and enterprise division under the UNCTAD, said China was taking the leading role in the FDI recovery worldwide, even though FDI growth was not a cause for optimism globally.

Sino-US relations 'on a sound track' - A US trade delegation meets with the Li Yuanchao at the Great Hall of the People in Beijing on Monday. China-US relations are back on track after being waylaid by difficulties earlier this year, a senior Beijing official told visiting White House envoys on Monday. Li Yuanchao, a top official with the ruling Communist Party, made the remarks in talks with US Deputy National Security Adviser Thomas Donilon and US National Economic Council Chairman Larry Summers. “Although there were some disturbances in China-US relations... relations have gotten back on a sound track,” Li told the visiting Americans before the two sides began closed-door talks. Neither side has offered detailed information on the purpose of the four-day visit or what was to be discussed. However officials from the two sides have met recently about the possibility of resuming six-nation negotiations on ridding North Korea of its nuclear programs. Tensions spiked this year over issues including a US arms sale to Taiwan, a meeting in February between President Barack Obama and the exiled Tibetan spiritual leader the Dalai Lama, and trade disputes. However the temperature has cooled considerably in recent months following several high-level meetings of the two sides, including between Obama and President Hu Jintao. Following the meeting with Li, the two White House officials met with Foreign Minister Yang Jiechi.

Eighteen steel mills in Wuan district of Hebei province which do not meet state requirements for environmental protection and energy savings have been forced to close since Sunday, reports said on Monday.

Guangzhou Auto unveils its model - The central government is urging domestic carmakers to develop their own models. Newly listed Guangzhou Automobile Group has started producing its first home-grown model, the Trumpchi, which is made on the technological platform of Fiat's Alfa Romeo. Trumpchi, which means miracle in Chinese, sells for about 15 per cent less than the 180,000 yuan (HK$205,250) Toyota Camry. Guangzhou Auto, a joint-venture partner with Toyota and Honda, expects sales of Trumpchi to reach 30,000 units by next year. "When we reach 60,000 units, the business will contribute to profits," said Wu Song, vice-general manager of Guangzhou Auto. "By 2015, total sales should be 300,000 units and production will be 400,000 units." An initial batch of about 500 units is to be delivered by December, just in time to serve as the official car of the 2010 Asian Games, which will be hosted in Guangzhou. Other state-owned carmakers such as Shanghai's SAIC Motor and Hubei's Dongfeng Motor (SEHK: 0489) have rolled out their own models, such as the Roewe and the Fengshen. Similar to SAIC Motor and Dongfeng, Guangzhou Auto is looking to launch mid-range cars. The central government has urged mainland carmakers to develop their own models in order to compete with global players, which are seeing huge sales expansion on the mainland. Since the 1980s, mainland carmakers have been teaming with foreign players to set up 50-50 joint ventures for technology transfers. "I learned a lot from Toyota and Honda about how to manage a factory and nurture talent," Wu said. That provided him with the knowledge to lead the effort to make the company's own model. Hong Kong-listed Guangzhou Auto, which privatised subsidiary Denway Motor this month, was also eyeing a listing on the mainland's A-share market in three to five years, its top executives said.

Sept 7, 2010

Hong Kong*: Property deals in HK climb to 31-month high - Property sales in Hong Kong rose to a 31-month high last month but the market is expected to slow significantly as government cooling measures make buyers more cautious.

A mobile phone used by the hijacker of the tourist bus in which eight Hongkongers were shot dead is missing and could be in Hong Kong, a police hostage negotiator told an inquiry in Manila yesterday. Chief Inspector Romeo Salvador said the phone disappeared the day after the tragedy. One of the members of the inquiry team, Secretary of the Interior and Local Government Jesse Robredo, said records of text messages and calls from the negotiators' cell phones did not match those retrieved from the phone of former policeman Rolando Mendoza. He asked Salvador if all the mobile phones used by the gunman on August 23 had been collected. Salvador said: "The [missing] cell phone was turned over to the homicide [division], which turned it over to a Hong Kong representative [the next day] because homicide thought it was the personal property of one of the hostages. We really tried to look for it because all our calls are recorded there." He said the officers gave the phone, which belonged to an officer, to Mendoza so they could communicate with him. Justice Secretary Leila De Lima, chairwoman of the panel, ordered an aide to write a letter to the Hong Kong authorities asking for the return of the phone. Hong Kong officials refused to comment. The five-member panel looking into the bungled rescue of 15 Hong Kong hostages was also told that during one phone conversation, Mendoza shouted abuse about a corruption investigator, deputy ombudsman Emilio Gonzalez, who was examining the robbery and extortion allegations against him. Mendoza accused Gonzalez of demanding 150,000 pesos (HK$26,200) for a favorable ruling in his case. Salvador said he heard the gunman repeatedly curse Gonzalez on the phone saying: "You were demanding 150,000 pesos for my case. It will be all your fault if all these people die." In separate testimony, Manila vice-mayor Isko Moreno said he was standing next to Gonzalez when Mendoza was abusing him over the phone. Gonzalez said: "Wait, I don't know anything about that." The panel went into a closed-door session with Metropolitan Police Chief Leocadio Santiago. Then Manila SWAT team members who took part in the bungled rescue testified.

Hong Kong and Ukraine signed VISA FREE Agreement amid warming trade ties with China - Donald Tsang greets Ukrainian President Viktor Yanukovych after the pair witnessed the signing of an agreement on visa-free travel. - Hong Kong struck a visa-free travel agreement with Ukraine yesterday as its president hailed the city's role in his Eastern European nation's emerging "strategic relationship" with China. President Viktor Yanukovych said he wanted Hong Kong investors to play a key role in a new era of "political pragmatism and economic modernization" after long years of "political confusion". "Elevating our relationship [with China] to a new strategic level is a priority for us," Yanukovych told a Trade Development Council lunch after meeting Chief Executive Donald Tsang Yam-kuen. "China is a special force of attraction for Ukraine ... it is a tolerant force, it's not going to pull Ukraine to the right or left nor make it an area of its influence. "Today we have a new class in our country, a class of entrepreneurs willing to work in market conditions and with respect to fair competition. The work of this class is not based on ideology but on fair competition." Hong Kong's relations with the emerging markets of Eastern Europe have had a hectic few days. Yanukovych's delegation included senior government, parliamentary and industrial figures, and marked his first state visit to China. Tsang met Russian President Dmitry Medvedev in Moscow on Tuesday after Cathay Pacific (SEHK: 0293)'s inaugural passenger flight between the Russian capital and Hong Kong. He will meet a delegation from the Slovakia led by President Ivan Gasparovic at Government House tomorrow. Hong Kong officials said that while Eastern Europe remained an important emerging region for the city, the flurry of activity did not represent a sudden new push but rather efforts to steadily build links. Trade with Eastern Europe was largely insulated from the worst effects of the global financial crisis. Council executive director Fred Lam Tin-fuk said Hong Kong-Ukraine trade was up 33 per cent to US$78 million in the first two quarters of this year - a figure he described as "just the beginning". "I say this because I know that Ukrainian trade with the ... mainland is also growing fast. Building economic ties with the ... mainland is a priority for Ukraine." Ukraine exports minerals and agricultural products and is also a source of hardware and technology for China's growing military - a legacy stemming from its previous inclusion in the former Soviet Union. The People's Liberation Army is expected to lean more heavily on Ukraine in coming years as a source of technology it can no longer acquire from an increasingly wary Moscow. Once derided by opponents as being too close to Moscow, Yanukovych has broadened Ukraine's international relationships while seeking to promote its entrepreneurs. A former Soviet-era transport chief, Yanukovych recovered from an overturned 2004 election to win a five-year term in March.

Mass dredging works raise fears for harbor - A dozen marine projects will transform the sea bed A dozen marine projects will transform the sea bed.

A host of big engineering projects due to start beneath the waters of Victoria Harbour this year and next have raised fears over what effects the collective dredging operation might have on marine life and water quality. The seabed, from east to west, will undergo a massive transformation as various projects involving dredging start almost simultaneously. It is likely to be the biggest collection of such jobs since the early 1990s, when the so-called rose garden projects - the new airport and related road and rail links - saw vast land areas reclaimed from the sea. While all the latest projects have been approved by the environmental watchdog, questions are being raised about why they are being allowed to start at about the same time and whether the effects on marine ecology and water quality have been properly assessed. At least a dozen marine projects - including roads, ports, tunnels and submarine pipes - are due to start this year or next, and they will continue into 2012 and beyond. Together they will produce an estimated 40 million cubic metres of sediment - enough to fill 16,000 Olympic-sized swimming pools - that will have to be disposed of somewhere. At least seven million cubic metres of this material is contaminated with heavy metals like silver, mercury, arsenic, copper and zinc released into the water and dropped to the seabed since the unregulated industrial boom of the 1960s and '70s. Individual sediment samples at the site of one project - a cross-harbour gas pipeline - was found to contain heavy metal levels up to eight times the maximum used by the Environmental Protection Department to decide if such sediment must be dumped in an isolated area.

John Woo honor 'a triumph for HK' - Director Quentin Tarantino applauds as John Woo takes the stage at the 67th Venice Film Festival on Friday to receive the Golden Lion award. The lifetime achievement award bestowed on Hong Kong director John Woo at the 67th Venice Film Festival is recognition of the city's world-class talent, the head of CreateHK says. Jerry Liu Wing-leung, who heads the government office that leads the development of creative industries, congratulated Woo, who received the prestigious Golden Lion award in Venice on Friday. "[Woo's honour] is an international recognition as well as a demonstration of the strength of Hong Kong filmmakers," Liu said, referring to the strong presence of Hong Kong films at this year's Venice festival. Woo was joined on stage by Hong Kong director Tsui Hark and award-winning director Quentin Tarantino. Woo, who brought a string of highly stylised Hong Kong action classics - including A Better Tomorrow and Hard Boiled - to Hollywood, said in his acceptance speech that he had not contributed much to film, but had made a few good movies. "I would like to be a bridge between the good things of the West and the East, so we can further our mutual knowledge and build a strong friendship," said the 64-year-old veteran, who's directed some of Hollywood's top-grossing films, including Mission Impossible II and Face/Off. Woo also presented his latest martial arts thriller, Reign of Assassins, in the festival's out-of-competition section. The film stars Michelle Yeoh and Korean Jung Woo-sung. Festival director Marco Mueller described Woo's films as "a perfect union of China tradition and avant-garde filmmaking". Venice is crowded with big names from Hong Kong this year. Tsui is presenting Detective Dee and the Mystery of the Phantom Flame tonight at Sala Grande. The period action drama - starring Andy Lau Tak-wah, Carina Lau Ka-ling and Tony Leung Ka-fai - is competing for top festival honors. The non-competition section also featured Stanley Kwan's drama Showtime, set in 1930s Shanghai, Andrew Lau Wai-keung's kung fu epic Legend of the Fist: The Return of Chen Zhen, and the Pang Brothers horror flick, The Child's Eye 3-D. Local trade and film bodies held a reception last night in honour of Woo and the local films selected in Venice.

Gold's long rally seen to continue on firm demand - Precious metal forecast to hit US$1,500 next year - Gold may reach at least US$1,300 an ounce this year as investors seek a shield against financial turmoil, weak currencies and inflation.

 China*: China's top 500 enterprises reported smaller revenue gaps with their U.S. counterparts, while outperforming their worldwide competitors in profitability amid the nation's rapid economic recovery, an industrial ranking report showed Saturday. China's top 500 enterprises chalked up 4.05 trillion U.S. dollars in operating revenues last year, equivalent to about 18 percent of the operating revenue total created by the world's top 500 companies in the same year, and the ratio was 2.62 percentage points lower than the figure recorded for the year earlier, according to a report released Saturday in Hefei, capital of east China's Anhui Province, by the China Enterprise Confederation (CEC) and China Enterprise Directors Association. The average profit margin of China's top 500 enterprises was 5.44 percent in 2009, compared with 4.16 percent for the world's top 500 companies. Further, the net profits of the Chinese heavyweights grew by more than 20 percent last year, faster than the 17 percent for the world's top 500. It was the second consecutive year that Chinese enterprises outshone their foreign counterparts in annual profits. Miao Rong, researcher with CEC, said despite the progress, China's top 500 enterprises obviously suffered from the impact of the global financial crisis as they reported slower growth in new employment and business revenues. However, unlike the world's top 500 companies, most of which are service and high tech giants, a lion's share of China's top 500 businesses are traditional industrial enterprises in the fields of energy development, telecommunications and power generation, Miao noted. "It is a tough job, in the short-term, to make Chinese corporations catch up with their foreign counterparts in terms of 'soft power' , such as the capability of resource integration, management expertise, brand building and intellectual property protection," he added. Sinopec, Asia's leading refinery, topped the top 500 revenue list for the fifth consecutive year with 1.39 trillion yuan (about 204.41 billion U.S. dollars) in 2009. It was followed by the State Grid and PetroChina. Also, private businesses were growing rapidly as five companies reported operating revenues exceeding 100 billion yuan. Huawei Technology Co Ltd, a telecommunication equipment producer, recently leaped into the world's top 500 enterprises club.

Ningbo Port to feed off Shanghai's strength - Ningbo Port hopes to raise 13 billion yuan in its initial public offering on the Shanghai Stock Exchange this month. Profit soared 60 per cent in the first half to 1.1 billion yuan. Ningbo Port plans to tighten its partnership with rival Shanghai after Ningbo Port's initial public offering on the Shanghai Stock Exchange on September 14. The two neighbouring ports in the Yangtze River Delta are the world's two largest ports by cargo tonnage. Ningbo Port has received approval from the China Securities Regulatory Commission to issue 2.5 billion A shares on the Shanghai exchange, from which the state-owned port operator hopes to raise at least 13.03 billion yuan (HK$14.88 billion). Ningbo Port's strategy was to capitalise on the central government's policy to establish Shanghai as a leading international port by expanding its scale as a deepwater port and increasing its specialisation, said Ningbo Port's IPO prospectus. "I see the two ports growing stronger rather than weaker going forward. In the past, there was a lot more rivalry between Shanghai and Ningbo, but at the end of the day, they don't need to compete fiercely because both are enjoying strong volume growth," said Anderson Chow, Asia head of infrastructure research at Macquarie Securities. Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council, said that if Shanghai and Ningbo developed aggressively, they might take some of Hong Kong's international transshipment business. In 2009, Shanghai was the port with the world's most cargo throughput at 590 million tons, with Ningbo second at 570 million tonnes and Singapore third, according to data by the Port of Rotterdam. Excluding river cargo, Ningbo had the world's most cargo throughput at 577 million tonnes in 2009, with Shanghai second at 495 million tonnes, according to data by China's Ministry of Transport. Last year, Ningbo ranked eighth globally in container throughput with 10.26 million 20-foot equivalent units (teu), according to its prospectus. During the first half, Ningbo's container throughput grew 34.4 per cent to 6.27 million teu, overtaking Guangzhou as China's third-busiest container port behind Shanghai and Shenzhen. On a monthly basis, Shanghai is the world's busiest container port, with Singapore second, Shenzhen third and Hong Kong fourth. "Ningbo is stronger than Shanghai in bulk cargo. Because of its location, Shanghai still enjoys an advantage in containers," Chow said. Ningbo Port planned to add 5.5 million teu of new annual container capacity by 2014, said its prospectus. "More capacity may lead to lowering terminal prices. It means operating costs will be lower, so Ningbo can afford to be competitive," Ho said. During the first half, Ningbo Port's net profit soared 60.4 per cent to 1.11 billion yuan, while revenue grew 62.9 per cent to 3.08 billion yuan. The lead underwriter of Ningbo Port's A-share IPO is BOC (SEHK: 3988) International.

China launches satellite Sinosat-6 for TV, radio live broadcast. The satellite was carried on the Long March 3B rocket which took the SinoSat-6 into a geostationary transfer orbit 26 minutes after the launch. In the following days, Xi'an Satellite Control Center and Yuanwang tracking ship will manipulate the satellite's position and transfer it to enter the geostationary orbit. SinoSat-6 has a designed lifespan of 15 years and will eventually work at longitude 126.4 degrees east about 35,700 kilometers above the equator, said the China Aerospace Science and Technology Corporation (CASTC), the satellite's researcher and producer. It will mainly serve for relaying TV and radio live broadcast signals and will greatly improve cultural life for people living in remote and mountainous regions, according to China Satellite Communications Corporation which will operate the satellite. China has launched the first SinoSat series satellite, SinoSat-1, in 1998. The SinoSat-2 was launched in 2006 but malfuctioned for it failed to deploy its solar panels and communication antennae. SinoSat-6 will serve as a substitute for SinoSat-3 which was launched on June 1, 2007, according to the China Aerospace Science and Technology Corporation.

PLA navy repels pirates with grenades, bullets - CCTV footage shows a Kunlunshan crew member firing on pirate skiffs. The PLA navy has displayed a fresh appetite to confront pirates plaguing vital sea lanes off the Horn of Africa, breaking up recent attacks on shipping with stun grenades and machine-gun fire. PLA commanders appear determined to showcase the potential of the large amphibious assault ship Kunlunshan just as monsoonal calms spark fresh attacks by Somali pirates on ships plying the Indian Ocean trade routes linking Asia to Europe and the Middle East. State media reports and CCTV military broadcasts have highlighted an incident on August 28 when three waves of fast-moving pirate skiffs attempted to attack a convoy of 21 commercial ships under PLA escort. The incident comes in a high-profile week for China's rapidly modernising navy, with ships fresh from unprecedented exercises in the Mediterranean sailing up the Irrawaddy River to stop in Yangon, Myanmar, while another crossed the Coral Sea to visit Vanuatu and Tonga as part of a Pacific tour. Helicopters launched from the 17,600-tonne Kunlunshan and the destroyer Lanzhou helped repel the pirate skiffs, with marines firing stun grenades and heavy machine guns to warn off the pirates, who later fled the area. At one point a skiff came within less than a nautical mile of the freighter Haijie, the PLA Daily reported, but was chased off. Special operations troops were then placed aboard the slow-moving ship for extra protection. Just as it marked new tactics from the pirates, who attacked the convoy at several different points in a battle that lasted more than 30 minutes, it also revealed higher levels of organisation and co-ordination from the PLA. While the incident was not witnessed by foreign navies, PLA officials have outlined the incident to their international counterparts in the anti-piracy fight. "From everything we can tell, it was a very successful operation," said one Asian naval official monitoring China's anti-piracy effort. "They seem more highly organised and eager to intervene... There was no panic. The pirates were persistent but driven off without loss of life." Gary Li, a PLA analyst at the London-based International Institute for Strategic Studies, said the sailors involved "seemed much more co-ordinated and cool-headed than before ... and certainly prepared to use force to ward off attacks". "They seem determined to use the Kunlunshan to its best advantage," he said. The Kunlunshan is one of the most closely watched of China's new warships. The 200-metre ship is the only one of its kind in the PLA fleet and believed to be central to any plan to invade Taiwan, able to carry large helicopters, fast patrol vessels and even hovercraft. Its appearance off the Horn of Africa comes ahead of the first anniversary later this month of the successful hijacking of a Chinese coal carrier. The De Xin Hai was boarded by pirates as it sailed from South Africa to India and held at a stronghold on the Somali coast for more than two months pending the settlement of a ransom. So far, it is the only Chinese ship captured since the PLA joined international anti-piracy efforts in December 2008 - the first time Chinese warships have entered a potential conflict zone outside home waters in six centuries. While the PLA continues to escort convoys of ships mainly from greater China, including Hong Kong, it has yet to join international patrols of a special transit zone in the Gulf of Aden. Such a move would force even closer co-operation with a range of international navies under American and European leadership and would pave the way for China to jointly chair co-ordinating sessions - another first for a once-insular PLA. China has offered to head up the sessions but PLA officials have told their counterparts that they are still waiting for political approval from Beijing before pushing ahead with the plan. Russia and India, eyeing a suddenly expanded PLA role in a highly strategic area, are also pushing for greater involvement. "We are in uncharted waters in terms of co-operation at this point," a European naval officer said. "These are fresh relationships and everybody is still feeling their way... everybody is trying to be very patient."

Statistics bureau taking closer look at signs of speculation - Following mainland media reports that 64.5 million urban electricity meters registered zero consumption over a recent six-month period, Beijing will start gathering data on unoccupied residential units amid fears of a property bubble. The National Bureau of Statistics will gather data on unoccupied residential property, seen as a crucial indicator of speculation in the property market, in its nationwide population census starting November 1. Ma Jiantang, head of the bureau, said the agency also had drafted a plan to improve its statistical methodology for housing prices, as suspicion grew over the accuracy of data. Andy Xie, a board member of Rosetta Stone Advisors, said the huge quantity of empty apartments represented speculation in current home purchases. Xie estimated the vacancy rate for the mainland's private, commercial housing stock was between 25 per cent and 30 per cent, at least double normal market conditions.

Pilot error may have caused the fatal crash in Yichun city, Heilongjiang province on August 24, according to a top aviation official. Li Jiaxiang , chief of the Civil Aviation Administration of China (CAAC), told aviation officials at an internal meeting on August 26 that the crash location suggested the 40-year-old pilot had made a "low-level mistake", China Business reported. The Brazilian-built Embraer E-190 Henan Airlines aircraft landed 1,200 meters short of the runway at Lindu airport in poor visibility, and broke in half and burst into flames, killing 42 of the 96 people on board. Mainland authorities have yet to announce the cause of the first fatal civil aviation accident since 2004, but the newspaper said aviation officials at the internal meeting raised questions about the skills and credentials of the pilot. The newspaper is published under the auspices of the Chinese Academy of Social Sciences. Li asked why the pilot tried to land the plane even though he could not see the lights of the runway.

Sept 6, 2010

Hong Kong*: Octopus Holdings denied in the Small Claims Tribunal yesterday that it had sold the personal data of cardholders and wanted a claim for compensation over the sale to be dismissed. This came as the claimant, who is asking for compensation of HK$50 for injured feelings over the sale of his personal data, applied to add another respondent, Octopus Awards, a subsidiary of Octopus Holdings, to his claim. Octopus Awards has been held responsible for selling the data. Representatives of Octopus said if the adjudicator would not strike out the claim, it wanted the case to be transferred to the District Court or the Court of First Instance because of the complexity of the claim's facts and the legal matters involved. This drew criticism from the claimant. The claim was filed by a member of the Association for Democracy and People's Livelihood after Octopus admitted in late July to selling cardholders' personal data to third parties for HK$44 million over the past four years - two weeks after it had denied the accusation. It said no laws had been broken.

Caritas finds value in old computers - Used machines are fixed and given to the poor, or components are recycled. A worker separates glass from cathode ray tube monitors as part of a recycling process at the Caritas computer workshop in Kowloon Bay. Old, slow computers are often discarded by owners looking for high performance and efficiency. But for Lau Lu-keung, the older the computers the more valuable they are. "Every part of an old computer is a treasure for us," he said. Lau is in charge of the Caritas Hong Kong Computer Workshop. Founded in 2001, the Kowloon Bay facility receives used computers and gives them new life if possible. Second-hand computers, if reusable, are fixed and given away to poor families or sold cheaply. Those that cannot be reused are dismantled and their components sold to recyclers. Every year, about 2,000 companies donate on average 50,000 used computers, printers and scanners to the workshop. Lau said 30 per cent to 40 per cent of them had been used for only two to three years. Three years ago, only 10 per cent of the donated computers were relatively new. "Many Hong Kong people think that it is better to donate new things. But, in fact, people should not mind donating old things to us," he said. "The raw materials used by some old computers are more expensive ... Some contact surfaces of internal parts are even gold-plated. They can be sold at a better price," he said. Lau hoped people would dispose of their electronic waste in a proper manner, so that it is handled in the most environmentally friendly way. The workshop is self-financing: money earned by selling old computer parts is used to support the computer giveaway business. Every computer collected is demagnetised, a process that wipes out stored data. Computers that cannot be reused are dismantled. Glass is separated from cathode ray tube monitors, processed with acid to remove lead, and broken down into sand as a raw material for "green" bricks. Parts made of plastic, or metals such as iron and aluminium, are separated and sent for recycling. Circuit boards, which contain toxic substances, are sent overseas for further processing. Students, the elderly, the disabled and low-income earners can, with a social worker's referral, buy a computer for HK$998. The computer, with a Pentium 4 processor, comes with an LCD monitor and is loaded with an operating system and office and anti-virus software. So far, the workshop has given away or sold 40,000 computers to the needy. It also hires low-skilled youngsters and people from ethnic minorities, and gives them training. The Jockey Club last month donated 3,800 old betting terminals. Mimi Cunningham, the club's director of human resources and sustainability, said the donations benefited both parties. "We can handle our unwanted terminals and recycle those parts which still have a value. At the same time, we can support the workshop's operation and provide job opportunities to young people," she said.

Manila officials admit errors in hostage crisis - Inquiry hears how national police chief left midway, assault was bungled - Hong Kong Chief Inspector Wan Siu-hung before the start of the Manila inquiry.

Hong Kong's John Woo Yu-sen gets top award at Venice film festival - The Venice film festival yesterday honoured world-renowned director John Woo Yu-sen, the first Chinese filmmaker to receive a Golden Lion lifetime achievement award at the world's oldest film festival. "When [festival director] Marco Mueller mentioned he was giving me this lifetime achievement award, my first reaction was of shock," Woo said. "The second reaction was I thought he was kidding." Mueller said Woo had "the perfect union of Chinese tradition and avant-garde films". Born on the mainland and bred in Hong Kong, the 64-year-old, who recently returned to China after 16 years in Hollywood, said: "I'd like to be a bridge between the West and the East." Woo, best known for his choreographed action sequences, was active in Hong Kong during the 1970s and 80s. In 1989 he released The Killer, which helped him make the jump to Hollywood. After his return to China, he directed the war epic Red Cliff, the first film to earn more than 300 million yuan (HK$342 million) on the mainland. He said in Venice: "Since I'd been working in Hollywood for over 16 years and learned a lot ... it is about time to bring what I have learned in Hollywood into Asia." Through films John Woo becomes bridge between cultures - The 63-year-old Woo -- best known for his 1987 classic A Better Tomorrow and The Killer two years later -- said he dedicated the Golden Lion prize to his mother, who he said was the first person to take him to the cinema and who encouraged him to follow his cinematic dreams, and to fellow director Cheh Chang, Woo's mentor, who died eight years ago at the age of 79.

Retiring Jockey Club chairman John Chan Cho-chak said in a newspaper interview that young people keen to buy their first home should get a small one first and wait until they can afford something bigger. I agree. However I realized that, at the beginning, Chan worked for three years and then spent HK$70,000 on a 1,200 square foot home in a nice area thanks to financial help from his father. Don't forget, HK$70,000 four decades ago is equivalent to several million dollars today - Chan's family must have been quite well off. I hope readers do not build up unrealistic expectations and think that like doctors and lawyers, who like to buy their first flats in the Mid-Levels, everyone looking for their first home should buy premises of more that 1,000 sq ft. I bought my first home in early 1991, a 400 sq ft flat on a medium- sized estate in Tsuen Wan. It cost HK$800,000 and I also had to borrow money from my family to realize my dream. Recent transaction records of the estate indicate that a similar flat today would go for between HK$4 million-HK$5 million, with many finding the cost acceptable. Based on a HK$1.5 million price tag, the average annual rise would only be about 3 percent over the past 20 years. It has not gone up too much. Media guru KK Tsang, CEO of GroupM, takes a candid look at life.

 China*: Fines of up to 5m yuan for mine bosses who refuse to work in pits - The central government has given coal mine bosses an ultimatum: either risk your lives by entering the pits with your workers every day, or face dismissal or fines of up to five million yuan (HK$5.7 million). A State Council edict two months ago that ordered coal mine managers down the pits was never effectively implemented, and the central government has now warned it will hand out punishments ranging from verbal warnings to dismissal if mine owners flout the regulation, as well as fines of 150,000 yuan. It said on Thursday that the fines would be increased to up to five million yuan if managers were not in mines when major accidents happened. Compensation payments to the families of miners who die in mine accidents will also be increased to 20 times a city dweller's average annual income from next year. Premier Wen Jiabao told a State Council meeting in July that he hoped mine safety could be improved by forcing managers to share the same risks as miners, and that mine bosses should take charge of work in the pits by descending into shafts with their workers. However, very few mine bosses actually follow the regulation. Lu Rizhou , a former political adviser from Shanxi province, which sees the country's highest number of casualties from mine accidents, said he saw a county party secretary cry when forced to enter a mine. According to the edict, mine bosses are required to stay in the pits for at least eight hours at a time and return to the surface with their workers. Managers of mid-sized mines will need to go underground between eight and 15 times a month. State media quoted mine workers as saying that the new regulation could force mine bosses to attach more importance to work safety and ensure more effective evacuation procedures - but only if it was followed by the bosses. Mainland mines are notorious for their failure to adhere to safety standards and their high fatality rates. Work safety authorities had hoped that the regulations implemented in July would reduce the accident rate and clean up the industry by forcing mine bosses to share the same risks as their workers. The authorities reiterate safety regulations every time a mine tragedy occurs on the mainland, but very few mine bosses obey the regulations because of widespread corruption and lax supervision.

The rise of factory workers' salaries in China's coastal provinces has raised concern that many international manufacturers will relocate to lower-cost countries such as Indonesia, Vietnam and Cambodia. But as China has built an efficient transport network, and its massive population provides a good market for consumer goods, multinational firms would like to maintain their exposure there. These companies will be able to absorb the relative small labor cost increase. But a labor shortage will intensify in parts of China, especially when many find jobs nearer their hometowns as factories move inland. With these factors in mind, I recommend Chen Hsong Holdings (0057). The 50-year-old company which makes plastic injection moulding machines is expecting more orders from its top clients. They include Foxconn (2038), TPV Technology (0903) and VTech (0303). Chen Hsong's net profit rose 78.9 percent to HK$154 million for the year year ended March. Standard Chartered Securities targets it at HK$4.25. Closing yesterday at HK$2.90, Chen Hsong now looks like a good buy. Dr Check and/or The Standard bear no responsibility for any investment decision made based on the views expressed in this column.

Highlights of China Int'l Cashmere Design Contest.

An air-cushion boat of the Chinese navy patrols in the waters of the Gulf of Aden on Sept 2, 2010. The boat, part of China's sixth naval escort flotilla for the Gulf of Aden and Somali waters, patrolled against pirates for two hours near the vessels sailing through the region. This is the first time the Chinese navy deployed the air-cushion boat, carried by the amphibious landing ship Kunlunshan, on an escort mission.

Investors eager for slice of China's wedding cake - Having dated for three years, Wang Zhijun and his girlfriend decided to tie the knot. Buried in piles of work, the couple, both marketing managers at media companies in Shanghai, found it impossible to run through all the preparations for their wedding. A one-stop wedding venue that provides wedding photography, the ceremony, dresses and food came to the rescue. "The company saved us from all the trips and work needed for the wedding from the very beginning," said Wang, 30, who married his love last month at the Villa Grandis near the Huangpu River. "They delivered a tastefully themed wedding without dragging us from one place to another. All we needed to do was speak of our expectations and wishes for the big day." A wedding ceremony that mixes Western style and Chinese tradition followed by a banquet is favored by most couples getting married these days. One-stop wedding venues, a trend picked up from Japan, have now become popular in Shanghai, where six venues are operating. They are also becoming more fashionable in other cities, including Beijing and Suzhou. "People in Shanghai like fresh ideas," said Hu Guoping, a marketing manager at Villa Grandis, a wedding service provider launched in 2008 with investment from Japan. The store opened its second branch in Shanghai last year, after its first outlet, in Nanpu district, was a great success. The average couple using the Villa Grandis service spends 130,000 yuan ($19,000) to 150,000 yuan, a figure that is much higher than the national level of 60,000 yuan, according to Shi Yu, vice-director of the Committee of Wedding Service Industries of the China Association of Social Workers, who spoke to China Daily during the Beijing Wedding Expo on Friday. The wedding house service is a natural development in China's wedding market to better integrate various wedding services, a result of heated market competition, Shi said. "Such a one-stop wedding provider is booming in many cities," he said. "Investors are eager to get a share of the big cake." In Beijing, there are 1,168 registered wedding planning companies and 4,650 registered wedding venues and service providers, Shi said. In the past decade, about 9.12 million couples have married each year, creating a huge market for wedding products. In 2009, direct consumption as a result of weddings exceeded 600 billion yuan and more money is pouring into the sector, Chinese media reports said. Spending on weddings last year increased by 40 percent compared to 2006 and is growing by about 10 percent annually. Other sectors that benefit from weddings include the auto, property, decoration and tourism industries, Shi said.

IMAX, the Canadian operator of large-screen movie theaters, is set to open 80 theaters in China over the next couple of years. And its overall goal is to open 250- 300 theaters in China. This will make China the second largest market in the world for IMAX, and allow IMAX to claim the title of largest foreign movie exhibitor in China. Calling it a win-win situation for both China and IMAX, Rechard Gelfond, chief executive of IMAX Corp, told Xinhua in an interview that "I think there's enormous opportunity (for IMAX) to expand in China. We'll absolutely aggressively pursue that opportunity." Two new trends in China's cinema industry have given IMAX impetus to pursue its ambitious business agenda, said Gelfond. First, he anticipated that many more movie theaters of all kinds will be opened in China owing to the rapid growth of the cinema industry. For instance, on the regular screen side, there will be 20,000 cinemas in next five years in China, compared to the current 5,000 ones and 1,500 three years ago. "The Chinese government has moved the responsibility for cinema from the cultural office to the commerce office," said Gelfond. " They set up very aggressive targets for the growth of cinema in China." Second, Gelfond pointed to how Chinese audiences are becoming more interested in premium viewing experiences when they go to the movies. This is helping increase interest in IMAX due to the giant screen and the high quality sound. "Our box-office attendance has been getting better and better every year," said Gelfond. Take the movie Avatar as an example, IMAX earned $24 million in China from that film, which it played on just 13 screens, receiving almost $2 million per screen. It represents 10 percent of IMAX's total box office revenue. Another example is "Aftershock," the first Chinese language film IMAX released on par with the Huayi Brothers, China's largest privately owned media group. The film has generated more than $640,000 at the box office, for a per screen average of approximately $55,000 for the opening weekend. IMAX and Huayi Bros Media Corporation Ltd entered a partnership to release up to three mainstream Chinese pictures in China in last June. "I'd like to convert more films, especially more Chinese language films with splendid visual results, to IMAX format films. Aftershock is a bit of experiment." said Gelfond. "We're continuing talks with Chinese directors and local studios." Gelfond's plan is to convert three to four Chinese movies a year in the future. The big challenge, he said, is to identify the right blockbusters, since IMAX is best for blockbusters, but fewer big budget films are been made in China compared to the US. Starting to explore opportunities in China 12 years ago, Gelfond now has built many partnerships with Chinese film companies for IMAX. "Most major exhibitors, such as Wanda Cinema Line Corp, the No 1 cinema exhibitor in China, are IMAX's partners in China," said Gelfond. Its partners also include Lumiere Pavilions, a private movie exhibition company, and Guangzhou Jinyi Film & Television Group. They all have signed deals with IMAX to install more theaters in China. Since opening its first cinema in China in 2001, in the Shanghai Science Technology Museum, the Canadian firm now has 23 theaters located in big cities such as Shanghai, Beijing, Chongqing, and Dalian. IMAX will focus its expansion plans on second-and third-tire cities in China, using its portable theater technology to speed up its pace of growth. Using the portable IMAX theater technology, the company can operate IMAX screens even in towns without the necessary basic infrastructure, such as multiplex-style theaters.

FAW-General Motor to double China's light commercial vehicle capacity - General Motors said on Friday that its joint venture with FAW Group plans to double production capacity of light commercial vehicles in China. "We plan to be a major player in the light-duty truck market in the short term and lead the market in terms of sales over the long term," said David Dunahay, president of FAW-GM Light Duty Commercial Vehicle Co Ltd. The Changchun, Jilin-based company is currently the fourth-largest manufacturer of light-duty trucks in China. Set up last year, FAW-GM, has sold 61,000 units till this August. "China's light-duty truck market accounts for more than 50 percent of the global market. We are confident of being the leaders in the segment soon," said Dunahay. As part of the capacity expansion plans, FAW-GM will relocate its plant in Harbin, Heilongjiang province. The new facility is expected to start operations by early next year. Combined with the plant in Qujing, Yunnan province, its light-duty trucks annual output capacity is to reach 200,000 units. The nation's robust economic growth has also increased demand for vehicles to transport goods. High-end light commercial vehicles offer relatively high profit margins and hence the sector could see the entry of more foreign players, said analysts. Last year, China sold 1.5 million light-duty trucks. Dunahay expects the sales to reach 1.8 million this year. Dunahay said that his company plans to upgrade the low-end products to mid-end products in a bid to meet the market requirement. The company's light-duty trucks are sold under the name of FAW Jiefang in China. In January, it launched Jiefang 501, a mid-level light-duty truck. "China's light-duty commercial vehicle market is extremely competitive. We must have competitive products with competitive prices," said Dunahay. "We expect to increase our market share by upgrading the products from low- to high-end," he said. "Strong after-sales service network is also a key ingredient for our success in China. Hence we are focusing more on upgrading our dealer-networks and services," said Dunahay. FAW-GM plans to have 588 dealerships by the end of this year, he said.

Sept 5, 2010

Hong Kong*: Calls against Hong Kong firm's bid racist, says New Zealand Minister - A New Zealand minister has suggested that opposition to foreign land ownership is more about “racism” than economic concerns, as a Hong Kong-based company vies to take over a bankrupt farm group. Land Information Minister Maurice Williamson, who will decide whether the Hong Kong-listed Natural Foods NZ can buy the string of New Zealand dairy farms, reportedly raised the issue at a function on Thursday. Williamson said attitudes to foreign ownership were usually linked to the buyer’s ethnic origin, Wellington’s Dominion Post newspaper reported on Friday. “The number of New Zealanders who don’t like the idea of overseas investments and think it’s a really bad thing really sort of frightens me,” he was quoted as saying. Williamson said the most vehement opponents of foreign investment were often overseas-born themselves, noting that many had “pommie” [British] accents. “A lot of it’s more to do with racism,” he said. “If you look different, you’re a foreigner, but if you come from the other side of the world, from Scotland, then you’re not.” Williamson is in the process of deciding whether Natural Foods NZ can buy a chain of 16 dairy farms that went into receivership last year. New Zealand is the world’s largest dairy exporter and has seen overseas interest in the sector increase amid rising demand from Asia. An opinion poll published by 3 News last month showed more than 75 per cent of the 1,000 respondents favoured tightening rules relating to foreign ownership of land such as farms. Greens Party co-leader Russel Norman said Williamson was wrong to label those worried about foreign ownership of prime agricultural land racist, noting Prime Minister John Key said last month that New Zealanders risked becoming ”tenants in their own land”. “New Zealand should not be selling off our best assets to Chinese, American or Australian investors,” Norman said.

Whirlwind Beijing trip fans rumors Tang's moving in on top job - A whirlwind trip to Beijing by Chief Secretary Henry Tang Ying-yen has sparked feverish speculation he may soon be announcing an intention to run for chief executive in 2012. Tang's trip was announced only hours before he left yesterday morning and he was back in Hong Kong by midnight. With both Chief Executive Donald Tsang Yam-kuen and Financial Secretary John Tsang Chun-wah out of town on business trips, Secretary for Justice Wong Yan-lung spent a few hours as acting chief executive. During those few hours, Tang met with Zhou Bo, deputy director of the Hong Kong and Macao Affairs Office of the State Council. The two exchanged views on Hong Kong's role in preparing the national 12th Five-Year Plan and on Hong Kong- Guangdong cooperation, a government spokesman said. Tang is one of a handful being widely tipped as a candidate in the 2012 election for chief executive. On Wednesday, industrial-sector lawmaker Lam Tai-fai said those interested in running should announce their candidacy by the end of this year so that residents can get to know them. Lam said if Tang is interested, he may have to resign by year's end. He added that National People's Congress Standing Committee member Rita Fan Hsu Lai-tai is also a likely candidate. She appears fit and should be able to work for 10 years or more, Lam said. Regarding cross-border cooperation, sources said the Hong Kong government earlier made a number of proposals covering a wide range of issues. Since some of these involve policy changes, help from the Hong Kong and Macao Affairs Office is needed to coordinate with the different mainland departments. The issues include yuan business, a possible expansion of the individual travel scheme and cross-border transport. The sources said Beijing may have wished to inform Tang of the preliminary response to the proposals so Hong Kong can work on them further. The confirmed pacts may be included in the 12th Five-Year Plan - which will outline the nation's development blueprint between 2011 and 2015. "The arrangement [of Tang's visit] is rare," political pundit Johnny Lau Yui-siu said. " I think it was more urgent than just the economic affairs between Hong Kong and the mainland. The hostage incident should not be ruled out either." He said Beijing is probably concerned about public discussion in Hong Kong over the "sub-sovereignty" issue when dealing with foreign affairs. "Beijing is probably worried the talk could become so heated it may affect its sovereignty," he said. Tang was originally due to go on leave for five days from last Monday but this was canceled in the aftermath of the Manila hostage tragedy. Tang last visited Beijing in July for two days to discuss cross-boundary infrastructure. On that occasion as well, the announcement was made just a day before the trip. Donald Tsang yesterday concluded his three-day trip to Russia. And John Tsang is leading a business delegation to meet with senior government officials of Changchun municipality and Jilin province.

Hong Kong-flagged ship to blaze Arctic route - A cargo ship flying Hong Kong's Bauhinia flag and carrying 41,000 tonnes of iron ore will make maritime history this weekend when it sets sail from Norway on a voyage through Russia's Arctic wastes to China. The bulk carrier Nordic Barents is the first foreign-registered ship Russia has allowed to make a voyage between two foreign ports via the country's northern sea route. The Scandinavian owner and charterer of the ship aim to prove that the route long called the Northeast Passage is a viable commercial alternative to southern routes from Europe to Asia. The Nordic Barents is due to leave the small Norwegian port of Kirkenes tomorrow, less than a week after a Russian-owned tanker completed a 13,000-kilometre voyage from Murmansk to Ningbo. The SCF Baltica, owned by privately controlled company Sovcomflot, carried 70,000 tonnes of gas condensate, less than the 117,500 tonnes the ship was capable of carrying because of draft restrictions through Arctic waters. If the Nordic Barents' voyage to Dalian , Qingdao and possibly southern China is successful it will effectively end a 500-year-old quest by explorers, shipowners and cargo owners to find a northern route between Europe and Asia. Shipping and chartering companies, including firms in Hong Kong, are viewing the voyage with keen interest.

CLP in talks on saving art deco HQ - Utility explores alternatives to demolition for tower already approved - Then and now: the CLP Power building as it was in 1940 (left) and as it is today. It has 78,000 square feet of floor space, but the 2001 plan for a residential tower on the site allows 309,000 square feet. CLP Power (SEHK: 0002) is in talks with the government about economic incentives to preserve its 70-year-old headquarters in Argyle Street, Kowloon, as it seeks to guard redevelopment rights granted nine years ago. Grade-one historic status was proposed by the Antiquities and Monuments Office last year for the building at 139-147 Argyle Street. The negotiation is based on an approved building plan for a 39-storey residential tower atop a four-storey car-parking podium on the site that CLP secured in 2001, which could be worth billions of dollars, a person in the heritage-conservation field said. A CLP spokeswoman confirmed the utility had had discussions with the government on "the need to balance between preservation of built heritage for the benefits of the community and allowing individual owners such as CLP to exercise the rights that come with ownership". "We are constantly reviewing our need and requirement for our properties and currently reviewing various options for our head office building," she said. A top government official said it was having talks with a grade-one heritage owner, without giving a name. "If negotiations bore fruit, the case would be another example in which the government managed to secure preservation of privately owned heritage by handing out economic incentives instead of buying out with cash," the official said. The art deco building was opened in 1940 as the utility, led by the Kadoorie family, extended the electricity supply for a growing Kowloon. It marked a milestone in the development of the company and the district, according to a heritage appraisal by the antiquities office.

Roger Garcia will return from USA to run Hong Kong International Film Festival - Roger Garcia will return as executive director of the film festival - a role he held in the 1970s. Inspiring young movie-goers top priority for new film festival chief - Roger Garcia will return as executive director of the film festival - a role he held in the 1970s. Inspiring a passion for cinema among the next generation of movie-goers through new technology will be a top priority for the city's new international film festival chief. Film festival veteran Roger Garcia will return as executive director of the Hong Kong International Film Festival at the end of this month, a role he held in the 1970s when the event was run by the Urban Services Department. He has since worked as a consultant for the festival. Garcia is also planning initiatives to foster the talent of budding film programmers, writers and critics in the coming years. Garcia's appointment was announced yesterday by the Hong Kong International Film Festival Society. He takes over from Shaw Soo-wei, who is leaving her position after two years of service. Garcia, who is currently based in the US, will return to his city of birth to manage the festival, as well as the Asian Film Awards and the Hong Kong-Asia Film Financing Forum. A renowned programmer and curator of film festivals around the world, Garcia described his new job as a homecoming. "I started my film career here," said Garcia, also an established film critic, writer and producer. Having been a "film person" for 30 years, Garcia said he now hoped to show films as a group in a festival that can articulate a vision of cinema. And the format for showcasing those films may not be limited to the big screen. Garcia said he hoped to reach a wider, and especially younger, audience through new technology. "People watch films in every format they can think of, and we can use new technology to meet the audience, such as by streaming films," he said. Garcia said he wanted to develop the film literacy of younger viewers. "We are being bombarded by Hollywood blockbusters, but it's important to keep the auteur and art films ... keep the idea among the audience that cinema is a diversified culture." While glitz and glamour have become an essential part of film festivals, the Hong Kong event should also be about promoting local culture and talent, Garcia said. "The Hong Kong International Film Festival is an important part of the Hong Kong cultural landscape," he said, agreeing it was important for the West Kowloon Cultural District to devote areas to cinema such as the theatres recently proposed in one of the conceptual plans for the hub. Garcia said the plan reminded him of Southbank in London. He recalled going to the theatre at Southbank when he studied in England. "That was when I learnt about cinema as a student," he said. As the festival's executive director, Garcia said he planned to make the case for a theatre in the Kowloon arts hub that was dedicated to a range of film genres. Although other film festivals have sprung up in the region, Garcia believed the Hong Kong event, the first of its type in Asia, still had its niche and was supported by strong programming and curatorship. But he noted there was a lack of successors and he planned to cultivate curatorial skills among the next generation. Grooming the next breed of writers and critics is also on Garcia's mind. He said he hoped the festival could organise an event similar to the annual Talent Press, which is run by the Berlin International Film Festival's Talent Campus and open to young film critics and journalists around the world. Whether or not sponsors could be secured would determine the extent to which these plans could be carried out, Garcia said. "We are trying to develop a new generation and promote film culture among a young generation who will grow up and become ambassadors or commentators of films," Garcia said. "[Sponsors] might not see the immediate return, but the return comes when the young generation takes over in future."

An international consortium founded in Hong Kong launched the world's first universal standard for wireless battery charging - Menno Treffers, the chairman of the Wireless Power Consortium, unveils prototypes and soon-to-be-released mobile device chargers. An international consortium founded in Hong Kong launched the world's first universal standard for wireless battery charging yesterday, called "Qi", to cut the last cord that limits mobility for smartphones, digital cameras, media players and other consumer electronic gadgets. The Wireless Power Consortium's new standard is expected to help speed up the ability of various consumer electronics brands to bring compatible wireless charging products to market. This will benefit consumers who have had enough with using different power chargers and cables for a myriad of devices. Instead of plugging electronic devices into a charger, consumers will be able to simply place their gadget on top of a desk pad, which will charge their device wirelessly. Chairman Menno Treffers said the consortium's goal was to "bring simplicity and convenience to users", while making wireless power chargers ubiquitous. "Qi empowers mobile-phone manufacturers to integrate wireless power receivers, the semiconductor industry to incorporate the functionality into their chip sets, and infrastructure providers to build chargers in homes, offices, automobiles, hotels and furniture," Treffers said. According to market researcher iSuppli Corp, shipments of consumer electronic products with wireless charging capability will reach 234.9 million units by 2014 from 3.6 million units this year. Treffers said hitting those numbers would be expedited by having a universal standard with broad industry support. The consortium, which was set up in December 2008, enabled that, he said. The group is looking forward to a dialogue with the Chinese authorities that could lead to the standard being officially recognised on the mainland, with consortium member Shenzhen Sangfei Consumer Communications expected to help spearhead this effort. Petri Vuori, a director of mobile solutions research and development at Nokia, said the consortium was hopeful of wide acceptance on the mainland, where he said many of the most popular consumer electronics devices were being made and bought by consumers. The association had 59 members as of last month, including Nokia, Samsung Electronics, HTC, Research In Motion, LG Electronics and Sony Ericsson. Other members are industry leaders in consumer electronics, semiconductors, mobile components, batteries and wireless power technology. Among the first products to be certified by the consortium is the "Dragon Qi" charging pad from local wireless charger maker ConvenientPower Group. This so-called wireless inductive charger, available this month, can handle up to three devices, regardless of manufacturer, at the same time. US-based battery maker Energizer Holdings yesterday demonstrated its inductive charger, which will initially be available in North America next month.

Hong Thai Travel pays tribute to tour guide Masa Tse Ting-chunn killed in Manila - Hundreds attended a memorial service in Kwai Chung yesterday organised by Hong Thai Travel for hostage crisis victim Masa Tse.

Manila officers raps HK police over bullets in luggage earned them a reprimand from a senior Philippine justice official. Philippine justice undersecretary Jose Salazar holds up plastic bags containing bullets found in the luggage of Chief Inspector Li Kwai-wah.

Manila considers compensation for bus hostage bloodbath - The Philippines is considering paying compensation to families of eight Hong Kong tourists who were killed when their bus was hijacked by a sacked policeman, an official said on Friday. The Chinese and Hong Kong governments have demanded an exhaustive inquiry into the August 23 bloodbath in Manila, while the Hong Kong legislature on Thursday passed a non-binding resolution demanding Manila apologise and pay compensation. As the official inquiry continues, President Benigno Aquino formed a cabinet-level committee to look into possible indemnity for the victims, said Budget Secretary Florencio Abad, a member of the committee. “I don’t think the issue here is compensation alone. What is important is to be able to show solidarity. We understand what happened. We are sympathetic to them,” Abad told reporters. He would not give an amount or timetable for giving compensation, but added that the committee was in constant touch with the governments in Hong Kong and China. “It is a question of timing. What is important is we are prepared, we have options,” Abad said. Aquino meanwhile told reporters on Friday he expected the official inquiry into the carnage to conclude next week, and has promised to provide a copy of the report to the Hong Kong and Chinese authorities. He pledged to do all he could to prevent any repetition of the bloodshed. “By next week... I hope we can demonstrate the capacity of our security forces in securing the people,” Aquino said. The deaths, after a 12-hour ordeal broadcast live on television around the world, triggered outrage in Hong Kong over the mishandling of the crisis.

Student activist Christina Chan Hau-man was found not guilty in Eastern Court on Friday of assaulting a policewoman during a protest on New Year's Day.

Risqué business - A Hong Kong film about 'bad girls' selling sex online depicts them as anything but victims - A scene from Kenneth Bi's new film, ''Girl$'' - Girl$, directed b Kenneth Bi, is the latest Hong Kong bad-girl movie. Addressing the rise of teenagers advertising their sexual services online, it features four independent-minded young girls with few scruples about what they have to do to fulfil their material desires. "These girls are not dumb - they are out to exploit guys," says Bi of his characters in Girl$. Yet, he did not set out to make a film to judge these women. "The film has no moral position: that's the way I wanted it." Art-house films about poor, victimised Chinese women tend to be the productions that win awards at European film festivals, Bi says. "I always hated this position - why do we have to play victims to get European sympathy? And here's a chance to look at these prostitutes that are not victims - that's why I'm excited to make this film." Bi says he's not worried about the reaction from conservative groups. "The film is just a depiction of these girls. The truth is there are hundreds or thousands of these girls out there. How did it come to this? Is it because of films [about prostitution]? I don't think so. There are good movies about good people, but we don't see the influence. It's the value system in place from the 1970s and 80s; we are now seeing the disadvantages of this. In Hong Kong we always place money before everything - before morals and principles; these young girls are paying for their parents' sins or their misunderstanding of what life is about." Girl$ has barely figured in the mainstream media, unlike in 1982 when the release of Lonely Fifteen ignited widespread moral outrage for its depiction of schoolgirls dabbling in prostitution and drugs. "It's a topic nobody dared touch then," says Michael Mak Dong-kit, who worked on Lonely Fifteen with his brother, Johnny. Inspired by Christiane F., Uli Edel's 1981 German film based on the real-life ordeals of a 12-year-old, drug-taking prostitute, Lonely Fifteen was lambasted by many, including Szeto Wah, then the chairman of the Professional Teachers' Union, Mak says. "He questioned how we could present such a ugly picture of things. People were hysterical in their condemnation, and in the news reports." Such an outcry is unimaginable these days, Mak says. Hong Kong's sex-obsessed tabloid culture and the internet is awash with video clips of teenagers up to no good. "It's all down to the power of the internet - nothing looks outlandish any more. Back then [Johnny Mak] and I were making this television serial about 10 bizarre crimes in Hong Kong. Today, people would say, `What's so strange about them? We've read and seen everything already.'" Bi agrees: "The media does what films used to do and still do - exploit the subject matter and sugar-coat it with a grain of morality. Before, you just read about those things; now, you can look at the sexy pictures and be fascinated by them."

Hong Kong Women at work put spouses first - given up promotions because they do not want to outshine their spouses. Some working women have given up promotions because they do not want to outshine their spouses. Equal Opportunities Commission chairman Lam Woon-kwong said that in his years in the public sector, he has seen "not an inconsiderable number" of females holding back their career advancement for fear of overtaking their husbands, some retiring earlier to devote more time to their families. "It's free choice but I hope that is not a conscious choice conditioned by social stereotypes disguised as free choice," Lam said at the launch of a women's leadership program yesterday. According to the Census and Statistics Department, women make up 53 percent of the Hong Kong workforce but hold only 29 percent of leadership positions. This compares with the female representation rates in the United States and Australia of 43 and 37 percent respectively, according to UN figures. Also, Hong Kong female representation at senior levels across professions and industries is low, with 19 percent in the legislative and district councils, 10 percent at the Bar, 14 percent in academia, and 26 percent in business management and administration. The Women's Foundation executive director Su-mei Thompson said that the government and business should do more to enhance the status of women and help narrow the leadership gender gap. "Things will not change until there is a critical mass of women in leadership positions," she added. The gender benchmark of the appointment of members in advisory and statutory bodies has been raised from 25 to 30 percent since June this year. Thompson urged the government to introduce flexible family-based working policies and improve child-care services to help women concerned about family who also wish to pursue their career. According to Thompson, there are many capable women who are not achieving their full potential and because of social stereotypes, they are not brave enough to change and they lack role models. The foundation is launching a mentoring program for women leaders to address the low number of women in senior management. Sixty mentors and protegees will be joining the one-year program. Several corporations such as JPMorgan and Kimberly-Clark are collaborating.

 China*: Step up fight against fakes, EU urges China - The European Union said it would press China on Friday to back up its words with action and do more to stem the flow of Chinese-made counterfeit goods into around the world.

China taps Canadian fund on rival Potash bid - Mainland’s state-owned Sinochem has reportedly hired HSBC to evaluate options to bid for Canada’s Potash Corp while reports say China Investment Corp may also be seeking a bid of some kind. Chinese and other investors have approached at least one big Canadian pension manager about a bid for Canada’s Potash Corp to rival BHP Billiton’s US$39 billion hostile offer. The disclosure by Alberta Investment Management Corp, which manages some C$70 billion (HK$517 billion) in public sector pension funds, is one of the first pieces of hard evidence to back up speculation that mainland is looking for a way to derail a takeover of Potash Corp by the powerful Anglo-Australian miner. AIMCo said it was not interested, because the economics did not work. Mainland’s state-owned chemicals giant Sinochem has reportedly hired HSBC (SEHK: 0005) to evaluate options, and chatter persists that sovereign wealth funds, such as $300 billion China Investment Corp, may also be seeking a bid of some kind. Given the size of the deal, all major investment banks not working with BHP or Potash Corp are pitching possibilities to mainland clients, multiple investment banking sources in Asia have said. But so far, no formal counter bid has emerged, only talk. The hefty price tag is still prohibitive for many potential suitors, bankers say. Shares in Potash closed up 1.8 per cent at US$148.55 on Thursday, 14 per cent above BHP’s US$130 offer price, while BHP shares edged up 0.3 per cent on Friday.

Farmers in eastern China are grappling with an explosion in the population of wild boars, who are destroying crops and upsetting the ecological balance, state media said on Friday.

The mainland will not publish quarter-on-quarter gross domestic output (GDP) data until 2011, a year later than scheduled, the National Bureau of Statistics said on Friday.

Newbridge Capital, the Asian unit of US buyout firm TPG Capital, sold the remainder of its stake in Ping An Insurance (2318) yesterday for HK$9.07 billion, immediately after the insurance giant announced its merger plan with Shenzhen Development Bank.

CITIC 1616 set to be telecom flagship - Telecom company CITIC 1616 Holdings Ltd (1883) expects a boost in business after it acquires China Enterprise Communications - the broadband network builder of parent conglomerate CITIC Group.

Olympic gold medalist Li Ning is expanding from sportswear into the property market. Li, who is also chairman of Coolpoint Energy (8032), said yesterday he is using the renewable energy firm to launch an eco- city project in Shenyang. "People tend to forget about the environment," he said. Sportswear will remain the focus for Li Ning (2331), the retail giant that the gymnast built, while Coolpoint will be the vehicle for other businesses. The energy firm will acquire Viva China for HK$400 million by issuing 590 million new shares. It will then buy Bright Equal and Union Wealth - two financial holding companies - to gain the rights to develop and manage two plots of land in Shenyang. Coolpoint will also issue one billion new shares to support development of the sites. The city center plots together make up 607 hectares and will be developed into a sports center and green community over five to eight years at a cost of around 40 billion yuan (HK$45.66 billion). Ongoing financing will be sought when needed. Coolpoint will also end up with a 30.9 percent stake in Li Ning. Li will personally hold a 75 percent stake in Coolpoint, which will be renamed Viva China. The company will focus on China, while Li Ning will seek exposure in global markets. Li hopes the expansion will help the sportswear company getting 20 percent of its revenue from overseas.

China Southern Airlines began offering direct flights on Thursday from Beijing to Tashkent, capital of Uzbekistan, to meet rising air travel demand and further strengthen bilateral ties between the two countries. Flights to Tashkent, the largest city in Central Asia, depart Beijing at 4:20 p.m. and arrive at 7:35 p.m. (local time). Return flights from Tashkent leave at 8:55 p.m. (local time) and arrive in Beijing at 5:50 a.m. Flights are scheduled every Thursday and Sunday. An Airbus 330-200 plane will be used for the flights. The airline provides passengers with 100 classic movies and 1,000 songs to entertain them during the long flight. It also serves a variety of halal food. An executive with the company said the launch of the route would facilitate personal exchanges and trade relations between China and Central Asia.

Noodle makers show their skills at a Shanxi noodle culture exhibition in Taiyuan, capital of North China's Shanxi province on Sept 3, 2010.

Sept 4, 2010

Hong Kong*: Chief Secretary Henry Tang Ying-yen left for Beijing on Thursday morning to meet top mainland officials. When he left Hong Kong International Airport at Chek Lap Kok, Tang did not answer any questions from reporters, local media reported. He will return to Hong Kong on Thursday evening. On Thursday afternoon, Tang met Zhou Bo, the Deputy Director of Hong Kong and Macau Affairs Office of the State Council, to economic co-operation between Hong Kong and the mainland. During his absence, Secretary for Education Michael Suen Ming-yueng was acting chief secretary.

Move mulled to close door on property migrants - Cash-rich overseas investors planning to win Hong Kong residency through buying property could be in for a shock. Concern is growing that the Capital Investment Entrant Scheme helps to fuel the overheated property market, and the government is considering whether to cut property out of the special scheme. Official figures show 41.3 percent of the investments by these residency investors comprised real estate in the first half of this year - a jump of 17.9 percentage points from 2007. As the property market is super- sensitive, a source revealed, the government is now assessing how amending the scheme might affect housing prices. Nothing has been decided yet. A government spokesman confirmed that a review of the scheme is indeed underway, and it is due to be completed by the end of the year. Under the scheme, an applicant has to have net assets of at least HK$6.5 million in the two years before an application. Investors must put in not less than HK$6.5 million in either or both real estate assets and financial assets such as equities and debt securities. Executive Council convener Leung Chun-ying said he has not heard the government has a plan to exclude property investments from the residency scheme, adding that it would not be as simple as it appeared. If real estate investments are not counted in the scheme, he added, the government may have to consider whether it should continue to allow foreign companies to acquire premises for their staff and to allow non-local shareholders of local firms to buy premises in Hong Kong. Lawmaker Priscilla Leung Mei-fun called on the government to raise the minimum investment amount to HK$10 million instead of excluding property investments from the scheme. "Many mainlanders prefer investing in the property market," she said. "Some of them don't know much about the stock market." Excluding property investments may drive mainland investors to move to other places, Leung added. Legislator Chan Kam-lam of the Democratic Alliance for the Betterment and Progress of Hong Kong said if property investments are counted out of the scheme "it seems to suggest that the city is putting the blame for home speculation on those immigrants. It is unfair." He suggested the government double the minimum investment amount to HK$13 million. Bauhinia Foundation Research Centre chairman Anthony Wu Ting- yuk said overseas investors should not be banned from buying property. Excessive intervention is not desirable in a free market economy. Hang Lung Group chairman Ronnie Chan Chi-chung said: "If you ask me, I don't care whether they live in their local homes or not. I have properties in Singapore and the United States, but I don't live there." He called on the government to be cautious as it weighs the issue. "When it comes to controlling demand through preventing outsiders from buying things in Hong Kong, we have to be very careful. Our success lies in the complete freedom in society. A very free market economy. "You should not spoil the ship for a ha'porth of tar."

Forensic tests on Manila bus completed - Hong Kong police forensic experts examine the tour bus used in the Manila hostage-hijacking on August 23 at Camp Bagong Diwa in Taguig City on Monday. Secretary for Security Ambrose Lee Siu-kwong said on Thursday Hong Kong police officers had finished their forensic examinations of the ill-fated Manila tour bus. Lee told lawmakers police now planned to submit their findings to Coroner Michael Chan Pik-kiu. He was speaking in the Legislative Council where lawmakers are holding a special meeting to discuss the Manila hostage crisis. Last week, eight Hong Kong tour-group members died in the Philippine capital. Lee noted that Chief Executive Donald Tsang Yam-kuen had already written to Philippine President Benigno Aquino demanding a full report. “The president and ministers of the [Philippine] justice department have promised several times they would conduct a complete, fair and full investigation,” Lee noted. Legislators also discussed a motion moved by Legco House Committee president Miriam Lau Kin-yee. This expressed lawmakers’ anger with the Philippine government’s handling of the rescue operation. Legco also observed a minute silence to mourn the victims. Miriam Lau requested the Hong Kong government take a strong stand on the issue. “The investigations are being conducted by a government which handled the hostage crisis poorly,” she added. Lau urged the Philippines government to publicly apologise to victims’ families and to offer compensation. During the discussions, other legislators also strongly criticized the way Manila had handled the crisis.

Esprit's second half profit down 19pc - Esprit Holdings on Thursday posted a 19 per cent fall in fiscal second-half profit, lagging forecasts amid slower sales growth. Esprit Holdings (SEHK: 0330), the world’s No 8 apparel retailer by market value, on Thursday posted a worse-than-expected 19 per cent fall in second-half profit amid slower sales growth and euro weakness, and said the wholesale market will remain challenging to the end of the current year. “We expect the wholesale market environment in the first half of the new financial year to remain challenging,” the company said in a filing to the Hong Kong bourse. “The wholesale order book between July and November 2010 shows a mid-single-digit year-on-year decline in local currency and it is improving month by month to November 2010 – particularly strong in flash and repeat orders.” Analysts said the lower euro and weak wholesale business had offset retail sales growth, affecting earnings. The appreciation of the yuan and soaring rental and labour costs in Asia could impact profit margin in the year ahead. The Europe-focused fashion group said it had earmarked HK$2.2 billion for capital spending in the new financial year, of which HK$738 million would be invested in opening about 100 new stores and store expansion, as well as HK$406 million for refurbishing existing stores. The company said it planned to expand the overall volume of retail selling space by 5-10 per cent in the fiscal year ending June next year. Esprit posted a net profit of HK$1.53 billion for the second half of its fiscal year ended June, down from HK$1.89 billion a year earlier. The result lagged an average estimate of HK$1.73 billion from 13 analysts polled by Thomson Reuters I/B/E/S. Competing with Hennes & Mauritz, Inditex, and GAP, Esprit reported a net profit of HK$4.23 billion for the fiscal year ended June, against a consensus forecast of HK$4.439 billion and a year-earlier profit of HK$4.745 billion. Shares of the company have fallen more than 13 per cent so far this year, compared with a 4.5 per cent fall by the Hang Seng Index. The stock was up 1.4 per cent by midday on Thursday.

Ten top Hong Kong athletes have been given HK$150,000 each in scholarship fees to help them prepare for the London Olympics in 2012, Sports Federation and Olympic Committee of Hong Kong president Timothy Fok Tsun-ting said on Thursday. “The scholarship program would assist our athletes... by providing financial support towards the cost of training, coaching, and medical and scientific monitoring,” Fok said. Under the Panasonic Sports Scholarship Program sponsored by Shun Hing Group, each athlete would receive a total subsidy of HK$150,000 within the next 18 months. The Olympic hopefuls include: Yip Pui-yin, a badminton silver medalist at the 2006 Doha Asian Games; cyclist Steven Wong, who won an East Asian Games gold medal last year; and Jasmine Lai Zin-man, who won silver at the equestrian team jumping event at the Singapore Turf Club Riding Centre.

Hong Kong's SHKP Beas River house at US$20,000/SF - SHKP Beas River house to carry HK$100m price tag - Rural Sheung Shui touted as area for rich and famous. Most property buyers probably wouldn't fancy Sheung Shui, close to the Hong Kong-Shenzhen border, as a prestigious location. But developers seem to think otherwise. Sheung Shui's Beas River, about five minutes' drive from Huanggang opposite Lok Ma Chau, is fast becoming the new area for the rich and famous. Close to Beas River Country Club and Hong Kong Golf Club, houses at St Andrews Place and Royal Oaks have been going for HK$12,000 to HK$15,000 per square foot. Now Sun Hung Kai Properties (SEHK: 0016) has announced that it will offer its upcoming luxury housing project, Valais, in the Beas River area, at a new record price in the New Territories. Valais has 300 detached and semi-detached houses ranging from 2,600 to 4,500 square feet. SHKP plans to offer the cheapest unit at about HK$30 million, while the most expensive house would come with a price tag of more than HK$100 million, or more than HK$20,000 per square foot, said Victor Lui Ting, executive director at Sun Hung Kai Real Estate Agency. Given the going rates in the neighbourhood, is SHKP aiming for the moon? Some analysts think so. "It is a marketing gimmick. Any owner can ask for HK$100,000 per square foot, that does not necessarily mean they will get it. We only look at transaction prices," said analyst Paul Louie at Nomura International (HK). Eric Yuen, head of research at GuocoCapital, said the SHKP brand could indeed sell its products at a premium but it is hard to predict the sales outcome at this stage. "With prices like that, the developer is clearly more interested in achieving high prices for the project rather than generating a good turnover by volume," he said. The pricing strategy underscored the limited supply of top-notch houses in Hong Kong, he added. Valais would be targeted at Hong Kong businesspeople and affluent mainlanders, said Lui. Danny Lau Tat-pong could be the kind of buyer SHKP is angling for. Lau travels to Dongguan three times a week to visit his factory and spends two days in his office in Kwun Tong. He lives in a 2,000 square foot unit in Kowloon Tong, which is conveniently located for access to both his Hong Kong and mainland offices. But Lau doesn't find the proposed prices of Valais appetising. "I have friends living in Beas River. They just paid HK$7,000 per square foot three years ago. It is getting expensive as prices have increased to HK$11,000 per square foot now," he said. "[But] at that price level, I would prefer to buy a house in Clearwater Bay as it is closer to my office in Kwun Tong." Property agents, however, believe Valais would be sought after. Alfred Cheung, sales director at Centaline Property Agency's northwest New Territories branch, which focuses on broking luxury projects, said SHKP has created a loyal customer base in the mainland. "They just buy the [SHKP] brand even if the project is located in a remote area," he said. Assuming the entry level price for a 2,600 square foot house will be set at about HK$30 million, or HK$11,600 per square foot, Cheung believes it to be reasonable. Given the high level of privacy, Cheung says movie stars and celebrities would be quite interested in Valais.

 China*: China and Russia have agreed to expand nuclear power co-operation in seven areas, including building floating nuclear power plants, exploring uranium mines, eliminating old plants and developing markets abroad, the China Atomic Energy Authority said. They will also cooperate on molten-core catcher technologies, which improve nuclear safety, the authority said in a statement on its website (www.caea.gov.cn), after a meeting of Russian and Chinese government officials and industry executives. It did not elabourate. China is interested in Russia’s expertise on floating nuclear power plants, and both sides will set up groups to assess prospects in the area, Interfax news agency has reported, citing Sergei Kiriyenko, head of Russia’s state nuclear energy corporation, Rosatom. They also reached agreement on Russia’s involvement in the construction of two fast-neutron reactors in China, while a contract to add two nuclear power generating units at the Tianwan nuclear power plant could also be signed before the end of this year or in the first quarter of next year, Kiriyenko was quoted as saying. Tianwan, the first Chinese nuclear power plant using Russian technology, started commercial operation of its first generating unit in 2006 and the second in 2007. China is making a big push for nuclear power and other alternative energy sources to reduce its over-reliance on dirty coal. It is building more nuclear power plants than any country in the world and has become a test ground for different nuclear technologies from France, Canada, Russia and the United States.

Lufthansa's third Airbus A380 'Peking' starts regular service to Beijing China - Lufthansa's third Airbus A380,which bears the name Peking, arrives in Capital International Airport in Beijing, Sept 2, 2010. Lufthansa has launched Airbus A380 flights between Frankfurt and Beijing.

A photographer takes pictures of fireworks during a ceremony to commemorate the 65th anniversary of the end of World War II in Heihe, Northeast China's Heilongjiang province, Sept 2, 2010.

EU's Ashton in Beijing for trade talks - European Union's Catherine Ashton shakes hands with Foreign Minister Yang Jiechi in Beijing on Thursday. EU foreign policy chief Catherine Ashton met Foreign Minister Yang Jiechi on Thursday as she looked to wrap up a visit thought to have included talks on trade, environment and security issues. The Beijing meeting with Yang came a day after she took part in the inaugural EU-China High-Level Strategic Dialogue in the southwestern city of Guiyang – a forum intended to keep the two sides in contact on major issues. Ashton’s talks in Guiyang with State Councillor Dai Bingguo – a senior foreign policy official – helped promote mutual understanding, she told Yang. Through the dialogue, “we know the issues better, and we understand better, and I think we can now turn that... into pursuing some of the issues in greater detail,” she said before going into talks with Yang. Neither side has given details on the substance of their discussions but the EU had indicated earlier they were to have included trade, climate change, and security issues such as the Iran and North Korea nuclear standoffs. Ashton was also due to meet Premier Wen Jiabao later on Thursday and hold a press briefing. Dispute thriving economic ties, relations between China and Europe have been strained by trade disputes, with European firms complaining Beijing is not doing enough to ensure a level playing field for European companies in the country. It has also called for more aggressive actions by key producers of greenhouse gases, such as China, to curb their emissions. China, meanwhile, said in July it was opposed to tough new sanctions imposed by the European Union on Iran over its contested nuclear programme, calling for more talks to resolve the standoff. China is now Europe’s second-biggest trading partner after the United States, according to the EU. China is also Europe’s fastest-growing export market.

China's Culture Minister Cai Wu flew into Taiwan on Thursday to become the highest-ranking mainland official to visit the self-governing island in 12 years, officials said. “While here, I will attend a seminar ... and promote cultural exchanges with Taiwan,” he said on arrival at Taoyuan airport outside Taipei. It was the first visit to Taiwan by a Chinese cabinet minister since 1998, when Zhu Lilan, then China’s science and technology minister, travelled to the island. Cai will attend a seminar in Taipei on September 6, according to its organisers the Shen Chun-chih Culture Foundation, a non-profit Taipei-based body focused on cultural exchanges with the mainland. He may meet his Taiwanese counterpart Emile Sheng, the chairman of the island’s Council for Cultural Affairs, the organisers said. The visit comes after Taiwan’s parliament last month approved a trade agreement with China – by far the island’s most wide-ranging accord yet with the mainland.

China Tibetan canyon Yarlung Tsangpo entrance to be site of top hotel - The Yarlung Tsangpo Canyon in Tibet, with spectacular views and limited access. The canyon's mouth is the intended site of a hotel. A five-star hotel will be built at the entrance of Yarlung Tsangpo Canyon - regarded by some as the longest and deepest in the world, certainly one of the least accessible, and yet probably the most scenic in Tibet - mostly to attract conference business, according to official media. The hotel would stand on a mountain in the remote town of Pai, providing 150 rooms for at least 300 guests at a construction cost of 100 million yuan (HK$114 million) and with minimum carbon dioxide emissions, Xinhua quoted Liu Jianyun , vice-president of Tibetan Tourism, as saying. Liu said his company, based in Lhasa and listed on the Shanghai Stock Exchange, had won the central government's approval to set up a world-class conference centre. An increasing number of demanding and prestigious guests found it impossible to stay in the beautiful but ecologically fragile and politically sensitive area of eastern Tibet. The only accommodation available at present was youth hostels and guest houses run by local Tibetans. To create a different atmosphere, the hotel will be run by an overseas management team and become the first major facility in Tibet whose operations were entirely entrusted to foreigners. The mainland spends more than 100 billion yuan on meetings every year. In the past, most meetings have been held by the government, but in recent years, more overseas companies and organisations have been choosing the mainland for their conferences - a tribute to the country's growing economy. But though the canyon's scenery is certainly remarkable, the choice of location left Yang Yong , an explorer who was among the first adventurers to trek through the canyon in 1998, scratching his head. "Pai used to be a transaction centre for military personnel and materials. It was at the mouth of the canyon but not part of it," he said. Yang and his teammates spent 35 days trudging for about 200 kilometres through the heart of the canyon, where the river sharply turned south and plunged more than 2,000 metres. The view was spectacular, he said, but the dangers were many - landslides, snakes, disease-carrying mosquitoes, sudden floods - and any one of them could keep you from making it home.

China Manufacturing sector ends 3-month decline - Trend expected to stay sluggish on property curbs - Inspecting newly made items at a vehicle components factory in Suining, Sichuan province. Manufacturing has staged a small rebound. The recent slowdown in the country's manufacturing sector reversed course slightly last month, but it was still manufacturing's second-lowest performance in 18 months, and economists generally expect it will remain sluggish owing to efforts to cool the property market. The Purchasing Managers' Index (PMI) compiled by the China Federation of Logistics and Purchasing on behalf of the National Bureau of Statistics, ended a three-month decline and edged up to 51.7 last month from 51.2 in July. The improvement, which was to a level slightly better than economists' forecast of 51.5, was driven by higher output and new orders. A reading above 50 indicates expansion, while one below 50 signals contraction. The findings of a PMI survey compiled by HSBC (SEHK: 0005, announcements, news) /Markit also showed a slight improvement in the manufacturing sector, which was sharply off its near-record growth trend at the beginning of this year. The HSBC/Markit PMI rose to 51.9 last month from 49.4 in July, buoyed by stronger new orders from the domestic market. "China is moderating rather than melting down," said HSBC chief economist Qu Hongbin. "Domestic demand will be resilient and uphold around 9 per cent economic growth in the second half and next year, while external demand is more likely to worsen in the coming months." The official PMI showed that new orders jumped to 53.1 last month from 50.9 in July, while new export orders edged up to 52.2 from 51.2. This means domestic demand grew faster than that from overseas. Morgan Stanley chief economist Wang Qing said the manufacturing sector slowed as a result of cooling measures in the property market and efforts by local governments to meet full-year energy conservation targets. "With no sign that the tightening on the property sector will be loosened soon, industrial production will likely remain weak before policy turns growth-supportive in the fourth quarter of this year," Wang said. Mizuho Securities Asia chief economist Shen Jianguang said the two sets of PMI indices signalled economic activity was gradually decelerating and that the country seemed to be on track for an economic "soft landing". The official PMI found that 14 out of 20 industries recorded expansion last month, but industries such as chemical fibres, rubber and plastics and textiles slipped into contraction. Meanwhile, the government's China Automotive Technology and Research Centre revealed that retail deliveries of cars, SUVs and multipurpose vehicles rose 59.3 per cent last month to 977,300 units from a year earlier after Beijing subsidised fuel-efficient models. The growth was much faster than the 15.4 per cent increase in July to 822,300 units. This is despite the fact that the government raised the consumption tax for small cars to 7.5 per cent from 5 per cent. A Credit Suisse research report estimates that car sales will grow in the next few months when there are more holidays, including National Day. It says sales will probably be spurred largely by discount offers. However, Credit Suisse says it expects car manufacturers and dealers to remain cautious about sales in the rest of this year.

China Strategic chief hits out at Taiwanese regulators - Raymond Or Ching-fai, the chief executive of China Strategic Holdings, has criticized Taiwan's regulators for rejecting the company's US$2.15 billion bid with partner Primus Financial Holdings to buy Nan Shan Life Insurance from the American International Group. The Financial Supervisory Commission, which vetted the sale, said it was concerned that China Strategic, a battery maker, lacked experience in running an insurance business. It also said that the buyers had failed to demonstrate they had the ability to raise funds in the future, and that their commitment to operating the insurer for the long term was questionable. It also questioned the stability of the shareholder structure of the buyers. China Strategic has been in talks with its private-equity fund partner Primus and AIG on what to do next since Taiwan's Investment Commission and the FSC rejected the bid on Tuesday. Or said they had not reached a decision on whether they would appeal. The Hong Kong buyers had yet to receive an official written statement on the rejection of the bid from the Investment Commission of Taiwan's Ministry of Economic Affairs, which approves foreign investments. Or said he did not understand the regulators' reasons for rejecting the bid, saying that there were some "gaps" in the regulators' knowledge of the operations of international capital markets and of fund-raising exercises. He also questioned whether the Taiwanese regulators had followed "standard protocol" when they examined the bid. There is continuing speculation that Taiwan scrapped the bid because the proposed buyers had close associations with the mainland. Or in June had to resign from the Chinese People's Political Consultative Conference after politicians and regulators expressed concern about a possible conflict between his advisory role in the mainland body and his leadership of the bid. In July, Or and three other board members of a consortium on the bid were barred by the Taiwanese government from serving as directors of the company because they failed to provide documents to prove that they were not mainland residents. Or said he was only a member of the local Beijing CPPCC and not the national committee. He said the FSC had advised the company that bidders only had to disclose whether they were members of the national committee. "While I respect and understand the regulators' stringent requirements, I believe when it comes to examining the deal they had been influenced by the legislators, who were in turn influenced by the media, which is owned by people with vested interests in Taiwan." Trading of China Strategic shares has been suspended since Tuesday.

Sept 3, 2010

Hong Kong*: Cheung Kong eyes more overseas projects - Cheung Kong Infrastructure (SEHK: 1038) (CKI) said it was looking at more than 10 projects in Europe, North America, Australia and New Zealand, after it struck a US$9 billion deal to buy Britain’s biggest power network. “Money is not an issue and the most important thing is whether we can find good projects,” CKI group managing director Kam Hing Lam told reporters on the sidelines of an infrastructure conference in Hong Kong. The company, controlled by Hong Kong billionaire Li Ka-shing, had cash on hand of more than HK$10 billion at the end of June. Kam would not directly comment on a report that it was bidding for Britain’s high-speed rail line, High Speed 1, which could fetch £1.5 billion (HK$17.95 billion). But he said the company has consistently targeted projects with certainty of returns and strong recurrent cash flow. CKI, a unit of Hutchison Whampoa (SEHK: 0013), is one of the bidders for Britain’s only high-speed rail line, three people familiar with the matter said last month. “This is not a rail but a tunnel project that has a 30-year concession to the undersea tunnel that Eurostar runs,” Kam said. CKI has experience in investing in an undersea tunnel for Hong Kong’s subway, he added. “The bidding is at its very preliminary stage and they have just asked for potential bidders to show their hands,” Kam said. In late July, the company teamed up with affiliate Hongkong Electric (SEHK: 0006) and the Li Ka-shing foundation to buy Britain’s biggest electricity distribution network from France’s EDF for US$9 billion, CKI’s largest investment ever. “The UK power grid was a ‘must bid’ project for CKI, as we had electricity distribution investments in other countries but not in the UK at that time,” he said. The deal will roughly doubled CKI’s presence in Britain.

Ma pledges judicial independence - Hong Kong's new Chief Justice, Geoffrey Ma, has begun his first day in the post by pledging to uphold the rule of law and the independence of the judiciary. On his first day in his new job on Wednesday, Chief Justice Geoffrey Ma Tao-li said he was committed to upholding Hong Kong's judicial independence. Ma, 54, is the territory's second chief justice since the 1997 handover. He succeeds Andrew Li Kwok-nang – who retired on Tuesday. Speaking to local media, Ma said the job was a great honour. “I am fully aware of the community’s expectations,” he added. Ma had been in private practice since 1978 until he joined the Judiciary as a Judge of the Court of First Instance of the High Court in December 2001. He was appointed Chief Judge of the High Court in July 2003, where he led the High Court, both judicially and administratively. Ma has considerable experience in various areas of civil law.

Luxury site sets Kowloon record at land auction - Steven Ho Shut-kan of Kerry Properties. A luxury residential site in Kowloon topped records at a land auction yesterday, underpinning the buoyancy of the runaway property market. Property sales, which had fallen in response to recent government cooling measures, are now expected to rebound after Kerry Properties (SEHK: 0683) won the most expensive site in Kowloon in terms of floor area price. Prices have exceeded estimates in land auctions held since the government introduced measures to slow the property market last month. Singapore joined Hong Kong in imposing anti-speculation measures this week, underscoring the risk of asset bubbles in Asia as record-low US interest rates and the region's economic recovery spur demand. Kerry beat 15 other bidders to snap up the site at 1 Ede Road in Kowloon Tong for HK$1.285 billion, or HK$16,587 per square foot. This was 95 per cent higher than the opening bid of HK$659 million and at least 17 per cent above market expectations. The previous record for Kowloon was set in June, when Sun Hung Kai Properties (SEHK: 0016) paid HK$12,540 per sq ft for a site in Ho Man Tin. Ricacorp Properties said weekly sales at 50 big housing estates across the city fell 9 per cent to a four-month low of 302 last week. Agents expect sales to pick up this week. Hong Kong's home prices have surged about 45 per cent since the beginning of last year, prompting a series of cooling measures including reducing the availability of mortgage loans for luxury and investment properties as well as tighter control on speculative selling. Leo Siu, a senior sales manager at Midland Realty, said many flat owners in Kowloon Tong had raised their asking prices after the auction. "One vendor raised the asking price of his 2,652 square foot duplex flat at One Beacon Hill by 10 per cent to HK$55 million. Another owner at the estate raised their asking price by 11 per cent to HK$80 million." Raymond So Wai-man, dean of the business school at Hang Seng Management College, said the record-breaking result would boost prices in the secondary market. "Property sales have dropped in recent weeks as buyers worried the government may release a new series of cooling measures," he said. "The aggressive bidding shows developers believe the government will not release stronger measures and the record-breaking site in Kowloon Tong is positive news." Both big and small developers were drawn to the 25,823 sq ft site, with bids from Chinachem Group, Wing Tai Properties, Kerry Properties, New World Development, Wang On Group, Nam Fung Development and Tai Cheung Holdings. Surveyor Charles Chan Chiu-kwok said the construction cost of the project was about HK$3,000 to HK$4,000 per sq ft. The average price of the project has to reach more than HK$20,000 per sq ft to generate a reasonable profit. Kerry Properties is part of the Kerry Group, controlling shareholder of the SCMP Group, which publishes the South China Morning Post (SEHK: 0583).

Hong Kong Financial Secretary John Tsang back from Taiwan with visa FREE deal - Taiwan offered free entry permits online to returning Hong Kong visitors as Financial Secretary John Tsang Chun-wah wound up his four- day visit to the island. However, Hong Kong did not immediately reciprocate, with Tsang saying the possibility will be studied further.

Tourists help retail sales hit new heights - Hong Kong retail sales grew for an 11th consecutive month in July amid an economic recovery aided by record tourist arrivals.

A minimum charge for inbound tours as a deterrent to tourism malpractice is facing strong opposition even before it is formally proposed to the government. The task force set up after a spate of controversies - including a tour guide insulting mainland visitors - has agreed in principle to a charge to tackle the problem "at its roots." But the government, holding tight to the principles of a free market, appears lukewarm to the idea. A government source said regulating fees has never been the objective of the task force, set up by the Tourism Industry Council in the wake of tour scandals. But two task force members said the plan has the backing of the majority. The body is set to make recommendations to the government this month on how to better regulate the industry. "No one objected to it in the meeting," task force member Leung Fu-wah said. Legislator Paul Tse Wai-chun said the government is reluctant to regulate tour fees because of its entrenched free-market values. Tse added some industry stakeholders have expressed support for price regulation because it can stamp out "zero-charge" tours, which have been blamed for recent controversies. Hong Kong Inbound Tour Operators Association chairman Simon Hau Suk-kei also supports the plan. "I think this can be considered. It can be done as long as operators think this is feasible," Hau said. Other places have similar arrangements, with Thailand setting the minimum charge at about HK$350 a day per person and Taiwan at HK$250, according to Leung, who said some operators believe the Hong Kong benchmark should be HK$400. A government source denied that the issue has ever been discussed. But Leung claimed Commissioner for Tourism Philip Yung Wai-hung has expressed a willingness to explore the issue. The task force will consult tour guides, travel agencies and other stakeholders in the coming days to hammer out final details of the review, which will be discussed at a Tourism Industry Council board meeting on September 14. Other suggestions that may be put on the table include a point-deduction system for tour guides found to be breaking rules and basic salaries for guides.

China and Hong Kong big real estates investors to the world - HK and mainland buyers are among the biggest property players in capital cities - Mainland and Hong Kong investors have become a major force in the global property market. They have already emerged as the biggest group of buyers in many places, and their share of the market is expected to grow even further. Favoured investment destinations of Chinese buyers include university towns and cities where their children study, especially in Britain, the United States, Canada and Australia. The combined mainland and Hong Kong student population in Britain has reached 60,000. Patrick O'Neill, chief executive of the US property developer The O'Neill Group, said the Chinese share of international demand for homes in the US would double to 16 per cent this year. In Vancouver and London, he said, they were already the biggest source of overseas demand. "Anecdotally, our associates in Vancouver are reporting that Hong Kong and mainland investors comprise over half of the open house traffic," O'Neill said. Figures from estate agency Knight Frank show that 11 per cent of international property investors in prime central London's new-homes market are Chinese, who are also the largest overseas group. One-third of buyers of new homes in the Canary Wharf financial district come from the mainland and Hong Kong, the agency reports. Jennet Siebrits, head of residential research at CB Richard Ellis, said Chinese buyers were poised to overtake Russians as the most active international buyers in the prime central London housing market. "We would expect the favourable exchange rate to lead to an imminent rise in the number of Chinese buyers investing in prime central London property," Siebrits said. Chinese investors are most active in the off-plan, or pre-construction, markets across the world from Dubai to Sao Paulo. Other hot destinations include France, where they are buying second-hand apartments in Paris and holiday homes on the French Riviera as well as new homes, reports estate agency HomeHunts. Homebuying is tracking other economic activities. In Bordeaux, for example, the number of vineyard investors from the mainland and Hong Kong has been growing, according to Joel Palous, proprietor of AIM Vineyards consultancy. Chinese buyers are said to target homes across the price spectrum. "The price points of mainland and Hong Kong investments begin from the low-end properties starting around HK$800,000," O'Neill said. At the top end of the market, agents recount helping mainland business people purchase £15 million (HK$180 million) houses in London. O'Neill said Chinese investors were taking advantage of the slump in property prices overseas to buy into these markets for capital gains in future. "In some of the overbuilt markets in Southeast Asia and US cities like Miami and Las Vegas, homes are going at a discount of up to 70 per cent," O'Neill said. "Real estate is cyclical, and even the most conservative economists project returning to and eventually surpassing the 2006 prices in the next upswing in about four to six years." Gary Zhang, a senior manager in a Beijing-based energy company, has been looking for an apartment below US$1.5 million in Manhattan. Among the main reasons for his interest are an appreciating yuan and a drop in New York property prices. "Prices in Shanghai, Beijing and Hong Kong all are too high. New York City is a better place to invest," Zhang said, adding that prices in Manhattan have picked up a bit in the first half but are still lower than their peak levels. "I may work in New York City in the next couple of years. I will move in if I do go. If not, it can just be an investment," Zhang said. Currency fluctuations in some countries has also made property less expensive for Chinese investors. The pound has depreciated 20 per cent against the Hong Kong dollar and 30 per cent against the yuan over the past three years, according to Reuters, while the US dollar has depreciated 10 per cent against the yuan. The mainland's rapid economic growth means it now has 343,000 high net worth individuals, or people with more than US$1 million in investable assets, according to wealth management company Scorpio Partnership. Hong Kong has 72,000 high net worth individuals. Many such people buy property in Canada, Britain and the US because they are also attracted to their visa programmes, O'Neill said. Wealthy foreigners can gain permanent residency in Britain by investing £1 million over five years. In Quebec, Canada, those who have net assets of C$800,000 (HK$5.94 million) and invest C$400,000 can get permanent residency. In the US, the requirement is an investment of US$1 million in a business that employs 10 people. Matthew Montagu-Pollock, publisher of the website Global Property Guide, said mainland investment in overseas property was on the threshold of a boom. "What triggers any national buying spree is of course economic growth, large increases in personal wealth and large increases in the value of the currency. The mainland Chinese have experienced the first two," he said. "Many of them have good reason to want to keep some property outside the mainland for the time-honoured reason of diversification or risk-avoidance. I would expect the US, Canada, Hong Kong, Singapore, Australia and the UK to continue to top the list. Mainlanders' interest in overseas property seems likely to just keep growing." Ed Lewis, director of London new developments at Savills estate agency, said 10 per cent of his company's sales went to mainland and Hong Kong buyers. He said he expected this proportion to rise next year when the number of British buyers are likely to decline further. According to website Smart New Homes, the number of new homes for sale in Britain is at its lowest since November 2006. A lack of mortgage financing has deterred many Britons from buying, the website says. Ironically, while Hong Kong investors benefit from affordable buying opportunities overseas, they are finding competition from mainland investors increasingly tough at home. A third of Hong Kong's luxury flats were sold to mainland buyers in the first six months of this year, prompting lawmakers to debate curbs on mainland investment. Two ideas being discussed are raising the investment level in the Capital Investment Entrant Scheme to HK$10 million from HK$6.5 million, and banning outside investment in small-to-medium-sized flats. If enacted, they could restrict the number of mainlanders using Hong Kong as a springboard into overseas property.

Snipers should have acted earlier, Manila mayor says - City chief rues missed opportunities to shoot hostage-taker. Officers from the Philippine National Police light candles and make offerings yesterday at the spot in Manila where eight Hongkongers died in the August 23 hostage tragedy. Manila mayor Alfredo Lim said yesterday snipers should have shot the gunman in last week's tragic bus hijacking when they had the chance instead of waiting to see if the situation could be solved through negotiation. Several times throughout the day sacked policeman Rolando Mendoza was in clear view in the door of the bus where he held a group of Hong Kong tourists at gunpoint, but police held off in the hope they could end the crisis peacefully. "I think that was a mistake, the failure to take that opportunity [to shoot]," Lim said yesterday at a memorial Mass in Manila for the victims. "But at that time he was already releasing some of the hostages and no harm was being done to them." He said earlier that as a general rule, a hostage-taker was not shot if he was not hurting the hostages. "But there is also a rule that if a clear shot could be given ... and no one else would be hurt, the negotiator has to take advantage of that opportunity." Lim was speaking as Hong Kong police officers in Manila wound up 15 hours of investigations on the Hong Thai Travel coach where eight hostages and Mendoza died and began to make ballistic examinations of firearms used in the shoot-out.

The condition of teenager Jason Leung Song-xue - who suffered serious head injuries in Manila last week - has stabilised after brain surgery, Tuen Mun Hospital said on Wednesday.

A PhD student was sentenced to four years jail on Wednesday after he was convicted of conspiracy to blackmail a 76-year-old religious leader for HK$6.3 million.

Customs officers on Tuesday raided 17 shops across Hong Kong and seized a large quantity of counterfeit leather goods, Trade Descriptions Investigation divisional commander Koon Hon-chuen said on Wednesday. He said 100 customs officers had discovered some 4,500 fake leather goods in retail outlets in Mong Kok, Wan Chai and Causeway Bay. The goods were worth about HK$5 million, Koon said. Customs officers also arrested three men and 23 women, aged between 19 and 45. Koon said some shop staff had claimed the leather goods were made in Britain. But investigations revealed they were from the mainland. He said a closer examination showed they were generally of poor quality. “We found many bags had been returned by customers with defects in their metal zippers and thread,” added Koon.

 China*: Mainland’s manufacturing economy staged a moderate rebound in August after three months of slowing growth, an official survey showed on Wednesday.

China's August car sales jumps 59% - A man is seen taking a closer look at a car on display for sale at a second hand car market in Beijing. On Wednesday, China Automotive Technology and Research Center said the sales of cars in August rose 55.7 per cent over a year earlier to 1.21 million vehicles. Mainland’s car sales in August rose 59.3 per cent from a year earlier, bouncing surprisingly higher after sluggish sales in the summer months, helped largely by Beijing subsidies for fuel-efficient models. The up-turn in demand in the world’s largest car market could extend into September and October, the best auto sales season, and may continue into the winter months if automakers slash prices to drive sales, industry observers said. “It’s a big surprise! Everyone was expecting car sales to hit bottom in August, but they didn’t,” said Zhang Xin, a Beijing-based analyst with Guotai Junan Securities. “The rebound shows that the intrinsic demand for automobiles is still there. A little policy incentive could make a big difference.” Beijing unveiled a pilot program in five select cities in June to subsidize green car buyers, with handouts ranging from 3,000 yuan (HK$3,422) for fuel-saving models to as much 60,000 yuan for electric cars.

China launched live-fire naval exercises in the Yellow Sea on Wednesday after voicing opposition to similar war games to be staged there this month by the United States and South Korea. The Beihai fleet of the navy of the People’s Liberation Army will conduct a “live ammunition drill” until Saturday in waters off the east coast near the city of Qingdao, Xinhua news agency reported. The report said many of the planes, vessels and battlefield weaponry to be used in the exercises were unveiled at the National Day military parade on October 1 last year, when China celebrated 60 years of Communist rule. “This is an annual routine training, mainly involving the shooting of shipboard artillery,” Xinhua had said in a previous report, citing China’s defence ministry. The United States and South Korea are set to carry out a new round of joint drills in the Yellow Sea from Sunday in another show of force against communist North Korea following the sinking of a South Korean warship in March. Any military drills involving the United States in the Yellow Sea are a sensitive issue because of the area’s proximity to China and the disputed maritime boundary between North and South Korea. China has bristled at the idea of a US aircraft carrier group patrolling waters near its coast, although the US military has said this month’s planned anti-submarine exercise would not involve a carrier. As China launched its war games, PLA commander Zhang Youxia met in Pyongyang with North Korea’s number two leader Kim Yong-Nam and pledged to step up military exchanges, Xinhua said. The United States and South Korea staged massive joint naval and air exercises in July in the nearby Sea of Japan (East Sea), which also drew criticism from Beijing – North Korea’s closest ally and trade partner. Seoul and its allies say the sinking of the South Korean corvette the Cheonan in March was caused by a North Korean torpedo attack, but Beijing has refused to join in international condemnation of Pyongyang over the incident. China staged its own naval, air and artillery exercises in late July, though it was not clear if the drills had been pre-planned or were in response to the US-South Korea manoeuvres. Last month, the South staged its largest-ever anti-submarine drill including live-fire training near the disputed Yellow Sea border, prompting a North Korean artillery barrage fired into the sea. Also in August, the United States and South Korea held annual 10-day joint war games on land that involved more than 80,000 troops.

Mongolian coking coal producer Mongolian Mining plans to raise about US$700 million through an initial public offering on the Hong Kong stock exchange, according a term sheet.

China Strategic Holdings (0235) has failed to acquire Taiwan's Nan Shan Life Insurance - and it is believed that politics rather than regulatory hurdles was the stumbling block. Taiwan's Ministry of Economic Affairs announced yesterday that the Financial Supervisory Commission rejected the US$2.15 billion (HK$16.77 billion) bid by China Strategic and Primus Financial for the Taiwanese unit of American International Group. The China Strategic-led consortium has a month to appeal. It also agreed with AIG to extend a deadline for any deal to October 12. Since the group agreed to buy Nan Shan in October, many Taiwanese have protested over fears China Strategic may be funded by Beijing. Analysts said the case turned political, with even the public posts of key members of the consortium coming under scrutiny. To smoothen the path for the deal, China Strategic vice chairman Raymond Or Ching-fai resigned from the Chinese People's Political Consultative Conference in June. Chairman Frederick Ma Si-hang is a former commerce and economic development minister. Sources said due to political concerns of Taiwan authorities, Or and his management team, as well as AIA, were forced to turn passive. Opposition also emerged within Nan Shan over the deal, Taiwan's United Daily News reported. The newspaper said the transaction would not be welcomed as the rights of employees and policyholders might be at risk. Taiwan's securities regulator, which examined the case for 10 months, set five criteria, two of which were not met, said FSC vice chairman Wu Tang-chieh. They were the ability to raise capital in the future and a commitment to Nan Shan's long-term operations. "From the information submitted by the [prospective] buyers, other than the US$325 million cost of purchase, we could not see further arrangements for possible expansion of capital in the future," said Wu.

Sept 2, 2010

Hong Kong*: Taipei brings in free online visa to boost travel - From Sept 1 2010, Hong Kong, Macau citizens can print 30-day permit at home. Hongkongers may not yet enjoy visa-free entry to Taiwan, but from today they can get free visas - applied for online and printed out at home. The measure was announced by Taiwan's government yesterday, as Financial Secretary John Tsang Chun-wah completed his four-day historic visit to Taipei to promote ties. But the offer was not greeted with any reciprocal measure from Hong Kong, with Tsang saying arrangements were under review. Taiwan's National Immigration Agency announced the measure yesterday, a day after Mainland Affairs Council chairwoman Lai Shin-yuan said her government would simplify visa application procedures for Hong Kong travellers. The move came after two high-level semi-official bodies from the two places met for the first time on Monday. The Hong Kong-Taiwan Economic and Cultural Co-operation and Promotion Council (ECCPC) was set up in Hong Kong in April, and the Taiwan-Hong Kong Economic and Cultural Co-operation Council (ECCC) was launched in Taipei the following month. Previously, Hong Kong passport holders could either apply for a Taiwan visa on the immigration agency's website and collect it at the airport before boarding, or obtain a 30-day visa on arrival for HK$75. From today, applicants can print their own visa from the website. On arrival in Taiwan, they present the visa with their passport at immigration and officers stamp the visa, but not the passport. The visa fee is waived. The visas are also available to Macau citizens. To be eligible for the visa, travellers must be Hong Kong- or Macau-born or have visited Taiwan before. The visa will be valid for 90 days, with a maximum stay of 30 days. Lee Ling-fong, director of the agency's entry and exit affairs division, said the move aimed to make the system more convenient and bring more Hongkongers to Taiwan. "There will be celebrations for the Double Tenth Festival in October and the Taipei International Flora Expo in November. Next year will be the 100th anniversary of the establishment of the nation. We hope to attract more tourists from Hong Kong and Macau," she said. The agency last year issued 340,000 visas to Hongkongers who applied online. Lee said she hoped the annual number would increase to 350,000 under the new system. "We hope to help foster exchange. The Taiwan side has already extended so much friendliness. I hope Hong Kong will respond with equal friendliness by, for example, granting Taiwan visitors visa-free entry or cutting some application fees," Lee said. Speaking before he left Taipei, Tsang said he did not know the details of the new visa system. But when asked if Hong Kong would offer a reciprocal arrangement, he said: "We welcome any measure which provides convenience for Hong Kong and Taiwan people travelling between the two places. We review our own system from time to time to see what changes we can make to improve the arrangements." Under the current iPermit scheme, Taiwan residents can apply for an electronic permit to visit Hong Kong but must do so via authorised airlines or agents. An iPermit costs HK$50 for a 30-day stay. Holders of Mainland Travel Permits for Taiwan Residents can stay in Hong Kong without a visa for up to seven days. Taiwan residents made a total of two million trips to Hong Kong last year, while Hongkongers took 600,000 tours to Taiwan. The Taiwan government has been calling for a mutual visa waiver since the Kuomintang returned to rule in 2008. At a meeting between Lai and Tsang on Monday, the Taiwan minister again raised the issue. Tsang said the government would look into it. Paul Leung Yiu-lam, chairman of the Hong Kong Association of Travel Agents, said he expected the number of visas for Hong Kong visitors to Taiwan to jump by a double-digit percentage under the online system. That could see a rise in hotel room rates, especially as Taiwan is opened up to more mainland travellers, Leung said. Political instability and violence in places such as Thailand and the Philippines would likely boost Taiwan's appeal as a holiday destination, Leung said.

Andrew Li leaves the Court of Final Appeal in Central on his final day as chief justice yesterday, having passed the baton to Geoffrey Ma. Ma takes firm stance on role of courts - Judge's meteoric rise marked by efforts in shaping constitutional order under Basic Law. At 54, Chief Justice Geoffrey Ma Tao-li is a relative newcomer to the judiciary, having only become a judge at the Court of First Instance in 2001. Nevertheless, as a young barrister Ma was already playing a pivotal role in shaping Hong Kong's new constitutional order, representing the government in a right-of-abode case that led to a controversial interpretation of the Basic Law in 1999 by the Standing Committee of the National People's Congress. In 1999, he represented the government in the case, in which the Court of Final Appeal ruled any Chinese person with a parent who was a Hong Kong resident had right of abode. The Standing Committee's reinterpretation, requested by the Hong Kong government, effectively overturned key parts of that ruling. Ma's involvement in the case, the very first involving Basic Law issues to reach the Court of Final Appeal, as well as subsequent cases that debated the effect of the Standing Committee's interpretation on Hong Kong, proved himself on the fundamental constitutional nature of the city's courts, under the watch of then chief justice Andrew Li Kwok-nang himself. In the right-of-abode case, Li remarked that Ma was not advocating the court should seek an interpretation from the Standing Committee, but was providing useful assistance on the issue: "He must draw to our attention these submissions to enable the court to consider whether a reference should be made. In our view, it is proper for Mr Ma ... to put these submissions to us since they relate to the Court's constitutional jurisdiction." And while that case is most well known for sparking a reinterpretation by Beijing, it also provides the platform for setting in stone other key principles that lie at the heart of the "one country, two systems" concept: Hong Kong's use of common law principles, the court's purposive approach to interpretation of the Basic Law, and the emphasis on granting Hong Kong residents "the full measure" of the rights and freedoms guaranteed in the Basic Law.

Appeals for justice mark Mass for Manila dead - Almost 1,000 people turned out in Manila yesterday for a memorial service for the victims of last week's tour bus tragedy, with appeals for justice over the botched handling of the hostage crisis that led to the deaths of eight Hong Kong tourists. There has been a storm of criticism from Hong Kong since last Monday's carnage in which authorities' mishandling of the crisis seemed to enrage the hostage-taker, former police officer Rolando Mendoza, who shot the victims before he was killed by a police sharpshooter. About 250 police officers were among those who attended the Mass, which was offered in front of the Quirino Grandstand, the site of tragedy. "This terrible case is also calling out to heaven for justice," Bishop Broderick Pabillo, Manila Auxiliary Bishop, said in his homily. "Not only the Chinese are calling for a just and swift investigation of this case. We Filipinos demand the same from our officials. Bring out the truth, let those who are responsible, whoever they may be, be held accountable. No whitewash. No scapegoats. Let there be new life for our justice system." The Mass was preceded by a ceremony performed by Buddhist monks from Taiwan. China's ambassador to the Philippines, Liu Jianchao , said that a fair and thorough investigation would help relieve the anger and loss of Hong Kong and Chinese people.He told the South China Morning Post (SEHK: 0583, announcements, news) that "both the Chinese and Philippine governments share the aspiration that we should focus now on the investigation, which means a thorough, fair and credible investigation that will bring further relief to the [families of] people who lost their lives". After laying a single white rose on a dais in front of the site of the incident, he added, "I'm really touched by the service." Liu said, "We appreciate everything the Philippine government and the president himself have done" in the aftermath of the hostage-taking. In his homily, the prelate noted that Mendoza was a veteran policeman and he had a special message for the authorities: "Did his service not ingrain in him respect for others and respect for life? New life for our police and armed forces is not just to get more sophisticated arms or to get more training. It is above all to have deep love and respect for human rights and life itself."

An all-star group of artists has failed in its bid to turn the former married police quarters in Hollywood Road into a creative cluster. The committee vetting applications for the project has shortlisted a foundation set up by a Sino Land executive and another established by a newspaper boss, leaving the Hong Kong Institute of Contemporary Culture out of the running. "The institute's creative elements are outstanding, but in other aspects it is outshone by the others," a committee member said. The committee comprises building professionals together with industry and community representatives. The member said the proposal lagged behind the others particularly in management capacity. The shortlisted bidders - the Hong Kong Heritage Conservation Foundation, set up by Sino Land executive director Daryl Ng Win-kong, and the Musketeers Education and Culture Charitable Foundation, formed by Hong Kong Economic Times Holdings chairman Lawrence Fung Siu-por - have yet to reveal their proposals. The member said the institute's proposal could be reconsidered if the shortlisted ones were found unsatisfactory. Honorary institute chief executive Ada Wong Ying-kay said last night she would not comment until she was informed officially about the decision, which was made at a meeting on Monday. Criteria considered by the vetting committee included reflection of historical value and technical aspects, creative industries' value and social value, financial viability and management capacity. The institute announced last week that it planned to invite 30 top arts and design figures as anchor tenants. The star would-be tenants included actor Daniel Wu Yin-cho, G.O.D. founder Douglas Young and Brian Tse Lap-man and Alice Mak Ka-bik, creators of the McDull stories and cartoons. It said the key players had promised to mentor budding talents in their arts. The Musketeers earlier said it would partner with the Polytechnic University, the Hong Kong Design Centre and the Design Institute. The successful operator will take a 10-year tenancy to set up a creative area at the site, which is composed of two vacant police quarters blocks and the remains of the Central School, founded at the site in 1889.

E-games creator CY Foundation gets visit from ICAC - CY Foundation's first Enternet store. The company serves a network of 20,000 internet cafes to help promote its e-sports game sites. CY Foundation Group's plans to conquer the mainland's burgeoning digital entertainment industry appear to have hit a snag, following a visit by Hong Kong's graftbusters. The Independent Commission Against Corruption on Monday swooped on the group's headquarters in Wan Chai, where officers reportedly stayed several hours before taking away documents and an undisclosed number of employees whose identities are unknown. In a filing with the Hong Kong stock exchange yesterday, CY Foundation executive director Woelm Samuel said the group's board had requested a suspension of trading in its shares, "pending the release of a public announcement in relation to information, which is considered to be price-sensitive in nature". CY Foundation, which describes itself as the mainland's leading electronic sports tournament provider, was in the middle of pre-launch testing of its flagship, multiplayer online game when the ICAC raid occurred. A spokeswoman for CY Foundation confirmed that "the ICAC contacted the company yesterday", but declined to elaborate. The ICAC had no comment on the investigation. In May, gaming machines and software that CY Foundation bought from a company called Weike, owned by a former director of the group, were confiscated by mainland police for being used in gambling. A month earlier, Luck Continent, a substantial shareholder of CY Foundation, filed a lawsuit against group chairman Theodore Cheng Chee Tock and his spouse, and six other corporate shareholders, concerning various allegations related to the group's investments. CY Foundation recently received approval from the General Administration of Press and Publication and the Ministry of Culture to operate its South Korean-developed online game, Rohan, across the country as part of its move into the larger and more profitable online game market. With the Communist Youth League-owned Network Media Centre and software developer Playtech as strategic partners, CY Foundation has developed a network of more than 20,000 internet cafes to help promote its e-sports game sites.

 China*: Polluters targeted in survey of waterways - The mainland's top environmental agency has announced an investigation into the state of the nation's rivers and waterways - the biggest water-pollution survey in years.

National registration aims to foil phone scammers - Pre-paid SIM cards lose their anonymity - A new nationwide policy will require mobile phone users who buy prepaid SIM cards to use their official identity cards and register with their real names from today. The Ministry of Industry and Information Technology has been pushing for the move for five years. It said the new move would curb fraud. However, activists and online users are worried the new move, which coincided with the tightening of control over the internet - including a ban on individuals owning website domains and the closure of popular online communities - is aimed at curbing the flow of information and dissident views. Mobile users who already have prepaid SIM cards won't have to register immediately, but they will have to provide their real names and ID card numbers within the next three years, according to the new policy effective today. They will be encouraged to go to one of three telecommunications service provider (TSP) offices with their ID cards or call a customer service number and, in exchange, they will receive a benefit such as a fee waiver, according to The Beijing News.

Mengniu earnings decline on rising prices of raw materials - China Mengniu Dairy executives (from left) Lu Jianjin, Wu Jingshui and Chris Kwok at the results announcement yesterday. China Mengniu Dairy (SEHK: 2319), the biggest liquid milk maker on the mainland, reported its net profit slid for the first six months of the year because of rising costs of raw materials. The company, which was deeply embroiled in the melamine scandal of 2008, posted a net profit of 618.82 million yuan (HK$707.25 million), down 6.5 per cent from a year earlier. Revenue increased 19.3 per cent to 14.43 billion yuan. The cost of sales as a percentage of revenue rose 0.5 per cent to 73.3 per cent, or 8.86 billion yuan, while operating expenses such as distribution and administration costs also increased. The company will not pay an interim dividend. Chief financial officer Wu Jingshui said the cost of raw materials, such as raw milk and sugar, have increased by 10 to 30 per cent so far this year. The company has not responded by raising its prices but will not discount that possibility for the rest of the year. Wu denied that Mengniu's sales had been affected by recent discoveries of melamine-laced milk powder. Last month, food safety authorities seized more than 100 tonnes of tainted milk powder in several provinces in the north of the country, raising concerns over how much of the product, which should have been destroyed in 2008, was hidden and is still leaking into the market. The mainland dairy industry faced another scandal last month when the Ministry of Health said it would investigate claims that Qingdao-based Synutra International produced infant formula tainted with adult hormones, which caused baby girls to grow breasts. The liquid milk business, which includes ultra-high-temperature processed milk and flavored milk beverages, accounted for 86.4 per cent of total group revenue. The business recorded a 21.1 per cent increase in sales year on year to 12.46 billion yuan. The ice cream business saw revenue grow 9.9 per cent to 1.82 billion yuan. Mengniu expanded its production capacity with aggregate annual production capacity reaching 6.14 million tonnes as of June. Shares in Mengniu closed 3.6 per cent lower at HK$21.50.

Sept 1, 2010

Hong Kong*: On his last day at work, Chief Justice Andrew Li Kwok-nang said on Tuesday he was very relaxed about his time as Hong Kong's top judge. “During the last 13 years, I have done my best to fulfil my duties. I have no regrets. I will leave the Court of Final Appeal at 6pm,” a smiling Li said. The 61-year-old, speaking outside the Court of Final Appeal, Li said he planned to keep busy after retiring. Li would focus on legal education in Hong Kong because he had been appointed Honorary Professor of Law of the Chinese University of Hong Kong (CUHK) and University of Hong Kong (HKU). He would also teach at the Tsinghua University Law School. Li will be succeeded by current Chief Judge of the High Court, Justice Geoffrey Ma Tao-li. As the first appointed Chief Justice of Hong Kong after the 1997 handover, Li was respected for his experience and impartiality. Andrew Li was educated in Hong Kong. After finishing his A Levels in Repton School in Derbyshire in 1966, he furthered his studies at the University of Cambridge, where he obtained an MA and an LLM. He was called to the Bar in 1970 and started practising in Hong Kong in 1973 and also in the United Kingdom. Li was later appointed a judge in Hong Kong. He was appointed a deputy judge of the District Court of Hong Kong in 1982 and became a Queen’s Counsel (QC) in 1988. He was then appointed a Deputy High Court Judge in 1991. In 1997 Li was appointed the first Chief Justice of the Court of Final Appeal.

Philippine authorities will send investigators to Hong Kong this week to collect statements from survivors of last week's tour bus hijacking.

School pulls out all the stops to help orphans learn to start new life - Two siblings orphaned by the Manila hostage tragedy have been promised help by their school, including 15 peer supporters, ahead of tomorrow's start of the new school year. Tracey Wong Cheuk-yiu will be in Secondary Five, while her brother Jason Wong Ching-yat will be in Secondary One. Both survived the bloodbath that claimed the lives of their father Wong Tze-lam, 51, mother Yeung Yee- wa, 44, and aunt Yeung Yee-kam, 46. Whether the pair can attend school tomorrow depends on the results of an evaluation of their mental status by the Social Welfare Department, said Daniel Wong Yip-cheung, principal of the Tsuen Wan Government Secondary School. The entire school is geared to help the siblings cope with their first school year without their parents. Fifteen schoolmates will be peer supporters for 15-year-old Tracey, he added. "We've taught them in a counseling workshop last week how to help Tracey cope with the trauma." The school will organize a life education seminar tomorrow and advise students not to dwell too much on the hostage-taking incident with Tracey and Jason, 12. In a statement posted on its website, the school also said: "The Parent- Teacher Association, the Alumni Association and alumni would also like to express their deepest sympathies to them and are prepared to provide all possible assistance." Donations have continued to pour in, with several groups expressing willingness to pay for the orphans' school fees until they graduate from university. These include the Jockey Club's Charities Trust, the Community Chest and MTR Corp, where their father worked. The Tung Wah Group of Hospitals aims to collect more than HK$1 million for its newly-launched special education fund for the Wongs as well as three other teenage survivors who lost a parent in the tragedy. The Housing Department have also allocated a public housing flat in King Lam Estate, Tseung Kwan O, for the siblings who are temporarily staying with their aunt who lives in the block. A spokeswoman from the Education Bureau, meanwhile, said the government will monitor the academic progress of the Wongs and two other survivors who are studying in local schools. The fifth teen survivor, Jason Leung Song-xeu, studies in Canada.

Hong Kong Jockey Club boss bets on flats at his final hurdle - Retiring Jockey Club chairman John Chan Cho-chak is all for the resumption of the Home Ownership Scheme. But the government must ensure that the scheme is not seen as interfering with market mechanisms, Chan warned. Citing his own experience, the 67-year-old said most youngsters need help from their families to get started on their first homes. "HOS flats are cheaper and the mortgages easier to pay off," he told a media gathering yesterday. He officially steps down as the Jockey Club chairman today, with Brian Stevenson taking over. The former civil servant bought his first home in 1967. Property prices at the time had been adversely affected by riots in what was then British-ruled Hong Kong. Chan's 1,200 square foot home on Waterloo Road Hill, an upper-class residential area, cost around HK$70,000. That was equivalent to years of earnings for an average worker. "At any point in time, youngsters wanting to buy their first home will need some sort of help from the family," Chan said. It was his father who made the downpayment for him. But Chan, then a junior civil servant, had to pay HK$1,000 a month to the bank as mortgage. The top executive of Hong Kong's biggest donor also advised youngsters to aim lower when buying a home. "You should work your way up. Target the smallest flat and trade up slowly." Turning his attention to racing, Chan said the equestrian facilities for the Guangzhou Asian Games will be turned into a training base for the Jockey Club when the tournament ends in November. Construction work for the Conghua training base will be completed by 2014. Racehorses from the territory can then be trained there. "The mainland facilities will be more modern and spacious. It will not be two to three-story buildings," Chan said. The club hopes to increase the number of horses from 1,200 to 1,400 once the new base is opened. The base will also include an uphill track and other facilities. Chan said the stables at Sha Tin Racecourse are in need of renovation. They were built more than 30 years ago on reclaimed land that has been sinking each year. He also renewed the call for a change in the betting duty system. The club has suggested that the government scrap the double taxation system and lower the betting rate to attract revenue from overseas. But the man who helped stabilize the Jockey Club revenues by increasing the number of racing days by five, said such a policy change may take a long time to materialize.

Kerry Properties lands Kowloon (HK) site for HK$1.285b (US$165 million) 33% above market forcast - Hong Kong sold a piece of land on Tuesday at a price that was a third above forecasts, indicating that the territory’s property sector could still be frothy even after cooling measures were announced weeks ago. View of a residential site at 1 Ede Road, which was auctioned of on Tuesday for for HK$1.285 billion, a price that was a third above market forecasts.

The Air Pollution Index recorded "very high" levels across Hong Kong on Tuesday, a spokesman for the Environmental Protection Department said.

Financial Secretary John Tsang Chun-wah and his high-level Hong Kong delegation yesterday held a landmark meeting with senior government officials in Taiwan, paving the way for annual discussions.

Twenty-nine bucks an hour - that's the amount a panel tasked with arriving at Hong Kong's first minimum wage is set to recommend to the chief executive. Members of the Provisional Minimum Wage Commission have settled on a figure, which sources put at HK$29, give or take a few cents. But chairwoman Teresa Cheng Yeuk-wah was tight-lipped about the figure yesterday. Aside from talking about aspects of the panel's work, all she would say is that the 13 members of the commission - which includes representatives of bosses and workers - have reached a consensus on the minimum wage. If it is HK$29 an hour - or HK$4 less than what unionists demand - some 347,800 workers stand to benefit. That is the number of people the Census and Statistics Department reckons earn less than HK$29 an hour. It arrived at that the number after a study of wage levels in the second quarter of last year. Declining to give anything away, Cheng said: "It's not due to any worries. Our task is to make a recommendation to the chief executive. As an advisory group, I think we should respect the one whom we advise. "He has his own considerations and will have to mull it over before deciding what to do." The commission is still putting the finishing touches to its report for Donald Tsang Yam-kuen. The Chief Executive-in-Council will decide whether to accept the recommendation or come up with other ideas about a minimum wage backed by law. A government source told The Standard that Tsang is not aware of the figure being proposed. Cheng said it was challenging to reach a consensus, but members had discussed the issue rationally and weighed wage statistics from the government. Factors taken into consideration to arrive at an hourly rate include the general economic situation, the labor market, the SAR's competitiveness and people's living standards. The commission also carried out impact studies of businesses and employees to try to determine the effects of different wage levels. Asked how workers might greet the final figure, commission member Lee Kai-ming, a consultant to the Federation of Hong Kong and Kowloon Labour Unions, said: "We seek to strike a balance. As the consensus was reached through a complicated and thorough discussion, it is not a matter of whether we can swallow it or not." On speculation the government may extend the Transport Support Scheme - a subsidy program for low-paid workers - should the minimum wage be HK$28 an hour, Permanent Secretary for Labour and Welfare Paul Tang Kwok-wai said it was a separate issue. But the scheme is now under review in any event. Commission member Thomas Kwok Ping-kwong, vice chairman and managing director of Sun Hung Kai Properties, said he believes businesses will comply with the law and pay wages at the level the law will demand. But commission member Michael Chan Yue-kwong, executive chairman of Cafe de Coral Holdings, who came under fire for saying that a profit warning and layoffs may be considered if the minimum wage was HK$33 per hour, declined to take questions yesterday. The Minimum Wage Ordinance was passed by a wide margin by the Legislative Council on July 17. Legislators must next decide whether to accept or reject the rate decided by the chief executive. The minimum wage is scheduled to take effect in the first half of next year.

Taiwan waits on visa-free deal to Hong Kong - The government is exploring the possibility of granting Taiwan visitors visa- free entry, according to the finance chief. However, discussions between John Tsang Chun-wah and Taiwan officials on the issue failed to reach a consensus. Yesterday's meeting in Taipei was the first between the Hong Kong-Taiwan Economic and Cultural Cooperation and Promotion Council, and the Taiwan- Hong Kong Economic and Cultural Co- operation Council. Tsang, honorary chairman of the Hong Kong council, and Mainland Affairs Council minister Lai Shin-yuan were both present at the meeting. Tsang - the highest ranking SAR official to visit Taiwan - will return to Hong Kong today after a four-day trip. He is scheduled to meet Taiwan Premier Wu Den-yih before he sets off. Tsang said the visa issue will be further discussed on bilateral platforms. "We will look into the problem. If both sides can show sincerity on the issue, the problem can be resolved," he said. Currently, Taiwan visitors must pay visa fees ranging from HK$50 to HK$650 to visit the territory. Following yesterday's meeting, the two governments said a series of economic agreements have been reached. That includes a "pragmatic" approach on issues such as cooperation on banking and financial regulations, shipping and air transport arrangements. The Hong Kong Tourism Board will set up an office in Taipei to promote tourism exchanges, it was agreed. The two sides also agreed to hold regular meetings to promote trade and investment. The next meeting will be in Hong Kong next year. Recent media reports suggest Taiwan plans to let Hong Kong and Macau residents apply for entry permits online for free. The permits would be valid for three months and allow multiple entries for up to 30 days, the reports said. But Taiwan officials said they have not made any such announcement.

 China*: Wen says rote learning must go - Schools have to get their students to be creative and think for themselves, Premier Wen Jiabao told officials, in reference to the rote-learning ingrained in the education system.

Taiwan regulators rejected AIG’s planned US$2.2 billion sale of its Taiwan unit to a mainland-related group, citing regulations on mainland investment.

Twist in Gome battle as Du freed from jail - Founder's wife can have say at showdown - Du Juan has had her jail term for insider trading commuted by the Beijing high court. Wong Kwong-yu's 14-year sentence was upheld. The power struggle between Gome founder Wong Kwong-yu and the giant mainland appliance retailer's current management took another twist yesterday as Wong's wife, Du Juan, was freed from jail with a commuted sentence for insider trading. The release of Du is likely to benefit Wong because she will be able to participate in a September 28 special general meeting where a vote will be taken on whether to remove Chen Xiao as Gome's chairman. Du now will also be able to manage the family's huge fortune directly. The Beijing high court upheld on appeal Wong's 14-year jail sentence for bribery and insider trading handed down in May. But it commuted a three year and six month term given to Du and released her, prosecutors said in a statement. Wong, known on the mainland as Huang Guangyu, and Du have yet to answer allegations by Hong Kong's Securities and Futures Commission that they perpetrated stock market malpractice resulting in HK$1.6 billion in losses in 2008. Last August the SFC won a High Court order freezing HK$1.66 billion in Gome shares controlled by Wong and Du. But to date it has been unable to serve a summons on the pair as their whereabouts were unknown. People with direct knowledge of the case said the regulator cannot send a writ to Du across the border. Meanwhile, Du could send her representative to take part in Gome's special general meeting in the city next month. On August 4, Wong's wholly owned Shinning Crown Holdings sent a letter to Gome's board proposing a special general meeting to vote on Chen's removal and the cancellation of a mandate to issue new shares, which is regarded as a move to dilute Wong's stakes in Gome. Wong's Shinning Crown, a shareholder of Gome, said in its statement it will take legal action to stop the company from issuing new shares because the dilution of stakes could affect the voting results at the special general meeting. Meanwhile, Wong's family bought 120 million Gome shares last week, increasing their stake to 34.78 per cent from 33.98 per cent. A spokesman for Gome said the company has not yet made a decision to issue new shares. Also yesterday, Gome said it had received a letter from Beijing Gome, a company owned and controlled by Wong, threatening to cut contracts between the company and hundreds of stores that the jailed tycoon still owns if shareholders support the current chairman Chen. Gome dismissed the threat as an "empty" ultimatum, saying it was "clearly motivated" by Wong's desire to win over investors ahead of the special shareholders' meeting. In May, Gome's management reinstated three directors from the US private equity firm Bain Capital after they were voted out by shareholder companies Wong owns. "We were so urgently in need of money to address the cash crush caused by Wong's detention," Chen said earlier in Beijing. "Only Bain accepted the condition that it would bring money to Gome and would not dilute the equity stake of the largest shareholder." Bain spent HK$3.6 billion to become the second-largest shareholder in Gome after buying new shares and convertible bonds. Bain has committed to convert the bonds into equity before the next general meeting. After the conversion, Bain will then have a 9.8 per cent stake.

The government's efforts to curb rising property prices are beginning to work, the nation's top official paper said on Tuesday, citing shrinking transaction volumes.

Ningxia races to harness sun and wind - This 10MW solar power plant in Shizuishan, Ningxia, makes use of the region's sunny weather, which averages 300 days a year. Government subsidies have triggered high levels of investment in renewable energy. Times are tough in the Ningxia Hui Autonomous Region , so about 1,000 families in Zhongwei city's Yongkang town are looking to boost their incomes by adding to the power grid the natural way - through sun and wind. The Wang family earned around 9,000 yuan (HK$10,300) last year from their farmland in Yangtan village. But their rooftop will also contribute from October, with solar panels that feed electricity into the public grid set to provide 1,000 yuan. Wang Tingli , head of the family, said they paid 1,500 yuan to have the system installed and are looking forward to an annual subsidy of 540 yuan from the government and around 500 yuan for the electricity their panels generate. A remote, dry region covered in part by the Tengger Desert, Ningxia is looking to the sun and wind to increase its energy production and thereby fight poverty. Local authorities say the region has an installed capacity of 673 megawatts of wind power and 60MW of solar power. Eighteen more solar power stations are being built, each with a capacity of about 10MW. "In recent years, we realised renewable energy is a new advantage Ningxia has," Yang Ruijun , deputy chief of the Ningxia Development and Reform Commission's comprehensive affairs section, said. "We have about 300 sunny days in a year. And we don't need to occupy farmland to develop wind farms and solar stations, since we have big areas of sandy wasteland to make use of." Already self-sufficient with coal-fired power and hydroelectricity provided by plants built on the Yellow River, the region is selling its surplus electricity to Shandong and Lanzhou , the capital of Gansu . What's more, it is planning to help the east's energy-thirsty areas further by participating in China's West Electricity for the East project. "We are now talking with Zhejiang to transfer part of our electricity there," Yang said. Solar and wind companies have burgeoned in Ningxia in recent years as central government subsidies triggered a renewable energy frenzy. When it comes to harnessing the wind, there has been talk of too much investment on the mainland, but Ningxia is undaunted. Chang Xiaowei , deputy general manager of the Ningxia Yinxing Energy Co's wind equipment subsidiary, said that although wind farms needed 10 years to recover the cost of the original investment, the government's preferential policies were a big attraction. "But if it were solely market-motivated, nobody would be in the business," he said. Given the damage from blowing sand, a wind turbine installed in Ningxia has an average life of 20 years. "The first 10 years is the cost-recovery period, and we have another 10 years to make profits," Chang said. The production line at the photovoltaic equipment subsidiary of Yinxing Energy has been halted. Hu Jianping , its assistant chief engineer, explained that supplies of silicon, a material needed for solar panels, had fallen short of demand. "Solar projects are being implemented all over the country. We've even tried some southern provinces but didn't manage to buy any [silicon] from there," he said. It normally depends on local providers. China has recently launched bidding for the second batch of 13 solar power station projects, with a total capacity of 280MW. All the projects were planned for the western region, with Ningxia sharing 30MW. Besides providing solar panels for power stations, his company also contracted the rooftop project in Yongkang village, which was jointly invested by the central government, local government and farmers. "I think it's a good thing [to make money by installing solar panels]," Wang, the villager, said, adding that 263 of the 300 households in his village had signed contracts. The rest are either too poor to afford the investment or have adobe houses unsuitable for solar panels.

Evergrande net soars five-fold - Evergrande Real Estate (3333) saw net profit soar nearly five-fold to 2.5 billion yuan (HK$2.86 billion) in the first half - fueled by record home sales.

'China threat' exaggerated - Despite Japan's escalated maritime disputes with China, discussion about "military threats from China" in Japan is indeed exaggerated, Japan's former defense minister said on Monday. "There is no need for us to keep stressing that China is a threat. The China-threat theory in Japan has turgidly stirred unease among the people," Shigeru Ishiba said when talking with diplomats and scholars from China and Japan on diplomatic and security affairs at the Beijing-Tokyo Forum. Japanese scholars attending the forum, however, were still extremely concerned about China's naval development. "China insists on self-defense, but the stance of its military is more and more aggressive," said Masashi Nishihara, director of Japan's Research Institute for Peace and Security. A series of Chinese naval exercises this year have shown a different stance, he said, warning that the US has been more and more active in containing the Chinese navy based on Washington's joint military actions with Seoul and Hanoi this summer. The US has conducted condensed military drills with the Republic of Korea and Vietnam, its old rival, in the neighborhood of China since July and vowed to remain in the South China Sea where China has overlapped territorial disputes with some countries. Media reports have linked China's military exercises to its discontent with the US moves. Chen Jian, former Chinese ambassador to Japan, said Japan's views on the Chinese military have long been disturbed by the Cold War thinking pattern. "Some of our problems are due to lack of confidence and mutual trust," Chen said. "We both have our own advantages and there is no need to be overly concerned." Liu Jiangyong, a senior scholar on Japanese studies with Tsinghua University, said China would not choose to expand across the world as the US and the former Soviet Union did. He, however, warned of the shift of Japan's military attention to the Southwest toward China. Japan's National Defense Program Outline, scheduled to be finished this year, is highly dangerous, Liu said. "That will draw China's unease toward Japan," he said. "This is the first such revision of the ruling Democratic Party of Japan and I hope they do not choose the wrong direction." Now there is noticeable imbalance between China and Japan over each other's military intention, Liu said. "China used to believe Japan would become a strong military power. But we noticed the Chinese government changed its attitude after Shinzo Abe (former Japanese prime minister) took office," he said. Li Wei, chief of Japanese studies with the Chinese Academy of Social Sciences, said getting Tokyo to understand Beijing is not as difficult as getting the US to understand Beijing.
"Japan is a country that listens to others, unlike the US," she said.

Beijing's tallest skyscraper open for business - A 330-meter tall skyscraper, located in the central business district (CBD) of Beijing, opens for business on Aug. 30, 2010. The International Trade Plaza, an office building, is the tallest structure in the capital.

Photo taken on Aug. 30, 2010 shows both sides of the Huangpu River in Shanghai, east China. According to a new survey released on Aug. 30, Shanghai topped the "List of Best Chinese Cities of Global Images", followed by Beijing, Chengdu, and Nanjing. The survey took into account culture, environment, quality of life, public security, government, investment value and internationalization, among other aspects.

  Chinese showbiz belles in traditional Qipaos

Aug 31, 2010

Hong Kong*: Hong Kong forensic experts on Monday inspected the bus in which a hijacker killed eight tourists in Manila last week, as the Philippines tried to calm outrage over the bloodshed.

Hong Kong forensic experts on Monday inspected the bullet-riddled bus in which a hijacker killed eight Hong Kong tourists in Manila last week, as the Philippines tried to calm outrage over the bloodshed. A Hong Kong police forensic team examine the tourist bus used in the hostage-hijacking in Manila on August 23 at an auditorium in Taguig City, Manila, on Monday. Guided by Filipino investigators, the Hong Kong team used torches to examine the bloodied passenger compartment, taking pictures of bullet holes and shattered windows. Another investigator checked the bus tyres shot out by police to prevent the hostage-taker from moving out of a police cordon. Hong Kong investigators refused to talk to a throng of Chinese and Filipino journalists. Justice Secretary Leila de Lima met Hong Kong officials on Monday. Philippine investigators plan to question Manila Mayor Alfredo Lim, who helped oversee the hostage negotiations, as well as journalists who interviewed hostage-taker Rolando Mendoza by phone during the drama, de Lima said. They may also travel to Hong Kong to talk to survivors of the nearly 12-hour stand-off. It is unclear if that will be enough to stem the anger in Hong Kong, which has discouraged its residents from traveling to the Philippines. About 140,000 Hong Kong tourists visit the Philippines annually and hundreds have cancelled planned trips. Concerns have also been raised about a possible backlash on the more than 100,000 Filipinos working in the territory, mostly as maids. Filipino anti-crime activists placed flowers on Monday at the site of the carnage in a Manila park. One carried a wooden cross bearing the names of the slain hostages. “We couldn’t stomach this crime,” said activist Dante Jimenez. On Monday morning Hong Kong’s Assistant Commissioner of Police David Ng Ka-sing confirmed that Hong Kong police had been given permission to board the Hong Thai tour bus to carry out investigations into the siege. He said Hong Kong officers had met with officials from the Department of Justice, Legal Department and the Department of Internal Affairs in the Philippines on Monday morning. “This was to discuss arrangements for Hong Kong officers to collect evidence and conduct forensic investigations on the bus,” Ng explained. Ng also said he hoped Philippine authorities would allow them to examine the guns used by police and the gunman. He pledged that Hong Kong officers would try their best to find out the truth. Philippine Justice Secretary Leila De Lima said it was the responsibility of the Philippines police to carry out a thorough and fair investigation. But she has not said when the investigation would be completed. Anger has been rising in Hong Kong since the August 23 carnage in which a disgruntled former Philippine police officer took the busload of tourists from the Chinese territory hostage in a bid to win his job back. HongKongers have blasted a failed rescue operation and botched negotiations that seemed to enrage the hostage-taker, who was eventually killed by a police sharpshooter. Organisers said about 80,000 people marched in Hong Kong on Sunday, denouncing the Philippines and demanding justice for the dead. President Benigno Aquino III has ordered a thorough investigation into the crisis and the police response. “We want to appease them [HK officials] and show that we’re not hiding anything,” Philippine National Police spokesman Agrimero Cruz said. “This is a show of transparency.”

The Provisional Minimum Wage Commission (PMWC) has reached an agreement on what level Hong Kong’s minimum wage should be set at, PMWC chairwoman Teresa Cheng Yeuk-wah said on Monday. However, she did not disclose the exact amount which the commission believes the statutory minimum wage should be. Cheng said the commission would submit its report to Chief Executive Donald Tsang Yam-kuen soon. She said that in reaching its decision the commission had referred to experiences in other countries, the views of different sector groups, and relevant statistics. Local media reported that the wage would be set at HK$28-HK$29. Christine Fang Meng-sang, chief executive of the Hong Kong Council of Social Services, said she believed the minimum wage should be set at HK$33. “The PMWC’s main task is to advise the chief executive on the initial statutory minimum wage (SMW) rate to be adopted,” Fang said. She said the commission had to strike balance between raising wages, minimising the loss of low-paid jobs and ensuring Hong Kong’s economic growth and competitiveness.

The government may rake in up to HK$1.1 billion for a Kowloon Tong site in an auction that could breathe new life into the secondary home market where sales have plunged to a 27-week low. The 25,823-square-foot site at 1 Ede Road is expected to fetch between HK$930 million and HK$1.1 billion tomorrow, according to four surveyors. Given a gross floor area of 77,469 square feet, the accommodation value could be be HK$12,000 to HK$14,200 per square foot. Midland Surveyors director Alvin Lam Tsz-pun said property development and capital inflow are long-term, so a competitive atmosphere at the auction is unlikely to be affected by short-term market cooling. His valuation of HK$1.02 billion is 20 percent higher than a month ago. Slacker rules on joint development - with a larger plot at 3 and 5 Ede Road on the application list - will make the site more attractive, surveyors said. "If the same developer owns both sites, it can apply for lease modification," said Ringo Lam Chun-chiu, valuations director at AG Wilkinson & Associates. "The developer can build an underground car park and a clubhouse for joint use." He believes developers are willing to pay a premium for 1 Ede Road, which he values at HK$1.1 billion. Midland expects the site to be developed into low-rise buildings with around 50 homes of about 1,500 sq ft each. Savills forecasts the average selling price for completed homes can reach HK$17,000 psf . There were four deals this month at nearby One Beacon Hill and Beacon Heights, averaging around HK$14,000 and HK$17,000 psf, said Centaline senior sales director Matthews Lee Tze-ming. Lee admits transactions have halved, but "sellers believe prices will be better after the auction. On the other hand, buyers may expect new [home] measures in the policy address." Total secondary transactions over the weekend fell to just 26, down from 29, while the number of primary homes launched dropped to 417 as of Friday, from 1,513 in July, Midland Realty said.

 China*: Gome tycoon's jail term upheld, wife freed - A mainland court on Monday freed on parole the wife of the former head of appliance giant Gome, prosecutors said, as the jailed tycoon battles for control of the empire he founded.

Spain's Prime Minister Jose Luis Rodriguez Zapatero and Zhou Hanmin, deputy director of the Shanghai Expo's Executive Committee pose with the World Cup football trophy at the Spanish pavilion at the Shanghai Expo on Monday.

The central government announced a global talent search on Monday to fill top posts at 12 major state-owned companies in its latest effort to improve performance at huge but inefficient government firms. State industries have hired managers from abroad in the past but the announcement on Monday by the Cabinet agency that runs the country’s biggest government companies appeared to be most sweeping recruitment effort to date. The State Asset Supervision and Administration Commission wants “talented candidates from home and abroad” to help strengthen and develop companies, said a two-page advertisement in the China Daily, the main government newspaper aimed at foreign readers. The posts include general managers of the State Nuclear Power Technology, the China State Construction Engineering and automaker Dongfeng Motor (SEHK: 0489). Some posts specified Chinese citizens were preferred, indicating companies were trying to lure back Chinese executives abroad. But others said they would consider managers of any nationality. Last year, a major aerospace firm, state-owned Aviation Industry Corp of China, announced a similar worldwide search for managers and said it would consider foreign nationals. After a six-month search, the company hired six Chinese executives. Some of the mainland’s top state-owned banking, oil, telecommunications and other companies are among the largest entities in their global industries due to their protected positions in the huge domestic market. But the government acknowledges they trail their global rivals in technology and efficiency. Other positions advertised on Monday included general manager of Chinatex, a major textile producer; deputy general managers at China National Administration of Geology, China National Gold Group and China Guangdong Nuclear Power Holding and other jobs at China Shipping (Group), China Resources (SEHK: 0291) (Holdings) and China National Building Material Group.

Closer contacts between retired Taiwanese generals and the mainland authorities have sparked concerns in Washington, the island's major arms supplier, media and an official said on Monday. The former generals started visiting China years ago, but with Taiwan’s mainland ties improving rapidly since 2008, the trips have become so frequent that they have drawn US attention, the Taipei-based China Times said. “The United States has voiced its concerns to [Taiwan’s de facto ambassador] Jason Yuan and voiced the hope that Taiwan can come up with an explanation,” the paper said, without naming the source. It said Washington was especially concerned if such contacts may endanger long-standing military co-operation projects with Taiwan. Washington is also wondering if the visits mark the beginning of discussion about military exchanges and the establishment of confidence-building measures between the two former cross-Strait rivals, it said. “It would be understandable if the United States voices such concerns, given the fast improving ties between Taipei and Beijing,” Chen Wen-yi, deputy chief of the foreign ministry’s North American Affairs Department, told reporters. But he said the concerns were unnecessary as the visits were not authorised by the government.

China will launch an inquiry into whether to impose countervailing duties on potato starch imports from the European Union, the commerce ministry said on Monday.

In a world of fakes, tainted food, indifferent service and shoddy products, Lionel Derimais is trying to highlight the best of the mainland's crafts and services people. Xiamen Red Dragon Yacht Building employees craft a sailing boat for a client. The yacht builder is one of the mainland companies featured on nicelymadeinchina.com. And the idea has obviously struck a chord, with the website attracting around 7,300 readers since it launched in April. Derimais, who arrived in Beijing five years ago, said the aim of the website was to focus on the manufacture of "well-made goods by Chinese who take pride in producing quality products". Perhaps unsurprisingly, the companies featured so far have been small and medium-sized enterprises, some of which already have a global reach. They also feature a high proportion of expatriates, albeit with Chinese connections through family or mainland partners. For example, Xiamen Red Dragon Yacht Building, which focuses on yachts and speedboats, was founded in 2003 by David Winter, an expatriate who was associated with shipyards in Taiwan. Working with general manager Liu Hongyan and a team of 50 crafts people, Winter has since developed a network of clients all over the world and the company has sold vessels to at least 10 European countries, the United States, Australia and India. Shanghai Trio, which started making souvenirs 12 years ago, has branched out into making bags, quilts, tablecloths, silk jackets and other products that are sold in its own stores on the mainland and stocked by shops in Hong Kong, Taiwan and Europe.

Lenovo has said it will launch a video games console this year to vie with Nintendo’s Wii, Microsoft’s XBox 360 and Sony’s PlayStation 3 in the booming motion-gaming market.

Shanghai Pudong Development (SPD) Bank said its first-half-year net profit rose 33.92 percent from one year earlier due largely to lending boom and increased commission fees. Net profits climbed to 9.08 billion yuan (1.34 billion U.S. dollars) in the first six months of this year, the Shanghai-based lender said in a statement filed with the Shanghai Stock Exchange late Sunday. Its growth in profits stemmed from rising operating revenues, a result of growing net interest earnings, increased fee incomes and the improved quality of assets, according to the statement. Earnings per share stood at 0.791 yuan, up 20.21 percent from one year earlier. Also, operating revenues grew 36.42 percent to 22.75 billion yuan in the first half of 2010, it said. Total assets for the commercial bank hit 1.781 trillion yuan by the end of June, up 9.77 percent from the end of 2009.

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

pon.jpg (13583 bytes)    Powered by ProjectOnNet.com - "Connecting the Building Industry"        BEST Airline & Hotel Offers - enter to save $

 

Honolulu USA

Hong Kong

Shanghai PRC

Taipei ROC

San Francisco

New York

London England