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Hong Kong*:  April 1 2011

China Southern Airlines on Tuesday said net profit soared 17-fold last year on the back of surging demand for air travel in the world’s second-largest economy. The carrier’s profit reached 5.8 billion yuan (US$884 million) last year and operating revenue leapt 40 per cent to 76.5 billion yuan as robust economic growth and major events such as the Shanghai World Expo boosted ticket sales. China Southern added its bottom-line was also helped by the disposal of its shares in MTU Maintenance Zhuhai Company, which earned the company 1.08 billion yuan. Total passenger numbers rose 15.4 per cent to 76.46 million during the year. The airline has been carried along on booming demand for air traffic in China as the country’s economy roars ahead with near double-digit growth and an increasingly affluent middle class travels more frequently. China Southern’s net profit result was higher than the 4.59 billion yuan forecast by analysts and compared with the 330 million yuan posted in 2009, Dow Jones Newswires reported. The firm said it had “successfully grasped buoyant opportunities arising from continuous prosperity (SEHK: 0803, announcements, news) in the aviation industry”. “Faced with an increasingly complex domestic and international economic environment, China’s aviation industry will continue to forge ahead amid opportunities and challenges,” chairman Si Xianmin said in a statement. But investors appeared unimpressed by the result, with China Southern’s Shanghai-listed shares closing down 1.21 per cent at 8.17 yuan. China Southern is one of the country’s major airlines, along with Air China (SEHK: 0753, announcements, news) and China Eastern Airlines (SEHK: 0670). A total of 267 million air passenger trips were recorded in China last year, up 15.8 per cent from the previous year, official figures showed.

Citic Securities shares jumped more than 3 per cent on Tuesday after China's biggest listed brokerage unveiled its roughly US$2.7 billion Hong Kong IPO plan, potentially boosting the company's global competitiveness. “Selling shares in Hong Kong would provide a good financing platform for Citic Securities to conduct overseas mergers and acquisitions,” said Wei Tao, analyst at China Securities. “Like dual-listed Ping An and China Merchants Bank (SEHK: 3968), Citic Securities can now ramp up international expansion, and move towards becoming a world-class investment bank.” Citic Securities plans to sell up to 10 per cent of its enlarged capital base to overseas investors to raise funds for expansion abroad, the company said late on Monday. It is joining rival brokerages such as Haitong Securities and China International Capital Corporation (CICC) in a rush to expand abroad, seeking to capitalise on China’s growing international clout and the rising status of the Chinese currency. Citic shares rose to 14.48 yuan by 10.41am, compared with its closing price of 14.04 yuan on March 22, when the shares were suspended from trading pending announcement of a major deal. Citic Securities said it has an option to increase the Hong Kong fundraising by 15 per cent, and would use the proceeds from the share sale to set up or acquire overseas operations and develop overseas and cross-border businesses. Citic Securities has been in talks with French bank Credit Agricole on creating a broker and investment bank partnership to chase growing opportunities in China and the Asia-Pacific region. The two have set the end of June as the planned completion date for the talks, pushed back from an original aim of finishing the tie-up by the end of last year. Based on the company’s current price in Shanghai, Citic Securities can raise about 18 billion yuan, including the green-shoe option. Citic Securities could raise about HK$22 billion (US$2.8 billion) if the company can sell H shares at a premium over its mainland-listed A shares, and that would increase net asset value per share by 10 per cent, analyst Wei said. Citic’s fundraising plan underscores the government’s support for Chinese brokerages’ overseas expansion. Many Chinese brokerages have set up subsidiaries in Hong Kong in recent years, betting that China’s further deregulation of its capital markets, and Beijing’s yuan internationalisation plan would help boost their overseas businesses.

Guidelines on the minimum wage that fail to cover pay for rest days and meal breaks are under fire, but the administration's position is that the rules are enough. Commissioner for Labour Cheuk Wing-hing says pay for days off and meal times depends on a worker's individual employment contract, not on the Minimum Wage Ordinance or the Employment Ordinance. But he appealed to bosses to "treat your employees well" when the minimum wage of HK$28 an hour takes effect on May 1. "Where feasible, employers should not reduce employees' remuneration and benefits," he said. "Employees' monthly pay should not be lower than before the implementation of the ordinance." Cheuk then came up with some basic numbers that suggest not all workers will be treated well. Some wages, he said, will increase more than 27 percent if employers give four rest days every month and an hour- long meal break every working day to an employee who works eight hours a day at an hourly rate of HK$28 for 26 days a month. So labor unions are worried that what is not in the guidelines effectively shows employers how to exploit workers by not paying for days off and meal times. Both employers' groups and unions slammed the guidelines for being unclear and hard to understand. The non-binding guidelines released yesterday are largely the same as in a draft seen in December, though there are three additional examples to illustrate how pay should be calculated, and job descriptions have been removed from examples. Cheuk said the reason for not pointing to specific jobs in the guidelines, which offer 37 scenarios, is that the pointers apply broadly. The minimum wage is derived by multiplying an employee's total number of working hours in a wage period at HK$28 an hour. But leave periods are not working hours, so pay for a holiday, annual leave, maternity leave and rest days - as well as any sickness allowance - are not counted when assessing whether an employee is receiving a lawful deal. So whether a worker enjoys paid leave depends on an individual contract. And only if a worker has to be at the workplace during meal times or it is stated in a contract that a meal break is regarded as working hours does it count as time to be paid by at least HK$28 an hour. Otherwise, bosses need not pay for meal breaks. Employers and unionists say a lack of definition on rest days and meal times are gray areas that can lead to disputes. "I'm very dissatisfied that the guidelines are siding with employers by almost abetting them to cancel meal- break pay," said Confederation of Trade Unions lawmaker Lee Cheuk-yan. And Derek Cheung Ming, owner of the Fook Kee Restaurant in Wan Chai, said: "I'm confused about holiday pay." But John Yeung Kin-wai, owner of sushi shop Yummy Sushi Ya also in Wan Chai, disagrees with calls for meal times to be covered by law. "If other owners can hire workers without paying meal times, I will follow them," he said, adding that he now pays kitchen workers HK$40 an hour.

Tiny amounts of the radioactive particle iodine-131 from Japan’s damaged Fukushima nuclear plant were detected in Hong Kong over the weekend, the Hong Kong Observatory confirmed on Tuesday afternoon. Ma Wai-man, observatory acting assistant director, confirmed that a monitoring station at King’s Park detected “extremely low” amounts of radioactive iodine-131 leaked from the Fukushima nuclear power plant on Saturday and Sunday. Ma said the dose had been significantly diluted by distance and did not pose any danger to people or the environment. “The amounts detected were only one 3.5 millionth of the level that starts to pose a health risk and prompts protective measures,” Ma said. “With that concentration, you would need to breathe for 2,400 years to absorb the radiation level of one X-ray screen,” he explained. He added that there were now more frequent tests on air samples to monitor radioactive particles in Hong Kong’s atmosphere. Traces of the radioactive iodine-131 from the same nuclear plant on Japan’s eastern coast have already been detected at monitoring stations in the Northeastern province of Heilongjiang and some southeast costal provinces over the weekend, according to the Ministry of Environmental Protection on Monday. Ma said a monsoon now developing in the mainland was expected to head south through eastern costal provinces. He said it might carry some radioactive particles to Hong Kong in the next few days. But Ma said the radiation doses would also be very small and pose no health risks. “The amounts detected in the mainland were very, very low,” he added. “We expect that even if the radioactive materials reach Hong Kong, it would not pose any health risk or environmental hazards because the concentration would be very, very low,” he said.

A delivery truck carrying HK$5 million worth of silver bars was hijacked yesterday afternoon in Hung Hom by five men posing as customs officers. Police said the gang forced the driver of the truck and his colleague into a getaway vehicle and driven to Sha Tin, where it was set on fire. The truck contained 250 bars of silver weighing 15 kilograms each. The victims surnamed Lau, 45, and Lui, 53, are employees of a logistics company. They escaped unhurt. The men were escorting the silver from a factory in Fan Ling to a client in Hung Hom, shortly after 12pm. As the truck traveled along Fat Kwong Street, it was forced to a halt by an unmarked light goods vehicle. Five men in jeans, aged 30 to 40, got out and ordered the victims from their truck. It is understood the goods vehicle had grills fitted on its windows and the assailants posed as customs officers. They accused Lau and Lui of smuggling, and ordered them out of their vehicle. The victims were then hooded and taken to the getaway vehicle, where their hands were bound. Two of the assailants escaped with the truck containing the silver. Lau and Lui were then driven to Sha Tin Heights Road, where they were pushed out before the van was set ablaze. Police said they received a report of a burning vehicle at about 2pm. Upon arriving at the scene, they found Lau and Lui still tied up away from the vehicle, which was burning slightly. Firefighters who put out the fire found three drums of lubricant in the van. The van's registration plates and Electronic Toll Collection device appeared to be removed, indicating a possibly stolen vehicle. The delivery truck was recovered last night in Kwun Tong, but the silver bars were missing. Police have classified the incident as robbery, and are still investigating. No arrests have been made.

 China*:  April 1 2011

China sends 2nd batch of relief materials to Japan - Workers carry relief materials provided by Chinese government at Narita airport in Tokyo, Japan, March 28, 2011. The second batch of relief materials, including 60,000 bottled water and 3.25 million pairs of rubber gloves, donated by China arrived in Tokyo on Monday night. Workers carry bottled water as relief materials that provided by Chinese government at Narita airport in Tokyo, Japan, March 28, 2011. 

Food to be tested for radiation - The Ministry of Health has ordered local administrations in 14 places including Beijing, Tianjin, Shanghai and some coastal provinces to test drinking water and food for radiation, according to an online statement issued on Sunday. A worker with the entry-exit inspection and quarantine bureau in Rizhao city, East China's Shandong province, checks frozen fish imported from Japan on March 24. 

Private jet sales taking off - A flight attendant in an Airbus A318 Elite business jet on display at the Business Aviation Center during the Asian Aerospace International Expo and Congress in Hong Kong on March 9. With its steaming economy and surging ranks of billionaires, China has become the fastest-growing market for Airbus' private jet business, with at least 25 corporate jets to be sold in the next five years. "The demand for corporate jets is already very high, and the government is more supportive of corporate aviation," Francois Chazelle, vice-president of worldwide sales at Europe's Airbus Corporate Jets, said at a news conference on Monday. Eric Chen, senior vice-president of Airbus China, added: "Five aircraft a year is a conservative figure. We have already sold two in the first quarter of this year in China." Airbus reached a record high in private jet sales last year, delivering 15 aircraft worth $1.5 billion. Airbus has sold 20 aircraft in China since 2005, accounting for about 25 percent of its business jet sales. There are currently six Airbus business jets in operation in China, with another two set to begin flying soon, Chazelle said. Chinese civil aviation is expected to grow 11 percent annually between 2011 and 2015, requiring a total of 1,100 aircraft. The nation's private aviation increased by 400 percent in 2010 over 2009, said Li Xiaojin, a professor at the Civil Aviation University of China. More than 100 business jets are in operation in the country now, according to statistics from Firestone Management Group's released in January. The increase in the number of business jets is a result of the booming Chinese economy, which by 2009 was home to about 875,000 millionaires and 1,363 billionaires, according to the Hurun Rich List, the Chinese equivalent of the Forbes list. Airbus' flying office for the ultra-rich is mainly aimed at large corporations and individual entrepreneurs and hopes to lure more government customers in the future, Chazelle said. Despite the difficulties of private aviation in China such as air traffic control, the corporate jet business has gained sudden attention from global plane makers since 2010. Canada's Bombardier forecast the industry will make 600 business jet deliveries in China between 2010 and 2019, while US-based Gulfstream and French business jet maker Dassault Falcon are also boosting their presence on the Chinese mainland, according to Agence France-Presse. US plane maker Boeing is introducing its own private jets in China on Thursday in Beijing. Also on Monday, Airbus announced it has appointed Taikoo (Xiamen) Aircraft Engineering Company Ltd as its first approved cabin-outfitter in the Asia-Pacific region, expanding its finishing centers. "We are shifting our marketing focus to China and Asia, setting up sales offices in Hong Kong and Beijing," Chen said. "As more and more business leaders become aware of the benefits of traveling in their own aircraft, there will be a domino effect."

China Petroleum & Chemical Corp (Sinopec), Asia's biggest oil refiner by capacity, aims to produce 45.59 million tons of crude oil in 2011. Sinopec's profit rose 12.8 percent year-on-year to 70.7 billion yuan ($10.77 billion) in 2010.

Hong Kong*:  March 31 2011

Hong Kong played a key role in life of China's revolutionary leader - Dr. Sun Yat-sen, Hong Kong played a key role in the life of Dr Sun Yat-sen. He attended secondary school at what is now the Diocesan Boys' School and Queen's College and studied medicine at what became the medical school of the University of Hong Kong. He was one of the first two Chinese graduates. It was at a church here that, over the objections of his brother, he was baptised a Christian; he worshipped at a church that still stands in Caine Road. Tse Tsan-tai, who founded the South China Morning Post with British partners. He was a Hong Kong citizen. But, after the failure of the 1900 uprising, the Qing government put him on its most-wanted list and he was expelled from Hong Kong. In 1996, the district of Central and Western established a Sun Yat-sen walk to 15 sites associated with him, starting at the University of Hong Kong and ending at a fruit shop in D'Aguilar Street, Central, which was used as a revolutionary base. The Dr Sun Yat-sen Museum opened in Kom Tong Hall in Castle Road, Central, in December 2006. The building was constructed in 1914 for the Hos, the first Chinese family allowed to live in Mid-Levels, and used as a headquarters of the Mormon Church between 1960 and 2004. Sun also has a park named after him in Sai Ying Poon district on the harbor. One of Sun's strongest supporters in Hong Kong was Tse Tsan-tai, one of the co-founders of this newspaper. Born the son of a grocer in Sydney in May 1872, Tse moved with his family to Hong Kong in 1888 and also attended Queen's College. After working for nearly 10 years in the government, he set up a Hong Kong branch of Sun's revolutionary party in 1895. He was one of China's first political cartoonists. One entitled "Situation in the Far East", which was printed in Japan in 1899, showed China infested by symbols that represented foreign powers - Britain a dog, France a frog, Japan a sunray, Germany a sausage and Russia a bear. It was widely reprinted in China and overseas. In 1903, with two British partners, Tse set up the South China Morning Post (SEHK: 0583) and worked there as an editor. Sun's mother was buried in Hong Kong after her death in June 1910, in a cemetery behind a factory owned by his elder brother. In 1899, Sun sent an associate to found the China Daily newspaper - unrelated to the current publication of the same name - in Hong Kong. The editor of the paper was one of the main characters in the martial arts film Bodyguards and Assassins, which was made in Hong Kong in 2009; it was about a one-day visit by Sun to the colony in 1905 to discuss plans for revolution with his associates. Most of the characters are fictional, but it is based on a real story - Sun succeeded in holding the meeting and leaving unscathed, despite the best efforts of Qing agents to assassinate him.

A prominent Hong Kong family has won approval from the Buildings Department to redevelop a pair of historic Chinese-style buildings in Mid-Levels. The company Wonderful Path, owned by former stock exchange chairman Ronald Li Fook-shiu and his family, plans to build a 25-storey apartment block with recreational facilities on the site - 6 and 8 Kennedy Road. The buildings were given a grade-two historical rating, which does not prevent demolition, last year. But heritage officials have persuaded the owners to agree to preserve important features such as the facade. "[We] have followed up with the owner on preservation options and obtained the owner's agreement to preserve all character-defining elements of the building in the new design of the development," the Commissioner for Heritage's Office said. "We consider this an appropriate balance between heritage conservation and respect for private property rights." The development comes a year after the Antiquities Advisory Board rejected a request from the owners to downgrade the rating of the four- storey blocks from two to three. Board members said the neoclassical architecture was a landmark and a reflection of the life of a well-to-do business family living in Mid-Levels in the past century. The blocks were built in 1927 and 1935 by philanthropist Li Koon-chun, a founder of the Bank of East Asia (SEHK: 0023), for his family, but the owners said the buildings were not their core residence. Three of Li's sons, including Ronald Li and Simon Li Fook-sean, who ran in the first election for chief executive after the handover in 1997, and his grandsons, Bank of East Asia chairman David Li Kwok-po and his brother Arthur Li Kwok-cheung, now jointly own the buildings through their companies. Lands records show the transfer of ownership from under their names to their companies last year involved HK$900 million. A person familiar with the project said the facades of the blocks were to be kept. Antiquities Advisory Board member Dr Lee Ho-yin said preserving the facade would be "weird but the only approach" for officials. "Grade two or three does not make any difference under the existing system," Lee said. "But keeping the facade is an outdated approach to heritage conservation internationally. This was thought to be good practice 20 years ago." A better way, he said, would be to restore the building and give it a new use, although the value would not compare to a denser redevelopment.

"Conservative" and "modest" are words often mentioned by Swire Pacific Ltd Chairman Christopher Pratt when talking about business development of the Hong Kong-listed conglomerate. "We are known to be relatively conservative and very high quality and I think that's the culture of the company," said Pratt, adding that the company's motto is "Esse quam videri" Latin for "To be, and not to seem to be". In other words, substance over style. As an industrial group with 195 years of history, Swire Pacific Ltd is one of Hong Kong's leading listed companies, with diversified interests in five operating divisions: property, aviation, beverages, marine services and trading and industrial. Unlike many large companies that want to be multinationals, Swire Pacific Ltd said it will focus on developing on the Chinese mainland. "I am very bullish on the future of Hong Kong and very bullish on what is happening on the mainland. Otherwise we wouldn't be investing so aggressively," said the chairman, adding that Hong Kong and the mainland are the places to be. Currently, 90 percent of what Swire Pacific Ltd does is to invest in Hong Kong and on the mainland. "I am very happy and privileged (to be able to do that)," said Pratt. Hong Kong businesses have been particularly active in the mainland market in recent years. According to the Ministry of Commerce, the number of newly approved Hong Kong-funded projects on the mainland increased 22.1 percent to 13,037 in 2010. The special administrative region's investment in the mainland amounted to $60.57 billion last year, a year-on-year increase of 31.5 percent. By the end of last year, a total of 322,391 projects funded by Hong Kong businesses were operating on the mainland, with a combined investment of $456.21 billion. However, compared with its archrivals, such as Sun Hung Kai and Jardine, Swire Pacific Ltd's expansion into the mainland was neither early nor quick. Taking real estate - the most important sector in the group's portfolio - as an example, its first major commitment was between 2004 and 2005, but it did not commit significant capital until 2006. So far, it has five development projects with 8.5 million square feet (789,650 square meters) on the mainland, all in different states of completion. The most recent one in Chengdu has yet to start after the company won the tender at the very end of last year. There are two others in Beijing, one in Shanghai and one in Guangzhou. They are all commercial mixed-use projects, predominantly retail with some office and hotels, but very little residential. Their completion dates vary between imminent and 2015. "We are always looking," said Pratt, adding there was no specific plan in mind. "It depends on what comes up." The chairman indicated that the company is comfortable in the major cities. Other Hong Kong developers have already entered the second- and third-tier cities, where they see huge potential and rich land resources. "I don't think we intend to be the biggest. We believe we've been very good at what we do," said Pratt. The company has targeted its property and real estate investment on the mainland predominantly within the retail sector. "I think it is where our greatest area of expertise is," Pratt said. Swire Pacific Ltd is regarded in Hong Kong as the premier retail developer. It has three very highly regarded retail malls - Pacific Place, Island East and Festival Walk - in the special administrative region. "We are trying to duplicate or replicate that model on the mainland," said Pratt. Swire's Sanlitun Village project in Beijing has shown itself to be successful and is regarded as one of the most modern and attractive business areas in the capital city. Other divisions of the company got an earlier start on the mainland. Its beverages arm, for example, entered the mainland in 1986, and its aircraft maintenance wing started in 1993. Some of Swire's trading and industrial activities can be traced back to between 1980 and 1981, while Cathay Pacific Airways and Hong Hong Dragon Airlines Ltd, operating as Dragonair, the group's aviation division, have been flying in and out of the mainland for many years. Swire Pacific Ltd has never tapped into new businesses, such as the Internet, clean energy or finance. "We should focus on what we feel competent at doing and where our expertise is greatest - in things including shipping, aviation and property," said Pratt. "The culture of the group is essentially conservative, so we will not easily go out and buy a new business that does Internet stuff. It is all about corporate culture. The sort of culture you need to start Facebook or Alibaba is not something that we as a company have." However, the company said it is fair to say that it does make use of modern technology to help its business. At Cathay Pacific Airways, for instance, all of the carrier's products have been put online, including reservations. Swire Pacific Ltd has been devoted to organic growth. "We don't go into a particular business, grow it and then sell it on before going into something else. We tend to just invest and hold and grow," said Pratt, adding that it is one of the investment principals of the group to not get into financial services. Pratt joined Swire in 1978 and has been in his current position for five years. "I have learned lots of things from different people. To keep things in perspective, don't lose your temper. Try to stand back and think about it overnight. Don't make snap decisions," he said. For his staff, his advice is "Just do your best". He said: "Don't be political. Quality people will get noticed and will get pushed up and moved up. Try to keep work in perspective. Work hard but not too hard. Respect your colleagues." Swire Pacific Ltd released its annual report earlier this month. It showed net profit increasing 75 percent to HK$38 billion ($4.9 billion) in 2010. The 2010 results benefited from a very strong performance from Cathay Pacific and continued growth in profits from the property division. Profits also increased in the trading and industrial division. However, profits fell in the beverages and marine services divisions and were little changed at Hong Kong Aircraft Engineering Company Limited, according to Pratt.

Financial Secretary John Tsang Chun-wah on Monday advised people who invested in Lehman Brothers minibonds to accept the latest payout offers from Hong Kong banks. On Sunday, 16 banks agreed on a joint proposal that could see investors holding Lehman Brothers minibonds recover most of their original investments. As a final settlement, the banks offered to pay back up to 96.5 per cent of the defunct investments - up from 60 per cent in 2009. But this will only go ahead if at least 75 per cent of an estimated 31,000 investors agree to it. The retail investors bought 24 tranches of minibond products - a type of derivatives rather than real bonds - through the local banks before the Western financial crisis brought down Lehman, one of Wall Street’s most prominent investment banks, in September 2008. Investors can also receive an “ex-gratia” payment - which the banks have no legal obligation to pay - if they agree not to pursue their cases any further. On Monday, Tsang said the latest offer showed the banks were sincere in resolving the issue. He said that the only other option now available to investors was legal action. “The proposal is the result of our efforts and the bank’s sincerity. I think it is a very good deal and we encourage investors to accept it. If investors still find it unsatisfactory, they would have to take their cases to court,” added Tsang. But some investors are unhappy with the offer. Eddy Chan Ho-wai, convener of the Allied Victims of Lehman Products, said his group would not accept it. “We have been demanding 100 per cent recovery of our investments if the banks were found to have handled the sales in breach of regulations,” he said. Chan said the issue was also about “justice” – because the investments had been sold in a “misleading” way. “We understand that there are already bond sellers who have agreed to a 100 per cent recovery,” he said. “It is unreasonable for investors to bear any part of the losses involved.”

The Liberal Party has had a makeover. The pro-business party yesterday unveiled a new emblem which it said represented a shift towards a green platform. Honorary chairman James Tien Pei-chun said the party would pay more attention to environmental protection and sustainable development in the District Council and Legislative Council elections. "Both young and old people in Hong Kong have shown increasing care about urban sustainability and the environment in recent years. This is also what concerns our members," the former lawmaker said. With a small green circle on top, and two larger interlocking rings - one blue and one green - below, the logo symbolises unity within the party and within society and its ambition to move upwards, its designers David Lo Wing-keung and Alan Chan Yau-kin said. The two rings resemble the Arabic number eight, representing infinity and vitality, they explained. The colour green symbolises the environment and the colour blue represents the party reaching out to the community like water passing over objects. "We hope the new logo will convey the message that the Liberal Party is a party which keeps up with the pace of political and social development," party chairwoman Miriam Lau Kin-yee said. "We take efficient and effective actions to reflect citizens' opinions to the government and we care about the interests of all classes in society." The original logo was unveiled at the time the party was founded 18 years ago. In 2003 the letter "L" was changed from being in segments to a continuous form to symbolise the party's efforts to bring people from different walks of life together. The launch of the new logo is part of an image revamp. The party suffered a blow when its position on the minimum wage law was widely criticised last year. Michael Tien Puk-sun, one of its core members, quit after falling out with party leaders on the issue.

Taiwan businesses have struggled for years for access to the mainland, yet just as entry is becoming easier many are heading back to their home island. One such firm, Taipei-based restaurant giant Namchow Group, was a relative late-comer on the mainland but is an early bird in the reverse drive back across the Taiwan Strait. "Taiwan people's income is higher," Alfred Chen (pictured), chairman of the group, said. Namchow derived about half of last year's NT$9.6 billion (HK$2.54 billion) in revenues from the island. "Besides, local consumers provide us with valuable experience regarding emerging consumption habits." Chen's company is maintaining its mainland operations while boosting those at home. He is building a culinary empire on Taiwan focused on German and Chinese restaurant chains, plus he is planning to modernise his edible oil and fats plants on the island at a cost of NT$500 million. Cheng Shin Rubber Industries, a tyre maker with plants Vietnam and Thailand, as well as the mainland, invested NT$10 billion at home last year to boost capacity and plans to spend another NT$20 billion over the next two years. "The investments are aimed to boost the manufacturing capacity of our high-price items," company spokesman Wu Hsuan-miao said. This appears to be the beginning of a broader trend. Taiwanese companies with a majority of their business on the mainland invested NT$40.9 billion at home last year, a tripling of the figure since 2007. "There are signs that such investments are on the rise," Tristan Lu, of the Taiwan Institute of Economic Research, a private think-tank based in Taipei, said. It is somewhat ironic that this should happen as the two sides have started removing many of the remaining obstacles to business. When Taiwanese companies started funneling funds out of the island in the 1980s, they were attracted by the mainland's cheap labour and land prices, but they acted without government permission. Since then, however, they have received official approval, and a Beijing-friendly administration that took over in Taipei in 2008 is promoting economic exchanges more actively than ever. Last year Beijing and Taipei signed the Economic Co-operation Framework Agreement, the most sweeping cross-strait pact in six decades, and an investment protection agreement is likely to follow soon. The mainland does still attract large amounts of Taiwanese funds, with enterprises from the island investing US$6.7 billion last year, according to the mainland Ministry of Commerce. But at the same time, the investment climate has changed dramatically, investors say, as skyrocketing labour costs, a new business income tax and a more cumbersome labour contract law combine to sour the outlook. "Lots of Taiwan-invested companies have been forced to close their plants there," Ling Chia-yu, the head of the Taiwanese economic ministry's department of investment, said. But Taiwan-invested companies which were getting less enthusiastic about the mainland may find that returning home was not a solution to their woes, analysts said. "Those companies, mostly small ones without competitiveness, won't be able to survive in Taiwan even if they come back," Tung Chen-yuan, an expert on cross-strait economic ties at Taipei's National Chengchi University, said. "Their only chance is if they can upgrade their industrial technologies, but that might be very hard considering their modest scale" So most of them had either moved to Southeast Asia or western parts of the mainland, where labour costs were cheaper, he said. Other investment barriers were the decades-old restrictions that have barred Taiwan from further liberalisation and internationalisation, Tung said. "Poor," Namchow's Chen quipped when asked to comment on the island's investment environment. "There is much the government needs to do." This was disputed by government officials, who argued the government had provided a full range of benefits to potential investors coming back from the mainland. They included tax cuts, loans, and assistance in the acquisition of land, the officials said.

Another Cantonese-language television channel joined the already crowded Hong Kong market when Phoenix TV launched its new service yesterday. The Hong Kong-listed broadcaster, which now transmits five channels in Putonghua, also plans to launch an English-language channel within two years. Some observers see the latest moves by Phoenix - which has close ties to Beijing and is the only non-state network allowed to broadcast in Chinese on the mainland - as a sign of expansion of the political influence of the central government. Launching the new channel yesterday, chief executive Liu Changle said the station had a responsibility to provide a service to Hong Kong's large Cantonese-speaking community. "The establishment of the Hong Kong Channel is Phoenix's feedback to its birthplace, Hong Kong," he said at the ceremony. The channel, which will provide 24-hour news and commentary programmes to the Asia-Pacific region, was opened yesterday by Chief Executive Donald Tsang Yam-kuen with mainland government officials in attendance. Liu, a Shanghai-born former colonel in the People's Liberation Army with strong ties to senior Communist Party officials, set up Phoenix in 1996 as a joint-venture with media baron Rupert Murdoch. While Phoenix can broadcast on the mainland in Chinese its so-called landing rights are limited to Guangdong and hotels of three stars and above in other areas. Cheuk Pak-tong, head of Baptist University's Academy of Film, said he did not rule out the possibility that the station's recent expansion had political reasons, as it was backed by the central government. "Its news programme is relatively pro-Beijing," he said. "The station has more liberty in handling political news than the mainland media, but more restrictions than Hong Kong." Cheuk said the keen competition in Hong Kong would not make it easy for the station to attract an audience. But Peter Lam Yuk-wah, vice-chairman of the Hong Kong Televisioners Association, had a different view. He said Hong Kong people always liked to try new things and the growing number of mainland immigrants could also provide a strong audience. "In this age no one would say no to a new station," he said. The new channel is available through satellite and on Cable TV channel 14, Now TV channel 367 and HKBN channel 507. Some of its competitors showed reservations about the launch. TVB (SEHK: 0511) spokesman Tsang Shing-ming said the station would closely observe the new channel's strategy and hoped all competitors could operate under fair conditions. A spokesman from ATV declined to comment. A person working in the industry said that as residents in some large-scale private estates who did not subscribe to any pay TV channel could get the Phoenix signal by satellite, it would not be fair competition to other licence holders. Only TVB and ATV hold licences for free-to-air channels. A Broadcasting Authority spokeswoman said the new Phoenix channel was launched under its non-domestic television programme service licence and there was no restriction prohibiting a non-domestic licensee from providing a Cantonese channel. But it had to ensure that the channel was not primarily targeting a Hong Kong audience. "As Phoenix Hong Kong Channel is only one of the channels provided by Phoenix and is targeting audiences in the Asia-Pacific region and mainland China, its provision is not a breach of the existing regulation," she said. A spokeswoman for Phoenix said it would not comment at this stage.

 China*:  March 31 2011

InterContinental Hotels chairman David Webster says the new brand will build the firm's market position. InterContinental to step up expansion with China brand - InterContinental Hotels Group, the world's largest hotel chain by number of rooms, plans to launch a China-specific brand to drive its ambitious expansion in the world's fastest-growing market. The upscale brand that will be on par with the Crowne Plaza brand, also owned by the British hotelier, will feature Chinese restaurants, teahouses and grand lobbies to cater for local travellers amid rising affluence on the mainland. Details of the brand would be unveiled by the end of this year as InterContinental looks to double its portfolio in the "Greater China" region - comprising the mainland, Taiwan and Hong Kong - over the next five years. "China is the fastest-growing travel and tourism economy in the world and we aim to build on our leadership position by developing this new upscale brand while continuing the fast growth of our existing brands," said David Webster, the chairman of InterContinental. InterContinental has the largest China presence among international hotel groups, running 150 hotels under the brands of InterContinental, Crowne Plaza, Holiday Inn, Holiday Inn Express and Hotel Indigo. The plan for a China-centric hotel brand reflects its ambition to rev up expansion in the region, which it expects to grow bigger than its business in the United States by 2025. Demand for hotels in China was now mainly driven by business tours rather than travel and leisure, Webster said. He predicted 50 per cent of hotel occupancy in China in future would be generated by travellers for leisure. "If we can persuade Chinese to love our brand, it will be a huge success." InterContinental now has about 500,000 rooms in Greater China and expects the number to top 360,000 by 2030. China's rising economic might has caused global brands to adjust their strategies to sharpen their focus on the country. Brokerage CSLA said in a report the Greater China region would become the world's largest market for luxury good over the next decade with an annual growth of 23 per cent. The median age of China's affluent middle class is lower than their Western counterparts, and InterContinental hoped to build up a distinct hotel brand to appeal to them, said Keith Barr, InterContinental's chief executive for Greater China. "It's very easy to launch a new brand," he said. "It's hard to launch a nice brand." The company is now soliciting consumers' opinions to make the brand more specific to the Chinese market. Webster said the company would hold its board and executive committee meetings in China this week, with a focus on developing the market. InterContinental would not comment on reports that it was in talks with Sands China to manage two hotel towers in the casino-resort project in Macau's Cotai strip. International hotel chains have been shifting their focus from the Western market to China. US hotel group Marriott International has said it will double the number of hotels on the mainland to 90 by 2015. Guoman Hotels, another British hotelier, aims to open 40 to 50 hotels in Asia over the next five years, most of which will be in China.

Chicago mayor Richard Daley, in Hong Kong on the last leg of a China tour, said yesterday the Midwestern metropolis aspires to be the "most friendly city in the United States for Chinese investors and tourism". Daley, who will retire in May after 22 years in office, said he visited an electric car and bus factory in Hangzhou , and a Motorola plant in Tianjin , but offered no details of business talks on the tour, during which he launched his "Chicago-China Friendship Initiative". Nearly 300 Chicago-based firms have operations on the mainland, including Motorola, Wrigley and Boeing. The Chicago area is home to 30 mainland-owned firms. Daley, a Democrat, is a key figure in promoting Chicago's ties with China. He said President Hu Jintao's visit to the city during his US tour in January - his only stop outside Washington - was "very significant". More than 500 guests attended a dinner he hosted for Hu. On the mainland, Daley sought both state and private investors for a high-speed rail link from Chicago's city centre to O'Hare International Airport, but he declined to discuss details. "China has the experience and expertise; we're trying to work it out." Asked what he thought Chicago could bring to its relations with China beyond business and investment, Daley pointed to various exchange programmes, including some between universities and high schools, and some in government, environment and construction. Chicago also boasts America's biggest Putonghua-teaching programme, with more than 20,000 children learning Chinese in the public school system, Daley said. "It's very important for us, as a global city, to give our young people a better understanding of the world and better opportunities," he said. Daley has been criticised for avoiding human rights issues when dealing with China, but he defended himself by saying he often held talks in confidence. He declined to elaborate. "I've always talked about human rights ... but I'm not here to debate about the whole world. [It's] not my role; my role is to keep peace and harmony between people."

Moody's Investors Service said Monday the outlook for China's banking system is stable over the next 12 to 18 months, and the country's banks have adequate cushions against rising non-performing loans (NPLs). The report, entitled "China Banking System Outlook," said the outlook was based on the view that the domestic economy will remain strong and provide banks with ongoing opportunities to generate strong earnings. "In this context, the key credit issue facing the system is the extent to which credit expansion can slow to a sustainable level that checks inflationary pressures, while simultaneously accommodating the country's 7 to 8 percent real GDP growth target for 2011 to 2015," said Yvonne Zhang, a Moody's Vice President, based in Moody's Beijing office. The report expected a rise in the banks' NPLs, a trend that typically follows very strong loan growth, and said even if NPLs rise to much higher levels than assumed, China's banking system would remain stable because of adequate capital, reserves for possible losses and robust earnings. Given the system's developmental nature, there are potential risks stemming from rapid credit growth and execution risks as China tries to transform the economy from an ivestment-driven model to a consumption-driven one, said the report. In the sectors of most concern to Moody's, including real estate-related sectors and loans to local government financing vehicles, rises in NPLs would be manageable, according to the report. The report rated 16 banks in China, which together account for about 73 percent of the system's total assets.

An ancient building is seen through cherry blossoms in Wuhan University in Central China's Hubei province, March 27, 2011.

Business people promoting Taiwan-grown tea products to Beijing customers at Maliandao Tea Street, the biggest tea-trade hub in southern Beijing. According to tea experts at Maliandao, 2011 is a good year for tea after unusually cold weather in southern China lengthened the tea-growing period, enabling leaves to store more nutrition and, therefore, pushing prices higher than last year. A top tea expert says the average price of this year's spring tea will be up 15 percent because of a high demand-supply ratio, a lengthy cold season and soaring labor costs. Wu Xiduan, general secretary of the China Tea Marketing Association (CTMA), the country's semi-official organization set up to promote tea, said because this year has been unusually cold, tea plants matured later and output was reduced. Many plantations in the growing area hired fewer experienced tea-pickers because their wages have doubled. Thanks to higher farm-gate prices, the wider market is anticipating a substantial rise. According to CTMA statistics, top quality Longjing tea picked before the Tomb Sweeping Festival, which is on April 5 this year, could hit 12,000 yuan ($1,828) to 14,000 yuan a kilogram at the plantations in several nationally famous villages around the Hangzhou suburbs, such as Meijiawu and Shifengshan. He said China's demand for high quality tea is increasing fast at 10 percent year-on-year. He believes the tea market will take a leaf out of the book of wineries, carefully marketing different types of tea and the terrain in which they were grown. This year, a Hangzhou-based tea company, Hangzhou Longjing Tea Group, is selling its Meijiawu-grown Longjing as a futures financial product, known as a tea primeur, at cost of 30,000 yuan for a 500-gram presentation box. Chinese businessmen bought the entire crop before it was picked. According to tea traders in Maliandao Tea Street, the largest tea-trade hub in southern Beijing, 2011 is considered a very good year for tea because the unusually cold weather in southern China lengthened the growing season, enabling the plants to store more nutrition and creating shorter, more attractive leaves. "We have promoted an idea called the 'geographic indicator' for several years, and it has delivered results," said Wu. "Tea-fanciers, for example people who love Tieguanyin (a kind of oolong tea), only drink the tea grown in Xiping village, in Anxi county, Fujian province." Wu said nowadays people care more about taste and quality than function. Tea grown in an unrecognized area is considered to be a kind of commodity without investment value. Wu said there is an enormous variety of Chinese tea, each with its own character, making it difficult to apply a universal standard. However, CTMA is embarking on the process with some teas where it feels it can - for example with the more uniform puer tea. Puer tea was once the subject of intense speculation in 2006 and 2007. At one point, 500 grams of the tea from the best growing area cost 1 million yuan. After investor fever in puer tea subsided, the frenzy moved on to Dahongpao, a type of oolong tea. Dahongpao grows on the rocky Wuyi Mountain, in Fujian province. This ensures an extremely low output. The original four "mother shrubs" produce only 400 grams every year. Wu said he doesn't know what type of tea will spark the next investment fever. "I think the fast change in the market favorites helps to promote China's tea industry," Wu said. It enables the public to learn more about different kinds of tea. CTMA said that China produced 1.4 million tons of tea last year. One million was sold in China, 300,000 tons were exported and the remaining 100,000 tons were made into products such as bottled-tea soft drinks. Compared with exports, the local market is huge. Wu believes exports will remain stable over the next few years, although revenues might fluctuate according to currency movements. There have been concerns that The Cross-Straits Economic Cooperation Framework Agreement, under which tea from the island province of Taiwan can be imported free of tax, might affect the mainland market. Wu said the impact will not be very large because the production of tea is limited in Taiwan and most of it is sold locally.

Snapshots of swimwear design contest at China Fashion Week - Models present creations for the 7th Hosa Cup Swimwear Design Contest during the China Fashion Week in Beijing, March 28, 2011.

Hong Kong*:  March 30 2011

HK banks agree extra Lehman minibond payouts - Lehman investors may get 96.5pc of initial sum Lehman investors may get 96.5pc of initial sum - Sixteen Hong Kong banks have agreed on a joint proposal that could see investors in Lehman Brothers minibonds recover most of their original investments. As a final settlement, the banks yesterday offered to pay back up to 96.5 per cent of the defunct investments - up from 60 per cent in 2009. But this will only go ahead if at least 75 per cent of an estimated 31,000 investors agree to it. The retail investors bought 24 tranches of minibond products - a type of derivatives rather than real bonds - through the local banks before the Western financial crisis brought down Lehman, one of Wall Street's most prominent investment banks, in September 2008. Investors can also receive an "ex-gratia" payment - which the banks have no legal obligation to pay - if they agree not to pursue their cases any further. "The banks have shown their best sincerity in resolving the issue. We believe investors will support [the proposal]," said He Guangbei, chairman of the Hong Kong Association of Banks and chief executive of Bank of China (Hong Kong). By initial estimates, roughly two-thirds of the investors could recover about 80 per cent to 90 per cent of their principal investment, while 31 per cent could get back about 70 per cent to 80 per cent. But with the ex-gratia payment, many may get back as much as 96.5 per cent of their initial investment, He said. Investors who had previously settled claims would also be eligible. The latest decision follows the banks' 2009 offer of a repurchase scheme in which those who accepted the terms could recoup at least 60 per cent of their initial investment. At that time, the 16 distributing banks reached an agreement with the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority to expedite the return of the collateral. Then in December 2009 two banks offered to pay back 80 per cent. The offer from Dah Sing (SEHK: 0440) Bank and Mevas Bank was seen as paving the way for all affected customers to receive the same payout. Investors reportedly lost about US$2.5 billion on minibonds offered by Lehman Brothers. Many accused banks of misleading them to invest in the products without fully informing them of the risks. Some still stage daily protests outside large branches. An investigation by the legislature into possible sale malpractice is still under way. Approval is required by at least 75 per cent of the minibond holders for every tranche. They will cast votes at meetings expected to be held in May. It is also subject to Lehman Brothers obtaining US Bankruptcy Court confirmation that the derivatives procedures order made in December 2008 applied to the Hong Kong minibond programme, although this is considered procedural. If everything goes smoothly, distribution to investors by the 16 banks, including Bank of China (Hong Kong), Bank of East Asia (SEHK: 0023), Dah Sing Bank, Industrial and Commercial Bank of China (SEHK: 1398) (Asia), is set for June. BOCHK (SEHK: 2388) acting deputy chief executive Jason Yueng Chi-wai, speaking for the 16 distributing banks yesterday, warned that if the proposal could not get passed in any one of the May meetings, the entire package would fall through. Eddy Chan Ho-wai, chairman of the Allied Victims of Lehman Products, said his group would study the proposal. "We have been demanding 100 per cent recovery of our investments if the banks are found to have handled the sales in breach of regulations," he said. Democratic Party lawmaker Kam Nai-wai, who supports the investors, believed those who choose not to take the ex-gratia payment would continue to make claims against the banks. He said the amount of the ex-gratia payment was insufficient to "reflect the banks' responsibility". Dr Raymond So Wai-man, dean of Hang Seng Management College's school of business, said he believed the latest arrangement was a compromise by the banks. "The new offer covers the majority of the investors' principal. Their real loss now would be the interest forgone due to the holding up of their money," So said. The HKMA, SFC and the government said they were pleased with the development. Arthur Yuen, HKMA deputy chief executive, said it would allow investors to avoid lengthy litigation and their high costs. SFC chief executive officer Martin Wheatley said he was pleased by the outcome. A government spokesman praised the high rate of recovery in the value of the minibond collateral. "We welcome the final resolution for the vast majority of the minibond noteholders and the ex-gratia payment as a gesture of goodwill by the distributing banks," he said. In a related development, Standard Chartered agreed this month to buy back HK$1.48 billion worth of outstanding Lehman Brothers derivative products it sold. The repurchase scheme covers 95 per cent of the outstanding transactions in Lehman-issued equity-linked notes held by the bank's customers. The bank said the buyback offer was made in the interest of customers and the city's financial system. ELNs are debt instruments that base their performance on the return of the underlying equity. They are not minibonds but a similar type of credit derivative.

Credit Suisse chief executive Brady Dougan says the company wants to be thought of as a partner to its customers, not just a seller of financial products. Credit Suisse chief has high hopes for Asia - Despite the earthquake, tsunami and radiation crisis in Japan and monetary tightening policy in China, Credit Suisse chief executive Brady Dougan is optimistic about growth in Asia over the next five years. The head of Credit Suisse, one of the largest banks in Switzerland, expects Asian revenues to grow to about 25 to 30 per cent of total group revenues in five years, up from about 10 per cent at the moment.

Revolutionaries' secret base left to decay despite heritage - A century-old heritage building that served as a secret base for the Chinese Revolution of 1911 has stood neglected and decaying despite the fanfare being prepared for the centenary of the revolution this year. Numerous proposals have been made to save the red-brick building in Tuen Mun over four decades, but some activists believe its neglect may stem from its close association with pro-Taiwan groups in Hong Kong. Hung Lau, literally Red House, is part of the former Castle Peak Farm, which was used by revolutionaries as a place to store and experiment with firearms between 1901 and 1911. The building, the only reminder of the vanished farm, was rated as a grade-one historic building in 1986. Despite a government surveyor's assessment in 1968 that the building was a century old, officials now say there are doubts that the structure is authentic. They have plans to conserve other revolution-related heritage sites but not this one. "Historians have long concluded Hung Lau played a part in the revolution," Yuen Long district councillor Mak Ip-sing said. "I think the government just wants to play down its significance because of its association with the Kuomintang and Taiwan," said Mak, who is chairman of Highwise Yuen Long Service Centre, a pro-Taiwan group that manages the memorial ground next to Hung Lau. The two-storey block is dilapidated and full of haphazard additions and alterations. The verandah has been sealed off with bricks, cement and wire gates. The balcony balustrades have been replaced. The traditional tiles on the roof have disappeared, replaced by metal sheets. The second floor has been subdivided into seven tiny rooms. Mak said the roof tiles disappeared only six months ago. The grounds, with a statue of Dr Sun Yat-sen and a pole flying the Taiwanese flag, have been used to host events to commemorate the founding of the Republic of China. The ceremonies were attended by pro-Taiwan sympathisers and officials from the Chung Hwa Travel Service, which acts as Taiwan's quasi-embassy in Hong Kong. "We've been fighting for Hung Lau's conservation for 20 years," Mak said. "Heritage conservation shouldn't be mixed with politics. If the government does nothing, the building will collapse one day." The Antiquities and Monuments Office said in a paper last month: "It is doubtful whether the existing Hung Lau is an original structure of Castle Peak Farm." However, according to government archival records, a maintenance surveyor said in an internal memo in 1968 that the building was "built approximately one hundred years ago" and that it was in serious disrepair to the extent that reconstruction was necessary to return it to public use. The surveyor's comments were made after he conducted a structural assessment, which followed a proposal by then lawmaker Ellen Li that a memorial garden and museum be set up at Hung Lau. But the proposal was shelved because officials did not want to liaise with the pro-Taiwan Sun Yat-sen Memorial Association of Hong Kong, which had also stepped in and made repeated requests to preserve Hung Lau. The colonial government thought such collaboration would be politically embarrassing. In the 1990s and early 2000s, Tuen Mun District Council proposed an HK$86 million restoration plan for the building, but it was also shelved. The antiquities office says the development proposal is still "subject to further study with the owner" because it involves private property and land matters. The land register records the official owner as Li Shiu-kwan, a nephew of Li Ki-tong, who was a great financial supporter of the revolution and set up the Castle Peak Farm. The owner was reported to have offered to donate the site to the government in the 1990s. Li did not respond to inquiries, but his brother, Li Shiu-tsang, said through a spokeswoman that Hung Lau was "a case of years ago" and declined further comment. Ho Puay-peng, an architectural heritage professor at Chinese University, said he could not rule out the possibility Hung Lau was built in the early 1900s, although the windows were of a later style. He said tests might be needed to determine its age, such as examining the bricks. History professor Ho Pui-yin, a member of the Antiquities Advisory Board, said the government should conduct thorough research to determine the building's importance. Hong Kong has only a few surviving sites connected to the revolution. A fortified structure in Ha Pak Nai, Yuen Long, and the residence of Ip Ting-sz, another supporter of Sun Yat-sen, have been declared monuments. Pak Tsz Lane in Central, a meeting place for revolutionaries, will be revamped by the Urban Renewal Authority into a memorial park.

Foster eyes zero emissions for West Kowloon - Food waste in district to be targeted and turned into biogas - Norman Foster wants to turn West Kowloon into Hong Kong's first zero carbon-emission district. The renowned British architect and his team think people tend to focus on the large urban park in their design. But their zero-emission ambition is just as "green," even if it may take up to 25 years to achieve. To achieve that goal, the team will take into account emissions generated from buildings only rather than from other sources in the district. "There's no one magic bullet," Colin Ward, one of the partners at Foster + Partners, said. The hub's park will not be used as the only tool to offset carbon emissions as the hub will also target the district's waste problem by collecting the food waste generated daily in its neighbourhood and turn this into biogas for its power system. Working with this architectural firm is a team of specialists from Arup, a global engineering firm with experience in zero- or low-carbon projects, including a new phase currently under planning at Hong Kong's Science Park and the BedZED residential project in Beddington, south London. The Foster firm also designed the zero-carbon city in Masdar, Abu Dhabi. "We are not suggesting a fantasy or a mediocre design," said Raymond Yau, a director of Arup. "The arts hub still needs to be powered by the local electricity grid but we will offset by helping the city to solve part of its food-waste problem." To arrive at the "zero" figure, will mean careful planning and design of the whole site and its buildings; a creative recycling of food waste, and increasing use of wind and solar energy. More importantly, it will mean bringing about behavioural change among hub users. Yau added that the goal could be achieved much earlier - by 2025 (see graphic) - if the energy centre and the district cooling system could operate at an earlier stage. The project, if realised, would set an example for the region. But if it fails, it could become an obstacle for other low-carbon projects in the pipeline. Ward said the plan aimed to cut Hong Kong's carbon emission by 135,000 tonnes a year, the equivalent of taking 23,400 cars off the road. Hong Kong generates 3,280 tonnes of food waste a day, accounting for 44 per cent of waste dumped in landfills. "We need a strong policy in place to ensure a sufficient amount of food waste and an efficient operation of the energy centre, if you don't want to see it becoming a refuse-collection point," Yau warned. The team follows the zero-carbon definition currently adopted by the UK government: using on-site renewable energy to offset electricity taken from the local power grid and allowing some degree of off-site emission mitigations, such as reducing methane gas in landfills in the case of the arts hub. "It's a universally accepted definition," he said, adding that UK projects also target buildings' emissions rather than emissions generated by external transportation, as this is an uncontrollable factor. Whether the plan will succeed hinges on many factors: "Design is just the first step. It will depend on how the authority decides on the phasing of the hub. Public education and behavioural change will also take time," he said. Foster's background in designing a zero-carbon city, dubbed a green utopia, in the deserts of Abu Dhabi may not be seen as a credit, however. The project was described as a mirage after its scale and budget were cut. The original plan included extensive use of a transport system in which cars were banned and people transported in driverless pods. "There are reasons for its failure," said the president of the Hong Kong Green Building Council Andrew Chan Ka-ching. "The project of creating a city in a desert is very artificial to begin with. It is too ambitious." Chan said that the key was to ensure the idea was implemented consistently and sustained in the long run, a role in which the arts hub authority will play an important part. For example, a clear set of design guidelines must be ready for buildings when sites are sold for development. "It's not beyond our reach," Chan said.

As global luxury brands saturate first and even second-tier mainland cities, Hong Kong-based luxury menswear group Trinity is pushing its frontiers in third and fourth-tier cities. The group is setting up a central China regional office in Wuhan in the middle of this year, riding on the business opportunities that will come with the construction of high-speed railway lines in the region. Group managing director Sunny Wong Yat-ming said he was bullish about the markets in provincial capitals like Wuhan, Nanchang and Changsha. He believes the luxury menswear market on the mainland is still under-penetrated by global brands, especially in third and fourth-tier cities. "There are three types of luxury menswear customers: entrepreneurs, senior management of local or foreign companies, and the professionals," he said. "You have senior management and professionals in first and second-tier cities. But if you are talking about entrepreneurs, like department store bosses and coal mine owners, they are everywhere in China - in Taiyuan, in Xian, in Inner Mongolia. You don't have a lot of professionals, but then you don't need that many customers. The entrepreneurs will spend a lot." As Wong sees it, the way forward is to increase shop density in second-tier cities and spread the group's footprints into yet more third and fourth-tier cities. Trinity now has 409 shops in 50 cities - compared with 354 shops in 42 cities in 2009. But, Wong realises there could be growing pains as the company ventures into a market totally unused to high-end consumption. "As we go to the smaller cities, it is virtually impossible to find staff who already know this kind of business," he said. "We either look for people in a different kind of retailing industry, or those we believe are trainable. "When we went into Inner Mongolia - we couldn't find anyone. Then we had to think: would a five-star hotel receptionist be good? Or should we just look for someone working for the ticketing office of a big airline? "Hiring is always a challenge in China. We spend a lot time hiring and training people. "Every industry keeps saying they will open many shops, but where are they going to hire all those people?" Wong said having local partners could be one of the best solutions. Local department stores and hotels could help recruit and screen the candidates for the shops in exchange for a commission on sales. And finding the right location could also be a puzzle. "It is not difficult to get into a good shop," Wong said. "The challenge is to know which one is the best, because they are all very nice, but they are not yet completed, and you have to use your imagination. So you can be wrong, you can choose the wrong guy, bet on the wrong horse ... this happens. "But more often we choose our partners for the quality of their management; if they are committed and if they know how to do this kind of business." He said the good thing was the company could always choose to move to another shop location, or another city. In 2010, Trinity closed 49 shops on the mainland, while opening 104 new shops in new locations. Trinity now owns the Kent and Curwen and Cerruti 1881 brands globally, and manages five other international luxury brands including Gieves & Hawkes, D'urban, Intermezzo and Altea. Having completed the €53 million (HK$582 million) acquisition of Cerruti 1881 earlier this month, Wong said the group was actively looking for opportunities to buy European brands. The mainland market has become the focus of all luxury brands. According to a recent report by independent brokerage and investment group CLSA, the mainland's domestic luxury market amounted to €9.2 billion in 2009, about 5 per cent of the global market. The market is expected to grow by about 25 per cent per year for the next five years, reaching €74 billion by 2020, making it the largest domestic market in the world. Including the Taiwan, Hong Kong and Macau markets, Greater China demand will account for 44 per cent of the global luxury goods market by 2020. While big luxury brands are buying back shares from their local partners in order to have total control over the lucrative expansion into China, Wong said smaller European brands were more open to the idea of partnerships or takeovers because they might not have the resources to compete with the big tickers. "There are always some brands which catch our eyes," he said. "We will wait for the right opportunity and right timing."

Hong Kong seeks coordination as China fears mount-low levels radiation from the quake-hit Fukushima nuclear power plant detected - Hong Kong will step up coordination with the mainland after low levels of radiation from the quake-hit Fukushima nuclear power plant was detected in northeast Heilongjiang. Fears of radioactive contamination of food increased came after wasabi plants in Fukushima prefecture were also found to be tainted. In Hong Kong, Director of Health Lam Ping- yan pledged greater coordination with the mainland over the radiation leaks from Japan. Lam ruled out mandatory radiation checks for all arriving passengers from Japan, saying the World Health Organisation has yet to make a recommendation in this matter. Meanwhile, radiation levels in some vegetables produced in Fukushima, Chiba and other prefectures were higher than legal limits, Japanese authorities said. In Fukushima, above-normal radiation in milk, wasabi plants and 11 other vegetables was detected. In Ibaraki prefecture red-leaf lettuce had 2,300 becquerels per kilogram of iodine-131. This exceeded the limit of 2,000 becquerels. In Chiba, a major source of vegetables to Tokyo, above-maximum radiation in 11 vegetables, including red-leaf lettuce, was detected. Spinach in Tochigi and Gunma was also tainted with radiation. The number of radiation-affected food is likely to increase as each prefecture begins testing its produce, said health, labor and welfare ministry official Taku Ohhara said. But there are some signs of improvement in the supply of tap water in Tokyo. Meanwhile, since Thursday, Hong Kong has imposed an indefinite ban on imports of milk, dairy products, milk powder, vegetables and fruits produced or reaped on or after March 11 in Fukushima, Tochigi, Gunma, Ibaraki and Chiba prefectures. Meat, poultry and seafood from these areas cannot be imported unless they bear hygiene certificates issued by Japanese authorities, the SAR government said. Japan plans to urge other nations to observe World Trade Organization rules after the United States, China and others halted imports of some Japanese food products over radiation concerns. Trade rules require restrictions on imports and exports to have a scientific basis. To show support for the victims of the quake- tsunami disaster, the pan-democrats held a candlelight vigil at Statue Square in Central last night attended by more than a hundred people.

 China*:  March 30 2011

People pack Japanese milk powder containers into shopping bags in Hong Kong two days after the earthquake in Japan. The threat of nuclear radiation leaks from a damaged plant have stoked Chinese concerns about food supplies from Japan. Dairy products crackdown - At least 20 percent of domestic companies will be kicked out of the dairy market at the end of this month following the latest inspection by the central government of China's fresh milk and infant formula producers, official sources revealed. To help Chinese companies win back a bigger share of the domestic market, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) ordered its local branches to re-inspect dairy enterprises that had already obtained production licenses. The deadline to do so is March 31. According to data released in late February by four provinces and an autonmous region that had completed the re-inspection - Fujian, Guangdong, Shaanxi, Sichuan and Ningxia - all but Sichuan saw 30 percent of its dairy companies fail. Those companies will have their licenses revoked by the government. In Sichuan, less than 20 percent of dairy enterprises failed. Mu Jingjun, secretary-general of the China Dairy Industry Association, said it is now time to clarify the situation and air the facts. "Consumers have been confused by irresponsible statements and reporting. There are problems with ongoing speculation that harms the whole industry and the national interest," Mu was quoted by China Radio International as saying. The Dairy Association of China under the Ministry of Agriculture forecast that more than 20 percent of the country's dairy companies, accounting for about 10 percent of the market, will have their licenses revoked when the re-inspection finishes this month. The obligation for every company engaged in dairy production in China to re-apply for licenses was imposed in November by AQSIQ, the Ministry of Industry and Information Technology, and the National Development and Reform Commission. "Local quality supervision departments, especially those in major dairy producing areas, should speed up the inspection. Dairy producers who failed to pass the quality inspections will be forced to shut down," Li Yuanping, an AQSIQ spokesman, told China Radio International recently. According to the order, dairy companies must have equipment that can test for 64 additives, including melamine. The equipment will cost the companies 3 million yuan ($456,000) to 4 million yuan each. "Only big companies with annual revenues exceeding 80 million yuan and more than 20 tons of daily output can afford to upgrade their equipment," said Jiang Xin, an analyst from China Jianyin Investment Securities. The policy will streamline the production of normal temperature fresh milk but not affect production of powdered milk and pasteurized milk to any great extent. These latter products already have higher standards of quality control that include sourcing the milk to a particular cow and testing equipment, she added. It will also have a greater influence on small companies because the big ones already have mature testing methods. Inner Mongolia Yili Industrial Group Co Ltd, one of China's biggest dairy products manufacturers, and Nestle China, which has three production centers in Shandong province, said they do not need to invest more in testing machines. The world's largest dairy processing company, New Zealand Fonterra Co-operative Group Ltd, said because it only has cow farms in China, not factories, it does not need to apply for the new manufacturing license. China has more than 800 dairy companies at present. About one third of them had finished the application process by Feb 24, according to AQSIQ. The application deadline was postponed to the end of March, instead of March 1, as the original order in last November required. Jiang said big companies such as Yili and its major competitor, Inner Mongolia Mengniu Dairy (Group) Co Ltd, have advantages in terms of sales networks that will enable them to take over the 10 percent market share held by small companies by the end of this month. "The new license application is definitely good news for China's dairy industry, which has witnessed quality scandals in recent years," Jiang said. "It's a good time to rebuild a healthy image." China's dairy industry is still in its infancy in comparison with Europe. Since 1997, the industry has been increasing annually at a rate of 25 percent. Its rapid development saw a handful of small businesses bring discredit to the industry. Thanks to the re-inspection regime, these companies will be eliminated, industry experts said.

Culture a key priority in five-year plan - Leaders hope industry will help bolster nation's 'soft power' abroad; cynics fear waste - State media like CCTV, which built this headquarters in Beijing, have benefited from government cash. Top leaders want to turn culture into a "pillar industry" for the mainland by 2015. As they see it, the world needs to know about Chinese culture, a development which will help boost the country's attractiveness, and capacity to use "soft power" to increase its influence on the global stage. Critics, however, fear the campaign will end up being a "Great Leap Forward in culture", saying the spending is wastefully extravagant and will not bring the desired result. The stated economic goals of the 12th five-year plan for 2011-15, approved at the National People's Congress session on March 14, include a massive expansion of the media, publishing, movie, animation, television series and performance sectors for export. A pillar industry is loosely defined as one that contributes five per cent or more of the mainland's annual gross domestic product, a share which is predicted to be worth at least 2 trillion yuan (HK$2.37 trillion) in 2015. The government plans to invest 171 billion yuan this year in the culture, sports and media sectors, according to the Ministry of Finance. Culture was not only "the spirit and soul of the nation", but also a powerful force for the development of the country, according to a document containing suggestions for the five-year plan, approved at the Communist Party congress in October. Authorities have come to realise the key role culture plays in developing the economy and boosting China's image abroad.

A Chinese imperial jade seal used by emperor Qianlong (1736-95) sold for €12.4 million (HK$136 million) on Saturday at an auction in southwest France, setting a record for seals. The white jade imperial seal measuring 9.85cm, with carvings of intertwined dragons, was one of a number used by Qianlong, the fourth emperor of the Qing dynasty (1644-1911), and was first valued at €1.5 million. French media said the imperial seal was sold by a Toulouse-based auction house to a Chinese bidder, who refused to give his name. The previous highest-priced seal was also a Chinese imperial jade seal used by emperor Kangxi (1661-1722), who had the longest reign in China and was Qianlong's grandfather. Earlier, at another auction house in Toulouse, a giant 18th century Chinese silk scroll painting of a military troop review was sold for more than €22 million, the highest price paid for a Chinese work in France. The work, found in a Paris attic and sold in Toulouse by auctioneer Marc Labarbe, is one of a series of four works of 17th century military manoeuvres that mobilised some 20,000 men. The scroll, the fourth and last of the Painting of Emperor Qianlong Inspecting the Troops series, shows his army under review. The 24-metre scroll depicts about 9,000 figures. According to the Qing court regulation, a review was held once every three years. It took five to six years for the paintings to be completed. Zhao Xin, a Hong Kong collector, made the winning bid of €22,057,000 after ferocious competition with seven others. Zhao, a coal and electricity businessman, is originally from Shanxi and migrated to Hong Kong in the 1990s. His bid also set the record for the highest price ever paid worldwide for a painting from the Ming and Qing dynasties. Zhao began collecting antiques in the 1990s. His winning bids were seen as legendary conquests in the auction world. Last June, he bought an imperial jade seal used by Qianlong for HK$128 million at an auction in Taiwan. Zhao also owns the third scroll of the Painting of Emperor Qianlong Inspecting the Troops series. The second scroll is now in the Forbidden City in Beijing, and the first one is in France.

Hong Kong*:  March 29 2011

Hong Kong a winner as China boom goes on - Beijing's policies, domestic demand to keep delivering growth - Anthony Bolton is president of investments at Fidelity International moved to Hong Kong one year ago. When I moved to Hong Kong a year ago, I recognised that my new home would be the financial gateway to the mainland. What has surprised me has been the extent to which the traffic has been two-way. Hong Kong stands to be a significant beneficiary of the financial and monetary integration of China with the developed world. Hong Kong is also where the two financials worlds we live in today meet - the high-growth mainland world and the stagnant developed world are linked by the currency peg through which Hong Kong monetary policy is tied to the US. The peg holds this two-speed world together. Even a couple of years ago, there were fears that Hong Kong's future was threatened by the growth of financial centres on the mainland, but China's internationalisation is giving it fresh purpose. The increasing importance of Hong Kong is illustrated by the rapid growth in IPOs, with almost as many companies listing here as in New York last year (and raising more money). The broadening reach of the renminbi, allowing companies to settle trade in the Chinese currency, is another powerful opportunity for Hong Kong, as is the introduction of renminbi-denominated share and bond issues as well as other savings products. Whether the dollar peg continues to be appropriate in this new world is open to debate. The ultra-loose monetary policy imported from the US Federal Reserve is unhelpful against a backdrop of inflation and soaring property prices. The Hong Kong dollar was pegged to the US currency in 1983 in very different circumstances from those prevailing today. It was a time of severe currency weakness amid concerns about capital flight during a prolonged transition from British to Chinese sovereignty. Perhaps the dollar peg does remain sensible for a small, outward-looking economy as long as the principal means of exchange in global trade is the dollar and the renminbi is not fully convertible. But in my investment career I have learned to expect the unexpected and I remain alert to the possibility of change. What would be the consequences of a loosening of the dollar link? Most likely, it would be a positive for the Hong Kong currency, which would be viewed as an attractive alternative for speculation on the probable long-term appreciation of the yuan. That might be a negative for Hong Kong's retail sector, which has become attractive to shoppers from the mainland as the currency differential progressively, albeit slowly, widens. Interest rates would likely rise, too, which would be a negative for property, at least in the short term. While I continue to watch currency developments closely, the positioning of my investments actually reflects my belief that the status quo will persist for the time being. If things were to change, I would need to revise my exposure to, for example, the hotel and retail sectors in Hong Kong. More generally, I remain optimistic about the market outlook, having revisited the bullish view I have held since the last quarter of 2008 and concluded that it still holds good today. Valuations are not excessive and the behaviour of investors is less aggressive than it usually is towards the top of the market. There has also been plenty for investors to worry about. Bull markets normally climb a wall of worry. China's 12th five-year plan has confirmed that Beijing is determined to sustain growth while containing inflation and to rebalance the economy towards domestic consumption. China had a shock during the financial crisis and it will not allow itself to depend overly on exports, in particular to the US, again. My portfolio is biased towards this shift in the drivers of economic growth such as consumption and service industries. Service industries, notably financial services, education and health care, will see strong growth. Relatively speaking, I am much less interested in yesterday's story of low-cost manufacturing. I am rather less concerned about inflation than many mainland market watchers. Unlike in the developed world, mainland consumers are not so affected by rising interest rates. Indeed, with high cash savings, higher interest rates may even benefit savers. It is true that credit growth was strong last year, at maybe over 20 per cent once off-balance-sheet loans and the other ways that banks get around controls are taken into consideration. But even if there is a slowdown this year, I still expect growth to be strong relative to the rest of the world. Mainland inflation is also driven largely by food, where the worst pressures may be abating. Stripping this out along with the other commodity price rises which are affecting most economies today, underlying inflationary pressures are relatively benign. While further interest-rate rises and tighter reserve requirements for the banks are likely, it would be surprising if the policy response were not slow and steady. I am, of course, conscious that there has been a significant shift in sentiment from the emerging markets which fuelled the market recovery last year back to developed stock markets. This rotation could be extended by the events in North Africa, which could keep the oil price elevated for some time, stifling economic recovery to some extent. But this should be a temporary change and I expect investors' preference for the developing world to return. I remain positive on the long-term investment outlook on the mainland and believe Hong Kong will continue to be a major winner from the accelerating investment and currency flows.

Japanese residents of Hong Kong and their friends are rallying to help some forgotten victims of the Tohoku earthquake and tsunami - pets. By yesterday, 10 volunteers had helped the Society for Prevention of Cruelty to Animals raise HK$150,000 in street donations. Team leader Miko Ishida, a Japanese woman living in Hong Kong, said she approached the SPCA when, seven days after rescue efforts began, still no animals had emerged from the rubble. That visit resulted in the fund-raising effort. "My voice is so tired, it is not so strong," Ishida said. "I chatted with so many people in Prince Edward, where so many people donated." Michael Wong Ho-ming, the SPCA's director of community development, said the public response was good. "People appreciated very much that we were helping animals. They also appreciated that Japanese here were helping their countrymen," he said. Wong said saving human lives was important and there were several groups working on that, but none for animals. "In the light of our core mission, we hope to help the animals. It does not conflict with saving human lives." The fund-raising will continue at least until the end of this month. The money will be used to buy pet food and other necessities. "Some animals have lost their owners," Wong said. "Many of the Japanese are taking care of stray animals. But the situation is poor; they take the pets to evacuation shelters, where the animals have no food." The SPCA quoted the Japan Animal Welfare Society, or Jaws as saying 7 to 10 per cent of the 300,000 to 500,000 evacuees living at shelters had taken their pets along. Other pet dogs are roaming the coast of northeast Japan devastated by March 11's magnitude-9 quake and tsunami, foraging for scraps and searching for their owners. Luna, a six-year-old Beagle mix, is one of the lucky pets. When owner Masami Endo, a 55-year-old grocer, evacuated the family home in Minamisoma, near the crippled Fukushima nuclear power station, he took the family pet and some food for her. Now she is tied to a tree and sleeps in a cardboard box on a dirty cushion, two bowls of frozen water before her. Passers-by pet her. She gets walked twice a day. And her owner is alive - he just can't take her to the shelter where the family is staying because of its no-pets rule. Ryo Taira's pet shop and animal shelter in Arahama, near the city of Sendai, is caring for 80 dogs and cats whose owners cannot take them to shelters. The pets sleep in crates stacked on one another. Volunteers and staff walk the dogs in a park.

Alert over ship from Fukushima sparks quarantine checks - Ships seeking to enter Hong Kong that began their voyage within 80 kilometres of Japan's Fukushima prefecture, site of a nuclear power plant crippled by a March 11 earthquake and tsunami, are to be quarantined for radiation checks off Lamma Island. The government announced the move after Hong Kong hospitals were placed on alert when the local agent of a Maltese-registered container ship asked late on Thursday for radiation checks of its 27 crew. The captain of the Maltese-registered CMA CGM Moliere, which began its voyage in Yokohama, Japan, later said the crew were fine. The alert was called off. Another cargo ship, the MOL Presence, was earlier detained in Xiamen, Fujian province, after excessive radiation was detected. And two Japanese tourists were found contaminated in Wuxi, Jiangsu. A Marine Department spokesman said a quarantine zone had been designated south of Lamma. "It will be a place for the ship to moor so that more inspections can be carried out," the spokesman said. "But so far we have not found any ship originating from the 80-kilometre-radius area." Only one of Japan's major commercial ports, Niigata on the west coast, is within 80 kilometres of Fukushima prefecture. The spokesman said the quarantine zone, approximately five kilometres south of Lamma Island, was close to Hong Kong's sea border. It is not clear what will happen if a ship is found contaminated. The plan worried some islanders. They want notifying quickly if there is anything wrong with vessels or people. "It is better for them not to wash the ships or goods that might have radiation there," said Leung Kwun-wah, who runs a fish farm in Lamma. "They should also inform us quickly in the worst case so I can move the fish out and sell them immediately." Heston Kwong Kwok-wai, assistant director of health, said the risk of the Maltese-registered ship being contaminated was low as it was away from Japan when the radiation scare happened at the Fukushima nuclear plant. "There is no need to impose any restriction on travellers or goods," he said, citing the International Maritime Organisation and World Health Organisation. Kwong said the Health Department took into account previous ports of call before issuing a health certificate for a ship to enter Hong Kong. Another container ship, the Clementine Maersk, will arrive today from Yokohama - which is more than 200 kilometres from Fukushima. The scare surrounding the Moliere began when the agent requested Princess Margaret Hospital, Kwai Chung, check the crew on board - mostly from Ukraine and Korea. Health authorities were put on high alert after the request, and temporary cleaning facilities were immediately set up at the entrances to three nearby hospitals, including Yan Chai Hospital, Tsuen Wan, and Caritas Medical Centre, Sham Shui Po. The alert ended after the shipmaster reported by radio yesterday morning that the crew were healthy. It is the first time such an emergency arrangement has been made since the crisis began at the Fukushima plant; its problems have led to contamination of crops, milk and even tap water. "It has given us a very good opportunity to prepare for what might happen," said Lai Tung-kwok, undersecretary for security. The Moliere left Yokohama, near Tokyo, on March 11, the day the earthquake and tsunami struck northeast Japan. It called at Pusan, Shanghai, Ningbo , Xiamen, Guangzhou and Shenzhen before reaching Hong Kong at about 3am. It anchored at berth 10 at Kwai Chung container port, where it unloaded 50 containers for re-export. Nine of the containers were from Japan, but customs officers found they were not contaminated by radiation. The ship left Hong Kong for Malaysia in the afternoon. Meanwhile, the Centre for Food Safety and the customs department said the latest batch of food and other imports from Japan tested for radiation were found to be safe.

Some local travel agencies have cancelled tours to all parts of Japan for the Easter holiday. The cancellations from April 16 to the end of the month will affect 3,300 holidaymakers and cost the tourism industry more than HK$3 million. Wing On Travel said it cancelled 122 tours affecting 1,755 travellers, who can switch to other destinations or use the money they paid for another trip within six months. Hong Thai Travel cancelled 27 tours affecting nearly 800 customers. As well as offering a switch of destination or the option of reserving the fee, the agency will also give refunds, excluding administration costs. Meanwhile, EGL Tours, an agency that focuses on Japan, said it would resume tours to regions other than the northeast and Tokyo from April 16 and offer cut-price trips. A spokesman said the agency had been offered discounts on five-day packages from some hotels in Japan. Another agency, Package Tour, said it would announce details of its Japanese holidays from April 16 onwards on April 1. Tours to northeast Japan, the region devastated by the nuclear crisis, departing next month and in May had already been cancelled.

Two buildings more than 50 years old will be the first to be redeveloped under a new policy that allows displaced residents to choose a flat in the development or nearby instead of cash compensation. One, a 54-year-old building in Pak Tai Street, Ma Tau Kok, houses 150 households while the other, a 55-year-old structure in Sham Shui Po, houses 60. The Urban Renewal Authority will spend HK$1.45 billion to develop the two sites, with work dur to end in 2018 or 2019. "These are the first projects in which residents can opt for the flat-for-flat compensation," the authority's managing director, Quinn Law Yee-kwan, said yesterday. "It is very difficult to predict how residents will respond to the flat-for-flat option ... it is a very personal choice." Flat owners welcomed the choice but said they would wait to see whether the new flats would cost more than the compensation they could get, meaning they would have to make up the difference. Under a new plan announced by the authority this week, owners who live in the affected buildings can opt to buy a new flat in the redeveloped building or in nearby new buildings at market prices set at the time the old flats are acquired. Otherwise they can take the cash, based on the cost of a seven-year-old flat of similar size to their own. The two new buildings, both more than 20 floors, will have 210 flats altogether. Five floors in the Ma Tau Kok building and eight floors of the Sham Shui Po one will be reserved for displaced residents who want new flats. Affected residents can also choose to buy a new flat in the nearby Kai Tak development, of which the first phase, next to the proposed Kai Tak MTR station, is due to be completed by 2016. Staff started visiting residents yesterday and there will be briefings in the next two weeks. A woman who has lived in the Ma Tau Kok building for more than 30 years said she would take the cash. "I'm 70 years old. I don't have money to pay extra ... I'd rather get a sum of compensation, rent a flat and spend the rest of the money over the years." She said she had spent tens of thousands of dollars on repairing her flat after pieces fell from the ceiling and cracks appeared in the walls. Leung Chi-hung, who is in his 50s, liked the idea of a flat in the redeveloped building but said the new flats might be too small. He wants one at least 70 per cent as big as his current 900sq ft home, but the biggest would only be 600 square feet. He will make a decision when prices are available. "I don't know how much the Kai Tak flats will cost, so I have no idea if I can afford it." "Grandma Jade", a woman in her sixties who owns a jade shop, said she would miss the area, in which she opened her shop 40 years ago. Many restaurants moved from Kowloon City to Ma Tau Kok after the Kai Tak Airport closed in 1998, making the area busier than before, she said.

 China*:  March 29 2011

Chi Buzhou and his Japanese wife, Akiko Shirohama, who chose Chi over her Japanese family when war loomed. Belated spotlight on unsung hero who cracked Japan's wartime codes - Chinese code-breaker is finally achieving the recognition he deserves. On December 2, 1941, a young Chinese intelligence officer in a cramped room in Chongqing decoded a message from Japan's Foreign Ministry to its ambassador in Washington: "Burn all secret codes and secret documents and move the embassy's deposits to the bank of a neutral country: the imperial government has decided at the highest level to take action." Knowing the cables that had gone before, the officer concluded that Japan was about to attack the United States five days later at Pearl Harbour. He passed the information to his superior, who gave it to president Chiang Kai-shek. Chiang sent an urgent cable to the US embassy; its diplomats judged that the Kuomintang did not have the technology to crack Japan's secret codes and threw the cable into the rubbish bin. The officer, Chi Buzhou , was the master code-breaker of China's intelligence during the second world war. On April 13, 1943, he decoded a cable from the headquarters of the Imperial Japanese Army saying that Isoroku Yamamoto, commander of the Combined Fleet and the man who led the attack on Pearl Harbour, would be flying from Rabaul to Ballale airfield, in the Solomon Islands, on the morning of April 18. This time the Americans believed him and sent a squadron of fighter aircraft to intercept the Mitsubishi aircraft with Yamamoto on board and the six escorting Zero fighters. Yamamoto's plane crashed into the jungle. The death of their most famous admiral was a major psychological blow to the Japanese public, who were only told of the event on May 21. Chi is one of the most important unsung heroes of China's war effort. Only now is he achieving the recognition he deserves thanks to a popular television series, Feng Yu, based on his life. The series aired on China Central Television's national Channel Eight last month and reached a peak of No2 in the ratings. Now CCTV is selling it to city and provincial cable stations. Before the series, few Chinese had ever heard of him, in part because he worked for the Kuomintang government and in part because of the secrecy surrounding what he did. His personal story is worthy of a Shakespeare play. Chi was born in 1908 into a large peasant family in Minqing, in rural Fujian province. His family was so poor that he did not go to school until he was 10, with financial assistance from one of his older brothers. An outstanding student, he completed primary school in three years and went to study at one of the best middle schools in the provincial capital, Fuzhou. In 1927, he earned a place at Tokyo Imperial University, the most famous institute of higher learning in Japan, where he finished a degree in electrical engineering. Then he did a degree in industrial studies at Waseda and met and married the love of his life, Akiko Shirohama. Chi took a part-time job at the Chinese embassy in Tokyo and, introduced by a fellow student, joined the Kuomintang. He wrote nearly 20 articles for a magazine published by Chinese students in Japan. In July 1937, the Japanese military launched its attack at the Marco Polo bridge outside Beijing. "I felt that an all-out war between China and Japan was imminent and that, as a Chinese, I could not go on living there and decided to return home at once," he wrote in his memoirs, completed in 1986. Shirohama's family told her to choose between them and her husband from the "enemy country": she chose Chi and her family cut her off. With their three children, they boarded a ship in Kobe on July 25, 1937. The police boarded the ship and detained them on the pier. Only when a Japanese friend came to vouch for them and paid fees demanded by the police were they able to reboard, minutes before the ship left for Shanghai. After arrival, they went to the capital, Nanjing (then Nanking), where they found everyone frantically preparing to escape the arrival of the Japanese. Chi found a guest house for students who had returned from Japan. "There was immediately a Japanese air raid and no bomb shelter. The five of us hid under a bed with a cotton blanket." A fellow returnee from Japan invited Chi to join a counter-intelligence unit set up to break Japanese military and civil codes. "I told him that, in Japan, I had studied electrical engineering and economics. I knew nothing about codes. But he quoted President Chiang as saying that a person who could break secret codes was like adding an army of over 100,000 troops. I was very moved. I was young and patriotic and agreed. It was an extremely difficult mission, to master something of which I had no knowledge." The unit had been set up in Chongqing, the wartime capital, by an American cryptologist, Herbert Yardley, who had founded MI-8, a US military intelligence unit, in June 1917. In 1931, Yardley wrote a book, The American Black Chamber, about his experiences, which became a best-seller around the world. President Chiang liked the book so much that he offered Yardley an annual salary of US$10,000 to set up a similar unit in China. In November 1938, he arrived in Chongqing, set up a team to crack Japanese codes and recruited more than 30 Chinese who had studied in Japan, including Chi. Chi was very strong in mathematics and, with an excellent memory, was able to remember figures. He made his first breakthrough in March 1939, when he read a cable from the Japanese Foreign Ministry to its offices around the world. The chief of staff was delighted and put Chi in charge of a team of 45 people. They broke codes that detailed plans to bomb Chongqing. "We threw ourselves into the task," Chi recalled later. "For us, there was no day or night. We had to succeed in our mission. We were exhausted but it was a joyful kind of exhaustion, with a great sense of achievement." Chi found that the code was a mixture of English letters, Japanese writing and numbers, with two letters denoting a Chinese or Japanese character. He worked out, for example, the letters to denote units of the Chinese army, the number of soldiers and the quantity of ammunition. (west wind tense) meant that relations with the US were bad: (clear in the north) meant that relations with the Soviet Union were improving. On a boat from Hong Kong to Haiphong, Yardley met a man who introduced himself as a "German Jewish engineer" and said he was going to Chongqing "because he liked the food". Yardley was suspicious and sent an agent to the man's hotel to spy on him. One evening, the "engineer" sent messages by telegraph. He was arrested and confessed that he was a Japanese agent preparing for a team of special forces to parachute in and kidnap or assassinate Chiang. Yardley stayed in Chongqing until March 1940, when poor health and revelations in The New York Times forced him to return home. In April 1940, Chiang set up "the Chinese black chamber", with 500 operatives divided into six units, with the mission of breaking Japanese military and diplomatic codes. It later broadened its task to reading the secret messages of the Communist Party, the competing factions in the KMT and the British, American and Soviet missions in China. From May 1941, Chi found a sudden heavy increase in cable traffic between Tokyo and its consulate in Hawaii, including requests for information on the numbers and position of naval vessels in Pearl Harbour, when they went out for manoeuvres, which was the rest day - Sunday - and the weather situation. It was these cables, plus the one on December 2 calling for the burning of the codes and documents at the Washington embassy, that caused him to predict, correctly, the attack on Sunday, the seventh. In October 1942, he decoded an order to send a Japanese air squadron to leave a base in Burma and bomb Calcutta. This was passed to British air command in New Delhi, enabling it to intercept and destroy the squadron. That month, Chi also discovered a Japanese plan to shoot down a plane carrying Sun Ke , the son of Sun Yat-sen. He managed to reach Sun at Chongqing airport just as he was about to board. He turned back - but the plane continued on its journey and was shot down; all those on board were killed. In October 1943, Chi was transferred to another division of the army to provide training and was promoted to the rank of major. After the civil war between the Nationalists and Communists broke out, he did not want to take part and took his family to his hometown in Fujian. He later took a job in a bank in Shanghai. He decided against following the KMT government to Taiwan. If Chi Buzhou made a courageous and patriotic decision to return to China in 1937, he made the wrong judgment to remain in 1949. After the establishment of the new state, he worked in a savings branch of the People's Bank in Shanghai. In 1951, the government launched a campaign against "counter-revolutionaries" and Chi was arrested. With his background in one of the Nationalist government's most important intelligence units, he was an obvious target. In January 1952, a military court in Shanghai sentenced him to 12 years in prison and he started his sentence as an accountant in a factory inside a labour reform camp. In 1956, he was sent to "study" at camps run by the PLA in Shandong and only returned to Shanghai in 1963. In 1979, he was invited to work at the Shanghai Academy of Social Sciences, where he researched the economic history of Taiwan. Finally, in March 1983, two of his wartime colleagues testified that he was not a criminal, had not worked as a spy and had made an important contribution in the war against Japan. In April that year - more than 30 years after the original accusation - the Shanghai High People's Court said Chi was innocent and he became a CPPCC member for the city's Changning district. He later returned with his wife to Japan for his final years and taught at Kobe university. He died in February 2003, at 94. His ashes were brought back to China after his death. In his memoirs, he was modest about his contribution. "The young people of my generation took part in the war against Japan, at a moment when our people were facing a crucial period of life or death. Everyone made whatever contribution they could. "Breaking the Japanese codes was a significant contribution. It was not my work alone but the work of many people in different departments." He reflected on how militarism had wreaked so much destruction. "China and Japan had been good neighbours for more than 2,000 years and the culture of China brought over during the Tang dynasty became the basis of Japanese civilisation. This is something everyone knows. "After the war, the Japanese government learnt from its past mistakes and built a new country based on peace, democracy and law. It concentrated on construction and built an economic superpower. A new era of Sino-Japanese friendship has arrived, with a conviction deep in every generation that they can never make war again."

Chinese producers and traders of agricultural products complain that exports to Japan have suffered a sharp decline since a massive quake and tsunami disrupted the country's transportation systems and power supply supplies. Agricultural officials and other experts believe that this trouble will ease and Chinese farm produce exports to Japan could even increase as recovery efforts continue. "Our company's export of grilled eel to Japan stopped right after the earthquake," said Zhang Lisen, president of Xilong Food Company in east China's Jiangxi Province. The firm, which mainly produces grilled eel, relies heavily on the Japanese market. It ships an average 2,000 tonnes of frozen grilled eel to Japan every year. Zhang was pessimistic about the quake-rattled Japanese market and has a plan for the worst case scenario: "shut down the factory and send workers home." Eel is favored by Japanese who believe eating eel boosts stamina, especially in hot weather. However, eel farming in Japan can only satisfy 30 percent of its demand, forcing the country to import the rest, said Zou Shengyuan, secretary-general of Jiangxi's fishery association. Commerce statistics show that around 70 percent of China's total eel exports were delivered to Japan. "The quake could hurt China's export of expensive freshwater products,like grilled eel, to Japan as disasters bring down consumer confidence," said Guan Shaofei, director of the provincial fishery bureau.

Employees of Chinese restaurants distribute food to quake survivors at Budokan arena in Tokyo, March 26, 2011. Japan New Overseas Chinese Association and All Japan Chinese Restaurant Support Association organized four local Chinese restaurants to serve food to about 320 evacuees from quake-hit areas staying at the arena. 

Expert says crisis in Japan should not derail the industry's development - Japan's nuclear crisis should not derail China's plan to develop the nuclear power industry, said the head of research at China National Nuclear Corp (CNNC), the country's largest nuclear plant operator, on Friday. "China should not change its development plan in the nuclear power sector," said Pan Ziqiang, director of the Science and Technology Commission at CNNC. He added that nuclear power is a major and reliable source for China to meet its energy demands, and one which is environmentally friendly. "China has a sound record in nuclear safety," Pan said. "We have never had a nuclear incident beyond level two." According to the International Atomic Energy Agency's (IAEA) nuclear event scale of one to seven, level two means significant failures in safety provision but with no actual consequences. Japan raised the crisis level at the Fukushima Daiichi plant to five, similar to the level at Three Mile Island in the United States in 1979. Level five is defined as a limited release of radioactive material likely to require implementation of some planned countermeasures and to cause deaths from radiation leakage. "China will not change its policy in developing the nuclear power industry," Sun Qin, president of CNNC, said during a visit to Qinshan nuclear power plant in Haiyan county in Zhejiang province, China's first domestically developed nuclear facility, on Thursday. On March 19, China's National Nuclear Safety Administration ordered existing facilities to begin safety checks in the wake of the Japanese incident. The checks included location adaptability to external incidents such as floods, earthquakes or any extreme natural disasters as well as the reliability of the emergency power supply, which are all the possible factors that might cause an event similar to that in Japan. China's State Council decided to halt new approvals of nuclear projects on March 16. Despite this, the country is likely to start building a nuclear power plant next month in Shandong province, using fourth-generation technology, according to Huaneng Nuclear Power Development Co, the project's developer. China currently has six nuclear power plants in operation, located along the country's eastern and southern coasts. The country is also considering building several inland nuclear stations in provinces such as Hubei, Hunan, Jiangxi, and Jilin, in addition to Chongqing municipality. "It is necessary for China to build inland nuclear stations, but they should all be subject to stricter standards for measuring radiation," said Pan. Japan's crisis has also raised a debate over the safety of second-generation nuclear technology. China currently uses the same second-generation nuclear technology as that employed in Japan. The use of third-generation technology, such as Westinghouse's AP1000 reactor and Areva's EPR reactor, is gaining ground commercially. China is currently building 28 new reactors, six of which will use third-generation technology.

Nissan Motor's Chinese venture cuts production amid worsening parts shortage - Workers at a Dongfeng Nissan plant in central China's Hubei Province told reporters that Saturday's production level at the assembly workshop dropped to less than one-third of the normal level.

Hong Kong*:  March 28 2011

Jackie Chan and HK celebrities to raise funds for quake victims in Japan - Jackie Chan and his fellow Hong Kong celebrities are set to stage a three-hour charity concert on April 1st, to raise funds for victims of Japan's massive earthquake and tsunami. The veteran action star and dozens of singers and actors were in a Hong Kong studio on Thursday, to rehearse and record the theme song for the concert, "Succumb Not to Sorrow." The song, based on an inspirational Japanese poem, will be recorded in both Japanese and Chinese lyrics. Addressing the Japanese victims, Chan said, "You will not be alone. We will all be by your side." Others attending the recording session included singers Alan Tam, Hacken Lee, Shirley Kwan and Chinese-American rapper Jin. Hong Kong actor Eric Tsang Chi-wai said, "Today's press conference is to announce that we have decided to hold a candlelight vigil on April 1st for the victims in Japan, in order to express our voice and support from Hong Kong residents and artists. We wish they will be fine." Jackie Chan said, "This is a concept of the Global Village. It doesn't matter if it's a South Asia Disaster, an earthquake in Taiwan, we are in Asia, we need to do something for our neighbor countries and friends. Thus, we prepare to hold the "311 Love Beyond Borders" candlelight vigil in Victoria Park on April 1st."

Cash handout will take longer for some - Payments to be staggered to avoid clogging banking system with six million deposits - Some people will have to wait longer than others for their HK$6,000 handout from the government. It wants to pay the money into recipients' bank accounts but the payments are likely to be staggered to avoid putting too much strain on the banking system by processing six million deposits all at once. Officials say they realise there might be accusations of unfairness from people forced to wait and they will need to "strike the right balance". Secretary for Financial Services and the Treasury Professor Chan Ka-keung and Financial Secretary John Tsang Chun-wah explained the handout proposal to lawmakers at a special meeting of the Legislative Council finance committee on the budget yesterday. "Our preliminary view is that some staggering will be required when implementing the proposal," the government said in a paper prepared for the meeting. "This is to avoid bunching up over six million registrations within a short period of time ... In doing so, we must be careful in striking the right balance. If we spread out the registration and payment over a longer period of time ... some may consider it unfair if they have to wait longer for their cases to be handled." Chan said the government was discussing the arrangements with the banks. People could opt to register for or to give up the handout. Those who chose to keep the HK$6,000 as savings instead of taking the cash out immediately would receive a bonus. The proposal will cost HK$37 billion, which includes the handout, the bonus and administrative costs. The paper assumes that 80 per cent of the giveaways will be spent in the financial year beginning April 1. Lawmakers pressed the officials for further details of the handout arrangements, such as how to give the cash to people without bank accounts and those legally declared incapacitated. But Chan said it was "impossible" to work out all the details of the proposal before Legco's vote on the budget on April 13. Faced with widespread criticism of his budget, Tsang cited the handout to lobby lawmakers to support the spending blueprint. "If you successfully veto the budget, then [no one will] get the HK$6,000 and many citizens will be disappointed," he said. Despite the appeal, pan-democrats confirmed at their weekly meeting afterwards that they would oppose the budget. They will also table amendments seeking to dock a month's salary for four officials - Tsang, Central Policy Unit head Professor Lau Siu-kai, Secretary for Labour and Welfare Matthew Cheung Kin-chung and Secretary for Transport and Housing Eva Cheng. They see this is a way to express dissatisfaction with the budget, the poor mastering of public opinion, the lack of initiatives to help the poor and the refusal to resume building Home Ownership Scheme flats, said the Democratic Party's Wong Sing-chi.

Trading house Li & Fung aims to double its core operating profit to US$1.5 billion in three years despite having missed a similar goal last year. The 105-year-old company said yesterday that core operating profit leapt 42 per cent to US$725 million last year, falling short of the US$1 billion target it set three years ago. Turnover rose 19 per cent to US$15.91 billion, also lagging behind the target of US$20 billion. "It was disappointing not to have reached the target," executive director Bruce Rockowitz (pictured) said. "We worked very hard but the global financial crisis in 2008 almost wiped out our three-year plan." He said the 2011-2013 plan had not factored in the turmoil in the Middle East and the crisis in Japan, which had made the global economic outlook more uncertain. Managing director William Fung Kwok-lun said the goals set in the next three-year plan of the company were "achievable, but challenging". Li & Fung has set a target of a 62 per cent jump in the core operating profit of the trading arm to US$700 million in 2013 from last year; that of the logistics arm to leap to US$100 million from a US$5 million loss, and the core operating profit of the onshore sourcing and distribution services to more than double to US$700 million from US$298 million last year. The company, which sources lipsticks, shoes, apparel and white goods from emerging markets to ship to the United States and Europe, would meet its goal through a two-pronged strategy of acquisitions and organic growth, Fung said. "We will definitely have some deals this year." The size of the logistics division was boosted significantly after Li & Fung last year took over Integrated Distribution Services Group, a supply-chain services provider that operates 30 offices and 96 distribution centres, mostly on the mainland. As costs jumped on all fronts on the mainland, from wages to raw materials, Rockowitz said he expected they would source more products outside the country. "China will remain a key sourcing region, but the proportion may get smaller," he said. "Retailers are testing consumers how much price rises they can take." Li & Fung sourced 57 per cent of its products from the mainland last year - 3 percentage points less than the year before - while the proportion from Southeast Asia edged down 1 percentage point to 20 per cent. The group's attributable profit grew 27 per cent to HK$4.27 billion, or HK$1.11 per share. The final dividend was raised 6 per cent to 52 HK cents per share, taking the full-year total up 20 per cent to 90 HK cents per share. Shares of Li & Fung dropped 10 HK cents, or 0.23 per cent, to HK$42.95 yesterday before the results were made public.

Hong Kong's reputation as an international financial centre would be damaged if it allowed foreign states to be immune from prosecution over their commercial deals, the Court of Final Appeal heard yesterday. That would go against the Basic Law, which demands that Hong Kong remain a global banking hub, and would signal a return to "the legal dark ages", said David Pannick QC for US-based vulture fund FG Hemisphere Associates. Vulture funds buy up a poor nation's debt at knockdown prices and seek the full amount in court. FG is claiming more than US$100 million in debts from the Congo, which it says are being held in Hong Kong by China Railway Group (SEHK: 0390). "The confidence of financial investors in Hong Kong will be significantly damaged if states cannot be held responsible for their actions," Pannick said. Article 109 of the Basic Law says the government "shall provide an appropriate economic and legal environment for the maintenance of the status of Hong Kong as an international financial centre". Pannick is just one of the star barristers drafted into the Court of Final Appeal from overseas to address the court in a landmark case concerning immunity rights. The outcome of the case could hinge on whether Hong Kong has to follow Beijing's stance on foreign immunity or can adopt its own - a point that the Basic Law is not explicit on. The Democratic Republic of Congo, China Railway Group and the secretary for justice - who intervened in the case as it was deemed to be in the public interest - contend that Congo is immune from prosecution. They have argued that state immunity laws fall under Article 13 of the Basic Law, which states that the central government is responsible for Hong Kong's foreign affairs. Beijing has explicitly stated that "absolute immunity" - where commercial deals are immune from prosecution - applies on the mainland. But Pannick argued yesterday that Article 13 did not directly address the courts and the circumstances in which they should follow the position of the mainland authorities. He said Article 19 - stating that Hong Kong's courts did not have jurisdiction over acts of state - applied instead. Article 19 held a narrower definition of "acts of state" than "foreign affairs" in Article 13 - and did not include immunity, he said. Pannick also submitted that Hong Kong's stance before the handover was that commercial deals would not be immune from prosecution, and that the same position was as applicable now as it was then. Vaughan Lowe QC, for the secretary of justice, had earlier argued that Hong Kong's position pre-1997 only meant it had to follow the position of the `state'. Before the handover that was the UK; now it is China. Lowe, a professor of international law at Oxford University - and a "black belt" in the field, Mr Justice Kemal Bokhary told the court yesterday - said that following pre-1997 law could mean following international norms. But following norms would not lead to restrictive immunity as the respondents had argued. Local courts must follow the position of the central government where there is no international consensus on what the "norm" is, according to Lowe. "As a matter of international law, courts cannot speak for jurisdictions, courts speak for states," he said. Bokhary noted that the application of these issues was without precedent in a unique system like Hong Kong's. The case continues today.

Police remove figures and models that were used during an inquest into the killing of eight Hong Kong hostages on a bus in Manila last August. Philippine authorities welcomed the "consistent" findings of a Hong Kong inquest into last year's deadly Manila hostage saga, saying victims' families could seek redress though the Philippine justice system if they wished. A five-member jury on Wednesday found that Philippine police officers contributed to the deaths of eight hostages last August, ruling that they were unlawful killings. Statements from both the Philippine presidential office and Department of Foreign Affairs expressed regret over the tragedy and pledged punishment for those responsible. "The inquest jurors' verdict of `unlawful killing' at the hands of the gunman is consistent with the conclusions of the Philippine investigation," the foreign affairs department said, referring to the independent Incident Investigation and Review Committee investigation held in Manila last year. "Philippine law affords the families of the victims in the August 23 tragedy the opportunity to seek redress in Philippine courts." The jury said the police had, among a host of factors, taken too long to subdue gunman Rolando Mendoza, who held a busload of Hong Kong tourists hostage in an attempt to get his police job back after his sacking. "As we said before, we are taking steps to improve the systemic problems that ultimately led to the failure of the police to handle the situation," presidential communications secretary Ricky Carandang said. "That's what people of Hong Kong will want to ultimately see - whether the capability of our security forces to take care of people who come here has improved since last year." Family members of victims are considering their legal options, including the relatives of slain tour guide Masa Tse Ting-chunn. Tse's elder brother, Tse Chi-kin, said it was unclear whether they would seek legal action in Hong Kong or the Philippines. Lawyer Daniel Wong Kwok-tung, who represented injured hostages Chan Kwok-chu and Yik Siu-ling, said they would seek compensation from their insurance company and the Philippine government, but asked: "How much can you trust their judicial system?" However, he said the inquest was helpful for future litigation as it laid out the facts. News of the Hong Kong jury's verdict received scant attention in the Philippine media yesterday. "We are so inured to having tragic things happening [involving Filipinos] almost on a daily basis," said Teresita Ang See, the founding president of the ethnic Chinese NGO Kaisa. What has grabbed headlines is the imminent execution of three Filipinos convicted of drug trafficking on the mainland. Despite frayed relations between Hong Kong and the Philippines, Beijing's envoy to Manila Liu Jianchao said he hoped that relations would soon return to normal. "We would like to see more Hong Kong tourists coming to the Philippines." The Hong Kong government said a seven-month black travel alert for the Philippines would remain.

Maersk Line, the world's biggest container-shipping company, will slash the number of ship calls in Hong Kong by about a third starting from next month when it transfers the business to an affiliated container terminal at Nansha. The Nansha facility, Guangzhou South China Oceangate Container Terminal, is partly owned by APM Terminals, which, like the container line, is controlled by Danish shipping giant AP Moeller-Maersk. The shift of the ship calls will be one of the biggest changes at Kwai Chung Container Port for years and affect both Modern Terminals, the Wharf (Holdings) (SEHK: 0004) port company, and tug operators. About 850 container ships owned or operated by Maersk Line call at Hong Kong each year, according to Tim Smith, the firm's chief executive for North Asia. Reducing the number of calls by a third would cut the number of Maersk ships calling at Hong Kong from around 71 a month to 47. All these vessels are handled by Modern Terminals, whose berths at Container Terminal 9 are almost a dedicated Maersk Line facility. The shift of the port calls was confirmed by Soren Karas, head of South China for Maersk Line. He said Maersk intended "to create a third major gateway" at Nansha, to augment Maersk's South China gateways at Yantian and Hong Kong. This meant Nansha would replace Hong Kong on several route rotations. Three Maersk Line services to Africa already call at Nansha. "The plans are to, in the coming months, add three Asia-Europe services - two export and one import, one transpacific and one Far East-Middle East service. The vessels involved thus span a broad range from the somewhat smaller Africa vessels to some of our largest East-West vessels," Karas said. Maersk Line is finalising its plans for the services calling at Nansha. "The first new calls will start in April and most will be in place by the end of May," Karas said. Pointing to the reasons for the shift, he added: "The move is first and foremost because we believe that the South China load area is large enough to have three gateways and that we can develop a superior product for our clients with this set-up." He also said the potential cargo growth volumes in the western part of Guangzhou and the western side of the Pearl River Delta were higher than in South China generally. "In short, Nansha offers Maersk Line, and by extension our customers, service reliability, a good location, high productivity, competitive cost levels and significant capacity to grow." Explaining the cost implications, Karas added: "Nansha is able to offer competitive terminal handling costs compared to other terminals in the area, on top of high service levels. On the other hand, adding Nansha to the global network comes at a cost of steaming time and port costs for mother vessels - so one needs a certain scale in the port for it to be sensible. "The Nansha gateway will attract volumes that in some cases move via Shenzhen ports and in others via Hong Kong. The latter is notably the case for some of the volumes that today are barged from western Pearl River Delta ports. This is the reason why as the new deployment falls in place, there will be fewer main-haul calls in Hong Kong. "However, it is very important to stress that Hong Kong remains one of our three strongholds here. The services that cater to our local Hong Kong business will generally remain, as will several strings still cater to transhipment volumes from the western Pearl River Delta and internationally in Hong Kong." Karas said the potential cost savings for exporters and importers depended on their current mode of transportation and location of production. He said the cost of trucking a 40-foot container to Shekou, Chiwan or Yantian in Shenzhen from a customer in Zhongshan would be US$160 per container higher than if they trucked it to Nansha for loading. "For a location like Zhuhai, this number jumps to US$200. The eastern side of Guangdong will of course not see such benefits, hence the reason why we still want a gateway there - Yantian." Modern Terminals sidestepped a detailed list of questions about the implications for its business from the reduction in port calls by Maersk. Instead, Modern Terminals spokeswoman Joel Cheung said: "This highlights the increased strategic significance of the western Pearl River Delta, which underscores the importance of Modern Terminals' development at Da Chan Bay near Shenzhen to support western Pearl River Delta growth. We look forward to continuing this partnership."

Nancy Kissel sits in a prison van as she arrives at the High Court in Admiralty on Thursday. A jury on Friday convicted American expatriate housewife Nancy Kissel of murder over the 2003 killing of her banker husband, in a retrial of a lurid case dubbed the “Milkshake Murder”. The Michigan-born mother-of-three won a new hearing last year into the killing of Robert Kissel, a senior executive at Merrill Lynch, after her 2005 murder conviction was quashed due to legal errors at the first trial. “It is the decision of the court that [Kissel] be sentenced to imprisonment for life,” Mr Justice Andrew Macrae said, after a nine-member jury unanimously found her guilty of murder for a second time. Kissel kept her head down and rocked back and forth as the judge handed down the sentence to a packed courtroom, while her mother, Jean McGlothlin, immediately burst into tears. The jury of seven women and two men, which started deliberations on Thursday, was tasked with deciding whether Kissel should be convicted of murder for the second time or the lesser charge of manslaughter. Kissel was convicted of drugging her husband with a sedative-laced strawberry milkshake before beating him to death with a lead ornament. But she maintained she acted in self-defence against an abusive, drug-addicted spouse. She was handed a life sentence in 2005, the mandatory sentence for murder, after her claims were rejected but the Court of Final Appeal overturned the conviction last February, citing legal errors, and ordered a fresh hearing. Outside court, McGlothlin said the family was disappointed. “I was absolutely stunned at the verdict,” she said trembling. “I don’t know how [the jury] could turn a household fight that ended up with one of them dead into murder.” She told reporters the family would not consider appealing for the time being. “Our first priority is to make sure that she has the medical, physical and psychological help from professionals − she won’t survive if she doesn’t. “Regardless of the huge disappointment in the verdict, there is relief for her that this intense pressure in having to relive the event is behind her for the time being,” she said. The family of Robert Kissel could not be reached for immediate comment on the verdict. “Obviously this is a very tragic time for the family,” counsel Andrew Powner, who represents the banker’s family, said, adding that he was waiting for instruction from the family. The prosecutors accused the 46-year-old Nancy Kissel of rolling up her husband’s body in a carpet and covering his head with plastic, leaving it in the bedroom for days before hiring workmen to carry it to a storeroom. They told jurors that Robert Kissel had a cocktail of drugs in his system and was lying face down during the attack at the couple’s luxury apartment. At the first hearing, prosecutors argued that Kissel stood to gain up to US$18 million (HK$140 million) from the death of her wealthy husband, saying she planned to run away with a TV repairman with whom she admitted having an affair in the US. Robert Kissel’s family suffered a further tragedy in 2006, when his brother Andrew was found murdered in his house in Connecticut, bound and with multiple stab wounds. He was reportedly about to plead guilty to bank fraud charges.

The operator of the Daya Bay nuclear power plant has gone on a public relations blitz to reassure Hongkongers a nuclear accident similar to Japan's present crisis is virtually impossible. The plant was built to stringent designs and standards, which enabled it to withstand a powerful earthquake, the operator said yesterday. Moreover, its location meant tidal waves were highly unlikely. Chen Tai, a nuclear safety specialist at the plant, said tsunami were unlikely to develop in shallow coastal waters. The biggest recorded in Guangdong waters was less than 50 centimetres. "The only serious casualty I can recall is that one person suffered from a broken finger," he said. Seismic history in the region indicated Daya Bay was not in an active seismic zone, with the area's strongest quake, measuring 6.0 on the Richter scale, occurring 60 kilometres away in 1911. Chen said the plant design could withstand a quake of magnitude 8.0. Chen said the plant had experienced no major casualties since it began operating in 1994. But asked to comment on the ultimate disposal of spent fuel, the operator declined to provide more information because it was a "sensitive" issue. "Having not said much about that does not mean that it is not properly dealt with," Chen said. The assurances were made during a visit organised for journalists through the central government's liaison office in Hong Kong, which said the visit had been planned before the crisis at Japan's Fukushima nuclear plant. Run by Daya Bay Nuclear Power Operations and Management Company, the plant is preparing to implement safety checks ordered by Premier Wen Jiabao after the Japanese crisis unfolded. Two safety drills will be conducted in June and November.

New Territories political rising star Junius Ho Kwan-yiu will take up leadership of Tuen Mun Rural Committee next month after Heung Yee Kuk chief Lau Wong-fat was barred from seeking re-election for the post he has held for 41 years. It is the latest challenge to the long-time kuk supremo, who in January was re-elected head of his home village amid unprecedented competition after a five-decade tenure. Last month, the rural committee passed a motion to amend its constitution so that a chairman could serve no more than two four-year terms, effectively preventing Lau from staying in the post. The change also means that Lau will automatically lose his seat on Tuen Mun District Council, of which he is chairman and an ex-officio member. Ho, 48 (pictured), a vice-president of the Law Society who for the first time secured a village representative seat in the January poll without a contest, was elected unopposed as rural committee chairman yesterday. "My first jobs after assuming the post of Tuen Mun Rural Committee chairman will be to handle the conflict between development projects and rural conservation, and to work on issues relating to indigenous residents' rights, including the rights to build small houses," he said. A candidate in the 2008 Legislative Council legal-sector race, the solicitor's recent emergence in the New Territories rural community has renewed speculation about his higher ambitions in the city's wider political scene. He has ruled out seeking the functional constituency seat again, but has not discounted the possibility of running in a direct election. Asked about any plan to contest the 2012 Legco race, the lawyer replied: "If I tell you I haven't thought about it, that's not frank ... But I have to show some performance in my present jobs first." To Sheck-yuen, an ally of Lau, and Tsang Chin-hung, an ally of Ho, were both re-elected uncontested as vice-chairmen of the rural committee. A kuk insider, who declined to be named, said opposition forces had successfully barred Lau from seeking re-election as the rural committee chief because his ties with people in the district had weakened in recent years. Lau had initially wanted To to succeed the post, the person said, but his camp later gave up as it considered To would not have enough votes to beat Ho. Lau was embroiled in a scandal in September over reports that he failed to declare a number of property transactions to the Executive Council, of which he is a member. The person said Lau was still influential. "There are still many members working for him on the council. He will mastermind the by-election of its chairman behind the scenes." Lau could not be reached for immediate comment.

 China*:  March 28 2011

Officials say the solution to crowded airspace involves opening it up, more planning and integrating air traffic control systems among the Pearl River Delta's five airports. The highly congested airspace of the Pearl River Delta will not only stifle industry growth, but may also compromise flight safety as air traffic in the region surges an estimated 70 per cent over the next decade. Mainland civil aviation officials said yesterday that solutions to the problem do not lie only with the opening up of mainland airspace, but also a thorough planning of segmented airspaces over the delta and integration of air traffic control systems among the area's five airports. The Pearl River Delta topped the list as the mainland's busiest and most complicated airspace - even more so than the northern aviation cluster in Beijing and Shanghai. That's because five airports are scattered within a 150-kilometre radius - Guangzhou, Hong Kong, Zhuhai, Shenzhen and Macau. According to the Civil Aviation Administration of China, hourly aircraft movements from Guangzhou's Baiyun International Airport and Shenzhen Baoan Airport already exceeded the maximum handling capacity of the region's airspace by seven and 10 flights respectively during peak-time traffic last year. "The capacity of the airports is suppressed, the flight punctuality rate constantly fell below average and officers are under immense pressure to maintain flight safety," Jiang Huaiyu, director of CAAC's Central and Southern Regional Administration told leaders and officials from the five cities at a conference yesterday. "These problems create a bottleneck in the future development." China Eastern Airlines (SEHK: 0670), the mainland's second-largest carrier, said more than 60 million air passengers had delays last year - amounting to about a quarter of all mainland civil aviation flights and causing more than one billion yuan (HK$1.19 billion) of direct economic losses. Only about 10 per cent of airspace is open for civil aviation flights on the mainland. The rest is restricted for military use. A number of measures have been taken to open up the skies - including a recent plan to release airspace under 5,000 metres for private aircraft - but progress has been slow and is unlikely to catch up with the industry's development plan for the next five years. Aircraft movements in the Pearl River Delta alone are expected to surge from 1.01 million last year to 1.8 million in 2020. The chairmen of the five airports yesterday signed a memorandum at a regional conference, pledging closer co-operation. They also discussed with authorities topics including a revamp of airspace boundaries and integration of air traffic control. "Consolidation of the measurement systems is of utmost priority," said Su Langen, CAAC's director general of Air Traffic Management Industry. "The workload of air traffic controllers is increased when they have to convert important flight data - including flight speed, height and distance - while processing a large number of aircraft movements within a limited airspace." University of Hong Kong aviation analyst James Wang said the main obstacle would be in deciding which airports should switch systems. Guangzhou and its nearby airports agreed in 2009 to form a cluster for domestic and overseas routes focusing on East Asia. Hong Kong agreed to lead Shenzhen, Zhuhai and Macau in a cluster for long-haul international flights.

China's top quality watchdog said Friday that alarmingly high levels of radiation had been detected on two Japanese Wednesday upon their arrival in east China's Wuxi city from Tokyo. The announcement was made shortly after the regulator said earlier Friday that the local quality control bureau had found "abnormal" levels of radiation on a Japanese merchant vessel that berthed in east China's Xiamen port, Fujian province, on Monday. The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) said the radiation was discovered on the two Japanese nationals when the local quality control bureau conducted radiation checks on passengers aboard flight ZH9056 that reached Wuxi, East China's Jiangsu province, from Tokyo on Wednesday. The AQSIQ said radiation on the two travelers was alarmingly high, and the case reported to the local environmental and health departments. The AQSIQ said one of the two Japanese nationals came from Nagano Prefecture, about 350 km from the Fukushima Prefecture, and the other from Saitama Prefecture, about 200 km from Fukushima, where the radiation leaking Dai-Ichi nuclear power plant is located. On Wednesday night, the two Japanese were sent to the Second Affiliated Hospital of Soochow University in Suzhou city for medical treatment. Their luggage and clothes were also detoxified, the AQSIQ said. An AQSIQ official, who spoke anonymously, said the two Japanese tourists had not caused harm to others. Earlier Friday, the AQSIQ announced abnormal radiation was found on a Japanese merchant vessel that berthed in Xiamen port, East China's Fujian province, on Monday. The vessel belongs to Mitsui O.S.K. Lines, a Japanese company with bulk transport services around the world. The vessel is still docked at the port, and the local quality control authority is working with other government departments to "take more measures" on the matter, said an AQSIQ spokesperson without elaborating. The spokesperson didn't say if high levels of radiation had been found on the ship itself or the goods onboard, but said more details would be provided by the local government. The vessel had set off from the US and reached Tokyo of Japan on March 17. On the same day, it left Tokyo and reached Xiamen port Monday night. The AQSIQ on Monday asked the local quality control authority to monitor food imported from Japan for radiation following the nuclear disaster at its Fukushima Dai-Ichi power plant. The AQSIQ has also ordered local quality watchdogs to test food from Japan for radiation to ensure the safety of China's food imports. China's National Nuclear Emergency Coordination Committee announced Thursday that China would remain unaffected by radiation emitted from the quake-hit nuclear power plant over the next three days. It said in a statement that currently, the radiation leaks from the plant would not have any impact on China's environment or the Chinese people's health.

Hainan, "Hawaii of China" to let travelers avoid duties including mainland China Visitors up to US$762 from April 20th - Customers select perfume in a duty-free store in Sanya, Hainan province, on Wednesday. Starting April 20, customers who buy any of 18 categories of products on the island, such as jewelry, watches and handicrafts worth less than 5,000 yuan ($762) can benefit from the duty-free policy. Starting April 20, mainland travelers will be able to buy duty-free goods in Hainan as long as they leave the island by air and return to the mainland, the Ministry of Finance announced on Thursday. The policy will prevent mainland visitors from paying various types of taxes on up to 5,000 yuan ($762) worth of imported goods bought at selected duty-free stores on the tropical island province in South China. With the change in place, the prices of certain goods in Hainan are expected to fall by 15 percent to 35 percent for Chinese travelers. Permission to buy goods duty-free in Hainan had been extended to foreign and non-mainland travelers before, but never to mainland visitors. The goal of the policy is to make Hainan into a tropical tourist destination by 2020. The tourism industry is then expected to contribute 12 percent of the island's gross domestic product. To that end, the policy has been designed to be generous. But there are restrictions. Only travelers who are 18 or older will avoid paying import duties. And mainland visitors to Hainan can only buy goods duty-free at the shop twice a year, while island residents can only once a year. The new policy allows 18 types of goods to be bought duty-free. They include jewelries, artworks, wristwatches, perfumes, cosmetics, pens, glasses, scarves, neckties, wool fabrics, cotton goods, clothing, belts, bags, small leather goods, candies and sporting goods. The new policy comes after China adopted a tax-refund program on Jan 1. That program made foreign tourists, as well as citizens from Hong Kong, Macao and Taiwan who have lived in the Chinese mainland for no more than 183 consecutive days, able to obtain a rebate of 11 percent of the taxes paid on certain purchases, Xinhua News Agency reported. Hainan's tourism officials have conceded that the policy has not produced the expected results. Undeterred, officials have pinned high hopes on the new policy, especially since it is aimed at attracting mainland tourists, who make up a majority of those who travel to Hainan. According to figures provided by the Sanya Tourism Industry Development Bureau, 96 percent of the tourists who visit Sanya, the most popular destination on the island, hail from the mainland. The new policy is expected to attract more tourists to the island and boost consumption, said Lu Yong, deputy director of the Hainan Provincial Department of Finance. Lu acknowledged that critics have questioned the reason for the 5,000-yuan limit set on duty-free purchases and the limit on the number of times tourists can take advantage of the policy. In answer, Lu said officials have carefully studied Chinese travelers and designed a program tailored to their shopping habits. And compared with the duty-free policies in effect in the Republic of Korea's Jeju island and Japan's Okinawa, Hainan's policy has advantages. He said Okinawa allows travelers to buy no more than 16,000 yuan worth of goods duty-free, more than three times Hainan's limit. "But we have better a deduction rate (than Okinawa), which ranges from 15 to 35 percent," he said. "Okinawa only saves you around 5 percent." Jeju island only allows travelers to buy up to 2,300 yuan worth of goods duty-free each time, far less than Hainan, he said. Tourists as well as duty-free shops in Hainan are happy about the news. A 7,000-square-meter duty-free store in downtown Sanya, which belongs to the only Stated-owned duty-free group in China - the China Duty Free Group Co Ltd - has been eagerly awaiting such a policy. "We receive many inquiries every day from domestic shoppers," said a staff member surnamed Ke, who works at the store's luxury watch booth. "We've been waiting for this moment to come as eagerly as they have." The China Duty Free Group also invested in a 250,000-sq-m shopping area in Haitang Bay, about 30 kilometers east of Sanya. "Another duty-free shopping venue will be built soon in Haikou as well," said Chang Zhen, of the group's Beijing office. Zhou Jun, a spokeswoman for the Korea Tourism Organization's Shanghai office, said important differences exist between the duty-free shops found in various places. Those in Hainan, for instance, are State-owned enterprises, while those in the Jeju island are managed by private companies and operate in a fairly free market. "The fact that the market is flexible benefits travelers coming here," Zhou said.

China aims to make major technological breakthroughs in developing shale gas to optimize the nation's energy structure, the nation's top energy official said on Thursday. The National Energy Administration (NEA) is studying a policy of setting up pilot exploration areas and striving to industrialize shale gas as early as possible, NEA's director Liu Tienan said in talks with Peter Voser, Chief Executive Officer of the Royal Dutch Shell Group in Beijing. Shale gas is an important unconventional source of natural gas. China has exploitable reserves of 26 trillion cubic meters, as much as that found in the United States. The massive stockpiles, however, are largely undeveloped. Due to shale being difficult to permeate, the exploration process is highly technology-dependent. According to a national energy strategy studied by NEA and the National Development and Reform Commission, China will select 50 to 80 potential shale gas areas and 20 to 30 exploration areas by 2020. The exploration capacity would hit 1 trillion cubic meters.

Overseas vistors at a real estate exhibition in Beijing. According to foreign real estate funds, there will be good buying opportunities in the coming six to 12 months. The coming six to 12 months will present good investment opportunities in China's property sector as liquidity in the market is expected to largely tighten during that period, according to leading foreign real estate funds. "We believe it will be the right buying time in China's residential sector in the following six to 12 months," said Nicholas Loup, chief executive of Grosvenor Asia Pacific. The UK-based Grosvenor, which manages $16 billion in assets, aims to raise at least $270 million for a fund that will invest in Chinese properties as part of its expansion in Asia. Raymond Lee, CEO of Savills Greater China, held a similar viewpoint. "A good opportunity will emerge for long-term investors in the coming six to 12 months, and what foreign real estate funds are doing now is finding a legal fund vehicle that can get their money into the country," said Lee, adding that a large amount of foreign capital is expected to flow into China this year. The Ministry of Commerce said on Tuesday that China's utilized foreign investment climbed 27 percent year-on-year to $17.8 billion in the first two months of this year, of which $4.15 billion was used in the real estate sector, up 50.5 percent year-on-year. To curb the trend, the ministry ordered local authorities to halt the approval of some foreign property investments to stop speculative purchases, it said in a Nov 22 statement. Local authorities are also required to strengthen their reviews of foreign exchange inflows for real estate transactions and documentation for land rights. Currently, there are two major channels for foreign capital to flow into the Chinese mainland's property market: taking part in the development stage with local partners and cooperating with Hong Kong-listed real estate companies. "Given the continuous tightening of bank lending and falling property sales, the cash flow for the small and medium-sized real estate firms will be further squeezed in the second half of this year, thus providing more equity investment opportunities for foreign institutional investors," said Chris Brooke, president of CB Richard Ellis China. "The pricing for residential projects will be more competitive, but those investors also keep a close eye on the commercial and logistics sectors, betting on China's domestic consumption in the long run," Brooke added. According to Richard van den Berg, managing director of ING Real Estate Investment Management Asia Ltd, the government's tightening of real estate policies mainly targets medium and high-end residential properties that saw excess short-term price growth. "If foreign investors can avoid these sectors, their investment will not be affected," said Van den Berg. ING is going to raise a second China real estate fund on a scale of about $500 million, he told China Daily. "But compared with our first China real estate fund, we may increase our investment into the commercial sector," Van den Berg said. Though some foreign investors are concerned about China's potential policy risks, Loup said the country offers a clear long-term picture through the 12th Five-Year Plan (2011-2015).

Yao Ming meets fans in Houston to appreciate their support - Houston Rockets' player Yao Ming are seen with his coach and teammates during an event to appreciate the fans' support, in Houston, March 24, 2011.

A woman walks in peach blossoms in Linzhi, southwest China's Tibet Autonomous Region, March 25, 2011. The 9th Linzhi Peach Cultural and Tourism Festival raised its curtain here on Friday, marking the beginning of a tourism season all the way until November.

Wang Hao wins Volkswagen Cup in Guangzhou - Wang Hao of China wins men's single in 2011 Volkswagen Cup of table tennis in Guangzhou, China, March 24, 2011. Wang beated Timo Boll of Germany 4-2 in the final.

Canada's IMAX Corporation announced plans yesterday to open 75 more mainland cinemas within four years in partnership with Wanda Cinemas, underscoring the Chinese movie industry's rapid expansion. IMAX, known for its large-format film technology, has 45 cinemas on the mainland and expects to have 300 by 2016, which could involve partnerships with operators other than Wanda, the country's largest cinema operator. There was no disclosure of the monetary value of the expansion plans and profit-sharing deal signed in Beijing. IMAX chief executive Richard Gelfond said China was the company's fastest growing market and the deal meant Wanda would be the single largest operator of its cinemas outside the United States. "Last year, we experienced record growth at IMAX ... Nowhere was our growth more evident than in China," said Gelfond, who added that the company's mainland box office revenues last year were 286 million yuan (HK$340 million), a tenfold jump from 2009. Part of that total stemmed from the conversion of Aftershock, a Chinese movie about the 1976 Tangshan quake, into IMAX format. That epic film became the mainland's highest-grossing movie. Gelfond said the company also planned to convert two upcoming movies, the patriotic Founding of a Party and Hong Kong director John Woo's Flying Tigers. The mainland's fledgling movie industry remains relatively small compared with more developed markets like the US. However, expansion plans are rapidly under way. The Film Bureau said in a recent report that the mainland added 313 cinemas and 1,533 new screens last year, for a total of just over 6,200 screens. The central government has said it expects 20,000 screens in operation by 2015. The emerging middle class is showing a new-found enthusiasm for cinema. Last year's blockbuster 3-D epic Avatar, which also played on IMAX screens on the mainland, drew enormous crowds willing to wait up to six hours in line for relatively pricey tickets. Hollywood's ability to make inroads in the Chinese market comes despite a quota system. The central government shares revenue for only 20 foreign movie imports a year - a formula that effectively limits the country to that number of foreign movies annually. Gelfond said the limitations on foreign movies were unlikely to pose a problem, since the movies usually screened by IMAX were Hollywood blockbusters that typically had no problem being allowed in. In addition, the company intended to convert more Chinese films into IMAX format, he said.

Hong Kong*:  March 27 2011

Hong Kong is not in danger of being attacked by terrorists, but the police are taking no chances. The force is setting up a 60-strong team to protect "critical infrastructure" from attacks. It will also exchange sensitive information with possible targets such as banks, power plants and the MTR Corp, a police spokesman said. Police Commissioner Andy Tsang Wai-hung (pictured), who is in Beijing for an annual meeting with the deputy minister of Public Security, Chen Zhimin, said Hong Kong needed to "prepare for danger at a peaceful time" even though there was no information indicating the city was facing "substantial terrorist threat". He said the risk Hong Kong faced was "moderate". Tsang and Chen discussed co-operation on counter-terrorism, among other issues, the police said. Anti-terrorism is among the commissioner's operational priorities this year. Last month's budget saw the creation of 104 posts for anti-terrorism work. But the Hong Kong government insists the city does not face any higher risk of terrorism. Tsang - who took up the post as head of the 30,000-strong force in January - faces many other pressing issues, such as how to raise the morale of crime investigators who are complaining of being understaffed and overstretched. This raises the question as to why at such a time the police commissioner has made anti-terrorism an operational priority and allocated more resources to it - even though the city seems to be under no greater threat from a terrorist attack. Police said they noticed overseas law enforcement agencies had set up similar co-ordination centres. A senior officer familiar with the set-up of the co-ordination centre said terrorists had targeted public transport networks, such as the London Underground and power plants in other countries. The police force is responsible for co-ordinating anti-terrorism efforts with government departments, public facilities, banks, consulates and public transport networks, and helping them to set up contingency plans in the event of an attack. The force has also added 40 new posts to the Counter Terrorism Response Unit, raising its manpower to 141. The unit will conduct more patrols on critical infrastructure and facilities in the city. The new team - called the Critical Infrastructure Security Co-ordination Centre - could help in "expanding the protection for critical infrastructure and facilities, strengthening police counter-terrorism capabilities and implementing effectively counter-terrorism strategies", a spokesman said in a written reply. The force will also buy some vehicles for patrol duties in sensitive areas and for effective deployment in the event of a terrorist attack. Hong Kong was found to be on the list of potential terrorist targets during the Olympic Games in Beijing in 2008, according to WikiLeaks in December, which revealed a cable sent from the US Embassy in Beijing. A large-scale exercise to enhance contingency plans for a terrorist attack might be conducted with agencies in the region this year. In August Shenzhen is staging the Universiade, an international multi-sports event. Tsang said that, if necessary, Hong Kong officers would provide all co-operation necessary. Mainland and Hong Kong police also agreed to establish direct contact to fight internet telephone scams. Tsang said officers would co-operate to overcome technical difficulties such as the problem of identify fraudsters who switch between internet networks in the region. They also agreed to step up co-operation on tackling drug trafficking and money laundering. After the meeting, Tsang and other members of the force management met the minister for public security, Meng Jianzhu. They will meet officials of the Hong Kong and Macau Affairs Office today before returning to Hong Kong tomorrow.

The fraud trial of businesswoman Lily Chiang Lai-lei was yesterday told of a shady man in a baseball cap who passed over to one of her co-accused what appeared to be police files on her personal assistant. The defence counsel believes the information in the files raises questions about the credibility of a witness and could give rise to grounds for a mistrial or an application for a permanent stay of the proceedings. Ex-General Chamber of Commerce chairman Chiang, 49, Shah Tahir Hussain, 45, and former chief executive of Eco-Tek Holdings Pau Kwok-ping, 54, are facing fraud charges brought by the Independent Commission Against Corruption. Yesterday, with the defence due to begin laying out its case following Tuesday's ruling by Judge Albert Wong Sung-hau that the defendants had a case to answer, counsel for Hussain, Kevin Egan SC, told the court that on Wednesday his client had been handed documents by the mysterious man in a baseball cap. The documents appeared to be police case reports, two of which bear the name Yip Yuk-chun - a name identical to that of Chiang's personal assistant of 15 years. Yip has already testified under immunity. One of the documents states that Yip was arrested on July 20, 2008 in possession of 17.29 grams of suspected cocaine. Another document, which mysteriously appeared on Hussain's office desk in Quarry Bay on Wednesday morning, states that Yip was robbed on September 7, 2009. Yip's bag, which was later found, contained a bag, suspected to contain dangerous drugs. Under earlier cross-examination, Yip told the court that she had never been arrested for drug offences and had never been found in possession of drugs, the court heard. Egan - who believed the documents to be genuine - said that he had received information that shortly after Yip's arrest in July 2008 an ICAC officer had arrived at Sheung Shui police headquarters demanding to see the officers involved in Yip's case. The ICAC officer allegedly made it clear that Yip was an important person to the ICAC. "The question that arises is that some two years and eight months later the [drugs] case remains open," Egan said. Chiang's counsel, Adrian Bell SC, said: "If the ICAC had proceeded to Sheung Shui police station, called for help ... to get the case [against Yip] dropped, we're entitled to know this." Egan said answers to outstanding questions may give rise to a mistrial or an application for a permanent stay of the proceedings. The third report concerns a man called Wong Wai-ming, whose name is identical to another prosecution witness, of whose history of arrests the defence was already aware. Prosecutor Simon Westbrook SC said that these allegations were not new. In January, correspondence between the Department of Justice and the defendants' solicitors showed that the defence had made specific inquiries whether Yip had been the subject of a criminal investigation. The department replied that: "The ICAC has confirmed with the police that Yip Yuk-chun has never been arrested for criminal investigation," the court heard. Westbrook said he would ask police about the matter and inform the court today. Chiang was first arrested by the ICAC in October 2007 and charged in January 2008. The trial came after the Court of Final Appeal refused to give her leave to appeal against a lower court's ruling to deny her a jury trial. Chiang denies five charges of fraud and making false statements. She allegedly pocketed more than HK$3.7 million by instructing others to hold share options or shares of two listed companies on her behalf, contrary to listing rules.

(From left) BOCHK deputy chief executive David Wong See-hong, vice-chairman and chief executive He Guangbei, chief financial officer Zhuo Chengwen and acting deputy chief executive Jason Yeung Chi-wai reporting results yesterday. The bank's loans increased just 19 per cent last year. In an effort to lift margins and limit risk, BOC Hong Kong (Holdings) (SEHK: 2388) said it would add an optional yuan custodian function to help Hong Kong banks deposit their money with the People’s Bank of China, while still keeping its yuan clearing function. As the city's only yuan clearing bank, Hong Kong banks with surplus yuan have the option of depositing it with BOCHK and receiving an interest rate of 0.865 per cent. BOCHK has the option of putting the money in the PBOC's Shenzhen branch to earn an interest spread of 0.125 per cent, or reinvesting it elsewhere. He Guangbei, vice-chairman and chief executive of BOCHK, said acting as the clearing bank had helped the bank increase its assets, but it also faced challenges due to limited yuan investment channels and higher risks when acting as the depositor for other banks. "As our yuan deposit went up, it actually pressured our net interest margin," He said. Banks' net interest margin is a key measure of their lending profitability. If BOCHK adds the custodian function for yuan deposits, it will no longer earn the interest spread of 0.125 per cent, but will charge a service fee instead, which will be reflected on the bank's non-interest income-based business. The bank did not specify when it planned to add a custodial function. "The change would help reflect our business more accurately," said He, adding that if the bank had not performed yuan clearing functions last year, its net interest margin would have been 10 basis points higher at 1.59 per cent. The bank did not specify when it planned to change to a custodial function. BOCHK's annual profit attributable to shareholders rose 16.3 per cent to more than HK$16.19 billion in the year to December. The bank has proposed a final dividend of 57.2 HK cents per share. The bank's return on equity - which measures a bank's profitability against shareholders' capital - dropped six basis points to 14.77 per cent. Its cost-income ratio was down 11.76 percentage points to 34.84 per cent. He said the bank's loan-deposit ratio stood at a relatively low level because the bank took a conservative approach to lending. Its loan-deposit rate stood at 59.69 per cent, down 129 basis points from a year earlier. BOCHK's loans increased only 19 per cent last year, when the overall loan increase in Hong Kong reached 29 per cent. Its parent, Bank of China, the third-largest bank on the mainland, said profit after tax increased 28.52 per cent to 109.69 billion yuan (HK$126.64 billion) last year. Its net interest margin rose 0.03 percentage point to 2.07 per cent year on year.

Hong Kong's sole railway operator Mass Transit Railways (MTR) announced Thursday the plan to raise average train fares by around 2.3 percent in June. The company said in a release that the 2.3-percent rise was decided under the Fare Adjustment Mechanism adopted in 2007. FAM is linked to the year-on-year percentage changes in the composite Consumer Price Index (CCPI) and Nominal Wage Index ( Transportation) for December of the preceding year as published by HK's Census and Statistics Department. As the year-on-year percentage changes for December 2010 are 3. 1 percent for CCPI and 1.5 percent for Nominal Wage Index ( Transportation) and each factor accounts for 50 percent of the overall fare adjustment rate, the rate of 2.3 percent is derived for 2011. Jeny Yeung, general manager for MTR's marketing and station commercial, said the MTR's fare concession schemes in 2010 amounted to more than 1.6 billion HK dollars, benefiting some 1.2 million passenger trips each day. She also noted that the company spended over 4 billion HK dollars each year to maintain and upgrade its railway assets. The MTR, which ranks among the world's busiest railway systems, transports over 1 billion passengers each year. It raised the average train fares by 2.05 percent in June 2010, the first of its price hike since 1997. The company said it would make a formal announcement on the adjustment to MTR fares and actual changes to individual fares after completing the required administrative procedures.

Hong Kong's total exports of goods rose 24.9 percent year on year in February to 227.8 billion HK dollars (29.2 billion U.S. dollars), and the re-exports of goods grew 25.2 percent from a year ago to 223.2 billion HK dollars, local authorities announced on Thursday. The Census & Statistics Department of Hong Kong said the volume of imports increased 25.2 percent in February from one year earlier to 253.0 billion HK dollars, bringing the trade deficit to 25.1 billion HK dollars. The total export to the Chinese mainland advanced 37.7 percent. Goods sold to Vietnam, India and Thailand jumped 57.6 percent, 43.6 percent and 40.7 percent respectively. Total shipments to Germany climbed 10.4 percent, while exports to the United States decreased 4.4 percent, following the 14.8 percent drop in the United Kingdom. The government spokesman said in the statement that Hong Kong's exports should continue to benefit from the vibrant economic conditions in Asia and further recovery in the United States and the Euro zone. However, considerable uncertainties remain in the external environment, including geopolitical tensions in the Middle East and North Africa and possible repercussions from the earthquake in Japan. (1 U.S. dollar = 7.795 HK dollars)

Hong Kong inquest faults Manila police for hostage slaughter - Tse Chi-kin, older brother of dead tour guide Masa Tse, gives his response to the inquest findings. Jury lists blunders of Philippine officers in bus siege. Philippine police officers contributed to the deaths of eight hostages in the Manila bus bloodbath an inquest jury said yesterday, ruling that they were unlawful killings. The jury said the police had among other things failed to stop people other than negotiators from contacting gunman Rolando Mendoza and had taken too long to subdue him. The verdict came at the end of a 28-day hearing before Michael Chan Pik-kiu into the shooting of the seven tourists and their guide on August 23 by sacked policeman Mendoza, who was demanding his job back. The hostage drama, which was played out live on TV around the world, horrified Hong Kong and badly damaged the city's relations with the Philippines. The Hong Kong government decided to conduct its own investigation in response to the public outcry. Jurors returned a narrative verdict - a description of the events - for the first time in a Hong Kong inquest. This allowed them to state whether they agreed or disagreed with a list of statements prepared by the court. They could then decide what happened in the incident and what factors contributed to the deaths. Tse Chi-kin, elder brother of slain tour guide Masa Tse Ting-chunn, felt the verdict was "fair enough". But he said: "Most of the Filipino witnesses did not testify in court. This would to a certain extent affect the evidence and truth found in court." Survivor Yik Siu-ling, who was shot in the face, said she was disappointed that the inquest did not establish whether any of the hostages were hit by stray bullets. Yik has bullet fragments embedded in her chest, which she is unwilling to have removed - although police said they would be valuable evidence - as they did not threaten her health and she had already undergone numerous operations on her shattered jaw. "But I have been thinking a lot recently," she said. "If the Philippines cannot give us justice, I am willing to suffer [surgery] one more time." Coroner Chan expressed his condolences to families of those killed and thanked survivors, especially Yik and Chan Kwok-chu, who were both seriously injured, for giving evidence. In 5 1/2-hours of deliberation, the jury decided the breakdown of negotiations that resulted when the gunman found out police had lied to him - as well as the arrest of his younger brother, which he saw on a TV set on the bus - contributed to the deaths. The inquest heard earlier that negotiators had told Mendoza they had returned his brother Gregorio's gun when they had not. The jury agreed that Philippine police officers did not stop people such as journalists Erwin Tulfo and Michael Rogas and the gunman's brother from contacting him. Also, the police did not ask released hostages about the gunman's emotions or the situation on the bus. The jury decided that the police's slow efforts to subdue the gunman - it took an hour and 20 minutes before he was shot dead - had hampered the chances of Tse and Jessie Leung Song-yi, 14, being treated and saved. An expert said these two hostages had the highest chance of survival if treated promptly - at 57 per cent and up to 60 per cent, respectively. An inquest in the Philippines in September concluded that all eight were killed by Mendoza's bullets. It recommended that several of those involved face criminal or administrative charges. But Philippine President Benigno Aquino called only for administrative sanctions to be filed against four police officers, the mayor of Manila, Alfredo Lim, and a deputy ombudsman. Outside court yesterday, Coroner's officer Jat Sew-tong SC said they were satisfied with the inquest. "We have basically done what the coroner's court can do. For some questions like who should take responsibility, it is not the scope of the hearing." He said the absence of most of the Filipino witnesses summoned to testify would not have affected the result because most of them had provided written statements. The jury agreed with 40 of the 42 statements about the series of events on the day of the drama and factors contributing to the deaths. But they were unsure if the gunman did tell the hostages at 2pm that they would be released an hour later. The jury was unsure if Masa Tse could have survived, if he had been resuscitated within 20 to 30 minutes after he was shot. There was also uncertainty about whether medics had left his body unattended outside the bus and at what time. Tse Chi-kin's lawyer Hectar Pun Hei said these uncertainties would not affect their future pursuit of compensation as the inquest had already established the four factors contributing to the guide's death. Tse Chi-kin said he would consider lodging a civil claim with other survivors and victim families against the Philippine government after seeking legal advice. He hoped the Hong Kong government would help. "We are only an ordinary family. There will be difficulty if we need to confront a government or a regime." A government spokesman said the inquest had been open, fair and professional. It respected the findings but was "indeed very disappointed" that most of the key Filipino witnesses had not agreed to testify.

New world champion Ho Ting Kwok of Hong Kong strains as he breaks away from the pack to win the men's 15 kilometers Scratch race during the Track Cycling World Championships in Apeldoorn, Netherlands on Wednesday. 

Shops and restaurants in the city, one of Japan’s key food export markets, have been hit badly by the radiation scare with shoppers and diners deserting Japanese produce en masse. Local consumers are normally willing to pay a premium for food imported from Japan, deeming it less likely to be affected by food safety scandals that have rocked the mainland, for example, in recent years. But with Hong Kong on Wednesday becoming the first Asian economy to slap an import ban on a variety of Japanese food after radiation was found in vegetables from Japan, consumers were shopping elsewhere. The ban applies to dairy products, fruit and vegetables from five prefectures near the Fukushima No 1 nuclear plant, which was hit by a powerful quake and tsunami on March 11, followed by a series of explosions and fires. Supermarkets that are usually popular with Western and Japanese expatriates as well as wealthier local Chinese consumers were markedly less busy Thursday. Japanese chains Apita and Jusco, as well as Japanese restaurants in the city were all quiet, despite hefty discounts on fruits and vegetables imported before the ban came into effect, with shoppers showing little interest.

A room at the mansion that fell into disrepair and (right) returned to splendour. A view of King Yin Lei mansion, which has been restored to its former glory after being saved and granted monument status in 2007. It will be open to the public next month. King Yin Lei, the historic mansion defaced by its owner more than three years ago, will open to the public next month after being restored to its former glory. The Chinese Renaissance-style building in Stubbs Road has been earmarked for the third phase of a government heritage revitalisation scheme to be launched in June. Jessie Ting Yip Yin-mei, deputy secretary for development, said the mansion would be open for 10 days over the first three weekends next month and the Easter Holidays, with a limit of 20,000 visitors. "The open days would be an opportunity to seek public opinion on how the site should be used. "But applicants for the revitalisation scheme will also be free to suggest uses," Ting said. She urged visitors to take public transport to the site, which does not have parking space. Guided tours will be available. The zoning of the site allows a range of uses, including for education, exhibition and convention purposes, as a library, shops or a restaurant. The future operator will have to seek Town Planning Board approval for commercial uses. King Yin Lei was built in 1937 by Shum Yat-chor, a merchant and philanthropist. In 2007, the then unidentified owner, who wanted to demolish the building for redevelopment, was found defacing it, with workers removing roof tiles and stone features. The damage initially escaped the government's attention but the work was halted after media coverage, and officials provisionally declared the mansion a monument. The status was confirmed in 2008 and the owner agreed to surrender the site in exchange for one on the slope next to it to build five three-storey houses. The restoration work was conducted by Professor Tang Guohua, a conservation specialist from Guangzhou University. Tang's team managed to find tiles, bricks and marble in Foshan and Fujian to recreate the window and door frames, the floor, the roof, a pavilion, ceiling, beams and walkways. Original and replicated features are distinguishable if viewed close-up. A documentary has been filmed on the restoration process. Open-day tickets are available from today online or by a form available at Tickets will also be distributed at the Heritage Discovery Centre in Kowloon Park from Saturday.

 China*:  March 27 2011

The monopoly held on China's iron ore supply by a small number of international companies will be "thoroughly" broken up by 2015 as increased investment in the sector boosts global production, according to an expert in China's mining industry. "The surging price of iron ore since 2003 has attracted a huge amount of investment in the sector, and there will soon be a concentrated release of capacity, breaking the monopoly a few big companies hold," Wu Rongqing, chief engineer of the industry development department at the China Mining Association, said on Wednesday. "In fact, the global iron ore reserve is so rich that it can satisfy consumption for the next 100 years," Wu said in a speech at the China Iron Ore 2011 conference on Wednesday. Vale SA, Rio Tinto PLC and BHP Billiton Ltd, the top three global suppliers of iron ore, have some high-quality ore, but they don't have all of the world's iron ore resources, he said. China will be less dependent on them, as it increases its own production and diversifies its import destination, said Wu. Domestic demand for iron ore has increased sharply over the past few years, triggered by the nation's rapid economic development. But the country's iron ore supply has not kept pace, resulting in dependence on imports, mostly from the big three iron ore miners. China, the world's largest iron ore importer and home to the world's largest steel industry, has complained that the big ore suppliers have been trying to force spot pricing on Chinese customers since Vale SA and Rio Tinto Group scrapped a decades-old annual pricing system in favor of a more flexible quarterly regime last year. The three suppliers account for about two-thirds of the global supply of the resource. In 2010, China's iron ore imports dipped 1.4 percent to 619 million tons, but the import price rose 61 percent to $145 a ton, as a result of the new pricing system. Chinese steelmakers had to pay 196 billion yuan ($30 billion) more for the imports, squeezing their profit margin to 2.9 percent from 7.3 percent in 2007, according to data from the Ministry of Industry and Information Technology. That compares with an average profit margin of 6.2 percent for the nation's industrial companies. Rio Tinto, the world's second-largest supplier of iron ore, said in February that it registered $14.3 billion in net profit in 2010, up 50.5 percent from the $9.5 billion in the previous year. Its iron ore unit contributed more than $10 billion to the profit. Wu said the international iron ore market will become "oversupplied" from the current classification of "tight-supplied" as early as 2013, as China and the rest of the world enlarge their production. China will increase its iron ore production to 1.5 billion tons by 2015, up from 1.1 billion tons in 2010, in a bid to reduce its reliance on imports, Wu said. The production of finished iron ore is projected to reach 760 million tons by 2015, when demand will be about 1.3 billion tons. That will reduce China's import dependency rate to about 42 percent from 63 percent in 2010, he said. Meanwhile, overseas iron ore mining rights controlled by Chinese miners will increase to 200 million tons by 2015, from the current 90 million tons, as Chinese companies quicken the pace of overseas mine acquisitions. China's fixed-asset investment in iron ore mining and selection rose 26.4 percent year-on-year in 2010 to reach 106.6 billion yuan. Planning and construction are underway to reach 480 million tons of mining and selection capacity annually, Wu said.

The pharmaceutical company Bayer HealthCare (BHC) is moving its general medicine headquarters to Beijing, which is a first among multinational drugmakers. "We expect this step to speed up the decision-making process and to promote more general efficiency in our day-to-day work," Chris H. Lee, the managing director of BHC China, said on Thursday. "For Chinese patients, the relocation of our general medicine headquarters will allow for more efficient product launches in China and focus greater attention on unmet local medical needs." BHC, a subsidiary of Germany's Bayer AG, said the decision to move was made late last year and the relocation is expected to be completed in June of this year. BHC plans to introduce some 20 new products in China over the next five years, including those in the fields of oncology, cardiology, women's healthcare, and diagnostic imaging. Two new products also will be launched this year. The company unveiled four new products and undertook 22 clinical trials in China in 2010. Lee said that the increasing importance of the Chinese market and BHC's rapid growth in the country had led to the relocation. The company is one of the top three multinational drugmakers in China, with sales from the business growing above the industry average at 22 percent year-on-year in 2010, according to the independent medical care researcher IMS Health. General drugs account for 82 percent of the company's business. In this sector, Chinese sales contribute 12 percent to the global total. "What we do in China will have an effect on other developing economies," Lee said. According to IMS Health, China is now the world's third-largest pharmaceutical market, and is predicted to grow between 25 percent and 27 percent to more than $50 billion in 2011. In addition to moving its general medicine headquarters, BHC is moving to a regionalized structure by dividing the huge Chinese market into three regions; the central China unit will be based in Beijing, southern China will be controlled from Shanghai, and the operations center for the west of the country will be located in Chengdu. "The strategy will enable us to be customer-centric, to disaggregate operational complexity, be more flexible, and speed up operational decision-making at the frontline. It will help us to stay close to front-line employees and be more attentive to their needs and development," said Lee. Currently, the central region accounts for 45 percent of the company's business in China. The southern operations make up 35 percent, and the western region 20 percent. "We believe the western region will grow faster than the others," said the managing director. The company will also strengthen its sales force by adding 1,000 positions in 2011 in its core markets and lower-tier cities. Despite the current enthusiasm of multinational companies for merging or acquiring local counterparts, Lee said that "at the moment" the company is "focusing on organic expansion". But when there are good opportunities, the company will engage in mergers and acquisitions, he added. "It is a sort of shortcut for the multinationals to expand their product portfolios, obtain medicines tailored for local requirements and penetrate the grassroots market," said Guo Fanli, an analyst at the China Investment Consulting. In the "On-The-Counter" market, BHC paid 100 million euros ($141 million) for the cough and cold medicines portfolio of the domestic drugmaker Topsun Science and Technology Co Ltd in 2006.

China's manufacturing growth is accelerating, according to preliminary data from a survey of purchasing managers, signaling the economy may withstand increased interest rates. The index may rise to 52.5 from 51.7 in February, HSBC Holdings Plc and Markit Economics said in a statement on Thursday. This is the second time advance data has been released. Producer prices in China jumped at the fastest pace in 29 months in February and consumer-price gains exceeded government targets for the eighth straight month. Interest rates in the world's fastest-growing major economy may be raised as early as next month as inflationary pressure builds from higher oil, food and labor costs, according to Bank of America-Merrill Lynch economists. The data "should reduce concerns about a sharp slowdown in growth", Qu Hongbin, chief economist for China at HSBC, said in the statement. "Beijing's policy tightening is working to contain inflationary pressures without choking off growth." A preliminary gauge of output climbed to 55.1 from a final reading of 51.9 in February, according to the statement. Thursday's data showed renewed growth in export orders and slower increases in input and output prices. Inflation should slow "meaningfully" by the middle of the year as the government continues to tighten policy, Qu said. Consumer prices rose an annual 4.9 percent last month.

China Fashion Week kicks off in Beijing - China Fashion Week 2011-2012 Autumn-Winter Collection kicked off on Thursday in Beijing.

World Bank said China's nominal GDP will equal that of the US in 20 years - China set for No 1 spot by 2030 - The World Bank's chief economist said on Wednesday that China's economy will probably become the world's biggest by 2030, when it will be twice the size of the United States, if measured in terms of purchasing power parity (PPP). "China could maintain GDP growth of 8 percent over the next 20 years, which will make it the world's biggest economy," said Justin Lin, senior vice-president and chief economist at the bank. He added that by 2030 the Chinese economy may be approximately the same size as that of the US at market exchange rates in terms of nominal GDP. Lin made the remarks at the China Economic Development Forum in Hong Kong. In 2010, China overtook Japan to become the world's second-largest economy. It has set a target of 8 percent for GDP growth for this year. The country is also aiming to record average annual GDP growth of 7 percent in each of the next five years. Lin said that by 2030, the country's per capita income, measured in terms of PPP, may reach 50 percent of the per capita income in the US. "It is imperative for China to address structural imbalances, by removing the remaining distortions in the financial, natural resources and service sectors to complete the transition to a well-functioning market economy," Lin said. The concentration of income in the corporate sector and the wealthier section of society is contributing to the rising disparity in incomes and other imbalances in the economy, he said. "China still has huge potential to maintain strong growth, as the country's urbanization rate is likely to reach 70 percent by 2030 from the current 47 percent," said Zheng Xinli, vice-president of the China Center for International Economic Exchanges. Zheng said that the total GDP of Brazil, Russia, India, China and South Africa will account for 47 percent, or possibly more than 50 percent, of the global economy 20 years from now. "But rising inflation and accelerating capital inflows are prominent problems facing these countries in the short and medium terms, especially China," said Zheng. Yi Gang, deputy governor of the People's Bank of China, the central bank, said in Hong Kong on Wednesday that he was confident the government will be able to keep consumer price inflation at, or below, 4 percent this year. "The inflation figure will rise to as high as 5 percent in May or June this year, but because of the higher base figure of the second half of 2010, inflation in the second half of this year will cool," Yi said. "So throughout the whole year, we will be able to meet the government's 4 percent target." Yi said he is "comfortable" with the current level of interest rates, and that raising them excessively would attract "hot money" inflows. China's consumer price inflation rose to 4.9 percent in January and February from 4.6 percent in December. It hit 5.1 percent in November, a 28-month high. A drought in some major grain-producing areas, together with increases in international grain and oil prices, has led to growing concerns about rising inflation. To mop up excessive liquidity and help curb increasing inflation and asset bubbles, the central bank has raised reserve requirements for banks nine times since the beginning of 2010, and hiked interest rates in February for the third time since October. Stephen Green, senior economist with Standard Chartered Bank, said in a research note that the central bank will raise interest rates twice more in the first half, increasing them by 25 basis points each time, and economic growth will slow as a result of tightening measures.

China National Nuclear Corp (CNNC), the country's largest nuclear plant operator, has started trial production at its first overseas uranium mine. The move comes as China increases efforts to secure more of the metal used in nuclear power production, from overseas acquisitions. The Azelik mine in Niger, 37.2 percent owned by CNNC, will be capable of producing 700 tons of uranium annually when it begins full operations. The operator said earlier that it would increase annual overseas uranium capacity to 5,000 tons within 10 years to secure supplies. Apart from Niger, CNNC is also looking for uranium mining resources in Russia, Zimbabwe, Australia, Kazakhstan, Tanzania and Zambia. China imported 17,136 tons of uranium in 2010, more than three times the total in 2009, according to the General Administration of Customs. Two reactors will come online in 2011, adding about 120 tons in uranium demand, said Xiao Xinjian, an expert at China's Energy Research Institute. Demand for uranium will continue to rise this year, said Xiao. Nuclear capacity may total 11.7 gigawatts (gW) by the end of 2011, according to the National Energy Administration. China has put on hold new approvals for nuclear power projects in the wake of the crisis at the Fukushima Daiichi power plant in Japan. Even with that brake, the country's nuclear capacity is still likely to reach 40 gW by 2015 as 28 reactors are currently under construction, the largest number in the world, and indicates that demand for uranium will continue to rise. "We must guarantee our domestic production capacity, which will constitute the major part of our supply," Sun Qin, president of CNNC, said earlier in an interview with the People's Daily Online. China could be self-sufficient in uranium supplies by 2020 when the country's nuclear capacity is scheduled to reach 40 gW, according to estimates by industry experts. "Domestic reserves and capacity, in addition to international purchases will assure the short-term supply (by 2020)," Sun said. China Uranium Corp, a unit of CNNC, plans to increase output to between 4,000 and 5,000 tons by 2020, the company said last year. Chinese nuclear power operators are sticking to the "Three One-Third" formula - one third from domestic supply, one third from overseas acquisitions and another third from direct international purchases - to ensure a stable supply in the long term. Another leading nuclear power developer, China Guangdong Nuclear Power Holding Corp, made a $1.2 billion bid for Kalahari Minerals Plc earlier this month, which could give the company access to one of the largest uranium deposits in Namibia.

Tourists to China's southern island of Hainan will soon be able to claim back taxes on imported goods they purchase there as the provincial government announced on Thursday a tax refund scheme to boost tourism and consumption.

China's Henan Golden Dragon Precise Copper Tube Inc, partly owned by Lehman Brothers Holdings Inc, Goldman Sachs Group Inc and the private equity unit of Standard Chartered Plc plans to raise 3.5 billion yuan ($533.72 million) through a domestic initial public offering.

Foreign-registered yachts will be able to stay up to 183 days a year in the waters of China's southernmost Hainan Province as of April 15, up from the current 15 days, according to a new regulation. The regulation comes as the famed tourism island tries to boost its yachting sector to help draw wealthy tourists from abroad. Foreign yachts can stay in Hainan waters for a maximum 30 days at one time but will be allowed to apply for extensions twice, with each one not exceeding 30 days, said a spokesman with Hainan Customs on Wednesday, quoting a new yachting regulation effective on April 15. The combined duration of stay would be no longer than 183 days for foreign yachts every year, the spokesman said. Under the new regulation, more ports will be available for yachts to go through entry and exit procedures. The tropical island is attempting to turn yachting into one of the pillars of local tourism according to the province's development plan for up to 2015. It also plans to build 13 more yacht ports, in addition to the current three, said Chen Zhifeng, deputy chief of Hainan Customs. Hainan announced a plan early last year to build itself into a top international tourism destination by 2020.

China again pressed on Thursday for an immediate ceasefire in Libya and a resolution through dialogue, warning that the fighting there could undermine regional stability. “We believe that the objective of enforcing the UN Security Council resolution is to protect humanitarian objectives and not to create an even bigger humanitarian disaster,” Foreign Ministry spokeswoman Jiang Yu told a regular news briefing in Beijing. “Libya’s sovereignty, independence, unity and territorial integrity should be respected. We also urge all sides to immediately cease fire and avoid the conflict escalating, which would worsen the situation regional-wide,” she added. Western warplanes began striking Libya over the weekend, but have so far have failed to stop Libyan leader Muammar Gaddafi’s tanks shelling rebel-held towns or dislodge his armour from a strategic junction in the east. Britain will host an international conference next Tuesday to discuss progress on the UN-mandated military intervention. Asked about the proposed meeting in London next week, Jiang said: “It’s my understanding that the Security Council will continue informal consultations about the situation in Libya.” “As for what actions the Security Council should take next, that should be decided by consultation among the Security Council member states. China is willing to work with other sides to promote a resolution of Libya’s current crisis through dialogue and other diplomatic means.” China abstained from the UN Security Council vote that authorised the intervention, but has since decried the US-led air strikes on Gaddafi as risky and unwarranted overreaching by the West.

Hong Kong*:  March 26 2011

Slow rescue efforts by Philippine police officers contributed to the deaths of eight Hong Kong people during last year’s Manila bus hijacking, a Coroner’s Court jury ruled on Wednesday afternoon. After four hours of deliberation, the five-member jury unanimously concluded that the eight tourists were killed unlawfully after they were taken hostage by sacked policeman Rolando Mendoza on their tour bus on August 23 last year. They also found that police negotiators failed to calm Mendoza down and that police snipers missed important opportunities to shoot him during the early stages of the hostage crisis. The jurors said in their verdict the eight Hongkongers died of gunshot wounds. Tour guide Masa Tse Ting-chunn, 31, died of wounds to his neck, arteries, veins and backbone. Another hostage, Fu Cheuk-yan, 39, was shot in the torso and died from injuries to his heart and lungs, the jurors said. Jessie Leung Song-yi, 14, was killed after a bullet struck her chest. Her 21-year-old sister Doris Leung Song-see was shot in the head and died from injuries to her brain. Their father, Ken Leung Kam-wing, 58, died after being shot in the respiratory tract and rib cage, the jurors said. Wong Tze-lam , 51, received bullet wounds in the chest and died from injuries to his respiratory tract and main artery. His wife, Yeung Yee-wa, 44, was shot in the chest and died from injuries to his lung and backbone. Her sister Yeung Yee-kam, 46, died from brain injuries after being shot in the head. The jurors also noted that other factors contributed to the deaths of the eight tourists. They said police negotiators lied to Mendoza when discussing his request to be restored as policeman. Mendoza grew angry after seeing TV footage of his brother being arrested by police and then started shooting the hostages. The jurors also said rescue efforts by police were too slow – taking one hour and 20 minutes. This, therefore, delayed vital medical treatment for the victims. And, on at least three occasions, Mendoza came within shooting range of police snipers who were concealed around the tour bus, they did not fire, the jurors said in their verdict. Masa Tse’s brother, Tse Chi-kin, said outside the court he welcomed the verdict. He said the inquest findings would help his family in their bid to sue the Philippines government for liability and for compensation. “The inquiry revealed some information and findings not disclosed at the previous investigation in the Philippines,’’ he said. “There may be a legal action against the people responsible in the Philippines for handling the crisis and a claim for compensation,” added Tse Chi-kin.

Most members of a Community Care Fund subcommittee support the proposal to give HK$6,000 cash handouts to "low-income" new migrants but remain undecided on the income cap. Home affairs subcommittee chairman Bunny Chan Chung-bun said members yesterday discussed at a closed-door meeting the proposal to make cash handouts to about 237,000 low-income new migrants aged 18 and above, a move that will cost the fund HK$1.5 billion if approved by the steering committee on April 20. The move to extend the cash handouts to include new migrants follows criticism that the original proposal to give them to adult permanent residents only was divisive. "Most members of the committee believe the income ceiling should be relaxed and that we should look towards using existing outlets to help those in need," said Chan. The proposal was still under consideration. Members of other subcommittees and the steering committee will discuss the proposal today while the executive committee will hold a meeting on Monday. Under the proposal, residents whose monthly household incomes are less than 75 percent of the median income of general households in Hong Kong are considered "low-income." This would mean a migrant with monthly pay of up to HK$4,875 would be eligible for the handout. For a four-member family, the income cap would be HK$18,000. "The 75 percent [threshold] is definitely not certain," Chan said. "We want to increase the ceiling, as certain members have suggested, but we definitely want to help as many as possible." The fund's steering committee member, lawmaker Peter Cheung Kwok-che, said some new migrants whose income exceeds the specified cap would not qualify for the scheme. Members "have reached unanimous agreement that the 75 percent ceiling should be raised." Cheung added he personally was against having the fund to deal with the HK$6,000 handouts for new migrants as this should be the government's job. The HK$10 billion Community Care Fund was announced in Chief Executive Donald Tsang Yam- kuen's policy address last year. Half the money will come from the government and the rest from donations. The fund aims to complement the social security system and help those left out of the current welfare net.

Hong Kong's overall consumer prices in February rose by 3.7 percent over the same month a year earlier, slightly higher than the 3.6 percent increase in January, the Census and Statistics Department of the HKSAR government said Tuesday in a statement. Netting out the effects of the city government's one-off relief measures, the year-on-year rate of increase in the composite consumer price index (CPI), the main gauge of the inflation, in February was 3.6 percent. It was also slightly higher than that in January, mainly due to the increases in private housing rentals, said the statement. Among the various CPI components, year-on-year increases in prices were recorded in February for food, electricity, gas and water, clothing and footwear, alcoholic drinks and tobacco, as well as housing. Year-on-year decreases in prices, however, were recorded in February for durable goods, according to the statement. Taking the first two months together, Hong Kong's CPI rose by 3.7 percent over a year earlier. A government spokesman said that taking the first two months together to remove any potential distortion due to the timing of the Lunar New Year, the underlying consumer price inflation went up further to 3.6 percent, amid the notable increases in import prices and the robust local economic conditions. The spokesman added that inflationary pressure on the economy was likely to increase in the coming months, as global food and commodity prices remained elevated and as the feed-through from the earlier rapid increases in private housing rentals continued. Hong Kong's government would closely monitor the impacts on inflation by global events, including the natural disasters and nuclear crisis in Japan and the political unrest in the Middle East, he said. Donna Kwok, HSBC's China Economist, maintained that Hong Kong's February CPI growth was fuelled by a spill-over impact from Mainland food price inflation, Lunar New Year's festive consumption, and global energy prices running high on the back of unfolding events in the Middle East. "For the rest of this year, we expect excessively loose monetary conditions, wage inflation, the weakness of the US dollar, global food price inflation and strong aggregate demand to continue stoking both headline and underlying CPI pressures in the territory," she added.

Sweet girls display 2011 S/S collection of A.T. in HK - Models present creations during A.T. by ATSURO TAYAMA 2011 Spring/Summer Fashion Show in Hong Kong on March 22, 2011.

Immunity law up to Beijing, court told - Congo case a foreign affairs issue: government - Hong Kong must follow the mainland in granting states immunity from lawsuits in all circumstances, the government has argued. Benjamin Yu SC, for the Secretary for Justice Wong Yan-lung, also said the National People's Congress enjoyed the power to interpret state immunity and to dictate such law to Hong Kong. "One looks at this concept of state immunity as to whether this can be a case where you have one state but two immunities. It's our submission ... that you can't have that. One state, one immunity," Yu told the highest court yesterday. "There can be no doubt whatsoever that the state certainly has the competence to pass national law on the subject of state immunity, and the NPCSC [National People's Congress Standing Committee] has the power ... to apply that law, national law, to Hong Kong." The barrister was arguing in a Court of Final Appeal case between US vulture fund FG Hemisphere Associates, the Democratic Republic of Congo and China Railway Group (SEHK: 0390) over more than US$100 million owed to FG by Congo in assets currently held in Hong Kong by China Railway Group. Vulture funds buy up a poor nation's debt at knockdown prices, before going to court to recover the full amount. Hong Kong's foreign affairs were the responsibility of the central government, Yu said, and immunity was a component of foreign affairs. Laws governing the immunity and privilege of diplomats and consuls in Hong Kong already existed as a matter of national law, and thus so should other immunity rights, he said. Lawyers for appellants China Railway Group and Congo have said that because the issue of immunity constitutes foreign affairs, Hong Kong and Beijing's positions should be consistent under the central government's policy. They have said the court should refer the case to Beijing for an interpretation of the Basic Law. The secretary for justice has intervened in the dispute, announcing on Monday that the case was in the public interest. Congo claimed in the Court of First Instance that it could not be forced to repay the debt because as a foreign country it enjoyed immunity from prosecution in Hong Kong courts. This raised the question of whether Hong Kong's immunity rights were a matter of local or national law. If the issue is for Beijing to decide, the court could request an interpretation of the Basic Law from the NPC Standing Committee - the first time this has ever happened. The mainland practices "absolute immunity", where a foreign state cannot be prosecuted for either sovereign acts or commercial deals. In 2008, the Court of First Instance upheld absolute immunity in Hong Kong, declaring that Congo did not have to repay its debts. In February last year, the Court of Appeal overturned the decision, saying that commercial deals were not immune in Hong Kong courts. Gerard McCoy SC, for China Railway Group, also argued that immunity was strictly a matter of foreign affairs in his opening submission yesterday. McCoy said immunity was an integral part of other "classic" acts of state, such as recognising foreign governments and forming treaties. McCoy said that article 13 of the Basic Law - which states that the central government is responsible for Hong Kong's foreign affairs - was crucially overlooked by the Court of Appeal. "Foreign affairs ultimately emphasises state power - the power of the nation," he said. "There is simply no capacity for [the] HKSAR to act as though it were a state. It is not." The case continues today.

Lap Leung, a chef at Japanese Cuisine Yaegiku in Tsim Sha Tsui, checks shellfish from Kyushu for radiation as the restaurant seeks to reassure its customers that its food is safe. Officials from the Hong Kong government met representatives of 19 importers and retailers of Japanese food following radiation leaks from the stricken Fukushima nuclear plants. The representatives said they would speed up restocking and step up planning to make sure there were no shortages. "Hongkongers can rest assured that there is no need to stockpile any products, including milk formula," said Secretary for Food and Health Professor Gabriel Leung. "We understand that Hongkongers are worried. The government will continue to step up monitoring of Japanese products." Hong Kong officials yesterday tested 17 types of food products and a batch of drugs from Japan - all proved normal. Hong Kong has found no tainted food from the island nation after abnormally high levels of radiation were recorded at the Fukushima plants. The city - along with the mainland, Taiwan and many countries around the world - has stepped up inspections of Japanese imports amid increased anxiety about the quality and future availability of key supplies such as milk formula. One Japanese restaurant in Hong Kong took the precaution yesterday of buying a HK$6,000 machine that monitors radiation to test its food imports. Jackal Lui, manager of Yaegiku Japanese Cuisine in Tsim Sha Tsui, said the machine was bought to "provide additional assurance to our customers ... We are confident that the Hong Kong and the Japanese governments will do their job well". "We just want to make our customers even less worried." He said chefs would use the machine, brought from the United States, to check all food imported from Japan before cooking. Local representatives of American company Wyeth said inquiries on milk formula had risen 2.4 times since the March 11 earthquake. Its supplies in Hong Kong could last at least a month, the company said. A spokeswoman for Japanese milk formula manufacturer Snow Brand said sales in Hong Kong had increased after the earthquake, but it expected demand to drop next month. "Mothers are just stockpiling right now. They will stop buying in April. Parents may also have concerns about the safety of products made after the nuclear scare," she said. A number of department stores, restaurants and importers said they would seek products from other countries, such as Australia and South Korea. Japanese baby products importer BB-Boom said it was considering switching to products from other countries, because parents were worried about the safety of Japanese items. Lui, of the Yaegiku restaurant, said it would now buy fish from South Korea, abalone from Australia, and chicken and pork from the US. Jusco department store said only 5 per cent of its perishable goods were from Japan, yet it would now import more from places such as Taiwan, South Korea and Europe. In another sign of public jitters, radiation-testing devices costing just a few hundred dollars appeared on auction websites. The Yahoo site offered a handheld device, said to be capable of detecting radiation emitted by microwaves, photocopying machines and telephones, for HK$290. But Leung said professional devices should cost HK$4,000 to HK$100,000, and he doubted the cheaper products were reliable. "These devices are not plug-and-go," he said. "They have to be extremely accurate, or else there could be fake positive or fake negative cases." The government began calling individual pharmacies to urge them not to stockpile or raise prices of milk formula. The move came as Snow Brand compiled a blacklist of about 10 pharmacies and told its three wholesalers not to supply them. The chairman of the Hong Kong College of Paediatricians, Professor Ng Pak-cheung, said it was not a problem to change formula. He said parents should switch over five to seven days by slowly increasing the proportion of meals using the new formula. In testing food from Japan, experts are most concerned about three types of radioactive substances, one of which can last for 240 years before its radioactivity is exhausted. "Caesium-137 can last for hundreds of years. If exposed, one can get spasms, involuntary muscular contractions and may lose the ability to walk. It also causes infertility. High doses will also damage a person's DNA and cause cancer later," said Lee Tin-lap, associate professor at Chinese University's School of Biomedical Sciences. But experts said the levels detected in Japan had been low and there was no need for alarm.

It has already made it clear that it is out for the middle-class vote. Now, Hong Kong's newest political party has injected a dash of celebrity into its launch - by appointing television chef Martin Yan as an adviser. It may not quite have the cachet of US President Barack Obama's "Yes we can" mantra, but New People's Party chairwoman Regina Ip Lau Suk-yee said yesterday that the celebrity chef's catchphrase, "if Yan can cook, so can you", typified her party's desire to drive home the ethic of self-improvement. Ip, former secretary for security, could not be specific on the exact advice the mainland-born, San Francisco-based chef would bring to the party, but said he was picked for his motivational abilities. It is an unusual partnership, however. Ip believes Yan's involvement in Republican Party fund-raising in the United States will prove useful and be a perfect fit with the new party's right-of-centre political stance. And she clearly believes he knows his political onions. "Many Chinese in the US are more pro-Republican than pro-Democrat, as the Republicans are viewed as a more pro-business party. He is politically savvy and will have a big influence," she said. "Martin is from Hong Kong originally, so he keeps up with the news here and he knew me straight away. "He's a charismatic person. I love his catchphrase, `[If] Yan can cook, so can you!' It means the sky is the limit if you just try your best. Martin is a self-made man and a Hong Kong success story. He is very inspiring to many people here." Ip said she had always loved watching Yan's shows and felt his manner of presenting stirred the same feelings in many others. Yan lives in the Bay area of San Francisco, where Ip lived for four years while studying at Stanford University. She said she had invited him to speak to party members the next time he was in town. "We want to make use of his frequent visits here to speak with the public ... When we [said on Facebook that] he was going to be an adviser to our party, lots of young people wanted to meet him." Party vice-chairman Michael Tien Puk-sun is another Yan fan. The two have worked closely in the past. Ip is hoping Yan, along with other high-profile advisers such as entrepreneur Allan Zeman, will boost her party's prospects. "Allan is the same sort of story as Martin. Someone who has gone from rags to riches." Ip has said it is the rich and successful that her party is targeting, describing the party as centre-right and unapologetic about its elitist image. She confirmed it was uninterested in the working-class vote or in contesting public housing constituencies. Its board is filled with former senior government officials and business leaders, among them former colonial official David Akers-Jones and ex-health secretary Libby Wong Chien Chi-lien. Yan, 62, is a household name in Hong Kong. Born in Guangzhou, he moved to Hong Kong when he was 13 and, while schooling, worked at his uncle's Chinese restaurant, learning about traditional Chinese barbecue. He received a diploma in cooking and later left for Canada. He has hosted more than 1,500 episodes of Yan Can Cook since 1982.

Longing for a snooze on the bus? Go right ahead, for missing a stop may no longer be a concern. Kowloon Bus Company has devised an iPhone app that not only helps choose the lowest fare but also buzzes you two stops before your destination. But there is a catch. The pre-warning signal depends on iPhone's inbuilt GPS function which has been known to be unreliable at times. Less than 24 hours after its Monday launch, the KMB app reached the top spot in download charts. It was the most downloaded free app in the Hong Kong iTunes App Store by yesterday morning. The app also has functions such as searching for the nearest bus stop as well as route searches, and updates about scheduled re-routing. There are currently two other bus route-related applications that commuters may download, but none by a bus company. KMB commercial director James Louey said the app underwent meticulous testing and design checks, all with the commuter in mind. "What sets us apart is our extensive network and data," Louey said. While most transport apps feature route searches, KMB lets users search for the cheapest fare, as well as bus stops within a 200-meter radius. The information may be up to a kilometer off using GPS, but developers of the KMB system claim that does not hamper performance of the app. On a trial run from Wan Chai to Shau Kei Wan, the app was able to give the correct bus number, as well as information on where to switch buses. But it was frustrating trying to activate the Alight Reminder, defeating the aim of a stress-free ride. And, searching for the nearest bus stop in Shau Kei Wan, the iPhone's location was constantly alternating between Quarry Bay and Shau Kei Wan, a sign of the inbuilt GPS' unreliability. The application is available for free from the iTunes App Store and works on iPhones, iPod Touches and iPads. It comes in traditional Chinese, simplified Chinese and English. KMB serves 2.6 million passengers a day across nearly 400 routes. The company said there are plans to introduce the app to the Android platform, as well as to improve software. "We have plans to develop the app to include information on bus arrival times," Louey said. 

First Africa firm in Hong Kong debut - South African miner LontohCoal plans to raise between US$300 million (HK$2.34 billion) and US$500 million in a Hong Kong initial public offering in the second half, president and chief executive Tshepo Kgadima said. Set to be the first African company to list in the SAR market, LontohCoal is looking to introduce strategic investors to raise US$30 million before the IPO, sources said. Two pre-IPO investors are interested in pouring in US$100 million, the sources said. The company will launch a secondary listing in Johannesburg in the fourth quarter, Kgadima said. LontohCoal aims to tap the China market through the Hong Kong listing, looking to supply 80 percent of its coking coal output to the mainland, Kgadima said. But it has yet to sign any offtake agreements with mainland customers. Lontoh owns three coal mining projects in South Africa, and has a 51-percent stake in a Zimbabwe mine. Their reserves total 7 billion tons of coke, anthracite and thermal coal. Meanwhile, Hilong Holdings and Zhengye International scrapped their listings to raise HK$1.48 billion and HK$241 million, respectively, on lackluster market response. Mainland property developer Top Spring International (3688) recorded zero gray market transactions yesterday, according to Phillip Securities. It raised HK$1.56 billion after pricing the flotation at HK$6.23 per share, the bottom of the indicative range of HK$6.23 to HK$8.10 apiece. Net proceeds amounted to HK$1.4 billion. China Kingstone Mining (1380) rebounded 16 percent to HK$2.31, above the offer price of HK$2.25, after dropping 12 percent to HK$1.98 on its trading debut on Friday.

 China*:  March 26 2011

East China city to build ping-pong hotel - A 150-meter-tall hotel designed in the shape of a ping-pong racket will be built in Huainan city, East China's Anhui province, as part of a complex to tap the wealth of the sports industry. The hotel, located in a planned Olympic park covering an area of over 1,000 mu (67 hectares), has an estimated investment of 300 million yuan. It will feature three parts, the top designed for sight-seeing, the middle will house guest rooms, and bottom used for conference facilities. "The design idea is from ping-pong. An erected ping-pong racket has a perfect architectural shape for a hotel," said Jin Chang, director with Huainan Municipal Bureau of Sports. The buildings were all designed by Mei Jikui, a renowned architect for sports structures. Supporting facilities such as a swimming pool are also included in the plans. Four buildings in the park are also under construction, namely an American football-shaped main stadium, a volleyball-shaped natatorium, a football-shaped gym stadium and a basketball-shaped stadium. The overall investment of the park is said to reach 1.8 billion yuan in three phases within five years. The sports bureau has signed an agreement with China Sports Industry Group, stating that multiple sports games with international standards will be held in these stadiums in next 20 years. Huainan has a population of 2.4 million, and the average income for its rural famers in 2010 was 5,746 yuan ($876). The local government in Huainan is developing the hotel an investment project, but will fund construction of all sports stadiums in the park.

US companies in China profitable: Survey - More US businesses in China said they were profitable last year even as they are still worried about the prospects of local market access, the American Chamber of Commerce in China (Amcham) said on Tuesday. Seventy-eight percent of member companies surveyed by Amcham said their China operations in 2010 were very profitable or profitable, the highest proportion in survey results dating back to 2002, the Beijing-based chamber said in its annual business-climate survey. At the same time, the country's rapid economic growth makes it an increasingly important market for companies such as General Motors Co and General Electric Co. Some US companies, however, said the Chinese government is making it increasingly difficult to do business in the world's second-biggest economy. "There are two themes to the data," Amcham China Chairman Ted Dean said in Beijing. "American companies are doing well, and American companies are concerned in some cases about the current regulatory environment and in others the trend line for the regulatory environment." Eighty-three percent of Amcham China member companies plan to increase investment in the country this year, according to the survey, which used responses from 434 member companies out of a total of about 1,100 members. Some 85 percent of respondents reported increased revenue from their China operations last year. Sixty-three percent reported improved operating margins, compared with 44 percent who said the same of their 2009 results. Seventy-one percent of the respondents said China's business licensing process discriminates against foreign companies, according to the survey. More respondents - 31 percent - named bureaucracy as one of their top five challenges, up from 23 percent in 2010. Yao Jian, a spokesman for China's Commerce Ministry, told reporters on Tuesday in response to the Amcham survey that China will give equal treatment to foreign companies and further promote opening of the domestic market.

China will double its investment in waterway construction to 200 billion yuan (30.5 billion U.S. dollars) over the next five years to increase the nation's river transport capacity, a spokesman for the Ministry of Transport (MOT) said Wednesday. He Jianzhong, the MOT spokesman, told a press conference that the proposed investment will be twice the amount that China spent in river transport construction from the 2005-10 period. He said the central government will fund 45 billion yuan (6.86 billion U.S. dollars), more than one fifth of the total investment, while the rest will be raised by local governments or through social financing channels. After the overhaul, the average weight carried by cargo ships traveling on China's waterways will be raised by almost 800 tonnes, an almost 80 percent increase from the end of last year, according to MOT. In January, the State Council, or China's Cabinet, unveiled guidelines aimed at elevating the country's freight volume to 3 billion tons by the end of 2020. China's rivers handled cargo totaling 1.7 billion tonnes last year, according to MOT.

China's SWAT hold public police camp open day - SWAT camps held a public open day on Wednesday, demonstrating trainings and equipments and giving people a glimpse of what police camps really look like.

Hong Kong*:  March 25 2011

Hong Kong-based bankers got an average bonus jump of 25 per cent for last year, nearly double the increase received by counterparts in Singapore, as the territory enjoyed a record year for IPOs, jobs portal eFinancialCareers said on Tuesday. Bankers in Australia saw an average 13 per cent rise in bonus, similar to Singapore and well above the 5 per cent average increase in Britain. Those in the United States were the worst off with a 5 per cent drop in average bonus, according to a global survey by the jobs portal. The survey, which took place between January 4 and February 14 this year, collected responses from 6,364 financial markets professionals in Singapore, Hong Kong, Australia, the United States and Britain. “Hong Kong is perhaps more front-office driven and they had a record year in terms of IPOs and activities coming out of China,” eFinancialCareers’ Asia Pacific head George McFerran said at a media briefing. “That probably fuelled the greater bonus increase in Hong Kong versus Singapore.” Hong Kong’s stock market last year raised HK$445 billion (US$57.1 billion) via initial public offerings, higher than anywhere else in the world. The Singapore Exchange, in contrast, managed just S$11 billion (US$8.7 billion). Despite the higher bonuses, eFinancialCareers said 49 per cent of Singapore bankers and 45 per cent of Hong Kong bankers indicated that they were looking to change firms this year. The company did not have the data on attrition rates for the previous year. But while Hong Kong and Singapore remain the best places in Asia for bankers looking to earn megabucks, bankers in the mainland are likely to enjoy the biggest pay rise this year, according to a separate survey by recruitment consultancy Michael Page International. The average salary increase across the mainland’s financial services sector this year is expected to be 6-8 per cent, higher than 4-6 per cent in Singapore and 3-4 per cent in Hong Kong, partly due to the talent shortage in the market.

Asian Film Awards held in Hong Kong - Celebrities attend the Asian Film Awards in Hong Kong, south China, on March 21, 2011.

Xu Fan won Best Actress award at Asian Film Awards presentation ceremony in HK. 

Cathay Pacific sees opportunity from growth in mainland traffic - Cathay Pacific Airways Ltd and Hong Kong Dragon Airlines Ltd passenger planes are parked at Hong Kong International Airport. Cathay has a dominant share of about 43 percent of the passenger traffic out of Hong Kong. A robust growth in passenger and cargo services in the mainland are expected to provide a boost to Hong Kong-based Cathay Pacific Airways Ltd's operations, according to the company's chief operating officer. "China's fast-rising economy and rapidly expanding international travel market has boosted by the rise of income levels means a greater challenge for us," said the carrier's Chief Operating Officer John Slosar in an interview with China Daily. The rapid growth of international travel from China will probably be the most interesting story of the decade and the airline will take good advantage of the opportunity, Slosar said. Cathay Pacific holds about 18.5 percent stake in Air China, while Air China holds approximately 30 percent stake in Cathay. Cathay's subsidiary Dragon Airlines Ltd flies to the mainland. In 2010, the overall air transportation volume from the mainland was 267 million passengers and 5.57 million tons of cargo, a surge of 93 percent and 82 percent compared with 2005. Cathay has a dominant share of about 43 percent of the passenger market, while it has a 20 to 25 percent share of the cargo market out of Hong Kong. The share in the world's biggest cargo market is not that high because of huge capacity and stiff competition, said Slosar. Speaking about the launch of Air China Cargo - a joint venture between Air China and Cathay Pacific set up in 2010, Slosar said the cooperation will provide "fantastic opportunities".

 China*:  March 25 2011

China's Foreign Ministry said on Tuesday that it did not accept accusations from Google that the Chinese government was making it difficult for Gmail users to use the service in the country. “This is an unacceptable accusation,” Foreign Ministry spokeswoman Jiang Yu told a regular news conference, without elaborating. On Monday, a Google spokeswoman said any difficulty users in China may have faced in recent weeks accessing Google’s email service was likely the result of government blocks. Gmail users in China said they were still able to log in to their accounts, but were unable to perform tasks such as sending e-mail and accessing their address books. Google’s run-ins with the Chinese government began in January last year, when the company said it was no longer willing to censor search results in the country. Previously, the company included a disclaimer on its China service that searches may not be complete because of local laws. Searches for terms deemed sensitive by mainalnd censors are routinely blocked. Chinese search engines such as that offered by Baidu already voluntarily filter searches. This is not the first time Google has accused China of interfering with its services. In January, Google said it had uncovered sophisticated China-based attacks on human rights activists using its Gmail service around the world. The months-long censorship dispute that Google had with the Chinese government was a diplomatic flashpoint in Sino-US relations last year. Censorship of web content has intensified in China following calls on foreign websites for a “Jasmine Revolution”, which are anti-government gatherings inspired by demonstrations in the Middle East and North Africa.

China's Sany offers pump to Japan - A truck mounted concrete pump is being offered by Sany Heavy Industry free of charge to Tokyo Electric Power Company (TEP) to help water spraying operations at the Fukushima nuclear plant. The truck gets a final check before heading to Japan.

A bedding set worth one million yuan ($152,400) was presented to the public at a home goods store in Nanjing, Jiangsu province. The bedding set, designed based on royal bedding supplies of the Qing Dynasty (1644-1911), includes ten items, including a bed sheet, pajamas, pillows and cushions. Present-day fashion design elements were also added. It took several months and ten people to make the all-handmade bedding before before it was revealed to the public.

Budget hoteliers eye Motel 168 chain - A budget hotel of Home Inn & Hotels Management Inc in Shanghai. The top four Chinese budget hoteliers Home Inn, Jin Jiang, 7 Days Inn and Hanting Inn all indicated an interest in acquiring the Motel 168 chain from Shanghai Motel Management Co. With eyes on the popular Chinese motel chain that could fetch up to $1 billion, the top four Chinese budget hoteliers, 7 Days Group Holding Ltd, Shanghai International Jin Jiang Hotel Group, Hanting Hotel Group and Home Inns & Hotel Management Inc all indicated their interest in acquiring Motel 168 Hotel Group recently - along with other bidders such as Europe's largest hotel group Accor. The US investment bank Morgan Stanley brought a 20 percent share of Shanghai Motel Management Co, the company that operates the Motel 168 brand, for $20 million in 2006 and now controls 59 percent after two further investments. It hasn't said why it wants to sell now. But its offer to sell is expected to kick off a keen bidding contest between hotel operators who are rushing to establish their presence in the budget hotel sector during a time of a room glut in the luxury hotels, especially in the major cities. Hotel industry experts said that Morgan Stanley has picked the right time to sell because the delay for Motel 168 to obtain a listing on the depressed stock market may be prolonged. The sale of Motel 168 could be a game-changer for Chinese hotel chains. An acquisition by either 7 Days, Shanghai International Jin Jiang or Hanting Hotels, the second, third and fourth players, would help them leapfrog Home Inns in terms of number of rooms. As for Accor SA of France, which is unhappy with the development of its Ibis budget brand in China, Motel 168 is expected to be a saver. "It's the quickest way for Accor to gain greater market share in China's budget hotel sector," said Adeline Phua, associate director of HVS Global Hospitality Services. Accor, the fourth-largest hotel group globally after InterContinental, Marriott and Starwood Hotels, established its lower-end Ibis brand in China with the opening of its first property in Tianjin in 2004. But its budget hotel business in the country has grown at a slower rate than expected and only 52 Ibis's have been opened since, just a little more than half of the company's original plan. "Even though foreign brands have made forays into the market, they have been outperformed by the domestic counterparts in both networks and recognition," said Zhao Huanyan, a professor at the Shanghai Academy of Social Sciences. "China's local budget hotel operators have never been hungrier than in the past 10 years, the top three (domestic players) created sales amounting to 40 percent of the sector's total," Zhao said. Foreign hoteliers have less than 5 percent of China's budget hotel share. "Those well-known international hotel groups are famous for their high-end luxury product, while there aren't many key players in China's budget hotel market," said Lily Ng, vice-president of sales and marketing at Jones Lang LaSalle Hotels. Reasons for that partly lie in the price-sensitivity of customers at China's budget hotels. International chains usually charge more than the locals, for example, Ibis's upcoming branch in Shanghai's Xujiahui district (it will open in April) is asking 299 yuan ($45.5) a night, while on average the price of a room at the 7 Days Inns nationwide is 170 yuan and Home Inn is 190 yuan.

China's exports of rare earth metals burst through the US$100,000-per-ton mark for the first time in February, up almost nine folds from a year before, while the volume of trade stayed far below historical averages. China’s squeeze on rare earths, which are used in a wide range of hardware including precision-guided weapons, hybrid car batteries and iPads, has forced prices up dramatically since July last year, when each tonne fetched a mere US$14,405 on average. The apparent price rises have averaged US$10,000 per ton per month but accelerated in February, galloping ahead by US$34,000 per tonne, according to Reuters calculations based on data from China’s Customs office. Last month each ton of exports was valued at US$109,036, including the cost of insurance and freight, almost half as much again as the average value in January. The explosion in export values has coincided with a collapse in volumes coming out of China, the source of almost all the world’s rare earth supplies, which has cut export quotas of the 17 rare earth metals and raised tariffs on exports. China’s actions have infuriated its trading partners but lifted the shares of the few mining and prospecting companies outside China that are well-placed to capitalise on the constriction of Chinese supply. They include US miner Molycorp, Canada’s Rare Element Resources and Neo Material Technologies and Australia’s Arafura and Lynas. But those firms’ share prices have been under pressure this month because Japan’s earthquake and tsunami are expected to temporarily slash demand from China’s biggest customer. In February, 281 tonnes of Chinese exports went to Japan, valued at US$38.9 million or US$138,406 per ton. China exported a total of 750 tons in February, slightly more than the 647 tonnes shipped in January but otherwise the lowest monthly volume since February 2009, when demand was hit by the global financial crisis. China’s Customs office changed its method of presenting rare earths exports in its headline data this year, boosting the reported volume by including products made from rare earth metals in the total. By that method, exports were 2,976 tonnes in February, up by 132 per cent from a year before, when the figure did not include rare earth products.

Hong Kong*:  March 24 2011

Visitors view a booth during Hong Kong International Film & TV Market Expo in Hong Kong, south China, March 21, 2011. More than 180 enterprises from over 20 countries and regions took part in the expo that kicked off on Monday.

Some 237,000 new migrants will get a cash handout of HK$6,000 each under a proposal by members of the government-run Community Care Fund, in what looks like another change of heart from authorities to appease the public. The move, which will be discussed today, is going to cost the fund HK$1.5 billion if approved. It comes after strong protests by new migrants over being excluded from the government's cash giveaways in the revised budget. Under the fund proposal, new adult migrants with a household income below 75 per cent of the median household income of the same-size Hong Kong family will qualify for the handout. Taking figures from the fourth quarter of last year as a reference, a new migrant from a four-person family will qualify if their combined family income is under HK$18,000. For a family of six, the ceiling will be HK$27,000. Those who are living on public assistance should also be eligible, according to the proposal. The fund's home affairs subcommittee will meet to discuss details at a meeting today. One panel member said: "The government believes this is the easiest and most direct way to give out the cash. "But to be in line with the terms and reference of the fund, we have to set some eligibility requirements. The fund is supposed to help those in need so we need to define who are in need." He said he had doubts if those receiving public assistance should also be given the money. "This could give rise to a double benefit," he said. The move will be seen as another political capitulation from the government. It earlier announced a HK$6,000 giveaway to each Hong Kong permanent adult resident after running into strong public criticism for its original budget - which ruled out any instant tax rebate on the grounds of inflation concerns. Thousands of people took to the streets on March 6 in protest. Former secretary for the civil service Joseph Wong Wing-ping and Civic Party vice-chairman Alan Leong Kah-kit called on Financial Secretary John Tsang Chun-wah to step down. A few days after the budget Tsang promptly revised it. The revised budget in turn provoked criticism from new migrants who felt they were unfairly treated by being excluded from the cash giveaway. Analysts also criticised Tsang for deviating from a long-held principle of prudent financial management. The authorities' latest change of heart still leaves some people not satisfied. Grass-roots group the Society for Community Organisation said all new migrants should be eligible or else it could be in breach of the Basic Law. Citing Article 26 of the Basic Law, the group said the only right non-permanent residents might not be entitled to was the right to vote and stand for election. It said setting a means test was treating new migrants as second-class residents.

Eric Chan (right), shakes hands with his former boss Simon Peh yesterday after being confirmed as the new director of immigration. New immigration boss dodges thorny issue of dissident visas - Hong Kong's new immigration director sidestepped the thorny issue of political dissidents' entry applications, saying only that he would handle them in accordance with the law. Eric Chan Kwok-ki, 52, whose appointment was confirmed by Beijing yesterday, will take over from his former boss Simon Peh Yun-lu next Monday. The government came under fire in January after refusing two exiled June 4 dissidents, Wang Dan and Wuer Kaixi, entry to Hong Kong to attend the funeral of democracy stalwart Szeto Wah. When asked about how he would handle applications from political dissidents, Chan replied that genuine tourists would be welcomed. He added: "All the work in the Immigration Department will be dealt in accordance with the laws. And my consideration will also be based on the overall interest of Hong Kong people." Meanwhile, the staff union called on Chan to solve the manpower shortage problem "as soon as possible". Ngai Sik-shui, vice-chairman of the Immigration Service Officers Association, said the situation got worse when some officers were deployed to handle stranded residents in earthquake-struck Japan. "Some of our colleagues don't even dare to drink any water as they do not have time to go to the toilet," he added. Chan said he would make better use of information technology to facilitate the movement of tourists at border control points. Chan, who joined the department as assistant immigration officer in October 1982, took up the post as deputy director in 2009 after David Chiu Wai-kai, considered to be the next director at that time, had been demoted amid controversial issues. Outgoing director Simon Peh, 55, who is retiring from the department after 33 years, said he was planning to take a long vacation before considering his next move.

Hong Kong offers shelter to expatriates fleeing Tokyo after disaster - Hong Kong has become a haven for expatriates fleeing Tokyo in the wake of the crisis in Japan — among them finance professionals in need of trading licences and children who should be in school. The city's Securities and Futures Commission said it took the initiative, after the earthquake and the nuclear scare, to contact institutions that might wish to relocate trading staff and said it would grant them temporary or provisional licences. "In response, we have received indications that around 200 individuals who require such licences to be able to work in Hong Kong will be relocated here," a spokesman for the watchdog said. He said 50 formal applications had been received by the end of last week and 30 licences granted. Hong Kong requires licences for people dealing in and advising on securities or future contracts, or for providing automated trading services, the market regulator said. Although no international banks have closed their operations in Tokyo, some of their expatriate employees have left Japan. A manager with a US bank who wanted to remain anonymous said some senior expatriate bankers based in Tokyo asked to leave because they did not feel safe. But the number was small, because many senior bankers did not regard the situation as threatening. Not all who leave opt for Hong Kong. "Those who go to Hong Kong are senior bankers who work in equities, debt trading and other areas," the bank manager said. Some children of expatriates based in Japan are also relocating to Hong Kong, at least temporarily. The French International School (FIS) in Hong Kong put up a notice that special arrangements were being made for students coming from the Tokyo FIS. A spokesman for the school said that 75 students — 40 from secondary and 35 from primary — were already taking classes in Hong Kong. He said tuition fees would be waived until April 1, although students would be charged for food, travel and supplies. "Following the crisis in Japan, several French families have left Tokyo in a hurry and are in Hong Kong temporarily," the FIS notice read. "As a measure of solidarity and in order that students of the French school in Tokyo can continue their education while they wait in Hong Kong, the FIS has established exceptional circumstances and simplified temporary reception from the [kindergarten]." Simon Walton, principal of the Japanese International School, said they did not have the extra room for Japanese families fleeing the disaster, but had received many inquiries from Japanese people overseas. Patsy Chan, director of communications at the Kowloon Shangri-La Hotel, said they had received bookings and inquiries from overseas Japanese looking for one to several rooms in Hong Kong. The hotel is fully booked from today until the end of the month. Daf Marquez, at the front desk of Langham Place, said the hotel had also seen an increase in Japanese tourists. Those already in Hong Kong are extending their stay. The hotel has been fully booked for a week and will be for the rest of the month.

 China*:  March 24 2011

Chinese Premier Wen Jiabao (R) talks with Chief Executive Officer of Royal Dutch Shell Peter Voser (L) during a meeting with entrepreneurs from various countries at the China Development Forum in the Great Hall of the People, in Beijing, March 21, 2011. Chinese Premier Wen Jiabao said on Monday that China's 12th Five-Year Plan has brought hope and confidence not only to China, but also to the entire world. "China's opening-up policy will remain unchanged, and we will further strengthen, rather than weaken our policies for drawing foreign investment, advanced technologies, as well as management experience," Wen told about 70 overseas delegates in attendance at the China Development Forum 2011 in the Great Hall of the People. China's 12th Five-Year Plan was released earlier this month during the annual session of the National People's Congress, the country's top legislature. It steers the world's second largest economy towards a path of fairer and greener growth in the next five years. According to the plan, China aims to reduce energy consumption per unit of GDP by 16 percent in the five years leading up to 2015. The country is also looking to cut carbon dioxide emissions by 17 percent during the period. "China's development is inseparable from the world, and the development of the world cannot be realized without China," Wen said. "The more China develops, the more it needs to cooperate with the world," he added. As the world economy bounced back, the Premier called on the international community to enhance coordination in a spirit of unity and solidarity and called on countries to pull together to promote vigorous, sustainable and balanced growth of the world economy. Wen said he was optimistic about the prospects for the world economy. The forum runs from Saturday to Monday, and has the theme "the Ongoing Transformation of China's Growth Pattern".

China halts Libya investment - ZTE headquarters in Shenzhen, Guangdong province. Some Chinese companies, including ZTE, China's major telecom equipment maker, have been seriously affected by the political unrest and subsequent airstrikes in Libya. The Libyan turmoil will not hurt China's investment and business in Africa as a whole, although investment activities have been halted after the breakout of the unrest, officials and experts said. Early on Sunday, Western countries, including the United States and France, launched airstrikes and fired cruise missiles, a month after the unrest erupted in some Libyan cities in February. China will not make new investments in Libya in the short term until the Libyan situation stabilizes, an official with the Ministry of Commerce said on Monday. "Before the situation becomes clear, the exchanges between China and Libya in terms of trade, construction contracts and investment will be seriously affected," an official in charge of West Asian and North African affairs of MOFCOM said on condition of anonymity. "I am afraid that China is unlikely to make any new investments there soon," the official added. Chinese investment in Libya is mainly in the energy and construction sectors. Some Chinese project contractors, including China Gezhouba Corp as well as China Railway Construction and Metallurgical Co, have projects in Libya. But since the political unrest broke out in February, most Chinese companies in Libya have either withdrawn or stopped operations and a large number of people have been evacuated. "We are closely following what will happen there. But before everything gets back under control, we will not send any people there," said Zhang Hui, spokesperson of ZTE Corp. In the past month, the second-largest telecommunication equipment maker in China has evacuated 88 staff members, and only 20 local employees remain on duty for daily operations. "The company will continue to cooperate with our partners in the future, when the time is right," Zhang said. ZTE Corp is the largest telecommunication equipment provider in Libya, and has made investments worth 3 billion yuan ($457 million) since 1999, the CBN TV channel said. However, many experts said China's determination to invest in Africa will not change. "Although the investment in Libya gets delayed, China's investment in Africa will not be affected," said Wu Fang, senior researcher of China-Africa Research Center of International Trade and Economic Cooperation.

The Shanghai Expo's China Pavilion will again extend its exhibition beyond the scheduled closing on May 31, the Expo Bureau said on Monday. The pavilion's exhibition was first extended for half a year when the Shanghai Expo ended on Oct. 31, 2010. However, the pavilion is running at full capacity with more than 40,000 visitors per day, said Qian Zhiguang, head of the China Pavilion. Tickets for the pavilion are priced at 20 yuan for adults and 15 yuan for students, disabled people, military servicemen and senior citizens. It is open from 9 a.m. to 5 p.m., seven days a week. After May 31, the pavilion will have a "short break" for maintenance. Then, it will be reopened to the public again, said Qian, who did not specify how long the "short break" will be. He said that the China Pavilion and Saudi Arabia Pavilion might reopen together. The Italy, Spain, France and Russia pavilions, which were also preserved after the expo closed, are under restoration and will be reopened after the China and Saudi Arabia pavilions, he added. The China Pavilion, one of the most popular pavilions at the Shanghai World Expo, received more than 10 million visitors during the six-month event. 

Hong Kong*:  March 23 2011

Stars attend opening ceremony of HK Int'l Film Festival - Participants attend the opening ceremony of the 35th Hong Kong International Film Festival (HKIFF), in Hong Kong, March 20, 2011.

Regina Ip describes the position of her New People's Party as right of centre, with a strong interest in directly elected seats. The freshly launched New People's Party is not interested in contesting for grass-roots or public housing constituencies, said chairwoman Regina Ip Lau Suk-yee. The party was centre-right, she said, and unapologetic about its elitist image. Its board is filled with former senior government officials and business leaders. Its aim is to woo the middle class, professionals and civil servants. "We are not planning to send anyone to run in constituencies dominated by public housing estates," Ip said. "We don't have the resources. Nor do we have the candidates suitable for that kind of community. Most of our candidates are either young or of professional background. "We are ... focusing on constituencies which are not the traditional strongholds of the DAB or the FTU ," she said, referring to the Democratic Alliance for the Betterment and Progress of Hong Kong and the Federation of Trade Unions. Ip said the party would field about a dozen candidates in November's district council elections. "We are a bit right of centre," she said of her party's position. That is similar to the stance of the pro-business Liberal Party and Economic Synergy. But Ip said her party was clearly distinct from them. "We are more concerned with improving the overall business environment and restructuring the economy than protecting the interests of individual sectors. "We put more emphasis on participation in direct elections. I am very glad to hear that the Liberal Party is not giving up on direct elections. But so far they are a party of functional representatives. And so is Economic Synergy. I am not aware of plans yet of Economic Synergy to take part in direct elections." The party said six new members had joined its board of directors, taking the total to 24. Among them were Jeremy Godfrey, former government chief information officer; Alfred Chan Cheung-ming, chair professor of social gerontology at Lingnan University; and Dr Sam Wong Chun-sing, chairman of the New Territories General Chamber of Commerce. Ip's party would seek to put members on the Election Committee that chooses the chief executive and pursue seats in the Legislative Council. Recently Ip publicly hinted she could be a candidate for the chief executive - but said no decision had been made. Her party would also act as a voice for civil servants, and intended to field several former civil servants in the district council elections. "Clearly civil servants have realised that they need a voice in the district councils or Legislative Council," she said. Ip pointed to last year's legislation that required a cut to senior civil servant salaries by up to 5.38 per cent. "I raised concerns on their behalf. But I got very little support from the major parties, whether from the Democratic Party or the DAB. So civil servant unions were very disappointed, and they realised it's really time that they should have their own representatives."

The Boeing 747-8 Intercontinental takes off on its maiden flight from Paine Field, in Everett, Washington, March 20, 2011. The 747-8 Intercontinental will seat 467 passengers, 51 more than the latest model of the classic 747, and burn less fuel while offering passengers more comfort, the US planemaker says. The Boeing Co.'s newest and largest passenger plane completed its first flight on Sunday, marking another milestone as the company prepares to get the long-haul jumbo jet ready for the market by the end of the year. The 4hour-flight, which began in Everett and landed in Seattle, was the first in a months-long test program that will log more than 600 flight hours between now and the fall. Two pilots flew the 747-8 Intercontinental from Paine Field across Washington state, rousing cheers from several thousand Boeing workers who watched. Chief test pilot Capt. Mark Feuerstein said the flight was clean and that the airplane was "ready to go fly right now." The new plane, which has a new wing design and an upgraded flight deck, can carry up to 467 passengers with a range of about 8,000 nautical miles. The company expects to deliver the jet by the end of 2011, said Elizabeth Lund, Boeing vice president and general manager of the 747 program. A cargo version of the plane has been in flight tests for about a year. Feuerstein and co-pilot Capt. Paul Stemer guided the plane up to 20,000 feet (6,100 meters), and traveled about 250 knots, testing the airplane's handling and performance, including its maneuvering abilities. "It's one of the cleanest first-flight airplanes of a new design that I've seen," Feuerstein said. "It just went perfectly."

A last-minute, HK$500,000 government handout has saved one of Hong Kong's hottest stage acts from being dead in the water on the mainland. The Liaisons is a musical drama starring Josie Ho and Tse Kwan-ho and directed by veteran Fredric Mao Chun-fai, the former artistic director of the Hong Kong Repertory Theatre. The famed directors of the Infernal Affairs film series, Felix Chong Man-keung and Alan Mak Siu-fai, wrote the script. It won critical acclaim and was a popular success last year. But its creators were close to cancelling its mainland engagement because of a lack of funds from commercial sponsors. The Liaisons attracted the attention of Beijing People's Art Theatre, a top national theatre, which invited the group to perform in Beijing. But even the all-star production had failed to attract sufficient commercial sponsorship to cover costs of HK$2 million. At the last minute, the Home Affairs Bureau offered about HK$500,000, and that saved the situation. A contemporary restaging of the classic Cantonese opera The Legend of the Purple Hairpin, the drama tells the story of Ho and Tse's entangled love affair. "In Purple Hairpin, Tang dynasty poet Li Yi met his girl Huo Xiaoyu when she dropped her purple hairpin. In our drama, I met Josie after she dropped her mobile phone," Tse, the Taipei Golden Horse Film Festival best actor, said. Director Mao said he had bargained for sponsorships for half a year but the sum was still short of the costs. This was when government sponsorship came to his assistance. Also backing the drama is Oscar-winning Tim Yip for the team's image and costume design. First shown in the Arts Festival last year, Mao's team repeated the drama in Shanghai during the World Expo. Now it is going a step further, taking the performance to Beijing's Capital Theatre from Thursday to Sunday, and Shenzhen Grand Theatre on April 1 and 2. Shows will be in Cantonese.

Unlike Hong Kong, where investors and companies have been enthusiastic about investing in yuan products over the past nine months, many Australian individuals and companies think the yuan is untouchable. "I don't know if we can use yuan to pay the bills of our Chinese suppliers. I think the currency is not yet freely convertible," said Eric Wong Kam-wah, chief executive of the Golden Century seafood restaurant in Sydney's Chinatown. "It sounds good if we can settle trade in yuan as we also import furniture from China. It is more convenient and will avoid exchange risks. "But I don't know if my bank offers yuan services. If it does, I may consider it," he said. Wong is right. The yuan is not yet fully convertible. But since the launch of a pilot scheme by Beijing in 2009, restrictions have been gradually lifted and 300 mainland firms conduct cross-border trade settlements in Hong Kong. Other relaxations last year mean that companies around the world and 67,000 mainland firms may now choose to settle trade in yuan. Before that, they could only use the US dollar or other currencies to do so. From the second half of last year companies began issuing yuan bonds, yuan insurance products and yuan funds. They have proved popular with many investors betting on the rising value of yuan - which has gained 20 per cent in the past six years. Other relaxations are also on the way and there is also a plan to issue yuan-denominated gold bars next month. Meanwhile, Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) is looking at the issue of yuan shares this year. But while yuan products are in demand in Hong Kong, it is a different story in Australia. For instance, while ATMs in tourist areas can be used to withdraw British pounds, euros and US dollars, the yuan is nowhere to be seen. Shop assistant Merle Jones, who works in the Rocks tourist area, said tourists paid her in yen, euros or pounds "and if the yuan was an international currency like the others, we would accept it". But the key worry for Jones - and many other retailers - is whether the yuan really is as freely traded as other currencies. "It seems the yuan is still a domestic currency in China," she said. "This is worrying if we accept yuan from customers and can't convert them to Australian dollars."

The local stock market is set to lag behind the rising US and EU markets as funds continue to move away from the region this week following the Japan earthquake, market watchers said. The Hang Seng Index is expected to hover between 22,300 and 22,500 today, Delta Asia Financial head of equity markets Conita Hung Lai-ping forecast. The expected hike in the required reserve ratio has had little impact on mainland lenders, she said. However, she expects the annual results of mainland banks, to be released this week, may boost the Hang Seng Index. But Fulbright Securities general manager Francis Lun Sheung-nim projected a stronger rebound of the benchmark in April which may breach the 24,000-mark, when the impact of the disaster in Japan begins to fade. "I believe there will not be any further deterioration but improvement, and the Hong Kong index will make up the growth which other bourses are seeing," Lun said. Meanwhile, Hung expected speculation in stocks of food producers due to Japanese food being contaminated by radiation. Some local food picks include China Foods (0506), China Agri-Industries (0606), China Yurun Food Group (1068) and fruit juice maker Huiyuan Juice (1886). The quake in Japan may reduce demand for oil as many factories lie destroyed. Western military action against Libya, however, is likely to boost commodity prices, Hung said. She expected oil prices to hover between US$98 (HK$764.40) to US$103 a barrel. Financial Secretary John Tsang Chun-wah, writing in his blog yesterday, slammed market speculators, stressing Hong Kong's equity and exchange markets remain stable and orderly. Tokyo plans to inject up to 10 trillion yen (HK$966 billion) to help businesses finance their day-to-day operations and repair infrastructure damage, the Nikkei newspaper reported. Meanwhile, the Group of Seven spent US$25 billion (HK$195.02 billion) to intervene in the soaring yen on Friday.

 China*:  March 23 2011

Chinese official newspaper People's Daily on Monday stepped up opposition to Western air attacks on Libya, accusing the United States and its allies of breaking international rules and courting new turmoil in the Middle East. The paper likened the assault on Libyan sites to the US-led invasion of Iraq in 2003, and suggested it followed a pattern of Western overreaching in other countries' affairs. "The blood-soaked tempests that Iraq has undergone for eight years and the unspeakable suffering of its people are a mirror and a warning," said the commentary in the People's Daily. "The military attacks on Libya are, following on the Afghan and Iraq wars, the third time that some countries have launched armed action against sovereign countries," it said. "It should be seen that every time military means are used to address crises, that is a blow to the United Nations Charter and the rules of international relations." The paper argued that the new conflict in Libya could become a fresh point of contention between Beijing and Washington. China was among five countries that abstained from Thursday's vote on the UN resolution to allow "all necessary measures" - a term for military action - to authorize a no-fly zone and protect Libyan rebels from Muammar Gadhafi's forces. On Sunday, the Chinese Foreign Ministry expressed "serious reservations" about military action. "China has noticed the latest developments in Libya and regrets the military strike against Libya," the ministry spokeswoman Jiang Yu said. On Monday, the Ministry said its Middle East envoy would visit Israel, Lebanon, Syria, Qatar and Palestinian-controlled areas this week. The other four nations which also abstained from the UN vote are Russia, a permanent Council member with veto power, and Brazil, Germany and India, the three non-permanent Council members. Russia called on Britain, France and the US at the weekend to stop the air strikes, describing them as "non-selective use of force" against non-military targets.

Beijing’s lonely hearts are getting a little tonic for love sickness from a new group dubbed the Love Dinosaur Park, CFP reported. Manager Gong Yelong said he initially started the group to help a friend a year ago. "At that time, one of my friends was to marry soon, but he didn’t know how to deal with the letters and things from his past lovers. He turned to me to keep them for him. It then struck me that why not set up a “Bank” to store these things for people in need," he said. After meeting with other people struggling to come to terms with a former relationship, Gong found many were still bothered by love sickness, so he organized for these unhappy people to sit together to talk about their problem and encourage each other to share. "About one hundred members have joined the club to relieve from the troubles of the past. I remember a girl Xiao Wang used to sit in the corner in silence when she came, but now she is revived to be a happy girl and helps others often," Gong said. By taking lessons and tests, and communicating with each other, many members have rebuilt their confidence in life and have found new love, according to reports.

Renowned Chinese liquor producer Kweichow Moutai Co., Ltd. announced Monday its annual net profit in 2010 rose 17.13 percent year on year on strong market demand. Its net profit hit 5.05 billion yuan (769.17 million U.S. dollars), the Guizhou-based firm said in its 2010 annual report filed to Shanghai Stock Exchange. The company's annual business revenue increased 20.3 percent from one year earlier to 11.63 billion yuan while earnings per share stood at 5.35 yuan. The economic rebound accelerated the development of liquor industry despite rising raw material prices, said the report. The A-share price of the upmarket distiller opened down 0.70 percent from the previous close to 189.8 yuan Monday.

The combined photo shows a performance presenting the ancient royal sun worship ceremony of the Qing Dynasty (1644-1911), in the Ritan Park (Temple of the Sun) in Beijing, capital of China, March 20, 2011. The performance, which is adapted according to historical literature of the Qing Dynasty, consists of three parts. 

A rush to develop new commercial properties on the mainland will exacerbate oversupply, particularly in second- and third-tier cities, property analysts warn. With residential developments under a cloud owing to the introduction of government cooling measures, developers have turned to commercial projects to offset declining revenues from home sales. Typical of the trend is China Overseas Land (SEHK: 0688) and Investment, which plans to expand its investment property portfolio from an existing 310,000 square metres to 1.8 million sq m in the next five years. Beijing-based developer Sino-Ocean Land (SEHK: 3377) Holdings also plans to increase its investment property portfolio, and has a total commercial floor area of three million sq metres under construction. "This would be moving towards another extreme," said Alan Chiang Sheung-lai, head of residential market at property consultant DTZ on the mainland. "In the past few years, every mainland city has built dozens of giant shopping malls covering a few hundred thousand square metres. The problem of oversupply already exists in the retail market." Chiang said it was common to see shopping centres of more than 200,000 sq metres in many cities while there were "seven or more" giant complexes being built. "In fact, demand in each city could support no more than one or two shopping malls of such a size," he said. Data from the firm shows that, in all, more than one million sq metres of new retail space came on the market last year. The company forecasts the supply and competition for quality tenants among retail landlords will increase in the next few years. The problem of oversupply is also an issue in the office market, analysts say. Many local governments encouraged developers to build grade-A offices in the cities to try to attract more financial and business activities. Chiang said the oversupply problem was serious, particularly in second and third-tier cities, such as Wuhan, Xiamen and Shenyang. "The problem will worsen if developers rush into developing commercial properties," he said. One Beijing developer said property firms had been working on office and shopping projects recently because local governments encouraged commercial development. "But not all could achieve success. Rents in shopping malls in prime locations such as Xidan and Wangfujing Street continued to grow last year," he said. "However, the regional shopping centres in non-core areas and the suburbs are under pressure." "They have development potential. But they have to wait for the opening of new railway links and the districts to become mature," the developer said. He believed developers would shift to the residential market from the commercial sector once sentiment in residential property improved.

Workers scatter sterilizing chemicals while burying pigs that had been fed with banned additive clenbuterol in Qinyang city, Henan province, last week. Clenbuterol encourages the development of muscle and reduces fat in pigs, but is harmful to humans. Supermarkets across the country were busy recalling meat products at the weekend and taking packages off the shelves as a result of the growing scandal in which a banned substance was found in pork produced by an affiliate of the country's largest meat processor. Meat products branded as Shineway in English that were processed by the Henan-based Jiyuan Shuanghui Food Co Ltd were found last week to contain clenbuterol, a chemical that is hazardous to humans. The producer is an affiliate of the market-leading Shuanghui Group. In Xi'an, the capital of Shaanxi province, as in much of the country, supermarkets took products produced by Jiyuan Shuanghui off the shelves at the weekend. Customers are also being called on to return affected products to the store. The recall work was likely to take three days, local media reported on Saturday. Some 20 to 30 tons of meat products produced by the company had been selling in the city every month. Major supermarkets in Beijing, such as Wu Mart and Ito Yokado, told China Daily on Sunday that they were not recalling any Shineway meat products because the packs on their shelves had been processed by other affiliates of Shuanghui and had all been tested as safe. But in Guangzhou, the capital of Guangdong province, the Vanguard supermarket chain went one step further and withdrew all sausage marketed by Shuanghui despite the fact that none of it was made by the offending affiliate, Jiyuan Shuanghui. The Trust-Mart supermarket chain in the city was still selling Shineway sausages on Sunday and said it had not been ordered to withdraw the item. Customers at the supermarket, however, said they would not buy the brand. Major supermarket chains received a notice from the Shuanghui Group on Wednesday saying its cooked meat products sold in Guangzhou were safe. The live pigs bought by Shuanghui in Guangdong were not sourced from Henan province, where the pigs fed with the illegal additive came from, said the industry and commerce administration of Guangzhou. The ongoing recall began on Thursday when Shuanghui Group ordered its branches to recall all meat products processed by its Jiyuan affiliate. "It (the recall) does not mean all products produced by Jiyuan Shuanghui are substandard. The move is being done to reassure the public," Du Junfu, Party chief of Shuanghui Group, was quoted as saying by Xinhua on Saturday. By Saturday, more than 2,000 tons of meat products and 70 tons of fresh meat had been recalled, the company said. But it did not revealed the total amount of the products that needed to be recalled. The company suffered a major setback when China Central Television (CCTV) revealed on Tuesday that Jiyuan Shuanghui had purchased pigs that had been fed with the illegal additive clenbuterol. The feed additive causes the animals to develop more muscle and less fat and makes them more valuable. However, pigs fed with the additive produce pork that can be harmful to humans. At the Jiyuan Shuanghui plant, bulk meat products bore seals impounding them and formerly busy workshops were deserted. Twenty pigs that had been slaughtered but that had not been processed were laying in the empty building, Xinhua reported on Saturday. After the scandal broke on CCTV, the provincial authorities in Henan conducted urine tests on 1,512 pigs at nine pig farms. It said 158 pigs tested positive. In addition, 271 kilograms of feed in the province that was found to contain the additive was destroyed on Saturday. Three senior officials from the animal husbandry bureaus in the province were suspended from duty in the aftermath of the revelations, said Liu Xuezhou, chief of Henan department of health. Another 27 officials in the province were in police custody or had been sacked or suspended, he said.

Herdsmen from the Kirgiz ethnic group celebrate the festival of Nowruz, which marks the first day of spring and the beginning of the day on the Iranian calendar, at a square in Akqi county in the Xinjiang Uygur autonomous region on Saturday.

Henan Chuying has plans for a multibillion-yuan organic pig farm and believes that there is strong demand on the mainland for quality pork. Mainland poultry and livestock firm Henan Chuying Agro-Pastoral plans to spend four billion yuan (HK$4.74 billion) to set up a 400,000-hectare organic pig farm in Henan province. Expected to be completed in five years, the facility will include a pig-feed processing plant as well as pig farms and a pig processing plant. Approval has already been given for the development. Wu Yide, a director of the Shenzhen-listed group, said the mainland meat industry was starting to integrate and modernise rapidly amid the central government's concerns about food safety and food security. "Food safety is one of the major issues highlighted in NPC and CPPCC meetings. And the recent incident concerning the Shanghui Group has rung alarm bells," Wu said, referring to the discovery of the illegal additive, clenbuterol, in pork products by the Shanghui group's Shineway (SEHK: 2877) brand. "There is a strong demand for safe, quality pork products. If a big corporation can control the whole supply chain - from farming and feed to the actual production of pork, it can definitely control the quality of pork," Wu said. The price of pork has increased steadily over the past 12 months. According to figures from the Ministry of Commerce, the wholesale price of pork was 20.21 yuan per kilogram in mid-March, up from 15.29 yuan per kilogram at the same time last year. Wu expected the price of pork to remain stable this year. "What we see is a trend for big producers in the industry to further expand and integrate relevant businesses, while small- and medium-sized players, particularly those with less control over quality, exit the scene," he said. The mainland poultry market was still relatively fragmented, he said, with a sizeable number of small- and medium-sized operations. Henan Chuying produced about 700,000 pigs last year, a fraction of the mainland total of 600 million. The group plans to boost sales to more than 1.1 million pigs per year in 2011, and acquire middle- and lower-stream businesses to further integrate the supply chain. But management has not announced any concrete plans. In its annual report released on Friday, the group reported revenue for the year to December of 683 million yuan, up 26.2 per cent from 541.8 million yuan in 2009. Net profit, excluding non-recurrent losses and gains, reached 111.1 million yuan, up 45.5 per cent from 76.57 million yuan in 2009. The group issued 33.5 million new shares in September, which yielded 1.08 billion yuan. Its 2010 balance sheet recorded 1.8 billion yuan in total assets, including 1.18 billon yuan in liquid assets. Total liabilities reached 228.5 million yuan. Wu said the group had no plans to issue new shares, and would not consider any joint ventures with overseas companies. "The food industry, for security reasons, is much protected in China. I don't see direct foreign investment welcome yet in this area." Henan Chuying Agro-Pastoral closed at 55.65 yuan on Friday, down from 57 yuan.

With the spreading influence of the yuan, businesses in Sydney's Chinatown (left) both welcome and are concerned with settling trade in the currency (top right and bottom right) after the Australia and New Zealand Banking Group began offering yuan services last week.

Hong Kong*:  March 22 2011

Sushi restaurants are dropping Japanese fresh food from their menus as a radiation plume released by a damaged nuclear plant in the country heightens fears over possible radioactive contamination. "Our guests' safety is our top priority," said Sari Yong, a spokeswoman for Shangri-La Asia Ltd, the region's biggest luxury hotel company by market value with 71 locations worldwide. "As a precaution, we have temporarily stopped importing fresh food from Japan." The Mandarin Oriental International Ltd's flagship in Hong Kong and the city's Four Seasons Hotel have stopped buying food from Japan even as experts say the health risks haven't been established. The US and UK governments were among those to advise their citizens to consider leaving Japan on concerns that the authorities were losing the battle to contain leaks from the quake-stricken nuclear plant north of Tokyo. "Until the situation stabilizes in the country, it seems unlikely that guests will feel comfortable consuming Japanese produce," said Sally De Souza, public relations manager for the Mandarin Oriental hotel group. Japanese soldiers and firefighters from Tokyo, using 30 fire engines, began dousing sea water on reactor No 3, the site of an explosion earlier this week. Tokyo Electric Power Co said it may finish reconnecting a power line to the cooling system of the No 2 reactor. The power link will be used to restart pumps needed to pour cooling water on overheating fuel rods. Concerns about radiation levels in food have prompted South Korea, Indonesia, Thailand, Malaysia, India, Singapore and the Philippines to screen food imports from Japan. The US Food and Drug Administration is monitoring Japanese food for contamination and weighing steps that "may include increased and targeted product sampling", it said. The reluctance to buy seafood from Japan is affecting the nation's fish traders, who are already suffering from the damage caused by the earthquake and ensuing tsunami. "We are not selling anything because there are no customers," says Kengo Kumamoto, a worker at the wholesaler Miyake Fisheries at the Tsukiji Market in Tokyo. Sushi bars in Tokyo are also suffering. The normally busy Tsukiji Sushi Ichiban restaurant, located next to the wholesale fish market, was empty on Thursday afternoon. "We had a lot of customers until last Friday," said sushi chef, Shinichi Niiyama "Sales are really falling, we've probably lost about 70 percent, and a lot of it is from the lack of tourists." The Four Seasons Hotels Inc's Hong Kong hotel suspended all imports of Japanese food, including Wagyu beef, sea scallops and abalone, and substituted them with products from New Zealand and Australia, Claire Blackshaw, director of public relations, said on Thursday. London's Zuma and Roka restaurants have stopped buying fresh food directly from Japan.

Allan Zeman, chairman of Ocean Park, with a video of Ying Ying, who is ready to mate, showing an interest in Le Le. After five years of chewing bamboo, Ocean Park's giant panda Ying Ying has finally got eyes for the opposite sex - but she'd better be quick if Hong Kong is to hear the patter of tiny panda feet. Park keepers say the female panda has been acting strangely for weeks. She used to spend much of her time sleeping or quietly eating, but lately she has been bleating and playing in the water. All of these are sure signs that Ying Ying, now five years old, is sexually mature and has entered her estrous cycle, according to theme park officials. Her actions attracted male panda Le Le, also a five-year-old, and they had a romantic moment yesterday after staff put them together. "Both were energetic. But we could not confirm if they mated," Suzanne Gendron, executive director of zoological operations and education at Ocean Park, said. In a video showing their interaction, Ying Ying lay on the floor as Le Le tried hugging her neck and waist. Ying Ying continued her bleating. The park even closed its Amazing Asian Animals section - which houses the two pandas and two red pandas - for their natural mating from Friday to Sunday. "We have no time to lose," Gendron said. Giant pandas only ovulate once a year, and it allowed a small window of three days when the egg can be fertilised, she said. Hormonal levels peaked on Friday, indicating that the best time for Ying Ying has arrived. To increase the chances of fertilisation, the park also carried out artificial insemination on Ying Ying after what appeared to be the natural mating between the two. Depending on their mood, the pandas could meet each other again yesterday and today. Nevertheless, the success rate of young pandas producing offspring is only 30 to 50 per cent. While pandas have to carry a panda fetus for around four months, animal experts can only confirm their pregnancy two weeks before they give birth. Unlike humans, giant pandas do not put on weight when they are pregnant. A panda cub weighs only 50 to 230 grams, and Ying Ying weighs more than 400 times that: 97kg. Dr Wang Chengdong, a giant panda expert from the Wolong National Nature Reserve in Sichuan , said: "A panda cub is as small as a piece of faeces." If Ying Ying gave birth to a cub, Ocean Park would be able to keep it, park chairman Dr Allan Zeman said. Visitors should keep quiet when they go to see the pandas, park officials advised. A den has been prepared for the female in case she wants some time away from public eyes. To celebrate the 10th anniversary of Hong Kong's handover, the central government sent Ying Ying and Le Le from Sichuan to the park in 2007. It sent another pair of pandas, Tuan Tuan and Yuan Yuan, to Taiwan two years ago. The Taipei zoo tried artificial insemination on Yuan Yuan last month, which means the cities are competing to be the first to have a panda cub born this year.

The Environmental Protection Department believes the incinerator proposed for Shek Kwu Chau would become a draw for tourists interested in architecture and technology. Its assistant director Elvis Au Wai-kwong pointed to incinerators in Japan and Austria as examples of how such waste treatment facilities can draw visitors. "Tourists are attracted by the landmark buildings they build and the modern educational facilities," Au said. "They attract tourists because of the architecture and the modern facilities they provide." Au was speaking before a meeting tomorrow of a committee of the department's Advisory Council on the Environment, called to discuss the government's report on the choice of the island off Lantau for the incinerator, which has sparked a backlash from environmental groups and a series of protests over the past week. Au said his department had not yet spoken to the Tourism Board about how such a facility might be marketed to visitors, nor about any effect it might have on nearby Cheung Chau, which relies heavily on the visitors that each weekend, according to the board, double the island's population of about 25,000. Conservationists have expressed concern at the impact of a "mega incinerator" on species such as the finless porpoise, the white-bellied sea eagle and two snakes endemic to Shek Kwu Chau, while fishermen say the plan would destroy fishing grounds and ruin their livelihoods. "We are still in the planning stage, we are still planning the facilities and we are going to engage with the stakeholders by meeting them in the future," Au said. The economy of Cheung Chau would benefit, he said, because ferries would be employed to take the 1,000 or so people employed on construction of the incinerator to and from the island for meals. Cheung Chau residents, who have held a series of protests over the past week, remain unconvinced that the proposal would have any positive effect on their lives. "To be honest, no one really knows anything," said Rammy Chau, owner of the Lovely Island Restaurant on the Cheung Chau harbourfront directly facing Shek Kwu Chau. "We might get a short-term benefit from construction workers but it's hard to see any international visitors coming to see waste disposal in the long term. There also has to be an effect on us in terms of pollution, and no mention has been made on what happens with the boats that will go past full of rubbish." The incinerator would emit about 2,900 tonnes of sulphur dioxide and nitrogen dioxide, and 217 tonnes of respirable suspended particles per year, according to an environmental impact study. "It doesn't seem to have been thought through or explained," Chau said. "But we are a small community with no voice. If they put four small incinerators in four parts of town, Hong Kong as a community could share the burden - and no one would complain. Instead we are left having one huge one and a lot of questions." The government rejected an alternative site in Tuen Mun. The department says figures provided by the Maishima incinerator in Japan show it has received about 300 visitors a week since it opened in 2001 - although how many of them were students and how many international tourists could not be defined. Visitors to Cheung Chau yesterday showed concern about the plans. "I come here every time I come to Hong Kong," San Franciscan Sandra Tang said. "We love the city but Cheung Chau is an escape and you can enjoy the heritage and nature. We heard about the incinerator ... and it seems strange that anyone would want to put it in an area that has somehow remained so unspoilt."

Hong Kong's First 3-D sex movie a hot ticket with fans - When VIP tickets went on sale for 3-D Sex and Zen: Extreme Ecstasy - the world's first three-dimensional soft-core porn movie - fans queued overnight to make sure they got one. A large group - all of them men - lined up last weekend outside the offices of China 3-D Digital Entertainment on Morrison Hill Road, Causeway Bay, so as to be the first to get their hands on pre-sale VIP tickets when they went on offer at 11am the next morning. A VIP ticket guarantees a place at the front of the cinema for the best seats in the house and a perfect view of all the action. The pre-sale VIP tickets cost HK$100. The local production's initial run in Hong Kong is scheduled for April 14 to 25. Cinemas across the city will screen it. Box office returns will determine how long the film will run in cinemas after that. The price of standard tickets will vary from cinema to cinema. Two film enthusiasts, who gave their names only as Paul and Andrew, were at the front of the queue. They had no qualms about camping out all night to make sure they got their VIP tickets first for the show. "It should be good fun and I wanted to make sure I was able to get some tickets for myself and my friends," Paul said. "I don't mind sitting out all night if it means that I'll definitely get a ticket." Andrew agreed, but was prepared to stay up all night for another reason. "I'll buy a ticket for myself but the others I'll sell for a profit," Andrew said. "It's hard to say, but I think that some of the people here will be doing the same. It is a film people will definitely want to see, so if I get tickets now I can sell them later." Andrew said he would advertise the tickets for sale on the internet. As well as getting their VIP tickets, the first 50 lucky ticket buyers were also treated to a kiss from one of the film's busty stars, Vonnie Lui Hoi-yan from Hong Kong, who was making a special guest appearance at the ticket sale. The film's Japanese star, Saori Hara, was also there to dispense some kisses as well. Others buying their VIP tickets were not that forthcoming, and some were a bit sheepish about being there at all - one fan who had queued up all night preferred to stick his head into the plastic bag he was carrying rather than give a comment. "It's part of Hong Kong's culture for fans to sit out all night to try and get the best tickets available," Twriness Tang, of China 3-D Digital Entertainment, said. "There has been a lot of interest in the film and the pre-sales have been going well. Our promotion campaign seems to be working." Loosely based on a piece of classical Chinese erotic literature, The Carnal Prayer Mat, written by Li Yu in the 17th century, 3-D Sex and Zen stars two Japanese adult-film stars, Hara and Yukiko Suo, mainland actress Leni Lan and Lui from Hong Kong. The film's director, Christopher Sun Lap-key, would not give away too many details of the movie, but he did promise orgies, swinging and some very graphic sex scenes. The HK$25 million period drama will not make it to mainland cinemas because of its sexual content, but it's likely that mainlanders will come to Hong Kong to watch it.

Peter Sands, the group chief executive of Standard Chartered, and Benjamin Hung Pi-cheng, the chief executive of the bank's Hong Kong operation, at a media conference in Central yesterday. The bank says it had record profits and revenue in January. Standard Chartered will not change targets for double-digit income growth this year despite the turmoil in the Middle East and the unfolding nuclear disaster in Japan. "The world is obviously a very turbulent place as the tragic events in Japan and the political turbulence in the Middle East demonstrate, but Standard Chartered is in very good shape," said group chief executive Peter Sands, who added the bank started off with a record January both in profits and revenue. The bank dodged a bullet during the global financial crisis, thanks to its "big in Asia, Africa and Middle East" strategy. This year, all three regions face a rough start. Sands said the bank remained committed to the Middle East despite armed conflicts between government forces and protesters in Bahrain, where the bank has about 500 staff. "Some branches earlier this week were closed simply because of roadblocks that made it difficult ... to get to them," he said. "Our branches were open [on Thursday], and we will continue to operate there." Bahrain is a small island country near the western shores of the Persian Gulf. Standard Chartered does not have operations in Tunisia and Libya. It has eight staff in Egypt. HSBC Holdings (SEHK: 0005), another bank that is expanding in the Middle East, also closed some branches in Manama, the capital of Bahrain, where it has more than 300 staff. "In terms of our own business in Japan, this is a relatively small business that we have," Sands said. "At the moment, our business is operating in Tokyo with 100 per cent of the staff engaged." Standard Chartered doubled its workforce to more than 85,000 in the past five years to support its expansion in Asia, the Middle East and Africa. "The bank's exposure in Japan is not big, percentage-wise, so I don't think it would affect their business that much," said Louis Tse Ming-kwong, a director of VC Brokerage. Tse said India was actually the most important region for the bank. India became the largest profit contributor last year for the first time, with profits reaching US$45 million. Sands also said the bank was not retreating from South Korea after it announced a shutdown of 27 branches in the country this week. He said the move was mainly to help optimise portfolio and rid locations that were no longer profitable. The bank booked a 29 per cent increase in net profit of US$4.23 billion for the year to December, compared with 2009. Operating income rose 5.8 per cent to US$16.1 billion and operating expenses jumped 13.5 per cent to US$9.02 billion. Standard Chartered's shares yesterday rose HK$4.40, or 2.28 per cent, to HK$197.60, outperforming the Hang Seng Index, which closed up 0.07 per cent.

Shares of Ping An Insurance (Group) (SEHK: 2318) dropped to a six-month low yesterday after this week's controversial share placement with Cheng Yu-tung, with questions being raised over the company's transparency and corporate governance. The stock has fallen 9.9 per cent since the announcement on Monday that Jinjun, a company owned by Hong Kong jeweller Chow Tai Fook which is controlled by Cheng, bought 272 million shares for HK$19.45 billion, or HK$71.50 per share. The placement price was at a 12.5 per cent discount to market price. According to a filing with the Hong Kong stock exchange, Chow Tai Fook also had a short position in 196 million Ping An H shares in the form of cash-settled unlisted derivatives. However, Ping An's announcement did not disclose that Cheng had short positions in the stock. CCB (SEHK: 0939) International analyst Kenneth Yue said in a report that Ping An "did not offer satisfactory justification for why its shares should be placed with Chow Tai Fook instead of being offered to existing shareholders". Yue and other analysts also see short-term weakness in Ping An shares as a result of the placement. The placement with Cheng, the chairman of New World Development, was issued under the "general issue mandate". Ping An, which counts banking giant HSBC Holdings (SEHK: 0005) as a substantial stakeholder, received approval from shareholders in an annual general meeting in June last year to issue new shares equal to 20 per cent of existing issued shares, without offering them to existing shareholders first, at any time before the next annual general meeting. Ping An said the placement would broaden the shareholder and capital base, increasing its solvency ratio. "It (the transaction) seems unfair to existing shareholders even though it doesn't violate listing rules," said Ricky Tam Siu-hing, the chairman of the Hong Kong Institute of Investors. "This kind of transaction is very common among firms that also issue A shares. But I don't think it reflects well on Ping An when it comes to corporate governance." Analysts said it was not clear what the arrangement of Cheng's short positions were and whether he attempted to lock in gains using derivatives. A spokeswoman at New World declined to comment on the transaction but said Cheng bought the shares because he was "optimistic about the outlook of Ping An". Ping An yesterday closed 0.94 per cent lower at HK$73.60, raising its week's loss to 9.9 per cent.

 China*:  March 22 2011

The No 307 Hospital of the People's Liberation Army in the capital has been providing radiation exposure-related services to people returning from Japan since Wednesday night. As of Friday night, at least 44 people, including reporters, diplomats and students, have come voluntarily to the hospital for radiation checkups, and nothing unusual has been detected, said Zhou Zhenshan, director of the hospital's radiotherapy department. People first had their clothing checked to detect any radiation contamination, and then the doctors would decide whether further examinations were needed. People who stayed within 30 kilometers of the quake-hit Japanese nuclear plants in Fukushima are advised to go through intense checkups, but the hospital has not yet received anyone in that category, Zhou said, adding he did not know whether other hospitals were conducting such tests for people returning from Japan. "We opened the service because people are worried, and many called us during the past few days," he said. The hospital advises people to stay calm and get back to their normal lives, said Sheng Hongguo, a radiotherapist at the hospital, who is in charge of checking radiation levels on people's clothing. The probability of being exposed to a life-threatening level of radiation is quite slim for those who were far from the radiation-contaminated areas, Sheng said. Li Liuping was in Japan on a business trip from March 9 to 16. After returning to Beijing on Wednesday, he was deeply worried and went to the hospital on Friday morning to be tested. "I didn't want to put my family under risk. So I lived in a separate room after coming back to Beijing. Now I've taken the checkup, and the doctors told me everything was fine," Li said with great relief. Zhao Zhan, a reporter from the Beijing-based Mirror Evening News, went to the hospital on Thursday night after arriving from Osaka. He said he was not screened for radiation contamination at the airport in Beijing.

China's Minister of Commerce Chen Deming said here on Sunday that China hopes countries with large trade deficit with it could loose export control. Addressing the 12th China Development Forum held in Beijing from March 19 to 21, Chen said that China is willing to improve the trade structure through negotiations with countries which have large deficit with it. Chen said many Chinese enterprises are in need of advanced technology and equipment, resources and raw materials as they are transforming growth pattern. However, some countries are imposing restrictions on such exports to China. Chen said China's foreign trade is steering toward a more balanced direction. Its trade surplus has dropped for two consecutive years. Last year's surplus accounted for only 3.1 percent of China's GDP. In the first two months of this year, China posted a trade deficit of 890 million U.S. dollars, according to China's General Administration of Customs (GAC). Chen predicted that the proportion of surplus in GDP would further drop this year. "China's imports have been a significant driving force for global economic growth and have contributed substantially to relieving the imbalances of global trade," he said. Last year, China's imports from the United States, European Union and Japan climbed 32.6 percent, 30.2 percent and 36.6 percent respectively from 2009. China has already been running deficits with ASEAN countries, Japan, the Republic of Korea, as well as African and South American countries. According to the GAC, around 99 percent of China's trade surplus in 2010 came from the United States. Chen said that China will continue to boost the imports from the least developed countries, major trade partners and major sources of its trade surplus.

PetroChina (0857) saw annual net profit jump more than 35 percent to 139.99 billion yuan (HK$166 billion) for the year ended December 31, beating market estimates. The 35.4 percent hike came amid strong crude oil prices and robust economic growth in the mainland. Earnings per share stood at 76 fen, and a dividend of 18 fen was recommended. Net profit was 39.96 billion yuan in the fourth quarter, a year-on-year jump of 81.6 percent. Profits from the exploration and production segment climbed 46.4 percent from 2009 to 153.7 billion yuan, though refining and chemicals dipped nearly 55 percent to only 7.8 billion yuan. But that did not weigh too heavily, as revenue for the Beijing-based firm surged almost 44 percent to 1.47 trillion yuan. But cash and cash equivalents dropped 47 percent to 45.7 billion yuan. Windfall profits tax surged 160.6 percent to 52.17 billion yuan on higher oil price. Vice chairman and president Zhou Jiping said the group is seeking central government approval to lift the threshold of the windfall profits tax. He said the company may suffer losses when the oil price reaches US$90 (HK$702) per barrel. Crude was trading yesterday at 110.62 dpb. PetroChina, the world's second- largest oil and gas refiner by market value, aims to boost capital expenditure to around 320 billion yuan this year, a 16-percent hike over 2009. Of this, more than half, or 53.7 percent, will be put into exploration and production, with about a quarter going to natural gas and pipelines. "We will plan for more capital this year, since it is the beginning of the promising 12th Five Year [plan],"vice president Sun Longde said. Increased investments in low-carbon energy production are also on the cards. Zhou does not see businesses in the Middle East and North Africa being hampered amid the political chaos there. He also noted that PetroChina will ship 220,000 tonnes of refined oil to aid tsunami-stricken Japan. Shares of the company closed at HK$10.46 yesterday, down 0.76 percent.

Hong Kong*:  March 21 2011

The Daya Bay nuclear power station in Guangdong is just 50 kilometres from Hong Kong. Nuclear crisis puts HK energy goals in doubt - Officials will review situation in Japan before setting 50pc target - Hong Kong will consider the implications of the Fukushima nuclear crisis and its impact on the nuclear industry before deciding whether to harness more nuclear energy from the mainland, environment officials say. The unfolding crisis has led a number of nations to review the role and safety of nuclear power, with China ordering safety checks at all existing plants and suspending the approval of new projects. But Beijing's caution has also thrown into uncertainty Hong Kong's ambitious proposal to meet about half of its electricity needs with nuclear power from Guangdong by 2020. The proposal aims to lower the city's carbon intensity - a measure of carbon emitted per unit of GDP - by 60 per cent. To reach the target, Hong Kong would require power from at least two new nuclear reactors, along with the two existing 984-megawatt reactors at Daya Bay Nuclear Power Station, 50 kilometres from the city, which supplies 23 per cent of Hong Kong's electricity. The remainder comes from coal and gas. Hong Kong officials never spelt out where the new reactors would be built and to what extent the city would participate in the project. Commenting on Beijing's move, officials stressed that they still had not made up their mind whether to seek more nuclear energy.

Citic Pacific (SEHK: 0267), the Beijing-backed steelmaker and property developer, yesterday lost a two-year battle to block a Hong Kong police fraud investigation into its failure to disclose a HK$15.5 billion derivatives loss it racked up in September 2008. In the Court of First Instance, Mr Justice Alan Wright ruled that the state-owned enterprise should hand over documents it has been fighting to keep out of police hands. Based on a review of six documents being contested, he said: "There is a prima facie case of the existence of conspiracy to defraud." Citic Pacific did not admit to its losses from an unauthorised punt on the Australian dollar until six weeks after they occurred. The company, which is part of the massive Citic conglomerate, was raided by the Commercial Crime Bureau in April 2009. Police seized boxes of files and computers from the company's Hong Kong office. A few days later, former Citic Pacific chairman Larry Yung Chi-kin and managing director Henry Fan Hung-ling, resigned. Since the raid, Citic Pacific had tried to stop police using as evidence documents it said contained confidential advice from its solicitors. But yesterday, Wright ruled that the police could use the six files, after the Department of Justice argued successfully that they contained evidence of fraud. The department said Citic Pacific borrowed HK$1.75 billion from lenders, including the Bank of China, in between finding out about the derivatives loss and disclosing it. "Whilst they kept that information secret from the shareholders, from the public, and from the exchange, they went to the banks," prosecutor Charlotte Draycott, representing the department, told the court on March 10. The judge yesterday delayed implementing his ruling until April 1, to give Citic Pacific time to consider an appeal. He also sealed his judgment, which probably contains details of the six disputed documents and is unlikely to be made public unless Citic Pacific chooses not to appeal against the ruling. A Citic Pacific spokesman later said in an e-mail: "The company will be carefully reviewing the judgment and considering its response." In court, following the ruling, Richard Turnbull, the department's senior assistant director of public prosecutions, criticised Citic Pacific for using shareholders' funds to delay a police investigation. "A company is its shareholders. The shareholders are the company. Yet the company is, in this lengthy litigation, using shareholders' funds to defend a prima facie case of fraud." He also questioned whether Citic Pacific's current bosses, led by chairman Chang Zhenming, had delayed the police investigation to protect former directors who presided over the firm's disastrous foray into currency markets. Yung is the son of the late Rong Yiren, who was Deng Xiaoping's closest economic adviser as well as a one-time vice-president of China. Rong was also founding president of the Citic conglomerate, which is now a major financial powerhouse but was created by Deng in 1978 as an investment vehicle channelling Western funds into China as part of his project to revive the country's then shrivelled economy. Bernad Yip, a Citic Pacific minority shareholder attending yesterday's hearing, said: "I have never understood why the company has spent so much time preventing an investigation. I think it is time to resolve the matter so the company can focus on business."

Brian Kan Ping-chee, a five-time champion horse trainer and a rural leader, was arrested by the ICAC on Thursday on suspicion of violating the election ordinance in relation to a rural committee election held on Tuesday. Kan (pictured yesterday) was running for the Sheung Shui Rural Committee in the election on a slate with other candidates to form an executive committee cabinet. But with only 16 votes, they were beaten by Bowie Hau Chi-keung's cabinet, which got 44. North District councillor Hau Kam-lam was arrested with Kan. The Independent Commission Against Corruption yesterday confirmed two people were arrested on suspicion of violating the Election (Corrupt and Illegal Conduct) Ordinance in relation to the executive committee election of a rural committee. They were a candidate in that election and a district councillor, an ICAC spokesman said in a press release. Kan was released on bail and left ICAC headquarters in North Point last night, accompanied by his son Terry Kan Wing-fai, who is a barrister in Hong Kong, and senior counsel Cheng Huan. It is understood that Group X of the ICAC's Operations Department had invited more than 10 people for investigation in the past two days after receiving a complaint about pre-election vote-buying. The houses and offices of the arrested men were searched in the operation. The most influential horse trainer of his generation, the 73-year-old Kan is also a powerful political figure. He is the indigenous village chief of Tsung Pak Long, and was chairman of the Sheung Shui Rural Committee until 2003. He was an outspoken opponent during a controversial attempt to win inheritance rights for women in the New Territories in the 1990s and fervently opposed a conservation area for birds in Long Valley in 2001. In 1998 he was found guilty of indecently assaulting his maid. Hau Kam-lam, 57, a member of the Democratic Alliance for the Betterment and Progress of Hong Kong, was the village head of Ho Sheung Heung until 1999, when he was elected as a North District councillor. Hau Chi-keung, who defeated Kan and became chairman of the Sheung Shui Rural Committee, said he did not use any tricks to win the election. "I have wisdom but power, and I won the election in a fair manner," he said. An indigenous Ho Sheung Heung villager and the rural committee chairman since 2007, Hau Chi-keung was involved in an illegal dumping case in the village by helping the landowners clear and green the site in 2009. Rural committee posts are elected by village representatives. Each representative is elected by inhabitants of each village. The committee is the official link between the villages and Heung Yee Kuk and the committee chairman also sits on the district council. It is a powerful body when it comes to development and land issues in the district. In 2009, the government rolled out a zoning proposal to turn the Ho Sheung Heung and Kwu Tung area into a 450-hectare new development zone that would provide housing for 65,000 people - Tam Yiu-chung, chairman of the DAB, said yesterday that he had noted Hau's arrest by the ICAC and would follow the situation, but he would make no further comment at this stage.

Taiwan is spending US$558 million over eight years on harbour development in anticipation of a pick-up in global shipping this year and new direct links with the mainland. Just two years ago, the Port of Keelung, Taiwan's No 2 port, had a near-death experience. As harbour cranes lay idle and empty ship containers piled up onshore in the depths of the latest world economic downturn, port workers in the northern coast city wondered if it was time to pack up. Roll forward to the same time this year and the cranes are once again busy at Keelung, and a little further along the northern coast a new channel is being dredged at the Keelung-managed Port of Taipei, along with a warehouse and three new berths. The Port of Taipei developments are part of a US$558 million harbour expansion that will run for eight years as officials expect global marine shipping to pick up sharply this year. Taiwan's export-reliant economy is expected to grow 5 per cent in 2011, with exports at a record US$305.1 billion, after a 2010 rebound from the downturn. Boom times in Taiwan mean that its major markets - China, Europe and the United States - are ordering more goods, translating to direct gains for marine shippers. The International Monetary Fund has increased its growth estimate for the US economy to 3 per cent, easing some of the concerns of shippers.

 China*:  March 21 2011

'Manhattan' of delta sets its sights high - It is empty land now. Most of it has been flattened, waiting for construction. About a fifth of the 15 square kilometres has not been touched. Apart from a few temporary prefabricated houses and the criss-crossing of newly-laid roads, the area is essentially a void, bracketed by two of the world's busiest cities, Hong Kong and Shenzhen. Yet in a decade or two, this narrow strip of wasteland will be the site of a gleaming new town - Qianhai. Shenzhen's government, in a plan that has Beijing's blessing, is laying ambitious plans for a "Manhattan of the Pearl River Delta", a beating heart for a dynamic regional economic powerhouse. Qianhai, with Nansha in Guangzhou and Hengqin in Zhuhai , is written into China's 12th five-year plan for 2011 to 2015 as a test ground of strategic importance. Guangdong authorities hope that by granting Qianhai the liberty to experiment with new ideas in governance and economic policy, the new special zone will push the Pearl River Delta to a new levels of prosperity (SEHK: 0803), much as Shenzhen did for China in the past three decades. They are talking about granting Qianhai taxation and administrative autonomy, setting up a new anti-corruption body similar to Hong Kong's ICAC and even establishing a new court that will adopt some of Hong Kong's judiciary practices and laws. The Qianhai special zone will be run by an 11-member administration committee - two of them from Hong Kong, although selected by the Shenzhen government. Advocates say the blend will combine the best of two worlds - the mainland's production efficiency with Hong Kong's transparency and checks and balances - to create a magnet for foreign investment.

PBOC increases reserve ratios for lenders again - The required reserve ratios for banks were raised by 50 basis points on Friday - the ninth hike since the beginning of 2010 - to control inflation in the world's second-largest economy. The measure will be effective from March 25, after which the reserve requirement ratio for large commercial banks will be 20 percent. It's estimated that the move will soak up about 350 billion yuan ($53 billion) from the market, said Li Xunlei, chief economist with Guotai Junan Securities. "The current liquidity of the banking system is relatively abundant in the open market this month, with 700 billion yuan of funds due to return. But the uncertain international economic situation following the earthquake in Japan makes it difficult for the central bank to further raise interest rates, so it took the move to stabilize liquidity and curb inflation," said Guo Tianyong, an economist at the Central University of Finance and Economics. China's consumer inflation rose to 4.9 percent in January and February from 4.6 percent in December. It hit 5.1 percent in November, a 28-month high. A drought in some major grain-producing areas, together with rises in international grain and oil prices, has led to growing concerns about rising inflation. To soak up excessive liquidity and help curb increasing inflation and asset bubbles, the central bank raised interest rates in February for the third time since October. Lu Zhengwei, chief economist with the Industrial Bank, predicted the required reserves ratio for large lenders will probably reach close to 23 percent sometime this year, and interest rates might be raised three to four times before the end of the year. "But an interest rate hike is not likely to happen in March." He said the central bank's move is a typically neutral measure to keep liquidity at a normal level while it adopts a wait-and-see attitude after the Japanese earthquake, and doesn't mean a continuous shrinkage of liquidity. Huang Yiping, an economist at Peking University, said the moves to raise the deposit reserve requirement and interest rates since the beginning of the year demonstrate the government's resolve to check inflation. "Now inflation is no longer my biggest concern. Instead, the risks of over-tightening are ahead. Once China tightens monetary policies too much, the economy will cool down and enterprises will suffer a lot, then the stance might have to become looser again in the next half-year," said Huang. Some analysts said that a rise in the nation's foreign-exchange reserves, caused by the trade surplus, has increased liquidity in the domestic market and, in turn, put more pressure on inflation controls. By the end of 2010, China's foreign reserves amounted to a record $2.85 trillion. Yu Yongding, a former adviser to the Chinese central bank, said at a conference on Friday that the central bank should stop intervening in the foreign-exchange markets and liberalize the yuan's exchange rate, to avoid increasing domestic liquidity pressures and a potentially large loss of foreign reserves in the future.

Hong Kong*:  March 20 2011

Hong Kong officials on Friday urged people to stay calm in an effort to stop panic buying of salt and infant milk formula triggered by anxiety about nuclear radiation in Japan. Fears over Japan’s continuing nuclear crisis fuelled a salt-buying frenzy across the mainland in recent days as shoppers raced to stock-up in the wake of rumours and speculation. The craze began over the erroneous belief that salt – and the iodine it contains – can protect against radiation. Shelves were emptied in supermarkets and corner shops across the nation in a mad scramble for the condiment. The mania even spread to Hong Kong – usually less prone to panic buying – where the surge in demand led to retailers charging as much as 10 times the normal price. Some families also snatched up infant milk formula amid fears that delivery chains in Japan might become contaminated. Undersecretary for Security Lai Tung-kwok on Friday afternoon advised people not to over-react. He said there was no sign Hong Kong was affected by radiation coming from Japan and there was no need to stockpile foods – such as salt and infant formula — because the city had ample supplies. “We urge the people of Hong Kong to stay calm. There is no need to stockpile salt or rice now. Scientific data suggests Hong Kong is not affected by the radiation,” added Lai. “We advise people not to over-react to unreliable information on the internet,” he said. Undersecretary for Food, and Health Professor, Gabriel Leung said officials would work with wholesalers to ensure supplies of foodstuffs remained steady. More than 9,800 boxes of infant formula had arrived in the city as of Friday, he said, Each box contained 6 to 8 cans, depending on the specification of each brand. Lai also repeated calls for Hong Kong people to leave Tokyo soon. He said it would be difficult to arrange evacuations if the situation in Japan deteriorated. Additional flights had been arranged on Thursday evening and more flights would be operating on Friday evening, Lai said. A team of 25 government officers, including immigration, police and fire services officers arrived in Tokyo earlier on Friday to help Hong Kong people, he said. This comes as engineers in Japan decided on Friday that burying a crippled nuclear plant in sand and concrete may be a last resort to prevent a catastrophic radiation release, the method used to seal huge leakages at the Chernobyl nuclear power station in 1986.

People using Hong Kong as a hub for evacuation from disaster-stricken Japan may need to turn to other regional centres because of a shortage of hotel rooms. Many hotel rooms in Hong Kong have already been booked for the popular Rugby Sevens event from March 25 to 27 and commercial aircraft charterer Air Charter Service has urged evacuees to divert to other cities such as Singapore and Bangkok. “We have been evacuating people from Japan for several days,” Gavin Copus, Asia Pacific chief executive for Air Charter Service said on Friday. “One issue facing people coming here is firstly hotel rooms and transfer flights are also very busy to other destinations.” One of Air Charter Service’s first charters was for a hi-tech manufacturing company from Japan with about 300 people, including employees and their families. “We bought them to Hong Kong in order to continue their business and they took a lot of hotel rooms,” Copus said. Four Seasons Hong Kong, a five-star hotel in the city’s business centre, said it was fully booked on Friday and mostly booked for the next few days. Mandarin Oriental and the East hotel also said the vacancy situation would be very tight over the next few days. Most people evacuated from Japan are using Hong Kong as a hub to fly on to Europe and the United States. Air Charter Service would have six Boeing 747s stand by for the next few days with 450 seats each, Copus said. In Seoul, an official in charge of sales at Grand Hilton said, “We are receiving a lot of inquiries from European airlines in particular, about room availability for their crews. “It seems airlines are reluctant to have their crews stay in Japan, and are opting for South Korea due to its geographical proximity,” said the official, who declined to be named because she is not authorised to speak to the media.

From left: siege survivor Lee Ying-chuen; Lee Mei-chun, mother of tour guide Masa Tse Ting-chunn; and an unknown woman attend a Legco session during which aspects of the siege and its aftermath were discussed. Two badly wounded survivors of the Manila bus siege massacre say they have only received between HK$5,000 and HK$8,000 each from insurer Chartis Insurance. Joe Chan Kwok-chu, who was hit in the hands by a bullet from ex-policeman Roland Mendoza's M16 assault rifle, was responding to a press statement issued on Wednesday by Chartis, which said it had paid out HK$350,000 in total in respect of both of the survivors. Chan said he had never received the HK$350,000 mentioned in the statement. He said had only received HK$7,000 to HK$8,000 compensation. His friend Yik Siu-ling, whose thumbs and lower jaw were shattered when the gunman shot her in the face, received only HK$5,000 to HK$6,000, according to Chan. The statement from Chartis Insurance said Chan and Yik had received compensation as stated on the travel insurance policy. "[The insurance includes] a medical charter flight sending them back to Hong Kong, doctors accompaniment, hospital reimbursement, early journey cancellation reimbursement and loss of luggage reimbursement. The total amount of the above mentioned reimbursements is HK$350,000," it said. Chan said Chartis' mention of HK$350,000 was misleading because it also included the cost of the charter flight. "This is a tragedy seen by the whole world. How can they refuse to compensate [further]? ... It (Chartis) really does not have any corporate conscience," he said. On the day after the shooting on August 24 last year, a representative from Chartis Insurance said at a press conference with Hong Thai Travel Services that each of the families of the people killed during the siege might get up to HK$1.32 million in compensation. Meanwhile, the Philippines' consulate general in Hong Kong yesterday confirmed that nine more Philippine witnesses would testify at Hong Kong's inquest into the deaths of eight Hongkongers killed in last year's Manila bus siege, but they may have only one day in which to do so. Coroner's Officer Jat Sew-tong SC yesterday told the inquest that all potential witnesses had been informed months ago that today would be the inquest's final day and the last day for giving evidence on the August 23 massacre. Altogether, 116 Philippine witnesses were summoned, of whom only one - the lone gunman's brother - has testified before the inquest, which began on February 14 and was expected to conclude today. On Wednesday gunman Rolando Mendoza's younger brother, Gregorio, testified via videolink. On the day of the siege his arrest as an accessory was immediately followed by a series of gunshots in the bus. Jat suggested that, in today's hearing, the court could hear as much evidence as time allowed and conclude all testimony by the end of the day. Coroner Michael Chan Pik-kiu agreed but said that the court would allow for more time if any useful testimony emerged. Val Simon Roque, the Philippine vice-consul in Hong Kong, said that one of the nine witnesses expected today is from the National Bureau of Investigation, while the other eight were officers of the Philippine National Police. Jat said outside the court that the eight witnesses included those who had conducted autopsies and postmortem examinations on the deceased. Five of these witnesses were expected to testify on Tuesday, but it was later revealed that their attendance had not been confirmed. Meanwhile, family members of victims and survivors of the bloodbath yesterday requested a meeting with Chief Executive Donald Tsang Yam-kuen. Speaking on their behalf, Tse Chi-kin, elder brother of deceased tour guide Masa Tse Ting-chunn, expressed concern that the government had not done enough to compel the Philippine government to co-operate with the inquest. A government spokesman said the chief executive had phoned the foreign ministry, urging that officials pass on Hong Kong's demands to Manila. Tse Chi-kin's lawyer, Hector Pun Hei, is expected to make submissions early next week. The coroner will sum up the evidence and direct the jury on a verdict.

Rumours trigger panic buying of salt - The mania even spread to Hong Kong - usually less prone to panic buying - where the spike in demand led to retailers charging as much as 10 times the normal price. The National Development and Reform Commission called on market supervisory authorities nationwide yesterday afternoon to step up vigilance on salt vendors to prevent price manipulators or speculators taking advantage of the situation. Officials in Hong Kong and in main mainland cities issued public statements trying to refute concerns about radiation poisoning and the need to stockpile salt. But the official reassurances appeared to do little to put shoppers' minds at ease.

More than 100 Government staff set a record by pulling a Boeing 747 over100 metres at Hong Kong International Airport yesterday. It was definitely a long haul, but 260 adults and children muscled their way to a world record by pulling four planes weighing a total 470 tonnes at Chek Lap Kok yesterday. The event was organised by the Civil Aviation Department and the aviation industry to celebrate 100 years of flight in Hong Kong. A century ago the first powered aircraft - a Farman biplane - took off from a beach in Sha Tin, signalling the launch of the aviation industry in the city. Held in the restricted area inside Hong Kong International Airport early yesterday morning, the "pullathon" broke two Guinness world records. The crowd spent just under three minutes pulling four planes - a Boeing 747, two Airbus A330s and a Government Flying Services training aircraft. The four aircraft crawled 50 metres forward, breaking the record for the heaviest total weight of aircraft pulled simultaneously. The Boeing 747 weighing, 218 tonnes, was pulled by more than 100 government employees from five units, including the customs and fire services. They managed to cover double the distance, also breaking the record for the heaviest aircraft pulled over 100 metres by a team. Despite training daily, the staff said they were stretched to their limits by the challenge. Leung Pui-bo, an employee with the Fire Services Department, said: "You had to walk backwards when pulling which is difficult. But I was motivated by my colleagues to break the world record." Seven-year-old Chow Wing-hin was among the children pulling the small training aircraft, which weighed 750kg. He said he practised at home with his parents before the event. "I was afraid that I was not strong enough to pull it. So I practised pulling with my mum and dad at home," he said. One woman said she was thrilled to witness the historic moment. "Ordinary people seldom have the chance to participate in a world-record-breaking event," she said. "I was also excited that I could set foot on the airport restricted zone," she added.

 China*:  March 20 2011

President Hu visits Japanese embassy to convey condolences - President Hu paid a visit to the Japanese embassy in Beijing Friday to convey a message of condolences for the victims of massive earthquake and tsunami in Japan.

President Hu Jintao meets with Japan's Ambassador to China at Japan's embassy in Beijing, March 18, 2011. Chinese President Hu Jintao paid a visit to the Japanese Embassy in Beijing Friday afternoon to convey a message of condolences for the victims of last Friday's massive earthquake and tsunami in Japan. Hu told Japanese Ambassador Niwa Unichiro that, on behalf of the Chinese government and people, he extended his sincere sympathies to the Japanese people as well as condolences to the victims of the earthquake. As China and Japan are neighboring countries separated by a narrow strip of seawater, the Chinese people deeply felt the pain that the Japanese people are suffering, said Hu. China is helping with the quake relief work, and will continue to provide necessary assistance to Japan, he told the Japanese Ambassador. "We wish the Japanese people would overcome the difficulties and rebuild their homeland at an early date," Hu said. Hu also thanked the Japanese government for offering help to the Chinese citizens in the quake-stricken areas under such a difficult situation.

Workers sample data from a radiation detector in Ganyu county, East China's Jiangsu province, March 17, 2011. Following the nuclear leakage in Japan, Jiangsu set up seven inspection stations near the coast to monitor radiation levels, which are in the normal range.

Wang Zheng, the only female captain at Air China and the youngest in civil aviation in the country, If you have a chance to serve in the air -either as a stewardess or pilot - which would you prefer? For most men, being a handsome pilot operating a huge aircraft is likely their ideal choice, while for most women, being an elegant stewardess wearing a beautiful uniform may be their long-term dream. However, one Beijing woman booked her career path on a different flight. Twenty-nine-year-old Wang Zheng is the only female captain of Air China and the youngest one at the Civil Aviation Administration of China. "Like most girls, I also imagined being a stewardess in childhood, because it was regarded as a sign of beauty," Wang said. "But as I grew up, I thought that kind of beauty was a little bit superficial." In 2003, Wang was a sophomore majoring in electronics and information science in the Civil Aviation University of China when a recruiting notice for female pilots on a bulletin board caught her eye. "I was so curious about aviation, especially flying an airplane," Wang said. "Meanwhile, many classmates encouraged me to give it a try." So Wang entered the pilot project - the first time female aviators were recruited from universities across China - and to her surprise she became one of three selected. 

China raises bank reserve requirement ratio by 50 basis points - The People's Bank of China announced Friday to raise the bank reserve requirement ratio by 50 basis points from March 25. The hike, the third this year and the ninth since the beginning of last year, is the latest move to soak up liquidity to check inflation.

Li Baodong, China's Ambassador to the United Nations, votes to abstain for the United Nations Security Council Libya resolution calling for a no-fly zone and "all necessary measures" against Gaddifi's forces on Thursday. The vote was 10-yes and 5 abstained-- China, Russia, Germany, India and Brazil. Beijing on Friday voiced "serious reservations" about the vote.

Japanese manufacturers have not yet reported disruptions to production at their mainland plants. Most source between 70 per cent and 95 per cent of components locally. Supply chain disruptions in the wake of last week's earthquake and tsunami in Japan may spell trouble for Japanese carmakers in China if the situation worsens or current factory closures are prolonged. Shares in the mainland joint-venture partners of major Japanese car and truck manufacturers fell yesterday on fears that existing inventories of imported components from Japan could be run down in a matter of weeks. Production at nearly all of Japan's car plants and their supplier factories has been suspended since the quake struck last Friday, and continuing uncertainties over when normal operations there will resume have raised concerns over potential forced stoppages at car factories in China, the world's biggest car market. Japan is conserving electricity and struggling with rolling blackouts as its nuclear power crisis worsens and fears have grown that crippled reactors at the Fukushima power plant are teetering on the verge of meltdown. As of yesterday, 10 major Japanese car and truck makers continued to suspend production at more than 50 plants, according to Bloomberg figures. So far, no Japanese firms are reporting disruptions to production at their mainland plants. Most source between 70 per cent and 95 per cent of the components that go into their Chinese-made cars locally, and inventories of the parts they do import may be sufficient to sustain normal production on the mainland for several weeks. "Based on our latest assessment, the earthquake and tsunami in Japan won't impact Honda's China production before the end of this month," Honda Motor (China) Investment said yesterday. "Up to now, operations are proceeding in a normal and orderly fashion" at all Honda's joint-venture plants. The mainland imported 691.22 billion yen (HK$68.53 billion) worth of motor vehicle parts from Japan last year, up 25 per cent from 2009, as well as 545 billion yen worth of cars, according to CEIC Data. Against this backdrop, the "just in time" nature of the modern supply chains championed by Japanese carmakers, coupled with the prospect of backlogged global demand for key parts and components once Japan's car and component factories do resume production, has left investors unsettled. Shares in Dongfeng Motor Group (SEHK: 0489), the mainland joint-venture partner of Nissan and Honda, fell 6.98 per cent yesterday to a six-month low of HK$12.26. Dongfeng's shares are down 11.1 per cent from their March 10 close before the quake. Qingling Motors, which assembles Isuzu branded trucks in China, saw its shares decline 1.94 per cent yesterday and 10.6 per cent in the past week. Shares in Guangzhou Automobile Group - which makes cars on the mainland through tie-ups with Toyota Motor Corp and Honda, and trucks with Toyota's Hino Motor unit - fell 4.56 per cent to HK$8.80, also a six-month low. They are down 8.6 per cent since the day before the quake. "Visibility is still very poor because nobody really knows specifically what parts are purchased from Japan, and the [mainland] automakers don't really disclose that information," Samsung Securities analyst Steve Man said. "It would be a good sign if Japan starts to resume auto production." The potential impact extends well beyond the car industry. "Japan's transportation infrastructure has been crippled, electric power to factories is facing constant disruption and nuclear power capacity has been severely limited after last Friday's devastating earthquake and subsequent tsunami," Moody's Analytics economist Katrina Ell wrote in a research note. "Given that Japan plays a pivotal role in the global production supply chain, factory shutdowns are harming global output."

Hong Kong*:  March 19 2011

The Hong Kong government on Thursday afternoon urged its citizens to leave Tokyo as the nuclear crisis worsens in northeastern Japan. But it has refused calls to extend the highest travel alert signal to all of Japan. Undersecretary for Security Lai Tung-kwok made the first official evacuation call shortly after legislators urged the Hong Kong government to step up contingency measures to cope with the fallout from Japan’s nuclear emergency. “We understand that many Hong Kong people who are now in Tokyo are worried,” he said. “Taking into consideration the seriousness in Fukushima, the incomplete information on the situation and that many countries have urged their citizens to leave Tokyo, we now urge Hong Kong people to leave Tokyo,” Lai said. Additional flights would be arranged late on Thursday and Friday to take Hongkongers from Tokyo back home, he added. Currently, Hong Kong’s “black travel warning” is in place for four Japanese prefectures - but this does not include Tokyo or other parts of Japan. The black warning advises people not to visit these areas. Earlier at a special Legislative Council meeting, legislators said more contingency measures were required. These should include mandatory checks on travellers arriving from Japan and raising the travel warning to its highest level. Lawmakers also suggested the government carry out mandatory radiation checks on travellers, luggage and cargo from Japan. Radiation checks started earlier this week at the Hong Kong airport. But they are conducted only on travellers on a voluntary basis and exclude cargo and luggage. Federation of Trade Unions legislator Wong Kwok-hing said the current checks in Hong Kong did not go far enough. “Radiation checks have been made mandatory in Taiwan and tens of its people arriving from Japan have been found to have been contaminated. Why do the checks in Hong Kong remain a voluntary basis? This is beguiling,” Wong asked. “And why do our tests exclude luggage and cargo from Japan? I think the government is acting very slowly in trying to protect Hong Kong people’s safety,” he added. Liberal Party chairwoman Miriam Lau Kin-yee said the city should extend the highest-level warning on travel to all parts of Japan. “Many countries have already evacuated their citizens and staff from Tokyo. Is it sensible for us to refrain from issuing the black travel warning on Tokyo? I strongly hope the SAR government can reconsider this arrangement,” Lau said. But Secretary for Security Ambrose Lee Siu-kwong argued that there was no need yet to make radiation checks mandatory. “Japanese authorities closed off a zone within 20-kilometre radius of the Fukushima nuclear plant on March 12 and no travellers have been allowed to enter that area since then. Hong Kong tourists who were in other places in Japan such as Tokyo and Osaka at the time do not have a high risk of radiation contamination,” he said. Lee also said the warning level on Tokyo would be kept at red – the second highest level and warning against non-essential trips – as radiation levels were normal in Tokyo and its surrounding areas early on Thursday. “The present travel warning system is an objective risk assessment. We are closely monitoring the situation in Japan every day. We saw this morning that radiation levels were normal in Tokyo and its surrounding areas,” Lee said. “We will continue to review the situation,” he added. In Japan on Thursday, operators of an earthquake-crippled nuclear plant dumped water on overheating reactors. The United States expressed growing alarm about leaking radiation and said it was sending aircraft to help Americans leave Japan.

The Daya Bay nuclear power plant in Guangdong has a better design than the troubled plants in Japan, which should give Hong Kong and mainland authorities more time to cope with the risk of radiation leakage in a Fukushima-like nuclear crisis, a nuclear specialist said. Although nuclear plants in Fukushima and Daya Bay were all broadly categorised as second-generation technology, the Hong Kong-area plant had stronger layers protecting the reactors, Professor Woo Chung-ho of Polytechnic University said. Authorities would therefore have more time to handle the possible risks of explosions and the spread of radiation, he said. Hong Kong is 60 kilometres from the Daya Bay plant and imports 70 per cent of its output. "As the containment walls of the Daya Bay reactors can stand much higher pressure than those at Fukushima, it would take longer for the steam and hydrogen accumulating inside reactors to explode," Woo said. The Daya Bay plant, developed in the 1970s with French technology, uses pressurised water to carry away the heat generated from the reactors to the steam generators. In order to cope with the pressure, the reactors' protective layers are at least twice the thickness of those in the Fukushima plant, which uses US technology from the 1960s. The new nuclear station in Lingao, built next to the existing plant in Daya Bay and operating since 2002, is categorised as second-plus generation with improved technology. The reactors in Fukushima have in operation for 40 years. Those in Daya Bay, 17 years. With the protective layers of at least two reactors in Fukushima presumed damaged, there were questions in Hong Kong yesterday about the possible spread of radiation. "I don't think Hongkongers should panic at this stage, given the favourable wind direction," Woo said. "If we really need to do something, we should take this chance to improve the accountability of the nuclear power company." Secretary for Security Ambrose Lee Siu-kwong said in a legislative meeting that the city was unlikely to suffer an accident similar to Japan's. "First of all, the chance of Daya Bay being hit by a massive earthquake is very low," he said. "Moreover, the design of the nuclear plant in Daya Bay is different from the one in Japan. And I believe that the Daya Bay plant will learn a lesson from the Japanese incident." Lee said there was a contingency plan for the city in the event of an accident happening at the plant. This information was available on the Security Bureau website. "And there are rescue and evacuation exercises held in MTR and other government organisations," he said. "Do we need an exercise for the whole community? We will discuss it later to see if we really need it." Yuan Xilu , deputy director general of the department of development planning under the National Development and Reform Commission, said the nuclear power plant crisis in Japan would serve as an alert for countries using nuclear energy. "But the broad direction of raising the proportion of nuclear energy in the nation's electricity supply will remain unchanged," he said. "The long-term strategy was decided after lengthy discussion and studies." The mainland has 13 nuclear power reactors in operation and more than 25 under construction. Yuan said newly built nuclear plants on the mainland adopted third-generation technology, which would help them avoid the problems experienced in Japan. The troubled Japanese reactors used man-made power sources, such as diesel engines, to pump water to cool the reactors. Third-generation reactors used forces like gravity to deliver water automatically.

Lawmakers vote 35-0 to pass an interim funding bill yesterday to provide HK$59.7 billion of expenditure for the government.

An apparent shortage of international school places in Hong Kong could be a disincentive for staff of multinational companies eyeing a potential move to the city, according to a lawmaker. Democrat Party legislator Emily Lau Wai-hing told the Legislative Council that she had received complaints from members of the business sector saying that there were insufficient international school places. Lau said the shortage could seriously affect the plans of multinational companies to invest in the city. Her comments were echoed by fellow lawmaker Chan Kin-por who also received complaints. But Secretary for Education Michael Suen Ming-yeung said only 88 per cent of international school places were filled at present. He admitted that it was more difficult to get into one or two popular schools. "The government cannot satisfy the needs of everyone. But we can cope with the increase in the number of expats," he said. In a few years' time, the supply of international school places would increase by 5,000 as new schools at four sites in Kowloon, Tuen Mun and Sai Kung became available. Some school administrations have also been given approval to transform vacant schools into international schools. Over the past two years, nine international schools applied to the government to use vacant school premises as temporary campuses under tenancy agreements. "The majority of the seven approved applications have completed refurbishment of vacant school premises and commenced operation. The remaining two applications are being processed," Suen said. There were currently 10 vacant schools whose future was undecided. The sites, which were small and on the outskirts of the city, may not attract school bodies, he said. When an application is received from school administrations to expand campuses or to establish a new international school, they are required to reserve at least half of school places for international pupils. But the government could not control how many local pupils private schools accept, Suen said. Eighty-two per cent of students at Think International School in Kowloon Tong are locals. The figure for Kingston International School, also in Kowloon Tong, is 65 per cent. Non-locals make up 87 per cent of the city's 32,000 international school pupils.

The Macau casino giant owned by tycoon Stanley Ho saw net profit almost quadruple last year, the firm said, days after a family feud over his multi-billion dollar empire was settled. Ho’s flagship Sociedade de Jogos de Macau (SJM) saw a net profit of HK$3.56 billion (US$456 million), up from HK$907 million in 2009, while revenue soared almost 68 per cent HK$57.65 billion, it said in an annual report on Wednesday. The strong results come less than a week after 89-year-old Ho announced he had ended a bitter legal dispute with family members he had accused of trying to steal his gaming empire, estimated to be worth at least US$3.1 billion. Ho said he had dropped a high-profile lawsuit against some of the members of his family, comprised of 17 children born to four women whom he refers to as his wives. He did not reveal details of the settlement. The casino tycoon, considered the father of Macau’s booming casino scene, had previously accused various relatives, including some of his children, of trying to win control of SJM through a bogus share transfer. Ho enjoyed a four-decade monopoly on Macau’s casinos until licences were issued to foreign rivals in the past decade, including major Las Vegas players. Since then, the former Portuguese colony, which is the only city in China that allows casino gambling, has become the world’s biggest gaming hub with US$23.5 billion wagered at its tables last year. That growth has largely been fuelled by mainland visitors. “SJM continued to lead in market share of the Macau casino gaming market, with 40.1 per cent of mass market table gaming revenue and 29.5 per cent of VIP gaming revenue,” the firm’s annual report said. The company said its overall share of Macau’s casino sector grew to 31.3 per cent last year, up from 29.4 per cent in 2009. However, the Hong Kong-listed SJM shares were down 1.3 per cent in morning trade on Thursday. The firm added that its future prospects were “excellent, given continued robust growth of visitation and spending in Macau, and the general prosperity (SEHK: 0803, announcements, news) of the Asian region”. It discounted the impact of new gaming facilities being built by rivals on Macau’s Cotai Strip given that its casinos were “largely concentrated” in another part of the city. But SJM also said it was waiting for government approval for a plan to develop a site on Cotai as it expands its business.

The surging number of visitors between Hong Kong and Singapore has encouraged Singapore Airlines to launch a seventh daily flight between the two cities from next weekend. The move is part of an expansion of services by the Singaporean flag carrier in the coming months that is partly linked to further aircraft deliveries, according to David Lim (right), the airline's general manager in Hong Kong. The latest daily departure will be inaugurated on March 27 and will come about a year after Singapore Airlines launched its sixth flight. By comparison Cathay Pacific Airways (SEHK: 0293) already operates seven daily flights to Singapore although one includes a stop in Bangkok. Lim said the 285-seat Airbus A330-300 was fully booked for the new flight's first departure. He said while Cathay Pacific offered 26 more seats on its A330s used to fly the route, the Singapore Airlines business class was more spacious. Lim said the number of visitors from Hong Kong to Singapore climbed 51 per cent in January, one of the highest growth levels on record. He thought this was mainly because of people travelling before the start of the Lunar New Year holiday. While the Singapore Tourism Board has yet to release visitor figures for last month, Lim was "surprised passenger numbers kept up with last February's traffic figures" on the airline's Singapore-Hong Kong route. He would not give details of the load factors on individual routes, but Lim said the airline generally had a passenger load factor of more than 80 per cent. The growth in visitors this year followed large increases in traveller numbers last year. Singapore Tourism Board figures showed the number of visitors arriving from Hong Kong soared 30.4 per cent to 323,929. Comparable figures from the Hong Kong Tourism Board showed a 13.8 per cent rise to 709,777 in visitor numbers from Singapore. Lim said Singapore Airlines would begin a three times a week service between Singapore and Sao Paolo in Brazil on March 28, which will be the carrier's first destination in South America. The 26-hour flight includes a stop in Barcelona, Spain. Singapore Airlines will also take delivery of its 12th Airbus A380-800, which was due this month, in May. Seven more of the double-deck aircraft would be delivered "this year and next year" to take the airline's total A380 fleet to 19, Lim said.

Hong Kong has beefed up its emergency response as fears grow of a nuclear meltdown in Japan. Over the next few days, authorities will give a daily briefing on the latest situation in Japan. The Hong Kong Observatory yesterday started releasing realtime radiation readings on its website on an hourly basis instead of daily. Also, counters have been set up at Chek Lap Kok airport for passengers from Japan to have voluntary scans for radiation. Undersecretary for Security Lai Tung- kwok said radiation monitoring has been stepped up as "travelers may have concerns," but assured that it is unlikely those returning will have suffered radiation exposure. Tourists usually visit Tokyo and few travel to other neighboring prefectures. "The further one is away from the radiation source, the less harmful it will be. So we believe those returning from Tokyo and its neighboring areas were not exposed to higher-than-normal radiation levels," he said. The 64 travelers who received checks at the airport until 4.30pm were clear. The highest-level black outbound travel alert, warning people to avoid all travel to Fukushima, Miyagi, Ibaraki and Iwate prefectures, as well as a red alert for Tokyo and other areas remain in force. Some lawmakers questioned officials at a Legislative Council meeting why the black alert was not extended to the whole of Japan. Democratic Party legislator James To Kun-sun said: "The government should use common sense and issue a black alert as it is a public safety issue." Lai insisted that a red alert, which advises people to avoid non-essential travel, is adequate at this stage for Tokyo and other areas. Meanwhile, 22 Hongkongers in Japan have not been accounted for since Friday's disaster. Up to 3pm yesterday, the Immigration Department had received 5,297 inquiries and 1,110 calls for help. Cathay Pacific last night put on two more flights from Tokyo due to rising demand, adding more than 730 seats to the 2,700 available on seven daily flights. Passengers holding tickets issued on or before March 11 with departures to and from Tokyo, Osaka, Fukuoka, Nagoya, Sapporo and Okinawa, for travel between March 11 and June 30 will be eligible for a refund. Dragonair said those with tickets to and from Fukuoka and Okinawa for travel between March 11 and June 30 can get refunds.

The government plans to sell three sites in Hung Hom over the next three months to provide about 400 flats. The site on Ko Shan Road has an area of around 20,470 square feet, with gross floor area of between 92,107 sq ft and 153,515 sq ft. It previously housed the Customs and Excise Service Married Quarters. Midland Surveyors director Alvin Lam Tsz-pun expects it to fetch HK$1.2 billion, or about HK$7,800 per sq.ft. This site - scheduled for auction on April 27 - is expected to provide 150 to 200 flats, Lam said. Centaline Surveyors director James Cheung King-tat said the site should fetch HK$1.8 billion, or HK$10,000 psf. The other two sites, restricted to small apartments of 377 to 431 sq ft, will be sold through public tender. Submissions will be open from April 29 to June 3. The non-industrial plot at Gillies Avenue South and Bulkeley Street has an area of 6,268 sq ft, with gross floor area of between 33,852 sq ft and 56,410 sq ft. It is expected to provide 70 flats. Lam forecasts this plot will be sold for HK$310 million. The third site is a 13,979 sq ft plot on Lee Kung Street. It has a gross floor area of 62,904 sq ft to 104,840 sq ft, and at least 170 flats are expected to be built. Lam expects the third site to fetch HK$600 million, while Cheung expects the two sites to sell for HK$390 million and HK$880 million, respectively. Separately, housing chief Eva Cheng Yu-wah said the number of short-term resale cases last month fell 34 percent year-on-year. The news came as Henderson Land Development (0012) said three to four buyers want to purchase at least one floor, or six units totalling a gross floor area of 4,000 sq ft, of its Wan Chai project - The Gloucester - for HK$100 million each. General manager Thomas Lam Tat-man said one of the buyers is interested in buying 24 units for about HK$420 million, before the project is officially launched in April.

 China*:  March 19 2011

China sends 10 tonnes of drinking water to Japan quake-hit areas - China delivered ten tonnes of bottled drinking water to Japan's earthquake-hit areas on Thursday in the country's latest round of relief donations sent to Japan.

The People's Bank of China (PBOC), or the central bank, auctioned 50 billion yuan (7.61 billion U.S. dollars) of three-month bills at a yield of 2.7944 percent on Thursday, temporarily easing speculation of an approaching interest rate hike.

Workers on an assembly line that makes photovoltaic cells at the Suntech Power Holdings Co factory in Wuxi, China. With strong momentum in the US market, Suntech is planning to double or even triple its production capacity in its Arizona factory. California, one of the greenest states in the US, has become a major destination for Chinese solar companies. Suntech Power Holdings Co Ltd, based in Wuxi, Jaingsu province, one of the world's largest makers of solar panels, has its US headquarters in San Francisco in the state where most customers of the renewable-energy industry are based. Suntech's solar panels are used by the California-based Google Inc to power its data center. The 2 megawatt (mW) installation at Google's global headquarters is the largest corporate installation in US history. Two other Chinese solar companies, Yingli Green Energy Holding Company Ltd and Trina Solar Ltd, also have their US headquarters in California. The state accounts for half of the solar market in the North America region. It is estimated that the US solar market will see growth double to 11 percent in 2011. Photovoltaic installations are projected to reach 2 gigawatts (gW) in 2011, as US investors with deep pockets begin funding solar installations in larger numbers as the economy rebounds. In 2010, nearly 1 gW of new solar panel capacity was installed in the US, the highest total in the country's history. Solar applications in the United States started about 30 years ago and government at all levels has been showing a strong determination to promote the installation by the use of a number of incentives. San Francisco is now home to what city officials say is California's largest municipal solar installation. The city is aiming to get all of its electricity from renewable sources by 2020. In the city's largest residential solar project, government subsidies cover as much as 85 percent of the total cost. "Today, it is incentives that drive the market," said Brian Grenko, director of operations for Yingli Green Energy America. "Ultimately, technology and efficiency will be the driving forces." Yingli sold 100 mW of solar panels in the US last year and expects sales to double this year, said Grenko.

Chinese flotillas meet for joint escort mission - Soldiers on board the 7th Chinese naval escort flotilla stand guard and prepare to meet the 8th Chinese naval escort flotilla, consisting of frigate Wenzhou and frigate Ma'anshan, for their escort mission in the Gulf of Aden to protect commercial ships from pirate attacks, March 16, 2011.

Li Zhihong, a tea merchant from Taiwan, visits his 160-hectare tea plantation in Yongfu, Fujian province, in March. It is the hometown of his ancestors and the Taiwan Oolong tea. Tea merchant Li Zhihong is striving to tame Taiwan Oolong tea on the mainland. "The tea originally came from Fujian, just like me," said Li, whose father moved to Taiwan for business in 1947. The 50-year-old merchant said the Oolong tea in Taiwan also originally came from Fujian hundreds of years ago. Affected by humidity and high altitude on the island, it gradually evolved into Taiwan Oolong tea, with its unique fruity aroma. "Now I'm trying to bring it back to the mainland, which has a larger growing area and a bigger market," said Li, who founded a 160-hectare tea plantation in the mountainous town of Yongfu in Fujian province in 2004. Li has invested more than 10 million yuan ($1.5 million) in his plantation and production will reach 50,000 kilograms this year, up from 35,000 kg last year. Li patrols his garden every morning. He said the Taiwan plants have taken root and flourished after years of effort. Many people doubt Li's tea can maintain the same aroma as Taiwan Oolong tea, but he isn't deterred. Li attributes the unique aroma of Taiwan Oolong tea to the low temperature at an altitude of 1,000 meters on Ali Mountain, the landmark mountain on the island where the majority of Taiwan Oolong tea grows. "Low temperature allows the tea to grow slowly enough to store the aroma in its leaves and the mountain's high humidity protects the tea's young leaves from drying," Li explained. To ensure the tea retains its unique aroma when grown on the mainland, Li has found a location for his tea garden - also at an altitude of 1,000 meters - on the hills around Yongfu that have an environment similar to Ali Mountain. Seen from a distance, mist wreathes the top of the hills, neatly trimmed tea shrubs are planted in rows, covering the middle of the mountainside. Before visitors get halfway up the hill, the fragrance of tea leaves, the smell of moist and fresh earth drift down. Every 55 days from April to October workers collect the buds with two adjacent leaves slightly unfurled. And thanks to cheaper production cost and human resources, Li waters the tea plants with soybean milk 25 days before each harvest. Li said the milk watering enhances the tea's balminess and makes the sweet aftertaste last longer. It costs him at least 500,000 yuan each year, but it would be much more expensive in Taiwan. "The milk watering is only applied on the mainland because here we can afford the cheaper material and human resources," he said. During the busy season, nearly half of Yongfu's 46,000 locals work in the plantation, he said. "(With such milk watering) I believe the Oolong tea will evolve into a better variety, as its ancestor did in Taiwan," Li said. Born in Taipei, Li returned to Yongfu for the first time in 1987 to pay tribute to his ancestors - his grandparents and other kin were buried there. "It was a very poor village," he said. "The streets were cluttered with garbage and humble flats made of wooden planks. The floor creaked whiningly beneath my feet. I worried it would collapse at any moment." Though he had thought about helping the local people, it wasn't until years later that Li decided to give up his antiques business in Taiwan. By then the Fujian government had put forward a series of preferential policies in terms of insurance and taxation. In 2004 Li became one of the first to move to Yongfu, the largest production base of Taiwan Oolong tea on the mainland, also known as Development Park for Taiwan Farmers. The park has attracted more than 400 Taiwan investors like Li. He said Fujian is one of the best places for Taiwan farmers to expand their businesses: it is geographically close to Taiwan and its natural environment is similar to the island. "More importantly, as a descendant of Fujian people, the cultural environment is familiar to me. It is where my family tree has its roots," he said.

Beijing boasts world's second busiest airport - Beijing Capital International Airport was ranked 14th globally as recently as five years ago with 41 million passengers. 

State media says China will send 20,000 tons of fuel to Japan to aid earthquake recovery. The Xinhua News Agency reported on Thursday the shipment will include 10,000 tons of petrol and 10,000 tons of diesel fuel. China previously pledged US$4.5 million worth of blankets, tents, emergency lighting and other humanitarian assistance. It also sent 15 rescuers to help search for survivors. Despite often prickly relations between Beijing and Tokyo, the Japanese disasters have sparked an outpouring of sympathy in China.

Hong Kong*:  March 18 2011

Secretary for Security Ambrose Lee Siu-kwong said on Wednesday it was unlikely that Hong Kong would suffer a nuclear emergency similar to the one currently taking place in Japan. At a Legislative Council meeting, Lee was asked about the safety of the Daya Bay nuclear power plant following the crisis in Fukushima. The Daya Bay plant is situated about 50 kilometres northeast of Hong Kong in Guangdong, across the border in the mainland. Lee said safety measures at the power plant met international standards. He said the chance of Daya Bay being hit by a massive earthquake was slim because the plant was located outside any earthquake-active area. Several blasts have rocked the nuclear power plant in Fukushima since the region was struck by a 9.0 magnitude earthquake and tsunami last weekend. The explosions have caused low levels of radioactive materials to spew into the atmosphere, raising fears of an atomic catastrophe in Japan and in neighbouring countries. Lee said the government had assessed the impact of the Fukushima incident on Hong Kong by examining different scenarios - including an atomic explosion. He said that, given the distance from Japan and the weather conditions, Hong Kong was unlikely to be affected by radiation. To address the fears of travellers, radioactive tests on tourists returning from Japan started at the Hong Kong International Airport at Chek Lap Kok on Wednesday. Undersecretary for Security Lai Tung-kwok said the screening was done on a voluntary basis. The Department of Health said it had a stock of 140,000 iodine pills - a radiation sickness preventative - in case of a nuclear emergency. But Secretary for Food and Health York Chow Yat-ngok said there was no need for Hong Kong people to buy these pills. He said iodine pills were for people very close to the source of radiation – not for the general public.

The Hong Kong Observatory joined other Asian authorities yesterday in quickly dismissing rumours of radioactive rain reaching the region. The Observatory's Leung Wing-mo shows the forecast trajectory of radiation leaks. The rumours circulated via mobile phones and the internet following reports of damage to the Fukushima nuclear plant in Japan. E-mails and text messages which masqueraded as an extract from a BBC newsflash were reportedly circulating in Hong Kong, Singapore and the Philippines. The warning message said the Philippines would be hit by the radioactive rain travelling from Japan by 4pm yesterday. It advised people not to touch any rainwater over the next few days as it could be carrying radioactive particles that might cause burns, alopecia or even cancer. The Philippines' Department of Science and Technology stated clearly on its website that the e-mail message was a fake and there was no evidence that radioactive substances had reached other countries. The National Environment Agency in Singapore also dismissed the message as untrue. The message asked people to stay indoors for 24 hours after any rain, and to close all windows and doors. It told people to swab their necks with Betadine - an antiseptic product for minor wounds - around the throat where the thyroid gland is located.

Donald Tsang enjoys ratings rebound after budget U-turn - Chief Executive Donald Tsang Yam-kuen's performance rating has returned nearly to pre-budget standing, according to the first University of Hong Kong poll since the government's budget U-turn. But Financial Secretary John Tsang Chun-wah' s scores fell 5.8 marks to 46.6, his lowest rating since assuming office in 2007, according to the poll released yesterday of more than 1,000 Hongkongers taken earlier this month. People were asked to grade the executives on a scale of one to 100. Dr Robert Chung Ting-yiu, director of the university's public opinion programme, said the apparent rise in the chief executive's rating was due to the revision of the budget. "The financial secretary's significant revision to his budget proposals has stopped the bleeding," Chung said. On March 2, a week after the financial secretary unveiled his budget proposal in the Legislative Council, he announced an unprecedented about-face: the government would hand out HK$6,000 to all adult permanent residents, instead of injecting HK$6,000 in each of four million Mandatory Provident Fund accounts, an idea that had been widely criticised as particularly unhelpful to the middle class. He then suffered a humiliating defeat as the Legislative Council, in a historic first, rejected the HK$60.2 billion initial expenditure for the coming fiscal year. Although the chief executive gained 2.5 points to 51.2 points, almost equal to the pre-budget level of 51.9 points, his disapproval rate remained high at 54 per cent, resulting in a net popularity of negative 23 per cent. A negative percentage occurs when the percentage of non-supporters outweighs the percentage of supporters. The financial secretary suffered a greater setback. Compared with the net popularity of positive 34 per cent he registered before the budget, his latest figure plunged 40 per cent to a negative 6 per cent. The government's interim funding is being presented again for a vote today and most observers expect it will be approved. Nevertheless, pan-democrats escalated their attack and said they would maintain their opposition. Last Wednesday, 14 abstained and four did not vote. Civic Party lawmaker Ronny Tong Ka-wah wrote to the financial secretary, Secretary for Financial Services Professor Chan Ka-keung and Executive Councillor Anthony Cheung Bing-leung asking them to apologise for criticising pan-democrats over the funding vote. Pan-democrat Lee Cheuk-yan said: "Premier Wen Jiabao has become our spokesperson. His speech resonates with our demand but the government is still unrepentant." Wen said on Monday that Hong Kong's government should use its ample reserves and public revenues to improve residents' livelihoods. Frederick Fung Kin-kee, the lawmaker for the Association for Democracy and People's Livelihood, said he might vote yes to the budget if the government promised to resume construction of Home Ownership Scheme flats or looks into a universal retirement protection scheme. Legco's Finance Committee is holding a series of special meetings from March 21 to 25 to examine the budget. The university's performance poll has a maximum sampling error of plus of minus 1.4 points, while that for percentage figures was plus or minus 3 per cent.

Japan's earthquake and the Middle East turmoil have dealt yet another blow to Hong Kong manufacturers across the border, according to the Federation of Hong Kong Industries. Supplies of electronics, hi-tech components and car parts in Japan have been choked off by electricity rationing and damaged transport infrastructure after the earthquake and a subsequent tsunami hit the world's third-largest economy last Friday. Federation deputy chairman Stanley Lau Chin-ho said yesterday that dwindling and fickle supplies of components had disrupted the entire supply chain, while Japan's consumer market was also hit hard. Problems had also arisen from the Middle East, where buyers had demanded to put on hold shipments of finished goods as social unrest continued to bite, he said. "The external environment adds fresh pressure to manufacturers," Lau said. "They are already at the crossroads squeezed by shifting policies in the Pearl River Delta." Watch makers were particularly hard hit, chasing after fickle supplies of components for mechanical movements and steel parts, among other items. The production and shipments of core suppliers Seiko and Citizen were being disrupted by power rationing and damaged transport networks, he said. According to Morgan Stanley, China had the biggest trade surplus with Japan in textiles and the biggest trade deficit in machinery and electrical equipment. Trade in machinery and electrical equipment was the locomotive of growth in both exports to and imports from Japan, it added. Lau said room for manufacturers to survive was shrinking as mainland policies tended to favour labourers. As a key part of the next five-year plan to 2015, Premier Wen Jiabao stipulated that the minimum wage should be raised by at least 13 per cent annually, while welfare and working conditions should be enhanced to improve migrant workers' living standards and spending power. "Guangdong's minimum wage will rise even faster and steeper and will be doubled by 2015," Lau said. "The coming three years will be a critical period for the survival of Hong Kong manufacturers." Shenzhen plans to raise employers' contribution to workers' retirement funds by 3 percentage points to 13 per cent per month in summer while keeping the existing contribution by labourers at 8 per cent. This means a worker will have 21 per cent of his monthly income funnelled to the fund, up from 18 per cent. In addition, bosses in Shenzhen will have to pay 2 per cent of the monthly salary to an unemployment fund, which a worker is allowed to withdraw from should he lose his job. Lau said Hong Kong manufacturers must upgrade themselves or change their business models if they wanted to stay in the Pearl River Delta, or else they risked being pushed out of business. He predicted about one in every three Hong Kong factories in the delta, or about 22,000 out of 65,000, would go under.

The soccer World Cup in South Africa was among some of the programming that drove up expenses, i-Cable said. Pay-television and broadband internet service operator i-Cable Communications (SEHK: 1097) is looking ahead to better days after posting a bigger net loss for its fiscal year to December. The Wharf (Holdings) (SEHK: 0004) subsidiary yesterday reported a net loss of HK$267 million, up from HK$40 million in 2009, mainly due to high programming expenses related to its broadcast last year of Britain's Premier League soccer matches, the soccer World Cup in South Africa, the Guangzhou Asian Games and Vancouver Winter Olympics. In a filing with the Hong Kong stock exchange, the company said total revenue rose 14 per cent to HK$2 billion, from HK$1.75 billion the previous year. Operating costs before depreciation, however, increased 30 per cent year on year to HK$1.997 billion because of its expensive programming. Selling, general and administrative, and other operating expenses were up 2 per cent to HK$435 million. No final dividend will be issued to shareholders, according to i-Cable's board. The company's share price fell 5.26 per cent to close at 90 HK cents in yesterday's trading. Despite the hefty expenses incurred, the big investment in programming had boosted revenue and its share of the television services market, i-Cable said. The number of total subscribers grew about 10 per cent to more than 1.1 million last year, from one million in 2009. Pay-TV revenue climbed 27 per cent to HK$1.56 billion, up from HK$1.23 billion. There were fewer subscribers, however, to i-Cable's internet services last year due to stiff competition from other providers. The number of its broadband users slipped 8 per cent to 228,000 from 249,000 in 2009. That resulted in a 17 per cent decrease in internet services revenue to HK$433 million, from HK$522 million the previous year. With an eye on another market segment, i-Cable said its participation in a free local TV service through an affiliated company "will enable the group to tap new revenue from its well-regarded content capabilities". Affiliate Fantastic Television last year submitted an application for a free TV licence. Authorities are expected to make a decision in the first half this year. If successful, it would become Hong Kong's third free-TV operator after Television Broadcasts (SEHK: 0511) and Asia Television. The company was also upgrading its network infrastructure to boost competitiveness, it said. It recorded HK$251 million in capital spending last year, HK$10 million less than in 2009.

As Japan reels, investors may look to HK - Nervous global buyers may now look for opportunities in Chinese markets and Singapore - Wary global property investors could turn their attention to Hong Kong and the mainland as they steer away from the real estate market in Japan in the wake of last week's devastating earthquake and tsunami. Until last week's tragic events and the nuclear crisis that now looms over the country, Japan was a favourite target of global real estate funds and wealthy mainland investors who were betting on a rebound in its property market after it had slumped during the global financial crisis. "Now people in general would be very nervous," said Tim Murphy, managing director of property investment group IP Global. "The reality is, if you look at history, economic downturns after natural disasters do not tend to last for very long. But in the short term people will look at other overseas markets such as Hong Kong, China, and Singapore." Low interest rates in Hong Kong and Singapore would provide an added attraction to wary investors looking for safer havens for their money, Murphy said. "Lots of money will stay in Asia," he said.

 China*:  March 18 2011

China became the first country to evacuate its citizens from Japan's worst affected areas as fears mount that experts will be unable to contain the growing nuclear crisis. Explosions and a fire at Japan's quake-hit nuclear plant unleashed dangerous levels of radiation yesterday, sparking a stock market collapse and panic buying in supermarkets. Four of the six reactors at the Fukushima No1 plant, 250 kilometres northeast of Tokyo, have overheated, taking the four-day-old nuclear crisis to a new level - threatening to overshadow even the massive damage spawned by Friday's devastating 8.9-magnitude earthquake and tsunami. Experts were last night planning to pour water through two holes in the wall of the building housing the No4 reactor at the plant. A blast yesterday punctured two holes of 8 metres square in the wall of the reactor's outer building, exposing the spent fuel pool to the outside air. Winds dispersed radioactive material over the Pacific Ocean, away from the country, but radiation in the Japanese capital, Tokyo, was recorded at 10 times the normal level. City officials, however, said the increase was too small to threaten the 39 million people in and around the capital.

Risking the effects of nuclear radiation, Chinese rescuers continued their relief work in the Japanese coastal city of Ofunato in Iwate prefecture - one of the worst-hit cities in last Friday's devastating earthquake and tsunami. A 15-member team arrived in Ofunato on Sunday night and was the first overseas team to join relief efforts in the city, the People's Liberation Army Daily reported. Since water and electricity supplies were cut, they had to operate under a self-sufficient system, the report said. The team brought nearly four tonnes of equipment, including different kinds of advanced life and radiation detection instruments, tools to cut through steel and concrete in demolished buildings, first-aid supplies, camping equipment, food and water. "The situation here is much more serious than we ever imagined. All the sights and sounds were from debris," Peng Bibo , a medical expert with the PLA armed police, who joined the rescue team, told the newspaper via a maritime mobile system telephone call. "We have tried our best to conduct door-to-door searches, but so far no survivors have been found." Despite the incredible disaster, Peng said people in Ofunato welcomed the Chinese team with enthusiasm. "One of the victims said, `We are really moved by you Chinese - our close neighbour who helps us in need.'" Other team members are all well-trained rescue experts who have taken part in previous earthquake relief efforts, including the Sichuan quake in 2008 and in Qinghai last year, as well as overseas humanitarian activities in Haiti and Pakistan. Since the explosion of the Unit 2 reactor at the earthquake-crippled Fukushima No1 plant, Beijing announced yesterday that it would send another 30-member medical team with anti-radiation experts to Japan. The maritime mobile telephone system helped at least 18 Chinese nationals in Japan send messages of safety to Beijing yesterday, Xinhua said. It said rescue teams from the United States and Britain would also join local and Chinese rescuers in the area. The Chinese embassy in Tokyo confirmed yesterday that 10,657 Chinese nationals in Japan were safe, with their identities listed on the embassy's official website. But the Ministry of Commerce said 261 Chinese nationals could not be contacted. China's Red Cross Society decided yesterday to donate 5 million yuan (HK$5.92 million) in aid after providing 1 million yuan on Saturday.

Outspoken People's Liberation Army officer Luo Yuan says he has never said anything "to hurt another nation, or as a disservice to peace". "Overseas media call me a hawk. Well, I accept that because I am a soldier with hawkish eyes and claws," Major General Luo Yuan said. "But I also have a dove's heart and mind. Peace is my ultimate value." A rare outspoken People's Liberation Army officer, Luo is a senior researcher with the PLA Academy of Military Science - the military's highest academy - and also a Chinese People's Political Consultative Conference delegate. "They also call me a hardliner, because I give hard opinions," Luo said. "But I am a cool-headed hardliner. "When can you remember me saying anything to hurt another nation, or as a disservice to peace?" He said every country's soldiers tended to sound hawkish. "Soldiers talk like soldiers. And it would be unnatural if they don't, because they are not delegates for peace foundations after all," he said. Luo is one of the few PLA officers to give frequent interviews on national defence and international issues, along with Major General Yang Yi and Major General Peng Guangqian . They are seen as representing the common viewpoint of China's modern-day military elite. But he says that he and the other PLA commentators have no intention of using their opinions to influence diplomacy. "We have a rule in the PLA: it is the Communist Party that commands the guns, never the other way round," he said. "It is up to the party to decide foreign policy. And the PLA will never transgress that line." Yet as increasingly diverse opinions were being heard, it was not right for the PLA to just remain silent, he said, adding that the most important military opinions were those from the Communist Party's Central Military Commission and the PLA's official spokesmen. "The remaining opinions, like my own, are just personal opinions from PLA researchers," Luo said. However those personal opinions tend to garner many reprints and attract fans among mainland internet users, possibly because so many people share such views. Luo, a specialist in foreign military studies, previously served as China's military attache in Copenhagen and has taken part in an academic exchange programme in the United States. His hardline stance is highlighted by his adamant defence of China's military budget, due to increase by 12.7 per cent this year compared with just 7.5 per cent last year. When asked if this year's increase indicated an ambition to match the PLA's capabilities with the nation's increasing global economic influence, his answer was simple: "Why not? "Why shouldn't China build up its self-protection capabilities?" A country's national interests should always be matched with adequate military capabilities, he said, using the recent emergency evacuation of more than 35,000 Chinese workers from war-torn Libya as an example. The Libyan evacuation was the Chinese government's largest overseas evacuation operation, with the PLA sending Arabic-speaking foreign liaison officers, one missile frigate (diverted from anti-piracy patrols in the Gulf of Aden), and four Russian-built Ilyushin Il-76 transport aircraft. "However international observers assess our military capability, we have successfully carried out this mission in the face of a non-traditional threat," Luo said. "It shows that our training and learning in recent years, including multi-service operations and joint exercises with foreign partners, have all paid off. "Our people can still count on the PLA wherever they go." As the government and civilian companies were the mainstay of the nation's overseas activities, he said the PLA's role was only to support. "But it must be strong support, and a credible one," Luo said. At the same time, the PLA's limitations are easy to spot. A missile frigate is only a small naval vessel. And the Il-76s, the largest transport aircraft owned by the PLA, are built by Russia. China is the only permanent member of the UN Security Council never to have deployed an aircraft carrier, and Luo said it should have its own "large-scale seagoing military operation platforms". He avoided using the word "aircraft carrier", instead using a phrase that covers all large warships, from aircraft carriers to large amphibious vessels. Such large equipment was needed to protect China's growing national interests to push ahead with military modernisation, Luo said, adding that the Libyan crisis had also revealed the need to improve military-civilian co-ordination, and the drawing up of an appropriate legal structure. "We need a law to cover the army's overseas non-combat missions to avoid accidents with other armies," he said. Rather than dwelling on what Deng Xiaoping meant with his tao guang yang hui policy - generally translated as "hide your brightness, bide your time" - Luo said it was easier to look at the broad picture, and the country's core interests, including Tibet and Taiwan. "Core interests are not for debate, not for negotiation, and not for trade-off," he said, adding that China's national defence was now so strong that "it would be wishful thinking for any country or any military group to force China to give up on its core interests by means of force".

Hong Kong*:  March 17 2011

Hong Kong's black outbound travel alert was yesterday raised for three more Japanese prefectures but the government kept the alert for Tokyo at red, one level lower. Chief Executive Donald Tsang Yam- kuen called in top officials and nuclear experts for an interdepartmental emergency meeting to review the situation and its likely impact on the SAR. After the meeting, Undersecretary for Security Lai Tung-kwok said: "In view of the seriousness and uncertainty of the incident of the nuclear power plant in Fukushima prefecture, the Japanese government announced the evacuation of residents within a 20-kilometer radius of the plant and appealed to those within a 30km radius to stay home. "The SAR government decided to raise the outbound travel alert against three more prefectures, namely Miyagi, Ibaraki and Iwate to black." A black alert for Fukushima was issued on Saturday. Under the three-tier system, a black alert means Hongkongers should avoid traveling to the area. For red, non-essential travel should be avoided. Lai said Hongkongers can take buses arranged by the Chinese embassy in Japan to leave the four prefectures for Narita or Niigata airports. He said it was decided not to raise the black alert for Tokyo as it is about 240km from the Fukushima plant. Asked if all inbound travelers from Japan will be scanned for radiation when arriving in Hong Kong, Lai said there is no plan to do so as the Japanese government has already set up checkpoints around the plant's 20km radius to scan those leaving the area. He said about 257 tourists from 11 tour groups traveling in Honshu island will return by Friday while about 800 individual travelers who booked flights and hotels via travel agencies will return soon. The Immigration Department has received 4,689 inquiries and 1,018 calls for help since Friday's quake and tsunami. There has been no contact with 32 Hongkongers in the country. Hong Kong Observatory senior scientific officer Ma Wai-man said the air mass approaching the territory over the next two to three days is mainly from the mainland and it is highly unlikely the city will be affected by radiation. Experts said that in the worst-case scenario, the Japanese authorities may consider shelling the reactor core, a measure that was taken during the 1986 Chernobyl disaster in the Soviet Union. But John Leung Kon-chong, of the University of Hong Kong's department of physics, believes the reactor's vessel may contain the explosions. He added most active radioactive material will last for several weeks before the reactor cools. City University president Way Guo, who is a radiation expert, urged those in Tokyo to stay indoors or take iodine pills to guard against radiation.

Travellers wait in a long queue at the Cathay Pacific counter at Narita International Airport near Tokyo for flights to Hong Kong. Radiation scans greet returning journalists - Hong Kong journalists go through radiation checks at the airport immediately after they return from quake-hit Japan. Government officials in full bio-hazard gear stood by on the airport runway last night, waiting to greet returning local journalists. Buses lined up to act as decontanimation units for the 24 journalists who were scanned for radiation on their arrival in Hong Kong on four different flights last night after covering the earthquake, tsunami and Fukushima nuclear power plant disaster in Japan. The journalists were told about the inspections while in flight and as soon as their planes landed they were met by health officials wearing spacesuit-like protective clothing, and told to board the buses. Other passengers were not required to do so and were told to wait on the flight. Reporters had their hands, legs and bodies scanned and were asked if they had been to any places where they might have been exposed to radiation. The whole process lasted for about 20 minutes. They later rejoined the other passengers on another bus and were driven to the airport terminals. A government spokesman said the tests were conducted at the request of media organisations and no-one was found to be contaminated. Some passengers on one flight carrying 12 local journalists expressed concern over why reporters - uncertain if they were contaminated - were allowed to board the plane. A flight attendant said she only received a message from ground staff that the flight was carrying the journalists when the plane was in mid-air. "If we had known beforehand it would have been better to do the checking before allowing them to board the plane," she said. "It would be easier to remedy [in case someone is really contaminated]." Secretary for Food and Health Dr York Chow said anyone who was concerned about any radiation danger should visit their local hospitals. Meanwhile, back in Japan, 25 Hongkongers had still not been located by late yesterday, three days after the disaster. The Hong Kong government said it remained optimistic about finding the people, saying past experience indicated that many of them would be in contact soon. "The telephone network in Japan has yet to resume normal operation and we hope that these people will be reached when the network services improve," acting director of Immigration Eric Chan Kwok-ki said. Among the 25, two were believed to be in Sendai and six in Tokyo or its surrounding areas, according to telephone signals, Chan said. The whereabouts of the rest were unknown. Tokyo is the most popular travel destination in Japan for Hong Kong people, but now the rotational blackouts, train suspensions and petrol restrictions are making it a not-so-fun place. Tourists and Hongkongers working or studying there are leaving. "I made a decision to return," said Bob Lee, a Hongkonger who has been studying Japanese politics at a university in Tokyo for the past three years. He was at Tokyo's Narita International Airport waiting to board a plane back to Hong Kong. "[My family] were afraid about the explosions, so they wanted me to return," Lee said. "I was actually not that scared, but my family called many times since the quake struck." He said he would have a medical examination to check for radiation when he got home. Although admittedly afraid of nuclear leakage, what really drove him crazy were the electricity outages, Lee said. His Tokyo home had been blacked out for hours every day since the quakes. Kiki Wong, who has been studying web design in Tokyo for four years, flew back to Hong Kong yesterday, but vowed to return as she had a new job there and was set to start work on April 1. Her family, worried about the nuclear plants and the aftershocks, had urged her to return home. "I haven't slept very well for the past few days, and there were non-stop tremors," she said. Immigration director Chan said additional manpower was being deployed to help Hong Kong people in Japan. The hotline (852) 1868 had received 4,131 inquiries and 796 calls for assistance. Many Hong Kong travel agencies decided to cancel package tours to Japan until further notice. Cathay Pacific Airways (SEHK: 0293) extended a special one-way economy class fare of HK$5,755 from Japan to Hong Kong to include seven airports in six cities - Narita and Haneda near Tokyo, Osaka, Nagoya, Sapporo, Fukuoka and Okinawa. The special fare would be available until Sunday.

Hong Kong parents on Tuesday were stocking up on imported milk formula - amid fears that products manufactured in Japan might soon be contaminated with radiation.

The government would study increasing social welfare payments to low-income groups if high inflation continued this year, Social Welfare Department director Patrick Nip Tak-kuen said on Tuesday. Nip told local radio the government would consider raising payments under the Comprehensive Social Security Assistance (CSSA) scheme to help the needy. He made the comments amid concern about rising prices in Hong Kong. According to government figures, the inflation rate hit 3.6 per cent in February. Officials estimate that it could rise to 4.5 per cent for the year. “We are looking at the upward trend in the price indices,” Nip said. “There will be a review of the CSSA payment levels in the middle of the year and if it shows a need to adjust the payment levels upward, we will apply for it,” he added. In the 2010-2011 financial year, HK$19 billion was earmarked for CSSA payments, Nip said. The last adjustment was made in February. Welfare recipients received 3.4 per cent more money from the CSSA scheme, he explained. But Sze Lai-shan, a social worker with the Society for Community Organisation, urged the government to conduct more regular reviews of payment levels. He said reviews needed to be carried out more than twice a year. Sze said this would help ensure payments kept up with inflation. On Monday, Premier Wen Jiabao said Hong Kong should use its ample reserves to boost the social safety net to help the poor.

The damaged Fukushima Daiichi nuclear plant in Fukushima prefecture on Monday. Radiation leaked from the crippled nuclear plant in northeastern Japan after a third reactor was rocked by an explosion on Tuesday, and a fourth caught fire in a dramatic escalation of the four-day-old catastrophe. Japan faced potential catastrophe on Tuesday after a quake-crippled nuclear power plant exploded and sent low levels of radiation floating towards Tokyo, prompting some people to flee the capital and others to stock up on essential supplies. Prime Minister Naoto Kan urged people within 30 kilometres of the facility north of Tokyo to remain indoors and conserve power amid the world’s most serious nuclear disaster since the Chernobyl disaster in Ukraine in 1986. As concern about the crippling economic impact of the nuclear and earthquake disasters mounted, Japanese stocks fell as much as 14 per cent before ending down 9.5 per cent, compounding a slide of 7.6 per cent the day before. The two-day fall has wiped some US$620 billion off the market. The French embassy in Tokyo warned in an advisory at 9am that a low level of radioactive wind could reach the capital – 240 kilometres south of the plant – in about 10 hours. Radiation levels in the city of Maebashi, 100 kilometres north of Tokyo were up to 10 times normal levels, Kyodo news agency said. Only minute levels were found in the capital itself, which so far were “not a problem”, city officials said.

Japanese expat groups in Hong Kong launch fund-raising events - Japanese groups in Hong Kong are organising fund-raising events and other activities to help the victims of Friday's devastating earthquake and tsunami. Simon Walton, principal of the Japanese International School, said pupils and parents were keen to help. "We currently have several activities for fund-raising arranged. All funds from these events will now be channelled into the relief effort," he said. The school held a minute's silence yesterday and the school flag was at half mast. Teachers were given time to counsel pupils who might have relatives and friends affected by the earthquake. The Japanese consulate general will set up an account with the Japanese Club to collect donations from the expatriate community, according to a spokesman. An online message board has also been set up for expatriates to locate friends and relatives in Japan, he said. The spokesman said cash donations were preferable to donating blankets and relief materials. "We appreciate their goodwill, but it is difficult to deliver these goods to those who need it, especially when we are unable to locate some of the victims," he said. "We still don't know the number of casualties. We have not yet grasped the magnitude [of the incident]." The consulate said it would lower the Japanese flag to half mast simultaneously with other Japanese embassies and consulates around the world. The Japanese Chamber of Commerce and Industry will today start collecting donations from Japanese expatriates and companies. Hong Kong students learning Japanese are also doing their part to help. The University of Hong Kong's Japanese Society said it would launch a fund-raising campaign on campus this week. Chinese University Japanese Alumni Association vice-chairwoman Irene Cheung Wing said a meeting would be held in the next few days to see how they could help. A spokeswoman for the Jusco department store said they were planning to launch a campaign today or tomorrow, but did not give details. Japan earthquake donations: Red Cross - Crossed cheques payable to "Hong Kong Red Cross" sent to Hong Kong Red Cross, 33 Harcourt Road. Write "Japan Earthquake 2011" on the back. Online donation at,  Inquiries: 2802-0021; The Salvation Army - HSBC (SEHK: 0005): 001-032366-002; Bank of East Asia (SEHK: 0023): 015-515-40-400333-1; Bank of China: 012-878-1-044486-6; Hang Seng Bank (SEHK: 0011): 024-385-094180-001; Details at  Inquiries: 2783-2333; World Vision Hong Kong - HSBC: 018-377077-003, Hang Seng Bank: 286-364385-003, Bank of China: 012-883-0-002136-6, Details at 

 China*:  March 17 2011

Environmental watchdogs along China's east coast ramped up monitoring efforts after radiation leaked from Japan's quake-damaged Fukushima No. 1 Nuclear Power Plant reached dangerous levels on Tuesday. Initial environmental monitoring had not found any "abnormal" levels of radioactive substances by 4 p.m. Tuesday, the Ministry of Environmental Protection said in an updated statement. Monitoring stations in Shanghai as well as those in the eastern provinces of Heilongjiang, Liaoning, Shandong, Jiangsu, Zhejiang and Fujian were ordered to conduct around-the-clock surveillance of radioactive substances in the air and sea water. In Shanghai, authorities said they are preparing to inform the public of the dangers of radioactive substances and precautionary measures to take in case of contamination. In Jiangsu, authorities said the Tianwan nuclear plant, located in a coastal city some 500 sea miles from the coast of Japan, has not been affected by the destructive earthquake and subsequent tsunami. In Liaoning, inspectors went to the province's airports to check whether goods transported from Japan were contaminated by radioactive substances. ( Nuclear experts called on the public to remain calm and learn about what precautionary measures to take if nuclear leaks were reported. Meteorological experts say west-blowing winds will prevail in the area between Shanghai and Japan's Fukushima over the coming week, making Shanghai's air less likely to be tainted by radioactive substances leaked from the nuclear plant. Experts also say rains forecasted in Shanghai and adjacent areas in the coming days are not related to cloud movements from Japan and local residents are not advised to stay indoors. An explosion was heard early Tuesday morning at the No. 2 reactor and another hydrogen blast broke out in the building housing the No. 4 reactor at Fukushima No. 1 Nuclear Power Plant which had been crippled by Friday's devastating magnitude 9.0 earthquake, the government said. The Japanese government on Tuesday said levels of radiation released by damaged reactors at the nuclear power plant were high enough to threaten human health in the immediate area. Japan's nuclear safety agency has urged residents living around the damaged nuclear power plant to stay indoors and avoid exposure to possible radioactive substances.

GE to increase focus on Chinese market - General Electric Co (GE) will build on last year's earnings rebound with new products in energy, health care and aviation, while expanding in growing markets such as China and India, Chief Executive Officer Jeffrey Immelt said. "We see signs of economic strength every day," Immelt said in his annual letter to investors, which was formally released on Monday. Growth is volatile after the global financial crisis, and "it doesn't always 'feel great' because we have entered a new economic era. Growth around the world is happening at multiple speeds". About 53 percent of sales last year came from outside the United States as Immelt built exports and focused on faster-growing regions and countries such as eastern Europe, the Middle East and Brazil. International sales should approach 60 percent of total revenue as GE taps those markets and increases exports from a larger manufacturing base in the US, said Immelt. "We plan to have an increasing number of products localized in China and India in the next few years" as more than 1 billion people join the middle class in Asian markets including those two countries, Immelt said. "This will give us the right technology to satisfy our customers' needs." The company resumed share buybacks last year and raised its dividend twice after slashing the payout by two-thirds amid the financial crisis. It has boosted research and development funding. The shareholder dividend will be a "priority" moving forward, Immelt said. "Being a CEO can be pretty humbling," he wrote. "The toughest years of my life were 2008 and 2009. They were difficult for the company, investors and the economy as well. But our team worked hard for investors and the company. We promised you we would come out of the crisis a stronger company, and we have." The CEO, entering his 10th year in the job, has trimmed about half the Connecticut-based company's portfolio in the past decade. Divestitures have included plastics, insurance and most recently a majority stake in NBC Universal. "Repositioning GE in volatile times has demanded patience from our long-term investors," Immelt wrote. "Today, we earn more money than we did when the stock traded at an all-time high." GE agreed to more than $8 billion in acquisitions last year, investing some of the cash hoarded during the crisis, and ended the year with $79 billion in cash, $19 billion at the parent level.

A Sony store in Zhongguancun, the center of electronics products in Beijing. Some electronic devices made by Japanese brands saw price hikes on Monday following the devastating earthquake, which is hurting the supplies to China, vendors say. China's electronics market has been severely affected by the aftermath of the earthquake and tsunami that hit Japan on Friday. That's because many Japanese electronics companies have closed their factories in the country, meaning that supply in certain Chinese markets is facing intense shortages that could last until June. Zhongguancun, Beijing's largest retailing market for electronic goods by size, is the barometer of the market for Chinese digital products. Unlike major retail chains, which place orders ahead of time, Zhongguancun is a market that is highly susceptible to supply and demand. A swathe of top-name Japanese electronics manufacturers, including Sony Corp, Toshiba Inc, Canon Inc and Panasonic Corp, have been forced to close their factories in areas affected by Friday's disaster. Up to six Sony manufacturing plants have been shut down. "The price of Nikon's camera D3X increased by 2,000 yuan ($304) within three days of the earthquake," said Cheng Ying, a vendor in Zhongguancun. "The price will keep on increasing because many digital cameras are made in Japan. Chinese dealers simply don't have enough inventory." Friday's tsunami swept away 120,000 Sony PlayStation3 units. That resulted in the price of the PlayStation in the Chinese gray market increasing by 200 yuan almost immediately. "The 120 gigabyte version is already out of stock. Because of the shortage caused by the earthquake, we will have to raise the price even higher," said Lei Tao, a games vendor from Zhongguancun. Japan exports electronic products worth about $3 billion to China every month, according to the Shenzhen-based securities company Guosen Securities.

Activities across China mark Consumers' Rights Day - A variety of activities were held across the country to greet the International Day for Protecting Consumers' Rights on March 15.

Hong Kong*:  March 16 2011

HK firms help mainlanders get around the 'great firewall' - Virtual private networks give access to banned sites, software - Wally Lee yesterday. "Free up your internet! No restrictions whatsoever," his Life VPN's website declares, an invitation to mainlanders to circumvent bans on various websites. Some Hong Kong companies are finding windows of opportunity in the mainland's "great firewall". With more and more mainlanders seeking access to Facebook, Twitter, YouTube and MSN - all banned - Hong Kong companies have gone into the evade-the-censor business. Life VPN is one of half a dozen firms offering access through a virtual private network. In business for six months, it has gained 6,000 customers, half of them Hongkongers and the other half from the mainland. A one-day pass costs 99 US cents; a monthly one US$9.99. That is cheaper than VPN services offered by American companies. Wally Lee of Life VPN said data transfer through Hong Kong was faster because of the city's proximity to the mainland. A quick search on Google shows more than five other locally based companies offering VPN services, but most of them said representatives were not available for interviews. There were no estimates of the number of mainlanders using foreign paid VPNs, Reuters reported last year. The services are technically illegal, but an analyst said authorities were likely to leave them alone as long as the number of users stayed small. That might change, the analyst said, "if China's army of netizens gets in on these things". Local companies had an advantage in providing internet services such as VPNs because of low data transmission costs, Internet Society chairman Charles Mok said. Since the opening of the telecommunications market, bandwidth costs in Hong Kong have dropped to levels lower than in Taiwan, South Korea and Singapore. Life VPN advertises on Facebook, which, while banned on the mainland, still gets a lot of users who find ways of getting around the firewall. "Free up your internet! No restrictions whatsoever," Life VPN's website declares, inviting users to enjoy their "universal right anytime anywhere" in countries "notorious for controlling the content users can view or monitoring online activities". Subscribers from the mainland were able to visit all of the banned websites, including overseas social networking tools, media such as Apple Daily and gambling sites including the Jockey Club, Lee said. The central government's bans on internet services do not apply in Hong Kong - an instance of "one country, two systems" in full flower. Internet users on the mainland can make use of free tools such as proxy servers to access some banned websites. But a VPN also allows them to use banned software and to use e-mail without being checked. Lee said a virtual private network used technology that created an encrypted tunnel between a user's computer and the service provider's server. Then it forwarded the user's internet traffic through this link. "All the banned websites would be accessed by the server in Hong Kong, which mainland authorities do not censor," Lee explained. The technology itself is not new; it is used to build intranets and link up local companies with their remote offices. But it has been rare for companies to explicitly promote it as a censorship evader. Lee and his cohorts saw an increasing demand from mainlanders - and Hongkongers who travel on the mainland. "We launched the service half a year ago. It was after we heard about Google's plan to leave China," Lee said. The company's website was blocked once in the past six months. But it switched to a new page and business continued as usual. Mainland blogger Jason Ng, administrator of, conducted an online survey last year. Of the more than 5,000 respondents, 21 per cent said they evaded the great firewall with a VPN service, either at their own expense or by using their companies' built-in network. Others stick to free evasion services such as Freegate, software developed by people connected to the Falun Gong. Or they use proxy servers - people go on a website, type the web addresses of sites they want to access and are redirected there. But Ng keeps more than one VPN account. Paid VPN services were more secure, faster and steadier than the free-of-charge options, Ng said. Ng's survey found 80 per cent of firewall thwarters were motivated by a desire to use basic services such as Google, though 30 per cent also said they wanted access to pornography. Laws lightly enforced - so far - It is illegal for mainland corporations to offer services for evading censorship. But the national internet law, which bars providing users with international access to evade the local area network, does not apply in Hong Kong. However, it was illegal for Hongkongers and mainlanders to evade the local area network when on the mainland, warned Zhao Yun, associate professor in law at the University of Hong Kong. Offenders face a maximum fine of 100,000 yuan (HK$118,000) and possible criminal liabilities, though the law is lightly enforced, experts say. Those using their firms' intranets did not have to worry. Those arrangements were approved, just as some hotels were allowed to show overseas TV programmes, Zhou said. Internet Society chairman Charles Mok said: "Many internet users on the mainland use [virtual private networks]. Authorities just turn a blind eye." A law was in place, he said, but the central government targeted political activists and rarely prosecuted ordinary internet users. It was hard for authorities to ban VPNs, he said, because evading censorship was just a "side effect" of their original purpose - boosting online security and building intranets for individual companies.

A decades-old plan to build a second railway connecting Tuen Mun and Tsuen Wan is gathering speed. District representatives released a feasibility study yesterday and said residents needed a faster rail link in the area northwest of Kowloon. The proposed 18-kilometre railway would run along the coast between Tsuen Wan West and Tuen Mun, passing through Sham Tseng, Tsing Lung Tau and Sam Shing. It would be a more direct link than the existing 35.4-kilometre West Rail Line, which goes north to Yuen Long before getting to Tuen Mun. The district councils also suggested the railway be extended to a new station in western Tuen Mun. A feasibility study commissioned by the two district councils estimated the proposed railway would carry 237,600 passengers daily in 2021, and that the whole journey would take about 20 minutes. The HK$600,000 study was made by Ho Wang SPB. Most passengers would be taking medium-to-long trips and would need to change at Tsuen Wan West for the West Rail Line, the report said. Costs and other details of the construction were not known yet, but Joseph Wong Chung-chuen, executive director of the company, estimated tickets on the proposed line would cost less than the West Rail Line's charge of HK$11 one-way for adults from Tsuen Wan West to Tuen Mun. "Ticket prices on the MTR are usually based on the length of the journey. The proposed railway is shorter than the West Rail Line by 20 to 30 per cent, so prices will also be cheaper," Wong said. Travel time between the two areas would also be shortened by at least 15 minutes, he said. "Commuting time for residents in Tuen Mun West will further be reduced, because the rail network will become more accessible to them," he said. Wong said the cheaper costs and quicker commuting time would encourage residents to look for jobs outside the immediate area and encourage tourists to visit Tuen Mun. It could also ease the passenger load on the West Rail Line, which was likely to increase with more residential projects developing along it, he said. The railway could even connect with a cross-border railway, such as the Hong Kong-Shenzhen Western Express Line, and the Hong Kong-Zhuhai-Macau bridge, Wong said, although further studies would be needed. The two district councils proposed the railway to the government in 2009. It is now being considered under the Transport and Housing Bureau's updated railway development strategy. Tuen Mun District Council chairman Lau Wong-fat said the two councils sent the report to Chief Executive Donald Tsang Yam-kuen yesterday and hoped the railway could be built as soon as possible.

The mainland government’s national 12th five-year plan would not replace Hong Kong’s own economic policies, Premier Wen Jiabao said on Monday. Wen was speaking at a press conference after the closing of the annual meeting of the National People’s Congress – the nation’s top legislature – in Beijing. He said the latest national five-year plan unveiled by the NPC would not be imposed on Hong Kong – out of respect for the city’s autonomy. “We will adhere to the principle of ‘one country, two systems’ – Hong Kong people governing Hong Kong – and a high degree of autonomy. We will act in strict accordance with the Basic Law,” he added. Wen’s comments follow recent concerns in Hong Kong that cross-border planning might affect the city’s economic independence. The mainland’s latest national five-year plan for the first time devotes a full chapter to Hong Kong and Macau. It said the central government would encourage Hong Kong to become an offshore hub for renminbi business. Wen also said Hong Kong should make the most of its economic resources to help its low-income people.

Wong Wai-man, 55, has no plans to retire after surviving 33 years amid the ups and downs of the bar-bending trade. - Wages of bar benders have become a good measure of the city's economy. Because Wong Wai-man, who has been in the bar-bending trade for 33 years, has been affected by the ups and downs of the construction industry during that time, he knows as much about the booms and busts of the property market as any economist or official. Nowadays, the construction industry and the trades in it, such as bar bending, are enjoying a boom. "The [pay] rise is okay," Wong, 55, said, "It does make the workers feel better as the rate is finally getting back to the 1997 level." Last week, the Bar-bending Contractors Association promised to raise the daily rate for bar benders to HK$1,200 - HK$100 more than the current rate. The daily wage will increase to nearly HK$1,500 by 2014 as the association has promised an annual 10 per cent pay rise for the next three years. Wong has two grown-up children from his first marriage and two stepchildren from his current wife. Except for the youngest one, who is at vocational school, the others have graduated from university and support themselves. In 1997, the daily wage of bar benders was about HK$1,200, thanks to the construction boom. The number of working days also increased. "Once, I worked 45 days [shifts] in a month," Wong said. He earned more than HK$50,000 that month. But when the economic downturn hit Hong Kong soon after that, construction workers were among the first to feel it. By the end of 2000 sites had started to cut staff, and the daily wage dropped to HK$1,050. When Sars broke out in 2003, he left the industry. "The contractors were paying me HK$600. That's too low and the number of working days was not stable. And you didn't know whether you would get your pay." He became a security guard because the job provided a monthly salary of HK$7,000. He returned to construction sites a year later, doing general and scaffolding jobs. He was paid HK$400 a day. Wong got a bar bending job again in 2005 and was paid HK$700 a day. There are now about 3,000 registered bar benders, but an estimated 1,500 more would be needed to meet current demands. Besides bar benders, carpenters and workers in metal scaffolding and drainage are also in demand, thanks to the construction spree. But bar bending is one of the best paid. As a young man, Wong was attracted by the then high wage - HK$100 a day - and switched from a factory boy job to bar bending in 1978. "It was a very good wage at that time, when it cost only a few dollars for a meal." Wong has worked on the construction of the Hong Kong Convention and Exhibition Centre in Wan Chai, Chek Lap Kok airport and the Tsing Ma Bridge. He has no plans to retire. Wong says his joints crack when he moves and they are painful when it rains. Also, he cannot straighten his fingers. "Joints in my fingers have grown over time, and I can no longer hold my fingers straight, because I have to carry heavy loads all the time," said Wong, who became a bar bender at the age of 22. "I have been happy to earn money with a hard physical job," he said. He attended school until the age of 13.

Shop owner Lau Chi-kong displays the new white option. Parallel imports of the iPad 2 arrived yesterday, with shops in Mong Kok selling them for as much as HK$15,000. A white version of the new thinner and lighter iPad, with features including two cameras, for video calls and high-definition videoing, attracted tablet enthusiasts to Mong Kok. Despite selling at double the United States price, most parallel imports of the iPad 2 in two shops in the district were snapped up yesterday. The iPad 2 went on sale in the US first on Saturday. The three models cost US$499-US$699, the same as the original iPad when it was first launched in the US. At G-World Mobile in Sincere House Commercial Podium in Mong Kok, black iPad 2s sold from HK$7,980 to HK$11,880. White ones were HK$2,000 more. The most expensive iPad 2 - a white, 64 gigabyte, 3G and Wi-fi model - sold for HK$13,880, and was HK$15,000 at another shop. The owner of G-World Mobile, Lau Chi-kong, said most people wanted the most powerful version, in white. "We have 60 iPad 2s," he said. "Some 130 people called to place orders." He said the iPad 2 would not be on sale through Apple for another two or three months, so he had employed several people to go to the US. "They had to put up a tent in front of Apple stores three or four days before the sale," he said. "A place in the queue sold for HK$1,100." He said orders for the iPad 2 were double that for the original iPad when it was first launched. "Thirty per cent of the orders are placed by women, who all want the white colour," he said. "Half of the orders were placed by mainlanders. Our second batch of parallel imports will arrive on Wednesday.

 China*:  March 16 2011

US authorities are investigating accounting practices at up to 350 Chinese companies that are listed on New York exchanges. Chinese IPOs have long proven popular in New York, where investors desperate to diversify their holdings out of the moribund US economy queue up to grab a slice of the mainland's rapid economic growth. But some mainland firms listed in the US are being sent to the sin bin. The problem could be Chinese companies' general reticence to explain themselves, which mixes about as well with New York investors' high standards of corporate disclosure as a combination of chow mein and apple pie. Or it could be far worse, with questionable mainland firms targeting America because they would not pass muster in Hong Kong. American shareholders of Fujian-based advertising firm China MediaExpress Holdings are nervously awaiting news from the company after it halted trading in its shares late last Friday following a flurry of attacks from hedge fund short sellers and class action lawyers questioning the accuracy of its published accounts.

Software giant Microsoft Corp plans a major launch on the mainland this year for the advanced, Chinese-language version of its Bing search engine as it aims for broad adoption in the domestic e-commerce and smartphone markets. The internet search product, which has been in beta tests on the mainland since its worldwide release in June 2009, will be "much-improved and very competitive", said Zhang Yaqin, a corporate vice-president at Microsoft and the chairman of its Asia-Pacific research and development group. The domestic launch will form part of the United States-based company's increased focus this year on growing its underperforming internet services business on the mainland, which has the world's biggest internet population at 457 million users as of December. The country also has the largest mobile phone services market, with 842 million subscribers as of the same month. "We need to get a foothold in this market," Zhang said. "Are we realising the potential of 1.3 billion people? Absolutely not yet." Zhang said internet services on the mainland are dominated by local companies. Beijing-based Baidu, for example, is the leading internet search services provider in the country. Market research firm Analysys International estimated that Baidu's share on the mainland reached 75.5 per cent in the fourth quarter last year, while global search giant Google had a 19.6 per cent share of the internet search market in the same period. Shanghai MSN Network Communications Technology, a joint venture formed in 2005 between Microsoft and the city government-backed Shanghai Alliance Investment, will lead the marketing and distribution of the Chinese-language Bing search service. Zhang said the Microsoft research and development team is working with partners who make the hardware for Bing, including smartphones, personal computers, media tablets and television. "At present, a lot more effort is directed at the English-language market," Zhang said. "We now have a lot more people working in the Chinese search engine, so you'll see more products in the coming months." Bing Dictionary, known on the mainland as Engkoo, was a joint project between Microsoft Research Asia, led by Zhang, and the international Microsoft Bing team, and represented the most recent local success generated from the mainland beta tests. It provides a language assistance system to help Chinese users master English as a native speaker might. Although programmed to discover and analyse billions of Web pages with high-quality translations between English and Chinese, this technology can be extended to other languages. Zhang said Bing's "more intuitive and target-driven" approach to online search is expected to be valuable to the mainland's growing mobile search market, as the use of internet-ready smartphones and media tablets grows. Microsoft's research and development team on the mainland has long been working on a Chinese-language mobile search version of Bing, which is available in English for mobile devices sold in the US, Australia and Britain. Zhang declined to provide details of how the Chinese-language version of Bing mobile search would be integrated into the partnership between Microsoft and Nokia that was announced last month. Nokia, the world's leading mobile-phone manufacturer, remains the leading mobile handset brand on the mainland. According to Microsoft's branding programme, Bing is pronounced in Putonghua as "Bee-ying", which is based on the last two characters of a Chinese proverb that means "ask and you shall find".

Chinese Premier Wen Jiabao Monday rejected calls for a faster rise in the value of China's currency, the renminbi, citing the impact on jobs and domestic companies. "The appreciation of the RMB must be gradual, because it affects jobs and raises pressure on enterprises and employment," said Wen at a press conference after the end of the annual parliamentary session. "We must maintain the overall social stability." The premier reiterated the promise that China would continue to gradually increase the flexibility of its exchange rate."We will continue to stick to the reform of the formation mechanism of the RMB exchange rate," he said. The Chinese currency has appreciated 57.9 percent from the level of 1994, and since that year, China has conducted three major reforms on RMB's exchange rate formation mechanism, according to Wen. "Our reforms have aimed to adopt a market-based, managed floating exchange rate regime which is tied to a basket of foreign currencies instead of pegging to the US dollar," Wen said.

The World Trade Organization's appellate body has largely reversed a previous panel ruling on China-U.S. trade and supports China in its complaint against American anti-dumping measures imposed on four sets of Chinese exports. China filed its complaint to the WTO in December 2008, requesting that the Dispute Settlement Body establish a panel to probe a U.S. Commerce Department decision to impose anti-dumping and countervailing duties on Chinese-made steel pipe, tubing, sacks and tires and its determinations for the duties. An appeal was brought to the appellate body in December after China disagreed with part of the rulings made by the panel. A renewed report from the appellate body not only supported China's claims in specific cases, but also deemed the U.S. approach in forming the anti-dumping duties and countervailing duties inconsistent with WTO agreements. It outlawed American practices in labeling Chinese state-owned enterprises as "public body" and restricted the U.S. from applying anti-dumping duties to Chinese firms on the basis of an Non-Market Economy methodology. The practice of "double remedies," which by imposing countervailing duties on the basis of anti-dumping duties repeatedly applies trade measure on Chinese products, was also ruled inconsistent with WTO agreements. Analysts believe that the appellate body's ruling has a major influence on China's exportation, as some of its trading partners, the U.S. and EU in particular, frequently use anti-dumping and countervailing duties to block Chinese products from entering their markets. In its Friday announcement, the Chinese Ministry of Commerce welcomed the ruling and hailed it as a monumental victory in promoting fair trade. China urged the U.S. to immediately adjust its relevant measures on the four sets of Chinese exports, and demanded the U.S. mend its current practices of unfairly overusing trade measures and ensure Chinese companies' rights to fair competition in U.S. markets. Apart from China's complaints in the case, in recent years, the U.S. has initiated more than 20 other cases of anti-dumping and countervailing investigation, on virtually the same basis and methodology. The reported is expected to be adopted within 30 days of issuance.

The first relief package sent to Japan is composed of 2,000 blankets, 900 cotton tents and 200 emergency lights, and valued at 7.2 million yuan ($1.1 million), said Yang Hongbin, a Shanghai-based official with China's Ministry of Commerce. Yang said the China Eastern Airlines aircraft, a Boeing 777-200, was scheduled to touch down at Tokyo Haneda International Airport at about 8 pm Monday. The ministry announced Monday that China will provide 30 million yuan ($4.57 million)worth of emergency humanitarian assistance to Japan following the massive 9.0-magnitude earthquake and ensuing tsunami that have left thousands dead or missing. China's military was responsible for collecting this first batch of aid, as required by related emergency response mechanism and several government agencies, the Defense Ministry said in a separate statement, adding that the mission was accompolished in the shortest period of time. China sent a 15-member international rescue team to Japan on Sunday, while local governments and China's chapter of the Red Cross have announced separate donations to aid the quake relief actions. The rescue team started search and rescue operations Monday morning in Ofunato city of Japan's northeastern Iwate Prefecture, according to the website of the Chinese Embassy in Tokyo.

Fresh graduates from the capital's colleges are increasingly setting their sights on opportunities in smaller cities at campus job fairs. A recruitment drive last Friday at the University of International Business and Economics (UIBE), where just 12 of the 102 companies on show were from outside Beijing, saw employers from Qingdao and Hangzhou cities and Sichuan province outstrip those based in the capital for applications. About 35 percent of the UIBE's 3,300 graduating students are expected to land jobs in China's so-called second- or third-tier cities, up from 20 percent in previous years, said Chen Jianxiang, the university's deputy Party secretary. Li Zhiping, 22, was among the 40 or so smartly dressed people lining up in front of a booth for Taiyuan Iron and Steel Co Ltd, which is headquartered in the central Shanxi province. The firm received up to 400 applications during the fair. "The average salary for university graduates is about 3,000 yuan ($446.10)," said the international trade major, who complained that it has become too difficult to live in Beijing after new policies to restrict home and vehicle purchases. "With the staggering house and rental prices, I can barely rent an apartment, let alone to buy one. "Although I've spent a wonderful four-year college life in Beijing, with the restrictions I don't feel a sense of belonging in the city anymore," he told METRO.

A car is transfered into an intelligent parking garage of Anzhen Hospital in Beijing, capital of China, March 14, 2011. The debugging of the parking garage has been completed so far. It will be put into operation in the near future. The garage, with parking capability of 670 vehicles, is able to help drivers to park their vehicles automatically within one minute via its intelligent system.

Vehicles are transferred into an intelligent parking garage of Anzhen Hospital in Beijing, capital of China, March 14, 2011. The debugging of the parking garage has been completed so far. It will be put into operation in the near future. The garage, with parking capability of 670 vehicles, is able to help drivers to park their vehicles automatically within one minute via its intelligent system. Staff members check equipments of an intelligent parking garage of Anzhen Hospital in Beijing, capital of China, March 14, 2011. 

China's economy is likely to be a sensation in the coming 20 to 30 years, if it can successfully change its economic development model, according to Justin Yifu Lin, chief economist and senior vice president of the World Bank. "The possibility of this growth, however, will depend on measures China takes to restructure its economy and allow more market-oriented rules," Lin told Xinhua News Agency in Washington DC, adding resources should be allocated through a market mechanism. In his 1996 book The China Miracle, Lin forecast that by 2030 China's total economic volume will be as large as that of the United States. "It is encouraging to see that for the past few years there has been some improvement in the country, including an accelerated growth in salary for the low-income group, and increased income in rural areas at a faster pace than in urban cities," Lin said. China's February consumer price index (CPI) remained at 4.9 percent, which is higher than expected. Further tightening measures are not ruled out. Meanwhile, Lin has warned about risks amid global economic recovery. The World Bank predicts 3.3 percent global economic growth this year, while developing states and developed countries will grow by 6 percent and 2.4 percent, respectively. But developed nations will contribute 70 percent to the world economy.

Hong Kong*:  March 15 2011

A seamstress sews bras at Top Form's factory in Shenzhen, where the minimum wage is set to rise 20 per cent. Top Form boss Willie Fung believes it will double in two years. Top Form is beginning to sound like a misnomer as the bra maker struggles to get over the hump caused by rapid changes in the mainland's labour market and industrial laws. The group, which is the world's largest contract producer of lingerie and counts among its clients high-end brands such as Calvin Klein and Victoria's Secret, has been hit by "landslide changes" in mainland policies, complained its chairman, Willie Fung Wai-yiu. Top Form along with tens of thousands of Hong Kong factories across the border have been finding it difficult to stay afloat amid the sweeping changes that Fung calls "too rapid to comprehend and react to". These include proposals to let workers negotiate pay rises and welfare measures with bosses and also to allow them to sit on the board of directors. These are all expected to become law in Guangdong and Shenzhen after the National People's Congress draws to an end today. Other rules which were part of the Labour Contract law passed two years ago, will be strictly enforced in Shenzhen from this summer. "They are not well thought out and are full of loopholes," said Fung, who is also the chairman of Hong Kong Garment Manufacturers Association. "We are not opposed to new rules but these new laws were introduced too fast." He complained that some rules could be easily abused and cited the unemployment insurance arrangement in Jiangxi province, where Top Form runs a factory with about 2,000 workers. Shortly before the Lunar New Year holidays, a group of 40 migrant workers at the factory staged a strike and demanded to be sacked so that they could demand the insurance compensation, Fung said. A couple of months earlier, a security guard at the same factory intentionally drank alcohol on the factory premises during working hours and demanded to be sacked in order to qualify for the unemployment insurance, said Fung. The latest crisis was finally settled by having the workers in question resign and compensated according to their labour contract, he added. "We follow the rules of the game, but as reward we get punished with more troubles. "The rules come with good intentions but their drafting is so vague that it defeats the purpose of protecting workers and creates disputes, instead." Eventually, Top Form, which Fung said was alone in following the rules, called on the local government to revise the definition of unemployment. It now excludes workers who are sacked arising from a breach of factory rules, he added. Unemployment insurance is a fund in which employers have to contribute on a monthly basis. The fund is distributed among employees if they lose their jobs under certain circumstances. Employees do not have to contribute to the fund. Staff relations are crucial in labour-intensive businesses such as Top Form, which employs about 7,000 migrant workers in its production bases in Jiangxi, Shenzhen and Nanhai, Guangdong province. And the flow of new policies shows no sign of abating for manufacturers on the mainland, with the National People's Congress due to pass today the 12th five-year plan. Under the plan, which is aimed at preventing social unrest and spurring domestic consumption, the government wants to see minimum wages gradually increased; the welfare and rights of workers expanded; and the manufacturing sector encouraged to upgrade its technology and increase product values. Some leaders have said during the NPC's annual session that the state aims to have the minimum wage doubled by the end of 2015. Echoing the nation's objective, Guangdong Party Secretary Wang Yang has promised to lift the living standards and income of workers under the "happy Guangdong" slogan. "I don't think it will take as long as five years to double the minimum wage," Fung said. "A couple of years will do because of the severe labour shortage." Shenzhen, for example, is to raise the minimum pay by 20 per cent to 1,320 yuan on April 1, while Guangdong raised it by an average of 18.6 per cent on March 1. Dongguan, which has the largest cluster of Hong Kong factories, had the minimum wages raised by 19.6 per cent to 1,100 yuan on March 1, the second increase in 10 months. The Federation of Hong Kong Industries forecast that one in three Hong Kong-owned factories across the border - or 22,000 of the estimated 65,000 plants - will be forced to cut back their operations or go under in the next three to five years as a result of more stringent labour rules, labour shortages, rising wages, an appreciating yuan and high raw material prices. "Lingerie manufacturing was a sexy business even a few years ago," Fung said. "Now it is a headache." The future of the group rests on making the process more technologically advanced, he said. In recent years, bra manufacturing has deployed ultrasonic techniques, laser beams and adhesives to reduce labour and create new designs. According to the Hong Kong Intimate Apparel Industries' Association, the average woman in the US and Europe will own six bras and eight pairs of underpants and buy two bras and five pairs of underpants a year. In Japan, the average young woman buys 30 bras and 65 pairs of underpants a year. Top Form's backyard, the mainland market, also has a lot of room for growth. "The brassiere industry is viable; otherwise you would not have seen sports brands like Nike, Adidas and fashion brands like Esprit and Giordano (SEHK: 0709) expand into underwear," Fung said. "It is a growing business, but it is getting more competitive." Top Form, which also has a production base in Thailand, is looking for additional manufacturing sites beyond these two countries. Bangladesh, Vietnam and Sri Lanka were probable contenders due to their abundant labour supplies and relatively lower wages, he said. Top Form's decision to move more of its manufacturing to Thailand to lower costs has proved fruitful, as the group's bottom line shows. Its factory in Thailand, which employs about 6,000 workers, accounts for half of the group's production output. Net profit jumped 51 per cent to HK$47 million in the first half of the fiscal year as sales rose 18 per cent to HK$749 million. Gross margin was maintained at 21 per cent, marginally lower than 22 per cent a year ago.

The new national five-year development blueprint will help eliminate unhealthy competition between Hong Kong and mainland cities such as Shanghai and Guangzhou, the chief of the Central Policy Unit says. Lau Siu-kai, who heads the powerful government think tank, believes the state master plan has laid down the central role Hong Kong is to play in the financial system of the Pearl River Delta. Beijing has unveiled its latest five-year plan at the National People's Congress, which for the first time devoted a full chapter to the two special administrative regions of Hong Kong and Macau. It identifies Hong Kong as the "dragon head" of a regional financial system where other Pearl River Delta cities would play a "supporting role". More specifically, it said the central government would encourage Hong Kong to become an offshore hub for renminbi business. "The central government has stated its support for Hong Kong's development as an international financial centre," Lau said. "This will facilitate Hong Kong to take up the role as a centre for offshore renminbi business. This can also settle the division of labour between Hong Kong and Shanghai. While Shanghai will serve as a national hub for renminbi financial services, Hong Kong will face the international market in this regard." Lau was in Beijing attending the annual parliamentary sessions and speaking on the sidelines. Two years ago, the State Council endorsed Shanghai's plan to build itself into a global financial centre by 2020, sparking concerns in Hong Kong that the leading role of its financial market would be undermined. Lau said the national blueprint also showed the central government's determination on the division of labour between Guangzhou and Hong Kong. "Guangzhou has always wanted to develop itself as the financial hub of the Pearl River Delta region," he said. "[But] the 12th national five-year plan explicitly named Hong Kong as the dragon head." There are still conflicts for which solutions need to be sorted out, the government's chief adviser said. For example, the five airports in the Pearl River Delta - Hong Kong, Macau, Guangzhou, Zhuhai and Shenzhen - compete against one another, and the Yantian Port in Shenzhen is in keen competition with Hong Kong container terminals, he said. "Our container terminals ... need to concentrate on high-value-adding service, such as financing of ships and logistics services to develop our ports as headquarters, or command centres in the logistical process." But Lau cautioned that further migration towards a service-oriented economy would not necessarily be beneficial to all Hongkongers. "Older people with lower education may not be able to keep up with the changes. Although the move towards high-end services will boost the overall economy, not everyone will be able to participate ... The government has to help them find jobs as much as possible." Lau said the Hong Kong part of the national plan had taken in about 80 per cent of suggestions submitted by the city's government. He also revealed that the central government had at first hesitated over the weight given to the Hong Kong part of the paper, because of possible concern in the city over its autonomy. "Initially, the National Development and Reform Commission did not want to include so much content on Hong Kong in the plan, worrying that Hongkongers would mistakenly think it would damage `one country, two systems'. "[But] we conducted public opinion surveys and told the central government that Hongkongers very much supported Hong Kong participating in the 12th national five-year plan," he said. "About 70 per cent in our polls said they wanted Hong Kong to take part and hoped the central government would state clear support for particular development items relating to Hong Kong." Lau's fellow delegate to the Chinese People's Political Consultative Conference, Christopher Cheung Wah-fung, a former chairman of the Hong Kong Securities Professionals Association, said he hoped the mainland could issue more investment products denoted in renminbi in Hong Kong, since the central government had stated its support for the city to become an offshore centre for renminbi business. He further suggested that the stock exchanges of Hong Kong and Shenzhen should strengthen co-operation and, further down the road, consider a merger. In the long term, a "Greater China Exchange" could be set up to join the exchanges of Hong Kong, Shenzhen, Shanghai and Taipei, he said. Another delegate, Nellie Fong Wong Kut-man, and about 80 colleagues submitted a joint proposal to the CPPCC, urging the mainland authorities to relax rules for businesses to issue renminbi debentures in Hong Kong and to allow foreign enterprises to make investments in yuan. The development of the city as an offshore hub for renminbi business could facilitate the internationalisation of the national currency, they said.

Warehouse district develops in style - Moving to the mostly light industrial area of Wong Chuk Hang may make sense for certain small businesses struggling to find space - Ageing warehouses, petrol stations and delivery trucks lined up outside garage doors typify the facade of downtown Wong Chuk Hang. A steady arrival of lifestyle-centric small businesses is transforming Wong Chuk Hang into a vibrant commercial and residential area, offering a cheaper alternative to Central, which is a 15-minute drive away. The main drag - a stone's throw from Aberdeen and Ocean Park and skirting the island's prestigious Southside - is not widely known as a lifestyle destination. Yet there is a slow but sure change under way, thanks to the impending arrival of an MTR station (due for completion in 2016), Central's rising rents and lack of space. Already, a steady arrival of lifestyle-centric small businesses - art galleries and studios, design and wine stores, homewares and fashion designers in need of space, cheaper rents and display areas - are taking early advantage of loft-style spaces, proximity to upmarket suburbs and a 10- to 15-minute drive to Central. "The area is quite hot" for this kind of business, says Willis Mak Tze-hing, senior director of investment services for Colliers International, primarily because of the warehouse atmosphere, tourist areas such as Repulse Bay on its doorstep and the upcoming MTR station. "I definitely see the creative aspect of it growing. But, it will be gradual." As in other cities, decrepit warehouse districts close to the city centre (New York's Meat Packing district, for example) provide an aesthetically antiquated, open and bright atmosphere ripe for renovation and artistic innovation. In turn, they become a hot spot for designers, artists, studios, quirky gift stores and eventually, inspired dining establishments. Closer to 2016, Mak says food and beverage outlets will be introduced to Wong Chuk Hang, further attracting deeper pockets within Southside's residential areas. "I think Stanley [a major tourist destination known for shopping and dining] may suffer," he says. Stanley is another 15- to 20-minute bus ride away and will not be on the MTR line. Mak says many developers such as Swire Properties and Sun Hung Kai Properties (SEHK: 0016) are taking a wait-and-see approach until rents increase. For now, new tenants are simply taking advantage of space at a better price and the knowledge they are creating a "destination" known for its creative elements. "Large spaces, lower rents and less direct competition allow business owners in Wong Chuk Hang more room for creativity and to take interesting risks to push their business concepts," says Heather Thomas Shalabi, co-director of Flex Studio, a health and fitness centre that also sells leisure wear brand Tulaa. Flex opened there late last year after spending five years in Stanley. "Businesses [in Wong Chuk Hang] can expand in ways they would be unable to in Central. The strategic location straddling major residential areas is really proving to be an asset," she says. "Being here, we find we still get people from Southside, but can also tap into Pok Fu Lam and The Peak. And because business owners here are staking out new territory, we benefit from the synergy of being in the same neighbourhood." Eventually, she adds, when more consumer-related operations are introduced to complement the MTR, restaurateurs will move in. A similar "creative centre" vision is shared by Paul Fung, director of modern Scandinavian furniture design company Manks Ltd, which opened a showroom in the area in January. "A loft environment is suitable for showing off the design furniture and lighting we offer," says Fung. "We also wanted to reflect the cheaper rent here by lowering the price of our pieces compared to stores in prime commercial neighborhoods. "We can see this area transforming into quite a trendy district in a few year's time." Elsewhere, Burnt Oringe - a green certified, fine linen supplier and retailer - opened its showroom in Wong Chuk Hang in April last year. Owner Tarynn Hatton-Jones had looked in Central and was put off by the cost. "We were looking for fabulous space at reasonable expense," says Hatton-Jones. "Our aim was to find a showroom with optimal natural light to accentuate our product ... and moving into Central would have forced us to increase our retail costs." Also opened late last year is Mirth Home, selling homewares, gifts and children's items. "Hong Kong has so few areas where you can get big open-plan spaces with lots of natural light and oozing with character. Stores in Hong Kong often have great products, but because the space is so small, it's difficult to show them off," says co-owner Kylie Platt. "In the great cities of the world, there is an industrial area that has turned into retail/residential areas and we see Wong Chuk Hang has the most going for it; surrounded by residential and cool buildings to boot." Clinton Mong, owner of home decorative accessories store and gallery, Simply Decor, says he positioned his business as an outlet-style gallery and needed space for display. "A 2,400 sq ft shop in Central or a mall would cost a fortune," he says. "And Wong Chuk Hang is one of the areas in Hong Kong with a lot of middle- to upper-class residents." According to Colliers' Mak, the asking price in Central ranges from HK$30,000 to HK$150,000 per square foot compared with HK$6,300 to HK$8,000 in Wong Chuk Hang. Mong says clients tell him the studio is more convenient for them than nearby Ap Lei Chau. Elsewhere, Mimi Gradel, the director of Blindspot Gallery - a small gallery space in Central - has recently opened Blindspot Annex. "Wong Chuk Hang is a convenient location compared with other industrial areas such as Kwun Tong. I hope we can eventually build a little arts hub [here]. I do hear some art institutions looking around already." Contributing to this artistic image of the area is the building The Factory, which offers workshop space (Manks takes up a whole floor within it and Simply Decor is also a tenant). Developed by K. Wah Real Estate, The Factory is the first visibly artistic building, thanks to its eye-popping comic book-style designed by Italian comic artist Mauro Marchesi. Not everyone is as enthusiastic yet, however. Lau Chun-king, international director and head of valuation advisory services at Jones Lang LaSalle, says it is early days to predict if Wong Chuk Hang will become a thriving retail area. "Upon the availability of the MTR services, Wong Chuk Hang is expected to become a more vibrant location to do business. Various new redevelopments would also be completed by then, which will bring in more opportunities," says Lau. "[However] we are not aware of consumer-based businesses moving into Wong Chuk Hang at the moment," he says, although conceding that there have been "some increases in population due to some new developments." Those there now will have to wait for associated consumer operations (food and beverage, for example) to join them. "As more retail outlets open, I think [the area] will have less of an industrial feel," says Nicole Darragh, owner of children's clothing business Hip Little Bubba, which opened there in April last year. "With the opening of L'hotel [last year by Chinachem] and similar businesses, I believe this is an up-and-coming area."

Police Commissioner Andy Tsang Wai-hung said those calling on him to apologize for the force's actions in Sunday's anti-budget rally are fantasizing. "Apologizing for maintaining law and order is like an Arabian Nights fantasy," Tsang said in response to a question at a briefing yesterday. The newly installed police chief was responding to accusations that officers used excessive violence to subdue the protest, during which an eight-year-old boy was hit by pepper spray. In addition, a video uploaded on YouTube showed an officer throwing punches at protesters. Tsang said demonstrators who paralyzed traffic on Des Voeux Road Central for four hours were given ample warnings to leave, but some resisted violently. "We carried out the action [to disperse the crowd] after careful consideration as public order was threatened and public safety was at risk." The force made "a resolute decision" to restore order by using pepper spray and hauling away about 50 protesters, he added. Tsang said the mechanism is effective and better than those used overseas. About 10,000 people had taken took to the streets in Sunday's protest against the budget, but the rally turned rowdy after about 300 pushed onto traffic lanes and tramlines. Clearing the sitdown protest led to 113 arrests. Three officers and several demonstrators were injured. On a revolver being dropped during the rally by a Police Tactical Unit officer, Tsang said the firearm was retrieved immediately by officers and was not damaged. He said there was never any danger of an accidental discharge, but pledged to look into the design of holsters and the handling of protest confrontations. But no reports of defective holsters have been received. The commissioner also appealed to the person who took the video clip posted on YouTube - it shows an officer throwing two punches at protesters - to come forward and help police conduct a thorough investigation. Officers from the Organized Crime and Triad Bureau have been called in to probe that incident.

Annual passes at Disneyland cost up to 40 percent more after a shake-up in prices yesterday. As part of fifth anniversary celebrations, the theme park launched the Magic Access membership, which replaces annual passes. The red, silver, gold and platinum passes give visitors more flexibility than the previous program. A platinum membership offers visitors access 365 days a year and costs HK$2,400 for an adult pass, HK$600 more than the previous price. Students and children now pay HK$1,700 instead of HK$1,250. At HK$1,400, senior citizen passes saw the highest percentage increase - a similar pass used to cost just HK$1,000. Marketing director Vincent Wong said most seniors would not be affected as 80 percent of them bought basic passes last year. One-day tickets cost HK$350 for adults, HK$250 for children and HK$170 for seniors. The lowest-priced red passes will remain at HK$650 for two visits, with entry allowed on certain weekends. Previously, the cheapest passes allowed entry only on weekdays. "Our price plans were created after 18 months of market research and are intended to give the best value and experience," Wong said. There are now 130,000 annual pass holders, more than 90 percent of whom are locals. Current pass holders can upgrade to the Magic Access membership by paying from HK$200 to HK$1,750. Visitor Lena Cheng Lai-na said the red pass will be of more value because she usually comes on weekdays with her three-year-old son and the extra weekends will be a bonus. "For most of us who'll also grab a meal here, we'll definitely get value in the long run," Cherry Chim Shuk-han said. Homemaker Pang Sau-mun disagreed with the increase because it is still more expensive overall, adding that annual passes for the whole family make more sense. Student Germaine Woon Siu-yam agreed. "My dad likes coming so he bought us all passes. But when you compare this to other Disneylands, it's really small and limited," she said. Hong Kong Disneyland, meanwhile, has one of the lowest staff turnover rates in the industry. Vice president of human resources Christine Wong Siu-ping said it loses only about 16 percent of permanent staff every year because of the training and promotion opportunities offered.

Some developers have started cutting home prices now that China is aiming to build more low-cost homes over the next five years. With supply of public cheap homes set to beat the private sector, they face a challenge. More homes mean more glass is needed, and that's why Xinyi Glass (868) just scaled its all-time high this week. More homes also mean more construction machinery, so another share to watch is Changsha Zoomlion Heavy Industry Science and Technology Development (1157). The company is a sector leader, providing diversified products such as concrete, crane, and environmental and sanitation machinery. Changsha Zoomlion was listed in December at HK$14.98 when market sentiment was not good. But its shares have stayed on an upward trend, hitting HK$20 last month. It now trades at HK$19.06. Many brokers have set their target around HK$21 to HK$22. That may be too conservative. Any dip near HK$18.40 makes it worthwhile as a medium-term investment. Dr Check and/or The Standard bear no responsibility for any investment decision made based on the views in this column.

People from all over the world have set their heart on seeing Hong Kong, but it's unlikely that anyone was more glad to lay eyes on it than Phu Nguyen. On March 28, 1978, Phu made it here as one of the lucky Vietnamese boatpeople to safely reach the city. Hong Kong fishermen spotted his vessel and rescued everyone on board after it ran aground near the Paracel Islands. This weekend he returned to Hong Kong for the first time in 33 years to track down the fishermen that saved him and say thank you. Phu lived in the Vietnamese port city of Da Nang and had been a translator for the American military from 1969-73 in nearby Hue. After the American withdrawal he joined the South Vietnamese Army. However, at a time when any previous association with the United States could land people in jail, or worse, he knew that he had no option but to try to leave Vietnam with his family. He decided to sail to the Philippines from Da Nang in a small fishing boat he had bought. Soon it was crammed with 45 family and friends wanting to escape from Vietnam. Phu's wife, Bong, and his 16-month-old son, Adam, were also on board. "As I had bought the boat, I was made captain. But I had no knowledge at all about winds or currents," he explained. "All I did was rip a page out of Life magazine that had a map of Asia on it. I decided to just keep heading west and get to the Philippines. What the map didn't show was that there were islands and reefs in between." They spent four days and nights at sea until they ran aground on a reef off the Paracel Islands - a group of more than 30 islets, sandbanks or reefs stretched across 15,000 square kilometres of the South China Sea. "We got trapped on a reef and spent a night there. I never prayed before, but that night I did," Phu said. "My prayers were answered when fishermen in two boats from Hong Kong found us." However, their troubles were not over. The fishermen refused to let them aboard. Phu and his passengers offered them all the money and jewellery they had on them, to no avail. Then Phu made one desperate plea on behalf of his little son which, he thinks, changed everything. "I told them to take my 16-month-old son. `At least give him a chance to live,' I said to them. It didn't matter if I died so long as my son would live," said Phu. The fishermen refused again and set off in their two boats, leaving the refugees watching stricken as their hope of rescue vanished. Half an hour later, however, they saw the boats heading back. The fishermen told everyone to climb on board and brought the whole boatload safely to Hong Kong. "Did my actions make them change their mind? I don't know. Those were the longest 30 minutes of my life," he said. Phu and his passengers were taken to the old Mayfair Garden Hotel near Nathan Road in Yau Ma Tei and came under the control of the United Nations High Commissioner for Refugees' office. "One day we were without hope, the next we were in a hotel," he said. "We were given bread but were afraid to eat all of it in case we would not get any the next day. After all that we'd been through, it was hard to believe this was actually happening." Phu, 60, and his family stayed one month in Hong Kong before going to California. A friend he had made in the US military, Dr Stuart Grant, arranged for their passage. Phu attended college and became a social worker before retiring last year. His son, Adam, graduated from college and now works for a clothing company. It could all have been very different. Hence his determination to keep looking for any of those fishermen that turned back that day to save them. He has had some pamphlets printed and was handing them out at Aberdeen Fish Market yesterday in the hope it would give him a lead. "There were two Hong Kong boats and the captains' decision saved us all. I don't know their names and times have changed a lot since then, but I would love to find them," he said. "One of them was a younger man than me. Even if I could just find their family or descendants it would be great. I know it's like finding a needle in a haystack but I want to try." His timing is right. In just two weeks, it will be 33 years to the day that the fishermen brought the boatpeople into Hong Kong harbour.

The Cathay Pacific (SEHK: 0293) flight attendant who fought off a man trying to enter her hotel room in Saudi Arabia might have found herself on the wrong side of the law if police had been alerted, her union believes. Becky Kwan Siu-wa, vice-chairwoman of the Flight Attendants Union (FAU), said she believed the reason police were not called to the Marriott Hotel in Riyadh following the incident on February 28 was because of the possible legal implications for the victim. Under Saudi law, the flight attendant might have been found at fault for answering the knock on her door without first checking who was at the door and without changing out of her casual clothes into the all-covering abaya robes provided to all female airline staff staying at the hotel, Kwan said. The FAU wants Cathay Pacific to stop staff layovers in Riyadh after the incident, in which a local man tried to force his way into a young flight attendant's room after knocking on her door late at night. He only fled when she threatened to call police. Other flight attendants have complained of nuisance calls to their rooms and Kwan said men she referred to as "lobby lizards" had targeted Cathay flight attendants since the layovers were switched to the Saudi capital last month because of political unrest in Bahrain. Since the incident, security at the hotel has been stepped up, with extra patrols, CCTV cameras inside lifts, guest checks on the floor where cabin crew stay and the screening of room-to-room calls. Explaining the handling of the incident by Marriott Hotel staff, spokeswoman June Farrell said: "The action we took in response to the reported incident was to ensure that the privacy of the guests involved was not compromised." Cathay Pacific has provided abayas for female flight attendants to wear while in Riyadh. They are issued to the women when they check in, and written guidelines issued to staff tell them to wear them inside and outside the hotel. Kwan, who stayed at the Riyadh Marriott while on duty with Cathay Pacific at the beginning of March, described the locals as friendly and welcoming and said the abayas were comfortable to wear. "It's the first time I've had to wear something like that as a requirement but it's a local custom and when you go to another country, you have to follow their customs. I didn't mind it at all," she said. The problem for flight attendants, however, was that while they had been given guidelines on how to behave to avoid breaching local customs, they had not been told how to behave if someone was assaulted. "Everybody is really scared," she said, adding that flight attendants were too frightened to leave their rooms on layovers. "Cathay can't guarantee our safety." Cathay Pacific has said in a statement it is taking the incident "very seriously" and taking steps to ensure all crew in Riyadh are safe.

Two senior officers pass by ranks of graduate probationary inspectors and recruit constables at Hong Kong Police College, Wong Chuk Hang, yesterday. Police commissioner Andy Tsang Wai-hung yesterday warned an intake of new recruits that they would be expected to work under the kind of extreme pressure ordinary people could never understand. Tsang told the new recruits at a passing out parade at the police college in Wong Chuk Hang that no matter what pressure they faced, they should remain calm, collected and respectful when others around had lost control. Police were criticised for using excessive force during last Sunday's anti-budget protests in Central, a video of which appears to show officers throwing punches at protesters. In his first speech to new graduates, the commissioner stressed the challenges facing his officers and value of the police force. "As an officer in a patrol sub-unit, you will be at the sharp end of frontline policing in Hong Kong," Tsang said. He said graduates would be required to think and act under extreme pressure - the kind of pressure that many people could never appreciate. "Your thoughts, words and acts should represent you as policemen. The pressure you face is not what the public would understand," he said. Meanwhile, Tsang told graduates that their role as a police officer was not merely to respond to incidents. "We are there to serve the community, to reach out and find out about concerns, feelings and ideas, and where practical, to share those concerns and work in partnership with the community to address them," he said. "You must care about our people, and you must show that you care about our people," he told the 31 probationary inspectors and 205 recruit constables who graduated yesterday and hundreds of new trainee recruits at the passing-out parade. Tsang reaffirmed that police would not apologise for Sunday's incidents and insisted officers had done nothing wrong while carrying out their duties, despite a female protester's complaints to reporters that she had been roughly manhandled by police officers during the protest. Tsang publicly appealed for the protester to come forward to file a proper complaint so an investigation could be launched. "This is not fair to either side if they only accuse police through the media," Tsang said. The female protester, a form seven student, told media a group of male policemen had roughly pulled her leg when she was being removed from the protest. "Does it mean that police can hit people in the name of law and order," Miki said. She said she would not file a complaint to the Independent Police Complaints Council as she had no confidence in the complaints mechanism. "All complaints are investigated by police," she said. League of Social Democrats chairman Andrew To Kwan-hang and lawmaker "Longhair" Leung Kwok-hung yesterday protested about the arrest of 113 protesters during the Sunday operation which they likened to a "white terror".

Hong Kong travellers in Japan when the quake struck told yesterday how they battled through chaotic scenes in an attempt to get home. They spoke as the government warned people not to travel anywhere near tsunami-hit Fukushima prefecture amid nuclear radiation fears. One group of 13 Hong Kong tourists were understood to have been in Sendai - the epicentre of the quake - on Friday just before the earth shook, but a spokesman for tour operator, ELG Tours, said they made it out unharmed and were last night on their way to Tokyo. Aftershocks startled Hongkongers stuck in Tokyo, who told of airports and railway stations in and around the city being clogged with tens of thousands of stranded people. A group of immigration officers arrived in the Japanese capital yesterday as the Hong Kong Immigration Department said it received more than 1,700 inquiries about the earthquake and tsunami - among them more than 300 who said they had lost contact with relatives in Japan. Two Hong Kong immigration officers were at Haneda Airport while another four were at Narita Airport to assist citizens. Senior officer Frankie Yeung, a fluent Japanese speaker, who went to Haneda Airport, said 60 tourists had come to them for help with tickets and translation. As many other Hong Kong tourists made their way home, travel companies cancelled tours for coming days. The travel warning for most of Japan remains red - avoid unnecessary travel - and black, which means no travel at all - to the hardest-hit area. Two women on a waiting list for flights back to Hong Kong spent Friday night in a temporary shelter set up in a car park in Tokyo's Ueno railway station. "It's our first time sleeping in a car park. People were all over the place. It's not that terrible, but we just want to go home," one said. They were eating in a restaurant when the quake struck: "It was like we were on a boat. We were scared and ran outside the restaurant," she said. The two women had been in Sendai and went to the nearby city of Matsushima and stayed at a coastal guesthouse. Other Hongkongers spoke of the road to Narita Airport being blocked and hundreds in queues for taxis. Matthias Yeung Chi-kin went to Tokyo on a five-day trip with his family to celebrate his 60th birthday. The earthquake occurred when they were on a bus heading to the airport, he said after arriving back at Chek Lap Kok. "Normally it should take an hour to get to the airport, but it turned out to be a four-hour trip," he said. When they finally got to Narita Airport, more than 10,000 people were already there, he said, adding the aftershocks continued for hours after the quake. Meanwhile, it was business as usual for Hong Kong companies with offices in Japan as contingency plans kicked into gear immediately after the disaster on Friday afternoon. An HSBC (SEHK: 0005, announcements, news) spokeswoman said: "Our priority is the safety of our staff, their families, and our customers. All staff are safe and accounted for, although a few have minor injuries. Our buildings are unaffected and at this stage, we expect branches to continue business as usual." Eberhard Schoneburg, head of Hong Kong-based digital company Artificial Life, said all staff at its Tokyo office were safe, including director Kazutoshi Miyake. A spokeswoman for the Melco Group, which runs casinos in Macau and the floating seafood restaurant in Aberdeen, said the company's human resources team had checked to see if any staff were travelling in Japan on Friday and so far, they had found no one missing. Tsunami-devastated Sendai - known as the "City of Trees" with hot springs, stunning heritage-protected cherry blossoms and some of the best sushi in Japan - was becoming increasingly popular with Hong Kong and mainland tourists. "Lots of travel agents will offer this destination because it's a tourist destination with hot springs," said a Wing On Travel spokeswoman. "It's another choice for Hong Kong people and usually they will go in the Easter holidays for the hot springs and in spring for the flowers."

 China*:  March 15 2011

Local authorities' reckless pursuit of growth stands in the way of Beijing's pledge to pursue more balanced development, senior environmental officials warned yesterday. "If the country continues with its energy-intensive growth path, with high consumption of resources and high emissions of pollution, the pressure on environmental protection looks set to grow even heavier," Deputh Environment Minister Zhang Lijun said. The central government has vowed to reduce pollution and tap renewable energy sources, but Zhang said coal consumption, which has increased by 1 billion tonnes in the past five years, would see another big jump of about 1 billion tonnes by 2015. "You can imagine, how much impact it will have on our environment if [carbon] emissions from the increased 1 billion tonnes of coal are to be counted," he said yesterday at a briefing on the sidelines of annual gathering of the National People's Congress. Coal remains the biggest energy source for the mainland economy, accounting for nearly 70 per cent of its primary energy consumption. China has come under mounting pressure over its reliance on coal, the single largest source of its world-leading emissions as well as one of the main culprits behind widespread environmental degradation. Rapid economic development, which remains the government's top priority, has posed a dilemma for the leadership because of its appalling environmental costs and the heavy human toll from the severe pollution problems. "Local authorities remained determined to pursue economic development and the growth rate is expected to be at a high level during the 12th five-year plan period [between 2011 and 2015]," Zhang said. The new five-year plan aims to reduce energy intensity by 16 per cent by 2015 (against 20 per cent over five years in the previous plan) and sulphur dioxide and chemical oxygen demand (a measure of inorganic compounds in water) by 8 per cent, compared to the 10 per cent targets set in the previous five-year plan. Zhang said the country's rapid urbanisation and the emergence of fresh environmental problems, such as heavy-metal poisoning, dangerous chemicals and electronic waste, had contributed to the dilemma. He said his ministry had dealt with 912 pollution outbreaks in the past five years. The deputy minister did not give specific figures about demonstrations, some of them violent, prompted by pollution scandals, which are believed to have increased in recent years. Environment Minister Zhou Shengxian said earlier that at least 32 "mass incidents" occurred as a result of dozens of heavy metal poisoning incidents on the mainland last year. More than 4,000 people suffered from lead and cadmium poisoning, according to official figures. Zhang it was understandable Beijing had not include in revised national air quality standards the monitoring of fine particles - those with a median diameter of 2.5 microns (PM2.5) or less, which are believed to poses acute health risks. "It is true that there is a gap between the air quality standard China uses and that in the US. But given the country's practical situation, it is proper that China adopts the kind of standard recommended by WHO for developing countries," he said.

The 15-member Chinese rescue team is welcomed by Chinese Ambassador to Japan Cheng Yonghua upon their arrival at Haneda Airport in Tokyo, Japan, March 13, 2011. The Chinese rescue team arrived in Japan Sunday for quake relief operations. The rescuers will immediately head for quake-hit areas to search for survivors from Friday's great earthquake and ensuing tsunami. 

China outbound acquisitions in the metals and minerals sector amounted to just 10.6 per cent of global deals by value last year, belying the nation's portrayal by the media as an aggressive resources buyer abroad. But the mainland is set to become more acquisitive abroad, says accountant and tax consultancy PricewaterhouseCoopers (Pwc). Mainland firms made 161 acquisitions in the sector last year worth a total of US$12 billion, out of 2,693 transactions worth US$113 billion, based on Pwc's tally. It had a 6 per cent share by number of deals in the global mergers and acquisition pie, or 10.6 per cent by transaction value. The figures excluded the joint venture between Aluminium Corporation of China and Rio Tinto, to co-develop the Simandou iron ore project in Guinea. This was due to the uncertain legal status of the deal given that the Guinea government may raise the stake it gives itself, Pwc said. The largest outbound deal was the purchase by Jiangsu-based East China Mineral Exploration & Development Bureau of Brazilian iron ore miner Itaminas Comercio de Minerios for US$1.2 billion. "While China has been an extremely active investor in global mining projects, it has yet to produce a diversified mining market leader to rival the likes of a BHP Billiton or a Rio Tinto," said the report. It quoted research house Raw Materials Group as having estimated that Chinese interests control only 1 per cent of metals and minerals production outside China. But Pwc forecast this will change as mainland firms become more aggressive in outbound acquisitions this year. The report cited Andrew Michelmore, chief executive of Minmetals Resources - the Hong Kong-listed unit of China's largest metals trader Minmetals Group - as saying that with the support of its parent, Minmetals Resources was looking to spend at least its own market capitalisation on overseas assets. The opening of a Toronto office by the US$300 billion sovereign fund China Investment Corporation could signal a plan to ramp up investments in Canada, the report added. Luo Bingsheng, the former vice-chairman of the government-affiliated China Iron and Steel Association, said last month Beijing hoped to more than double the percentage contribution of iron ore imports from overseas mines in which it had an investment, to improve the mainland steel industry's paltry profitability.

China spent at least 1 billion yuan ($152 million), or 28,000 yuan per evacuee, on the recent mass evacuation of its citizens from Libya, an official from the emergency management authority said on Saturday. The evacuation, which helped 35,860 Chinese nationals return safely home, was a "living example" of the country's progressive capability in dealing with emergencies, said Zhao Hongyu, vice-inspector of the emergency management office under the State Council. Zhao added the current expense did not include the cost generated by follow-up operations. For instance, a passenger liner rented from foreign companies costs about 700,000 yuan a day, he said. Previously, the Chinese Foreign Ministry said the government had organized 91 domestic chartered flights, 12 flights by military airplanes, five cargo ferries, one escort ship, as well as 35 rented foreign chartered flights, 11 voyages by foreign passenger liners and some 100 bus runs to transfer evacuees from the North African country. Zhao made the remarks in a book release of China Emergency Management Report 2010, the country's first emergency management report, which reviewed major cases and the overall emergency management situation in 2009. According to the report, 13 provinces and autonomous regions and 10 ministries and administrations under the State Council have established their emergency platforms, six years after the State Council called on local governments and departments to strengthen emergency management. The report also said the country's emergency management capability was still challenged by "imbalanced development among different regions" and an "inadequate support system". In addition, Zhao said some emergency plans were not feasible, and were "redundant in language and lacking in clear guidance for each related party to follow in case of an emergency". Looking to this year, Zhao admitted the number of incidents was "on the rise", covering all the four types of emergencies - natural disasters, catastrophic accidents, public health emergencies and social security incidents - a classification used by the government. The report included separate accounts of the first three kinds of emergency incidents, but failed to comment on the last - social security incidents - for "confidentiality concerns", described by the book's chief editor, Wei Liqun, as a "defective point". The report was published in the wake of President Hu Jintao's recent speech on social management, in which he urged officials to improve social management capabilities and solve major problems that would damage the harmony and stability of society.

New York-based jeweller Tiffany has a market capitalisation of US$8 billion and is said to have good growth potential in China. Jeweller Tiffany has been singled out as a takeover target for luxury goods companies PPR or Richemont after LVMH's purchase of Bulgari, but a deal will take time and smaller bids are more likely. Of the remaining listed luxury firms - Burberry, Tiffany and Tod's - analysts and bankers say the US jeweller, which has a market capitalisation of US$8 billion, is most likely to be snapped up first, although not immediately. Attention in the luxury sector will focus instead on transactions worth below €500 million (HK$5.39 billion). These are set to multiply as growth prospects have rarely been so attractive, driven by the fast-rising purchasing power of emerging markets. Goldman Sachs estimates annual global sales of luxury goods will rise 16 per cent between this year and 2014 and could grow at 2.2 times gross domestic product to become a trillion-dollar industry by 2025. Despite this, a mega deal such as the €3.7 billion acquisition of Bulgari by LVMH, the world's biggest luxury group, may not be repeated any time soon. "History shows you never have two big deals in a row. The following ones will tend to be much smaller," one Milan-based senior banker said. Another financial adviser said PPR had looked seriously at Tiffany in the past and could consider buying it again, having cut some of its debt via its recent disposal of furniture chain Conforama for US$1.6 billion. Richemont, owner of jewellers Cartier and Van Cleef & Arpels, is sitting on more than €2.2 billion of cash, making it an obvious buyer of Tiffany since it could combine metal and jewel purchasing and expand Tiffany's retail network. But a senior manager at Richemont said the move would mark a strategy change for the Swiss group as Tiffany was more down-market than its other brands. However, it would give it exposure to the US economic recovery. "Tiffany has been in play for a long time, it has good growth potential in China but they move a lot of silver more than anything." Private equity firms and Middle Eastern and Asian retailers are likely to be more active consolidators than big luxury groups in the short term, financial advisers say. Chinese retailer YGM Trading, which owns the licence for London's Aquascutum in Asia and the French fashion brand Guy Laroche, said last week that it was still looking for acquisitions. Hong-Kong-based menswear retailer Trinity is also hunting for more European brands after buying Italian fashion house Cerruti for €53 million in December last year.

The Bund, Shanghai's famous waterfront promenade, is among the most fabled in the world. Neo-classical buildings lining the banks of the Huangpu River evoke the glamour of pre-war Shanghai, when traders from around the world would gather to seek their fortunes. Now, many of the historic structures symbolise the city's drive to regain its place as a premier gateway to the enormous mainland markets. Among the heritage makeovers on the Bund is the Waldorf Astoria Club. Built a century ago, the stately structure at the southern end of the Bund was home to the Shanghai Club, the most exclusive British gentlemen's club in China at the time. Now it forms the heritage wing of the luxury Waldorf Astoria hotel which opened last November. Connected to a newly built 252-room tower by a courtyard at the back, the original 40 rooms have been converted into 20 suites. "Back then, the Bund itself was very much China's front door," says Peter Hibbard, the president of the Royal Asiatic Society in Shanghai who advised on the restoration. When Waldorf Astoria announced in 2009 that it would open its first Asian hotel at the site, work was already under way to restore the building to its former grandeur. The structure was in good condition, so the refurbishment was a relatively smooth operation. "Restoring it was not hard as many of the original features, the ceiling and floors had merely been covered up and not destroyed," says Hibbard. "The interiors were largely untouched." The Shanghai Club opened at the site of No2 on the Bund in 1864. It was later demolished and rebuilt as the current six-storey building. When the club reopened in January 1911, it featured a 34-metre bar - the longest in the world at the time - a smoking room, library, dining room, billiards room, bowling alley and guest rooms. While the Long Bar was open to all members, seating was another matter. The bar was a showcase of the social pecking order. The east end, by the windows that looked out over the Huangpu River, was where the most respected and influential members of society hobnobbed. Newcomers were restricted to the west end, and advanced eastward as they rose in seniority and status. In the 40s, the building became the premises of the Seaman's Club, and after 1949 it was reincarnated as the Dongfeng Hotel. The L-shaped bar counter was dismantled, and in the 1990s the space was turned over to Kentucky Fried Chicken's first outlet in Shanghai. According to Dirk De Cuyper, general manager of the Waldorf Astoria Shanghai, the building remained unoccupied for 10 years after the Dongfeng Hotel vacated it in 1999, although many developers were eyeing the elegant site. Using archive records and photographs, the Waldorf Astoria has recreated the Long Bar to its original specifications. The marble columns, stained-glass windows, and ornate wall panelling remain intact. When the bar began serving drinks last November, Waldorf Astoria brought some of its own heritage in the form of five classic cocktails from its New York parent, including the Waldorf Cocktail. Named after William Waldorf Astor, who built the first Waldorf hotel in 1893, the cocktail is the most popular of the 69 mixes served in the New York hotel, says bartender Brett Clarke.

China will feel the impact if a global food crisis occurs, with prices hitting record highs, a top agricultural official said yesterday. However, the government would ensure that the mainland could provide at least 95 per cent of the food demanded by its 1.3 billion people, Deputy Agriculture Minister Wei Chaoan told a press conference yesterday. "The impact of volatility in the global food market in recent years has been mainly limited to prices," he said. Global food prices rose for the eighth consecutive month in February, the United Nations' Food and Agriculture Organisation said this month. Rising food prices have contributed substantially to inflation. Wei said the drought in the country's major wheat-producing areas this winter "has not had a serious impact on production of winter wheat and summer grain", adding that winter wheat only accounted for about 20 per cent of annual grain output. The drought in 75 per cent of the affected wheat-growing areas has been alleviated thanks to government anti-drought measures and rainfall after the Lunar New Year holiday, he said. However, it was too early to say whether another increase in grain output would be recorded this year. Farmers produced 546 million tonnes of grain last year, 2.9 per cent more than in 2009. It was the seventh consecutive year of growth. While the central government has reiterated its determination to keep the area of farmland above 120 million hectares, the amount of farmland used for growing crops is decreasing, said National People's Congress deputy Cui Fuhua , a researcher at the Agricultural Science Institute in Sichuan's Nanchong county. "Prices for agricultural products are too low and costs for farming materials are too high ... the percentage of farmland left idle is growing every year," she said. Wei said that while preventing further loss of farmland was a priority, the government was also paying more attention to improving the quality of land. Two-thirds of farmland was of mid- to low-level productivity, and under the 12th five-year plan up to 2015, "we will develop on a large scale high-standard farmland that can ensure production even when there are floods or droughts", he said. The central rural work conference in late December was told that by 2020, 53 million hectares of low-productivity farmland should be improved, but Lei Jiafu , former deputy director of the State Forestry Administration and a Chinese People's Political Consultative Conference delegate, said that was far from enough to achieve food security for China. "When I went back to the village where I had been sent to live and work [during the Cultural Revolution, I found] irrigation infrastructure was poorer, and there was very serious farmland degradation," he said. Lei called for more financial support from the central government for key grain-producing areas as almost all were in underdeveloped regions.

Hong Kong*:  March 14 2011

Actors take part in a parade in Hong Kong Disneyland in Hong Kong, south China, March 10, 2011. Hong Kong Disneyland launched a new Magic Access membership on Thursday, with the price ranging from 370 to 2,400 Hong Kong dollars, up 30 to 40 percent compared to the previous membership plan. 

The sensational feud between the four extended families of gambling mogul Stanley Ho Hung-sun over his massive wealth appears to have finally come to an end. The 89-year-old gaming tycoon and his family last night issued a statement - signed by Ho - saying the matter has been settled. But the statement, sent out via e-mail, did not mention how his massive fortune - including the stakes of SJM Holdings (0880), which holds Ho's Macau gaming business and worth an estimated HK$11.66 billion, nor any of his properties - will be allocated. The statement came two days after Ho was discharged from Hong Kong Sanatorium & Hospital after a check-up. But according to a source, daughters Pansy Ho Chiu-king and Daisy Ho Chiu- fung have given up for redistribution part of the shares in SJM that they acquired in January. They wanted to make their father happy, according to the source, and this helped settle the dispute. Also, Stanley Ho's house at No 1 Repulse Bay Road has been given to Angela Ho Chiu-yin, the daughter of his first wife, Clementina Leitao. The plot of land and the house are worth an estimated HK$1.6 billion. Ho's fourth wife, Angela Leong On- kei, said last night the four families will have equal participation in both SJM and parent company Sociedade de Turismo e Diversoes de Macau and that the structure of the board of SJM - of which she is managing director - will not be affected. Leong, worth US$1.1 billion (HK$8.57 billion), is ranked 1,057th on the latest Forbes list of the world's richest people - and she is the only Ho family member wealthy enough to make it. Meanwhile, Pansy is seeking to list MGM Macau - the company co-owned by her and MGM - in Hong Kong. The statement said that Ho dropped the court case against Pansy and Daisy as early as February 21 - five days after he filed the case in court. It said a Deed of Settlement was executed on March 8 between all branches of the family. The agreement was reached with "mutual understanding and mutual accommodation" and the families will work together and continue to develop the gambling business with a view to achieving greater contribution to the prosperity and stability of Macau, Hong Kong and China. The saga began on January 24 when SJM released a statement saying that Stanley Ho had offloaded his 31.7 percent stake in STDM, which owns 56 percent of SJM, to Lanceford Co. Ho's third wife Ina Chan Un-chan holds 50.5 percent of Lanceford, and the children of his second wife Lucina Laam King-ying, including Pansy and Daisy, hold the remaining 49.5 percent. The stake is worth about HK$13.3 billion, based on SJM's closing share price on that day, but is now worth HK$11.66 billion based on yesterday's share price of HK$12.1. That arrangement would have allowed Chan to hold 8.9 percent of SJM, or 488 million shares, worth HK$5.9 billion. Pansy and her siblings were to hold 8.7 percent of SJM, with 477 million shares worth HK$5.77 billion. Leong holds 417 million shares worth HK$5.04 billion. Ho sued his second and third families twice with his lawyer, Gordon Oldham, quoting the tycoon as saying he was disappointed that the four families could not reach an agreement over the distribution of his fortune. According to Oldham, Ho has always made it clear that when he dies he wants his assets split equally among his four families.

Several pro-government lawmakers have rushed back to Hong Kong to attend a Legco meeting that may prove crucial to interim government spending. A HK$60.2 billion interim funding request failed to get enough votes in Legco on Wednesday with pan-democrats abstaining and many pro-government lawmakers in Beijing for meetings. Legislative Council president Jasper Tsang Yok-sing yesterday approved the government's bid to retable the funding for next Wednesday's meeting but the resolution must go through the House Committee, which meets today. At least three legislators - Jeffrey Lam Kin-fung, Andrew Leung Kwan- yuen and House Committee chairwoman Miriam Lau Kin-yee - said in Beijing they will return for today's meeting. "It is an important issue. If [the resolution] is not passed, it is unfair to the Hong Kong people," Lam said. During a House Committee meeting, legislators can delay a bill by calling for a subcommittee to examine an issue, but a simple majority of those present can turn down any such request. With the pan-democrats having 23 votes in Legco, the pro-establishment group needs an extra seven to the 17 who voted for the funding. The veto was widely criticized, with radio callers blasting the "irresponsible" pan-democrats. "I feel very bad about it. I strongly oppose what the legislators have done. Their battle with the government should not be based on the well-being of Hong Kong people," a caller said. But a Mr Chow said they did the right thing. "I think what the pan-democrats did was right as it can let the government know they should not ignore public opinion. Many deep-rooted problems have been caused by officials," he said. Chief Executive Donald Tsang Yam- kuen also condemned the move. "I feel very saddened. I sincerely hope legislators do not put their personal or party's interest before public interest. Otherwise, people will be very disappointed and will be victimized." He said dole and Old Age Allowance will be hit if the funding is not passed. The government has cut HK$500 million in expenses because retabling the same resolution is not allowed in the same session under Legco rules. In a letter to Legco's president, Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung said pan-democrats had caused uncertainty over the continuation of public services. However, Democratic Party chairman Albert Ho Chun-yan defend the abstentions, saying it reflected their stance and lawmakers will abstain next Wednesday if the resolution is retabled.

Police Commissioner Andy Tsang Wai-hung said those calling on him to apologize for the force's actions in Sunday's anti-budget rally are fantasizing. "Apologizing for maintaining law and order is like an Arabian Nights fantasy," Tsang said in response to a question at a briefing yesterday. The newly installed police chief was responding to accusations that officers used excessive violence to subdue the protest, during which an eight-year-old boy was hit by pepper spray. In addition, a video uploaded on YouTube showed an officer throwing punches at protesters. Tsang said demonstrators who paralyzed traffic on Des Voeux Road Central for four hours were given ample warnings to leave, but some resisted violently. "We carried out the action [to disperse the crowd] after careful consideration as public order was threatened and public safety was at risk." The force made "a resolute decision" to restore order by using pepper spray and hauling away about 50 protesters, he added. Tsang said the mechanism is effective and better than those used overseas. About 10,000 people had taken took to the streets in Sunday's protest against the budget, but the rally turned rowdy after about 300 pushed onto traffic lanes and tramlines. Clearing the sitdown protest led to 113 arrests. Three officers and several demonstrators were injured. On a revolver being dropped during the rally by a Police Tactical Unit officer, Tsang said the firearm was retrieved immediately by officers and was not damaged. He said there was never any danger of an accidental discharge, but pledged to look into the design of holsters and the handling of protest confrontations. But no reports of defective holsters have been received. The commissioner also appealed to the person who took the video clip posted on YouTube - it shows an officer throwing two punches at protesters - to come forward and help police conduct a thorough investigation. Officers from the Organized Crime and Triad Bureau have been called in to probe that incident.

After ATV changed hands, it seemed the free-to-air broadcaster stopped caring about the Hong Kong market. Not only did it fail to support universally recognized viewer-rating surveys but it also froze advertising discounts and its clients' fees were in arrears. 

The Hong Kong Stock Exchange said it is still too early to tell what effect the extended trading hours have had, with today only being the fifth day. From last Monday the new trading hours are 9.30am to noon, and 1.30pm to 4pm, with lunch shortened by 30 minutes. The new times have been fixed to be better in tune with the mainland bourses, which operate 9.30am to 11.30am, and 1.30pm to 3pm. "Four days is a very short time to tell the effect of our change," said Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing (0388), at a luncheon of the Hong Kong Securities Institute. Li said people may not trade more every day, but the trading volumes may increase over time as investors become familiar with the new trading hours. He explained such an arrangement was to facilitate the future development of the qualified domestic institutional investor scheme, and the dual listings of stocks in Shanghai and Hong Kong. Hong Kong Securities and Futures Professionals Association chairman Wong Kwok-on said trading volumes haven't risen significantly in the past few days. "The new arrangement is creating more pressure for the brokers ... they don't have time to dine out," said Wong. The lunch hour will be shortened by a further 30 minutes for trading to start at 1pm from next March. Wong criticized the HKEx for deciding to further shorten the lunch hour next year, since it has not even seen the effects of the current arrangement. Meanwhile, the HKEx is studying the possibility of introducing commercial trust listings in Hong Kong. It had earlier said investors would not have enough protection with such listings. Hutchison Whampoa (0013) is listing its Ports Holdings Trust in Singapore, debuting on March 18. The pricing range has been kept narrow at US$0.99 (HK$7.71 or S$1.26) to US$1.03. Li said HKEx will ensure the infrastructure is ready before the listing of any yuan-denominated initial public offering, so that it will not be treated differently from the local Hong Kong dollar-denominated one by the market.

The average price of mass-market homes on Hong Kong Island has hit a historic high after topping the previous 1997 peak, according to leading agency Centaline.

 China*:  March 14 2011

China is likely to grant top-level support to the development of aero engines to further grow the country's burgeoning aircraft industry, a senior engineer said Friday. Gan Xiaohua, chief engineer of the Air Force Armament Research Institute, said the development of aero engines would probably be added to the list of national-level big research and development (R&D) projects. "Ministry of Science and Technology and Ministry of Industry and Information Technology are mulling the proposal, and steady progress has been made," Gan told Xinhua, without further elaboration. The national big R&D initiative during the 2006-2025 period covers an array of researches that are vital to China's future development, ranging from large-scale integrated circuit, new-generation broadband wireless telecommunication, to manned space and lunar probe projects. If included in the list, the project will be able to pool the necessary resources for achieving research breakthroughs. The development of large passenger jets has already been part of the massively-funded initiative. Wu Guanghui, vice general manager of the Commercial Aircraft Corporation of China (COMAC) said earlier this month that China's first large passenger jet, the C919, would make its maiden flight in 2014 and be put into service in 2016. However, imported engines have to be used in the early stage of the jet's development, because "China's aviation technology still lags behind that of developed nations by about 20 years," Gan said.

With communications still down, there were fears last night for the safety of Chinese citizens who may have been caught up in the earthquake and deadly tsunami, especially students in Miyagi prefecture, the area worst hit. Chinese ambassador Cheng Yonghua told China Central Television the embassy was still trying to establish whether Chinese citizens were safe. Cheng said the embassy had sent teams to check the safety of delegations and Chinese companies and was preparing to send a team to Sendai, the capital of Miyagi, to find out if any Chinese citizens were among the casualties. "The situation here is not only that telecommunications have broken down but also the railway and highways are closed," Cheng said. "We are worried because there are many Chinese students in Miyagi, especially in Sendai. We will send people there as soon as possible." Last night the Ministry of Foreign Affairs warned Chinese citizens to be cautious when travelling in Japan and to avoid areas affected by the quake and tsunami. The Chinese embassy posted a statement on its website saying it was trying to identify losses and casualties stemming from the 8.9 magnitude earthquake. It said an official would be on duty 24 hours a day. Japan is a popular travel destination for Chinese people. Last year 3.19 million people from the mainland, Hong Kong and Taiwan visited the country. China's biggest online travel agency, CTRIP, said Miyagi was not a popular tourist destination for Chinese, with most of those affected being tourists in Tokyo. There are 193 CTRIP tourists in Japan but some groups had yet to get in touch because of the communication problem. Another travel agency, China Youth Travel Service, had contacted its groups in Japan and was waiting to arrange their return to China because Tokyo's Narita airport had been closed. Feng Yuan, who is studying in Tokyo, told China News Service that she was in a fifth-floor dormitory when the quake struck. She said she thought it was an "ordinary quake", until books fell off the shelf. The quake lasted about one minute. "I rushed outside the dormitory and saw staff taking students to open ground. They were not in a panic." No one was hurt. "My mobile phone could not get a signal so I went online to contact my family and report I was safe," she told the news agency via an instant messaging service.

China says it is willing to provide Japan with whatever help is necessary as Tokyo deals with massive disruption caused by the 8.9-magnitude earthquake and ensuing tsunami that battered the country's northeast coast yesterday. Premier Wen Jiabao phoned Japan's prime minister, Naoto Kan, to offer his condolences, and the China Earthquake Administration said it had put personnel and medical supplies on standby, "ready to go in a minute" pending a request from Japan. Xinhua said the Chinese state rescue team was among 18 international rescue teams outfits that had been placed on high alert through the United Nations Office for the Co-ordination of Humanitarian Affairs. Qiu Lili, team leader of the Beijing Red Cross Blue Sky Rescue Team, told Xinhua that they had also contacted the Japanese Embassy within two hours of the quake to let them know they were on standby if called. A 31-member Japanese rescue team was the first international rescue team to arrive in Sichuan in the wake of the Wenchuan earthquake in May 2008, and its expertise and state-of-the-art equipment impressed many. However, Sino-Japanese ties have since been strained, with Japan detaining a Chinese trawler captain and his crew near the Diaoyu Islands in September after their vessel collided with two Japanese coastguard ships. Talks on the joint exploration of energy resources in the East China Sea, another issue of contention in bilateral relations, have since been frozen. Professor Liu Jiangyong , from Tsinghua University's Institute of International Studies, said Wen's overture should improve relations. "Even though there are some bilateral issues including territorial disputes and historic issues which we might not be able to resolve immediately, the two sides could still manage to reach a win-win solution via frank and effective communication." The director of the China Earthquake Administration, Chen Jianmin , said it had commissioned a panel of experts to look into the potential impact of the quake on China, although he did not expect substantial tsunami damage. "The consensus among the researchers is that the tsunami is no more than 50 centimetres high," Chen said. Shortly after the quake, the State Oceanic Administration's forecast centre issued its highest-level tidal tsunami warning for the first time. It lowered the level at 7.30pm. The centre said that tsunami could reach southeastern coastal areas, including the provinces of Zhejiang , Fujian and Guangdong at around 10pm. The government in Shanghai demanded departments overseeing emergency relief, earthquakes, marine safety and tourism take precautions and prepare for the worst. Gu Yongxin, deputy head of the Beijing Earthquake Administration, called on residents of the capital to remain at ease. "I'm sure Beijing is hardly the epicentre and there's no need to worry about safety, although we have received numerous accounts from members of the public who felt tremors, particularly from residents in the Muxidi and Wangjing to Zhongquancun areas."

In an effort to beat the introduction of measures to cool the property market, homebuyers on the mainland spent 447.1 billion yuan (HK$529 billion) in the first two months of the year, up 26 per cent from the same period a year earlier, according to the National Bureau of Statistics. The value of all property transactions, both residential and commercial property, was 524.2 billion yuan, up 27 per cent on last year. But that is all set to change when this month's figures are released, say analysts. "The surge in sales value came because buyers brought forward their purchases of homes before banks tightened their mortgage lending and scrapped their mortgage discounts," said Alan Chiang Sheung-lai, head of residential property research at DTZ. "But the situation will reverse in the coming months," he said, as sales were already slowing. He believed the volume and value of home sales would now start to fall significantly and said transaction volumes had halved in most cities so far this month. Home sales in both primary and secondary markets had already almost come to a standstill, he added, as more cities implement central government policy on restricting home purchases. In late January, the government announced measures to curb property demand. It raised down payments to 60 per cent of the cost of the property from 50 per cent and increased restrictions on buying second homes. Mainlanders were barred from buying a third house if they already own more than two properties in the city in which they are a resident. And a property tax was launched in Shanghai and Chongqing to tame the runaway home prices. Chiang said: "Even if you have money, you are not qualified to buy if you already own two or more apartments." In the first two months of this year, 81.43 million square metres of property was sold, 23.8 per cent more than in the same period last year. Real estate investment rose 35.2 per cent to 425 billion yuan in the first two months from a year earlier. The residential sector alone accounted for 301.4 billion yuan or a 34.9 per cent increase from the first two months of 2010. Jiang Weixin, the minister of housing and urban-rural development, said all but one of the 35 biggest mainland cities had introduced limits on homebuying since the government announced its crackdown in January. Home sales in some major cities tumbled one week after the crackdown on the purchase of third homes, according to Soufun, the biggest property website in the mainland. Sales in Hangzhou plunged 73 per cent, while buying was down 59 per cent in Chengdu, 56 per cent in Tianjin, 50 per cent in Beijing, and 37 per cent in Guangzhou.

Hong Kong*:  March 13 2011

A member of Cathay Pacific's ground staff helps a passenger check in at Chek Lap Kok Airport in Hong Kong. The airline will invest more in the mainland to allow its cargo venture to take advantage of inland manufacturing bases. Airline gets green light for cargo joint venture with Air China - Hong Kong-based Cathay Pacific Group announced on Wednesday that its plan of a cargo joint venture with Air China Ltd has received official approval from the mainland and the partnership is completing the necessary paperwork. The airline group, composed of Cathay Pacific and Dragon Airlines Ltd carriers, did not disclose a time frame for the launch of the venture. "So far the process is well-managed," said John Slosar, chief operating officer of the group, adding that he hopes it will be "imminent". Air China Cargo, a subsidiary of Air China, will be used as the platform for the joint venture. The Cathay Pacific Group, with a 49 percent stake, is selling four Boeing 747-400BCF freight aircraft and two spare engines to the joint venture. One of these aircraft has already been sold to Air China Cargo. The other three are expected to be delivered this and next year. Shanghai-based Air China Cargo is in a good position to exploit the attractive air cargo opportunities in the Yangtze River Delta region, analysts said. That region, a traditional manufacturing base, and Hong Kong will continue to be Cathay Pacific's principal source of growth. With the new base in Shanghai, the Hong Kong-listed aviation group can carry goods from the delta to Hong Kong, an international air hub, and deliver them to global destinations. Manufacturers are increasingly moving west - to places such as Chengdu and Chongqing - and abroad - for example to Vietnam and Bangladesh - in pursuit of lower labor costs. But Slosar said he believes the main manufacturing bases will remain on the Chinese mainland, so the group will invest more in the mainland market. According to Cathay Pacific's annual report filed at the Hong Kong Stock Exchange on Wednesday, the group's cargo revenue increased by 50.1 percent to HK$25.9 billion ($3.3 billion). Freight traffic surged by 18.1 percent to 1.8 million tons year-on-year, with cargo capacity growth of 15.2 percent year-on-year. The group expected cargo growth of 12 percent this year. Cathay recorded an attributable profit of HK$14.048 billion for 2010, a 199.3 percent increase over the HK$4.694 billion of the previous year. Attributable profit refers to profit available for distribution to shareholders after the deduction of company tax, preference dividends, payments to minority interests and other provisions. The group's turnover for 2010 rose by 33.7 percent year-on-year to HK$85.924 billion. Cathay's business began to recover from the global economic downturn in the second half of 2009, and the momentum was sustained throughout 2010, according to Christopher Pratt, the chairman. "We also benefited from the strong profits earned by our associated company, Air China, which contributed HK$2.428 billion to the 2010 result," he added. Chen Huanyu, an aviation analyst from Guotai Junan Securities, said that cooperation with mainland counterparts will greatly help the group's long-term development, given the rich cargo service resources in terms of the routes and commodities of the vast mainland market. The international cargo aviation market began to rebound in late 2009 and has continued its recovery this year, but around 80 percent of the market share is dominated by foreign carriers, according to Li Lei, an analyst at Citic China Securities. "It's a way for Air China to expand its cargo business and Cathay Pacific Group to explore the mainland market," Li said.

The clash started at a chain store in Wan Chai, where people rushed to buy imported baby formula when the store opened in the morning. The incident highlighted the loss of confidence in domestically produced milk products, which was eroded by the 2008 scandal on the Chinese mainland in which at least six infants were killed and hundreds of thousands were made ill by melamine-tainted milk powder. But a CPPCC National Committee member has said the wariness of domestic milk brands, which caused mainland parents to seek cheaper foreign alternatives in Hong Kong and Macao, will not last. The apprehension is expected to gradually ease, as regulation of the mainland's dairy industry improves, Liu Peizhi, who is also the deputy head of the executive office of the State Council Food Safety Commission, told The Beijing News on Wednesday. "I believe it's only temporary," Liu said. The General Administration of Quality Supervision, Inspection and Quarantine, the country's top food-quality regulator, released in November a new regulation requiring dairy manufacturers to reapply for their production licenses or be shut down this year. "The government's ongoing increases in regulation will improve the industry and rebuild its reputation," he said. Wednesday's melee involved a father and son surnamed Huang from the mainland and three cousins surnamed Lim from Hong Kong. The fight erupted when the younger Huang allegedly cut in line and tried to buy more than three tins - a quota set by the shop owner because of the shortage of the product. Other customers called the police, and all the five people claimed to have been injured. The senior Huang said he was struck on the head with a tin. They were discharged after treatment at Ruttonjee Hospital. Rita Fan Hsu Lai-Tai, deputy to the National People's Congress and former president of Legislative Council of Hong Kong, said she sympathizes with desperate mainland mothers who seek to purchase baby formula in Hong Kong for the sake of their infants' health. The Guangzhou-based New Express Daily quoted her on Tuesday as saying: "Those who harmed others' health for profit have completely lost their consciences." She also called for stricter enforcement of the food safety amendment to the Criminal Law, adopted by the county's top legislature last month. The amendment raises the minimum penalties for crimes related to the production and sale of tainted food from short-term criminal detention to prison terms of up to five years. Hong Kong's government does not plan to impose duties on milk powder exported from Hong Kong because of its free trade policy. A survey of 185 mothers with children younger than age 2 conducted outside of pharmacies and supermarkets in Hong Kong last month found 77 percent of mothers believed that formula is too expensive. About 63 percent reported difficulties in buying it.

The Singapore IPO of Hong Kong tycoon Li Ka-shing's ports unit will now raise up to US$5.5 billion, slightly lower than previously expected, after the unit tightened its indicative price range, sources familiar with the matter said on Thursday. Hutchison Port Holdings Trust (HPHT) narrowed its price guidance after traders told reporters late on Wednesday that most institutional investors had bid around the middle of the original US$0.91 to US$1.08 range, reflecting greater caution in financial markets due to tensions in the Middle East. The HPHT listing is, however, still set to exceed Petronas Chemicals’ US$4.1 billion fund raising last year, the biggest IPO in Southeast Asia. Sources said HPHT narrowed the IPO price range to US$0.99 to US$1.03, which translates to a yield of 6 to 5.8 per cent, as many investors are now looking for higher stream of regular income amid a rise in market volatility. The earlier guidance would have resulted in the IPO raising as much as US$5.8 billion and investors getting a yield as low as 5.5 per cent, versus the around 7 per cent offered by many Singapore-listed business and property trusts. “The price range has been tightened,” a source with knowledge of the deal said. The sources did not want to be identified because the details had not yet been made public. HPHT, a unit of Li’s Hutchison Whampoa (SEHK: 0013) that owns and operates ports in Shenzhen and Hong Kong, is aiming to cash in on a recovery in global trade and provide investors with access to China’s booming infrastructure business. Its IPO has attracted big names including Singapore state investor Temasek Holdings, US hedge fund manager Paulson & Company and Cathay Life Insurance as cornerstone investors, according to a draft prospectus. Bankers are bringing an early close to the institutional book of Hutchison Port’s IPO on Thursday, because it is oversubscribed, sources told reporters on Wednesday. The continued strong interest in HPHT contrasts with the diminishing appetite for new issues, which has delayed a planned S$1.1 billion Singapore IPO by Perennial China Retail Trust, a trust managed by former CapitaLand shopping mall chief Pua Seck Guan. DBS , Deutsche Bank and Goldman Sachs are joint book-runners and issue managers for HPHT, which is structured as a business trust that will pay regular dividend. JPMorgan, UBS , Barclays , Morgan Stanley are among co-lead managers. Hutchison Whampoa and HPHT were not available to comment, while the banks either declined comment or could not be reached.

Hong Kong Disneyland launched a new Magic Access membership on Thursday, with a price ranging from 650 Hong Kong dollars to 2,400 HK dollars for adults, up 30 to 40 percent compared to the current membership plan. The new Magic Access is transformed from the current 3-tier system into 4-tier, categorized into Red, Silver, Gold and Platinum, and each category has different pricing for adult, student and senior. Magic Access offers members benefits such as discounts on food and beverage, merchandise and hotel bookings, exclusive previews of the Park's seasonal events and new attractions, as well as various birthday treats. Hong Kong Disneyland' Marketing Director Vincent Wong said that the decision to launch the new Magic Access was made after an 18-month market research, and it includes more benefits for the customers compared to the current membership plan. Hong Kong Disneyland, the world's smallest Disney theme park, was open to visitors on Sept. 12, 2005. It was jointly built by the Hong Kong government and Walt Disney and Co., the world's largest media company and theme-park operator.

With online shopping becoming more and more acceptable, the challenge is stopping auctions of fake goods as well as intellectual property infringements. Lineament Monitoring System II - jointly developed by the Customs and Excise Department and the University of Hong Kong's Center for Information Security and Cryptography - is a new mechanism that makes 24-hour monitoring possible. The system is the product of the latest advances in cybercriminal profiling, artificial intelligence and web crawling. The crawler of the system not only collects data from targeted auction sites, but also performs a semantic analysis of the crawled data so they can be further analyzed by the profiling and artificial intelligence engines. The profiling engine analyzes the behavior patterns associated with individual user accounts, while the AI engine compares them with rules. Law enforcement officers are alerted if any follow-up action is needed. In the past, customs officers had to trawl the internet, a process which was both tedious and inefficient. Given the manual nature of this patrolling, it was unavoidable that quite a few cases would slip through the net. Besides, sellers of illegal products would keep the bidding process open for only brief periods and erase all incriminating information within an hour of the deals being sealed, making them more difficult to track. The new system that has been put into operation, however, does a search of key words such as sellers, brands and price range. After entering the relevant information into the Lineament II, round-the-clock monitoring of the designated internet auction sites begins - with any suspected infringements recorded to facilitate follow-up investigations. Last year, 45 cases of counterfeit goods sales were detected online, mainly involving auction websites - an increase of 15 percent over 2009. The goods involved accessories, watches, clothes, toys and sunglasses, among other items. The Lineament Monitoring System II, which costs about HK$300,000, has so far detected 30 cases, of which four have been resolved since its launch in January. It is encouraging to know the new system works well and we will keep updating and improving it. Meanwhile, in the near future, we will further cooperate with other Hong Kong law enforcement agencies like the police and Immigration Department to develop new technologies to help in fighting crime. Dr K P Chow is associate professor in the department of computer science at Hong Kong University and associate director of the Center for Information Security and Cryptography.

Search engines such as Google look for information. But a Hong Kong-based search engine tracks down something equally useful: fraudulent websites. SiteWatcher, which was built by City University computer scientist Liu Wenyin, has accurately identified 4,384 fake sites out of 14,622 submissions since 2008. He warned that such "phishing" sites were becoming more sophisticated and prevalent. "It is very easy to build a phishing website nowadays," Liu said. "There are some toolkits available online that allow hackers to build phishing sites within minutes. The cost is very low but the profit can be high." A phishing website tries to deceive users into entering their personal information or credit card passwords by disguising as a trustworthy site. SiteWatcher had found phishing sites of Paypal 863 times, 220 times for eBay and 179 for Wikipedia. The Facebook and HSBC (SEHK: 0005, announcements, news) sites are also among the most targeted. "Hackers usually download the whole genuine website and make some changes to produce a fake site. So there are some `traces' left that suggest the site is fake," Liu said. The international Anti-phishing Working Group said that of the 85,062 reports of phishing sites it received in the second quarter of last year, 37.9 per cent were faking payment services sites and 33.1 per cent pretended to be financial sites. Liu, who developed SiteWatcher three years ago, said it was getting more difficult to tell phishing sites from the genuine ones. Ordinary software can identify phishing only by searching its database, which needs frequent updates. In contrast, Liu's software downloads all the content from the suspect webpage, breaks down its content into photos, text and links, retrieves the "traces" and analyses the results. SiteWatcher has an accuracy rate of above 91 per cent. It can identify a phishing site in a minute. More complicated fake sites may take four to five minutes. SiteWatcher will automatically publish any new phishing site detected on its microblog and on Twitter to alert the public. But there is a constraint - some websites bar search engines from retrieving their contents. Liu said the problem of phishing was 10 times more common than in 2004, when he first studied such sites. He said the website addresses could look almost the same as the genuine ones. "Never trust the naked eye." The search engine is available for free at

 China*:  March 13 2011

Wu rules out multi-party system - Wu Bangguo delivers a speech during a Thusday's session of the National People's Congress in Beijing's Great Hall of the People. Wu said the mainland is determined not to adopt multi-party democracy or other political reforms that could challenge the Communist Party's grip on power. The chairman of the standing committee of the National People’s Congress (NPC) on Thursday ruled out any shift to multi-party democracy in a speech that appeared to pour cold water on political reform hopes sparked by remarks made by Premier Wen Jiabao last year. Wu Bangguo, who is officially number two in the country’s leadership behind President Hu Jintao, said in his annual address to the legislature that abandoning the Communist Party-dominated system could lead to chaos. “If we waver... the fruits of development that we have already achieved will be lost and the country could even fall into the abyss of civil strife,” Wu told the NPC in a speech on Thursday morning. The Communist Party uses Wu’s address each year to reinforce the idea that only its authoritarian rule is suitable for China, but Thursday’s speech follows comments by Wen last August seen by many as suggesting political reform. During a speech in the southern city of Shenzhen, Wen said China must “push forward reform of the political system”, increase citizen’s democratic rights and place checks on state power. Those comments, and his remarks in a subsequent interview, fuelled speculation of a split in the party’s top leadership, and especially with Hu, whose own later comments on reform were far less enthusiastic. Political analysts are closely watching such comments as the Communist Party prepares for a crucial meeting late next year, during which choices of personnel for the country’s leadership for the next decade will be finalised. Wu, however, made no mention of political reform in his speech to nearly 3,000 parliamentary delegates, whose annual session runs through March 14. “China’s national conditions strongly indicate that we not engage in multi-party rotations of political power, not engage in a diversity of guiding political ideologies,” or adopt other concepts such as separation of powers and legislatures, Wu said. He added China cannot “mechanically copy” foreign legislative features and said laws going through the parliament must aim to “strengthen and improve the party’s leadership, and cement and perfect the party’s ruling status”. Communist leaders regularly say people in the mainland already enjoy many democratic rights and that the country is on a long-term path towards perfecting that. However, political power is monopolised by the Communist Party and the government says China has unique features that prevent any speedy change in the situation. Many political observers have said Wen’s comments actually did not depart significantly, if at all, from the official lip service paid to democracy and political reform.

'Don't fear China,' Australian Prime Minister Julia Gillard tells USA - Australian Prime Minister Julia Gillard on Wednesday urged Americans downcast by their woeful economy to embrace, not fear, China's explosive growth while pressing Beijing to be “a good global citizen”. “There is no reason for Chinese prosperity (SEHK: 0803, announcements, news) to detract from prosperity in Australia, the United States or anywhere in the world,” she told a joint session of the US Congress. “Prosperity can be shared. We can create wealth together.” In a friendly but bracing speech, Gillard pleaded for US engagement in the Asia-Pacific region and the world, urged co-operation to battle climate change, and vowed unflinching Australian support in “hard days ahead” in the Afghan war. “Australia will stand firm with our ally the United States,” she said, calling herself “cautiously encouraged” about progress in the nearly 10-year-old conflict but warning: “We must be very realistic about Afghanistan’s future.” Gillard, wrapping up her first official US visit since becoming Australia’s first woman prime minister, did not spell out her concerns but warned against a hasty disengagement that could force a return to the strife-torn country. “We know transition will take some years. We must not transition out only to transition back in,” said the prime minister, who stressed that “we have the right strategy in place,” the right commander, and “the resources needed”. Australia is the largest non-Nato contributor of troops to the decade-long fight against Taliban militants, with a contingent of some 1,500 soldiers. And Gillard said she backed President Barack Obama’s approach, which calls for beginning a troop withdrawal in mid-2011 and handing Afghans responsibility for their own security by late 2014. In October, Gillard had predicted that Australian training of Afghan security forces as well as support for civilian-led aid and development would last “through this decade at least”. The prime minister confronted head-on US lawmakers’ deep worries about China’s rising economic and diplomatic influence at a time when stubbornly high unemployment and lasting overseas conflicts have sown doubts about US influence. “Like you, our relationship with China is important and complex. We encourage China to engage as a good global citizen and we are clear-eyed about where differences do lie,” she said. US lawmakers charge that Beijing is an economic predator that keeps its currency – and thus its exports – artificially cheap, turns a blind eye to or even encourages rampant US intellectual property theft, and favours domestic producers over their foreign competitors in lucrative government contracts. The prime minister told the joint session that “America has always understood this principle of the economy; that everyone can benefit when everyone competes,” and stressed: “The global economy is not a zero-sum game.” Her comments came as Obama nominated Gary Locke as the first Chinese American to be ambassador to Beijing, picking him to replace Jon Huntsman, widely seen as mounting a Republican bid for the White House next year. Gillard reassured her audience that the United States remains an “indispensable” partner and that its “growing engagement” with countries like Japan, India, South Korea and Indonesia was “enormously welcome.” “Be bold,” she urged. Gillard’s speech was the 110th address by a foreign leader or dignitary to a joint session of the US Congress, starting with King David Kalakaua of Hawaii in 1874, according to the official House of Representatives web site. She won standing ovations when she told the audience the United States “can do anything,” when she condemned Iran’s suspect nuclear programme, and paid tribute to a New York City firefighter killed when the World Trade Center collapsed in the September 11, 2001 terrorist strikes. But observers noted that youthful House pages and staff, rather than lawmakers, made up much of her audience, and one aide called the sparse attendance by elected officials and US media “not our finest hour”.

China has seen its richest people coming from diverse industries, indicating signs of a dynamic economy, according to Forbes magazine's Billionaires List of 2011. "Many entrepreneurs from different industries are visible, which is the most interesting thing this year. It showed China's economy has a very healthy source of vitality," said Russell Flannery, who heads the compilation of the list in the Chinese mainland, Hong Kong, and Taiwan. The number of Chinese billionaires nearly doubled to 115 in the latest global list. The newcomers represent more diverse industries, including pharmaceuticals, education, and clothing, rather than traditional industries such as real estate. Many of the new billionaires are from the private sector, which accounts for major growth in many important areas in China, said Flannery. "Since the global financial crisis, the central government has been giving a lot of support to big State-owned companies to quickly implement policies. But in the long term, the smart home-grown Chinese entrepreneurs are doing a lot to create jobs and wealth and help China to expand overseas," he said. Among the country's new billionaires, at least 20 made their way to the list through a surge in wealth from initial public offerings (IPO) on the stock markets, according to Flannery. China had the most IPOs last year, with 476 of its companies raising funds which totaled $105 billion from both domestic and overseas markets, according to a report by the Zero2IPO Research Center. The search engine Baidu Inc's share price almost doubled after Google Inc said it had redirected all its mainland traffic to Hong Kong, a move interpreted by some as "retreating from the Chinese market". That helped Robin Li, chairman and chief executive officer of Baidu, to top the billionaire list in China, and ranked 95th globally, with personal wealth of $9.4 billion.

A telecommunications exhibition in Beijing. Miao Wei, minister of industry and information technology, said on Thursday that it may take three to five years for China to issue 4G licenses. China's top telecom regulator said on Thursday that the country plans to adopt the commercial use of fourth-generation (4G) technology "in three to five years", providing the first official timetable for China's move to the next generation telecom service. Miao Wei, minister of industry and information technology, told China Daily at the ongoing National People's Congress meeting that "it will still take three to five years" before China will begin large-scale commercial use of the 4G service. He denied that China will "soon" adopt the technology and stated that the country would not launch a national commercial 4G service until 2014. 4G, which can provide a connection speed more than 50 times faster than the current third generation (3G) network, is regarded as the next growth engine for the world telecom market, as it can draw huge investment in network construction and services development. During the past few years, China has been actively trying to have its home-grown technology TD-LTE (Time Division-Long Term Evolution) technology accepted as the global 4G standard. However, most Western operators and equipment manufacturers are supporting a different technology called FDD-LTE (Frequency Division Duplex-Long Term Evolution). "Miao's comment was in line with our earlier estimate that China will not adopt 4G technology soon," said Wang Yuquan, a senior consultant with the research firm Frost & Sullivan in China. Wang said China's slowness in upgrading to 4G is because the TD-LTE technology is still not fully mature. "It is also obvious that the Chinese government doesn't want to adopt a 4G service too soon as that would disrupt the carriers' efforts to develop 3G services," he said. China launched the 3G service in 2009 and adopted three standards, including the home-grown technology TD-SCDMA, in the network construction. During the following years, Chinese carriers and the government poured billions of yuan into the construction and upgrading of the network.

China on Thursday welcomed the nomination of US Commerce Secretary Gary Locke to be Washington’s new ambassador to Beijing, saying it hoped he would help promote better ties between the two nations. “We welcome the US nomination of Gary Locke as the new US ambassador to China,” foreign ministry spokeswoman Jiang Yu told reporters. “China-US relations are highly important. We hope the new US ambassador to China will play a positive role in promoting greater development in bilateral relations.” If confirmed, Locke, 61, will replace Jon Huntsman, who is leaving Beijing as he flirts with seeking the Republican nomination to challenge US President Barack Obama for the presidency next year. Locke, a Chinese-American, grew up in Seattle’s housing projects and worked his way through Yale University, eventually becoming a prosecutor and the governor of Washington State. He has been commerce secretary since 2009. Locke would take over at a time of complexity in US-China relations, which have been fraught over a range of disputes including Beijing’s export-driven economic policies, growing military spending and human rights record.

The notorious melamine-tainted milk powder scandal exposed in 2008 triggered a surge of dairy product imports from 120,000 tons that year to 600,000 tons in 2009, a senior official said. "Imported infant formula has since then accounted for almost 90 percent of the domestic market," Liu Peizhi, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), who is also deputy head of the executive office of the State Council Food Safety Commission, said on Wednesday, during the ongoing annual session of the CPPCC National Committee. Food safety is a global concern with which every country experiences problems, Liu said. Reports showed the US government recalled hundreds of million salmonella-tainted eggs that had poisoned hundreds of consumers in 2010. "Food safety's pitfalls in developed countries come more from the natural morbigenous (disease-causing) microorganisms and chemical hazards," Liu said. "China's food safety incidents were mostly caused by human factors and the rampant use of illegal additives." He added that although poor government supervision should be blamed for the incidents, the backwardness of the industry - marked by small-scale production and comparatively underdeveloped industrialization - was the real cause of supervision difficulties. In the United States, for instance, 13 parent manufactories controlled 6,200 producers nationwide. Authorities directly punish the parent manufactory if any subsidiary is found to produce unsafe food. Chinese authorities supervise 450,000 food-production companies, 80 percent of which are small plants with 10 or fewer workers. That is in addition to 2.1 million licensed restaurants and countless small food stalls. The US Food and Drug Administration oversees about 50,000 food producers - a more manageable supervision workload, Liu said. The central government has introduced a slew of measures to tighten oversight of the dairy industry in recent years. The latest policy came out in November, when the General Administration of Quality Supervision, Inspection and Quarantine, the country's top food-quality regulator, released a new regulation requiring dairy manufacturers to reapply for their production licenses or face being shut down this year. The Dairy Association of China issued a report afterward in which it estimated the regulation will eliminate more than 20 percent of the country's dairy companies. But the dilemma Chinese consumers face is that they neither trust the quality of infant formula made by domestic producers nor can they easily afford the foreign brands' high prices. Liu quoted an investigative report in the Beijing-based Xiaokang magazine, which said about 70 percent of Chinese people expressed "a lack of trust in food safety". Another survey by the State broadcaster China Central Television indicated almost the same percentage of respondents in Beijing had low confidence in domestic milk powder. Neither survey disclosed the number of respondents. Wu Peiyuan, a 27-year-old resident of Tianjin municipality, told China Daily he only buys baby formula produced overseas for his 3-month-old son, even it costs an extra 350 yuan ($53) a month. Tang Zhiqing, a dairy industry analyst, said it will take time to rebuild the dairy industry's reputation, especially when the new regulation has not yet taken effect. Liu called for the facilitation of relevant laws and regulations, the specification of regulators' responsibilities and the strengthening of supervision over raw materials.

As the first of its kind, the Beijing-Shanghai High-Speed Railway will provide high speed Internet for commuters. Passengers in China will be able to access wireless broadband Internet via their laptops and iPhones or BlackBerrys while waiting to board their train. The Nasdaq-listed Telestone Technologies Corporation, an access network solutions provider serving the Chinese market, has been awarded a Wireless Fiber-Optics Distribution System(WFDS) project by China Beijing-Shanghai High Speed Rail Shareholding Corporation Ltd. "For the communication portion of our high-speed rail project, we are pleased to have selected Telestone, whose proprietary WFDS technology is uniquely suited for providing wireless voice and high-speed data service to our rail passengers," said Li Yunhui, general manager of the telecommunication department of China Beijing-Shanghai High Speed Rail Shareholding Corporation Ltd. The $10 million project calls for Telestone to provide engineering and equipment supply to enable wireless broadband Internet access as well as 2G and 3G wireless cellular coverage on the railway. Han Daqing, chairman and CEO of Telestone Technologies, said the WFDS project will be completed before the high-speed railway kicks off in June. The 818-mile (1,318-kilometer) railway, which began construction in April 2008, will cover Beijing, Tianjin, Shanghai and four provinces - Hebei, Shandong, Anhui and Jiangsu. The $33.4 billion high-speed railway, which will cut the travel between China's two largest cities by five hours, will run through 24 stations and serve 80 million passengers each year.

At least 24 dead, 207 injured in SW China quake - At least 24 people were killed and hundreds others injured in a 5.8-magnitude earthquake that jolted Yingjiang County in SW China's Yunnan Province Thursday.

Photo taken on March 9, 2011 shows the U-shape bend of Jinsha River in the Tibetan Autonomous Prefecture of Deqen in southwest China's Yunnan Province. The Jinsha River is the upper reaches of the Yangtze River, China's longest river. 

Hong Kong*:  March 12 2011

A US federal government shutdown in 1995 - similar to Hong Kong's dilemma - almost brought down the presidency of Bill Clinton. But in an astounding rebound, the shutdown - due to a budget fight with the Republican-led Congress - played a role in Clinton's re-election the next year. Clinton and Congress, led by Speaker of the House of Representatives Newt Gingrich, had failed to pass a budget when the fiscal year ended on September 30, 1995. Since a new budget had not been approved, October 1 started with the entire federal government running on continuing resolution to authorize funding for departments until new budgets were approved. The shutdown was the result of a conflict between Clinton and Congress over funding for Medicare, education, the environment and public health. This was resolved with the passage of a temporary spending bill, but the underlying disagreement between Gingrich and Clinton was not resolved, resulting in a second shutdown. The public sided with Clinton, who blamed the Republicans for the shutdown, and his approval rating rose to the highest point since his election. In recent months, the US Congress has also been in fiscal stalemate. A Republican bill, which passed the House of Representatives earlier this month, would cut US$61 billion (HK$475 billion) from the budget through September, the end of the fiscal year, stripping money from dozens of agencies and programs. The Democratic measure introduced in the Senate would trim US$6.5 billion, leaving a US$54.5 billion gap that neither party is willing to bridge at this point. If the current short-term measures lapse on March 18 without a replacement, the United States faces a partial government shutdown.

Net profit at Cathay Pacific Airways (0293) nearly tripled to a record HK$14 billion last year, beating the HK$13.4 billion average forecast of 15 analysts surveyed by Bloomberg. Turnover jumped 33.7 percent to HK$89.5 billion. Earnings per share were HK$3.57, up from HK$1.19. The record profit means more than 60 percent of Cathay employees will get at least six weeks' wages as a bonus. The airline, which also announced a 27-aircraft fleet expansion, attributed the soaring profits to a surge in both passenger numbers and cargo volumes. But that momentum may not continue into this year, warned chairman Christopher Pratt, as skyrocketing oil prices pose a major risk. "Oil is the single biggest cost for Cathay Pacific," said Pratt, adding that the price volatility makes hedging difficult. The blue-chip airline aims to hedge 20 to 30 percent of fuel purchases over the next one to three years. There are no long-term plans to raise fares, Pratt said. "We will pretty much keep our prices stable, but we will respond to competitors." He expects passenger demand to rise, but cargo traffic growth may suffer because of a high base effect. Major parts of the profit came from sources other than operations, Pratt said. Air China (0753) contributed HK$2.5 billion of profit for Cathay, which holds 18.7 percent of the Beijing- based carrier. Cathay may increase its stake in Air China, Pratt said. The sale of stakes in Hong Kong Aircraft Engineering Co (0044) and Hong Kong Air Cargo Terminals brought Cathay a one-time gain of HK$2.17 billion. To expand its fleet, Cathay has ordered 15 Airbus SAS A330-300 and 10 Boeing 777-300ER aircraft in two separate deals worth HK$51 billion. All the aircraft are expected to delivered by the end of 2015. The carrier will recruit 2,300 new staff this year, after hiring 1,600 last year. The stock closed at HK$18.94, up 4.5 percent, after the results announcement.

Caspian terns and Black-faced spoonbills congregate in the reserve's shallow water. Growing numbers of rare birds have drawn enthusiasts from around the world to Mai Po.

Pied avocets fly over a mud flat and n egret inspects a pond.

Heavy traffic on flight path - Delight for birdwatchers at Mai Po, but fewer black-faced spoonbills sighted - Flocks of Eurasian curlew and pied avocet congregate at a mud flat near the Mai Po nature reserve in Deep Bay. Every winter, tens of thousands of migratory birds stop off in Hong Kong – this year has seen a record number – much to the delight of local enthusiasts. Excited birdwatchers observed a record number of migratory birds at the Mai Po nature reserve this winter. But the rare black-faced spoonbill, whose presence has attracted enthusiasts from around the world to the wetland, was fewer in number. The species is classified as endangered by the International Union for Conservation of Nature, but a growing number have been seen in the city in recent years. Bena Smith, manager of the Mai Po reserve, said preliminary observations showed this year's figure could be down 10 per cent on last year's. Some 462 of the rare birds were sighted in Hong Kong last winter, accounting for one-fifth of the black-faced spoonbill's world population, according to an international survey released in April last year by a collection of birdwatching societies around the globe. The worldwide population showed a 15 per cent increase to a record high of 2,346. "I suspect they have been using other new wetlands along the eastern and southern coasts of China this year," Smith said, adding the population in Taiwan also dropped by 30 per cent this winter. The Hong Kong Bird Watching Society would soon release a more concrete figure, he said. Global conservation body WWF, which manages the reserve, is to spend HK$1 million raised from public donations to create and restore habitats for the spoonbills. Areas of shallow water were planned for the northern part of the reserve to provide food and a roosting ground for the birds, Smith said. He said the number of ducks spending the winter in Mai Po had increased by about 40 per cent this year. A similar increase has been recorded for some eagles and cormorants. In the longer term, the green group said it would come up with recommendations for improving the environment of the Deep Bay area with conservationists in Shenzhen. But Smith said the area was still under threat from development. "The fringe of Deep Bay is being developed, including the Lok Ma Chau Loop, which will create an accumulated impact on the wetlands in the long run," he said, referring to a government plan to develop the area into a hub for universities and research and development.

Possible chief executive contender Rita Fan Hsu Lai-tai admitted she made a mistake by branding Executive Council convenor Leung Chun-ying an unsuitable candidate for the city's top job seven years ago. Former Legislative Council president Fan (pictured), 66, said she had "said something wrong" and "gone overboard" when she described Leung as unsuitable to run. Speaking in Beijing on the sidelines of the annual plenary session of the National People's Congress, the NPC Standing Committee member stopped short of saying she would make a bid for chief executive. One recent poll placed her ahead of both Leung and another hotly tipped contender, Chief Secretary Henry Tang Ying-yen. Declining to give a definitive answer on whether she would run or not, Fan said only: "I am too old." Speculation over her intention to run has been rumbling for some time. An opinion poll conducted by the Hong Kong Transition Project in November last year found that she was the public's favourite candidate for the next chief executive, with 60 per cent of the 807 respondents saying they would support her. Tang was backed by 53 per cent and Leung 37 per cent. The Beijing loyalist admitted she had been encouraged to run, and that no one had asked her not to. Although she has never publicly confirmed an interest in the position, Fan has been openly known as a Leung sceptic. In her 2004 Legco election campaign, she said at a public forum that she did not find Leung a suitable candidate for the top job. Asked in July last year whether that opinion still held, she said: "Have I ever told you that he is a suitable candidate for the chief executive?" But yesterday she changed her stance: "I have said something wrong. I shouldn't have said this. I am just an ordinary citizen. I have gone overboard." Asked whether this meant she might now support Leung in next year's ballot, Fan, who as an NPC deputy has a vote on the Election Committee, said: "You will know when the election takes place whether I give him my vote or not." She compared Leung and Tang to two horses in a race. "One is in an upbeat mood for a battle, working hard and is performing quite well in morning exercise. Another one, working in the government, appears easy and relaxed but may have high potential."

In pictures: massive quake rocks Japan, tsunami warning issued on Friday March 11th - The powerful quake struck 382 kilometer northeast of Tokyo with depth of 10 kilometers under the seabed. An 8.8 magnitude earthquake hit Japan's northeastern Honshu island Friday, and 151 people were killed and 547 others were missing. 

 China*:  March 12 2011

Australian Prime Minister Julia Gillard on Wednesday urged Americans downcast by their woeful economy to embrace, not fear, China's explosive growth while pressing Beijing to be “a good global citizen”. “There is no reason for Chinese prosperity (SEHK: 0803) to detract from prosperity in Australia, the United States or anywhere in the world,” she told a joint session of the US Congress. “Prosperity can be shared. We can create wealth together.” In a friendly but bracing speech, Gillard pleaded for US engagement in the Asia-Pacific region and the world, urged co-operation to battle climate change, and vowed unflinching Australian support in “hard days ahead” in the Afghan war. “Australia will stand firm with our ally the United States,” she said, calling herself “cautiously encouraged” about progress in the nearly 10-year-old conflict but warning: “We must be very realistic about Afghanistan’s future.” Gillard, wrapping up her first official US visit since becoming Australia’s first woman prime minister, did not spell out her concerns but warned against a hasty disengagement that could force a return to the strife-torn country. “We know transition will take some years. We must not transition out only to transition back in,” said the prime minister, who stressed that “we have the right strategy in place,” the right commander, and “the resources needed”. Australia is the largest non-Nato contributor of troops to the decade-long fight against Taliban militants, with a contingent of some 1,500 soldiers. And Gillard said she backed President Barack Obama’s approach, which calls for beginning a troop withdrawal in mid-2011 and handing Afghans responsibility for their own security by late 2014. In October, Gillard had predicted that Australian training of Afghan security forces as well as support for civilian-led aid and development would last “through this decade at least”. The prime minister confronted head-on US lawmakers’ deep worries about China’s rising economic and diplomatic influence at a time when stubbornly high unemployment and lasting overseas conflicts have sown doubts about US influence. “Like you, our relationship with China is important and complex. We encourage China to engage as a good global citizen and we are clear-eyed about where differences do lie,” she said. US lawmakers charge that Beijing is an economic predator that keeps its currency – and thus its exports – artificially cheap, turns a blind eye to or even encourages rampant US intellectual property theft, and favours domestic producers over their foreign competitors in lucrative government contracts. The prime minister told the joint session that “America has always understood this principle of the economy; that everyone can benefit when everyone competes,” and stressed: “The global economy is not a zero-sum game.” Her comments came as Obama nominated Gary Locke as the first Chinese American to be ambassador to Beijing, picking him to replace Jon Huntsman, widely seen as mounting a Republican bid for the White House next year. Gillard reassured her audience that the United States remains an “indispensable” partner and that its “growing engagement” with countries like Japan, India, South Korea and Indonesia was “enormously welcome.” “Be bold,” she urged. Gillard’s speech was the 110th address by a foreign leader or dignitary to a joint session of the US Congress, starting with King David Kalakaua of Hawaii in 1874, according to the official House of Representatives web site. She won standing ovations when she told the audience the United States “can do anything,” when she condemned Iran’s suspect nuclear programme, and paid tribute to a New York City firefighter killed when the World Trade Center collapsed in the September 11, 2001 terrorist strikes. But observers noted that youthful House pages and staff, rather than lawmakers, made up much of her audience, and one aide called the sparse attendance by elected officials and US media “not our finest hour”.

The head of China's national legislature says the country is determined never to adopt multi-party democracy or other Western-style political reforms that could challenge the Communist Party’s grip on power. Wu Bangguo told members of the National People’s Congress on Thursday that Beijing also ruled out separating powers between the executive, legislative and judicial branches of government or considering diverse political viewpoints. Wu said a federal system and the division of parliament into upper and lower houses would also not be considered. He said while China wanted to strengthen its legal system, it would never blindly follow or imitate the legal systems of other countries.

The supply of affordable homes in the mainland will for the first time exceed that of private residential units this year, if developers' plans relating to new launches remain unchanged, Housing and Urban-Rural Development vice minister Qi Ji said in Beijing yesterday. China aims to build 10 million units of affordable homes this year, while property developers sold nine million private flats last year. The central government plans to build 36 million units of affordable homes in the next five years. Excluding land costs, these units will still cost up to 1.4 trillion yuan (HK$1.66 trillion) to build, Qi told a press conference on the sidelines of the ongoing National People's Congress. Financing is not a problem, as around 500 billion yuan will be provided by the government, while the remaining money will come from companies and social institutions. More flats will be put on the market in the coming years, Qi said, as newly launched projects totalled nearly 1.3 billion square meters last year, boosting the total gross floor area under construction nationwide to over three billion sq m. Qi did not say whether property taxes will be introduced in more cities, but authorities will keep a close eye on Shanghai and Chongqing, where the tax has been implemented. Separately, several developers are reportedly offering discounts on residential units.

Chinese mainland distillery, Dukang Distillers Holdings Limited, began issuing 130 million units of Taiwan depository receipts (TDRs) on the Taiwan Stock Exchange (TWSE) at 18.65 New Taiwan Dollars per unit on Wednesday. The offering makes Dukang the first alcoholic beverage company listed on the TWSE and the 25th TDR issuer after Taiwan's security authorities loosened the policy of listing. Currently, regulations stipulate that Chinese mainland companies can only enter the Taiwan security market by issuing TDRs. Dukang hopes to promote its brand with Taiwan's consumer industry and capital market by issuing the TDRs, although Chinese mainland distillers can not currently sell alcoholic beverages to Taiwan. After the mainland and Taiwan signed the Economic Cooperation Framework Agreement (ECFA), several mainland companies have issued TDRs. Dukang is the first beverage maker to do so. With a 2,000 year history, distilled liquor has been a mainstay in the Chinese mainland alcoholic beverage market. Liquor sales account for 70% to 90% of the total beverage sales each year. Hanna Hsian, an analyst with Taiwan's Polaris Securities, said that TDRs issued by Chinese mainland companies have been favored by Taiwan investors as almost all of them had been raised above issuing prices. "With China's 12th five-year national development program seeking to increase domestic consumption, it has been expected that consumer market will continue to grow in the next decade," Hsian said.

A pair of whooper swans swim in the Rongcheng Swan Lake, east China's Shandong Province, March 9, 2011. As the weather warms up, most whooper swans have migrated to the north, while about 500 ones still linger here.

U.S. Commerce Secretary Gary Locke addressing the opening ceremony of the plenary session of the 21st U.S.-China Joint Commission on Commerce and Trade meeting in Washington D.C., capital of the United States. U.S. President Obama on March 9, 2011 formally nominated Commerce Secretary Gary Locke to be the next U.S. Ambassador to China, saying that no one is better qualified for the diplomatic post than Locke. U.S. President Barack Obama on Wednesday formally nominated Commerce Secretary Gary Locke to be the next U.S. Ambassador to China, saying that no one is better qualified for the diplomatic post than Locke. "Our relationship with China is one of the most critical of the 21st century," Obama said at a joint White House appearance with Locke and Secretary of State Hillary Clinton. Obama said the administration has worked hard over the past two years to build a relationship with China which serves the national interests of the United States, addresses global security issues and expands opportunities for American companies and American workers. "Continuing cooperation between our two countries would be good for America, it would be good for China and it would be good for the world," he said. "As the grandson of a Chinese immigrant who went on to live the American dream, Gary is the right person to continue this cooperation," Obama said. "I know he would bring the same skills and experience he brought to commerce secretary to this new position that he is about to embark on." "I wish you all the best luck in Beijing," Obama said to Locke after the nomination.

Lawmakers and experts have urged stronger punishments and improved law enforcement to ensure food safety, following tainted food scandals that have generated nationwide concern. Wang Lijun, director of the Chongqing public security bureau and deputy to the National People's Congress (NPC), proposed a law on food and drug safety, separate from the current Criminal Law and the Food Safety Law, to stem the rise of such crimes. Inspectors with the commerce authority in Heihe city, Northeast China's Heilongjiang province, examine the ingredients of food in a local supermarket on Wednesday. His proposal is in line with remarks by Vice-Premier Wang Qishan, who earlier said the leaders feel "ashamed" about the tainted food cases at a meeting with NPC deputies from East China's Shandong province. Wang Lijun's proposal stated the country's current food safety situation requires "heavy and specific penalties", which are lacking in the current regulations and laws. The proposal also said food safety is a social issue that has confronted many countries in the early stages of their industrialization, and the legislation of a special law on such crimes is in accordance with international experience. The country's top legislature voted on and approved an amendment to the Criminal Law last month. The amendment raises the minimum penalty for crimes related to the production and sale of tainted food from short-term criminal detention to prison terms of up to five years. In addition to Wang's proposal, more than 30 lawmakers had earlier this month jointly called for a second inspection tour of food safety law enforcement, following the first tour conducted in September 2009 by the NPC Standing Committee. The spokesman of the NPC Standing Committee later announced plans for a second inspection tour this year. Jiang Jian, president of a Shandong-based hospital and a co-author of the proposal, said better implementation of the Food Safety Law is "an arduous and long-term task" and requires efforts from all levels of governments. But experts said legislation alone is not enough to deal with the food safety issue, which requires "comprehensive changes" within society. Qu Xinjiu, a criminal law professor at the China University of Political Science and Law, said another inspection tour of law enforcement will be "helpful". However, it might not be necessary to enact a separate law, since the current articles have provided necessary stipulations on such crimes, Qu added. Peng Jian, a criminal lawyer who represented clients in a tainted milk powder case, explained food safety is related with local and industry interests, which makes law enforcement relatively difficult. "Melamine was commonly used in the dairy industry for a long time, but the problem was exposed only after it made thousands of babies sick," Peng said. "It happened because there was a protection mechanism inside the industry." In 2008, melamine-tainted dairy products killed at least six infants and caused kidney problems in another 300,000 children across the country, official figures show. Peng also pointed out that holding inspection tours is by no means the only approach. "It is also essential to ensure a reasonable profit for dairy farmers and reduce role of the middlemen, who try to keep dairy purchasing prices down," he said.

Shares of Gome Electrical (SEHK: 0493) Appliance Holding, China's second-largest home appliance retailer by market value, rose more than 5 per cent on Thursday after it replaced chairman Chen Xiao. Gome, founded by imprisoned billionaire Huang Guangyu and in which Bain Capital has a stake of about 10 per cent, rose by as much as 4.7 per cent to HK$2.84, outperforming the Hang Seng Index. Chen, who resigned to spend more time with his family, would be succeeded by the founder of Beijing Dazhong Electrical Appliances, Zhang Dazhong, who takes over as chairman and non-executive director, Gome said in a filing to the Hong Kong stock exchange. “It is positive for the company as it removes uncertainty about possible management change,” said First Shanghai Securities chief strategist Linus Yip. “With the background of the new chairman, there is synergy there that may benefit the company in longer run,” he said, adding that he expected more share price gains. Founder Huang has been fighting from prison, where he is serving a 14-year sentence for bribery and insider trading, for control of the company. In December, Gome said shareholders had approved a plan to enlarge board representation with the appointment of new directors, ending a dispute between existing management and the company’s founder.

Hong Kong*:  March 11 2011

Top: an artist's impression of the main tank at the Grand Aquarium at Ocean Park. Above left: an artist's map of the Toy Story Land expansion. Above right: a fireworks display above Sleeping Beauty's castle at Hong Kong Disneyland - When Ocean Park opened its newest attraction, Aqua City, in January, the impact was immediate. For several days over the Lunar New Year period there were chaotic scenes as long queues formed and some disgruntled visitors were unable to enter Hong Kong's home-grown theme park. Those who got in were far happier. "My daughter loved it," says Carene Chan, who took six-year-old Yvette to the aquarium. One of the largest in the region, it contains more than 5,000 fish, including rare bluefin tuna and hammerhead sharks. "The window into their world is so huge for children," says Chan. Aqua City is one of several expansion plans in a US$5.5 billion upgrade at Ocean Park that will by next year have added a rainforest attraction, a Thrill Mountain ride and an exhibit featuring polar animals living in Arctic and Antarctic environments complete with snow and icebergs. The managers of the city's other main theme park, Disneyland, are fighting back. The venue is spending more than US$3.5 billion on its expansion, deploying Pixar hero Buzz Lightyear to feature in a Toy Story Land that will open late this year and two new attractions, Mystic Point and Grizzly Gulch, due to open by 2014. The gloves are off in the battle of the mascots: Whiskers the Sea Lion versus Mickey Mouse. The sea mammal is unheralded, but Hong Kong born and bred. His big-eared rival is famous but hasn't been here long enough to qualify for a permanent identity card. So, who's winning the battle of the theme parks? For now, Ocean Park, owned by the government, has the edge, says Chan, because of its mix of thrill rides, animals, birds and marine exhibits. "I prefer its educational value," says Chan, an annual pass-holder who has taken her daughter on a group study tour as well as fun days out. But both parks have their own appeal, she says. "Disneyland is like a fantasy. You can leave everything behind and just dream," she says. That American dream has struggled since it first arrived in Hong Kong in 2005. With disappointing attendance figures and criticism that it is too small, Disneyland has frequently attracted negative publicity. But some regular visitors to the Lantau park such as Sukie Cheung, a 25-year-old shop worker, think that's unfair. "It really is like walking into a fairy tale," says Cheung, who has been several times, usually with friends. "There's nothing like it in Hong Kong." Both park-goers agree the expansion plans will make the venues more attractive to revisit. Disneyland will expand its four zones, each tailored to a different age group, to seven by 2014. Three new themed areas will offer 30 new experiences, boosting the number of rides and attractions by almost half to more than 100, says Lana Wong, director of media relations for Hong Kong Disneyland Resort. Ocean Park's expansion started soon after Disneyland arrived and will double the number of animal and ride attractions from 35 to more than 70. The new aquarium follows the 2009 opening of the Amazing Asian Animals area featuring the panda habitats, and a funicular railway to carry visitors to the summit, providing an alternative to its cable car system. Ocean Park enjoyed its busiest February on record, says chairman Allan Zeman, adding that the expansion is on track and maintains the venue's mix of education and fun. "It's made in Hong Kong, for Hong Kong people by Hong Kong people," says Zeman. "It has world-class recognition." Competition exists between the two parks, Zeman adds, but they give Hong Kong world-class facilities to compete regionally for tourists. This competition is healthy, agees Joseph Tung Yao-chung, executive director of Hong Kong's Travel Industry Council. "Having two world-class parks means there are more programmes to attract visitors," Tung says. "Disney is international; children know all about it. Ocean Park offers more information about life in the sea." Disneyland's global brand attracts people from all over Southeast Asia, while Ocean Park can be sold on its theme of marine conservation and education, Tung says. As the number of mainlanders visiting Hong Kong soars - arrivals increased by more than 26 per cent last year - both parks should be able to justify their expansions. "There's a huge increase in tourists coming through here, mostly from China" says Aaron Fischer, a Hong Kong-based retail analyst for CLSA. "Spending on leisure activities is increasing and both Ocean Park and Disneyland will benefit."

Rents at Hysan buoyed by big-spending mainlanders - Causeway Bay landlord sees retail property income rise 8pc - Hysan chief executive Gerry Yim says 25 per cent of retail space at Hysan Place has been leased. Hysan Development (SEHK: 0014), the largest landlord in Causeway Bay, is reaping the benefits of cashed-up mainland tourists. Rents from the company's investment properties drove core earnings 3.4 per cent higher to HK$1.15 billion last year. Hysan recorded rental income growth across its portfolio of retail, office and residential properties, with tourist spending underpinning the gains. Net profit, including property revaluation gains, surged 31.9 per cent to HK$3.84 billion last year from HK$2.91 billion a year earlier. Turnover increased 5 per cent to HK$1.76 billion. Separately, Hysan announced yesterday David Akers-Jones would step down as independent non-executive chairman in May, while Irene Lee Yun-lien would become non-executive chairman. She is a member of the founding Lee family. Revenue from retail properties rose 8 per cent to HK$700 million last year because of the booming retail market. The firm has strengthened marketing activities targeting mainlanders, which helped Chinese tourist spending at upmarket The Lee Gardens and Lee Gardens Two rise more than 60 per cent compared with 2009. Retail rents renewed last year increased more than 20 per cent. Its new development Hysan Place, under construction at Hennessy Road, has leased 25 per cent of its retail space. Chief executive Gerry Yim Lui-fai said about another 20 per cent was under advanced talks. The project will increase the retail portfolio by 50 per cent in terms of gross floor area when completed in the second quarter of next year. Hysan Place will also offer office space of 240,000 square feet. The asking rent is at least HK$68 per sq ft. The landlord generated HK$770 million from the office sector last year, 3.1 per cent more than HK$747 million in 2009. Its occupancy rate improved to 95 per cent at the end of last year from 89 per cent the year before. Hysan leased 320,000 sq ft of office space to new tenants last year. It is due to renew office leases negotiated during the market peak in 2008. Executive director Wendy Yung Wen-yee said: "We have negotiated with some of the tenants and the new rents are similar or even higher than the old leases signed in 2008 ... Office rents at The Lee Gardens are more than HK$60 per sq ft. We believe the tight office supply will continue to support rents in core business areas." Yung said office rentals had benefited from renovations and a change in tenant mix. "Average rents at the Leighton Centre rose 15 per cent after renovation. For example, we leased an office unit at 111 Leighton Road to a make-up firm for HK$40 per sq ft, higher than that leased for office use." The company declared full-year dividends of 74 HK cents a share, 8.8 per cent more than a year ago. Its shares rose 0.14 per cent to close at HK$35.70 yesterday.

European aircraft manufacturer Airbus announced Wednesday that it has won a firm order of 15 A330s from Cathay Pacific Airways, the second order from the Hong Kong-based airline within six months. This order of 15 more A330-300s was scheduled for delivery from 2013, France-based Airbus said in a statement, adding the new planes will join the airline's existing A330 fleet flying on services across the Asia-Pacific region. Cathay Pacific Airways have chosen Trent 700 engines from Rolls-Royce for the required fleet. To date, Airbus has signed on more than 1,100 orders for the various versions of the aircraft. The twin engine A330 is one of the most widely used widebody aircraft in service today. Last September, Cathay Pacific Airways have ordered 30 all-new A350 XWB long range aircraft from Airbus.

Hong Kong's millionaires are getting younger and richer as mainland money floods across the border. The number of millionaires in the city surged 42 percent to 558,000 last year from 2009, according to a Citibank report. One in 11 adults in the city has hit the $$$ jackpot - and around 29 percent reached the millionaire ranks by selling property last year, compared with only 8 percent in 2009. Most millionaires live on Hong Kong Island, though West Kowloon has seen the fastest growth with the influx of mainlanders. In a breakdown of who looks a million dollars, Citibank says one in four of the lucky ones were born in the mainland. The Hong Kong millionaire has an average age of 46, compared with 51 in 2009, with one-third aged between 40 and 49. About 164,000 newcomers have just joined the elite - and they have an average age of 40. Twenty-two percent of the rich were born in the mainland, compared with 18 percent a year ago. And men still dominate with 57 percent, up from 48 percent a year ago. On average, they hold net assets of HK$9.8 million, which is HK$300,000 more than in 2009. But they have HK$3.3 million in liquid assets now, down 13 percent. Fifty-five percent hold liquid assets of between HK$1 million and HK$2 million, 28 percent have HK$2 million to HK$5 million, and 17 percent have HK$5 million or more. The proportion of millionaires who are managers and executives rose to 16 percent from 13 percent, while rich "non-working people" - including retirees and housewives - dropped to 36 percent from 47 percent. The top five "occupations" of the rich are: retirees 21 percent; professionals 17; managers and executives 16; housewives 15; and business owners eight. "Over half of the millionaires believe property will rise further in 2011, and 20 percent intend to buy a property this year," said Simon Chow, Citibank Global Consumer Group deputy country business manager. Eighty-three percent of the millionaires hold property, compared with 76 percent in 2009. Eighty percent invested in the stock market, the same proportion as 2009. But 31 percent bought bonds, compared with 20 percent a year ago. Chow said this is because more of them invested in yuan-denominated bonds. He expects the number of millionaires to increase again this year but at a slower pace as worldwide uncertainty rules.

People are likely to get the HK$6,000 budget handout put into their bank accounts, sources said. The Hong Kong Monetary Authority met with local banks over the possibility of handing out the cash through bank accounts and last week asked banks to submit statistics of individual account holders. An HSBC banker said yesterday that giving out the cash in that way is feasible. In an abrupt about-turn, Financial Secretary John Tsang Chun-wah last week scrapped the plan to inject HK$6,000 into the MPF accounts of all workers and announced giving the same amount to all adult permanent residents. He also said a scheme is being planned to encourage citizens not to withdraw the money immediately. One idea is to provide interest incentives to those who do not use the money at once. Tsang yesterday remained tight- lipped over how the money will be handed out. Sources have said that the authorities are unwilling to send checks through the post as letters can get lost. Mark McCombe, chief executive of HSBC in Hong Kong, said using the banking system is one feasible option. "I think operationally it will not be a problem because Hong Kong already has a very effective payment system and a very effective interbank system," he said. "People in Hong Kong have bank accounts." It is understood that more discussions will be held between banks, other stakeholders and the authorities over technical details, including how to cover those who do not have an account. Another issue is those who have had their account frozen may have to retrieve the money directly from the government. Those with more than one account reportedly may be able to choose into which one they wish the money to be deposited. McCombe also said more discussions are needed with the monetary authority and the government for the option to be finalized. "But it's down to the government and the HKMA to lead the way on this. It's not our initiative. It's an initiative of the government," he said. Authority officials are expected to meet again with banks in the next few weeks to finalize the details.

About 100 experienced doctors holding specialist qualifications for at least five years are to be promoted to deputy consultant doctors. The mass promotions, which will cost the Hospital Authority HK$100 million, are part of a contingency plan to stem the brain drain at public hospitals. Sources said the authority is also studying the possibility of special allowances for doctors on night shift. Hospitals already affected by an acute manpower shortage will be the first to benefit from the allowance. The plan was revealed as authority chief executive Leung Pak-yin visited Prince of Wales Hospital in Sha Tin and Caritas Medical Center in Cheung Sha Wan in the early hours of Tuesday. Public Doctors' Association president Loletta So Kit-ying welcomed the proposals but said the association will only comment after receiving full details. Leung had said after a meeting with frontline doctors in late February that the authority will submit a formal proposal for discussion on Friday. "As we requested at our last meeting with the authority, we insist on immediate promotions for those with specialist qualifications," she said. "I don't understand why they have to wait for five years." Regarding the night shift allowance, So said this will depend on what compensation the authority is offering. "Since the authority has proposed that the night shift allowance depends on the work of different specialists, we worry about the fairness of the system and the standard the authority will set for eligible doctors." The association's former president, Leung Ka-lau, said details of the promotions remain unknown but the proposals are steps in the right direction. "In principle, a doctor can be promoted immediately once he possesses specialist qualifications. I don't think they need to wait for five years," Leung said. "The authority should allocate extra resources to immediately promote those with specialist qualifications." He said the night shift allowance will not solve the problem of overtime work. Prince of Wales Hospital cardiology specialist Lam Yat-yin said the allowance may help boost morale in the short- term, but the authority needs to address the manpower shortage.

 China*:  March 11 2011

China will invest around 1.3 trillion yuan this year in affordable housing, a senior official said on Wednesday, as Beijing struggles to address mounting public concern over runaway property prices. The country will spend more than US$200 billion to build or renovate 10 million apartments for low-income households this year, Qi Ji, a vice minister of housing and urban-rural development, told reporters. Governments at all levels will provide more than 500 billion yuan of the total investment, with the remaining funds to be raised from companies and families who will benefit from the programme, he said at a news conference. Authorities will introduce favourable policies such as loans, subsidies and tax incentives to support the construction of the flats, he said. ''With the current financing channels and the support of new policies, I believe it is completely viable that we can accomplish the task of building 10 million low-income apartments,'' Qi said. State media however have reported that the government fell short of last year's target of building 5.8 million affordable dwellings. China's soaring property prices, combined with stubbornly high consumer prices in recent months, have become a source of anxiety for the public and top leaders, who are fearful of inflation's potential to spark social unrest. Premier Wen Jiabao, in a ''state of the nation'' speech to open the country's annual parliamentary session on Saturday, vowed his government would work harder to address public concerns over a string of problems including growing income disparity and surging house prices. Wen repeated government promises to curb property speculation, which is blamed for stoking prices, and ensure an adequate supply of low-income housing. Local officials who fail to stabilise property prices and promote the construction of low-income housing, and ''thereby affect social development and stability'', will be held accountable, he said. Qi said Wednesday that the government was focused on making sure those most in need had access to housing. ''The focus of our current adjustment and control policy is to postpone the demand of some consumers who do not need to buy houses immediately for living purposes,'' he said. ''We intend to use the temporarily limited supply to meet the most urgent demand of consumers who need to buy housing for living purposes.'' He said the government was closely monitoring the introduction of a property tax in Shanghai and Chongqing in the southwest, adding authorities would move forward based on experiences gathered from the trials in those cities.

China has surpassed the United Kingdom (UK) as Australia's most valuable tourism market, a survey released by the Australian Government Department of Resources, Energy and Tourism on Wednesday found. Tourism Research Australia's December 2010 quarterly results of the international visitor survey showed a 5 percent increase in international visitors in 2010, and a 4 percent rise in their spending. Almost 5,441,000 people came to Australia in 2010 and they spent 18 billion AU dollars (18.13 billion U.S. dollars) on their trips, the report said. In terms of total goods and services, they contributed 24 billion AU dollars (24.17 billion U.S. dollars). Although New Zealand was the largest source of visitors during the period (1,053,901), the Chinese emerged as Australia's most economically valuable market, surpassing the UK. Chinese travelers, who represented the fourth largest visitor numbers at 431,369, poured 3.1 billion AU dollars (3.12 billion U. S. dollars) into the economy. The UK contributed 2.9 billion AU dollars (2.92 billion U.S. dollars), and New Zealand 2 billion AU dollars (2.01 billion U.S. dollars). The total economic value was an increase of 2.9 percent on 2009, the report said.

A model struts down a vertical runway during an air fashion show in Southwest China's Chongqing municipality, March 8, 2011. The air fashion show, in which a model abseils down the runway, makes its debut in Chongqing after creating a furor in Europe.

Body of renowned Chinese medical scientist cremated in Beijing - President Hu Jintao, top legislator Wu Bangguo, Premier Wen Jiabao, and other state and Party leaders bid a final farewell to Wu Jieping, a well-known medical scientist.

Hong Kong*:  March 10 2011

A construction boom has driven up the salaries of bar benders and led to an acute shortage of manpower across the industry. One union says it has been promised an annual pay rise of 10 per cent for at least three years. The average daily wage of bar benders is HK$1,100 and will increase to HK$1,200 - similar to 1997 levels - in August. This does not take into account inflation, so their real salaries are still lower than in 1997. But their pay is expected to keep rising. By 2014, the daily rate will increase to HK$1,490. Fung Kin-cho, secretary of the Construction Industry Bar-bending Workers' Union, said the current shortage was due to an exodus from the bar bending trade during the economic downturn in 1997, as daily wages fell to HK$680 at one point. "Many bar benders left and not many came in for the 10 years after 1997," Fung said. "And now we see a shortage, when there are more rail works, infrastructure construction and private housing projects." The union said that after three months of talks, the Bar-bending Contractors Association had promised it an annual 10 per cent pay rise for at least three years. The 10 per cent rate would be used as a reference rather than a fixed rule. Individual contractors and bar benders can still discuss pay between themselves. Bar benders usually worked about 15 days a month, Fung said. That would take monthly salaries to about HK$18,000 and, by 2014, to more than HK$20,000. The union and the association also agreed to limit the number of working hours to eight. The recent change of fortune is not limited to bar benders; carpenters and workers in metal scaffolding and drainage are also in demand, thanks to the construction spree. Bar bending is one of the best-paid jobs in construction. Fung attributed the boom to the government's public works, totalling HK$486 million, according to the policy address. That, combined with the bullish property market, meant builders would continue to be in short supply. There are now about 3,000 registered bar benders. He estimated 1,500 more would be needed.

Blend of East meets West lures new breed - Sheung Wan remade by rapid gentrification - Tai Ping Shan Street is one of many in Sheung Wan to become gentrified over the past decade. Living in Sheung Wan for more than two decades, Karen Lee Ka-man witnessed its gradual gentrification from an old residential district into one of fashionable offices and eateries. "I have seen the old housing blocks that were occupied mainly by locals being renovated and coffee shops and Western gourmet restaurants opening up all over the district. The character of the area has changed," she said. Lee, who lived in the area for most of her 29 years, said the changes had not all been for the better. "It was a district with distinctive old architecture in which lived mainly local people. Now it's more commercial, with more serviced apartments, boutique hotels and Western restaurants, which have attracted more expatriates and young people." The price of this progress was that Sheung Wan had become more crowded, polluted and costly to live in, she said, so she and her retired parents decided to move to Tseung Kwan O three years ago. The family sold their Sheung Wan flat at that time for about HK$4 million, which was nearly triple what they paid for it two decades earlier, Lee said. It was now valued at closer to HK$5 million. Located between Sai Ying Pun and Central, Sheung Wan is close to the expensive residential area of Mid-Levels and is benefitting from its proximity to the upmarket area. Redevelopment in the district has transformed many tenement buildings into boutique hotels and luxury flats, among which is the Hotel de EDGE by Rhombus on Connaught Road West, scheduled to open in the middle of this month. "The renovations and redevelopment have boosted the quality and value of the flats there," Midland Realty Mid-Levels sales director Patrick Fung Kim-chiu said. Fung said that before 1997, buyers showed only lukewarm interest in flats in the walk-up tenement buildings in the area and they were priced up to 40 per cent lower than flats in buildings with a lift. Now they sold at similar prices. "The upgrading of the area has attracted some quality residents, including expatriates, to move in," he said. "There is also demand from those whose flats have been sold to developers for redevelopment, as they like the neighbourhood." Alan Lo Yeung-kit, co-founder and executive director of development company Blake's, said Sheung Wan had turned into the city's unofficial art and culture hub, which attracted his company to acquire a building at the west end of Hollywood Road and turn it into an upscale residential development. The flats in the TwoTwoSix project sold for HK$14,759 to HK$18,359 per square foot at the end of last year, which was a record high for western Sheung Wan, he said. Also attracted to the area by its blend of East meets West and old and modern was street artist Dom Chan, co-founder of two-member art crew Start From Zero, which opened its first store selling streetwear and exhibiting art in quiet Tai Ping Shan Street, Sheung Wan, in December. "At first we were thinking about premises in Central but the rent there was too expensive," Chan said. He could save about one-third on rent by choosing a spot in Sheung Wan instead. He pays nearly HK$14,000 a month to rent the 400 sq ft Sheung Wan store. He appreciated the variety of things the district offered, citing Hollywood Road as an example of the area's eclectic mix, with shops selling coffins, paintings and antiques. Simon Lo Wing-fai, director of research and advisory at property agency Colliers International, said local retailers were facing greater competition for retail space because of rising inflation and aggressive rent increases. "As a result, they are migrating to second-tier locations in key shopping districts from core shopping areas," he said. Data from the firm shows average rents for ground-floor shops in core shopping areas such as Central, Causeway Bay, Mong Kok and Tsim Sha Tsui increased by 5.3 per cent in the final quarter of last year. Lo said the sharp increase in store rents was due to double-digit growth in retail sales and leasing demand from international brand names. Given sustained economic growth and an anticipated increase in inbound visitors, he expects rents for ground-floor shops in traditional shopping districts to rise a further 20 per cent over the next 12 months.

HSBC may relocate its headquarters from London to Hong Kong - New regulations and asset tax could prompt bank to move headquarters. Europe's biggest bank HSBC Holdings Plc may be planning to move its headquarters from London to Hong Kong. The relocation may come because of what the bank sees as high levels of tax and red tape in the United Kingdom, according to a report in the Sunday Telegraph. The newspaper quoted unnamed investors who said they understood a move was "more than likely" and that there had been a "change of tone" as HSBC reviews its place of residence, something the bank does every three years. However, the bank maintained that it preferred to remain in the UK and said talk of an imminent change in its position was "entirely speculative and presumptuous". "We are, however, in light of possible regulatory changes and additional costs such as the bank levy, being increasingly asked by shareholders and investors about the likely additional cost of being headquartered in the UK," said Chairman Douglas Flint and CEO Stuart Gulliver in a joint statement on Sunday. A British tax on bank assets to be introduced this year would cost HSBC about $600 million based on its balance sheet at the end of December. That marks a cost for being based in the country, HSBC said last week as it cut its profitability targets alongside its 2010 results. Political rhetoric in the UK has become more aggressive towards banks, as public anger has risen at the cost of the taxpayer bailout of lenders Royal Bank of Scotland Group Plc and Lloyds TSB Bank Plc and the payment of generous bonuses to bankers. Bankers hit back after the Bank of England Governor Mervyn King gave an outspoken interview in Saturday's Daily Telegraph, in which he said the banking industry needed urgent reform and that there was a risk of a fresh financial crisis. But the UK's finance minister, George Osborne, defended King, telling Sky News on Sunday, "I wouldn't be (putting King in charge of bank regulation) if I didn't broadly agree with his concerns. I'm also very particularly looking at the issue, which he correctly raises, which is how do we deal with the 'too important to fail' problem." The system of regulation had completely failed, Osborne said. The Sunday Telegraph also said that the publication of a report into the collapse of RBS's in 2008 by the regulator, the Financial Services Authority, was likely to be delayed from this month until at least April.

Prada shuns Milan for Hong Kong listing - Prada SpA's logo is displayed on a store window in the district of Tsim Sha Tsui in Hong Kong. The fashion brand is planning the largest initial public offering of a family-owned Italian company since 2006. Prada SpA, the fashion house known for its Miu Miu bags and Church's shoes, is planning the largest initial public offering (IPO) of a family-owned Italian company since 2006. Investors in Prada's hometown of Milan will have to reach about 10,000 kilometers away to buy the stock. Prada is shunning the Italian exchange for a $2 billion IPO on the Hong Kong exchange because it's closer to the retailer's fastest-growing region. The decision was made to "seize the best opportunities offered by the international capital markets", Chief Executive Officer Patrizio Bertelli said in a statement when it announced the IPO. Losing Prada highlights the struggles facing Borsa Italiana, a unit of the London Stock Exchange Group Plc (LSE), to gain new listings, said investors, including Lorenzo Crispoltoni of Banca Fideuram SpA. The Italian exchange lost half its value in the past three years amid a dearth of IPOs and the drop in stock prices since 2007. The 332 traded companies on Borsa Italiana have a combined market capitalization of 425 billion euros ($593 billion), ranking the exchange no higher than seventh in Europe, data from the World Federation of Exchanges show. "The Borsa's troubles mirror sluggish economic growth and an exchange that isn't as visible as others on a global scale," said Milan-based Crispoltoni, who helps oversee 2.5 billion euros. "Companies that have a global market are looking elsewhere for success." Economic growth of just 1.1 percent last year combined with the region's sovereign debt crisis erased about 13 percent from the country's benchmark FTSE MIB Index in 2010. Italian shares are now the cheapest relative to Europe, the United States and the emerging markets on a price-to-book value basis since 1992, according to London-based Barclays Plc. The country is Barclays' preferred "deep-value" play, analysts led by Edmund Shing wrote in a note to clients on March 2. Italy's gross domestic product grew at an average annual rate of 1.5 percent from 1999 to 2007, compared with 2.2 percent for the European Union. Italy contracted 5.4 percent in 2009. The economy and weak stock market have deterred Italian companies, especially small ones, from going public, said Gioacchino Attanzio, chief executive officer of Milan-based Aidaf, a group that represents family-owned companies. "We're in a paralysis," he said. "Entrepreneurs are more worried than ever about losing control because their businesses are weak."

 China*:  March 10 2011

The expected nomination today of Chinese-American Gary Locke as the new US ambassador to China could ease tensions that dogged relations between Washington and Beijing last year, analysts say. US President Barack Obama would nominate Locke, commerce secretary in his administration, for the post, administration officials said. Locke, a former governor of Washington state, has dealt with China in various capacities for decades and was a key player in forging trade links with Beijing before becoming commerce secretary. Analysts say the decision reflects the importance the Obama administration attaches to often troubled China-US trade ties. Locke would be the first Chinese-American to serve as Washington's envoy to China. He would succeed another high-profile politician appointed by the Obama administration to what is an increasingly important and tricky post. Locke would replace Jon Huntsman, a Republican who has resigned with a view to running for his party's presidential nomination next year. "If he is actually nominated by the president, I think it is an extremely good choice," said Christian Murck, president of the American Chamber of Commerce in China. "He has lots of experience here as commerce secretary, as a governor and as a lawyer in his private practice." Chiling Tong, a former colleague of Locke who served in the Department of Commerce as deputy assistant secretary for Asia and the Pacific, said: "The appointment is smart and shrewd ... and actually quite unusual [to employ an important cabinet minister as the top envoy to Beijing]. "It reflects the degree of significance that the Obama administration has attached to US-China relations, which requires the appointment of a cabinet minister to the ambassadorship." Locke's appointment could help promote US-China trade, which may be one of the main reasons for Obama's decision, Tong told the official China News Service yesterday. Democratic Senator Maria Cantwell hailed the nomination of her long-term friend as good news for US trade.

Beijing intends to open 45 new airports across the country in the next five years to encourage development and almost double the aircraft fleet to more than 4,500 planes. The central government's plan to boost the number of airports by 45 in the next five years may be good news for the air cargo industry but rising costs, stiff competition and differences in customs policies among provinces mean many small freight-forwarding companies could be put out of business. Liu Shaocheng, director of policy research at the Civil Aviation Administration of China, said the new airports will be located in more remote and underdeveloped areas. "They may be [unprofitable] but they can boost the area's economy. Yunnan, for example, used to be a remote area but after the construction of an airport there, both tourism and the general economy picked up," Liu told the biennial Air Freight Asia 2011 Conference that opened yesterday. "Eventually the airports will also draw cargo and logistics businesses. We hope individual provincial governments will help raise capital and introduce incentives to attract foreign capital," he said. Under the 12th five-year plan announced last week, the central government will inject more than 1.5 trillion yuan (HK$1.78 trillion) in developing the aviation business, including raising the number of airports from 175 to 220 and nearly doubling the aircraft fleet from 2,600 to more than 4,500. But while airline representatives said different customs rules in different provinces hindered the development of e-freight - an initiative to replace supply chain paperwork with electronic messaging - a big mainland logistics firm said the government should stop multinationals from dominating China's air cargo business as that would stifle development of local freight forwarders. "Multinational firms take up 80 per cent of the air cargo market. Although the pie is getting bigger, competition is also becoming more intense," said Solomon Cai Shenyu, chief executive of Globelink China Logistics. "Many of the 30,000 small couriers will have to merge to stand up to the conglomerates or go out of business," he said. Yvonne Ho, country manager of the International Air Transport Association, said the organisation hopes to promote e-freight in new and small airports but differences in customs policies at different provinces presented an obstacle.

Air China, HNA pre-order 53 aircraft worth US$10.6b - Boeing, business-jet makers announce deals at HK air show - Air China (SEHK: 0753) and HNA Group, parent of Hong Kong Airlines and Hainan Airlines, signed preliminary agreements yesterday to buy 53 passenger and freight aircraft - most from Boeing, with others from Dassault Falcon and Gulfstream. Prices were not disclosed, but the planes are worth about US$10.6 billion at list prices, although the airlines are likely to get big discounts. No details were provided about when these initial pacts would be finalised into concrete orders, and aviation sources indicated it could be months before final contracts were signed. If the deals are confirmed, Air China would become the third airline, and the first in China, to order the Boeing 747-8 Intercontinental airliner, and Hong Kong Airlines would become the second China carrier to order the Boeing 787-900. Air China ordered 15 of them in 2005. Under the terms of the deals, signed on the opening day of the Asian Aerospace show at Chek Lap Kok airport, Air China plans to order five Boeing 747-8s. HNA signalled its intention to order 30 Boeing 787-900s, two Boeing 787-800s, six Boeing 777 freighters, five Dassault Falcon 7X business jets and five Gulfstream G450 corporate jets. The 787-900s will be ordered through Hong Kong Airlines. Speaking ahead of the signing ceremony, Tan Xiangdong, managing director of Hainan Airlines, gave no indication which airline would operate the 777s. But the 787-800s would be fitted with corporate jet interiors and, with the Gulfstreams and Falcons, would be operated by HNA's executive jet companies, Beijing Capital Airlines and Deer Jet. "We've been waiting for the 787 aircraft for a while," Tan said. He said that for the corporate jets "our clients in China are very diversified. Our business is very well orientated to people who prefer different types of aircraft." There was confusion about the inking of a similar preliminary agreement between Airbus and HNA for what aviation sources said was 10 wide-bodied aircraft. The aircraft manufacturer was billed with the other three plane builders as being part of the signing ceremony ahead of the event, but its name was missing from the billboard used as the backdrop to the ceremony. One source said Airbus pulled out because it was annoyed that it was signing its agreement on the same stage as the other manufacturers. Asked if Airbus withdrew after being upset, an Airbus spokeswoman at the firm's headquarters in Toulouse, France, said: "Not at all. Not at all. Not at all." She said the invitation to the ceremony was "sent without our approval". The 787-900 is a longer-range version of the 787-800 and will be capable of carrying 250 to 290 passengers up to 15,750 kilometres. It will allow a significant expansion of Hong Kong Airlines' route network. The 747-8, which can carry 400 to 500 people, is 12 per cent cheaper to operate and has 16 per cent better fuel economy than the 747-400, the fourth edition of Boeing's jumbo jet. Some 33 passenger 747-8s have been ordered. Randy Tinseth, vice-president of marketing for Boeing, said the first delivery of the aircraft, to German airline Lufthansa, would take place in the fourth quarter of this year. Boeing said the Air China 747 deal "requires Chinese government approval", and it was "working with Hong Kong Airlines to finalise the agreement" to buy the 38 Boeing aircraft.

Boeing sealed deals worth US$10 billion with two Chinese airlines as the world's second-largest economy expects to order more than 2,000 aircraft over the next five years to meet booming demand for air services. China expects to order 1,100 new transport aircraft and 1,000 general aviation aircraft in the next five years, Wang Changshun, vice minister of the Civil Aviation Administration of China, said at an Asian aerospace conference on Tuesday. As air travel becomes more essential among China’s increasingly wealthy population, Chinese airlines are keen to expand their fleet and bump up services to compete with regional players such as Cathay Pacific (SEHK: 0293). “(The sector) will maintain a definite growth speed,” Wang told reporters in Hong Kong on the sidelines of the conference. China’s purchases of aircraft will help drive overall demand in Asia Pacific, where average annual air traffic growth is expected to grow by 6.8 per cent over the next 20 years, higher than the global pace, Boeing, the world’s No 2 commercial plane maker after EADS subsidiary Airbus, said. Air China (SEHK: 0753, announcements, news) Ltd , the country’s flagship carrier said it plans to purchase five Boeing 747-8 aircraft worth a list price of about US$1.54 billion to expand its fleet, a move which would come as boost to the slow-selling super-jumbo jet. The Boeing 747-8 has a list price of US$317 million each and has 467 seats. Three customers have ordered the aircraft that is Boeing’s answer to Airbus’ A380. Lufthansa ordered 20 a few years ago, while Korean Air ordered five last year and now Air China plans to purchase another five. “We are talking to airlines around the world that have long-haul market requirements that need an airplane of around 450 seats. I think this will be a very good year for the 747 program. I think you will see more customers in our backlog,” Marlin Dailey, executive vice president, sales & marketing commercial airplanes of Boeing, told a news conference. In a separate deal, HNA Group, parent of Hainan Airlines, signed a memorandum of understanding with Boeing to purchase 38 aircraft, including six 777s and 32 787s. The deals are worth US$8.5 billion at list prices. Asia-Pacific’s demand for aircraft will likely form a significant portion of the demand from global airlines, which Boeing said would need 30,900 new passenger freighter aircraft by 2030, valued at US$3.6 trillion. However, analysts are concerned there could be an oversupply in the long term. “In terms of aircraft orders that is a long-term risk because deliveries take a long time to enter the system,” said Andrew Orchard, an analyst at RBS in Hong Kong. “Boeing and Airbus have a backlog of something like 7,000 planes in total. Right now they are just clearing the backlog of deliveries and so as these new planes come into the industry, that will impact supply and capacity.” In the short term, the industry’s outlook will also be clouded by uncertainties in the global economy, such as high oil prices and weakening defence spending, analysts and industry executives said. “This year will be a bit slower than last year, the reason being that most of the near-term production capacity that we have available has already been sold,” Dailey said. “And so airlines are going to slow down a bit before they make those decisions because they are talking about airplane availability in the 2014/15 time frame,” he said.

Tourists from China's mainland will be able to make their own way to Taiwan later this year when pilot trials of individual travel to the island from the mainland begin. At present, mainland tourists have to go as part of an organized tour. Shanghai and Beijing will be the two cities taking part in the trials, which are due to begin in the second quarter of this year, Shao Qiwei, director of the National Tourism Administration, said yesterday. Shao said that higher income groups would take part at first and then the market would be expanded to more people. Shanghai travel agencies said they had begun to design individual packages, mainly targeting the better off. They said flight tickets and room charges for individuals would be higher than those for groups, and tourists should be prepared to pay about 25 to 30 percent more for the packages. "An eight-day trip to Taiwan costs about 6,000 yuan (857 U.S. dollars) for group travelers, and the same trip, with the same dining and accommodation standard, would cost 8,000 to 9,000 yuan for individuals," said Wang Yan, general manager of Shanghai Airlines International Travel Service Co Ltd. "But, of course, self-service travelers will be able to choose hotels which are suitable for their budget." Since the Taiwan-bound tourist market opened to tourists from the Chinese mainland in 2008, most visitors have been middle-aged or elderly, travel agencies said. Young people showed less interest in the island. That meant most Taiwan packages at present were "round-island" trips geared to older people, allowing tourists to visit several cities over a week. That may change with the opening up of individual travel. Agencies said packages for individual tourists would be more flexible. Usually they would be around four to five days, and designed for those with specific aims, such as honeymoon couples or pop music fans going to concerts. Last year, nearly 1.23 million tourists from the mainland visited Taiwan, more than double 2009's figure. Taiwan-bound group tours are available to tourists from all 31 provinces, autonomous regions and municipalities on the mainland.

A passenger steps into the Jing'ansi station of Shanghai subway Line Two, March 8, 2011. A special subway with the theme "spring pink" will run on line two for a week to mark the International Women's Day in Shanghai. The subway has been decorated with pink pictures and displayed posters containing knowledge of women's health care.

A China Mobile logo at an exhibition in Beijing. China Mobile will set up more than 1,000 base stations in seven cities this year for a TD-LTE test, according to a statement of the company. China's new 4G telecommunications standard to be tested in seven cities - China Mobile Communications Co, the parent of world's largest telecom carrier by subscriber numbers, said on Monday that seven major Chinese cities will run a commercial trial of the TD-LTE network by the second quarter of 2012. TD-LTE, which stands for Time Division-Long Term Evolution technology, is the next generation (4G) telecommunication standard that has been in development by China Mobile since late 2007. The technology can easily reach a download speed of more than 100 megabytes a second, according to China Mobile. The seven cities are Beijing, Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen and Xiamen. All started wide-ranging tests of TD-LTE technology in January. China Mobile says it will set up more than 1,000 base stations in those seven cities this year to conduct the test. In addition, TD-LTE data cards - a wireless device that enables Internet surfing - will be available in the seven cities as early as the second half of this year, with a speed of more than 100 megabytes a second, ten times faster than 3G data cards. The company said the TD-LTE data card can support the transmission of large amounts of data, such as high-definition online meetings. It also added that a procurement program for TD-LTE trial terminals will begin soon. "In order to create conditions for the upcoming commercial use of TD-LTE, we will endeavor to perform well in the seven cities' tests," said Wang Jianzhou, chairman of China Mobile Communications Co. He made the comments on the sidelines of the ongoing Chinese People's Political Consultative Conference session, the nation's top advisory body. "I hope the Chinese government will draw up the development plans for TD-LTE as soon as possible, to send a clear signal to the market and help domestic and overseas resources to flow into the TD-LTE industry," Wang told China Daily. Compared with TD-SCDMA, the homegrown telecommunication standard for the 3G era, TD-LTE technology has truly opened a "global market" for China Mobile, Wang added. Foreign telecom giants such as Ericsson and Alcatel Lucent, plus domestic companies such as Huawei, ZTE and Datang, have participated in technical trials of the technology with China Mobile since the end of 2008. China Mobile has signed agreements with nine international telecom carriers to help deploy 27 TD-LTE trial networks worldwide, according to the company's statement.

New customers make up L'Oreal sales in China - A subway station in a Shanghai features advertisements for Garnier men's moisturizer, a brand belonging to the L'Oreal group. L'Oreal aims to double the number of people using its products by 2020. Millions of new Chinese customers helped to drive up sales for the French cosmetics giant L'Oreal SA. Sales in China in 2010 rose to 9.085 billion yuan ($1.38 billion), an 11.1 percent increase over the previous year, and a double-digit gain for the 10th consecutive year. The world's largest cosmetic group aims to gain one billion new consumers globally in the coming few years, doubling its current number. Around half of those will reside in Asian countries, according to Alexis Perakis-Valat, CEO of L'Oreal China at a news conference on Monday. "It's a great business goal for the company and also a very motivating goal for all our employees and partners in China," said Perakis-Valat. The strong sales figures, boosted by a growing appetite for cosmetics in the country, made China L'Oreal's third-largest market in 2010, following the United States and France. China was the company's fifth-largest market in 2009 and seventh in 2008. "Although last year was quite challenging, we managed to achieve growth in both sales and profits, and expand our market share, largely through innovations, new product launches, the development of new market categories and a deepening of distribution," said Paolo Gasparrini, president of L'Oreal China. In a sign of the importance of new frontiers, the company used Chinese singers and models, such as Zeng Yike and Zhang Zixuan, to advertise its mass-market brand Maybelline NY's BB Cream, which was first sold in South Korea and later became the star of the brand. "L'Oreal has done quite well in localization strategies," said Perakis-Valat. "From the formula (of the cream), and the packaging, to the shooting of the advert and the choice of advertiser, all of these were done in China." Apart from plans to expand in China's first- and second-tier cities, L'Oreal, which is also home to the iconic Lancome brand, also entered some third- and fourth-tier cities such as Dongguan, Luoyang and Lanzhou, where new stores for some of the company's luxury brands were opened last year. "A shop manager asked me why don't we open a Lancome shop in Yichang, I bet people would be lining up to visit it," said Gasparrini. "And so we did it at the beginning of 2011 and have received really positive feedback since it opened." Located in Central China's Hubei province, Yichang is also the location of L'Oreal's second factory in China, following one in Suzhou. L'Oreal began making acquisitions in China just after it became profitable in the country eight years ago. It started with the local brands Mininurse and Yue-Sai (in early 2004). "Mininurse can reach the consumers that other brands can't reach," said Perakis-Valat. "We think it's a great asset for us in China and consumers love the brand." However, at the current stage, the "great asset" is still undergoing consolidation pains and L'Oreal has declined to disclose details of its performance last year. "We're not ready today to talk about Mininurse, as it's not an easy topic. We'd rather work on it," said Gasparrini. "But one thing we're sure of is that we didn't buy Mininurse with the intention of taking it out of the Chinese market."

China on Tuesday reiterated its claim over disputed islands in the South China Sea after the Philippines and Vietnam protested to Beijing over its naval activity in contested waters. The Philippines last week lodged a complaint after two Chinese vessels ordered its oil exploration boat to leave waters near the disputed Spratly islands, and Vietnam has protested against Chinese military exercises nearby. “China holds indisputable sovereignty over the South China Sea islands and their adjacent waters,” foreign ministry spokeswoman Jiang Yu told reporters. “We have been committed to dialogue and consultation to properly solve the South China Sea dispute and work with relevant countries to safeguard peace and stability in the South China Sea.” The Philippine government has ordered the coastguard to escort the survey ship since the incident near the disputed archipelago, known as the Nansha islands in China and the Spratlys elsewhere. The reputedly oil-rich chain of tiny islands and reefs in the South China Sea is claimed in whole or in part by Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam. Jiang on Tuesday called on countries involved not to make the issue “more complicated”. “We hope that other countries can respect and support efforts to peacefully resolve the disputes, to promote good neighbourly friendship and peace and stability in the region,” she said.

Hong Kong*:  March 9 2011

Donald Tsang Yam-kuen should have had every reason to feel satisfied with his speech at the prestigious Peking University yesterday, holding forth on such erudite subjects as the internationalisation of the renminbi - all in the national tongue. But when the floor was opened to questions, it appeared it was not so much what the chief executive said but how he said it that had caught the students' attention. He was told his Putonghua really needed some work ... and that went for the rest of Hong Kong, too. "I have visited Hong Kong many times," one student said, citing two occasions on which he had to speak English to pedestrians to make himself understood. "I think many mainlanders have encountered this problem in Hong Kong. Chief executive, do you think it is necessary to promote Putonghua in Hong Kong?" Tsang quickly apologised for his own inadequacies, before an audience of nearly 1,000 teachers and students. "One has to go through a process of learning," he said. "I did not start learning Putonghua until in my 40s. So please excuse me for not speaking well." However, the chief executive made a valiant attempt to defend the honour of Hong Kong. "Our primary and secondary school students are learning [Putonghua] quite well," he said. "I believe the pupils can use it well after several years of learning. "Many of our young civil servants speak Putonghua very fluently. Thank you for your reminder. We will continue to make the efforts." Tsang was on the final day of a four-day visit to Beijing to attend the National People's Congress annual plenary meetings, and it appeared the nation's leaders were a far more linguistically tolerant audience. Xi Jing, a masters student who was in the university audience, said it took him a while to adjust to Tsang's less-than-pure Putonghua. Tony Yung Wah Kwok, a Hongkonger studying law at Tsinghua University, took issue with Tsang's claim that the standard of Putonghua among his compatriots was good. "Tsang said that the civil service officers are mostly good in Putonghua. But I don't think it is the case in Hong Kong," he said. He noted, however, that the chief executive's Putonghua appeared to have improved but could still do with some work.

Chinese pop singer Faye Wong performs in her concert in Hong Kong, south China, March 6, 2011. Wong staged concerts in Hong Kong from March 4 to 6 as part of her worldwide concert tour.

A new chapter opened yesterday in one of the most sensational crime stories in Hong Kong history, the 1990s abduction of billionaire Walter Kwok Ping-sheung. The Court of First Instance heard that two men who allegedly claimed to be members of a gang led by notorious gangster Cheung Tze-keung, the mastermind of the kidnapping, tried to extort HK$400 million from Kwok's wife. This was the outstanding amount the Kwok family allegedly owed as part of the HK$1 billion ransom. The court heard an account from Kwok's wife, Wendy Kwok Lee Ting-wing, about how she met Cheung, nicknamed "Big Spender", face to face to discuss the release of her husband. Wendy Kwok also told the court about Cheung's claim that he had kidnapped Victor Li Tzar-kuoi, eldest son of Li Ka-shing, Hong Kong's richest man, and that he had wrapped himself with explosives when he met Li to discuss the ransom. Chan Wai-hang, 58, and Kwok Ping-kan, 61, pleaded not guilty to a count of conspiracy to blackmail by demanding HK$400 million from Wendy Kwok between September and December 2009. They also pleaded not guilty to two alternative charges of blackmail. The charges confirm the heavily rumoured kidnapping of Kwok, former chairman of Sun Hung Kai Properties (SEHK: 0016). The families did not report the kidnappings at the time, but the crimes have long been accepted as fact by the public.

Prada, the fashion house known for its Miu Miu bags and Church's shoes, has chosen Hong Kong for the largest initial public offering of a family-owned Italian company since 2006. Prada is shunning the Italian exchange for a US$2 billion IPO on the Hong Kong exchange because it is closer to the retailer's fastest-growing region. The decision was made to "seize the best opportunities offered by the international capital markets," chief executive Patrizio Bertelli said. The decision is another feather in Hong Kong's cap as an international financial centre and a triumph for Ronald Arculli, the chairman of Hong Kong Exchanges and Clearing (SEHK: 0388). Arculli visited Italy in October to meet executives at Prada and deliver the message that "a listing in Hong Kong would automatically enhance their brand recognition". Prada is making its fifth attempt in the past decade at selling shares. The company, controlled by Bertelli, his wife Miuccia Prada and her family, is generating record sales. Revenue grew 31 per cent last year to €2.05 billion (HK$22.38 billion) led by demand in Asia, where sales rose 48 per cent. Credit Agricole, Goldman Sachs Group, Intesa Sanpaolo and UniCredit are helping manage the IPO, Prada said in January. Initial public offerings in Hong Kong raised US$49.5 billion in 2010, the most in developing markets, compared with US$28.4 billion in western Europe. L'Occitane International and its parent raised about US$780 million from the first Hong Kong IPO of a French company last year. While the Prada listing is a coup for the Hong Kong bourse it highlights the struggles facing Borsa Italiana, a unit of London Stock Exchange Group, to gain new listings, said investors, including Lorenzo Crispoltoni of Banca Fideuram. The Italian exchange lost half its value in the past three years amid a dearth of IPOs and the drop in stock prices since 2007. The 332 traded companies on Borsa Italiana have a combined market capitalization of €425 billion, ranking the exchange no higher than seventh in Europe, data from the World Federation of Exchanges shows.

Cheung Kong (Holdings) (SEHK: 0001) outbid six other developers to snap up a residential site in Yuen Long for HK$2.41 billion. It was the first site in which the number and size of flats were spelled out for bidding. The acquisition price is in line with the market expectations of between HK$1.95 billion and HK$2.5 billion. The land price is HK$3,629 per square foot. "The site could have sold for 10 to 20 per cent higher if the government had not imposed restrictions on the number and size of flats," said Charles Chan Chiu-kwok, managing director at Savills Valuation and Professional Services. While the land price is cheaper, there are doubts whether first-time buyers will benefit. Chan said the selling prices of the project would have to top HK$5,000 per sq ft to generate a reasonable profit. "The entry level for a flat with a gross area of 500 sq ft at the project may cost HK$3 million or above. I wonder if first-time buyers could afford that," he added. The 1.234 hectare site is bordered by Yuen Long On Ning Road, Tai Kiu Road and Yuen Long On Lok Road. It can provide a total gross floor area of 664,139 sq ft. To increase the supply of small and medium-sized flats, the government stipulates that at least 960 flats must be built on the site. Also, at least 800 of the flats should have saleable areas of between 375 sq ft and 430 sq ft, while the rest must be between 430 sq ft and 645 sq ft. Despite the development restrictions, the site attracted seven bidders when the tender closed on February 18. The companies included Sun Hung Kai Properties (SEHK: 0016), Sino Land, New World Development, Tai Cheung Holdings and China Overseas Land (SEHK: 0688) and Investment. The government will release another five plots of land for tender under this scheme. The sites are located in Hung Hom, Tung Chung, Tsuen Wan and Yuen Long, and could provide a total of about 3,000 small and medium-sized flats.

 China*:  March 9 2011

China's yuan strengthens to record high of 6.5651 per USD - The yuan has appreciated 3.84% since June 19 last year when the People's Bank of China, announced it would further reform the exchange rate formation mechanism to improve its flexibility.

US President Barack Obama will nominate Commerce Secretary Gary Locke as next US ambassador to China, two administration officials said on Monday. Locke would replace the current ambassador, Jon Huntsman, who is stepping down on April 30 and is considering a run for president in which he'd join a field of Republicans vying to challenge Obama in the 2012 election. An official announcement on Locke is expected on Tuesday. Locke, whose appointment would need confirmation by the US Senate, became the first Chinese-American Commerce Secretary when he joined the Obama administration in 2009. He is a former governor of Washington state.

China will more tightly control the exploration for rare-earth minerals and unify the distribution of precious metals in North China to regulate the previously over-exploited sector, government officials said on Monday. The Inner Mongolia autonomous region's Bayan Obo Mine in Baotou city - the world's largest rare-earth producer and the source of 97 percent of the country's reserves - has unified the exploration of rare-earth minerals. And it will further unify the distribution of the metals, Hu Ercha, deputy head of the standing committee of the autonomous region's people's congress, said during the annual national legislative meeting on Monday. Hu said Inner Mongolia's Baotou Steel Rare-Earth (Group) Hi-Tech Co, the country's largest light rare-earth producer, will further consolidate companies from Fujian and Jiangxi provinces, which are rich in heavy rare-earth metals. Rare-earth metals comprise 17 elements of the periodic table that are used to manufacture such products as wind turbines, hybrid cars, missile guidance systems and mobile phones. Much larger reserves of light rare-earth metals have been discovered. These are easy to process, while heavy rare earths, which are mostly found in South China, are more expensive. He also said the autonomous region will establish rare-earth stockpiles, to expand upon the rare-earth trading platform. These measures will prevent over-exploitation and increase the country's influence over prices. Jiangxi province, which has the country's largest reserves of heavy rare-earth metals, will impose controls on exploration and reduce exports this year to ensure the industry's long-term development, a local official said. "The volume of this year's rare-earth exploration in Jiangxi will be equal to that of the previous year because we will concentrate more on the sustainability of the industry's development," Hu Xian, director of the department of land and resources of Jiangxi province, told China Daily on the sidelines of the annual session of the National People's Congress. Yao Mugen, director of the development and reform commission of Jiangxi province, said: "Controlling the production of rare earths is our main task this year. Our strategy is to improve the recovery of industrial wastes and vegetation while exploring for rare-earth ores." Ganzhou Mayor Wang Ping said the export of rare earth from Ganzhou will be reduced this year because processing and use are the city's top priorities. China provides more than 90 percent of the global supply of rare-earth minerals, but its reserves are one-third of the global total. The central government has issued a number of measures to protect rare-earth minerals and ensure the sector's sustainable development, as previous over-exploitation has damaged the environment and depleted resources. The Ministry of Environmental Protection earlier this month issued stricter standards to emphasize pollution controls of rare earths. The standards, which will come into effect on Oct 1, might affect at least 60 percent of companies in the industry and raise the environmental costs for those companies. The Ministry of Commerce last December announced this year's first export quotas - 14,446 tons - marking a decrease of more than 10 percent year-on-year. China reduced export quotas by 30 percent to 40 percent last year, according to the ministry. Minister of Commerce Chen Deming said environmental concerns have led to the reduction of export quotas, and other countries with rare-earth reserves can develop their own stockpiles. He also said China is willing to jointly develop substitutes with Japan and other countries to better conserve rare-earth minerals.

A China-Hungary-Europe gala evening, in which both Chinese and Hungarian artists perform, has created a cultural bridge between China and Europe. China’s Yunnan Province Arts Group and the Hungarian Havasi symphonic group co-performe a symphony named Cultural Bridge at a China-Hungary-Europe gala held in Budapest, Hungary. 

Hainan's governor said domestic tourists to the island province were expected to be allowed to shop at duty-free stores from May 1, as part of the central government's efforts to transform it into the "Hawaii of the East" by 2020. Governor Luo Baoming said yesterday at the annual session of National People's Congress that the move would attract mainland tourists who wanted to buy imported goods. A cap would be placed, however - 5,000 yuan (HK$5,925) of duty-free goods per shopping trip - and each person would be limited to two such trips per year. If Hainan implements such a policy, it will be the first province to do so. "It's going to be a new strategy that will boost tourism in Hainan," Luo said. He added, though, that it would be difficult to predict the effects. Luo said the strategy wouldn't threaten Hong Kong's status as a shopping mecca. "As it's only a trial, it should take a certain amount of time to see the effects: how much the sales will be and how much tax the country will have to waive," he said. Luo said the government was still designing software to make sure the limits were not exceeded and would reveal details of the scheme in the middle of next month. Other details still to be worked out included the types of products eligible for duty-free purchase, what the tax rate would be for purchases above 5,000 yuan and what transportation tourists would have to use to be eligible for duty-free shopping, domestic media reported yesterday. Hainan received more than 23 million tourists who stayed at least one night in the first 11 months of last year, up 11.6 per cent year-on-year, according to the local statistics bureau. Mainlanders made up 96 per cent of the island's tourists. Tourism revenue surged 20.7 per cent year-on-year to 22.9 billion yuan.There were no plans to raise the cap on the amount tourists could spend duty-free, provincial Communist Party secretary Wei Liucheng said, until the trial was complete. He said he hoped the cap would eventually be increased. The central government had introduced an 11 per cent tax rebate for overseas tourists to the island from January 1, but Wei said the policy had only a lukewarm response. Under the policy, overseas tourists and visitors from Taiwan, Hong Kong and Macau who stay no longer than 90 days are entitled to the rebate if they spend at least 800 yuan in designated malls in one day. But the number of overseas tourists was too small and publicity was weak, Wei said. More than 500,000 foreigners visited Hainan last year, Wei said, but "only a little more than 100,000 yuan was rebated in the first two months of this year, mostly to Russians."

Airbus senior vice-president Christopher Emerson says 8,560 new aircraft will be delivered from all manufacturers in the Asia-Pacific region over the next 20 years. China will be key to growth for Airbus in the Asia-Pacific region as a boom in mainland air travel and rising sales of its large business aircraft fuelled prospects for the European aircraft manufacturer, said an Airbus executive yesterday. Christopher Emerson, senior vice-president and head of product strategy and market forecasts at Airbus, said the firm "was on target to ramp up" production of its A319 and A320 passenger aircraft in Tianjin.  Airbus China spokesman Robin Tao said 36 aircraft would be delivered from the Tianjin assembly plant this year, up from 26 in 2010 and just 11 when the facility opened in 2009. Tao added the aircraft made in Tianjin would be delivered to a raft of mainland carriers including Shenzhen Airlines, China Eastern Airlines (SEHK: 0670) and China Southern Airlines. Emerson gave no estimates for future Airbus sales in China, but said a total of 8,560 new passenger and freighter aircraft, worth US$1.2 trillion, would be delivered from all manufacturers in the Asia-Pacific region over the next 20 years. This comprised 5,200 single-aisle airplanes similar to the A320 or Boeing 737, plus 2,580 twin-aisle aircraft, such as the Airbus A330 and 780 and very large aircraft such as the A380. Emerson said the Airbus forecasts took into account the impact of high-speed rail development on aviation as well as indigenously made aircraft such as the Comac C919. Airbus spokesman Sean Lee confirmed China Southern would take delivery of the first of five A380s on order "in the second half of this year". Indicating the importance of China, the Airbus forecasts showed a strong increase in passenger travel to and from mainland cities compared with other Asian rivals. In volume terms, expressed as revenue passenger kilometres (RPK), there were just three mainland cities in 2009 of more than five million RPK. But this would rise to six cities by 2029. Similarly the number of cities with an RPK of between one and five billion would climb to 21, up from nine in 2009. This growth would fuel expansion of the air fleets. Emerson said the Asia-Pacific region would account for 33 per cent of all passenger aircraft deliveries over the next 20 years, ahead of Europe and North America which would each account for 23 per cent of deliveries. By comparison, the Asia-Pacific accounted for 26 per cent of deliveries between 1990 and 2009, behind both Europe and North America. Air traffic in the Asia-Pacific was also set to grow by 5.8 per cent a year between 2010 and 2029, compared with a global annual increase of 4.8 per cent. Against this background, Airbus expanded its focus on the mainland business jet market after inking a deal with Taikoo (Xiamen) Aircraft Engineering for the firm to become an approved outfitter of executive jets such as the A318 Elite and the Airbus Corporate Jet. China is the fastest-growing market for business jets for Airbus, said Francois Chagelle, vice-president for executive and private aviation. The plane maker has orders for 20 corporate jets of which eight would be in operation by the end of this month and four were being equipped and outfitted.

Hong Kong*:  March 8 2011

Vice-President Xi Jinping , in a meeting yesterday with Hong Kong delegates to the National People's Congress, praised the city's achievements in economic development. Xi, the heir apparent to President Hu Jintao , also urged Hongkongers to grasp development opportunities offered by the 12th national five-year plan, which for the first time includes a full chapter on Hong Kong and Macau, they said. "The Hong Kong government's work in improving people's livelihood and alleviating poverty is notable," Maria Tam Wai-chu, deputy convenor of the Hong Kong delegation to the NPC, quoted Xi as saying. Xi cited the construction of major infrastructure, the issue of renminbi bonds and enhanced co-operation with other cities as some of the Hong Kong government's achievements. "People from all walks of life in Hong Kong should gauge consensus and grasp opportunities to contribute to Hong Kong's participation in the national economy," Tam quoted Xi as saying. The Hong Kong government had repeatedly put forward to the central government proposals on the 12th national five-plan, and the central government had given these full consideration, Xi said. The plan, unveiled on Saturday, confirmed Beijing's support for Hong Kong to take a leading role in the financial market of the Pearl River Delta's financial market and to boost its status as an international financial, trade and shipping hub. On politics, Xi mentioned the passage of the constitutional reform proposal last year, saying it was "the results of everyone's efforts". Wong Kwok-kin, another Hong Kong deputy to the NPC, quoted Xi as appealing to Hongkongers to "consider the holistic situation" of society. Wong, who is also a Legislative Councillor and a vice-president of the Federation of Trade Unions, said Xi's call was in response to recent tensions between the Hong Kong's administration and legislature. Rita Fan Hsu Lai-tai, a Hong Kong representative on the NPC standing committee, told Xi Hong Kong should develop more renminbi financial products, and consider building a third runway at its airport. Another Hong Kong delegate, Peter Wong Man-kong, suggested the central government study the possibility of introducing a political system with two institutes to assess and monitor the conduct of legislators and government officials.

Yuan trading important for HK, says SFC chief - The Securities and Futures Commission will ensure risk-management systems are in place when the stock exchange introduces yuan-denominated shares, according to chairman Eddy Fong Ching. Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) last week announced its plan to introduce a "yuan trading support facility" in the second half of this year to ensure investors have enough currency to trade yuan-denominated stocks in the city. The commission did not say whether it will approve the facility, until the exchange provides more information about it, but Fong said that, overall, the SFC would need to ensure that risk management was a part of the plan to introduce yuan share trading. "Yuan-denominated shares will be an important development for the Hong Kong market," Fong told the South China Morning Post (SEHK: 0583). HKEx plans to introduce yuan share trading this year to bolster the city's role as an offshore yuan trading centre. HKEx chief executive Charles Li Xiaojia said many companies had been asking about yuan initial public offerings, though none had applied for a listing. Banking sources said Cheung Kong (Holdings) (SEHK: 0001) planned to spin off its investment properties arm in a yuan-denominated real estate investment trust, hoping to raise more than 10 billion yuan (HK$11.84 billion) in the first quarter. "If stocks are trading in the Hong Kong dollar or US dollar, we do not need to worry as investors and brokers can easily gain access to these currencies," Fong said. But the yuan is not yet fully convertible, and individuals can exchange only up to 20,000 yuan a day. Not all commercial banks and brokers are doing yuan business. The SFC said only 60 per cent of brokerage houses had yuan accounts as of last Thursday. "At present, investors cannot issue any yuan chequebooks and only a few banks provide yuan bank orders. This would make settlement of yuan shares more difficult than for Hong Kong dollar or US dollar denominated shares," Fong said. Brokers would find it hard to determine if investors had yuan on hand for settlement, he added. If investors can provide brokers only with Hong Kong dollars, that transfers the exchange risk to the brokers, who then had to convert the currency into yuan for the clients. The government collects stamp duty in Hong Kong dollars and the SFC collects the transaction levy in Hong Kong dollars. Investors and brokers would need to pay those levies in Hong Kong dollars even when they trade yuan shares. Fong said: "As we can see, there are a lot of technical issues and risk-management issues involved in yuan share trading. We need to make sure the banks, brokers and investors understand all these, and to make sure yuan shares settlement can be done smoothly." Fong wants the commission to liaise more closely with Russia, Italy, Brazil and other Latin America and European countries. "As the exchange has attracted more companies from international markets to list here, we have to make sure we have a close dialogue with regulators in these markets, to ensure sufficient investor protection in these cross-border listings," he said.

Jewellers and luxury goods stores are able to pay prohibitively high rents because of the buying power of mainland visitors. Hong Kong's retail market is undergoing a dramatic facelift because of the growing might of mainland shoppers. The currency-driven transformation of the sector is forcing an exodus of noodle-bars and mass retailers selling clothes and shoes from the prime shopping precincts of Tsim Sha Tsui, Causeway Bay and Central, as traditional tenants targeting local shoppers can no longer afford soaring rents. Replacing them are shops that sell jewellery and expensive watches targeted at big-spending visitors from the mainland. Typical of the change, is the expansion by Luk Fook Jewellery, which generates some 60 per cent of its sales from mainland shoppers. The chain has opened three outlets in Park Lane's Shopper's Boulevard beside Kowloon Park in Nathan Road, Tsim Sha Tsui. Rival Chow Tai Fook has two stores next to Luk Fook, and Chow Sang Sang and TSL Jewellery are also now located next to each other in the 300-metre shopping lane. "The change is being driven by the expensive taste of mainlanders. It is creating a unique shopping district and there is nothing else in the world like it," said Maureen Fung Sau-yim, general manager of Sun Hung Kai Properties (SEHK: 0016)' leasing department. Jewellers were engaged in an intense fight with one another for a slice of the tourist dollar, Fung said. "Jewellery stores are jam-packed with mainland tourists. It is not uncommon to see long queues forming at the cashier counters and even insufficient stock for sale. To avoid losing customers, jewellers need more stores to generate higher sales and provide better service. "If you don't take up the space vacated by others at higher rentals, your rival will," she said. Ten years ago, said Simon Lo Wing-fai, director of research and advisory at property consultancy Colliers International (Hong Kong), there was a balanced expansion in the market of retailers selling jewellery, electronic products and health foods. "But the market changed from late-2005 when we began witnessing retailers selling jewellery and watches growing faster than the other two sectors," he said. Analysts attribute the change to the influx of rich mainlanders. The number of visitors to Hong Kong rose from 15.54 million in 2003 to a record 36 million last year, boosted by the launch by the central government eight years ago of the Individual Visit Scheme that freed mainlanders to travel to Hong Kong individually instead of in groups. Mainland visitors accounted for 63 per cent or 22.5 million of the total arrivals last year, compared to about 7.5 million in 2003, the Tourism Board said. Given the limited prime retail space Lo said it was no surprise that landlords of high-street shops were doubling rents when leases fell due. But while that was forcing down-market tenants to vacate the premises, the steep rise in rents did not deter jewellery and watch retailers from expanding, and saw Hong Kong ranked as the third most expensive city in the world in which to rent street-level shops last year. "Jewellers can afford to pay higher rents than other retailers since they are capable of generating sales of millions of dollars a day. Some of their watches cost hundreds of thousands of dollars each and stores selling televisions or mobile phones cannot match that selling power," said Lo. More than 85 per cent of customers at Emperor Watch & Jewellery's flagship store in Canton Road, Tsim Sha Tsui, for instance, are from the mainland, and property agents said the jewellery retailer paid a monthly rental of HK$1,500 per sq ft, or HK$3 million for the 1,200 sq ft shop. In 2009, Emperor International Holdings paid HK$849 million or HK$695,544 per sq ft for the high-street shop and leased the unit to its sister company, Emperor Watch & Jewellery. The shop was formerly leased to the gift shop, Kalm's. Hard Rock Cafe closed its outlet in Canton Road in late 2008 and the space is now leased to international fashion chain H&M. Joe Lin, senior director of retail services at property consultancy CB Richard Ellis, said Canton Road was now dominated by luxury retailers and rents in the area had risen nearly sevenfold to more than HK$1,000 per sq ft in the past five or six years. Lin forecast that retail rents in prime districts would increase by between 10 and 20 per cent this year.

Carved teak pews made in Zhejiang fill the Holy Trinity Church in Shanghai; the baptismal area has a carved cherub with Chinese features. Empire of the Sun, J.G. Ballard's atmospheric novel about his coming of age in China, opens on the eve of the Pearl Harbour attack. Shanghai Cathedral choir boys are being marched to the crypt to watch newsreels of Royal Air Force fighter planes falling in flames in the English countryside. The cathedral's actual name was Holy Trinity, and Ballard, the son of expatriate Britons, attended the cathedral's prestigious boys school. Built in a Victorian Gothic style in the 1860s, Holy Trinity served for nearly eight decades as the spiritual home for colonialists who flocked to Shanghai after Britain's victory in the Opium wars opened the port to trade. With its stout pews, stained-glass windows and 2,500-pipe organ, the red-brick Anglican church provided a cloistered haven in an exotic, untamed place. Along with the men-only Shanghai Club and racehorse owners' Shanghai Race Club, "the cathedral was a central feature of British life in a faraway land", says Peter Hibbard, a British expatriate and president of the Royal Asiatic Society China in Shanghai. Here in the Red Church, as many called it, babies were baptised, couples were married and parishioners were laid to rest in a homey refuge complete with manicured lawn, gargoyles and spire.

The central government supports Hong Kong in building into an offshore RMB center, said a Chinese senior official Sunday. The central government also supports Hong Kong in strengthening its competitiveness and consolidating its position as an international center of finance, trading and shipping, Xu Xianping, vice minister of the National Development and Reform Commission, said at a press conference. Becoming an offshore RMB center matters a lot to Hong Kong's status as an global finance center, said Li Lihui, president of the Bank of China, on the sidelines of the on-going parliamentary session. Since Hong Kong is the springboard for many mainland companies to go global and overseas businesses to the Chinese mainland, Hong Kong's possible status as the RMB center will benefit handsomely both Hong Kong and companies at home and abroad, he said.

Now approaching his final season as chief conductor of the Hong Kong Philharmonic, Edo de Waart wants to leave us something to remember him by - ''This is deja vu, almost like looking through my family albums," murmurs Edo de Waart, flipping through vinyl record sleeves bearing his name and those of numerous orchestras he has worked with. With some 130 albums under his belt, the Dutch maestro is one of the few conductors still working whose career stretches back to the golden days of vinyl: the 1960s. The chief conductor will leave the Hong Kong Philharmonic Orchestra next year, in part because of his frustration with the limited ambitions of the city's leaders, and with him will go decades of experience, much of it recorded for all to hear. His latest release was a Wagner album, recorded in the Netherlands in 2009, giving him a discography that spans 45 years. "It all began by luck," says de Waart, who will turn 70 in June and is also the Hong Kong Phil's artistic director. "It was 1965 and I had just returned from New York after a year working as assistant to Leonard Bernstein. One day, two musicians of the Netherlands Wind Ensemble came to me and said its conductor, who was the principal bassoon of [the Royal] Concertgebouw Orchestra, in Amsterdam, had been sick and the group was falling apart. So I accepted their invitation to conduct. The three of us hand-picked 15 woodwind players. After intensive rehearsals throughout the summer, we performed six months later works by Gounod and Dvorak at the small hall in the Concertgebouw. It was a full house and we got reviews you only dream of. "At the concert was the producer of Philips Records, who recorded all of [conductor] Bernard Haitink's performances with the Concertgebouw [Orchestra]. He ... invited me to record as soon as possible all of Mozart's chamber works for wind instruments. That's how I got a contract with Philips to do other things." The "other things" began with his first job as a professional orchestra chief, for the Rotterdam Philharmonic, also in the Netherlands. "I went to the city government and met with the officials there. I told them we had a chance to make recordings for Philips with the Rotterdam Philharmonic, which was a first", because recording contracts usually went to top orchestras, such as the Concertgebouw. De Waart asked the city government for funding, to wrest some of the promotional control from Philips. "They agreed and we worked like buffaloes for those recordings, but it was great fun working with the players there, and they say [he points at a record cover showing red-nosed Russian composer Modest Mussorgsky, who suffered from alcoholism], 'This is Edo after a wild night!'".

 China*:  March 8 2011

PHASE 1 of Shanghai Disneyland will cost a total of 24.5 billion yuan (US$3.73 billion) - Shanghai Party Secretary Yu Zhengsheng (right) and Mayor Han Zheng answer questions after a panel discussion of the Shanghai delegation to the annual meeting of the National People's Congress in Beijing yesterday. "I have read some media reports about the Disneyland investment, but they were incorrect," said Han, who was attending the ongoing annual parliamentary session in Beijing. "I thereby clarify the figure seriously. The approved investment for the first phase of the Disneyland project is 24.5 billion yuan," he said. The long-awaited theme park project in Shanghai was launched in November last year, when the state-owned Shanghai Shendi Group Co Ltd signed a deal with the Walt Disney Co. It will be the first Disneyland theme park on the Chinese mainland and sixth in the world, and the United States entertainment giant's third theme park in Asia after Tokyo and Hong Kong. The Shanghai International Tourism Resort Administrative Committee will manage the project. The first phase of the amusement park in the Pudong New Area is expected to attract 7.3 million visitors a year when it opens in 2015. Shanghai Disneyland will feature three theme parks - "Magic Kingdom," which has already been announced, and possibly "Epcot" and "Animal Kingdom." A draft plan unveiled by the Disney company showed water to be a major feature of the park with numerous lakes and creeks and a castle and a mountain. Tom Staggs, chairman of Walt Disney Parks and Resorts, has described the park as the "most exciting opportunity since Walt first bought land in Florida in 1964." The Shanghai government regards the Disney Park project as an important step in its bid to build the city into a world-class tourist destination in the next five years. The city government recently announced plans to build a dedicated Disneyland Metro line. The subway service will have three stops including a terminal station called the Disneyland Stop. The first phase of the park will cover about 1.16 square kilometers while service facilities such as parking lots and dining areas will occupy up to 2.74 square kilometers. Construction could begin as early as May while work on roads surrounding the site has been ongoing for months. About 2,000 households and 297 enterprises have been relocated from the site to make way for the park. 

Beijing will give Taiwanese businesses operating on the mainland more sweeteners in the next five years. The 12th five-year plan, a draft of which was released yesterday, says a fair, transparent and convenient economic co-operation mechanism - tailor-made for cross-strait development - will be gradually built up after the signing of a landmark trade pact, the Economic Co-operation Framework Agreement, by the two sides last year. The draft says Beijing will "actively support the transformation and upgrading of Taiwanese enterprises on the mainland", and strengthen cross-strait co-operation in intellectual property rights protection, trade promotion, trade facilitation and other areas. In order to encourage two-way investment and foster emerging industries, the finance sector and other modern service industries on both sides of the strait, Beijing will support the establishment of a cross-strait currency settlement system. With more yuan flowing into Taiwan as cross-strait business ties multiply, the currency settlement mechanism was first proposed by Taipei in 2009. Its purpose will be to procure yuan notes more cheaply for Taiwanese retail banking customers and reduce the number of fake notes in circulation on the island. The draft plan says the central government will continue to support the Western Taiwan Straits Economic Zone, in Fujian province , to play a leading role in exchanges and co-operation between the two sides. "We will enhance mutual political trust and consolidate the political foundation for peaceful development of cross-strait relations," Premier Wen Jiabao told deputies yesterday at the opening of the annual session of the National People's Congress. "We will adhere to the major principles and policies for developing relations between the two sides of the Taiwan Strait and promoting the peaceful reunification of our motherland." Even so, there was less mention of cross-strait relations in Wen's speech this year, compared to the past. Liu Guoshen , the head of Xiamen University's Taiwan Research Institute, said that was because the Taiwan issue was not viewed as a "big problem" by the Beijing leadership. "Compared with past years, current cross-strait relations are more harmonious," he said. Taipei-based political commentator Nan Fangshuo said such harmony should be attributed to Taiwanese President Ma Ying-jeou's Beijing-friendly polices.

1.2 kilometres Dragon-shaped mall in the desert near Dubai a symbol of China's growing strength in Gulf - A behemoth dragon-shaped shopping mall in the desert near Dubai has become a symbol of the deepening links between East Asia and the Middle East. Dragon Mart - 3,950 wholesale and retail shops stretching 1.2 kilometres in a sinuous strip alongside a desert highway - is China's trade outpost in the Gulf, selling everything from marble tiles and artificial hair extensions to dried fish and Mickey Mouse telephones. "I come here with my wife and four children every second week, it's much cheaper and it is a great shopping experience," Souhail al-Zaabi, a policeman from Ras al-Khaimah, said. "Today, we are buying a chandelier for our majlis," he added, referring to the traditional Arab sitting room, "not too big, but like crystals it must look". Farther along the mall, Chinese massage machines were selling briskly. "I have already bought three tools," said Ali Abdulkader, a 65-year-old customer, also from Ras al-Khaimah, shopping at a Body Care health and fitness outlet. "They are good for my body. I have a massage belt, a massage hammer and a massage chair installed in my car. It's cheap stuff, cheap." The Elite Sauna Belt, to reduce fat and decrease joint stiffness, costs 50 dirhams (HK$106), including a remote control. A Magic Hand massage hammer, usually priced at 150 dirhams, was on sale for 45 dirhams. Similar European models cost four times as much. Trolleys loaded with children's bicycles and fluorescent lights were parked at the cashier' desk of the Suntour restaurant, where the smell of stir-fried vegetables and black bean sauce filled the air. If it were not for the veiled women and men in Arab garb, this could be a corridor in any of China's factory cities, crammed with merchandise and the cacophony of electric toys. Inaugurated in 2004, Dragon Mart, a retail property division of the Dubai government's investment vehicle Dubai World, is one of the largest trading centres for Chinese products in the world outside China. According to the Federal Customs Authority of the United Arab Emirates, non-oil trade between the Emirates and China reached around 42.6 billion dirhams in the first 10 months of 2010, up 3.4 per cent from the same period in 2009. There are almost 200,000 Chinese residents and more than 3,000 companies in the Emirates, according to the Chinese consulate. That compares with an estimated total population in the Emirates of five million. "The Chinese economy is resource hungry, and there is a need to access Gulf markets," said Mark McFarland, emerging markets economist at Emirates NBD in Dubai, who previously worked in Hong Kong. "The commerce with China is a symbol of its rise as an economic power. "China has been at the forefront of free-trade agreements with the UAE, which is of great benefit to both countries," he said. "Dubai is becoming a regional hub for a lot of Chinese operations that are setting up in the region, but also develop businesses in Africa." The dragon is a Chinese symbol of power and strength, and the mall aptly symbolises the growing strength of China's presence in the Emirates, where a growing number of Chinese businesses have set up operations and store signs in Chinese intermingle with those in Arabic. Some Emiratis have chosen to send their children to a Chinese school, believing that knowledge of both Arabic and Chinese will be a key to success in the coming decades. Hamid Kazim, an Emirati business consultant, has sent four of his five children to a Chinese school in Dubai, where they sit on bright green and yellow stools - most likely bought at Dragon Mart - alongside Chinese, Malay and Brazilian children. "I am an admirer of China. It's quite important for children to be skilled in different areas," Kazim said. Chinese residents, meanwhile, are picking up Arabic. "The Chinese ambassador and the Chinese consul both speak very good Arabic," Hamdan Mohamed, president of the Arab Business Club in Dubai, said. "We have a big Chinese community in the UAE ... To enter this community you have to speak their language." A natural global hub for long-distance flights between Asia, Europe and Africa, "Dubai is a great location which reflects this," McFarland of Emirates NBD said. "A lot of the companies here are construction and manufacturing-oriented. You can envision a big increase in trade between the UAE and China."

China's richest man yesterday rejected criticism that the rich have done little to help the country's millions of poor and said hard work was the key to lifting themselves out of poverty. China has struggled to spread its wealth evenly among its 1.3 billion-strong population and the widening wealth gap is at the top of the agenda of the country's annual parliamentary session, which opened Saturday. "The most important thing we can do is teach them [poor people] how to help themselves and help them get rich through hard work," Zong Qinghou , the founder of the country's biggest soft drinks maker, Wahaha, said. Zong, who leapt 11 places to top the Hurun Rich List in 2010 with a fortune of US$12 billion, is one of nearly 3,000 delegates to the National People's Congress meeting in Beijing. "In the 30 years since reform and opening up, people's living standards have increased greatly, but our goal is to make them even better," he said. "Over the next five years "we will attach even more importance to [income] distribution and further reduce the wealth gap." Wahaha, which is based in the eastern city of Hangzhou , gave its workers a pay rise every year and had built factories in poor regions to "create job opportunities and help local economic development", Zong said. Zong praised government efforts to improve the social safety net and boost wages, which had allowed people "to dare to spend money". In his speech to the rubber-stamp parliament on Saturday, Premier Wen Jiabao said addressing the "large income gap" dividing rich and poor was a key priority for the next five years. Zong rejected criticism that China's rich had done little to help the millions who still live in poverty despite rapid economic growth over the past three decades. "Chinese companies are more philanthropic than foreign companies," he said.

The mainland's four largest banks expect to issue loans totalling nearly three trillion yuan (HK$3.55 trillion) this year - almost unchanged from last year - according to bankers with knowledge of the matter. The combined loan target of the big four lenders - Industrial and Commercial Bank of China (SEHK: 1398), Bank of China, China Construction Bank (SEHK: 0939, announcements, news) , and Agricultural Bank of China - suggests the banking sector aims to maintain its loan approval targets despite Beijing's efforts to contain inflation. The big four combined extended 3.1 trillion yuan in loans last year. Normally, loans by the top four lenders account for 35 to 40 per cent of the national total and their ambitious loan targets signal credit expansion of more than 7.5 trillion yuan nationwide in 2011. "New loans of 7.5 trillion yuan this year appear to be a big number since the central government is determined to tighten monetary policies," said Orient Securities' analyst Jin Lin. "The sticking point is whether the banks would have enough funds to support that loan growth." Mainland banks extended a record 9.6 trillion yuan loans in 2009 followed by 7.95 trillion yuan last year. In 2009, credit issued by the banks was nearly double Beijing's target of five trillion yuan while last year's number also exceeded the government's preferred quota of 7.5 trillion yuan. A full-year loan quota is seen as a key economic tool that Beijing uses to control fixed-asset investment and consumer prices. "The central bank initially planned to set a full-year quota of six trillion yuan," said a banker who was informed about the policy plan. "But the banking industry actively maintained its faster pace of loan growth." Officials in Beijing said recently that they would not unveil a clear-cut full-year loan quota this year, letting banks decide themselves. But they said the central bank would still play a key role in controlling loan growth by adjusting the reserve requirement ratio - the percentage of cash that banks must deposit at the central bank to hedge against risks. A higher reserve ratio could hamper banks from extending loans freely. Beijing has raised the reserve requirement ratio five times since November to ease inflationary pressure and curb asset bubbles. A clutch of mid-size banks are now looking to tap the stock markets for fresh funds, a move to replenish their capital and support their future loan growth. Among them, Bank of Shanghai and Guangdong Development Bank are seeking to float initial public offerings to raise tens of billions of yuan. China Minsheng Banking Corp is expected to raise 27 billion yuan in a refinancing that involves share placement on the Hong Kong stock exchange and the issuance of convertible bonds at the Shanghai bourse. Mainland banks issued total credit of 1.04 trillion yuan in January, the central bank said. This was about 100 billion yuan more than the central bank expected. The loan figure for last month has yet to be officially announced. The official China Securities Journal said the banks extended about 600 billion yuan in February.

China's export limits on rare earth conform with the rules of the World Trade Organization (WTO), said China's former WTO representative Sunday. China had imposed regulating measures on the mining, manufacturing, processing and exporting of rare earth, limiting both exports and supply to domestic companies, Sun told Xinhua. "According to WTO rules, a country's regulation on a certain product to avoid resource exhaustion and environment pollution should be applied to both exporters and domestic users, and supply to both foreign and domestic markets should be cut," said Sun. As the world's largest rare earth producer and exporter, China provides more than 90 percent of global rare earth demand, though its reserves account for only one-third of the world's total. Sun called for the diversification of the supply of rare earth and expressed hopes that rare earth importers seek the resource from other countries. He said China was willing to conduct technological cooperation with other rare earth producing countries.

Tourists stroll through cherry trees in blossom in the Yuantong Park in Kunming, capital of southwest China's Yunnan Province, March 6, 2011. Thousands of cherry trees have been in blossom here. 

Chinese Vice President Xi Jinping (1st, L), also a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee shakes hands with delegates of Macao Special Administrative Region (SAR) after the signing ceremony of a framework agreement on cooperation between China's Guangdong Province and Macao SAR, in Beijing, capital of China, March 6, 2011. The agreement, consisting of eight chapters and 38 clauses, sets the orientations, principles and targets regarding a wide range of issues in economic, social, welfare and cultural fields. Guangdong Governor Huang Huahua and Macao SAR Chief Executive Chui Sai On, signed the document on behalf of their respective governments.

China will seek lower economic growth in the coming five years as the constant pursuit of rapid expansion in past years has brought about unbalanced economic and social development.

China's retailers will offer refund to recent buyers of iPad 1 as price dropped with the debut of iPad 2. Apple released the upgraded version of the tablet on March 3 and announced to lower the price tags of the first generation iPad 1 by up to 27.6 percent. Buyers of iPad 1 within the last two weeks are eligible for a price difference compensation, according to Apple. Chinese customers who bought the product via Apple China online or its chain stores will also be compensated, according to a statement on Apple's website. Chinese electronics retailers such as Suning and Gome responded quickly to the price cut, promising to pay back their customers with a refund. Suning, China's biggest electronics retailer by market value, said iPad 1 buyers who bought the product from Feb 17 to March 2 can get the refund with the receipt starting Saturday. Gome, the second largest electronics retailer in China, also announced to pay back their customers who bought the product from Feb 18 to March 3 from their stores. Customers could apply for the refund with the receipt starting Sunday.

Chinese Estates Holdings (SEHK: 0127), a property investment and development company, is expanding its portfolio in London with plans to buy from Goldman Sachs Group two commercial buildings that form part of the bank's London headquarters. A company spokesman said the buildings were Peterborough Court and Daniel House in Fleet Street. The sites are opposite River Court, another part of the headquarters, bought by Chinese Estates in January for £280 million (HK$3.55 billion). The selling price of the properties is more than £300 million, according to Jones Lang LaSalle, the property agent arranging the sale. Goldman's London offices will remain the company's European headquarters until 2026, with both buildings providing a total floor area of 370,526 square feet. The two properties were offered for sale since last month. There had been expectations in the market that they would attract interest from overseas investors including Malaysia's Employees Provident Fund, which has bought the home of law firm Freshfields Bruckhaus Deringer in Whitefriars, across the road. DTZ on Thursday released the findings of a survey into occupancy costs which revealed a 21 per cent rise in London's City district and a 9 per cent increase in the West End. The substantial rises were because of a combination of rental growth from falling supply of quality space and the effect of a change in property taxes. Total occupancy cost is defined as the average total cost of leasing prime net usable space. It includes rents and outgoings, such as maintenance costs and property taxes, if these areas are normally payable by the occupier. It excludes leasing incentives, such as rent-free periods.

Hong Kong*:  March 7 2011

The authority responsible for the West Kowloon arts hub yesterday admitted that the budget of HK$21.6 billion would not be enough to cover the costs if it is built in one go. The West Kowloon Cultural District Authority said it picked Norman Foster's design even though it knew it was not the cheapest of the three options. But it believed it could stay within budget. A day after announcing the selection of Foster's design for the cultural hub, Ronald Arculli, the authority's development committee chairman, said on a radio program the budget of HK$21.6 billion would not be enough if they built everything now. But Arculli said if the construction work was broken into stages over the years, it would allow the authority to generate returns from investments and keep costs under control. He said the authority would not ask for more funding in the near future. "Construction costs are on the rise. Industry veterans have reminded us that we need to be extra careful about when to tender the project," he said. Arculli remained tight-lipped about the projected costs to execute Foster's design. It will take nine months to prepare a development plan from the design that will be submitted to the Town Planning Board for consideration this year. Highlights from the two other contenders - Dutch architect Rem Koolhaas and Rocco Yim Sen-kee - would be incorporated into Foster's master plan, Arculli said. Some buildings would be ready by the end of 2015. However, the authority has yet to decide on how to use the vacant land to promote the arts hub until then. Gregory Wong Chak-yan, a former president of the Hong Kong Institute of Engineers, said he expected costs would be higher by the time the authority began the tender process in one or two years. Other projects such as the Guangzhou-Shenzhen-Hong Kong express rail link and the cruise terminal in Kai Tak would push up labour costs. Wong deemed it hard to estimate construction costs -dependent on the property market and changes in the macro economy - in five years time. But with some venues finished by then, the authority would be able to make money from ticketing. It would also have assets to borrow loans if necessary, he said. It would be a challenge for the authority to find a balance between profits and pricing of tickets, he said. To minimise costs, the authority should invite art veterans - the expected users of the facilities - to look into the designs of individual venues to make sure they were practical, the executive director of art group Zuni Icosahedron, Mathias Woo, said. "It makes no sense if the venues look pretty but cost too much to maintain," he said. While the authority had kick-started hardware development of the hub, it should begin collaboration with art groups to nurture local talents and to develop programmes under its own brand as soon as possible, Connie Lam Suk-yee, the executive director of the Hong Kong Arts Centre, said. According to Ada Wong Ying-kay, a member of the authority's consultative committee, the authority had already started looking into programming issues.

Will Executive Council convenor Leung Chun-ying be willing to play second fiddle if his rival Henry Tang Ying-yen, the chief secretary, is picked to be Hong Kong's chief executive next year, as some have speculated recently? No, in not so many words, the would-be candidate for the city's top job said yesterday, and in the process dropped the biggest hint yet that he would seek nominations to contest the election for chief executive. "This suggestion is totally irrelevant to me," Leung said. The speculation arose after an opinion poll found Leung, a Beijing loyalist, was the least popular of the prospective candidates. The opinion poll, conducted by the Hong Kong Transition Project in November last year, found that Rita Fan Hsu Lai-tai, a deputy to the National People's Congress Standing Committee, was the people's top choice, with 60 per cent of the 807 respondents saying they would support her. Leung was backed by only 37 per cent of interviewees. Tang had 53 per cent support and Civic Party leader Alan Leong Kah-kit 45 per cent. Commenting on the findings, Leung said: "I will continue to make efforts." He did not say what those efforts would be, nor whether this meant he was planning to run for chief executive next year. Asked whether he had conducted similar surveys, he said: "Can I not answer this question?" Leung was speaking in Beijing, where he is attending the annual meeting of the Chinese People's Political Consultative Conference, the Communist Party's top advisory body. He is a member of its standing committee.

Hong Kong lawyers may be allowed to mediate in disputes between Hong Kong and mainland companies under plans for Qianhai, a strip of land near the border that Shenzhen aims to use as an economic test lab. Although details are sketchy, a draft law submitted to Shenzhen's legislature could see some of Hong Kong's legal procedures adopted in the 15-square-kilometre zone in Shekou . The idea includes allowing permanent Hong Kong residents to serve as adjudicators - the closest thing to a jury under the mainland's legal system - in legal proceedings involving Hong Kong companies. This is one of a range of bold suggestions in the draft aimed at helping Qianhai become a "Hong Kong-Shenzhen service industries co-operation zone". The draft, submitted to the standing committee of the Shenzhen People's Congress on February 24, is expected to be endorsed by the end of the year. Hong Kong Law Society president Huen Wong hopes Qianhai - the "special zone within the special economic zone" - can go further. The National Development and Reform Commission had previously suggested setting up a means by which companies operating in Qianhai could get legal advice from Hong Kong lawyers. Some Hong Kong lawyers had been looking for ways to apply common law principles in Qianhai, as Shenzhen authorities had pledged to use the zone as a testing ground for initiatives not tried elsewhere on the mainland. Wong said the Qianhai development blueprint reminded him of the concept for the Dubai International Financial Centre, which had its own civil and commercial laws modelled closely on common law principles. Qiu Mei, a Shenzhen deputy to the National People's Congress, says she will table to the NPC a proposal for a special court in Qianhai where "some of Hong Kong's laws and court procedures could be adopted". Wong said he had heard some mainland officials had reservations about applying common law there. The Law Society's council endorsed on Tuesday a list of services it wants to see Hong Kong lawyers provide in Qianhai. It will submit the list to the National Development and Reform Commission soon. "I think it's a legitimate expectation that the mainland authorities would allow greater flexibility for Hong Kong lawyers in Qianhai than in the rest of the country under the Closer Economic Partnership Arrangement," Wong said. The society's proposals included allowing Hong Kong law firms to forge full partnerships with mainland counterparts. Wong said the society also hoped Hong Kong lawyers would be allowed to provide mediation in Qianhai as an alternative to litigation for resolving disputes. The society's wish list included the establishment of a World Trade Organisation dispute-resolution centre in the pilot zone. Wong also wanted Qianhai to be a testing ground for two concepts that have been implemented in Britain but not in Hong Kong - the alternative business structure and legal disciplinary practices. The alternative business structure allows lawyers and non-lawyers to establish a firm offering a "one-stop shop" of integrated legal and other professional services such as insurance, real estate or banking. Legal disciplinary practices are law firms providing the type of services offered by solicitors and notaries, but up to 25 per cent of the staff can be non-lawyer partners. Guo Wanda , vice-president of the Shenzhen-based China Development Institute, said applying some Hong Kong law in Qianhai could help lure foreign and Hong Kong-capital firms to invest. But he said a full-scale application of Hong Kong law might not be realistic.

A model displays jewellery from the House of Baguettes from New York during the Hong Kong International Jewellery Show in Hong Kong March 4, 2011. More than 2,800 exhibitors from 46 countries and regions are taking part in the five-day-show beginning Friday, according to the organizers. Chairman of the Hong Kong Trade Development Council (HKTDC) Jewellery Advisory Committee and Fair Organising Committee of the show Lawrence Ma said in a press release that the global jewellery market was on the upswing, "driven, in good part, by the Chinese mainland and its growing appetite for jewellery. Last year jewellery sales on the mainland totalled some US$30 billion." 

 China*:  March 7 2011

For the first time, Beijing has incorporated a chapter on enhancing "social governance" in its five-year plan, a reflection of the government's growing anxiety over domestic discontent and fear of contagion from unrest in the Arab world. A Finance Ministry report released yesterday says the need to maintain stability has also boosted the budget for "public security" this year to more than 624 billion yuan (HK$738.5 billion), a 13.8 per cent jump from actual spending last year - and more than the military budget. Fighting crime and keeping public order make up a big chunk of public security spending, which also includes the cost of emergency responses to natural disasters, and food and production safety. The authorities' nervousness over social discontent is particularly evident during this year's annual meetings of the National People's Congress and the Chinese People's Political Consultative Conference. Hundreds of police are expected to deploy in major cities today, for the third Sunday in a row, after calls for gatherings following the "jasmine revolutions" in North Africa. Hundreds of activists are either in detention or have been warned not to go to the gatherings. In his annual work report yesterday, Premier Wen Jiabao said the government would address people's discontent and "effectively solve problems that cause great resentment among the masses". He named inflation, illegal land grabs, food safety and corruption as top concerns. Wen said the government would improve the petitioning system and the government's mediation of social conflicts. The five-year plan for the years to 2015 also says the government will adopt preventive measures to reduce social problems and improve emergency responses. It will strengthen the role of grass-roots organisations to better monitor floating populations such as rural migrants in cities, and strengthen the role of property management organisations and property owners' associations to improve services and surveillance of community affairs. The government plans to build more community service centres to provide social services, maintain social stability and handle petitions. The plan says the government will build emergency response teams of police, paramilitary and army personnel and "combat forces". Experts and volunteers will assist the teams. It will improve emergency relief inventories to prepare for natural disasters. The concept of "innovative social governance methods" was brought to the public's attention last month at a pre-NPC training conference for provincial and ministerial officials, when President Hu Jintao and Vice-President Xi Jinping stressed the need for new thinking on administration to maintain social order and harmony. The recognition of the positive role of social organisations prompted speculation that the government might relax controls on the setting up of non-governmental organisations, but NGO staff said it was too soon to tell and the focus would be on strengthening traditional party- or government-affiliated organisations.

Beijing will give Taiwanese businesses operating on the mainland more sweeteners in the next five years. The 12th five-year plan, a draft of which was released yesterday, says a fair, transparent and convenient economic co-operation mechanism - tailor-made for cross-strait development - will be gradually built up after the signing of a landmark trade pact, the Economic Co-operation Framework Agreement, by the two sides last year. The draft says Beijing will "actively support the transformation and upgrading of Taiwanese enterprises on the mainland", and strengthen cross-strait co-operation in intellectual property rights protection, trade promotion, trade facilitation and other areas. In order to encourage two-way investment and foster emerging industries, the finance sector and other modern service industries on both sides of the strait, Beijing will support the establishment of a cross-strait currency settlement system. With more yuan flowing into Taiwan as cross-strait business ties multiply, the currency settlement mechanism was first proposed by Taipei in 2009. Its purpose will be to procure yuan notes more cheaply for Taiwanese retail banking customers and reduce the number of fake notes in circulation on the island. The draft plan says the central government will continue to support the Western Taiwan Straits Economic Zone, in Fujian province , to play a leading role in exchanges and co-operation between the two sides. "We will enhance mutual political trust and consolidate the political foundation for peaceful development of cross-strait relations," Premier Wen Jiabao told deputies yesterday at the opening of the annual session of the National People's Congress. "We will adhere to the major principles and policies for developing relations between the two sides of the Taiwan Strait and promoting the peaceful reunification of our motherland." Even so, there was less mention of cross-strait relations in Wen's speech this year, compared to the past. Liu Guoshen , the head of Xiamen University's Taiwan Research Institute, said that was because the Taiwan issue was not viewed as a "big problem" by the Beijing leadership. "Compared with past years, current cross-strait relations are more harmonious," he said. Taipei-based political commentator Nan Fangshuo said such harmony should be attributed to Taiwanese President Ma Ying-jeou's Beijing-friendly polices.

HAINAN Province has pledged to expand its tax refund policy to domestic tourists from May in an enhanced effort to build the island in south China into an international tourism hub by 2020. Imported products will be the first batch of goods on the tax-free list to lure more Chinese to the tropical island, Luo Baoming, governor of Hainan, said on Thursday in Beijing. But officials are still working on details to decide who will be entitled to the benefit and how much a tourist can buy to prevent possible misuse such as smuggling, Luo added. The inclusion of Chinese travelers for the tax-free status is a follow-up on a similar policy in January, which covers foreign travelers only when they buy goods from the 21 designated categories that add up to more than 800 yuan (US$122) on the island. However, feedback from overseas tourists was not very encouraging. Customs authorities in Hainan have received a total of 129 tax-rebate applications, which amounted to a combined refund of 50,000 yuan, since January 1. Luo cited a decline in visiting volume of foreign tourists during the Chinese New Year as one of the reasons behind the lower-than-expected result, saying the policy was still in its trial stage. Among all foreign tourists who applied for the tax refund, 63 percent came from Russia. But the number of Russians traveling to Hainan is declining sharply, because a weekly flight from Russia to Sanya was canceled in late January and rising accommodation and transport costs began to impede overseas tourist arrivals, Xinhua news agency said. The inclusion of domestic travelers for tax rebate may change things as up to 97 percent travelers to Hainan are Chinese. In 2010, about 25.88 million people visited Hainan, up nearly 15 percent from a year ago. Revenue from the tourism industry grew 21.68 percent from 2009 to 25.77 billion yuan. The provincial government aims to sharply increase its tourism revenue to 124 billion yuan by 2020.

Hong Kong*:  March 6 2011

Secretary for Food and Health York Chow Yat-ngok said on Friday the Hospital Authority would consider increasing public hospital bills for mainland mothers giving birth in Hong Kong. He said this was to deal with crowded maternity wards and rising medical costs. “Currently, the public hospitals charge mainlanders HK$48,000, but this price was set in 2007,” he explained. Chow said that according to the latest figures, many public hospitals had been fully booked by mainland women up until August. There were more than 40,000 babies born last year in Hong Kong. About a quarter of them were born to mainland mothers, the statistics showed. Many mothers from China want to give birth in Hong Kong so their children can obtain permanent residency. Maternity services in the city’s public hospitals match world-class standards. Chow also said he was concerned about the manpower crisis at Tuen Mun hospital – where doctors are threatening industrial action. The doctors are disgruntled about their promotion prospects, long working hours and staff shortages. Chow said the Hospital Authority (HA) was examining ways to improve the situation. “The HA management has met with the frontline representatives and also doctors’ unions. There are two unions involved,” added the health secretary.

Foster design chosen for US$361 million Hong Kong's cultural hub - An artist's impression of the aerial view over the site of the West Kowloon Cultural District Concept as designerd by by Foster + Partners. Acclaimed British architect Norman Foster has won the right to design the new HK$2.8 billion West Kowloon cultural hub. Chief Secretary Henry Tang Ying-yen said on Friday the West Kowloon Cultural District Authority board has endorsed Foster + Partners’ “City Park” proposal. Others who submitted proposals were Dutch architect Rem Koolhaas and a local designer. Foster’s plan envisions transforming the 40-hectare reclaimed site for the cultural hub on Kowloon peninsula into a lush waterfront park that contains an opera house, concert halls, a museum and arts schools. His other designs include the Hong Kong international airport, the international terminal in Beijing and the HSBC (SEHK: 0005) building in Central.

People living on the Whampoa Garden housing estate have launched a campaign to save ferry services sailing out of Hung Hom, which will stop this month because of declining passenger numbers. The services to Central and Wan Chai are being axed because the Star Ferry Company's licences will expire on March 31 and no operators expressed interest in running the routes during two rounds of tendering. The Transport Department declined to launch a third round. On Monday, the management office at Whampoa Garden, an estate of 10,000 households, began a week of gathering signatures for a petition in support of maintaining the two services. Resident Siu Hong-hing, 55, said his whole family would support the campaign. "It takes only a few minutes to cross the harbour by ferry, but it takes a lot more time by bus. [The government] really has to come up with a way to continue the services," Siu said. He takes the ferry three or four times a week. He said the termination of the services would cause inconvenience. Yuen Chi-hang, 23, also said the closure would be inconvenient for Whampoa Garden residents. "Whampoa Garden is close to the pier, and the ferry services are cheaper and more stable than buses." A one-way ferry trip costs HK$6.30 for adults while a bus trip through the Cross-Harbour Tunnel is nearly HK$10. In response to a question from legislator Dr Priscilla Leung Mei-fun during a Legislative Council meeting on Wednesday, Secretary for Transport and Housing Eva Cheng rejected the idea of another round of tendering, saying there would not be enough time. "As no tender submissions were received in the second tender exercise even though the requirements for the service had been relaxed, the Transport Department believes that conducting a third exercise will serve little purpose," she said. Cheng said she understood residents' concerns but that it was "not easy to retain the two services since they have been making long-term losses". A Transport Department spokeswoman said it had nothing more to add to Cheng's comments. Whampoa West district councillor Lau Wai-wing said 2,000 to 3,000 people living in the area would still need the ferry services. He urged the government to retain the ferry routes as road traffic would be further burdened by work extending the MTR's Kwun Tong Line to Whampoa, which is set to begin this year. But not everyone wants to keep the ferry services. Hung Hom Bay district councillor Cheung Yan-hong said those living near Hung Hom train station or bus terminals would not be concerned. Star Ferry Company records show that the Hung Hom-Central route carries about 400 passengers between 8am and 9am on weekdays, and the Wan Chai route about 500. Of the 12 years that the company has operated the routes, it recorded losses in 10.

Hong Kong's Yu Hiu-tung returns the ball to Aisam ul-Haq Qureshi in the opening singles of the Davis Cup tie against Pakistan yesterday. Yu won the match in five sets.

Conglomerate Citic Pacific (SEHK: 0267) has put the investment setbacks of two years ago behind it, announcing 14 per cent growth in underlying profit to HK$5.3 billion last year. However, a management reshuffle is looming. Taking into account one-off gains and revaluation surplus of properties, net profit leapt 49.83 per cent to HK$8.91 billion, or HK$2.44 per share. The group's core business, special steel manufacturing in the Yangtze River Delta, generated a 49 per cent jump in profit to HK$2.1 billion driven by larger output and an 18 per cent increase in selling prices. Chairman Chang Zhenming said the group had "emerged from the difficulties faced two years ago" when his predecessor Larry Yung Chi-kin was forced to step down over a Securities and Futures Commission probe into his alleged involvement in an improper property deal on Hainan Island. The probe continues. To strengthen its corporate governance, five Citic Pacific directors will resign in May to be replaced by only two independent non-executive directors. The five comprise two executive directors, Li Shilin and Wang Ande, who have reached retirement age. The others are non-executive director Willie Chang, independent non-executive director Hansen Loh Chung-hon and independent non-executive director Norman Ho Hau-chong. Citic Pacific managing director Zhang Jijing said Gregory Curl, the president of Singapore's sovereign investment firm Temasek Holdings, and a former KPMG senior partner, Francis Siu Wai-keung, would be appointed independent non-executive directors. Looking ahead, Chang warned of headwinds in the mainland's specialty steel industry, which was plagued by growing capacity and downward pressure on prices. Challenges also arose from its magnetite iron ore mining project in Western Australia, a US$5.2 billion project which will employ 4,500 workers and produce 25 million tonnes of the mineral annually. He said the start of production had to be put back from last December to July at the latest because of disputes with contractors building the infrastructure. Chang confirmed that Citic Group is preparing for a listing but said there was no specific timeframe. Citic Pacific proposed to lift the final dividend 20 per cent to 30 HK cents per share, bringing the full-year total to 45 HK cents per share, up 12.5 per cent. The stock jumped 80 HK cents, or 3.85 per cent, to HK$21.55 after the results announcement.

Walter Kwok Ping-sheung, the former chairman of Sun Hung Kai Properties (0016), and other tycoons are planning a Silicon Valley-like development in Nanjing. Straits Construction Investment Holdings, formed by Kwok and friends, announced yesterday that it has acquired a plot in Nanjing's Hexi New City for 4.47 billion yuan (HK$5.30 billion). It will be the company's first project. The plot, lying along a river, occupies an area of 341,000 square meters and has a planned gross floor area of about 940,000 sq m. The project, named Nanjing Straits City, will include cloud computing R&D and applications along with residential and commercial units. Cloud computing means computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that is delivering the services. Along with Kwok, Straits Construction was set up with a fund of US$1 billion (HK$7.8 billion) by Peter Lee Ka- kit, vice chairman of Henderson Land Development (0012), Hui Wing-mau, chairman of Shimao Property (0813), Chao Teng Hsiung, chairman of Falgory Group, and Theodore Huang, a former chairman of TECO. Kwok, who put in US$100 million, stepped down as chairman of SHKP in 2008 and has since been a non-executive director. 

 China*:  March 6 2011

Mercedes-Benz will be adding another manufacturing plant in Beijing and another 300,000 cars to its annual production capacity in China, according to Beijing Automotive Group Co Ltd (BAIC), its joint-venture partner. "Before the end of this year, the assets of Beijing Mercedes-Benz will be integrated into the BAIC," said Wang Dazong, president of the BAIC. Mercedes-Benz and BAIC agreed to begin a joint venture in 2006 but profits were hard to come by until last year, when it sold more than 50,000 cars. That is a dramatic increase from 2007, when 7,000 cars were sold. The announcement of the new plant was seen by industry experts as a sign that BAIC is continuing to expand. "Beijing is not a paradise for every industry since the costs are high, so we will leave high value-added series and mid-to-high level vehicles production in Beijing, and shift other models to other bases," Wang said. In 2010, BAIC sold 1.5 million automobiles and achieved 11 billion yuan (1.2 billion euros) in profits, a year-on-year increase of 75 percent. It is the only State company in Beijing that earned more than 10 billion yuan a year. In the past few years, BAIC has been planting bases across the country, each having distinct functions: the Shunyi factory in Beijing manufactures high-end cars, a Zhuzhou factory in Central China's Hunan focuses on high-end passenger cars, the Chongqing plant produces economical cars, while the Guangzhou plant explores the southern China market. Before 2010, BAIC was the only major auto group in China that didn't have its own brands. Though a joint venture with Hyundai is bringing considerable profits to BAIC, Wang said a lack of name brands will be a major problem in the long run. "If there is no self-brand, we have no products to go global, not to mention any say in the international auto market," Wang said. In 2009, the group acquired Saab, a former subdivision of General Motors, and was planning on making its own products, with more than 20 different models, based on the Saab platform. In 2010, BAIC rolled off its first brand car in Zhuzhou plant, in Central China's Hunan province. Wang said its overseas expansion is still preliminary. At this moment, commercial cars will be lead the way for BAIC's expansion overseas. "We are going global, but globalization doesn't merely mean global trade, although it is an essential part. We need to integrate global resources and do more international acquisitions. Currently a lack of talent is still hurting our development. Our goal is to become the world's top 15 auto companies in 2015. By then we will be able to produce 4 million automobiles every year. We have confidence, but we have to address various problems like talent, capital and improve our management skills," Wang said.

It is officially the largest overseas evacuation since the founding of the People's Republic in 1949. A total of 35,860 Chinese nationals stranded in riot-torn Libya were rescued in a huge air, sea and land operation in about 10 days. And for the first time, four military transport aircraft and a Chinese frigate were dispatched in a long-range overseas rescue mission. For many, it is more than just a tale of a rising and increasingly confident power eager to project influence beyond its borders and defend its fast-expanding overseas interests. "To put it short, the operation is a vivid display of China's national strength and its success has made many Chinese proud," said Professor Zhuang Jianzhong , an international security expert from Shanghai Jiaotong University. "And as a result, we've seen many firsts that occurred during the nation's largest government-led evacuation effort in the past six decades." China's deputy representative to the UN in Geneva, Wang Qun, hailed it as a vivid testament to Beijing's commitment to human rights. His remarks were made after China endorsed a UN resolution to suspend Libya's membership from its human rights council, a step that took many by surprise as China itself has often been singled out for its poor human rights record. While China has impressed the world with a massive multi-service evacuation operation, many Asian countries, including Bangladesh, Thailand and the Philippines, have called for international help to evacuate tens of thousands of their citizens trapped in the deadly Libyan unrest. The rescue operation started last week when an increasing number of Chinese citizens reported attacks by gun-wielding looters as the popular revolt grew more violent. Many experts said the rapid deterioration of the situation in Libya, and especially the besieged Libyan leader Colonel Muammar Gaddafi's inability to cope with what appeared, at the outset, to be small uprisings, had surprised Beijing. "With so many lives of Chinese nationals at risk amid political turmoil, the government simply has no choice but to attach the highest attention to the evacuation," said Professor Zhang Xiaodong, of the Chinese Academy of Social Sciences. Beijing set up an evacuation taskforce on Tuesday last week, under Vice-Premier Zhang Dejiang. Civilian aircraft and overseas passenger ferries were chartered by the government immediately in the rescue effort, which focused on evacuating Chinese citizens from Libya to a third country, including Greece, Malta, Egypt, Tunisia and Sudan.

Cosco Pacific and other mainland lines are being monitored by the US Federal Maritime Commission. Maritime regulators in the United States are monitoring Chinese container shipping lines, including Cosco Container Lines and China Shipping Container Lines (SEHK: 2866), and the Shanghai Shipping Exchange for signs of anticompetitive behaviour. This included the unfair use of commercially sensitive information and data such as freight rates that might give mainland lines a commercial advantage. The move was confirmed by Richard Lidinsky, chairman of the US Federal Maritime Commission, who said there was monthly contact between his staff and the shipping exchange. This regular contact was "just to be sure both sides understand what the other is up to". This monthly interaction followed a visit by Lidinsky to the exchange last September where there was a "nice, frank, full chat". This, he said, followed concerns by US importers and exporters that the exchange, as a quasi-government body linked to China's transport ministry, was "digging too deeply into US-bound carrier information and were somehow hurting them". He said these matters were also raised in October by the US delegation to bilateral consultations with the transport ministry under the US-China maritime agreement. They came against a rebound in trade on the transpacific route. Lidinsky said average weekly capacity was 24 per cent higher now than a year ago after container lines added more and larger ships on routes between Asia and the US. He pointed out that container imports from Asia grew by 14 per cent last year while US container exports to Asia grew by 7 per cent. "For every 20-foot equivalent unit exported from the United States, 2.1 teu are imported from Asia," Lidinsky added. The concerns outlined by Lidinsky were confirmed by the China head of one major container line who said there were fears when the exchange was launched 18 months ago that it would want detailed rate information from each carrier. This would cover freight rates charged to each customer on specific routes from the 30 container lines that were selected by the exchange to participate in what was a mandatory filing. The senior executive said that when the exchange started "we didn't really understand the type of information that needed filing". He added the concerns did not materialise because the exchange instead wanted the band of rates charged on specific routes and port pairs. "This could vary from US$500 to US$4,000 from Shenzhen to Rotterdam," he said, adding that this was less commercially sensitive. Aside from tariff information, the source said the exchange wanted details of the spot freight rates charged by container lines and non-vessel operating carriers. But he thought this was also misleading for shippers because most cargo was shipped at rates agreed under year-long contracts. These spot rates are used to create a daily index which is more volatile than the contract rates. "Our main concern is the impact this can have on market interpretation," the executive said, pointing out the index and spot rates "do not reflect" actual cargo rates. Turning to whether mainland box carriers such as Cosco Container Lines or CSCL had an unfair advantage in using this tariff and rate information, the senior executive added: "We don't have any reason to believe Chinese carriers act unfairly." Lidinsky told the House of Representatives coast guard and maritime transportation subcommittee last Tuesday that the commission was "carefully monitoring these state-owned carriers to ensure that US trades remain substantially free of unfair trading practices of foreign governments". He pointed out this not only covered the mainland carriers but also APL, the Singapore container carrier owned by Neptune Orient Lines, which is ultimately controlled by the Singapore government. In his Congressional speech, Lidinsky said the commission "will continue to follow these developments in China closely to ensure that no unreasonable conditions exist that would impair US commerce".

China Marine Surveillance No 50, the most advanced maritime administration ship in China, was launched in Wuhan, Hubei province, on March 2, 2011.

The number of foreign students in China reached a record high of more than 260,000 last year, led by South Koreans and Americans, the Ministry of Education said. A total of 265,090 students from 194 countries enrolled in the mainland last year, according to statistics carried by the official China Daily on Friday. That marked a jump of 8 per cent from the 240,000 students in 2009. South Korea sent the largest number of students, followed by the United States, Japan, Thailand and Vietnam, respectively. The paper gave no exact breakdown of numbers. Rounding out the top 10 countries sending students to China are Russia, Indonesia, India, Kazakhstan and Pakistan. China’s goal is to have 500,000 foreign students by 2020, the ministry said. Last year, the government awarded some 800 million yuan (HK$960 million) in scholarships to foreign students, while provincial governments gave 110 million yuan, according to the ministry. A total of 22,400 students were recipients of scholarship money. The vast majority of foreign students came from Asian countries though the number of students from Western nations has increased too, statistics showed. The United States and China have pledged to work together to bring 100,000 Americans to study in China over the next four years. Meanwhile, Chinese students also are increasingly choosing to study abroad, with the number reaching 284,700 last year, the ministry said. China is also spreading its language and culture through its nearly 300 overseas Confucius Institutes. The government-funded learning centres were set up in 88 countries by the end of 2009.

China will boost its defence spending by 12.7 per cent this year, a legislative spokesman said on Friday, while reiterating that Beijing’s return to double-digit military budget growth after a dip last year is not a threat to other countries. China’s defence buildup and military plans in recent years have alarmed its neighbours and the United States, where military and political leaders have spoken about a lack of transparency and cooperation in the process. The increase to just over 601 billion yuan (HK$711 billion) would go toward “appropriate” hardware spending and salary increases for the 2.3 million members of the People’s Liberation Army, spokesman Li Zhaoxing told a news conference in the Great Hall of the People, the seat of the legislature. Chinese media reports say members of the PLA, the world’s largest standing military, will receive raises of up to 40 per cent his year, their third pay increase in six years. The announcement comes a day ahead of the opening of the National People’s Congress, where the country’s social and economic goals will be laid out for the next five years amid lower growth targets and concerns about inflation and asset bubbles. The increase is up from the 7.5 per cent forecast last year, which broke a string of years of double-digit growth as China transformed its military into a more modern force as its economy boomed to become the world’s second largest. The rate of increase peaked at 17.8 per cent in 2007. Li said the defence budget accounted for just 6 per cent of China’s national budget and less than 2 per cent of its gross domestic product, a lower figure than in other countries. “The government has always tried to limit military spending and it has set the defence spending at a reasonable level to ensure the balance between national defence and economic development,” he said. Li, a former foreign minister, said China’s spending plans are transparent. “This will not pose a threat to any country,” he said. But China’s assertive behaviour — it sent navy vessels and military aircraft closer to Japanese territory last year than ever before — magnifies the perceived threat from its growing defence spending. India, which has border disputes with China, has also voiced concern about China’s military. Sea incidents involving the Chinese military and fishing boats are also common. Just this week, the Philippine military deployed two warplanes near a disputed area in the South China Sea after a ship searching for oil complained it was harassed by two Chinese patrol boats, Vietnam protested Chinese military drills in a group of islands that both countries claim, and Japan scrambled F-15 fighter jets after Chinese surveillance and anti-submarine aircraft flew into airspace near disputed islands in the East China Sea. China’s military budget is dwarfed by what the United States spends every year, but its actual spending, including funding for new weapons and research and development, is believed to be as much as double the official figure. The bigger budgets fed by rapid economic growth have allowed China to speed up development of new technologies such as the J-20, a stealth fighter jet. China also is moving toward launching its first aircraft carrier — though it will take years to learn how to operate it — along with sophisticated new submarines and larger surface ships. Ni Lexiong, a defence expert at Shanghai University of Political Science and Law, said China needs to increase its defence spending in response to closer military cooperation between the US, Japan, South Korea and other countries in the region. He said Beijing also needs to spend more on its military to deal with threats to its citizens and property overseas. Last month, Beijing took the unprecedented step of sending military transport planes and a navy missile frigate to help evacuate 32,000 Chinese from strife-torn Libya. High inflation, especially for food, and the need to buy supplies on the open market further justify higher military spending, Ni said. China’s latest five-year plan, which will be approved during the legislature’s annual 10-day meeting, is expected to feature a shift from rapid economic growth to slower development that is of higher quality and more sustainable, with a greater emphasis on services and broader distribution of wealth. Li promised unspecified measures to tame inflation, which hit 4.9 per cent in January. He blamed price rises on a range of factors, including higher global commodity prices, speculation and media hype.

Rising wages on the mainland will see Yue Yuen Industrial (SEHK: 0551, announcements, news) (Holdings) reduce the percentage of its workers in China from roughly 50 per cent of its workforce to about 30 per cent in the next few years as it adds factories elsewhere. The shoe maker employs 340,000 people around the world and has factories in China, Vietnam, Indonesia, Cambodia and Bangladesh. "We will gradually add more factories in Cambodia and Bangladesh and expand the ones in Indonesia and Vietnam," said the Hong Kong-listed firm's chairman Tsai Chi Neng. "We hope China will have a third of our workforce in the coming years." Five years ago, when China's role as the world factory was beyond dispute, it accounted for 60 per cent of Yue Yuen's workforce, executive director Steve Li I Nan said. Rising wages in China is a major reason why Yue Yuen's gross margin has dropped by a percentage point to 24.4 per cent from one year ago, since salaries account for 16 per cent of the company's sales revenue, said Yue Yuen managing director David Tsai. "Rising wages will affect gross margin. The company has a policy to spread its production base geographically. We won't concentrate production on any single country." Chinese wages are rising about 20 per cent a year on average, as part of the central government's policy to boost domestic consumption, said David Tsai. To save on labour costs, Yue Yuen has been shifting its mainland factories from Guangdong province to inland provinces such as Jiangxi in the past four years, where salaries are 30 per cent lower, he said. Inland factories now account for half of Yue Yuen's mainland workforce, said Tsai Chi Neng. Nonetheless, Yue Yuen will maintain a significant portion of its production in China, he said. As the spending power of the Chinese rises, China will be the world's biggest market in future, Tsai said. For the three months to December 31, the company's financial first quarter, Yue Yuen's net profit rose 17.8 per cent to US$141.68 million while revenue grew 28.9 per cent to US$1.7 billion.

Mainland puts IP, patents on agenda - Days of cheap labour and knockoffs are over - China's attempt to shed a reputation for product knockoffs and cheap labour is manifesting itself in a surge of applications at the United States patent office. Huawei Technologies and ZTE (SEHK: 0763), the mainland's biggest telecommunications-equipment makers, are at the vanguard of a 39 per cent jump in patents obtained by mainland inventors in the past fiscal year. The 3,060 tally is five times more than in 2005 and 21 times the 143 patents approved in 2000, according to data supplied by the US Patent and Trademark Office. Policies designed to encourage the creation of intellectual property (IP) and innovation have helped make China the seventh-highest foreign recipient of US patents. The government gives tax breaks for research spending, and compensates companies for some costs of obtaining patents in foreign nations, according to lawyers representing Chinese companies. "China has to become an IP-exporting country and the government realises it has to change now," Xiang Wang, a lawyer at Orrick, Herrington & Sutcliffe in Beijing who has represented ZTE, said. "China cannot afford to remain a cheap-labour country. IP is the thing that's going to drive the world, and China is using the US as a model." China's National Patent Development Strategy predicts that applications filed in foreign countries will quadruple by 2020, according to a translated copy of the plan provided by the US patent office. Chinese patent lawyers, including some from ZTE, are visiting Washington to learn the intricacies of US patent law. "We're teaching them US patent basics, the regulations, filing procedures, and what sort of problems crop up," said Brad Wright, a patent lawyer with Banner & Witcoff in Washington. "We're teaching them the US patent culture." Premier Wen Jiabao recognised that being a manufacturer is not where the money is, saying in a September 22 meeting with US executives in New York that "an iPod is sold at US$299, and China in the manufacturing link will only get US$6 for it". "You can only get so far by producing what everybody is doing, but cheaper," James Altman, a lawyer at Miller & Chevalier in Washington who visited the mainland in July to work with patent lawyers and companies, said. "That's a low-margin business and at some point you want to move into a high-margin business." The plan is to push for more innovation in semiconductor manufacturing, biotechnology, drug and energy industries, said Wang, who advised the government on patent policies. China spent 1.5 per cent of gross domestic product on research in 2008, up from 0.73 per cent in 1991, according to a December report by the OECD. At that time, the nation's GDP was about 31.4 trillion yuan (HK$37.2 trillion), according to Bloomberg data. The total value of goods and services rose 9.8 per cent in the fourth quarter from a year earlier. The nation plans to boost research and development spending to 2.5 per cent of GDP by 2020, according to a 2007 report by the Centre for International Governance Innovation in Ontario. Chinese companies were also buying patents, according to Wang, who said he had a client who just bought 1,000 patents. He declined to name the client. "In the not-so-distant future, China will become one of the biggest IP-owning countries, second only to the US and the goal is to be bigger," he said. "Acquiring valuable patents, that's the quickest way. As long as you have the money, why not?" The US issued 68 patents to mainland residents this week including for devices to test the durability of keys on electronics, a system to control wind turbine noise, air purifiers and modelling dough used in crafts. Huawei, the world's second-biggest maker of phone-network equipment after Ericsson, has more than 620 US patents in a portfolio of 17,765 worldwide, said Bill Plummer, a Huawei spokesman in Washington. Huawei spent US$1.9 billion on research and development in 2009, and about 80 per cent of the patents came from its own scientists, he said. "Any IT company is going to build a strong patent portfolio, organically or otherwise, whether they are based in China, Argentina or somewhere else," Plummer said. Huawei got 82 US patents in 2009, putting it at 218 on the Intellectual Property Owners Association list of the top 300 organisations that obtained US patents. The company touted its innovation in a February open letter to the US government after withdrawing its purchase of patents from California-based 3Leaf Systems amid concern by lawmakers that the deal might threaten national security. US lawmakers in October asked the Federal Communications Commission to review the risks of domestic companies such as Sprint Nextel using equipment from ZTE and Huawei. The US-China Economic and Security Review Commission, a panel that advises Congress, said in a January report that the Chinese government had influence over the telecommunications industry and could use the companies' networks to gather intelligence. Huawei and ZTE are the top filers for a type of international application that streamlines the process for getting patents in multiple countries. Part of the training in the US is understanding how to make sure those forms cover the specific US rules, said Wright, the Banner & Witcoff lawyer. "They're filing their applications first in China, based on their understanding of Chinese law, but some of what they do over there isn't going to fly over here," he said. "They know this big wave of stuff is coming and they need to be ready for it. "They need to understand in advance what they might be facing."

Despite continuing trade disputes, the United States and China share an unprecedented opportunity to boost the domestic economy and create jobs if they maintain close dialogue and cooperation, former U.S. trade representatives (USTR) told Xinhua Thursday. "China has done so well in its economic development, especially when it allows its people to be productive," Charlene Barshefsky, USTR from 1997 to 2001, said after finishing a panel discussion on U.S. trade agenda in 2011 at the Center for Strategic and International Studies. Several other former USTRs also spoke at the event held at the Washington-based think tank. As a leading engine of global recovery from the financial crisis, China's growth has been extremely robust in the past three decades, and China has outpaced Japan as the second largest economy in the world, Barshefsky said. She said the world economy has been witnessing several broad trends in recent years, including the reemergence of China and the integration of Asian countries around China, which have created a structural shift in the global trade and economic system. As two key players in world trade, China and the United States need "more robust and more direct" dialogue to understand each other, Barshefsky said. Clayton Yeutter, USTR from 1985 to 1989, said in an interview with Xinhua that China's fast growth provides the potential of market access for U.S. agricultural goods, manufactured products and services. "Now China is not only a major exporter in the world, but also an important importer," he said. Speaking about President Barack Obama's trade goal of doubling export in five years, Yeutter said "it is possible but very difficult," since the plan he laid out was to increase U.S. exports to 2 trillion dollars from 1 trillion in 2010. In January 2010, Obama pledged to double the country's export growth by 2015, which he said could create 2 million jobs. Earlier on Tuesday, current USTR Ron Kirk said in a report that U.S. exports surged about 17 percent in 2010 and have supported hundreds of thousands of jobs in the country. In the annual report sent to Congress, Kirk outlined the trade agenda for 2011, which will focus on supporting more and better U.S. jobs. Given the high unemployment rate -- currently at 9 percent and not expected to drop significantly in the short run -- the Obama administration has been making more efforts to push its trade agenda. William E. Brock, USTR during the Reagan administration from 1981 to 1985, said both China and the United States need economic growth to create jobs and deal with other challenges. The U.S. economy is recovering, and China's urbanization means vast development potential. The two sides can create more opportunities for cooperation if they can understand each other better through effective communication, he said. Still, some U.S. statesmen remain critical of China's role in alleviating the U.S. trade deficit. Rob Portman, a former USTR under George W. Bush and currently senator for Ohio, said he is concerned that China may "not play by the rules." However, Brock said the United States should not "blame others," but should solve its own fundamental problems. This point was echoed by Barshefsky. "We have to get our house in order," she said.

Hainan Airlines has grown rapidly in the past 10 years. It had 86 aircraft in service at the end of February and a further 58 on order. Hainan Airlines Group is expected to sign important aircraft deals on Tuesday that industry insiders say could lead to a significant order for Boeing and future orders for Airbus and business jet makers Dassault Falcon and Gulfstream. Executives from the airline group and aeroplane manufacturers will ink letters of intent and memorandums of understanding for future aircraft orders, rather than sign firm orders themselves, insiders said. The agreements will be signed after the formal opening of the Asian Aerospace show in Hong Kong on Tuesday morning. There were no details about how many aeroplanes were involved or the types of aircraft, although one aviation industry source speculated HNA could sign a pact agreeing to order the double-deck jumbo Airbus A380 sometime in the future. Hainan Airlines has grown rapidly in the past 10 years and had 86 aircraft in service at the end of February and a further 58 on order, according to figures from the Centre for Asia Pacific Aviation. These include about 70 Boeing 737 narrow-body aircraft and more than 10 Airbus passenger aeroplanes, including five longer-range A330-200s and A340-600s. The carrier started a thrice-weekly passenger service between Shenzhen and Sydney in January, the first time Shenzhen was linked with a direct flight to Australia. The aircraft were more than 80 per cent full during the first month of operation. Hainan Airlines is also planning to launch services between Beijing and Zurich. The carrier, which owns the DeerJet business jet company, is also set to expand its executive jet operations through future orders with Dassault Falcon and Gulfstream. Plans for the aircraft deals coincided with an unconnected and separate agreement between Canadian aircraft maker Bombardier and ICBC Leasing, under which the mainland leasing outfit would provide up to US$8 billion. Under the memorandum of understanding signed by the two firms, ICBC Leasing will provide financing and leasing services to buyers of Bombardier's range of commercial passenger aircraft seating between 37-149 people and business aircraft. The agreement also covers financing for Bombardier to expand its aircraft maintenance and other services, as well as credit facilities, hedging and settlement services for Bombardier's general requirements through subsidiaries of Industrial and Commercial Bank of China (SEHK: 1398). "The financial resources of ICBC Leasing put Bombardier in a stronger competitive position and support our long-term objective of growing our business in China and the Asia-Pacific region," said Mairead Lavery, Bombardier's vice-president for strategy, business development and structured finance. Bombardier has forecast that a combined 600 business jets from all manufacturers would be delivered in China between 2010 and 2019, with a further 500 in the rest of Asia and Australasia and 325 in India.

Hong Kong*:  March 5 2011

Hong Kong Exchanges and Clearing (SEHK: 0388) plans to introduce a "yuan trading support facility" in an effort to ensure investors have enough currency to fuel expected demand for yuan-denominated stocks in the city. "The yuan trading support facility is aimed to serve as a back-up facility to enable investors to buy yuan- denominated shares in the secondary market in Hong Kong if they have difficulty in obtaining yuan," said Charles Li Xiaojia, chief executive of HKEx. Li unveiled the blueprint for yuan share trading as he announced the exchange's annual results yesterday. The world's fifth largest exchange in terms of total market capitalisation reported a 7 per cent increase in profit last year to HK$5.04 billion, up from HK$4.7 billion the year before. The gains were driven by an 11 per cent increase in average daily turnover to HK$69.1 billion. The exchange will pay a final dividend at HK$2.31 per share. Li began investigating how to manage yuan share issues last year in the hope of seeing Hong Kong become a key offshore yuan trading centre. Beijing currently restricts investors from exchanging more than 20,000 yuan a day. "The facility could ensure the liquidity of yuan," said Li. "This will prevent yuan shares from becoming a replica of the mainland B shares." B shares are traded in Hong Kong dollars in Shenzhen and US dollars in Shanghai. There is little trading in B shares due to a lack of liquidity, since few people on the mainland hold foreign currency there. Under the planned facility, the exchange will get yuan from one or more banks in Hong Kong and provide the currency to brokers. They, in turn, can offer yuan to investors, who may only have Hong Kong dollars. Margin-trading clients can borrow Hong Kong dollars from brokers, then swap them for yuan at the market exchange rate via the facility. When investors sell the shares, they will swap the yuan back to Hong Kong dollars. The money will then be recycled back to the banks. "For investors, it's Hong Kong dollars in, Hong Kong dollars out, even though they are trading the yuan-denominated shares," said Li. Li said the yuan provided by the facility would only be used for yuan share trading. The total amount available will be linked to the market capitalisation of yuan shares. He said the first yuan initial public offering could come even before the facility is set up as the exchange is preparing to allow investors to subscribe to new offerings by borrowing in Hong Kong dollars, and paying up in yuan after the allocation. Li said many companies have questions about yuan IPOs, though none have formerly applied for listing. However, banking sources said Cheung Kong (Holdings) (SEHK: 0001) planned to spin off its investment properties arm in a yuan-denominated real estate investment trust, hoping to raise more than 10 billion yuan (HK$11.75 billion) in the first quarter. The facility needs to get the approval of the Securities and Futures Commission. A Securities and Futures Commission spokeswoman said the watchdog would review the system when the exchange submits the proposal. Brokers say they believe investors will want to invest in yuan shares but they wonder how well the facility will work. "The devil is in the detail," said Joseph Tong Tang, executive director of Sun Hung Kai Financial. "We need to make sure the banks can keep a supply of yuan in this facility. Right now, it is mainly Bank of China (Hong Kong) that supplies a lot of yuan, and we do not know if other banks can support the facility." Christopher Cheung Wah-fung, chairman of Christfund Securities, said he hoped the facility would provide liquidity to all brokers. "That is a good idea but the banks may add caps on each broker," he said. "They may also set the exchange rate too high. The exchange would need to solve all these technical problems before the yuan shares could take off."

In an unprecedented U-turn that has caused as much derision as glee, Financial Secretary John Tsang Chun-wah yesterday announced a budget plan to distribute HK$6,000 cash handouts to all Hong Kong's adult permanent residents. Bowing to political pressure and a plunge in popularity, Tsang revised his week-old budget and added two million more people to relief measures that ballooned by HK$16 billion to about HK$40 billion. Just days after insisting that inflation would be fuelled if he were to change his budget proposal in any substantial way, Tsang withdrew his controversial plan to inject HK$6,000 in each of four million Mandatory Provident Fund accounts, a move widely criticised as unhelpful in particular to the middle class. In its place, Tsang announced HK$6,000 cash handouts to about six million adult permanent residents, including housewives, retirees and even overseas emigrants. On top of that, salaried taxpayers will also get up to 75 per cent tax reductions capped at HK$6,000. Asked if he should apologise to the public for the changes, Tsang said: "I find this suggestion a bit strange. I have said the most important thing now is to forge a consensus." It will be the first time in Hong Kong's fiscal policy history that direct cash handouts have been given, though similar practices have been adopted in other places, including Singapore and Macau. Political observers and economists warned that the government had not only deviated from its commitment to financial prudence but had also eroded its authority. Raymond So Wai-man, dean of Hang Seng Management College's school of business, likened the government to a company caught up in a dividend row with its shareholders. "It has now become a company and when the company makes a profit, it has to distribute a dividend," he said, adding that issuing cash handouts would create a public expectation in future and become a potential source of social unrest. The HK$40 billion in handouts in Tsang's revised package comprise HK$4 billion in tax reductions to 1.4 million taxpayers and HK$36 billion in direct cash giveaways to the six million adult permanent residents. How and when the HK$6,000 handouts will be distributed and the exact criteria for eligibility have yet to be spelled out. To minimise the impact on inflation, there might be an option to save the money. An unspecified sum would also be reserved for those not benefiting from the handouts, said Tsang, who yesterday met a group of pro-establishment lawmakers to resolve the crisis. These lawmakers have now pledged support to the budget, but the pan-Democrats still oppose it, citing the budget's failure to address social and economic issues such as property prices and the pension fund. They say they will hold their scheduled protest against the budget on Sunday. Economists say the handouts will push up inflation slightly, in an economy that comprises over HK$1 trillion in retail spending and a HK$600 billion fiscal reserve. Bank of East Asia (SEHK: 0023) economist Tang Sai-on estimated the handouts would lift inflation by 0.2 percentage points to 4.7 per cent this year. "The cash handouts amount to about one per cent of the gross domestic product. Even if just half of that is spent, it will still push up inflation." Political observers said that the revised handout plans might spare the budget from being vetoed in the legislature - but they are creating implications for governance greater than those on the economy. Ma Ngok, a political scientist at Chinese University, said: "The government is expected to remain weak ... and the public now knows their demands will be met if they can mobilise mass support." The U-turn on handouts came just a week after Tsang's budget speech. Despite a HK$70 billion surplus last year, he said he would recommend no direct cash or tax rebates for fear of stimulating inflation. "Inflation is a problem for which we should be on alert," Tsang said yesterday. "Any similar measures will affect inflation. But all of us have heard clearly the strong demands from society. That's why I made this decision after striking a balance ." The public seemed receptive to the revised package. As Liberal Party vice-chairwoman Selina Chow Liang Shuk-yee put it: "At least the Financial Secretary has heard the voices from the majority of citizens and political parties." But the Hong Kong Council of Social Service said the government had failed to spend the surplus wisely, such as by boosting services to the underprivileged and elderly. The politicians who met Tsang this week considered the changes a victory. "We appreciate the financial secretary's courage in making prompt responses," said Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong.

Hooliganism under fire in outraged Legco - Legislators yesterday decried the spread of political hooliganism following an alleged attack on Chief Executive Donald Tsang Yam-kuen and called on their colleagues to set a better example for the next generation. Chief Secretary for Administration Henry Tang Ying-yen called the incident "totally unacceptable" while even Beijing expressed concern, its local representative saying the chief executive needs to be protected as he is appointed by the central government. The Legislative Council held an emergency debate yesterday after lawmaker Jeffrey Lam Kin-fung moved a motion condemning violence both within and outside the chamber. The alleged attacker, Wong Chun- kit, arrested on Tuesday on suspicion of common assault, has been released on a bail of HK$500 and told to report back by month's end. No charge has been laid. In a chilling hint to protest organizers, Yau Tsim Mong police commander Wong Kwok-wai said no stone will be left unturned in the investigation to find out who is involved. The police "will not miss any piece of evidence," Wong said. In the Legco debate, the Confederation of Trade Unions' Lee Cheuk-yan said such an attack went beyond the pale. "Such acts should not be committed against anyone, including government officials," Lee said, adding, however, that the government also needs to consider why such an incident occurred. The Federation of Trade Unions' Wong Kwok-hing blamed the incident on legislators who did not behave during Legco meetings. The Democratic Alliance for the Betterment and Progress of Hong Kong's Lau Kong-wah said Legco should review its guidelines to punish those who repeatedly used violence in the chamber. The Legco committee on rules of procedures is reviewing the guidelines and is expected to meet on March 29. Legco president Jasper Tsang Yok- sing has said there could be new rules to punish repeat offenders. A police source said that security cameras installed near the Tsim Sha Tsui history museum, where Tsang was allegedly hurt, will be reviewed. A spokeswoman of the Chief Executive's Office said Tsang went to work as usual despite feeling some pain. The State Council expressed grave concern, saying the chief executive must be properly protected. Those found responsible should be punished.

MTR juggernaut rolls past Octopus scandal - Rapid growth will help investors forget last year's data-privacy embarrassment - MTR chief executive Chow Chung-kong at the company's annual media conference. MTR saw underlying profit jump 18.5 per cent to HK$8.66 billion last year as a revived economy boosted almost all fronts of its core operations except Octopus cards - whose contribution to MTR's net profit fell by 15.4 per cent to HK$126 million owing to the data-privacy scandal. Octopus Holdings, in which MTR is the major shareholder, donated HK$44 million to charity last year, to redeem itself for earnings made by selling cardholders' personal data. The expense is a one-off, and the drop in the smart-card issuer's contribution was negligible given strong profit growth from train fares, property sales, station retail outlet rental and advertising. MTR will tender out four more sites that are expected to put more than 11,000 flats into the market in the coming year. Last year, sales at developments including Le Prestige at Lohas Park, Fo Tan's Palazzo and Wu Kai Sha's Lake Silver contributed HK$4.03 billion in profit. "We plan to tender out the Tai Wai station site and the smaller Tin Shui Wai sites in the first half of the year, while in the second half of the year we may tender out the sites at Nam Cheong station and Tsuen Wan West, of which we only act as agent for the government," said MTR's chief executive Chow Chung-kong, who retires on December 31. MTR withdrew a tender for the HK$33 billion Nam Cheong station residential project last May because of a poor response, but property director Thomas Ho said they did not expect any withdrawal at this stage. Chow said the company would "follow market demand" in choosing what flats to build on the two sites they owned - Tai Wai and Tin Shui Wai - instead of the small flats catering to first-time home buyers, as advised by the government. Fare income from domestic and cross-border train services jumped 8.5 per cent and 6.9 per cent year on year to HK$8.67 billion and HK$2.49 billion respectively, increasing its market share in the public transport market to 44.3 per cent. The rise mainly stemmed from a fare increase of 2.05 per cent in June, and a gain in the number of longer journeys. The city's only rail operator stands a good chance of imposing another raise again under a fare adjustment mechanism, given spiralling inflation and wage levels. Contributions from rail services outside Hong Kong were slimmer as most of the projects - including the Beijing Line 4 and Shenzhen Line 4 were still in initial operations. However, Chow said the Beijing line may start generating profit next year while the latter will be in the black in two years. Its second phase opens in the middle of this year. Station commercial operations and rail-related business rose 11.6 per cent to HK$3.72 billion, mainly because of a heavy rebound in advertising income. Under the merger agreement with the Kowloon-Canton Raily Corp, the MTR will have to start paying a full year of variable annual payment next year to the KCRC - a profit-sharing premium on top of a fixed yearly HK$750 million service concession payment.

Comic artists Rainbow Leung and Jeffrey Lau at an event sponsored by Create Hong Kong at the Arts Centre in Wan Chai. The government has earmarked HK$4.5 million to promote independent filmmakers and comic artists in overseas markets as part of a long-overdue package to boost the creative industries. Jerry Liu Wing-leung, head of the Create Hong Kong office, said the sponsorships aimed to help budding players in the fields to raise their profile internationally. One of the programs involves a HK$2.7 million fund to sponsor local short-film producers to take part in international events. "These producers, without the backing of big companies, may not be able to afford an entry. They may not be familiar with the procedures. The Arts Centre, as our partner, will approach them and help them out," said Liu, a former film producer. The Arts Centre will form a panel to select more than 30 short films that have received awards in six local competitions, and then submit the entries to 40 international contests and festivals. The scheme will sponsor the entry fees and travelling expenses of the producers. Another program is a master class for comic artists and animators, open to university students studying the subjects, and professionals who want to hone their skills. They will be able to join the three-day course at the bargain price of HK$800. Two teachers from the renowned Gobelins Schools of the Image in France will be invited to teach the class of 20. Two outstanding performers will be awarded scholarships to attend a summer course at the Parisian school this year. Lee Chi-ching, a veteran comic artist, said the measures to support the industry were welcome but long overdue. "Hong Kong's market is too small and we need to open up new markets. We have been hit hard by the internet, with sales of comic books dropping over the years," Lee said. The third initiative, which was completed last month, was the sponsorship of a first-time Hong Kong delegation to the Angouleme International Comics Festival in France, one of the biggest comic festivals in Europe, in January. Rainbow Leung Hiu-man, a 24-year-old who has published a comic book depicting life in her Sha Tin village and draws for a weekly publication, said it was difficult to be a full-time artist and she had to supplement her income by teaching. Attending events like the festival in January - as she did - could help inspire more budding artists like her, she said. Jeffrey Lau Wan-kit, who has won an award in Japan for his signature comic Feel 100%, said the measures would help the industry. "But ultimately the government needs to put more effort into education and raise young people's ability to appreciate different forms of arts, be it comics or fine art," he said.

Billionaire hedge fund manager John Paulson has won a licence from the Securities and Futures Commission in Hong Kong to deal in securities, records on the market regulator's website show. Paulson, whose bet that the American mortgage market would implode made him one of the world’s wealthiest people, received the licence on February 21, according to the records. The hedge fund industry pioneer, who earned an estimated US$5 billion last year, mainly through bets that the economy would recover, has hired Xiaoli Deng, Sandra Lee and Winnie Wong, all from Morgan Stanley, the records show. The Financial Times publication Ignites Asia reported earlier that Paulson had received the licence for a Hong Kong office. About a fifth of 100 leading institutional investors in hedge funds surveyed by alternative assets research firm Preqin expressed an improvement in their levels of confidence in hedge funds last year, with nearly two-thirds saying Asia would present the best opportunity this year. Asian hedge funds are projected by tracker Eurekahedge to add about US$40 billion to their current assets of US$125 billion this year. The region has attracted the likes of GLG, Soros Fund Management, Moore Capital, Maverick Capital and Viking Global Investors.

Another 58-year-old Briton has landed on Hong Kong's art scene. Following January's abrupt departure of West Kowloon Cultural District chief Graham Sheffield because of "health reasons", the Hong Kong Philharmonic Orchestra yesterday announced Michael MacLeod as its new chief executive. The government-funded orchestra's artistic director and chief conductor Edo de Waart praised MacLeod as "an outstanding leader with a strong passion for orchestras". "I have known Michael for a number of years ... His appointment is an important step for the HKPO to further develop its great future and I look forward very much to our creative partnership," de Waart said in a statement. MacLeod will begin his new position April 1. De Waart, 69, previously said he would be leaving his post after the 2011-12 season. Music critic Chow Fan-fu said MacLeod would have to work with the future artistic director, and their collaboration would be crucial for the orchestra's development. The South China Morning Post (SEHK: 0583) has reported that Dutch conductor Jaap Van Zweden, now music director of the Dallas Symphony, the Netherlands Radio Philharmonic and the Royal Flemish Philharmonic, will fill the shoes of de Waart, on the latter's recommendation. The orchestra's board chairman and the chairman of the search committee, Liu Yuen-seng, said in a statement he was confident that MacLeod's presence "will help lead and drive our fine orchestra to the best level of excellence". MacLeod is the third chief executive of the government-funded orchestra in three years. Last July, So Hau-leung left the position after a one-year stint, succeeding previous chief executive Tim Calnin. MacLeod was the general and artistic director of Glimmerglass Opera, a summer festival in New York state, between 2005 and 2010. Earlier, he was executive director of the New Haven Symphony Orchestra from 2001 to 2005. "As the son of a British diplomat, I am used to relocating to different countries," MacLeod said in a statement issued by the orchestra. "I find the variety of cultures stimulating, and I look forward to coming to a part of the world with an extraordinary economic and cultural vitality. I regard Hong Kong and China as the new land of opportunity." Born in Bogota, Colombia, to an American mother and diplomat father, MacLeod has lived in Turkey, Austria, the US and Ethiopia. On his personal website, MacLeod said his interest was being an "adventurer". In 1983, he cycled from London to Scotland.

More than a million Hong Kong people living overseas and on the mainland will receive an unexpected budget windfall of HK$6,000, with many saying they will return to the city to claim the money. Travel agencies said the unexpected giveaway could lead to a rise in ticket bookings and boost tourism in the city. The sudden announcement by Financial Secretary John Tsang Chun-wah to dish out HK$6,000 to every Hong Kong resident aged 18 or above stoked heated discussion on social network sites such as Facebook among the overseas Hong Kong resident community on how to claim the bonus when they return to the city. It is estimated that millions of Hong Kong residents live overseas, with half a million on the mainland and 200,000 in Australia. One woman who emigrated to Sydney six years ago with her husband, said they would come back to Hong Kong to claim HK$12,000. "The amount of HK$6,000 might be offset by the ticket fare, but it's like the government is giving me a free trip back to Hong Kong to visit my friends and relatives," she said, adding that she felt entitled to the cash.

The Legislative Council last night cleared the first hurdle to finalising the 2012 electoral reform package. After three hours of debate, lawmakers voted 35 to 9 in the second reading of the chief executive election bill. They will continue scrutinising and vote on the amendments tabled by lawmakers and officials today. But some amendments tabled by Civic Party legislator Margaret Ng Ngoi-yee were already voted down. These include a cap on the number of nominations a chief-executive candidate can get, as well as the number of seats allocated to each sector in the Election Committee and how to draw up the electorate. Lawmakers will vote on a total of 33 amendments leading to more than 100 changes to the laws on chief executive and Legco elections. According to the reform plan passed in June, the membership of the Election Committee to return the chief executive will be increased from 800 to 1,200. Lawmakers passed an amendment proposed by the government to discard the voting right of foreign consulates - dozens of whom were allowed to vote in the Election Committee before. Another government amendment which stipulates that the elected candidate for chief executive should get support from more than half - or at least 601 votes - of the total number of Election Committee members, was also passed. Before, a candidate would be elected with more than half of the valid votes. Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, said the party's lawmakers would vote against most of the legislators' amendments because they believed the changes were "unnecessary and unsuitable". Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung said the reform package and government-proposed amendments had enhanced the democratic elements in the election bill. "The proposed package for the 2012 elections can roll forward democratic development for Hong Kong and will be conducive to the city's steady transition to universal suffrage," Lam said. The debate will continue today on amendments for Legco elections - in which the number of seats will rise by 10 to 70. Five of the new seats, known as "super lawmakers", would be in the district councils functional constituency, where 3.2 million people would be eligible to vote. Lawmakers will also vote on an amendment by Democrat Emily Lau Wai-hing to lower the nomination threshold for the five new district council functional constituency seats from 15 to 10; and an amendment by Federation of Trade Unions legislator Wong Kwok-hing to allow former district councillors to contest these.

The ICAC is looking into a complaint in which workers at a Wellcome supermarket in Sheung Shui allegedly sold a large amount of tinned milk formula to two people. The supermarket chain said yesterday an internal investigation found three staff members working in Sheung Shui - a district hit by milk powder shortages - violated company guidelines when they sold the milk formula to the individuals, believed to be middlemen. The chain's management yesterday met lawmaker Wong Sing-chi after he complained to the ICAC about Wellcome staff in the Choi Yuen Estate store accumulating stocks of milk powder rather than selling them to parents. "We are following procedures in taking up the case," an ICAC spokesman said. Baby formula has become a must-buy item for many mainland visitors and middlemen after the tainted milk scandal across the border, leading to shortages in many districts across Hong Kong. Apart from the Wellcome case, Wong said he had received more than 10 complaints about staff at other supermarket chains selling milk powder to traders - people who buy products in Hong Kong for resale on the mainland - instead of making them available to regular customers. Outlets in Sha Tin, Tseung Kwan O, Taikoo Shing and Northern district were involved, he said. A spokeswoman for the supermarket confirmed that the employees had failed to follow company sales procedures stating each customer could only buy three cans of milk formula at a time, and the three had been formally warned. The company had strengthened internal communication to reinforce the message to all frontline staff that sales procedures must be followed, she said. "All stores will be checked to ensure they are compliant. Staff members who fail to adhere to the rules will be disciplined," the spokeswoman said. Wong questioned why Wellcome had not referred the case to the authorities. Public confidence in milk formula sold on the mainland has plunged following the tainting of milk with the chemical compound melamine by a number of manufacturers in 2008. The supply situation began to worsen in Hong Kong before the Lunar New Year, as parents complained they could not buy enough milk powder in supermarkets and pharmacies. In response, a number of manufacturers promised to increase supplies and to deliver goods directly to homes. Despite the increase in supplies, it remains difficult for many parents to find popular brands of milk formula on shelves in Sheung Shui and Fanling, according to several district councillors.

 China*:  March 5 2011

China reaches for the moon - and gets it - From the depths of the ocean to orbiting the moon, China's army of scientists and engineers made great strides forwards last year. And, well, backwards, too. China produced the world's darkest dark-matter detector, the longest long-range quantum teleporter, the deepest deep-sea exploration submarine and a superlative supercomputer that leaves overseas competitors standing. But there were also academics who got it wrong, cases of pseudoscience and technology that caused more harm than good. One revolutionary technology claimed to extract cooking oil from restaurant waste - but not only did the oil taste repulsive but it turned out to be carcinogenic. The good and the bad all benefited from cash allocated at last year's National People's Congress. The latter, of course, will be absent from Premier Wen Jiabao's next Government Report. On the upside, China continued to make progress in space last year. On October 1, it launched its second lunar probe, the Chang'e II, to pinpoint a suitable landing site for a future mission. More than 500 senior mainland scientists chose the Chang'e II as the year's biggest scientific event, according to a survey by the Chinese Academy of Sciences. This year China aims to further improve on that with the launch of Tiangong I, China's first space-station module. The ocean is another frontier where China made breakthroughs. In August, the manned deep-sea submarine Jiaolong, or Sea Dragon, planted a national flag on the floor of the South China Sea. Its mission is to seek natural resources, such as minerals. And it is charged with going beyond the South China Sea and into the Pacific, challenging US dominance in the world's largest body of water. While the world struggled with recovery from the financial crisis, China stimulated its economy with high-speed rail projects. The world's longest high-speed rail line, between Shanghai and Beijing, has been completed and is being tested. On one such test run, the train reached more than 480 kilometres per hour, a world record for an unmodified conventional commercial train. There was also progress in the energy sector. While most fast reactors in developed countries such as Britain and the United States were suspended or scrapped, China fired up one in a nuclear-research facility south of Beijing, paving the way for commercial use. Fast reactors can burn up uranium fuel thoroughly and produce little radioactive waste, but they are challenging to build and maintain. China's communication sector also caught the world's attention. Aware that its existing military and economic communication network was prone to be hacked, China poured money into quantum communication technology that, in theory, kept transmissions secure. Nature magazine published a cover story in June reporting the success of a 16-kilometre quantum teleportation experiment in China, in which information was transported using unentangled photons. It was a distance more than 20 times longer than had ever been achieved before. Other notable scientific and technological breakthroughs that China achieved last year included finding a gene that can boost the production of rice; an innovative and promising treatment that aims to starve cancer cells to death; drawing the first complete map of panda genes; and liquefying coal at low cost. Meanwhile, academic scandals also went to new levels. Dr Li Liansheng, former professor of Xian Jiaotong University, lost his job and a National Science Award for stealing other researchers' work. The scandal shocked the mainland's scientific community because Li was the first to lose the top science prize on the mainland. Many said others had done worse things but had not been found out ... yet. Dr Xiao Chuanguo, a former professor of Huazhong University of Science and Technology, hired hitmen, who attacked science critic and blogger Dr Fang Shimin in August because Fang had exposed Xiao's academic faults to the media. Xiao was arrested in Beijing and sentenced to five months' imprisonment in October, in the first verdict of its kind on the mainland. Ordinary citizens have fallen victim to bad ethics within the scientific community. Last year, some mainland parents made their children prepare for IQ tests in the misguided belief that it would turn them into Einsteins; young women swallowed bottles of pills in a useless attempt to make their body odour more attractive to men; and many people, misled by unproven claims by so-called experts, took a chemical called L-carnitine to lose weight. Fang said that in a country where government bureaucrats controlled most research funds, scientists had no freedom to follow their passions. He said this was the reason why a recent campaign launched by China to attract world-class scientists to study there has met with little interest. Chinese 21st-century science had been kidnapped by the ethics of the Dark Age, Fang said, adding: "What has been exposed is only the tip of an iceberg."

Chinese buy up Bordeaux chateaux - Jewellery tycoon Shen Dongjun not only imports wine to China, he aims to make wine from the Bordeaux region solely for the mainland. China gained another foothold in the booming wine trade with Bordeaux when a jewellery magnate added a chateau in the southwest of France to his glittering assets. Shen Dongjun's purchase of Chateau Laulan Ducos is part of a broader Chinese investment boom that has begun to change trading strategies - and even the taste of some wines - in France's best-known growing area. The chief executive of Tesiro, a high-end retail jewellery chain, visited 40 vineyards before settling on his 22-hectare cru bourgeois estate at the remote tip of the Medoc region, outside Bordeaux. Shen, 42, says his family and friends have been astonished by his plan to invest in a French vineyard but, amid a Chinese wine boom offering ballooning profits, "they are beginning to understand". He began importing wine to China last year, when the combined mainland-Hong Kong market lapped up 33.5 million bottles of Bordeaux worth €333 million (HK$3.6 billion), making it the French region's biggest export market by value. Taken separately, and in value terms, wine sales to the mainland increased 98 per cent and those to Hong Kong rose 126 per cent last year. Given these figures, it's no surprise that savvy players such as Shen are heeding the call that has lured many a foreigner to Bordeaux's quays over the past 800 years. "I wanted to understand the entire process of producing wine - not just the commercialisation of wine - in order to develop the market," says Shen, who plans to invest to improve the quality of his cabernet-merlot blend. This dovetails nicely with Bordeaux's tradition of welcoming foreigners who have developed a passion for its wines and are eager to develop trade, according to Georges Haushalter, president of the Bordeaux wine council. "First, the English, Dutch, Irish came. The Japanese came 20 years ago. It's logical that the Chinese arrive today," he says. In the past three years, the Chinese have bought five chateaux, including one snapped up by the state-owned agricultural and food conglomerate Cofco last month. But the Chinese buyers have put a savvy twist on tradition. Not only will they control the entire production from grape to glass, cutting out the middlemen, but every sip is destined for China. Shen confirmed that all 150,000 bottles of Laulan Ducos would be given a packaging makeover suited to Chinese consumers and bypass the traditional network of brokers and merchants that distributed Bordeaux. English wine merchant Francis Anson says: "There are loads of examples of foreigners coming to Bordeaux and investing in chateaux and export businesses, but they've almost always adopted the Bordeaux model of exporting to multiple markets. "Very few take the entire production for their home market." With only one market in mind, the Chinese chateau owners are also making wine tailored to their palate, says Stephane Toutoundji, a consultant with two Chinese-owned chateaux. "They prefer smooth wines without too much tannin and not too much oak, and they hate bitterness," he says. "They want charm, elegance and balance." Being a Bordeaux chateau owner also provides an incredible brand-building opportunity in the most dynamic wine market on the planet. "The Chinese know French wine and Bordeaux, but they rarely know the names of wines", which leaves the door open to new Bordeaux brands, Shen says. And the jeweller, with 200 retail stores, 3,000 employees and the exclusive Chinese distribution of Eurostar Diamond Traders' Blue Flame 89-facet diamond, knows something about marketing luxury goods. He also has access to a long roster of VIP clients, the corporate gift market and wedding planners. "If we sell our jewellery for weddings, why not our wine?" asks Zhou Linjun, a Tesiro executive who oversaw the chateau purchase. Once their Laulan Ducos brand is established, they plan to sell wines produced by other estates under the Laulan banner label. "It sounds to be a very savvy purchase from a potentially major Chinese player," Anson says. "It's remarkably well planned and part of a larger strategy." Shen admits the investment to build his wine brand in China may cost more than the chateau. He declines to reveal the purchase price.

Tax threshold to be increased by 1,000 yuan per month - A draft amendment by the State Council will be submitted to the National People's Congress Standing Committee to raise the threshold for paying personal income tax in a move to benefit low and middle income earners. Although the new tax threshold has not been released, mainland press reports indicated the government would raise it from the present level of 2,000 yuan (HK$2,400) a month to 3,000 yuan. Some NPC delegates have lobbied to raise the threshold to 3,500, 5,000 or even 10,000 yuan. "In order to further reduce the tax burden on medium and low-income people, it has become necessary to revise the personal income tax laws and increase the tax-paying threshold," the State Council said. The proposal to amend the personal income law needs the Standing Committee's approval. At an executive meeting presided over by Premier Wen Jiabao yesterday, the State Council, China's cabinet, also decided to streamline existing tax brackets. In his online interview on Sunday, Wen announced the State Council's tax reform plans in response to a complaint by a taxi driver. Once the new rules were implemented, he said, they would benefit "the entire salaried class", from workers to government employees. "A tax reform is the simplest thing that the government can do to bring them tangible benefits," the premier said, and personal income tax reform is to be the first thing that the central government will do this year. The personal income tax law has nine tax brackets, which critics say work against people on relatively low incomes. The maximum tax rate is 45 per cent. The State Council also decided to make "a corresponding adjustment" in the business income tax for self-employed businesspeople. It did not give details. Many NPC deputies have proposed raising the income threshold. Dr Ren Zhenglong , an agricultural scientist and deputy from Sichuan , said a person making 7,000 yuan a month would not be considered rich, especially if he or she took care of other people. But the present income tax rules would ask him to surrender 20 per cent of his earnings in income tax. And that would create a lot of psychological pressure for the working class. Dong Mingzhu , chief executive of Gree Electrical Appliances and a delegate from Guangdong, proposed last year to raise the income tax threshold to 5,000 yuan a month. This year, Zhao Xizhong , a grain storage expert from Liaoning , said he was preparing a motion to raise the personal income threshold to 3,500 yuan a month. According to Wen Tianyu, a columnist on, if the personal income tax threshold were raised from 2,000 to 3,500 yuan a month, a taxpayer would save 100 yuan a month. The threshold was 1,600 yuan in 2006 and raised to 2,000 in 2008.

China's top political advisory body convenes annual session - The National Committee of the CPPCC, the country's top advisory body, convenes its annual session at 3 p.m. Thursday.

"He-Man" to hit screen on April 1 - As the sequel of the film "Underdog Knight", the film "He-Man" performed by Liu Ye and Zhang Zilin will be staged on April 1.

Wahaha plans to open department stores - Zong Qinghou, chairman of Wahaha Group, encourages employees to sing at the company's New Year Party. Billionaire Zong Qinghou, whose beverage maker Hangzhou Wahaha Group Co has made him China's richest man, said he plans to venture into retailing by opening 100 department stores. "We are in talks with many local governments because establishing big stores requires land," Zong said in an interview in Beijing on Tuesday. "By setting up our own shops, we can have more say in the distribution" of Wahaha's products, including carbonated drinks and mineral water, he said. Wahaha, founded in 1987 by Zong with a 140,000 yuan ($21,300) loan, aims to boost sales 27 percent to 70 billion yuan this year, he said. In 2009, the company ended two years of legal disputes with Danone over control of the Wahaha trademark, with the Paris-based owner of the Evian and Volvic bottled-water brands agreeing to sell its stakes in their joint ventures. Wahaha, the third-biggest soft-drinks maker in China by market share, will also invest in the mining and high-tech industries, said Zong, who is also a deputy to the country's National People's Congress, the top legislature, which starts its annual session on Saturday. "As for overseas investment, I'm not going to compete against foreign companies," said Zong, whose wealth was estimated by Forbes at $8 billion last year. "What I'll do is buy companies that make products that China lacks or China isn't good at making and sell them back to China," he said. Wahaha already makes milk powder in the Netherlands, he said. The beverage maker, whose name means "Laughing Child" in Chinese, competes against Coca-Cola Co and Tingyi (Cayman Islands) Holding Co in China, where retail sales grew by 18.4 percent year-on-year in 2010.

Hong Kong*:  March 4 2011

Hong Kong Exchanges & Clearing (HKEx (SEHK: 0388, announcements, news) ), the world's largest exchange operator by market value, posted a 21 per cent rise in fourth-quarter earnings, roughly in line with estimates, and said it is aiming for strategic alliances to boost growth. HKEx said it would not be surprising to see mergers of leading exchanges in the quest for strategic flexibility and synergy, but the move would intensify competition among exchanges. “We may seek strategic alliances with technology providers, industry participants, and our regional and global counterparts to expedite our growth initiatives,” HKEx Chairman Ronald Joseph Arculli said in a statement. “Any alliance we pursue would need to present strategically compelling benefits consistent with our focus on markets in Greater China,” he added. HKEx’s shares were down 2 per cent at midday on Wednesday prior to the results announcement. This compared with a 1.8 per cent fall in the benchmark Hang Seng Index. The stock rose 26.5 per cent last year, outperforming a 5.3 per cent rise in the broader market. HKEx had said it would like to replicate Intercontinental Exchange’s model of buying up businesses in the commodities futures space, looking to put a US$5 billion war chest to work as a wave of consolidation sweeps the industry. It also looked to the Shanghai and Shenzhen stock exchanges for closer cooperation, but current regulations make such an arrangement unfeasible. HKEx reported a net profit of HK$1.56 billion (US$200.5 million) for the October-December quarter, according to Reuters calculations based on the company’s full-year results, up 21 per cent as compared with HK$1.29 billion from a year earlier. The result was roughly in line with expectations for a quarterly net profit of HK$1.61 billion from 17 analysts polled by Thomson Reuters I/B/E/S. For the full year, net profit was HK$5.04 billion, up 7 per cent year on year, the exchange said. Average daily stock market turnover – a key determinant of exchange revenue – rose 11 per cent last year to HK$68.58 billion. Hong Kong saw 141 IPOs last year, raising HK$449 billion, up from 93 IPOs in 2009 that raised HK$248 billion. Last month Australia’s ASX Group eked out a small rise in its first-half profit, but focus was squarely on the completion of Singapore Exchange’s US$7.9 billion bid for the Australian bourse operator, a move to help them fight growing competition.

Standard Chartered's Benjamin Hung, left; Jaspal Bindra, centre; and Julian Fong give the thumbs up sign at the company's headquarters in Central on Wednesday. Asia-focused bank Standard Chartered met expectations with a 19 per cent rise in profits and said it had made a record start to this year as India, China and other Asian markets boomed. The London-based bank which generates more than four-fifths of its profit in Asia and other emerging markets, said it had its best ever January and expects revenue to grow by at least 10 per cent this year and beyond. It made a pretax profit of US$6.12 billion last year, a new high for the eighth year in a row and in line with analysts’ forecasts but warned that banking regulations were becoming more fragmented than coordinated and it was “relatively cautious” on the outlook for the world economy, which remains vulnerable to shocks. “The bank is very well positioned, and while we won’t see the kind of jump we saw last year, it’s still going to be fairly good growth,” said Daniel Tabbush, analyst at CLSA in Bangkok. “We’re very comfortable with their exposure to both the emerging markets and the developed markets for origination and connectivity.” Chief Executive Peter Sands said in a statement the bank started the year with good momentum and volume growth, backed up by a strong balance sheet. Costs rose 13 per cent last year, outpacing a 6 per cent rise in income, as the bank fights to hire and retain staff in its hot Asian markets and invested more after slowing spending in 2009. Costs rose to 55.9 per cent of revenue from 51.3 per cent. It said its bonus pool costs for staff “increased modestly” to US$1.19 billion from US$1.1 billion and it added about 7,000 staff last year, or a 9 per cent rise to 85,000. It said it plans to keep cost growth at the same rate as income growth this year after the step up in spending last year. Rival HSBC Holdings (SEHK: 0005, announcements, news) this week cut its profitability targets because of the cost of tougher banking regulations and plans to cut costs and overhaul other areas after its annual profit missed expectations. Standard Chartered’s history of financing trade between Europe, Asia and Africa dates back to 1853 and its wholesale business, which includes investment banking and trade finance operations, remains its key driver. India surpassed Hong Kong as its top profit contributor last year with earnings of US$1.2 billion. Wholesale operating profit of US$4.5 billion last year was up 17 per cent from 2009. Consumer banking operating profit rose 51 per cent to US$1.3 billion, the bank said. Operating expenses at its wholesale business rose 16 per cent as the bank paid top dollar to snag several high-profile hires as its aggressively expands in the fast-growing emerging markets segments of Asia and Africa, where it has a history of financing trade between those two continents and Europe. The bank’s second-half net profit attributable to ordinary shareholders rose 52 per cent. Its Hong Kong-listed shares rose 12 per cent last year, outpacing the benchmark Hang Seng Index’s 5.3 per cent advance.

A block of four Mao-era stamps sole for a record HK$8.97 million at auction in Hong Kong on Wednesday. A rare stamp set dating back to the Cultural Revolution has sold for HK$8.97 million in Hong Kong, organisers said Wednesday, setting a world record for Chinese stamps sold at auction. The connected set of four from 1968 – entitled Inscription to Japanese Worker Friends – was never issued by Beijing after Japan raised objections, saying the message from Mao Zedong would incite its citizens to revolt. The set, which is believed to be the only surviving block of four and was among 3,000 lots at the sale Hong Kong, was sold for HK$8.97 million (US$1.15 million). The auction raised a total of HK$98.7 million. Other lots included an 1897 Qing Dynasty stamp that went under the hammer for a record HK$5.52 million and another 1968 Cultural Revolution stamp, which sold for HK$2.53 million, said organisers Interasia Auctions. “We are seeing a level of interest and excitement in People’s Republic [of China] stamps that is absolutely breathtaking,” said the auctioneer’s founder Jeffrey Schneider. Organisers said the auction was the biggest stamp sale in Hong Kong, which has emerged as the world’s third-largest auction centre after New York and London, thanks in large part to China’s rapidly growing number of millionaires. Mainlanders are regular buyers of the top lots at sales of art, jewellery and wine and Hong Kong has positioned itself as a wine hub for Asia as well as the gateway to China’s vast market.

The meeting of the Public Doctors' Association hears from Loletta So. The biggest public doctors union yesterday urged the Hospital Authority to promote all the medics who had acquired specialist qualifications to senior posts to stop a brain drain. But the authority said doing so would stretch its finances as more than 700 doctors had the qualifications. But it pledged to shorten the promotion path for them to less than six years. The Public Doctors' Association threatened industrial action if the authority failed to address a manpower shortage with a package of improvement measures by March 18. At present, 777 doctors from different specialities have attained specialist qualifications but remain at the junior medical officer or resident doctor grade - the lowest in the system. It takes a doctor at least six years after graduation to take a specialist position, such as surgeon, physician or paediatrician. Hospital Authority chief executive Dr Leung Pak-yin yesterday said that a wholesale promotion would be financially impractical. Instead, the authority would consider introducing a policy that ensured doctors promotion to senior medical officer or associate consultant position five or six years after receiving the specialist qualification. Leung hopes to enforce the policy in the next two to three years. "It is an important policy with a long-term commitment, we cannot just make a one-off move," Leung said. "We have to look carefully into our financial situation before coming up with a final package." A medical officer earns up to HK$102,959 a month, but his monthly salary will increase to between HK$108,227 and HK$124,684 if he is promoted to the associate consultant grade. More than 200 doctors attended a forum held by the Public Doctors' Association last night to express their grievances over heavy workloads and poor career prospects. The doctors were from all public hospitals in Hong Kong and practised in different specialties. Dr Peter Pang Ka-hung, a senior medical officer who specialises in neurosurgery at Kwong Wah Hospital in Yau Ma Tei, said he had taken to using sleeping pills to get to sleep during the past 13 years. He is on call 10 to 15 nights every month. "Doctors always ask patients to take a rest. But they are the ones who needed rest the most," he said. Tuen Mun Hospital medical officer Dr Yuen Mang-ho said: "The workload is so heavy that I no longer feel like a doctor. I feel more like a slave." Association president Dr Loletta So Kit-ying called on the authority to set standard work hours for doctors. So said the authority should also compensate doctors with extra pay or time off for overtime work. However, Leung said stipulating standard working hours was a complex issue which needed careful consideration. Five per cent of Hospital Authority doctors have quit in the financial year ending this month, with many heading to the private sector. The departures mean heavier workloads for those who remain. Poor promotion prospects have been a main factor leading to a high turnover of doctors. At Tuen Mun Hospital, the major acute-care hospital in the western New Territories, 25 per cent of junior doctors at its internal medicine department have quit since January last year. Doctors of internal medicine complained that they were not getting promoted even after they attained specialist qualifications and had worked for the authority for more than 15 years. Meanwhile, the Hong Kong College of Physicians warned that the severe manpower shortage at public internal medicine departments was putting patients at risk. The top training body for specialists in internal medicine gave its "strong support" to doctors who expressed dissatisfaction over heavy workloads and career prospects. In a letter to all college fellows and trainees on Monday, college president Dr Patrick Li Chung-ki said: "Doctors in medical departments of public hospitals have become severely stretched beyond their limits. Due to overcrowding in medical wards, premature patient discharge is commonplace making unplanned readmissions a high risk. Further risks are incurred because contact time with both in- and out-patients has, inevitably, been compromised." The college urged the Hospital Authority to review the manpower allocation in all departments, reduce doctors' workloads by providing clerical support, and promote doctors who have acquired specialist accreditation to senior posts. In the next few weeks the college would modify its examinations "as a priority to reduce the hardship to our trainees in the light of their heavy workload".

The Borrett Road site is one of the few large plots still available for sale in Mid Levels. Mid-Levels site could hit record HK$10.9b - Continuing influx of mainland buyers likely to drive prices of luxury flats even higher. A luxury residential site in Mid-Levels slated for sale this year could set a land price record in Hong Kong, believe some property watchers. It could also bring sky-high expectations about the outlook for further strong growth in property prices back to earth with a bump. The 1.05-hectare site at 21, 23 and 25 Borrett Road commands views of Victoria Harbour view. It is conveniently located in a neighbourhood that offers access to several international schools and is also one of the few large development sites in Mid-Levels areas that are still available for sale. When it was first put on the application list six years ago - opening it to bids from developers that for a variety of reasons never followed - surveyors estimated the site was worth HK$7.1 billion, or HK$12,500 per sq ft. Following the recent sustained growth in luxury housing prices, surveyors now set the value of the site at HK$10.9 billion, or HK$25,000 per sq ft. The belief among some analysts that the Borrett Road site would set a record land price for Hong Kong has remained unshaken even after the government increased the supply of luxury residential sites to cool the overheated property market. Are they over-optimistic about the outlook for the luxury residential market? Or is the market still on a strong upward path? The market's record is impressive. Prices at 35 luxury housing estates have risen by 26.5 per cent from 2008 to January this year, according to property agency Ricacorp Properties. Patrick Chow Mun-kit, head of research at the firm, said he expected prices of luxury properties to rise a further 15 per cent this year, but after the strong start to the year he has revised that higher. "It is pretty scary that the prices of houses on the Peak and Island South have already reached HK$70,000 or HK$80,000 per sq ft," said Joseph Tsang, managing director at property consultant Jones Lang LaSalle in Hong Kong. At that level they have surpassed the price level recorded at the market peak in 1997.

 China*:  March 4 2011

A widening probe into corruption in the mainland’s powerful Railways Ministry is raising questions over the scale and pace of its multibillion-dollar drive to build costly high-speed railways, though it is unlikely to derail the program. Along with concerns over financing and other issues, at least one proposal for scaling down the showcase program is due to be presented to a top advisory group meeting in Beijing this week during the annual session of China’s National People’s Congress, a state media report said on Wednesday. Critics of the high-speed railways expansion say ticket costs are too high and the services do not really meet the needs of average travellers in many areas. “Railway development plans should be more down to earth and take into account what people really need,” Wu Youying told the Shanghai Daily. Wu is a member of the advisory group, the Chinese People’s Political Consultative Congress. While Wu’s proposal will likely gain little traction given the resources invested in high-speed rail, the corruption investigation is a blow to the program, which until recently has rivaled the mainland’s space efforts in terms of national pride and importance.The scandal surfaced last month with the dismissal of Railways Minister Liu Zhijun amid allegations of so-far unspecified “severe violations of discipline.” Reports in the financial news magazine Caixin Media and other local media say the allegations involve kickbacks, bribes, illegal contracts and sexual liaisons. Dismissals of top Communist Party officials are rare, since they can damage the party’s credibility among a public already jaded by widespread graft. But the current leadership has sought to burnish its image with various cleanup campaigns. In the latest development, Zhang Shuguang, an engineer in charge of research and development of the country’s high-speed railways, was removed, also for alleged but unnamed disciplinary violations, Xinhua announced late on Tuesday. Zhang oversaw innovation of China’s high-speed rail technology, according to an earlier Xinhua report that quoted him describing his triumphs in negotiations with foreign companies. “Our strong point is that Chinese producers are united to form a ‘China corps,’” Zhang said. The same epic account cited Liu, the ousted railways minister, as likening the country’s high-speed railways to “dragons in the sky.” The concerns over the railway program are not limited to corruption. The country’s 91,000 kilometres of passenger railways are the world’s longest and, in some cases, the fastest, but are still working beyond their capacity. China will spend 700 billion yuan (HK$828 billion) in railways construction this year, railway officials say, as it works toward its goal of having 13,000 kilometres of high-speed rail in place by the year’s end. The costs are raising worries over financing. Major state-owned railway and railcar building companies with shares listed in Hong Kong and Shanghai increasingly are relying on bonds and bank loans to finance projects, with onerous repayment obligations that may be difficult to meet given the revenue projections for many projects. Annual interest payments on loans for a high-speed rail link between Beijing and the nearby city of Tianjin, for example, will fall short of the line’s annual revenues. Other lines face similar woes, the financial magazine Caijing reported, citing Zhao Jian, a professor at Beijing’s Jiaotong University. “It seems that political impetus, rather than market needs, lies behind China’s railway frenzy,” said a recent commentary in the Chinese newspaper Global Times, describing the boom as “incredibly risky”. The speed of construction has some experts asking about safety issues, but the top gripe among critics of the program is that the emphasis on bullet trains is coming at the expense of slower but more practical services. Despite the increasingly public criticisms over the high-speed rail programme, it is unclear what impact the scandal will have on future and current projects. They include a 1,400-kilometre high-speed link between Beijing and Shanghai that is due to open in June. China, meanwhile, is going head-to-head with global rivals like Siemens, Japan Railways and Bombardier and winning overseas contracts, among them a recent US$13 billion deal to build eight railway lines in Iran and plans for joint construction of a high-speed railway in Kazakhstan.

Chinese and Indian demand will fuel a global commodities price rally for another two years before miners and farmers produce enough metals and grains to restrain the charge, Australian and US officials said yesterday. Some analysts have expressed doubts about the sustainability of the price rally, now in its third year, partly because of a manufacturing slowdown in China. Commodity prices have also lost some momentum although iron ore, coking coal, copper and gold remain around all-time highs, and wheat and crude oil are around two-year highs. "We are certainly looking at a continuation in the mining boom, at least in the short run anyway," said Paul Morris, deputy director of Australia's official commodities forecaster. Supply would gradually catch up with demand over the next two years and lead to a peak in prices, he said. "Over the medium term, some of the price rises we have seen will start to ease a bit, as there's expected to be a supply response to the rises in agricultural products as well as minerals and energy output." US Department of Agriculture senior analyst Shayle Shagam agreed. "In the global sense, we are looking at relatively high grains prices and commodities generally over the next two years," Shagam said. That would encourage companies to invest in increased production, he said. Australia is the world's third largest wheat exporter and a top-two exporter of iron ore and coal. Its small population means just about everything it mines or grows is shipped abroad. Not everyone is convinced the boom can last given inflationary concerns and rising interest rates in China and a modest slowdown forecast for emerging economies this year. Citigroup does not expect copper prices to go much above current levels of around US$10,000 a tonne and it forecasts iron ore to top out at current levels of US$190 a tonne, then fall to US$160 mid-year and to only US$80 a tonne by 2015. Australia & New Zealand Bank sees a broad decline in commodities prices through to the end of 2013 and Rabobank expects farm commodities to become increasingly volatile. "We are near the peaks right now," said Tom Price, commodities analyst for UBS. The global iron ore trade would move into surplus by 2014, he said. "These prices are going to stimulate a very strong supply-side response across all commodities, so when the supply starts to lift that should undermine prices." Some investors see the likely flotation of Swiss commodities giant Glencore this year as another indication the commodities cycle is peaking. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) is much more upbeat: it is counting on around US$255 billion in annual commodity export earnings - equal to a fifth of the country's gross domestic product - over the next four years. "Overall, compared to long-term averages, the outlook for minerals and energy is reasonably favourable," Morris said. "The main drivers will be China and India." Australian iron ore exports, the biggest earner, are forecast to jump 5 per cent to 425 million tonnes in 2011, fed by a recovery in demand from steelmakers after the global financial crisis. They could near 600 million tonnes by 2016. In 2011, ABARES forecasts world steel production to grow 7 per cent to 1.5 billion tonnes and continue at an average rate of 6 per cent a year to reach 2 billion tonnes in 2016. Australia's liquefied natural gas exports are expected to more than double from 18 million tonnes in 2009/10 to 41 million tonnes in 2015/16, ABARES said.

The US government owes nearly a third more money to China than earlier thought, the Treasury Department said as it revised Beijing's December holdings of US Treasury debt sharply higher to US$1.16 trillion. The US$268.4 billion increase over figures reported on February 15 was contained in a survey of foreign portfolio holdings of US securities that provided fresh evidence that China has been buying Treasuries through broker-dealers in Britain. The report's benchmark revisions attributed Treasuries holdings to China that were previously counted in other countries where the transactions were made, cementing Beijing's status as the largest US creditor. The Treasury report showed that UK December Treasuries holdings were revised downward to US$272.1 billion from a previously reported US$541.3 billion - a nearly corresponding drop of US$269.2 billion. "This provides the most substantive evidence to what has been suspected - that China has been increasingly transacting through the UK," said Alan Ruskin, global head of G10 foreign exchange strategy at Deutsche Bank in New York. "It does suggest that there's more commitment on the part of China to finance the US current account deficit. On the downside is the perception that the US is more beholden to the Chinese," he added. However, it also means that China has an even bigger stake in Washington's ability to bring its deficits under control and avoid a major market decline in its debt prices. Analysts and officials across the Group of 20 major economies say that China has had to purchase vast amounts of US assets to keep its currency from rising against the dollar. While Beijing has allowed the yuan to rise about 3.8 per cent since June, the currency is widely viewed as undervalued, giving China an export advantage. US Treasury officials say they believe China will allow the yuan to appreciate more quickly to control growing inflationary pressures. The preliminary report on foreign portfolio holdings showed that China's total holdings of US securities as of June 30, 2010, including Treasuries, stocks, asset backed securities and other long-term and short-term debt rose to US$1.61 trillion from US$1.46 trillion a year earlier. Total US securities held by all foreign countries on June 30, 2010, rose 11 per cent to US$10.7 trillion from $9.64 trillion a year earlier. The Treasury used the survey data through June 30, 2010, to identify the ultimate holders of its debt and make the benchmark revisions to its latest Treasury International Capital data. Other major foreign holders of Treasuries showed far smaller revisions. December holdings by Japan, the second-largest US creditor, declined just US$1.3 billion to US$882.3 billion. Holdings of oil-exporting countries, the number three group, fell US$6.1 billion to US$211.9 billion. But December Treasuries holdings in Russia were revised sharply upward to US$151 billion from US$106.2 billion, putting it in eighth place behind Taiwan, which saw its holdings revised US$23.2 billion higher, suggesting that both countries had made offshore purchases. Canada saw its December Treasuries holdings revised sharply lower to US$76.8 billion from a previously reported US$134.6 billion, suggesting that its banks also may be purchasing on behalf of buyers elsewhere.

Rowland Wong, president of Goldin Metropolitan Polo Club, in the stables. "We are building communities," he says. Polo club sets exclusive tone at luxury Tianjin mini-city - 10m yuan membership fee to join retreat for the wealthy - A massive complex now under construction in Tianjin and including business, residential, sporting and commercial developments is monumental in both scope and scale. The first phase of the development, which is located in Tianjin's Binhai hi-tech park, is the 1.6 billion yuan (HK$1.89 billion) Tianjin Goldin Metropolitan Polo Club and Hotel. It features two international-standard polo fields, stabling for 150 horses, a 167-room hotel, 10 restaurants, a three-storey wine cellar with a capacity of 10,000 bottles, a business centre, a ballroom for 1,000 guests, plus conference rooms, spas, gymnasiums and a Roman-styled indoor swimming pool. But that is just the icing on a very large cake. Still to be developed are 2,000 apartments and villas, a 117-storey office tower with space for 3,000 to 4,000 workers, and retail and entertainment zones that include a theme park and theatre. Once completed the project, which is backed by Hong Kong-listed Goldin Properties Holdings, will be a self-contained mini-city. "We are not just building buildings, we are building communities," Rowland Wong, president of the polo club, said. An hour's drive from Beijing, the development is taking shape on the western outskirts of Tianjin city, one of the mainland's fastest-growing economic strongholds. So far, Goldin has put 10 billion yuan into the project. The polo club opened in November, while the hotel, conference facilities, and restaurants should be open for business soon. Construction continues apace on the apartments and villas, which will be launched in June. The office tower comes next, with the full project set for completion in 2015. The choice to open the polo club first may seem unusual. After all, why build world-standard facilities to cater for a sport hardly known in China with an associated large hotel in a largely empty industrial zone miles from any alternative scenic or historic attractions that would otherwise lure visitors? The development schedule is, however, visionary. Polo, a lavishly expensive sport indulged in by the wealthy across the world, is often seen by aspirant wealthy on the mainland as the pinnacle of high society. By creating a polo club, the developers are "bringing the spirit of nobility" to Tianjin, as Wong sees it. This sounds grand. But it is also practical and many would argue that this part of Tianjin sorely needs an injection of nobility if the mainland's upwardly mobile are to be attracted here to live or work. The polo club, so the reasoning goes, will create a lifestyle image for people to buy into. "Lifestyle is our main theme, and the polo club sets the tone," says Francis Yeung, director of residential sales at Goldin Properties. But the noble spirit comes with an appropriately noble price tag. The club facilities will be for members only, and membership will set you back 10 million yuan upfront, plus a further 10,000 yuan a month fee for the highest category of membership, to be called "Patron", which comes by invitation only and offers the chance to form one's own polo team. Others memberships will range in price from 380,000 yuan to two million yuan. So far, no one has signed up for membership, although it is early days, the club having been launched just last month. Ellen Ng, mother of Jacqueline and Jasmine Lai who both represent Hong Kong in international equestrian competitions, visited the club. The facilities looked impressive and would be good for athletes and spectators, said Ng, but she was surprised by the cost of membership. The facilities feature two million sq ft of space designed to keep members plied with food and drink, entertainment, and networking opportunities. The hotel's flagship restaurant, Le Pan by Voon, is Tianjin's first haute cuisine French restaurant and offers a chef's table costing 10,000 yuan a head, with delicacies whipped up on the US$1 million stove imported from Italy. The hotel suites will cost around 8,000 yuan a night.

Hong Kong*:  March 3 2011

Entrepreneur Richard Li Tzar-kai broke his silence last night to rebuke "fabricated" media reports on his parting with actress-singer Isabella Leong Lok-si. "Isabella announced the news of our separation days ago. This is sad. But we will strive to take care of our three sons and look for the best environment for them to grow up," Li said at the start of a statement made in Chinese released last night. The 44-year-old chairman of PCCW (SEHK: 0008) also said recent reports about various people said to be involved as "a third person" were groundless fabrications. He had never met the people mentioned in the reports. He also said the millions of dollars mentioned as a "parting fee" was an invention, and "deliberately linked the affair with money and concealed intentions". He called on journalists to show integrity and said he "would not baulk at taking legal action if needed" in order to protect his family. Leong, 22, often described in media reports as a Cinderella, announced in a press statement on Saturday that she had parted with Li. Her spokeswoman, Michelle Loo, said previously this parting did not involve a third person. Loo also said the couple's separation was completely unrelated to an article that appeared in Next Magazine 10 days ago, which reported that Leong was dating a man in Toronto. The magazine published a series of shots of Leong in a bar chatting to a young man. Loo said the man in the photo was a childhood friend. The split came just months after Leong gave birth to twin boys in June. Li said he would not respond to any "absurd and untrue reports", and he "earnestly requested media to restrain from speculation and to use their professional integrity for fair and objective reporting".

Standard Chartered will pay HK$1.48 billion to buy back the HK$2.19 billion worth of outstanding Lehman Brothers derivative products it sold. The move marks a big step forward in resolving disputes over the sales of the soured investment products. The repurchase scheme covering 95 per cent of the outstanding transactions in Lehman Brothers-issued Equity Linked Notes (ELN) held by Standard Chartered customers was announced yesterday by the Securities and Futures Commission and the Hong Kong Monetary Authority. ELNs are debt instruments that base their performance on the return of the underlying equity. They are not minibonds but a similar type of credit derivative. Earlier, 16 banks offered to buy back Lehman Brothers-issued minibonds from about 25,000 investors. Some people who bought Standard Chartered ELNs at the time argued that they should also get a similar buy-back package. The two regulators said they were concerned Standard Chartered may have exposed Lehman Brothers customers to higher levels of risk than appropriate. "Intermediaries have an obligation to ensure suitability when making a recommendation or advising on securities. Assessing the right level of concentration is a necessary part of the suitability assessment," SFC chief executive Martin Wheatley said. Under the repurchase scheme, Standard Chartered agreed to offer a discounted price for the Lehman Brothers investments relating to each customer's total assets held at the bank. The bank, however, does not accept it committed any wrongdoing over the sale of the ELNs. It said the buy-back offer was made in the interest of its customers and Hong Kong's financial system. The offered price is equal to an investor's investment in the ELN minus 5 per cent of his total assets in the bank if he bought ELNs in which the principal was not protected. For those with principal-protected ELNs, it would be 10 per cent. That means those who bought the principal-protected scheme would receive less than those who bought the other. Some 2,234 customers hold 2,515 outstanding Lehman ELNs. Only about 3 per cent of them are holding principal-protected ELNs. David Webb, a campaigner for better corporate governance, said investors should study buy-back options carefully. "The bank is not paying 95 per cent of the value of the Lehman Brothers products," he said. Webb expected many customers would take the offer as there were not many options available. "And I think such a formula would very likely be used by other banks. The banks would like to put the problems behind them and move forward," he said, adding that the saga had dragged on for too long. Standard Chartered sold more than HK$5 billion worth of Lehman ELNs from August 2006 to June 2008 of which HK$2.19 billion worth remains outstanding.

Days after insisting he would not give way, John Tsang Chun-wah looks ready to offer concessions on the budget. After meeting 20 lawmakers from government-friendly parties yesterday, the finance chief appeared set to backtrack on injections into MPF retirement schemes and offer new sweeteners for people on low pay. If Tsang does make concessions in the face of mounting opposition, it will be the first time the administration has bowed to pressure since 1991, when financial secretary Piers Jacobs watered down his plan to raise the tax on tobacco. Tsang said the legislators raised concerns about the plan to inject HK$6,000 into Mandatory Provident Fund retirement schemes - money that recipients would not get their hands on for years. They also voiced displeasure at the lack of tax rebates in last week's budget and expressed concern for people who would not benefit from the relief measures he proposed. "I will look at those recommendations from these members," he said. "I will consolidate some of those recommendations and propose some recommendations to everyone." He would also address the issue of whether civil servants were entitled to the MPF injection. The finance chief's about-face came two days after he said there was little room for negotiation. With pan-democrat groups planning a march on the government headquarters on Sunday, time is running out for Tsang to make concessions. He did not answer a query on whether amendments would be announced before the protest. Ip Kwok-him, a lawmaker from the Democratic Alliance for the Betterment and Progress of Hong Kong, said Tsang was likely to make amendments in the next few days to defuse the opposition. A pro-establishment lawmaker who asked to remain anonymous quoted another lawmaker, who said: "If there is a gap between political expectation and economic analysis, when citizens ask for monetary relief, you need to give it." Democratic Party lawmaker Lee Wing-tat urged Tsang to start a second round of budget consultation, given the ample time before the budget was put to a Legco vote in April. "Tsang should not only consult government allies in attempting to get enough votes, but ask for opinions from the whole Legco," he said. The budget contains a HK$43.6 billion relief package, including an electricity charge subsidy, injection into MPF retirement schemes, and a waiver of public housing rents and property rates. But Tsang, who granted a tax rebate of up to HK$6,000 last year, decided against a rebate this year, saying extra disposable income would further fuel inflation. Twenty-two pan-democrat lawmakers say they will vote against the budget if he fails to meet four demands, including resumption of the Home Ownership Scheme and the introduction of a universal pension. The DAB has suggested allowing employees to draw part or all of the HK$6,000 injection from their MPF accounts. The Economic Synergy group proposes converting the money into inflation-linked bonds for distribution to eligible employees. A survey last week by Chinese University's Institute of Asia Pacific Studies found that 41.3 per cent of 926 respondents were dissatisfied with the budget, up 24.9 percentage points from last year. Just 16.7 per cent said they were satisfied, a drop of 12.4 percentage points from last year. Critics said the financial secretary should have come up with measures to help middle class and poor families, especially as Tsang forecast a surplus of HK$71.3 billion for 2010-11. The government announced yesterday there was a surplus of HK$34.8 billion in January. That brought a cumulative surplus of HK$93.8 billion to the end of January. In the 1991-92 budget, Jacobs imposed a 200 per cent increase on tobacco duties. This led to a propaganda war led by tobacco firms. The government bowed to pressure and cut the rise to 100 per cent.

Six children of a multimillionaire who died in 2004 leaving an estate worth hundreds of millions of dollars yesterday began a court challenge against a will disinheriting them in favour of one of his mistresses. Chiu Yau-chuen, who suffered a heart attack at the age of 55, left an estate worth at least HK$260 million in property alone. But it is also rumoured to include hundreds of taxi licences - worth around HK$5 million each according to the latest auction prices for city taxis. Chiu had at least one wife, three mistresses and 16 children, but could also have had as many as six wives and mistresses and 19 children, according to the plaintiffs' lawyer. Neville Sarony SC told the court that, in addition to being dubbed "Mr Taxi" because of his many licences, his clients' father was also called the "Three Dunnoes" - because it remained unknown exactly how much wealth, how many wives and how many children he had. The six plaintiffs are the children of Chiu and his first wife, Wendy Wong Mei-ying, whom Chiu married in 1973 and divorced in 1992 after she bore him nine children. In 2003, Wong committed suicide. The six are seeking a court declaration that a 2003 will disinheriting them and their three siblings is invalid and instead issue a grant of probate for the 1997 will or, alternatively, a declaration that their father died not having disposed of his wealth by will. The hearing, which opened in the Court of First Instance yesterday, is scheduled to last 25 days. The court heard that after leaving Wong, Chiu lived with at least three mistresses, who were named as Chiu Chung Kwan-ying, Chan Koon-hing and Lam Po-chun. The first two bore him three children each and the latter, one. Chiu Chung Kwan-ying has been named as the respondent. "Given the unconventional composition of the deceased's menage, there were bound to be tensions between the co-habitees on one side and Madam Wong and her children on the other," Sarony told the court. Sarony said Chiu's decision to disinherit his nine children by Wong was so irrational that it could in itself amount to evidence that he had been mentally unsound. "The indiscriminate nature of this is in stark contrast to the provisions of the 1997 will, which evidenced his affection for all his children but not for their mothers," he said. Before his death Chiu had suffered from long-term and poorly controlled diabetes, along with diseases related to blood vessels supplying his brain that had led to three mini-strokes. He had for a long time been dependent on sedatives known as benzodiapenes and cocktails of drugs including psychotropics. These, Sarony said, along with Chiu's bereavement caused by the death of Wong, were possible causes for an unsound mental state. "Notwithstanding their divorce, it is clear that the deceased still cared for Madam Wong, the mother of his nine children, all of whom had lived with him at various times," he said. The late Chiu gave first-class accommodation to his children by Wong, housing them at Baguio Villa, Estoril Court or Chi Fu Fa Yuen, unlike his children by the other women, Sarony said. "This discriminatory treatment by the deceased was hardly calculated to engender a harmonious relationship between his legitimate children and his co-habitees." Sarony said a series of tragic events occurred in April 2003. Chiu Man-fu, a son by Wong and one of the plaintiffs, needed hospital treatment after suffering a relapse in psychiatric symptoms that had first appeared in 2002. When he was discharged, he attempted to tell his mother on the mainland but could not reach her. He called her brothers, who broke into her home and found her dead, having committed suicide by burning charcoal. The trial continues before Mr Justice Jeremy Poon Shiu-chor.

Hong Kong shipowners have warned that heavily armed Somali pirate gangs using large merchant ships as mother vessels could choke global trade between Asia and the Middle East and Europe unless governments take tougher action. Arthur Bowring, managing director of the Hong Kong Shipowners Association, said pirates had already attacked and seized ships off the west coast of India. The warning comes as international shipping industry organisations today launch a six-point plan calling on governments to mount a more robust military approach to tackle the piracy menace. "Who's to say they can't go through the Malacca Strait to the South China Sea?" Bowring said. He pointed out merchant ships were sailing further south around the Cape of Good Hope from Asia to Europe where possible to avoid pirates further north where ships are being attacked on a daily basis. Ships heading from the Gulf to Asia attempt to hug the Indian coast to avoid attack. Asked if pirates could threaten the Malacca Strait, the key sea route from Asia to Europe, Noel Choong, head of the International Maritime Bureau's piracy reporting centre in Kuala Lumpur, said: "It's not to say it's impossible. Pirates are coming closer." With sufficient fuel, ocean-going mother vessels "can go anywhere", he said, but the Malacca Strait was heavily patrolled by naval and coast guard ships from Malaysia, Indonesia and other nearby states. The international action blueprint adopted by global tanker, dry cargo and seamen's organisations calls for increased naval forces in the Indian Ocean and the Gulf of Aden region and action against pirate mother ships. These bodies include the ship owners' group the Baltic and International Maritime Council, tanker group Intertanko, the International Chamber of Shipping and the International Transport Workers Federation. They also want all captured pirates prosecuted and punished, better protection for crews and criminalisation of organisers and financiers of piracy networks. Bowring said the "piracy situation has changed and changed dramatically" in the past few months and owners, initially opposed to armed guards onboard, now supported the idea. Several shipowners and managers had urged prosecution and execution of convicted pirates. Pirates had become more violent, he said, killing, torturing and seriously injuring seamen. They were also more heavily armed, more daring and better informed. And while a move into the South China Sea might sound improbable, he pointed out that pirates had hijacked large merchant ships and subsequently used them and coerced their crews to attack and help seize other vessels. Specialist consultancy Risk Intelligence has identified five large ships, including three tankers, hijacked and subsequently used in further hijackings since November. These big mother vessels allowed pirates to roam over a wider area, with attacks now 2,400 kilometres from Somalia. They also provided a stable platform for pirates "to go alongside and fire down" on other ships, Bowring said. The ransoms paid had allowed pirates to acquire heavy weapons that could be mounted on large mother vessels and may eventually be used to fire on helicopters sent to rescue vessels under attack, he said. Several ships owned and registered in Hong Kong have been attacked, including the 319,000 deadweight tonne supertanker Starlight Venture, which had encountered pirates twice. The ship, including the bridge, was peppered with nearly 100 bullet and grenade holes during the first attack, which it evaded.

Executive Council convenor Leung Chun-ying will lead a group of influential figures in setting up a foundation with the aim of holding on to and managing Hong Kong's natural assets for long-term conservation. Widely tipped to be a frontrunner in the next chief executive election, Leung will jointly chair the new Hong Kong Countryside Foundation - to be officially launched today - with former chief secretary Sir David Akers-Jones. The foundation plans to be the first to be set up solely to resolve conflicts between property owners and the public interest in protecting private sites with high ecological or heritage value. Solutions may include buying a piece of land or compensating a property owner. A foundation member said last night it would have to raise funds and there was no specific target at the moment. "Apart from accepting donations, the foundation can also accept gifts of land and property, and even time and expertise of any volunteers who want to help," a member said. According to the memorandum of the foundation, the body will "secure for the long term public benefit, conservation and restoration of countryside, habitats, natural landscape and biological diversity of Hong Kong including their associated natural and cultural heritage by holding and managing such natural assets." Apart from Jones and Leung, the 11-member board responsible for the foundation's management, including its funds and property will include former Hong Kong Observatory director Lam Chiu-ying, former director of lands Patrick Lau Lai-chiu, former government official Roger Nissim, Hans Michael Jebsen, a trustee of WWF Hong Kong, senior counsel Ruy Barretto, Law Society president Albert Wong Kwai-huen, Yau Wing-kwong, an adviser to Heung Yee Kuk, and Ng Cho-nam, an environmentalist and professor.

Macau February casino revenue up 48pc - Casino revenue in Macau jumped 47.7 per cent in February to 19.86 billion patacas (US$2.5 billion), the Macau government said on Tuesday, driven by a torrent of gamblers from mainland China to the world’s largest gaming market. Robust demand from mainland tourists, who account for the bulk of Macau’s visitors, has been bolstered by a buoyant Chinese economy, helping to sustain double-digit growth in the former Portuguese enclave. In recent years, US casino operators Wynn Resorts, operating through Hong Kong-listed Wynn Macau and Las Vegas Sands, via Hong Kong-listed Sands China, have seen revenue from their Macau casinos dwarf that of their Las Vegas counterparts. Analysts remain bullish on the city’s outlook, citing the low penetration of the mainland market and the rising affluence of China’s burgeoning middle class. Gary Pinge, regional head of Gaming and Consumer at Macquarie Securities in Hong Kong, said the figures were a surprise as over the past four years, February has generally been 5-10 per cent weaker than in January, because of the timing of the Lunar New Year holiday. “February looks all the more impressive given the fact that there were three [10 per cent] fewer days and one less weekend than in January. If this is a trend for the rest of the year, Macau could continue to see strong growth, month on month,” he said. February’s figure was higher than the 18.57 billion patacas recorded for January. China’s super rich, who make up Macau’s high-rolling VIP segment, were likely to continue to account for about 70 per cent of gaming revenue in the near term, said analysts. But mass-gaming revenue, seen predominantly through revenue from baccarat, the most popular card game in Macau, is expected to start playing a bigger role this year. Macau’s growing mass-market segment is also expected to be supported in the medium to longer term by infrastructure developments such as construction of a light rail system in Macau and China’s high-speed rail network.

Singapore sovereign wealth fund Temasek Holdings and US hedge fund manager Paulson & Co are cornerstone investors in Hutchison Whampoa (SEHK: 0013)'s port spin-off in Singapore, the largest listing in Southeast Asia. Hong Kong tycoon Li Ka-shing's conglomerate could raise almost US$6 billion by floating its Hong Kong and Shenzhen port and related assets in a business trust, Hutchison Port Holdings Trust. Apart from Temasek and Paulson, the other major cornerstone investor is Taiwan-listed Cathay Life Insurance. Between them, the eight cornerstone investors are putting in a total of US$1.62 billion. Paulson will inject US$350 million in the IPO, and a Temasek unit and Cathay Life will each put in US$100 million. According to its preliminary prospectus, Hutchison Port Holdings has been priced at an indicative range of 91 US cents to US$1.09 per unit, for a possible range of up to US$5.2 billion to US$5.8 billion. The listing of one of Hutchison Whampoa's most profitable assets could reduce the group's net debt by as much as 30 per cent at the outset, according to a report by rating agency Moody's last month. Hutchison Whampoa's net debt as of June 30 last year, was US$19 billion and its net debt to net capitalisation ratio was over 30 per cent, Moody's said. The group wants to trim the ratio to the low-to-mid-20 per cent range. The IPO would also allow Hutchison Whampoa's partner, Singapore terminal operator PSA International, which has stakes in the group's port assets, to cash in. Hutchison Whampoa's holding in the Singapore-listed company would be cut to about 25 per cent following the listing. The rating agency said that the reduction in ownership would decrease Hutchison Whampoa's share of future profit and cashflow. But Moody's said that the dividend stream it would receive from the trust would offset the cutback in revenue. Revenues from the trust assets was about US$1.3 billion for 2009, constituting 5 per cent of Hutchison Whampoa's total revenue and gross earnings came to about US$800 million, making up 17 per cent of Hutchison Whampoa's total earnings. Apart from repaying debt, the company could also use the proceeds for acquisitions relating to ports and other businesses, according to the prospectus. In January, Hutchison Whampoa confirmed a HK$5.7 billion deal to buy port and property assets from China Resources (SEHK: 0291) (Holdings). The company chose Singapore over Hong Kong because the city has only regulations covering real estate investment trusts and not other types of trusts. Hutchison Whampoa said it would consider an additional listing on the Hong Kong bourse later if the regulatory environment changed.

 China*:  March 3 2011

A Chaoda greenhouse in Nanjing. The company on Monday reported a 41 per cent increase in spending on new land even though it has a large supply of unused land. Shares in mainland vegetable farmer Chaoda Modern Agriculture (SEHK: 0682, announcements, news) tumbled 5 per cent yesterday after analysts raised strong questions about the company's high levels of capital expenditure, with one saying he had no idea where the money was going. Fujian-based Chaoda, which supplies produce to supermarkets and wet markets on the mainland and in Hong Kong, told analysts after its interim results presentation on Monday it will spend 18 billion yuan (HK$21.34 billion) by 2013 on projects, including new irrigation systems and greenhouses. Nomura analyst Emma Liu wrote in a research note issued late Monday night that this amount "cannot be justified". Meanwhile, Macquarie analyst Jake Lynch wrote in a note yesterday: "We cannot seem to get an answer to the question, 'where is the extra money going to?'" In the note, entitled "Still confused", Lynch said Chaoda's capital expenditure was already 34,511 yuan per mu, which was "too high" for a mainland vegetable grower. Both analysts declined to comment. A Chaoda spokeswoman said she could not reach company directors and was not authorised to comment on their behalf. It is unusual for investment banks to publish negative reports about large Chinese companies, which brings the risk of losing future opportunities advising on deals. Chaoda, - the name means "super big" - is a sizeable business. It claims to be the mainland's largest vegetable grower and has a market capitalisation of HK$16 billion. Its shares have plunged 23 per cent so far this year, closing yesterday at HK$4.74. Chairman Kwok Ho, the son of a People's Liberation Army officer, transformed Chaoda from an electronics firm to an agricultural company in 1997. By 2000, the company had grown large enough to raise money in a Hong Kong IPO. Shortly after its flotation, the firm announced a 770 per cent increase in interim profits. Over the last five years, Chaoda has displayed eye-popping and tremendously consistent operating profit margins of 49 to 53 per cent. It also has a history of perplexing its shareholders. In 2002, big four auditor PricewaterhouseCoopers said it could not endorse the company's annual results, and promptly resigned. Chaoda replaced PwC with the much smaller CCIF and Baker Tilly, who both resigned in 2007. It is now audited by mid-sized accountants BDO. Since 2002, Kwok has gradually reduced his ownership of the company by arranging regular issues of new shares. Kwok held 55 per cent of the firm in 2002. The company said last November his shareholding was now 19.23 per cent. The regular capital raisings have puzzled analysts, as Chaoda states it has a healthy cash pile. For example, the firm sold US$300 million of shares and convertible bonds in August. Yet in its latest annual report, Chaoda said it had more than 2 billion yuan of net cash. In its interim results published Monday, Chaoda revealed its spending on new land had risen 41 per cent from a year previously. That, wrote Macquarie's Lynch, was "very troubling", because Chaoda already has a large bank of unused land. That expansion strategy has proven expensive for Chaoda. In the year to last June, the company spent 152 million yuan on "expenses incurred for idle farmland". That was almost as much as the 172.5 million yuan paid out in dividends.

Groupon launches group-buying site in China - World's largest coupon website Groupon on Monday launched a group-buying website in China,, according to AP reports. The U.S.-based website entered the Chinese market by collaborating with, a local web giant that offers entertainment, e-commerce and other services. "The collaboration combines Groupon's global group-buying experience with Tencent's in-depth knowledge of Chinese online communities," Groupon said in a statement. Customers can now sign up on, but discount deals will not be offered until March. will first offer discounts on eating, shopping and entertainment in Beijing and Shanghai, and then expand to cover other major Chinese cities. The site advertises that discounts will be from 50 to 70 percent off. China has the world's biggest Internet population with more than 457 million users, many of whom are willing and able to spend online. Founded by Andrew Mason in Chicago in 2008, Groupon offers discounts to its subscribers on retail goods and services on a daily basis.

Construction began on China's first low-speed maglev line Monday in Beijing, a project that will make China only the second country with a low-speed maglev line after Japan. The project marked China's ability to industrialize low-speed maglev technologies, said Chang Wensen, father of China's maglev technology and professor at the National University of Defense Technology. The 10-kilometer line runs from Shimenying Station in west Beijing's Mentougou District to Pingguoyuan Station in the Shijingshan District. The line, a section of Line S1 on the Beijing subway network, is expected to be completed in 2013 with a designed speed of 100 to 120 km per hour. China's research of maglev technologies was started in the 1980s by a team led by Chang Wensen. A 204-meter test line in central China's Hunan Province and a 1.5-km test line in north China's Hebei Province were built jointly by Beijing Maglev Technology Development Co., Ltd. and National University of Defense Technology. The intensity of the magnetic field had been tested as safe, according to a test report of Institute of Electrical Engineering, Chinese Academy of Sciences. The cost of the low-speed maglev line was estimated at 300 million yuan (4.6 million U.S. dollars) per kilometer, slightly more than light rail, but cheaper than the subway, which cost more than 600 million yuan a kilometer, said Li Jie, director of technology research center of National University of Defense Technology. The technology was also under consideration for Line 8 of the subway network in Shenzhen, in south China's Guangdong Province, said Liu Zhiming, board chairman of Beijing Maglev Technology Development Co., Ltd.. "If Shenzhen adopts the technology, Line 8 will be China's second low-speed maglev line," he said. The world's first low-speed maglev line, at 8.9 km long, was completed in Japan in March 2005. Maglev, short for magnetic levitation, technology uses a large number of magnets to lift and propel a vehicle, making it faster, quieter and smoother than conventional wheeled transport systems. High-speed maglev vehicles can reach speeds of 450 km per hour and are usually used in long distance transportation, while low-speed maglev lines are usually used in short distance transportation. Construction also began on another seven lines on the Beijing subway network Monday. With an investment of 82 billion yuan (12 billion U.S. dollars), the eight lines will total 113.7 km in length and are expected to open from 2013 to 2015. Beijing has 16 lines under construction.

China's holdings of long-term U. S. Treasury securities totaled 1.16 trillion U.S. dollars at the end of December 2010, according to an annual revision report released by the U.S. Treasury Department on Monday. The figure was an increase of 268.5 billion dollars, or 30 percent from an estimate the government reported on Feb. 15. The U.S. Treasury made the change to its monthly report based on more accurate information it obtains in an annual survey. Foreign holdings of U.S. long-term securities reflect demand for U.S. Treasury obligations and other assets including stocks and government agency debt, a key to funding the massive U.S. balance of payments deficit with the rest of the world. The report showed that China, the largest holder of U.S. Treasury securities, reduced its holdings by 4 billion dollars in December from 1.164 trillion dollars in November. In the monthly report released two weeks ago, it said that China trimmed its holdings from 895.6 billion dollars in November to 891.6 billion dollars in December. In the new report, Japan, the second largest foreign holder of U.S. government debt, raised its holdings to 882.3 billion dollars in December. That was 1.3 billion dollars less than the estimate in the monthly report. Britain, the third largest owner of U.S. debt, boosted its holdings to 272.1 billion dollars in December from 242.5 billion dollars in November. Britain's holdings were revised lower by 269.2 billion dollars from the monthly report. Total foreign holdings of U.S. long-term securities in December 2010 reached 4.44 trillion dollars, up from 4.41 trillion dollars from November. The new figure in year end 2010 is 70 billion dollars more than the government's previous estimate in its monthly report. The Treasury Department refused to comment on the revised figures. The debt figures are closely watched at a time when more and more Americans believe that the U.S. soaring debt is unsustainable. The federal debt has surpassed 14 trillion at the end of 2010 and the federal government is at the edge of bankruptcy if the Congress does not increase the debt ceiling which is 14.3 trillion dollars before the deadline of March 4. U.S. federal budget deficit reached 1.29 trillion dollars in the fiscal year 2010 ended Sept. 30. It recorded a historic high of 1.42 trillion dollars in fiscal year 2009 when the economy was hit hard by the financial crisis. According to President Barack Obama's fiscal year 2012 budget which was sent to Congress earlier this month, the U.S. federal deficit in 2011 is expected to hit a new record of 1.65 trillion dollars.

Newly-expanded National Museum of China in Beijing, capital of China, March 1, 2011. China's National Museum, lying to the east of Tian'anmen Square, reopened Tuesday after more than three years' renovation.

More than two-thirds of consumers are wary of mainland brands of infant formula following the melamine-tainted-milk scandal three years ago, a survey by China Central Television found. CCTV's Weekly Quality Report programme said on Sunday that 70 per cent of customers interviewed at supermarkets and baby product stores said they would prefer not to buy mainland-made formula. The shops sold more than 30 types of infant formula, CCTV reported, with 70 per cent imported. The preference for foreign formula has seen mainlanders flock to Hong Kong and Macau in search of supplies, with the buying spree peaking around Lunar New Year, when many stores ran out of stock. About half of mainland newborns are not breastfed, CCTV says. The mainland consumed 560,000 tonnes of formula last year, with imports accounting for half. Before the melamine scandal, which saw six infants die and 300,000 fall ill with kidney damage, imports accounted for just a tiny proportion of the market. There are more than 800 dairy manufacturers on the mainland, with 139 making infant formula. CCTV said 10 brands dominated. Song Kungang , China Dairy Industry Association chairman, told CCTV that the mainland's production of infant formula fell 12 per cent last year, after several years of growth. Song said that at least a third of manufacturers would be forced to quit the industry. Amendments to the Criminal Code passed by the National People's Congress Standing Committee on Friday increased the penalties for those guilty of food safety violations and made it easier for courts to sentence offenders to death. Melamine, an industrial chemical used in plastics and glue, was added to substandard milk to boost its nitrogen content, allowing it to pass testing for protein levels. A similar scandal has now been reported by mainland media: that albumin from leather has been added to milk to boost protein. Safety experts said the practice could result in heavy metal contamination. The Beijing Times quoted the Ministry of Agriculture as saying that no albumin was detected in fresh milk supplies last year, but pointed out that the authorities only screened a third of production, leaving many consumers worried. The Chenyuan Dairy in Jinhua , Zhejiang , was closed in 2009 for adding albumin to milk. Fan Zhihong , a food safety professor at China Agricultural University, said deep-rooted problems needed to be addressed. "Improving farmers' livelihoods to enable them to improve breeding and environmental protection would be more significant," Fan said. Dr Li Duo, from Zhejiang University's school of biosystems engineering and food science, called for stronger law enforcement.

A move led by the US and European nations to implement a no-fly zone over Libya ran into problems yesterday, with Russia ruling out such a move and China voicing its misgivings. In Libya, the pro-democracy protesters say they are determined to unseat strongman Muammar Gaddafi without any foreign military intervention, even at the cost of further bloodshed. China supported a UN Security Council resolution on Saturday for an arms embargo and other sanctions targeting Gaddafi and his inner circle, and referred the crackdown to the International Criminal Court in the Hague. But China's foreign ministry spokeswoman, Jiang Yu , said Beijing was concerned about suggestions of military action against Libya and of setting up no-fly zones to protect Libyans from attacks by Gaddafi's forces. "We have noticed this and are paying close attention," Jiang said. Russian Foreign Minister Sergey Lavrov described the idea of imposing limits on Libyan air space as "superfluous" and said world powers must instead focus on fully using the sanctions that the UN Security Council approved. Leaders in the US, Europe and Australia suggested the military tactic - used successfully for years in northern Iraq - to prevent Gaddafi from bombing his own people. "If someone in Washington is seeking a blitzkrieg in Libya, it is a serious mistake because any use of military force outside the Nato responsibility zone will be considered a violation of international law," Moscow's ambassador to Nato, Dmitry Rogozin, told Russia's Interfax news agency in Brussels yesterday. "A ban on the national air force or civil aviation to fly over their own territory is still a serious interference into the domestic affairs of another country, and at any rate it requires a resolution of the UN Security Council," he said. The council's sanctions so far include an arms embargo on Gaddafi, four of his sons and a daughter and leaders of revolutionary committees accused of much of the violence against opponents. It urged 192 member nations to freeze Libyan assets and authorised an investigation into Gaddafi's regime for possible crimes against humanity. In Washington, a top commander warned that enforcing a no-fly zone over Libya would first require bombing the north African nation's air defence systems. A no-fly zone would require removing "the air defence capability first", commander General James Mattis, the head of Central Command, told a Senate hearing. "It would be a military operation," the general said.

Hong Kong*:  March 2 2011

Banking giant HSBC (SEHK: 0005) said on Monday that its net profit more than doubled to US$13.16 billion (9.56 billion euros) last year as bad debts plunged to the lowest level since 2006. HSBC said in a results statement that pre-tax profits soared by nearly 170 per cent to US$19 billion last year, while loan impairments and other credit risk provisions nosedived 47 per cent to US$14.04 billion. Group revenues increased by 3.1 per cent to US$68.3 billion last year. Market expectations, however, had been for net earnings of US$14.02 billion, according to Dow Jones Newswires, with the shares suffering as a result when they fell short. In mid-morning trade, HSBC shares were down nearly 4.0 per cent in a slightly lower London market. “Underlying financial performance continued to improve last year,” HSBC chief executive Stuart Gulliver said in the results statement. “All regions and customer groups were profitable, as Personal Financial Services and North America returned to profit,” added Gulliver, HSBC’s former head of investment banking who replaced Michael Geoghegan last month. “Commercial Banking made an increased contribution to underlying earnings and Global Banking and Markets also remained strongly profitable, albeit behind 2009’s record performance, reflecting a well-balanced and diversified business.” HSBC is headquartered in London but the group was founded in Hong Kong and Shanghai in 1865 and the bank regards Asia as its most important region. The group said it continued to draw strength from fast-growing emerging markets. “Credit experience continued to improve, as a result of a stronger global economy and our actions to reduce balance sheet risk,” Gulliver said. “As a globally-connected bank with a growing presence across the world’s faster-growing regions, HSBC also benefited from higher trade volumes and strong momentum in emerging economies, especially in Asia. “Asia contributed the largest proportion to underlying pre-tax profits, while the contributions made by Latin America and the Middle East also increased. “Together with our conservative management of the balance sheet, this improved performance allowed us to concentrate on serving our customers and to further strengthen our capital position.”

Sun Hung Kai Properties (SEHK: 0016), Asia’s largest developer by market value, posted underlying profit of HK$10.42 billion (US$1.6 billion), beating forecasts on strong property sales in the Chinese territory. Sun Hung Kai, builder of Hong Kong’s landmark International Finance Centre, was expected to report an underlying profit of HK$9.66 billion, according to an average estimate of six analysts. Net profit was HK$21.02 billion for the quarter ended December, up 36 per cent from a year earlier, the company said in a filing on the Hong Kong stock exchange on Monday. The announcement came after the market closed. Sun Hung Kai shares were up 1.21 per cent, compared with the Hang Seng Index’s 1.42 per cent rise.

Hutchison Whampoa (SEHK: 0013)’s ports unit is looking to raise as much as US$5.8 billion in an initial public offering (IPO) in Singapore, allowing investors to tap into China’s booming infrastructure business. Southeast Asia’s biggest ever listing comes at a time when intra-Asia sea-borne trade is swelling and global container shipping firms are putting more ships and resources to serve Asian routes from Europe and North America. The assets of the Hutchison subsidiary, Hutchison Port Holdings Trust, are located in Hong Kong and Shenzhen, two of the world’s busiest container ports in 2009 with a total throughput of 39.2 million twenty-foot equivalent units, according to the IPO prospectus. It would be the first publicly traded business trust backed by port assets, according to the prospectus, and would exceed Malaysia’s Petronas Chemicals’ US$4.1 billion listing of last year, which has so far been the biggest listing in the region. “Given the size of HPH Trust, we expect the proposed IPO to attract significant investor interest,” said Sean Quek, Singapore head of research at Credit Suisse. “In addition to the potential direct impact on trading volume, the IPO could also set the path for business trusts and port-related companies’ listings here.” Hutchison, the world’s largest container terminal operator, is owned by Hong Kong tycoon Li Ka-shing, who is spinning off Hutchison Port Holdings Trust in a separate listing in Singapore to take advantage of regulations that are favourable for trust-like companies. The company chose Singapore over Hong Kong because the city-state has been an attractive destination for infrastructure and real estate trusts, bankers said. The company reported a net profit of US$655 million last year, from a revenue of US$1.49 billion. Similar trusts have been lapped up by investors who seek a higher dividend yield and want to diversify from bonds. Singapore is home to property trusts owned by Southeast Asia’s biggest property firm CapitaLand as well as shipping, infrastructure and logistics’ trusts from China to Australia. Hutchison has set an indicative price of US$0.91 to US$1.08 per unit for the IPO, aiming to raise US$4.2 billion through the sale share. The proceeds will be used to pay off debt and for development of two ports’ projects in China. Cornerstone investors, who include Singapore state investor Temasek Holdings, US hedge fund manager Paulson & Company and Cathay Life Insurance, will be putting in an additional US$1.6 billion in the deal, according to its preliminary prospectus. Based on the maximum indicative price, the market cap of the company will be US$9.4 billion after the listing, which is likely to be within a few weeks. Hutchison Whampoa and Singapore state-owned PSA International, which owns 20 per cent of the Hong Kong firm, will together own 32 per cent of the company after the listing. The units will offer a yield of between 5.5 per cent to 6.5 per cent to unit holders, according to the prospectus. Paulson will invest US$350 million in the IPO, whereas a Temasek unit will put in US$100 million. DBS , Deutsche Bank and Goldman Sachs are joint book-runners and issue managers. JPMorgan, UBS, Barclays, Morgan Stanley are among co-lead managers.

History trail charts course from plague to modern day - The Shek Kip Mei Fire of December 1953 is widely known as the trigger for the city's mass public housing programme, but few people can point to the 1894 outbreak of bubonic plague as the instigator of the colonial government's decision to build sound public sanitation and health systems. The plague epidemic was a turning point in the city's medical history, says Dr Faith Ho Chi-suk, chairwoman of the Hong Kong Museum of Medical Science's education and research committee. "The government realised it had to improve Hong Kong's public sanitation and public health to stop the epidemic and avoid another, or Hong Kong's economy would be badly hurt," Ho said. During the run of the epidemic - 1894 to 1923 - 20,489 people died from the plague, which broke out in the overcrowded Tai Ping Shan Street area in Sheung Wan. The building that houses the museum was built in 1906 as the Bacteriological Institute as part of efforts to fight the plague. Ho and her colleagues at the museum have mapped out a 110-minute walking trail across Sheung Wan and Sai Ying Pun to bring this important piece of history back to life. The Tai Ping Shan Medical Heritage Trail takes visitors to 16 sites. Some are historic buildings, such as the museum's premises and the former Chinese Lunatic Asylum, now a methadone clinic, in Eastern Street. Others are modern structures on historic sites, such as the Caine Lane Garden, which used to be a disinfecting station and ambulance depot. The walk takes in Blake Garden, possibly the city's first urban renewal project, also prompted by the plague. "The government realised it had to improve the sanitation of the Tai Ping Shan area, so it announced the Tai Ping Shan Resumption Ordinance, under which it demolished all the tenement houses in the area and built a brand new neighbourhood," Ho said. "It reserved an open space for the community and this is how we now have Blake Garden." Other public facilities included the Pound Lane Bath House. Built in 1904, it was the city's first public bath house and provided free running hot water, with a total of 170,000 people using it in 1904 and 1905, Ho said. The trail, which starts at the museum and ends at the Old Tsan Yuk Hospital in Western Street, also tells a story of gradual Chinese acceptance of Western medicine. When it was built in 1870, Tung Wah Hospital only practised Chinese medicine, but the government ordered it to start providing Western services after the plague. In the middle of the trail, in the Hospital Road area, a group of government-built hospitals provide Western medical services. And at the trail's end are two hospitals and clinics built by the Chinese community in 1922 that practise Western medicine. Guided tours will take place on Sunday. Museum member Ko Wing-man hopes they will become a fixture. The museum and district council are erecting plaques at the 16 sites.

Most pet owners are responsible and disciplined in the care of their pets, according to a survey by the Agriculture, Fisheries and Conservation Department. But animal welfare groups say there is still room for improvement in public awareness of animal welfare because the number of abandoned pets has not declined over the years. The department conducted the survey in January, interviewing more than 300 residents on pet ownership and animal care. Just under half of the respondents had pets, with 28 per cent of them keeping dogs. Overall, 86 per cent of the respondents said pet owners in the city were responsible in the care of their animals. Over 70 per cent cited "sufficient residential space", "sufficient time to take care of pets", "the need to take care of the pets until they die" and "care for others by minimising disturbance" as conditions for keeping the animals. But department senior veterinary officer Chow Ka-wai said the public still did not know enough about regulations because around half of all respondents did not know the details of microchipping, dog licence applications and vaccination. "Their awareness of complying with the rules is weak. We have to do more to promote that," she said. Department assistant director Thomas Sit Hon-chung said the department was catching fewer stray animals. "We caught 6,000 stray dogs and 4,000 stray cats last year, 10 per cent fewer than the year before. We caught 19,000 strays around two decades ago," he said. However, Rebecca Ngan Yee-ning, from the Society for the Prevention of Cruelty to Animals, said the number of abandoned pets had not gone down. "We rescue more than 8,000 animals every year. The figure has roughly stayed the same over the years," she said. The society put down more than 4,000 animals in 2008-09, around 10 per cent more than the previous 12 months. The department puts down around 12,000 stray and abandoned cats and dogs every year. But Law Bick-wan, executive director of the Hong Kong Cat Salvation Army, said tens of thousands of strays were put down every year. "The department lacks an adoption system. Only dogs that are claimed by owners within four days are saved," Law said. She criticised the department for not doing enough to raise public awareness about animal welfare. "The rising awareness of animal welfare is attributable not to the government but to the work done by non-profit animal welfare groups, which have mushroomed over the years," Law said.

 China*:  March 2 2011

Daily-deals website Groupon goes live in China on Monday, bringing its popular brand of internet retail to the world’s most populous nation., funded by Groupon, the Tencent (SEHK: 0700) Collaboration Fund and Yunfeng Capital, will begin accepting email registrations from local consumers, with daily deals promoting local merchants to debut in March. However, analysts cast doubts over how successful Groupon can be in China given the numerous group-buying websites that are already active in the country. “Discounts will always be popular but the question is, will Groupon be more popular than the other websites,” said Paul Wuh, a Hong Kong-based analyst with Samsung Securities. “There are many entrenched companies already offering this product,” Wuh said. Taobao, China’s largest consumer e-commerce website, launched a group-buying website last year, while other sites such as Mei Tuan and Man Zuo have also sprung up. Popular portal websites such as Tencent’s QQ and have also launched group-buying websites. China had almost 19 million group-buying users at the end of last year, according to government statistics. Wuh said the move is generally positive for Tencent as it signals that China’s largest Internet firm is further expanding its operations its core revenue driver of games. Groupon had been widely reported to be scouting out locations and workers in China, seeking the global expansion its plethora of rivals have not embarked upon. Groupon, the two-year-old start-up that has met bankers about an initial public offering and which sources say rebuffed a US$6 billion advance from Google – has seen phenomenal growth. It has grown to about 50 million users from 3 million across 500 cities in 40 countries over the course of last year. But the competition is intensifying, with the likes of LivingSocial expanding in the same space and a plethora of websites springing up globally that specialize in deals for niche markets. Groupon recently completed a US$950 million round of financing on its way to pondering an IPO, which sources have said would be one of the largest technology IPOs of this year. Its venture capital backers and late-stage investors include Andreessen Horowitz, Battery Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, Group, Maverick Capital, Silver Lake and Technology Crossover Ventures.

China said on Monday it had evacuated nearly 29,000 of its nationals from strife-torn Libya, where a popular uprising has left at least hundreds dead and triggered a mass exodus of foreigners. The foreign ministry said around 2,500 Chinese citizens had already returned home and 23,000 more had been sent to Greece, Malta, Tunisia, Sudan and the United Arab Emirates, where they were waiting to board flights home. Another 3,400 had left Libya and were making their way to some of these countries aboard ships, it added. China has ramped up a massive air, sea and land operation to evacuate more than 30,000 citizens from oil-rich Libya, as unrest in the North African country continues. The foreign ministry said those remaining in Libya were going to be flown out or taken overland to Tunisia, without giving a figure for the number yet to be evacuated. According to state media, most of the Chinese citizens living in Libya work in the oil, rail and telecom sectors. The Civil Aviation Administration of China has agreed to send 15 aircraft a day for the next two weeks to speed up the evacuation of Chinese citizens. The violent unrest in Libya has triggered a mass exodus of foreigners, with 100,000 migrant workers fleeing the violence.

Pollution, resource waste imperil growth - China faces acute environmental and resource strains that threaten to choke growth unless the China cleans up its act, the nation’s environment minister said in a blunt warning.

China's population passes 1.34 billion - China's population grew to 1.34 billion people last year, the National Bureau of Statistics announced on Monday, marking a modest jump for a massive population.

China railways carry 221 million over Spring Festival travel period - China's railways carried a record 221 mln passengers during a 40-day Spring Festival travel rush period that ended Sunday, the Ministry of Railways said Monday.

Jewelers at shopping malls across Beijing are witnessing a gold rush as residents spooked by inflation fears look to protect their money. Statistics from Beijing Caibai, the city's largest jewelry store, show sales of gold and other jewelry have totaled about 4 billion yuan ($608 million) so far this year, a 70-percent increase year-on-year. Wang Chunli, general manager, told METRO that hundreds of customers are lining up outside every day to buy gold accessories, such as necklaces and rings. To cope with demand, the store has even introduced a string-weave service, she said, adding: "We've also arranged experienced staff to be on duty and increased the number of security guards." After seeing the enthusiasm for gold investment, insiders predict prices will continue to rise this year. Zhou Xiangrui, deputy general manager of Guo Hua, an established gold and jewelry store, even suggested that the surging demand could set a new record, saying: "The price is estimated to increase by 10 percent this year." The price has already reached 338 yuan a gram at Caibai and 375 yuan a gram at Beijing branches of Chow Tai Fook and Chow Tai Seng, according to data from, a popular gold investment website. Concern over the volatile conditions in the Middle East and the debt crises in Europe could also impact gold prices, said Ji Zhiguo, an analyst the Beijing Gold Trade Center. "This year we might see some investors purchasing more than 10 kilograms of gold bars again," he said. "A booming gold market coupled with a stable price increase could prompt more individuals to rush in and invest." Gold sales in large shopping malls citywide increased by at least 40 percent year-on-year during the first two months of 2011, Legal Mirror reported. According to China Central Television, about 40 investors are rushing to purchase gold bars every day at the Wang Feng shopping mall in the Xinjiekou area, with most snapping up several kilograms at a time. Wang Qiming, 34, who lives in Haidian district, said he has purchased both gold bars in malls and paper gold online. "The capital has limits on house and car purchases, and it might be hard to preserve the value of my assets if I save cash in a bank account. So, I've started to focus on gold investment," he said, explaining that he plans to spend 300,000 yuan on 100 grams of gold bars. "Stock markets change very fast and are not stable," said Wang. "Gold investment seems much safer." A report released by the World Gold Council at the end of 2010 said China is the strongest market for gold investment and gold accessory purchase.

An elderly customer examines health products on the shelves of a pharmacy in Zhengzhou, the capital city of Henan province. The fact that people are enjoying rising disposable incomes and living for longer is triggering a surge in the demand for health foods among the elderly who want to enjoy a healthy retirement. However, experts are advising senior citizens to be cautious when choosing which food supplements to buy. According to a survey jointly conducted by China News Weekly and Tencent-owned on the Internet, some 60 percent of the 1,929 families surveyed said elderly relatives living with them bought health foods and devices to make their lives easier. More than 30 percent of those surveyed said items often cost more than 1,000 yuan ($151.95), some were even more than 5,000 yuan. "Senior citizens, especially those who have a stable monthly income, want to live long, healthy lives. Some of them will take nutritious products to lower the chance of contracting some age-related conditions," said Gao Jian, an expert in nutrition at Zhongshang Hospital Fudan University in Shanghai. Total sales of health supplements have reached 100 billion yuan over the past few years, according to China Food Quality News. Naobaijin (melatonin), one of the nutritional supplements developed to improve sleep quality by Giant Interactive Group in China, generated revenues of more than 10 billion yuan between 1998 and 2008, although there is some skepticism about the effectiveness of the product. "I do not know whether the health products are as effective as the sales literature makes out, but I am sure my mother was quite happy to take the daily supplement," said Liu Hui, a white-collar worker in Beijing. "I will not stop my mother buying health products unless they are not good quality." Experts said the growing aging population and increasing spending power of senior citizens have created tremendous business opportunities for health-product manufacturers. A report from Ogilvy Public Relations Worldwide said the annual per capita spending power of senior citizens would increase from $1,620 in 2005 to $4,112 in 2015. The makers of health supplements both in China and overseas are keen to develop the market, confident it has great potential. "As the population of China gets more wealthy and educated and pays more attention to health, including such conditions as osteoporosis, the demand for bone health products will undoubtedly grow," said Char-Le Wang, general manager of Fonterra Brands China. Wang said Fonterra is planning to introduce more products into the Chinese market over the next few years. At present, Fonterra has only one product designed for the elderly on sale in China. "Milk products designed for senior people sell very well and sales have maintained a high growth rate over the last few years," said Zhang Jianqiu, executive president and spokesperson of Inner Mongolia Yili Industrial Group, without revealing precise figures. "We are planning to give a long-term commitment to exploring the market for the elderly." A report by Euromonitor in 2010 pointed out that as the number of senior citizens in China continues to accelerate, the older demographic "will increasingly become a strategically important consumer base for health and wellness industry players". Although this market is booming, experts said senior citizens should be careful in choosing which supplements they purchase. The elderly are advised to seek the advice of a doctor before taking health products.

Hong Kong*:  March 1 2011

Rumours of the demise of the Hong Kong's Lan Kwai Fong have been greatly exaggerated - once again - One of the first things Chris Lau Wing-nam did when he returned from his studies in Australia this year was head to Lan Kwai Fong for a fun night out. But as he made the familiar trek up D'Aguilar Street, the 22-year-old was taken aback to see a gaping hole where the California Tower and California Entertainment Building once stood. "The street was unusually quiet for a Thursday night, and the construction site was an eyesore," Lau says. "It's like the old Lan Kwai Fong I knew and loved has gone forever." Similar declarations were heard in many circles last August when the 12-storey buildings were torn down after 27 years of operation to make room for a state-of-the-art 24-storey tower slated to open at the end of next year. After all, the California high-rises were key developments in the transformation of Lan Kwai Fong from grubby lane into Hong Kong's most famous nightlife spot. "Lan Kwai Fong will never be the same," wrote former DJ Nat King, who runs the blog site Businessman Allan Zeman, who owned both buildings, says the decision to demolish them "broke my heart". "My office was there for nearly 30 years," says the 62-year-old dubbed the Father of Lan Kwai Fong. Zeman spearheaded the area's nightlife movement with his opening of the California Restaurant in 1983, and consolidated the business after he bought California Entertainment Building in 1988 and California Tower four years later. But he decided to redevelop the properties - reportedly for HK$1 billion - to take consumer entertainment to the next level. The towers were too old, with low ceilings and no open terraces, which became problematic for businesses after the government banned smoking in enclosed spaces. So his new building is being designed for "very big" venues, each covering at least 4,000 sq ft and featuring its own terrace, which won't just be for smoking. "The new trend is to eat outdoors and get fresh air," Zeman says. "The building will offer everything that people of Hong Kong would want." The problem is that the building isn't scheduled to open for at least another 18 months, and with Wyndham Street and SoHo booming as alternative nightlife areas, some believe Lan Kwai Fong is in danger of losing its spot as the go-to entertainment hub. Zeman dismisses such worries, citing the many other establishments that keep punters crowding into Lan Kwai Fong. Still, Zeman's company, Lan Kwai Fong Entertainments, hired the marketing agency Fluid to launch an aggressive campaign to promote the area, including putting up a website and magazine. "The main point of what we're doing is to show that there are still things happening in Lan Kwai Fong outside of the construction," says Scott Davies, managing director of Fluid's ILove brand. But some entertainment industry insiders reckon Lan Kwai Fong has been losing its lustre in recent years, and Zeman's redevelopment was more of a move to stay relevant. "Lan Kwai Fong is getting very, very tired," says celebrity chef Harlan Goldstein. Ironically, he opened his high-end restaurant, Gold, in Lan Kwai Fong Tower, last November. But since the tower's main entrance is on Wyndham Street, Goldstein considers the venue to be part of the Wyndham Street nightlife scene, which he says is "on fire". He even closed his other restaurant in the heart of Lan Kwai Fong, Tuscany H, to focus strictly on Gold. "Gold has been fully booked from November to today, and that's never happened before with Tuscany," he claims. Several factors make Wyndham Street a superior spot, he says. "One of the major reasons is that Lan Kwai Fong closes its streets [to traffic] on weekends, and that made it hard for customers to be dropped off," he says. "If you're a woman, dressed up and in high heels, you don't want to walk up a hill just to get somewhere. With Wyndham, you can be dropped off at the door." Another reason, he says, is that Lan Kwai Fong has become more plebeian. It's a sentiment that others have expressed. When announcements were made last year that live music hot spot The Cavern was being replaced by the Hard Rock Cafe, many bemoaned the transformation of Lan Kwai Fong into a corporate-driven tourist attraction. "Lan Kwai Fong has been watered down the past several years," says Sandeep Sekhri, managing director of Dining Concepts, which operates two restaurants in the Lan Kwai Fong area, among many others. "I've been in Hong Kong for over 20 years so I've seen the scene move. There once was a bar named Oscars in Lan Kwai Fong that drew hundreds of people a night, then people moved on to Dolce Vita, and then later Alibi on Wyndham Street. That crowd is always moving around as their hot spots come and go." His point is: people moved on from Lan Kwai Fong long ago. "Fortunately for us, we're destination restaurants where people are coming specifically to eat our food. So Lan Kwai Fong losing its appeal doesn't affect us," he says. David Yeo, owner of Aqua Restaurant Group, says the customer profile of Lan Kwai Fong has changed over the years and Zeman's revamp is just a response to the changing demand. "Lan Kwai Fong used to be more of a sophisticated cocktail crowd; now it's a younger beer drinking crowd," Yeo says, adding that venues in SoHo and Wyndham Street tend to appeal to more sophisticated women, and that, in turn, draws the men. Zeman probably wouldn't put it those terms, but he says the new building will aim to bring in a more diverse clientele. "It's going to be a full lifestyle building," he says. "Not just bars or restaurants, but also spas and yoga lounges and other different ventures the area has never seen before. Everyone will find their niche in Lan Kwai Fong." However, he concedes that the long wait to opening is hard to bear. "Would I want the new tower to be up today? Of course," he says. "But I think we have enough options nearby to keep the area vibrant." Among the new entrants is 19-year-old Rachel Geicke, who recently opened Likuid in Lan Kwai Fong. An avid clubber, Geicke reckons she knows just how to spice up the nightlife. "We'll keep things fresh with unique events and promotions, costume parties, and our club features state-of-the-art lighting systems which simulate a laser show," she says. Another club slated to open in April, Bisous, is the brainchild of Chinese-American sisters Janelle and Kat Zai. "It's a very exciting time for Lan Kwai Fong," says Janelle Zai, the younger sibling. "The economy is picking up and there's a new influx of expats and newcomers from the mainland. Yes, it's a more diverse group than before but it's a positive change for the area." Zai, too, initially had concerns about Lan Kwai Fong losing its status as a nightlife hot spot. "The direction that the area was heading was a bit unclear at first, especially when Ben & Jerry's [on D'Aguilar Street] closed and was replaced by a clothing store. But with Likuid opening and Hard Rock coming soon, it seems that everything will actually step up a level." And despite the continuing construction, the vibrant street parties that the area is known for will continue to take place - including one for the upcoming Rugby Sevens, says Tommy Fong Leung-shuen, director of the Lan Kwai Fong Association. "In my 30 years, I've heard people say `this is the end of Lan Kwai Fong' several times," Zeman says. "It hasn't happened yet." With the new clubs opening and old favourites such as Volar and Beijing Club still going strong, it seems that reports of Lan Kwai Fong's demise have been greatly exaggerated.

Hong Kong has become the favored destination for Japanese firms that wish to go public, said international accounting firm RSM Nelson Wheeler. And despite the Singapore's aggressive plans, the Lion City does not pose any threat to the SAR. "Singapore is too far away from Japan, while Hong Kong - being the center of Asia - is also the gateway to China," said managing director Takafumi Otsuka. "It is becoming more attractive for foreign firms to tap the large booming mainland market through the SAR." Otsuka said a recent seminar held in Japan about listing in Hong Kong attracted more than 200 companies. Many of the firms eyeing a listing in Hong Kong are still at the planning stage with their floatations, he said. It usually takes about a year to list over here, compared to at least two years to float on the Japanese exchange, he said. "Many companies are tired of the lengthy preparation work required by conservative Japanese regulators," said Otsuka. And due to lower profit- to-earnings ratio they can raise much less money in Japan than in Hong Kong, he added. Given the same amount of pretax revenues, the market price for a stock in Hong Kong can be double that in Tokyo. "The tax rate is as high as 40 percent in Japan, compared to just 16 percent in Hong Kong," said Otsuka. With tight regulations usually making it difficult for foreign firms to set foot in the mainland, Hong Kong is the best choice for them, he added. Also the processing fees for an IPO in Hong Kong is much higher than in Japan, due to the difference in accounting systems. "Beside accounting, Japanese firms also need the services of a legal firm to go public, which is not required in Japan," said Otsuka, adding that companies usually spend quite a lot on translation and interpretation services. Two Japanese firms plan to go public in the SAR this year. Clothing retailer Baroque Japan aims to raise up to HK$2.34 billion and Internet financial services provider SBI Holdings plans to tap up to HK$3.9 billion.

The rush is on to buy a home despite the attempt to reduce the heat in the local property market with last week's budget promise of more land for building. Weekend sales moved smartly at new projects, with all 250 flats sold at Festival City 2, a Cheung Kong (0001) development in Tai Wai. Buyers can obtain a second mortgage of 20 percent of the price. That is interest free for the first two years. Over in Mid-Levels at CentrePoint from Henderson Land (0012), 60 flats out of 78 sold over the past two days at an average HK$16,500 per square foot. Sales now total around HK$650 million. More than 3,000 people visited show flats in two days, and "we're very satisfied," said Thomas Lam Tat-man, Henderson's general manager of sales. "We may put more flats on the market in the next few days." The secondary market is also hot. "Almost half of sellers are raising prices now as they do not feel any impact from the budget," said Jeffrey Lam, a Hong Kong Property agent at North Point's City Garden estate. Increases average 3 percent, he said, but "prices are still acceptable for a lot of buyers as many are end-users." Hikes of around 1-2 percent are seen at South Horizons on the south of Hong Kong Island where, according to Ricacorp, weekend deals numbered 58. "Transaction volume is quite good as there are so many new projects," said Ricacorp research head Patrick Chow Moon-kit. "Prices in the secondary market rose 5-10 percent after the budget." Elsewhere, Sino Land (0083) plans to put four residential projects and three commercial-residential projects on the market this year. These are1 Broadcast Drive, Pak Shek Kok at Tai Po (three projects), 270 Cheung Sha Wan, West Kowloon and Aberdeen.

The government is to investigate whether short-lived arts chief Graham Sheffield breached his contract by leaving Hong Kong to take up a new job in London. Chief Secretary Henry Tang Ying- yen - who is also chairman of the West Kowloon Cultural District Authority - said yesterday the government will study Sheffield's contract terms when he was appointed chief executive of the authority to see if there can be "any control over his post-resignation work." Sheffield, 58, was named to the Hong Kong post in March last year. He started in August and resigned in January citing ill health. Last Thursday, Sheffield was appointed the British Council's new director for arts in London. He takes up his new job in May. Online advertisements showed applications for the British Council job closed on December 3 - and Sheffield first said he wanted to leave the authority on December 15. "The health reasons cited [by Sheffield] at that time are based on his doctors' notes," Tang said. "At that time, we did not doubt whether the doctors' judgment was right or wrong." On suggestions the authority may have been cheated, Tang said: "We accepted his resignation based on his health reasons, his intention to resign and the doctors' notes." Sin Chung-kai, chairman of the authority's remuneration committee, said it has discussed requiring former workers to seek approval from the board before taking up a new job within six months of departure. Tanya Chan Suk-chong, a member of the Legislative Council's joint subcommittee to monitor the implementation of the West Kowloon Cultural District Project, said: "It seems the ill- health reason cited is no longer valid. It has raised doubts as to whether there is any management problems within the authority. "It feels like being cheated. It remains unknown whether someone deliberately cheated us or the board had got to know about it [Sheffield's new job] but did not tell us." Entrepreneur and West Kowloon board member Allan Zeman - who last month said the reason for Sheffield's departure was health-related - yesterday said he understands why some people feel cheated. On Saturday, Zeman said: "I could understand some people or many people in Hong Kong would feel cheated. I do know that he was not well. Probably if I hadn't talked to him, I would feel the same way." A source said 40 to 50 applications to succeed Sheffield have been received.

Hospital Authority chief executive Leung Pak-yin says that a special night-shift allowance and part-time doctors will help deal with the current manpower shortage. The authority is also in discussions with the Public Doctors Association and the Frontline Doctors' Union about creating more posts for promotions. It expects a solution to be ready to click in by April. This comes after doctors threatened a sit-in when talks to ease staffing problems in public hospitals fell through. "I don't think they're asking for money - I think they're asking for recognition," Leung said. But pay issues will also be addressed in fresh talks starting today. Staff will be shuffled internally as a short-term measure, but Leung sought to assure people that emergency services will not be affected. Still, people seeking non-emergency procedures and attention at specialist outpatient clinics might face longer waiting times - at least until July when new medical graduates join the system. Leung was speaking at an organ-donation event at Prince of Wales Hospital where recipients got to thank donors and their families anonymously by writing notes and pasting them on a board. The president of the Hong Kong Society of Transplantation, Philip Li Kam-tao, said 13 people in Hong Kong had heart transplants while three children received kidney transplants in 2010, which was the highest number yet in a single year. Among the children to benefit was nine-year-old Oscar Chan Chun- sin, whose kidneys were damaged when he suffered an infection at 18 months. He needed peritoneal dialysis for years. Said his mother, Annie Hu Yajing: "For a long while I was constantly worried about Oscar damaging the tube and infections at the tube site." A kidney donation was offered in September after Oscar had been on the waiting list for six years. Oscar's life has changed remarkably since the operation. He can even play football with his school pals. Contractor CY Yuen, 50, gave his wife a kidney in a four-hour surgery last year. The couple, who have been married 25 years, have five children. Mrs Yuen said: "Every day, I feel as though I'm carrying a piece of my husband in me. I'm very thankful for what he did because it has given our family a new lease of life." Raymond, in his late 50s, had a congenital heart defect discovered 10 years ago. Although a donation was available he backed out at the last minute for fear of side effects. But his condition deteriorated and he said yes in June last year when another heart was available. "Some have said that people show personality changes after a heart transplant," he said. "All I feel is a sense of gratitude to the family that gave up a part of a loved one so someone could have a better life."

 China*:  March 1 2011

Aviation sector has high hopes for next 5 yrs - 45 airports will be built, 700 planes to join the fleet as blueprint drafted. China plans to invest 1.5 trillion yuan ($228.2 billion) in the aviation industry, building 45 airports and adding 700 new commercial planes, over the next five years to meet surging demand, a top regulator said on Thursday. The figure is half a trillion yuan more than that for the previous five years, Li Jiaxiang, head of the Civil Aviation Administration of China (CAAC), told a news conference. By 2015, the country is expected to have 220 commercial airports and its fleet size will expand to more than 4,500 planes, according to Li. "The ability of the civil aviation sector to serve the national economy and the public will be further strengthened," Li said. The country currently has 175 commercial airports in operation and keeps more than 2,600 aircraft in its fleet, he said. In the next five years, the commercial aircraft fleet, which stood at more than 1,600 in 2010, will expand by some 700 planes, a scale similar to the growth in the past five years. The number of commercial airports will increase by 45, mostly regional, in the next five years, compared with the 33 new airports completed in the past five years. Despite concerns over losses reported by many regional airports, the construction process will be speeded up over the next five years, he said. Li admitted that 130 out of the 175 airports reported "a rather small amount" in losses last year, totaling 1.68 billion yuan. But "regional airports are public infrastructures, and their construction should not be profit-driven", he said. Besides, regional airports have brought large economic and social benefits to local communities, which "is why many local governments are still willing to subsidize their operations, despite losses", he said. The airport in Huai'an, Jiangsu province, which opened for operations in 2010, has attracted 61 foreign-invested companies to settle in the city, while an airport in remote Tengchong county in Yunnan province boosted local tourism, with the county's GDP rising 56 percent since it opened in 2009. Also, after a magnitude 7.1 earthquake shook Yushu in Qinghai province, killing 2,687 people, the local airport played a major role in disaster relief. Airlines transported nearly 3,000 injured people for treatment and prevented the death toll from rising further, he said. As proof of the enthusiasm of local governments to develop civil aviation, he said top officials from 29 provinces and regions visited the CAAC last year to discuss building airports and opening new routes. Li Lei, a civil aviation analyst at CITIC China Securities, said the increase in the number of airports will also benefit the entire industry. "With more airports built, it will drive market demand for civil aviation." Besides building more airports and increasing the fleet, the CAAC will also take measures to strengthen airline competitiveness in the international transportation market over the next five years, Li Jiaxiang said. He cited statistics saying that foreign airlines are gaining an upper hand in the country's lucrative international travel market. Statistics showed domestic airlines account for only 46 percent of China's international passenger market and less than 30 percent of China's international cargo market. The administration will boost the industry's overall strength by nourishing large-scale aviation hubs and super-network carriers, he said, without elaborating. Some analysts have expressed concerns that State-controlled airlines are too well-supported and resourced, but Li noted that the CAAC encourages the development of privately owned airlines as well. China has 43 airlines - eight privately owned or controlled and 35 State-controlled. Of these, 16 are joint ventures. The CAAC will soon accept three applications for establishing private airlines, he said. Demand for air traffic is booming as the world's second-largest economy roars ahead on near double-digit growth and increasingly affluent Chinese people travel more frequently. A total of 267 million air passenger trips were recorded in China in 2010, up 15.8 percent from the previous year, official figures showed. Domestic airlines reaped profits totaling 35.1 billion yuan in 2010, accounting for 60 percent of the world's total, CAAC statistics showed. The rapid development has benefited foreign aviation industry players as well, amid a huge demand for aircraft and airport facilities, according to Li. Of the 200 billion yuan in commercial deals China made in November when President Hu Jintao visited France, 104.1 billion yuan was spent on civil aviation-related goods. Also, when President Hu visited the United States in January, $19 billion out of the total $45 billion in commercial deals was spent in the aviation sector.

The French retailer Carrefour SA resells products bought from its suppliers to intermediate distributors at a discount in China to inflate sales figures, according to a report on the news portal on Friday. The retailer also increases the charges for promotional and management activities to its suppliers, to make up for losses incurred in the reselling process, the report said, citing former Carrefour store managers in Shanghai. These activities account for between 5 and 15 percent of sales at Carrefour stores in Shanghai, the report said, citing a former store manager. The people quoted in the report were not available for comment on Friday. Carrefour earned 36.6 billion yuan ($5.6 billion) in sales in 2009, according to a report last year by the China Chain Store & Franchise Association. That means, at the lowest rate of 5 percent, about 900 million yuan of the retailer's sales in China in 2009 came from the practice of reselling. The products resold by Carrefour are cheaper than those on the market, resulting in a situation where distributors make a profit at the expense of Carrefour's suppliers, the report said, citing a Carrefour supplier. Yu Guo, a public relations official with Carrefour in Shanghai, refused to comment on the NetEase report. The practice, if verified, casts doubt over the supermarket's rapid sales growth in China, which is among the fastest in the retailer's worldwide operations. Carrefour's sales grew 12.5 percent in China in the fourth quarter of last year, more than double the company's overall growth of 5.1 percent.

Classy 'hourglass lunch' at Shangri-La - Michelin-star Chef de Cuisine Fabrice Giraud works at the kitchen of Jade 36 in Pudong Shangri-La Shanghai. A business lunch can be both efficient and epicurean, especially when one lunches at the summit of Shanghai, rubbing shoulders with the sparkling skyline and gazing down at the Huangpu River. Jade on 36 Restaurant in the Pudong Shangri-La today launches business lunch from Monday to Friday, 12pm to 2pm. Helmed by Michelin-star Chef de Cuisine Fabrice Giraud, Jade on 36's fresh concept of "lunch reinvented" offers a unique set of experiences. The moment the guest is seated, a one-hour hourglass on the table is turned over to keep time in this culinary journey. Service is prompt. Guests can be out in an hour, when the hourglass empties - or they may well wish to linger. Lunch offers the best of French classics given a contemporary twist. A smorgasbord of appetizers on display in the open kitchen tempts the palate - guests go into the immaculate kitchen to make their buffet selection and are welcome to chat. The main course is selected from the menu. An array of desserts on a trolley gives a sweet ending to the meal. "They are all homemade, featuring classic French cuisine, from which guests can taste the true flavor of France," says Chef Fabrice. The menu is refreshed on a weekly basis. Diners with a limited time for lunch can experience an innovative lunch concept that combines culinary art, fashion, stunning views, wines and Champagne and timely service. It starts with a rich selection of appetizers, ranging from salads, soups and cold cuts to fresh oysters, shrimp, foie gras. But what makes it special is that diners are free to venture into the kitchen to choose their starters. And they may have a chance to chat with the welcoming chef or cooks, if they are not too busy, of course. Appetizers also include cured salmon with herbs, prawns with cocktail sauce, octopus salad, onion tart with Gruyere cheese. "It's in a buffet style. Guest can come to the kitchen to get them freely," the chef says. Though the appetizers are spectacular, the main course is the true highlight. Diners can choose from the roast beef sirloin and baked potatoes from the trolley; cauliflower gratin with béchamel sauce and Parmesan; seared cod with anchovy butter and zucchini; duck Magret pan-seared, with corn pancake and cherry sauce; and roast halibut and peas wasabi mousseline served with orange sauce. Then the dessert trolley arrives, offering fruit tarts, chocolate quenelles, cheese cake, Paris-Brest and other favorites. The unique flavors from the kitchen are paired with an extensive collection of wine and Champagne from Jade on 36's impressive cellar to celebrate the closing of business deals or toast to success.

Dealers discuss oil drilling equipment at an exhibition in Beijing. The growth of China's machinery exports is expected to slow in the coming years. Machinery exports growth seen slowing - The growth rate of China's machinery exports will slow during the 12th Five-Year Plan (2011-2015) because of yuan appreciation and rising costs, said Cai Weici, the vice-president of the China Machinery Industry Federation (CMIF) on Friday. "We will make some progress in high-end machinery exports in the coming years but for now, we will continue to focus on the middle and low-end markets in our overseas business," he said. China's machinery exports were $258.5 billion in 2010, up 32 percent compared with 2009, while imports were $255.3 billion, a rise of 41 percent from a year earlier. The average annual export growth during the 11th Five-Year Plan (2006-2010) was 20 percent, but Cai said it is impossible for the country to maintain such a growth momentum during the next five years. He said the industry will see slower growth in the coming five years both in overseas and domestic markets, but such a slowdown would aid sustainable development of the industry. The yuan's continued appreciation has added to exporters' difficulties, including those in the machinery sector. Meanwhile, the increasing price of labor and raw materials such as coal, oil, and electricity will add to the cost of machinery production, which may affect the industry's profits, the CMIF said in a statement. Cai also estimated that industry output is expected to register average growth of a 12 percent annually. The industry has seen annual output increase by an average of 28 percent during the last five years, 16 percentage points higher than the target set for the 11th Five-Year Plan. "It was expanding at a super-high pace, but we are now moving towards a steady developmental stage," said Cai. According to the CMIF, more of the country's machinery production now caters more to the domestic market than in previous years. In 2010, domestic sales increased to 85 percent from 80 percent of total sales in 2005. However, because of the strengthening of the yuan against the US dollar and increasing imports of foreign-brand products, the industry's competitiveness has been weakened. Zhao Xinmin, senior economist at CMIF, told China Daily that in some important high-tech fields, the market is being occupied by foreign companies, presenting a challenge for domestic producers. The trade surplus of the machinery industry in 2010 decreased 80 percent year-on-year compared with 2009, according to CMIF.

Fidelity plans to enter the mainland via trust venture - Mutual fund giant Fidelity is actively preparing to enter the Chinese mainland by securing a trust company license in one of the world's fastest-growing asset management markets, a person familiar with the situation said on Wednesday. Fidelity, which a few years ago dropped its venture talks with China's Hua An Fund Management Co, is now seeking to invest in a Chinese trust company, which will enable it to launch products on the mainland, said the source, who declined to be identified because he was not allowed to speak to the media. A spokeswoman at Fidelity International declined to comment. "Many foreign and domestic investors are seeking a trust company license, which will enable them to conduct a wide range of finance-related businesses," said Wei Tao, Beijing-based analyst at China Securities Co. Subject to less regulatory scrutiny than banks or mutual fund houses, Chinese trust companies are allowed to launch a range of products to invest in stocks, bonds, infrastructure and real estate projects. Some overseas banks including Morgan Stanley and Macquarie Group Ltd have already set up Chinese trust joint ventures, in which a single foreign institution can hold up to a 20 percent stake. The sector is attracting a new wave of foreign investor interest. The Financial Times reported on Wednesday that JPMorgan Chase & Co, in addition to Fidelity, was preparing to apply for a Chinese license. Fidelity is hoping that by investing in a Chinese trust company, it can launch products under China's Qualified Domestic Institutional Investor scheme, which channels money into overseas capital markets. Fidelity's star manager Anthony Bolton is well known in China. He frequently makes speeches at financial conferences on the mainland, and books promoting his investment philosophy are popular at Chinese bookstores. Last week, Bolton's Fidelity China Special Situation Fund wrapped up a share offering, raising its targeted proceeds of 166 million pounds ($269 million), more than a third of which came from new investors. The fund has risen about 8 percent in net asset value since its launch in April 2010.

China has set a lower average annual economic growth target of 7 percent for 2011 to 2015, Premier Wen Jiabao has revealed. Leaders of the world's second-largest economy will also take steps to keep inflation in check and stabilize home prices, making these top priority in the coming years. "During the 12th five-year plan, we have set our economic growth at 7 percent [a year]," Wen said yesterday at an online forum ahead of the National People's Congress and the Chinese People's Political Consultative Conference plenary sessions. This is because the government will focus on improving the quality of economic growth and benefits and use the results of development on people's livelihood, he added. So growth as outlined is lower than the 7.5 percent target for the past five years and significantly below the average annual gross domestic product growth - 11 percent - for 2005-10. Market concerns have arisen as Beijing is expected to launch more tightening measures that could mean a hard landing of the economy. Economists forecast that real GDP growth will be 8-9 percent in 2011 to 2015. A slightly lower annual GDP growth target in 2011 to 2015 is "a good thing" as it could help intensify the economic structural adjustment and enhance the quality of economic growth, said Citi Investment Research economist Shen Minggao. Besides, he added, a lower GDP growth for the next five years could help maintain long-term stable economic growth. Daiwa Capital Markets chief economist for Greater China Sun Mingchun agreed but added that real GDP growth will still be definitely higher than the targeted 7 percent and be around 8-9 percent instead from 2011 to 2015. Meanwhile, Wen said he is still confident of achieving his goals of stabilizing home prices and curbing inflation by controlling prices. "Having seven successive years of bumper harvests, we have ample [grain] reserves, plenty of raw materials and abundant foreign exchange reserves, which all offer favourable conditions for us to deal with price rises," Wen said. He also said the government will be resolute in curbing speculative investments, which can lead to higher home prices. "We will use economic and legal measures or even administrative measures when necessary," he said. Among these measures, he added, could be "different lending rates, tax rates and policies on land supply." Wen also said that the exchange rate of the yuan will be gradually revised to ensure social stability.

Hong Kong*:  February 28 2011

Furs on show at the International Fur and Fashion Fair. Hong Kong is the trade's global hub thanks to the surging mainland market. HK takes over as world's fur trade hub - City rides the coattails of mainland fashion boom - A subtropical city of seven million as the world's fur hub? Surely not. Yet, from a small start 30 years ago, when Hong Kong's furriers began selling people in China's remote northeast one of their first luxuries - fur coats - the city has, almost overnight, become the trade's capital. Hong Kong now handles 70 per cent of the trade in raw furs and 80 per cent of the world's processed furs, according to a United States Department of Agriculture report. Like a lot of the city's recent business successes, the mainland is the key to the story. Between 2000 and 2009 its fur imports more than doubled in value, from US$165 million to US$463 million. And in 2009 alone, its exports of fur products rose 47 per cent year on year, to US$1.3 billion. Domestic production has rocketed. Just five years ago, Russia - a natural market for furs and with a population of more than 150 million - was still the biggest importer of mainland furs. Now Hong Kong has taken over. Traders attending the Hong Kong International Fur and Fashion Fair in Wan Chai this weekend agreed with the US government report that the fur market had been reborn a decade ago thanks to the mainland.

Richard Li and Isabella Leong pose with first son Ethan in June 2009. Former actress-singer Isabella Leong Lok-si has split with entrepreneur Richard Li Tzar-kai just months after giving birth to twin boys in June. The 22-year-old announced the news in a press statement last night which read: "This new year has marked a new chapter in my life: I have parted with Richard Li. I will always have fond memories of our time together and will continue to share custody of our children. We will ensure the kids' happy and healthy developments." Their first son, Ethan Li Cheung-chi, was born in 2009. Leong's spokeswoman, Michelle Loo, said their relationship ended earlier this year and the decision was personal. No details were given. Li, 44, is chairman of PCCW (SEHK: 0008), Hong Kong's biggest telecommunications provider, and the younger son of Li Ka-shing, Asia's richest tycoon. Loo told the Sunday Morning Post (SEHK: 0583) last night that their separation was completely unrelated to an article that appeared in Next magazine 10 days ago, which reported that Leong was dating a man in Toronto. The magazine published a series of photo shots with Leong sitting in a bar and chatting with a young man. Loo said the man in the photo was a childhood friend of Leong's from school who was also known to Li. Loo said the pictures were taken last year, long before the couple split up. "The article is unfair. Even rich people can have friends," she said. Asked whether Leong had made any plans for her future, such as returning to showbiz, Loo replied: "Those issues are not Leong's priorities." Leong is now in Toronto with the couple's three sons. Li could not be reached for comment last night. Lawyer Lau Kar-wah, an expert in civil disputes, said when two people were not married it would be almost impossible for one party to claim assets from his or her partner after they split up, especially if the relationship had lasted for only a few years. Lau said the only possible dispute would be over the children's custody. "If the issue of custody has been resolved, there is basically no room for further legal dispute." The lawyer said that in such cases the natural father would have a legal duty to provide maintenance for his children even if they were born out of wedlock. Under the law the children would also have a claim on their father's assets. Leong, 22 years younger than the billionaire Li, was often described in media reports as a Cinderella. The couple reportedly met during the filming of Hollywood movie The Mummy: Tomb of the Dragon Emperor, in which Leong had a much-ballyhooed supporting role.

Developers yesterday launched sales at three new projects, offering a total of 112 flats. Henderson Land (SEHK: 0012)'s CentrePoint in Sheung Wan recorded the strongest sales. Property agents estimated that by 7pm more than 40 of the 50 flats available had been sold at an average price of about HK$16,400 per sq ft - a figure in keeping with surrounding properties. Danny Leung, associate director of Centaline Property Agency in Mid-Levels, noted Financial Secretary John Tsang Chun-wah had not announced news steps to cool the property market in his budget speech last week. "No bad news in Wednesday's budget is good news for the sales of new projects," he said. He estimated more than half the buyers at CentrePoint were investors. "They are prepared to hold the flats for at least two years to avoid paying the additional stamp duty and are expecting a substantial growth in property prices in next few years." Elsewhere, the asking price of Sun Hung Kai Properties (SEHK: 0016)' Avignon in Tuen Mun is 110 per cent higher than the prices on estates nearby. Nevertheless, by 6pm the company had sold around half the 57 flats on offer at an average price of HK$9,736 per square foot. Only three flats were sold at Cheung Kong (Holdings) (SEHK: 0001)' nearby development Crown by the Sea. Development minister Carrie Lam Cheng Yuet-ngor said soaring property prices could not be reined in simply by adjusting the land supply because Hong Kong faces ultra-low interest rates and an inflow of speculative "hot" money. Amplifying comments in Tsang's speech last week, Lam said the government would look at optimising land use by moving facilities such as Sha Tin's sewage works and the Kennedy Town water service reservoir underground. "The government has the responsibility to increase the supply of residential land, and the land-sale programme in the coming year will be more aggressive and proactive than in the past," she said. Last week she said enough land could be freed next year to build 35,400 flats. Yesterday she repeated Tsang's statement that HK$300 million would be spent studying whether rock caverns could be built and more land reclaimed outside the harbour. The government has earmarked a site in Kai Tak where 1,000 flats can be developed under the Urban Renewal Authority's "flat-for-flat" scheme. This gives owners the choice of moving into one of the authority's flats or taking compensation. Lam said a tenth of the budget's HK$10 billion for the Development Bureau would be spent on Operation Building Bright, a scheme to help renovate 3,000 rundown buildings over 30 years old. The rest would be spent on infrastructure.

 China*:  February 28 2011

In pictures: Chinese Premier Wen holds online chat with netizens - Wen Jiabao began online chat with netizens Sunday jointly hosted by the central government website and Xinhua News Agency website.

Surfers, such as these at a cafe in Beijing, can use Renren as the mainland's Facebook, Sina Weibo asTwitter and Jiepang as Foursquare. Chinese social media sites no mere clones - Copies of Facebook and Twitter improve on the originals, their operators say - It's called the "copy to China" model, but don't say that too loud in a room full of technology executives from the mainland. It's a reference to the way copycat versions of online products developed in Europe or the US tend to turn up in the Chinese market. Renren is the mainland's Facebook, Sina Weibo is Twitter and Jiepang is Foursquare. But it's not simple plagiarism, said Dr Lu Gang, observer of online media trends on the mainland, at a recent social media conference in Hong Kong. "We copy the product but we never copy the way to promote it, or marketing," he told the audience at Social Media Week, a conference organised by United States-based Crowdcentric Media and its Hong Kong partner Impact Asia. "If you look at products like Renren or Weibo or even Jiepang, I think you can see a big difference coming out of the Chinese local copycats. "The interface for Twitter is very simple, but on Weibo you can see the thread on comments which you can never see on Twitter. "Copying is not the problem. The problem is, after we copy the product how can we localise and innovate?" Growth strategies for Chinese social media products also differ.

China's vegetable doesn't always mean surging prices and contamination - (left to right) Providence Family Farm co-founder Andrew Lam, chairman Gary Cheng and co-founder Ada Lui at Corner Kitchen, Feb 24, 2011. Credit: Vivian Chen Byline: Vivian Chen. Buying mainland vegetables doesn't always mean suffering surging prices and risking the effects of contamination. Dr Andrew Lam, a Californian-born Hongkonger, grows more than 80 organic crops on his farm in Jiangxi province and has recently started to deliver his produce to Hong Kong. Lam, who is based on the farm in the rural Wuyi Mountains area, was in town this week and threw a tasting lunch for media yesterday at Corner Kitchen in Sheung Wan. The menu, created by Vivian Herijanto, chef at the restaurant, used a range of chemical-free produce from Lam's Providence Family Farm, and included beetroot salad with quail and braised ribs with purple carrots. Guests were also offered slices of raw radish and tomato. Lam, a former surgeon, quit his job of 30 years to start experimenting with alternative medicine in Jiangxi. He found the area to be ideal for agriculture. Lam's business partner Gary Cheng (pictured centre with (left) Lam and (right) farm-co-founder Ada Lui) was amazed by his first tasting at the farm and encouraged Lam to start the delivery business to Hong Kong. "My first tasting was mind-blowing," Cheng said. "It was like all this time I'd been watching black-and-white TV when there were already high-definition [colour] models available." With all the hype in town over organic produce, business has been good since it launched in September. A trial box of seasonal vegetables costs HK$390. Check out 

Officials in China's southernmost island province of Hainan are hoping a fledgeling yachting industry would give the famed tourism destination the edge to draw wealthy tourists from home and broad. "Yachting can strongly propel tourism and the local economy in a sustainable way," Lu Zhiyuan, director of the Hainan tourism development commission, was quoted as saying by Saturday's China Daily. China's yacht market was worth about 3 billion yuan (about 455 million U.S. dollars) in 2009 and has an annual growth rate of about 10 percent, the paper said, quoting an industry report. Government officials used to be wary of the luxurious image of yachting for fear of upsetting social harmony, particularly given the widening rich-poor gap in China, Wang Dafu, chairman of the Shenzhen Visun Real Estate Group, and a deputy to the Hainan provincial people's congress, was quoted as saying. He said that a change of attitude in recent years had helped the business to boom. More than 1,000 yachts are registered on the Chinese mainland and some 37 percent of the most luxurious ones are docked at one of the Hainan's five yachting clubs, said the newspaper. Officials are keen to turn yachting into one of the pillars of local tourism as the province's development plan for up to 2015 refers to yachting five times. The tropical island announced a plan early last year to build itself into a top international tourism destination by 2020.

Big spenders hit expo to plan big day - A young woman tries on a wedding dress at the China Wedding Expo in Beijing on Friday. The three-day event, which ends on Sunday, gathers 1,800 shops together in the hope of providing one-stop shopping for couples. Beauty may take your breath away, but a glamorous wedding is almost certain to take your savings away. That was the message many young couples took from the first day of the annual China Wedding Expo in Beijing on Friday. The expo, which lasts until Sunday, is a one-stop shop for those planning their big day. It is packed with 1,800 retailers, from caterers and florists to photographers and cake designers. Thousands of future brides and grooms were busy pinning down the little details that go into creating the perfect wedding, although many found the array of choices and high prices somewhat overwhelming. "I like this one better. It might cost more but I just want everything to be perfect," said newly engaged Peng Ning, as she looked in the mirror while trying on a 20,000-yuan ($3,000) Spanish-made La Sposa wedding dress at the expo. "It's a once-in-a-life event, so I don't want to settle for less." Peng's mother, who is paying for the wedding in July, could not agree more with her 28-year-old daughter. "Of course, it's a lot of money to spend on a dress that will only be worn once, but she has no interest in cheaper brands," she added. Ye Shichang, director of La Sposa, said Chinese's attitudes towards wedding dresses have changed much since the Spanish company started to do business in China 12 years ago. "Chinese people used to rent wedding dresses because it's cheaper, but now people want it tailor-made in Europe. Chinese have more money now, a lot more, and they want to show it," Ye said. He said three people have already shown an interest in the most expensive wedding dress he has brought to the expo, which cost almost 120,000 yuan. Wu Chao, a consultant at wedding planners Princess Dairy, said: "We can give couples any kind of wedding they can imagine, as long as they can afford it." However, Princess Dairy's clients Hu Xiaohan and her fiance Zhang Liang just want something simple. "We won't be wearing a wedding dress and tuxedo. Instead we'll just wear plain white T-shirts and jeans and hold the ceremony at the university dining hall where we first met," Hu said. The couple will use the money they save to travel around China for six months in the belief such memories will be more precious to them.

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

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