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China President Hu Jintao USA State Visit January 19 - 21 2011 http://www.b2bchinadirect.com/hujintaousavisit.htm

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Hong Kong*:  April 30 2011

Mainland women planning to give birth in Hong Kong will have to obtain certificates issued by the health department before their arrival in the city, according to a new measure proposed on Thursday. Secretary for Food and Health York Chow Yat-ngok said pregnant women from the mainland would have to undergo pre-natal checks recognised by Hong Kong’s health department and obtain certain certificates before they would be permitted in any of the city’s hospitals. Chow said the intention was to stop agencies and individual private doctors from issuing certificates on a casual basis. The health secretary announced the measures after meeting the hospitals’ heads of obstetric services to discuss measures to deal with strained obstetric services after an influx of expectant mothers from the mainland in recent years. Doctors and medical workers have said demand for cross-border births has stretched resources to the limit at local hospitals – both private and public – and this has affected services available to local mothers. Earlier this month, officials announced that Hong Kong’s public hospitals would cease admitting mothers-to-be from the mainland for the rest of the year. The health secretary also said officials would launch a crackdown on agents that use illegal means to arrange for mainland women to give birth in Hong Kong. Some agents have been arranging for Hong Kong doctors to provide pre-natal checks for mainland mothers in Shenzhen and Guangzhou before they travel to Hong Kong to give birth. A taskforce would be set up later this year to review manpower in obstetric services and in intensive care units for infants, Chow said. The group would also determine the number of pregnant women hospitals can afford to admit from outside Hong Kong each year. The health secretary explained that the measures intended to give priority to local mothers when it comes to using obstetric services in Hong Kong.

The tobacco tax increase introduced in 2009 has helped to halve the number of young smokers, a University of Hong Kong study released on Thursday showed. Researchers said the increase in tobacco duty proposed in the recent budget would encourage more teenagers to quit as they would find it difficult to afford to buy cigarettes. The study conducted by the university’s faculty of medicine monitored 50,000 secondary school students over the past eight years to study smoking trends among young people. It found that the number of young smokers dropped by 51 per cent after a 50 per cent increase in tobacco duty was introduced in 2009. The study showed that in 2008, 6.9 per cent of the students, or 3,450, were smokers. Last year, only 3.4 per cent, or 1,700, were smokers. The city’s legislature is going to discuss a proposal to further raise the tax on cigarettes by 41 per cent. The increase was proposed by Financial Secretary John Tsang Chun-wah in this year’s budget. If passed, it will raise the retail price for a pack by about HK$10. A projection based on the study’s figures estimated that about 13,000 young people across the city would quit smoking if the proposed cigarette tax is imposed. Lam Tai-hing, chair professor of the University of Hong Kong’s community medicine department, said increasing the tax levied on tobacco was the best way to curb smoking. Lam urged legislators to back the proposed increase on cigarette tax. “Many people used to blame manufacturers and sellers of cigarettes for the smoking-related deaths. I think now it comes [down] to our legislators. If they vote down the tax increase they will have to shoulder the blame,” he said. Legislators are expected to discuss and vote on the bill in May.

Higher borrowing costs may finally lead to falling prices in the world's least-affordable housing market, one that so far has resisted government efforts to cool it down. Prices of Hong Kong properties jumped 24% last year on top of a 30% surge in 2009, according to local property indexes. But there are signs that the pace of transactions in the market for existing housing has started to slow. Hong Kong leaders now worry that a small trickle of cash out of the market for luxury housing, driven by wealthy mainland Chinese, could accelerate and send prices tumbling. Mortgage rates are starting to rise, albeit from levels of less than 1% a year for some adjustable-rate loans. Earlier this month, HSBC Holdings PLC and some other banks announced higher rates on certain mortgage loans for new customers; HSBC now charges as much as 1.5 percentage point above the Hong Kong interbank offered rate. Barclays Capital forecasts that a steady rise in borrowing costs, to above 4% next year, in part as the U.S. Federal Reserve starts increasing its own interest rates, could eventually lead to a drop in sales. Because the value of the Hong Kong dollar is pegged to the U.S. dollar, local interest rates are effectively set by the U.S., even though banks can adjust their mortgage rates independently of central-bank moves. Financial Secretary John Tsang earlier this month warned investors not to count on cheap credit. "The current abundant liquidity and low interest rates will not last forever," he said. "Neither will rising property prices." So far, government efforts to cool the market, including moves in November to impose new taxes aimed at discouraging speculative transactions and restrict credit for high-end purchases, haven't worked. Analysts say that is because interest rates remained low and buyers had easy access to cheap loans. Since the November measures, average housing prices have risen an additional 15%, according to an index compiled by Centaline, a property agency. Sales volume increased 9% in March from February, according to the latest Land Registry report. A survey on global housing affordability, published by Demographia International in January, ranked Hong Kong last among 325 urban markets. The territory's median house price was 11.4 times Hong Kong's gross annual median household income. By comparison, New York ranked 68th in affordability, with prices at 6.1 times median income. Atlanta was ranked most affordable; the median home price was 2.3 times income. Hong Kong's housing prices now are above the peak reached in 1997, just before a financial crisis hammered most of the region, Mr. Tsang noted. Discontent over unaffordable housing—and the belief that government policy favors powerful property developers over ordinary people—has become a political flashpoint. Recently, activists from the Civic Party's youth branch camped outside the offices of Li Ka-shing, Hong Kong's richest businessman, to protest what they call the "property-developer hegemony." Now, some analysts are forecasting that the market is close to a tipping point. Analysts at Barclays Capital predict prices will rise another 15% this year as the supply of new apartments remains low, even as the number of transactions starts to fall. Next year, they added in a recent report, prices could fall 15% to 20% from 2011 levels. In 2013, the report said, prices could fall another 10% from the 2012 levels. The Barclays analysts also predict mortgage rates will rise to 2.5% at the end of this year and above 4% next year, making housing less affordable. But others doubt that rising mortgage rates will stem demand, because of mainland Chinese buyers who don't rely much on loans to buy property. Newly affluent Chinese account for some 30% of luxury real-estate purchases in Hong Kong. That could change if the Beijing government take additional measures to cool down China's overheating economy, such as raising interest rates further or boosting reserve requirements for banks. This month, China raised the share of deposits banks must hold as reserves at the nation's central bank to 20.5%, the 10th increase since the start of last year, after boosting interest rates yet again. However, a drop in home prices is unlikely to bring the sort of damage to banks that U.S. lenders suffered after the U.S. housing bubble burst. Analysts say banks are protected from the impact of a downturn by the conservative loan-to-value ratios in use in Hong Kong, as well as the use of recourse lending, in which banks can go after borrowers who default on loans. In a sign of continued optimism about the housing market, developers behind two luxury residential projects haven't budged on prices, despite sluggish sales. The developers say their current asking prices reflect the market. Queen's Cube, a 96-unit luxury residential building jointly developed by Nan Fung Development Ltd. and an arm of the Hong Kong government, has sold only eight apartments since the project was launched in October. Units at Queen's Cube have sold for between roughly HK$14,000 a square foot and HK$18,500 a square foot (about US$1,800 to US$2,380), well above the average price of HK$12,292 a square foot in the Wanchai district, according to data from Midland Realty. Donald Choi, managing director of Nan Fung, said the firm hasn't lowered prices at Queen's Cube. Just five of 66 apartments have sold at Henderson Land Development Co.'s 39 Conduit Road development in the Midlevels district; 20 of the first 24 sales fell through in June. One of the canceled sales was for a 6,158-square-foot duplex that went for HK$71,280 per square foot, which would have made it the world's most expensive apartment. The 39 Conduit Road project has sold only one unit since the cancellations: a semi-duplex that fetched HK$60,000 per square foot—a record price for a luxury apartment in Hong Kong, according to Henderson Land. Homes in the Midlevels district average about HK$15,000 per square foot, says Midland Realty broker Phoebe Wong. "These developers are cash-rich, so they're waiting the market out," said Benedict Ma, associate director of research at CB Richard Ellis.

Diamond smugglers jailed in Shenzhen - HK-based racket shut down after huge haul - A Hong Kong-based cross-border diamond-smuggling racket has been broken up, with the Shenzhen authorities seizing 200 million yuan (HK$238.19 million) worth of precious stones. Swift justice has been meted out to three Hongkongers and 22 Indian nationals behind what is one of the largest smuggling operations of its kind. They were arrested between January and March this year. According to a Shenzhen court official, all of the accused pleaded guilty in the city's Intermediate People's Court last month and have been jailed. The contraband operation was based in Hong Kong, and the movements of a gang member between the city and Shenzhen were key to the smugglers being caught. But if Hong Kong police knew anything about the two-year operation they are refusing to say so. The case was made public by authorities in Shenzhen only yesterday and Hong Kong police declined to comment last night. The Indian consulate general's office in Guangzhou sent representatives to watch the trial, the court official said. Shenzhen customs yesterday said the smuggled diamonds, believed to be from India, were sold to jewellery factories in the city and, after processing, distributed to retailers as legally acquired gems. The price of raw stones in Shenzhen rose 10 per cent after the break-up of the smuggling ring, customs officials said. The phenomenal growth of diamond sales on the mainland, which is expected to become the largest consumer market for polished diamonds in the next decade, has provided huge incentive for smuggling. Last year, the total volume of the diamond trade in the country shot up by 88.1 per cent. Beijing has dropped the raw stone tariff from 33.9 per cent to about 17 per cent to encourage imports, but many dealers still complain that the duty rates are too high. "[China] is our strongest growth market. Our main challenges are the import tariff, language barriers and red tape," an Indian diamond dealer said. Shenzhen customs said unpaid tax on the seized diamonds amounted to 43 million yuan. The case first came to the Shenzhen authorities' attention in 2009, when a Hong Kong resident told local police he had been robbed of three million yuan worth of diamonds in Lowu, Shenzhen. "We found out that [he] was actually unemployed. The fact that he had all these diamonds was suspicious," a spokesman for Shenzhen customs said. "We did a background check and found that he frequently travelled from Hong Kong to Shenzhen - about five to seven times a week. Each time he stayed just two hours. So he was listed as a key target." Shenzhen authorities tailed the man for two years, gathering evidence on the smuggling ring. Shenzhen customs finally took action in January and the last ring member was arrested on March 31. Shenzhen customs did not say if it had been in contact with the Hong Kong authorities for help. Shenzhen customs said the gang had set up a legal diamond import business as a front to cover up the smuggling. The gang was mainly operated by Indian nationals from Gujarat and Mumbai. The three Hong Kong residents were professional smugglers employed by them. Shenzhen is one of the mainland's key jewellery manufacturing and processing centres, with more than 2,300 factories staffed by over 300,000 workers. Total turnover of the jewellery trade in Shenzhen was 80 billion yuan last year.

After more than two years' delay and a change in the designated commodity of trade from oil to gold, the Hong Kong Mercantile Exchange will go into business next month, having finally received the Securities and Futures Commission's approval. First floated by HKMEx chairman and veteran oil executive Barry Cheung Chun-yuen in the midst of a typhoon in July 2008, the exchange was originally envisioned as a platform to trade fuel oil and come on stream in early 2009. But the global financial crisis and system testing delayed regulatory approval. In July 2009, Cheung dropped the plan to trade fuel oil contacts due to weak demand and replaced it with gold. When the exchange opens on May 18, its 16 members, including BOCI Securities, ICBC International Futures, Interactive Brokers, Morgan Stanley Hong Kong Securities and OSK Futures Hong Kong, will trade 1kg gold bar futures in US dollars through an electronic trading system, with physical delivery in Hong Kong. It will be open 15 hours each weekday from 8am, allowing simultaneous trade with commodity markets in Europe and the US. "This will help promote cross-continent trading and boost liquidity," HKMEx president Albert Helmig, said. "It also offers extensive opportunities for hedging, arbitrage and effective risk management." Record-high gold prices, now hovering around US$1,500 per ounce, have triggered renewed interest in the precious metal. This makes HKMEx's launch timely but it will still face a lot of competition. Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) as well as the Chinese Gold and Silver Exchange Society also trade gold, as do many overseas exchanges, including those in London and Singapore. HKEx's gold futures, which are only settled in cash, had an average daily volume of 178 contracts last month. The century-old Chinese Gold and Silver Exchange Society also offers gold bar trading with physical delivery. Legislator Chim Pui-chung, who represents the financial services sector, said: "Besides HKEx and the Chinese Gold and Silver Exchange Society, many gold brokerages offer clients gold trading facilities. I don't think HKMEx will have much active trading." But Stephen Hui Chiu-chung, vice-chairman of OSK Holdings Hong Kong, whose futures arm is a member of the new exchange, said the HKMEx would offer investors more choice. Cheung, the HKMEx chairman, said global demand for core commodities had been driven by Asia, especially China and India, but traders now relied on western exchanges to hedge futures prices. "Our new platform will offer Asia a bigger say in setting global commodity prices. It will also enable market participants to more actively manage their risk exposure, using products tailored to Asian market needs." The HKMEx plans to introduce other products covering precious metals, energy, agriculture and commodity indices but has no timetable for their launch. The three clearing members of the HKMEx are Interactive Brokers (UK), MF Global UK and Morgan Stanley & Co International. All transactions will be cleared through London-based LCH.Clearnet. The shareholders of the exchange include the mainland's ICBC and Cosco Group and Russia's En+ Group.

 China*:  April 30 2011

Australia will host more warships from the mainland and increase live-firing and other defence exercises with the PLA in a bid to boost ties, Prime Minister Julia Gillard said on Thursday. Speaking to Australian media as she wrapped up a North Asia tour, including her first visit to Beijing as leader, Gillard said she discussed greater military co-operation during “friendly” talks with President Hu Jintao. “[We] indicated a preparedness to keep discussing defence co-operation,” she told the Sydney Morning Herald. “We have indicated we are open to ships visiting Australian ports [and] there’s some prospect that there will be some visiting before the end of the year. “It’s a few small steps on a journey to better understanding each other’s military perspectives.” The United States and its allies have expressed concern over the motivation behind Beijing’s military build-up and called for greater transparency. Australia’s 20-year defence plan, released in 2009, saw China on track to become Asia’s dominant military power “by a considerable margin,” but warned that the “pace, scope and structure” of its expansion could create tensions. Beijing was troubled by the assessment, which was echoed in a foreign policy poll in Australia this week that found 44 per cent of respondents believed China would become a military threat in the next two decades. Of those, 87 per cent said this would be because Australia would be drawn into any conflict with China as a US ally. Gillard said increased military transparency was key to combating tensions by helping to “build understanding about people’s military methods and military protocols”. Defence co-operation was already being boosted, she added, “taking the form of discussions between counterparts. It is also taking the form of some shared exercises, including live firing exercises.” “The best way of working through these issues is to, at a step at a time, engage in increased co-operation and links,” said Gillard, in separate remarks to The Australian newspaper. The mainland is Australia’s largest trading partner, buying mostly raw materials such as coal and iron ore crucial to fuel rapid industrialisation.

Horticultural Expo blooms in Xi'an - Dancers perform at the opening ceremony of the International Horticultural Expo 2011 in Xi'an, capital of Northwest China's Shaanxi province, April 28, 2011. The opening ceremony lasted less than an hour to embody the Expo's theme of environmental-friendliness. Expo lasts about six months to Oct 22. Li Meng, image ambassador of the International Horticultural Expo perform at the opening ceremony in Xi'an, capital of Northwest China's Shaanxi province, April 28, 2011.

Premier Wen meets with Malaysian PM - Chinese Premier Wen Jiabao inspects an honour guard during the official welcoming ceremony in Putrajaya outside Kuala Lumpur April 28, 2011. Wen is on a two-day official visit to Malaysia. Chinese Premier Wen Jiabao (L) and Malaysia's Prime Minister Najib Razak talk during a photo call at an official welcoming ceremony in Putrajaya outside Kuala Lumpur April 28, 2011.

China's population hits 1.34 billion - China's population had increased to 1.37 billion, including 1.3397 billion in the mainland, the National Bureau of Statistics (NBS) said Thursday. The population figure for the mainland was 73.9 million more than that of 2000, when China conducted its fifth national census, according to data from the sixth census released by the NBS. The data show an annual average population growth of 0.57 percent over the past decade (2000-2010) on the Chinese mainland, compared with the growth rate of 1.07 percent from 1990 to 2000, indicating population growth is slowing, said Ma Jiantang, director of the NBS. Of the total population in the mainland, men accounted for 51.27 percent, while women made up 48.73 percent. The Chinese mainland's population living in urban areas totaled 665.57 million, representing 49.68 percent of the total, up by 13.46 percentage points on the 2000 figure, while the population classified as rural population stood at 674.15 million, said the bureau. The falling birth rate and increasing migrating population led to a declining number of 3.1 persons for each core household on average in the mainland, compared with 3.44 persons in 2000, according to the census data. Meanwhile, the proportion of Han Chinese residing in the mainland had dropped to 91.51 percent, or 0.08 percentage points lower than that in 2000 when China conducted its previous national census. The census data showed the growth rate of aging population in the Chinese mainland had increased with people aged 60 or above accounting for 13.26 percent, while juniors aged below 14 made up 16.6 of the mainland's total population. The census data also showed that the illiteracy ratio in the mainland declined to 4.08 percent in 2010 from 6.72 percent in 2000. To break down the census data by regions, Guangdong, Shandong, Henan, Sichuan and Jiangsu provinces were the top five largest populated regions on the Chinese mainland. As the world's most populous country, China launched its month-long sixth national population census in its mainland from Nov 1 last year, mobilizing more than six million census takers to go door to door and visit over 400 million households across the country. The population in China's Hong Kong, Macao and Taiwan stood at 7.10 million, 552,300 and 23.16 million respectively, according to figures provided by authorities in these regions.

China decries Japanese claims of military threat - China refuted rumors of a Chinese military threat that have been stirred up by misleading reports in Japanese media, Chinese Defense Ministry spokesman Geng Yansheng said in Beijing on Wednesday. Geng's remark came in response to the China Security Report released by the Japanese Defense Ministry, as well as concerns voiced by Japanese Defense Minister Kitazawa Toshimi over the increasing size of the People's Liberation Army (PLA) navy. "The past few years has seen some progress in China-Japan defense exchanges, yet a series of serious obstacles still remain, " said Geng, adding that one significant obstacle is the playing-up of China's military development by a small number of people and media in Japan. According to Geng, false reporting has misled the Japanese people and undermined the foundation of non-governmental friendship. "We hope that both sides remove these obstacles, deepen understanding, build up mutual trust and continue with defense exchanges in various fields," said Geng.

A small train overturned in Taiwan's Ali Mountain area on Wednesday, killing five tourists from the Chinese mainland and seriously injuring at least 50 passengers who are members of five mainland tour groups. The injured have been sent to hospitals in Chiayi. Witnesses say branches of a tree had fallen over the railway line, which hit the last carriage and then caused several carriages to overturn. Liu Kezhi, director of the Cross-Strait Tourism Exchange Association's Taipei office, has reported the accident to the association and asked Taiwan's relevant department to make its best efforts to take care of the injured mainland tourists. Liu will be visiting the accident site together with his colleagues. The Taiwan Affairs Office of the State Council and the National Tourism Administration immediately launched an emergency mechanism to handle the accident. The Association for Relations Across the Taiwan Straits also contacted the Straits Exchange Foundation (SEF), urging all-out rescue efforts from Taiwan's relevant departments. The relevant departments of mainland would keep in contact with Taiwan counterparts, actively safeguard the rights and interests of mainland tourists' and properly handle the aftermath of the accident, according to a press release from the Taiwan Affairs Office of the State Council on Wednesday evening. Among the dead are three people from southern Guangdong Province - Ye Yinxian, Ye Qiongzhen and Peng Zhenqu, and two from southwestern Sichuan Province - Chen Daohua and Zhuo Peiqun, according to Taiwan authorities. The identities of the injured mainland tourists are being confirmed. Ali mountain, or Alishan, is one of Taiwan's premier tourist attractions for mainland tourists. A similar train accident occurred near to that of Wednesday's one nine years ago, killing 17 and injuring more than 150 people. The Alishan rail line, running east from the southern city of Chiayi, goes through steep mountains. According to Taiwan authorities, 1.82 million mainland tourists visited the island on tour packages from July 2008 to the end of 2010. Last October, 19 tourists from southern coastal city of Zhuhai, Guangdong province, went missing after their bus was hit by a landslide during a storm in northeast Taiwan.

Chinese premier meets with Malaysian PM to boost bilateral relations - Chinese Premier Wen Jiabao (L, front) meets with his Malaysian counterpart Najib Tun Razak in Kuala Lumpur, Malaysia, April 27, 2011. Visiting Chinese Premier Wen Jiabao met here on Wednesday with Malaysian Prime Minister Najib Tun Razak to boost relations between their two countries. During the small-scale meeting, Wen expressed happiness over his visit to Malaysia, his first in six years, and congratulated the country on its great achievements in economic and social development. Wen said Malaysia is a good friend of China, adding that the two countries, due to their joint efforts, have continuously boosted their traditional friendship, and achieved rich fruits in their cooperation in various fields. China and Malaysia both are facing the major tasks of developing the economy and improving people's livelihood, Wen said. He said that he wishes both sides continue deepening cooperation from a strategic and long-term perspective so as to create a more splendid future for their relations. For his part, Najib said he is confident Wen's trip will further deepen bilateral pragmatic cooperation and bring the two countries' strategic cooperation onto a higher stage. The two leaders also exchanged views on issues of common concern. The Chinese premier will continue his current Southeast Asia trip in Indonesia on April 29-30.

Yum Gets Hungry for Growth in China - Proposal to Take Control of Hot-Pot Chain Little Sheep Indicates New Strategy in U.S. Company's Biggest Market. Yum Brands Inc.'s preliminary offer to take full control of Little Sheep Group Ltd., the operator of a popular hot-pot chain in China, has signaled a new growth strategy for Yum's largest market. Analysts said the move indicates that Yum, which has 3,800 KFC and Pizza Hut outlets in China, is looking beyond pizza and chicken to establish its own presence in the rapidly growing market for Chinese casual dining. Yum bought a 20% stake in Little Sheep in 2009 and increased its stake to 27.2% last year.

Hong Kong*:  April 29 2011

A joint venture by Nan Fung Group and Singapore-listed partner Wing Tai Properties purchased a prime residential site in Hung Hom for HK$1.525 billion on Wednesday in the first government land auction of the year. The price was higher than previous market estimates, which stood at between HK$1.04 billion and HK$1.2 billion. This was despite new restrictions on site development and government pledges to increase land supply. Both factors had been expected to dampen demand. The site is the former Customs and Excise Service married quarters. It is located at 7 Ko Shan Road and is large enough to house a residential block with a gross floor area of 153,000 square feet. Wednesday’s auction saw keen competition from developers, including industry leaders like Cheung Kong (SEHK: 0001), Sino Land and New World Development. The auction opened at HK$900 million and 30 bids were placed within the first 10 minutes. The Nan Fung and Wing Tai venture eventually won the site on the 88th bid for HK$1.525 billion – a that cost can be calculated at HK$9,900 per square foot. “The price is above consensus, but this is a small site and will be developed into big flats, which are scarce and should have good bargaining power,” said Nicole Wong, a property analyst at CLSA. “They have to sell at HK$15,000 per square foot for a meaningful margin,” she added. Nan Fung’s managing director Donald Choi told reporters after the auction that the cost of building the project would be somewhere between HK$500-HK$600 million and the selling price for the finished apartments would be more than HK$15,000 per square feet. Wednesday’s auction is the first since the government introduced new restrictions governing residential developments. Since April 1, features such as balconies, utility platforms, and clubhouses – previously included in gross-floor-area calculations – must now not exceed 10 per cent of a development’s gross floor area. Developers have traditionally included such spaces in the total area they market to buyers, sometimes increasing gross floor areas by 20 to 50 per cent to generate more profits. Financial Secretary John Tsang Chun-wah announced on April 13 that 12 sites – nine residential and three commercial – would be offered for auction and tender between by June in a bid to curb rising flat prices.

The first yuan-denominated share to list on the Hong Kong stock exchange is laying the groundwork for a "seismic change" when China allows its citizens to invest abroad more freely, the exchange's head said. In an exclusive interview with The Wall Street Journal, Charles Li, chief executive of Hong Kong Exchanges & Clearing Ltd., said exchange officials are preparing for much greater outbound investment from China that would drive demand for yuan-linked products in Hong Kong. He also outlined his ambitions to build up a derivatives business that would act as a bridge between Chinese customers and international commodity markets. The comments from Mr. Li, a 50-year-old native of Beijing and former banker with J.P. Morgan Chase & Co. who once worked on oil rigs in northwest China, reflect his intense focus on connecting the Hong Kong exchange with the largely untapped market of mainland Chinese investors. Since taking over as head of HKEx in January 2010, he has made a particular priority out of positioning the exchange to benefit from China's effort to liberalize its currency, also known as the renminbi. One result is Hui Xian Real Estate Investment Trust, the first yuan-denominated stock issued outside mainland China, which begins trading on the Hong Kong exchange this Friday. The offering, backed by properties in Beijing owned by billionaire Li Ka-shing, has raised 10.48 billion yuan (US$1.61 billion). Expectations of yuan appreciation have pushed the amount of renminbi held in Hong Kong bank accounts up more than fivefold since the beginning of last year to 407.7 billion yuan. Bankers expect renminbi bond issuance in Hong Kong, which hit 36 billion yuan in 2010, to more than double this year. After Hui Xian REIT, HKEx's Mr. Li hopes to see several more yuan stocks list in Hong Kong later this year. But Mr. Li's ambitions for those shares aren't geared toward Hong Kong investors: They are a play on "a seismic change that is taking place in our market over time," he said, as China allows investors to take their money abroad. "That big gate, that big dam" holding back China's massive investor base "is coming down," Mr. Li said, adding that the result will "bring more changes to the global capital market today than anything else." Mr. Li believes that the key for HKEx to capture demand from mainland Chinese investors is to have renminbi products that are "currency neutral." That is, you remove an element of exchange-rate risk that bankers say depresses demand for overseas shares from Chinese investors through an existing quota system. As the availability of renminbi products grows, he said, "we're working with the [central] government, we're lobbying authorities, to gradually open" and allow greater outbound investment through new quotas aimed at high-net-worth individuals, he says. After that, he believes Hong Kong could aim for dual listings of yuan-denominated shares in Shanghai and Hong Kong. Eventually, those shares might be freely tradable by investors in both markets. "This is our pipe dream," he said, adding that the exchange has discussed these ideas "with a lot of other people." Dreams of outbound flows of Chinese capital have long had a special appeal in Hong Kong. In August of 2007, an unusual proposal to allow domestic Chinese investors to bypass existing barriers and buy Hong Kong stocks directly sent the city's benchmark index soaring nearly 50% in 10 weeks. The plan was later quashed, and stocks fell back to earth. In the interview, Mr. Li later spoke of his aim to make HKEx a bigger player in commodity and financial derivatives that tap demand from China, already a powerhouse in global markets for energy, metals and agricultural products. He identified interest-rate swaps as a big potential market, as use of China's currency becomes more widespread. As part of these efforts, HKEx is talking with China's three commodity exchanges as well as with its financial futures exchange about ways to cooperate. Not all changes at HKEx under Mr. Li have been universally welcomed. Earlier this year, HKEx began allowing mainland Chinese companies to use Chinese accounting standards and auditors. Critics say the move, aimed at reducing auditing costs for issuers, undermines protections for investors. Exchange officials have defended the move, arguing that China has raised its accounting standards and auditors will be subject to tight scrutiny by China's Ministry of Finance.

The Hong Kong stock exchange has rejected PCCW (SEHK: 0008)'s plan to spin off its telecommunications business and list it as a business trust, a decision the group is appealing. The news could force PCCW, chaired by media tycoon Richard Li Tzar-kai, to consider listing the telecoms unit as a business trust in Singapore, where such structures are allowed. “I’m sure the Singapore Exchange would welcome PCCW to list as a business trust if they fail to be successful in Hong Kong,” said Raymond Tong, a partner in law firm Clifford Chance’s capital markets practice in Singapore. In a filing to the Hong Kong exchange on Wednesday, PCCW said it would appeal the committee’s decision to block its plans for the city’s first listed business trust. “We would trust that the appeal can be held expeditiously,” a PCCW spokeswoman, who did not want to be identified, told reporters by telephone. “We don’t wish to go into the details while we are going through the formal appeal process. We believe we have strong ground to appeal and therefore we are exercising that right,” she added. Shares in the company fell 2.2 per cent, underperforming a 0.5 per cent fall in the benchmark Hang Seng Index. The company said the rejection was made under the Hong Kong Exchange’s guidance note for companies looking to spin off and separately list one of their existing businesses, but did not elaborate. Henry Law, a spokesman for the Hong Kong Exchange, said they were unable to comment on individual listing applications. The move marks a further blow to Richard Li’s numerous attempts to reorganise the telecoms business. He first tried to sell the telecom and media assets in 2006 but was blocked by state-owned China Netcom (SEHK: 0906), a 20 per cent stakeholder in the company, which said it was worried about the phone infrastructure falling into foreign hands. Then in April 2009 Li’s move to try and privatise the phone company was blocked by Hong Kong’s Court of Appeal after Hong Kong’s Securities and Futures Commission intervened saying there was evidence that the shareholder vote had been manipulated by the company. In March this year PCCW said it was in discussions with the Hong Kong Exchange and the city’s Securities and Futures Commission over the possible listing of its telecommunications business in the form of a business trust. The move was seen as an attempt to put the thumbscrews on Hong Kong’s regulators to allow publicly listed business trusts following an outcry by some investors and politicians when Richard Li’s father, Li Ka-Shing, listed the ports business of Hutchison Whampoa (SEHK: 0013) as a trust in rival financial centre Singapore last month. Business trusts allow companies to pay dividends out of their underlying cash flow rather than profits and so tend to be used by firms in the infrastructure sector that have fairly steady revenue streams. The trusts are popular with companies because it allows them to raise cash without relinquishing control. In a business-trust model, the trust sells units to investors, but control of the business is left with the trustee manager, who is usually an affiliate of the company establishing the trust. However, opponents of business trusts point out that this removes a degree of accountability to the trust’s unit holders. If unit holders want to remove the trustee manager, at least 75 per cent of them would need to vote in favour of the move. “We can see no good reason for Hong Kong to emulate Singapore business trusts,” Hong Kong-based activist shareholder David Webb wrote on his website. “There’s no tax reason for doing so and there are governance reasons why we shouldn’t,” he added. PCCW, which aims to retain a controlling stake in the business on a long-term basis, said the proceeds from the spin-off and listing would be used to strengthen its balance sheet and for investment in future growth. PCCW shares have fallen 8.7 per cent so far this year versus a 3.7 per cent gain in the Hang Seng Index.

Hong Kong columnist meets Premier Wen - (From left) Premier Wen Jiabao's wife Zhang Peili, Wen, former National People's Congress deputy Ng Hong-mun and his wife. Veteran Hong Kong columnist and former local National People's Congress deputy Ng Hong-mun has had a 90-minute audience with premier Wen Jiabao which political commentators see as Beijing trying to show it is more open to criticism. Ng, whose columns in the Chinese-language Ming Pao have been increasingly critical of the Communist Party, visited Wen's office in Beijing on Saturday for a discussion during which, he said, Wen told him the central government lacked people who were willing to tell the truth. They also touched on sensitive topics such as the forthcoming Hong Kong chief executive election and political reform. What raised more eyebrows, however, was that Wen's wife, Zhang Peili , was at an event after the meeting and was shown in one of two photographs accompanying a press release issued afterwards. Zhang, 68, has rarely been seen at any official occasions with the premier, including his visits to foreign countries, which sparked rumours that the couple had divorced. Political commentators believe, however, it is because Wen has not wanted his political career to be linked with his wife's jewellery business, which could conflict with his carefully maintained frugal image. Zhang, former vice-president of the Chinese Jewellery Association and the head of a Beijing diamond and jewellery company, reportedly has huge influence in the industry. Wen's predecessors, such as Zhu Rongji and Li Peng , often took their wives overseas. Ng - an NPC member for 32 years who stepped down in 2007 - said Wen invited him to hear his "in-depth analysis which gives inspiration" and they talked about one of Ng's recent columns judging the quality needed for Hong Kong's next chief executive. "I said in the commentary that whoever can stabilise Hong Kong can win the top job," Ng said. "Wen laughed when hearing my comments, but did not say who would be a suitable candidate." Ng also quoted Wen as saying that the lingering influence of "cultural revolution" and "feudalism" values has deterred mainlanders from speaking the truth. The only state leader to advocate political reform and tout "universal values", Wen told cadres on April 19 to "speak the truth". He made a similar appeal to the nation's official writers' association nearly five years ago and created waves twice last year by discussing political reform - in an interview with CNN and during a visit to Shenzhen. Hong Kong-based China observer Johnny Lau Yui-siu said the rare meeting appeared to be aimed at constructing an image that Beijing is open to criticism, but this did not necessarily mean it was ready for political reform. "Beijing is seeking to convince the traditional leftists, who feel marginalised after last June's electoral reform, that they are still important," he said. "While Wen may have asked for Ng's opinions on the next chief executive, Beijing has been asking around in Hong Kong for some time."

The Federal Reserve kicked off a two-day meeting last night, Hong Kong time, that is expected to conclude with a signal that it is in no hurry to scale back its support for the economic recovery. The US central bank is expected to use a post-meeting statement to confirm that it will complete its US$600 billion (HK$4.68 trillion) bond-buying program by the end of June and renew its commitment to maintain rock-bottom borrowing costs for "an extended period." The statement on the bond-buying program, the Fed's second since the recession and known as quantitative easing or QE2, is expected early tomorrow morning Hong Kong time. Following the announcement, Ben Bernanke will hold the first-ever regularly scheduled news conference by a Fed chairman. It is expected to last 45 minutes. Bernanke will open with a brief statement and then take questions. In another move to improve public understanding of the Fed's policies, policymakers will issue quarterly forecasts for growth, employment and inflation as the news conference begins. Those forecasts were formerly released as part of the minutes of Fed meetings, which are published three weeks after policy meetings. A backdrop of softer-than-expected economic data, weak housing markets and possible government austerity measures to tackle the budget deficit all make it more likely the Fed will keep its support for the recovery in place for some time, analysts said. Although a jump in oil prices has pushed headline inflation higher, the most influential Fed officials - including Bernanke - see the rise as transitory. Still, the Fed is likely to discuss how it will eventually exit from its extremely easy monetary policy, It has kept overnight interest rates near zero since December 2008 and is on track to wrap up the purchase of about US$2.3 trillion in bonds in its effort to keep borrowing costs low. Some of the more hawkish Fed officials have argued that the central bank needs to detail how it will withdraw this economic support. The Fed's holding pattern puts it at odds with other central banks around the world, most notably the European Central Bank. That raised euro zone interest rates this month, ending almost two years of record low borrowing costs. Some analysts expect the Fed not to expand its bond-buying program. It may underscore this by changing its post-meeting statement to say "will purchase" from "intends to purchase," said Michael Gapen, an economist at Barclays Capital in New York and a former Fed staffer. 

Admiralty office prices reach new heights - Government headquarters to revitalise area as residential buying proves to be pricey - Prospects of a value-adding facelift to Admiralty's office precinct after the opening of new government headquarters in the area have driven prices of grade-A offices above their previous market peaks in 1994 and 1997. Until recently, office prices had lagged behind the rebound in the luxury residential and retail sectors that took prices to new market peaks in 2007. "But all grade-A office prices in Admiralty and Central went beyond their previous peak levels after sharp increases in the first quarter," said Eric Ong, sales director of the office department at property agency Midland IC&I. Average grade-A office prices in Admiralty rose 15 per cent in the first quarter, and offices in the 31-year-old Admiralty Centre were the latest to hit records when a 10,918 square foot unit on the 21st floor was sold last week for about HK$197 million, or HK$18,000 per square foot. During the market peak of 1994, the highest price for the office unit at Admiralty Centre was just HK$13,000 per square foot, according to transaction data from Centaline Commercial. The vendor bought the unit for about HK$104 million in October 2009 - a surge of 89 per cent in less than two years. A 1,308 sqft unit in Far East Finance Centre in the area sold for HK$26,758 per square foot earlier this month, 9 per cent higher than the previous record high of HK$24,550 in 1997. "Buyers are expecting that the image of Admiralty will improve after the new government headquarters are completed and occupied at the end of this year," said Desmond Poon, an associate director at property agency Chartersince Realty. "The opening will represent a new landmark for Hong Kong and they expect the office market will benefit." In Central, offices at Nine Queen's Road also hit a record last month when an investor bought the 20th floor for HK$378 million, or HK$27,500 per square foot, from Henderson Land Development (SEHK: 0012) chairman Lee Shau-kee and a related party. That was up 31 per cent on the previous record of HK$21,000 per square foot recorded in 1994. "Offices were cheaper than luxury residential and retail properties since their prices had lagged behind the market recovery for so many years. This attracted investors who saw that office rents were rising because of the lack of new supply and the positive economic performance," Ong said. The government's introduction of cooling measures targeted at the residential market added to the alternative attractions of offices, making commercial properties a more flexible investment than residential properties which attracted additional stamp duty if resold within two years, he said. "Office rents rose 10 to 15 per cent in the first quarter. That's why buyers could still enjoy rental yields of 3 per cent, even though office prices rose to more than HK$20,000 per square foot in the same period." However, the change in sentiment towards buying offices attracted a new breed of more aggressive investors, Ong said. "The office investment market used to be dominated by several veteran investors. But in this cycle, there are more individual buyers and newcomers. These veterans have shifted their focus to the stock or grade-B office markets, which may be a response to their concern that prices of grade-A offices have risen too far." Poon said there were fewer mainland buyers in the market than before and the new investors in the office market included industrialists and owners of trading firms, who found it easier to get loans from banks. As the new investors were in a rush to enter the office market, they were less cautious about the price inflation in prime areas. "Even though buyers were aggressive in buying office properties in 1994 and 1997, they would hire architects to verify the area of the office units and require agents to issue certificates to indicate the saleable area of the units," Poon said. "But now none of the buyers care about how much the floor area may have been inflated and they don't require certificates." Poon said the efficiency rate of office units was about 65 per cent at present, compared with 70 per cent during the market peak. "That means the average price of the office units is much higher than the market peaks in term of saleable area." Ong expects office prices will continue to rise this year. "Prices of grade-A offices will grow a further 30 per cent by the end of this year. Office prices in Admiralty will hit HK$30,000 per square foot," he said.

John Chiang, the grandson of late Kuomintang leader Chiang Kai-shek, yesterday conceded defeat in a shock result in the KMT primaries for Taiwan's legislative elections in January. The 69-year-old, three-term legislator lost by a paper-thin margin to Lo Shu-lei, an outspoken at-large legislator, the KMT said. "I fully accept the result," said Chiang, a KMT vice-chairman. He said he would follow the party's instructions and help Lo in campaigning once she was officially nominated by the party. Chiang had earlier filed a complaint alleging Lo smeared him during the primaries. But the KMT disciplinary committee decided to reprimand Lo rather than disqualify her. Chiang said he respected the decision and arrangements of the party, and would not seek to reverse its decision. Asked about his future plans, the former foreign minister and presidential secretary-general said he did not think a single defeat would end his political career. Taiwanese media said Lo's frequent criticism of the party was probably the reason she was supported by many KMT voters who were disappointed with the party, especially over its failure to rein in the island's ever-widening wealth gap. The media said the KMT was likely to make Chiang an at-large legislator. At-large seats are allotted to parties in proportion to their percentage of the total vote in the election. Chiang is the sole surviving son of former Taiwanese president Chiang Ching-kuo, who died in 1988. The influence of the Chiang family, which governed Taiwan between 1949 and 1988, has been waning since.

 China*:  April 29 2011

World's top 500 firms eyed for int'l board - The lobby of HSBC Bank Company Ltd's newly built headquarters in Shanghai. According to media reports, the world's top companies, including HSBC Holdings PLC, are likely to be listed on the international board of the Shanghai Stock Exchange. Regulator may allow 10 foreign companies in the first batch of listings - China will likely allow some of the world's top 500 companies to float shares in its A-share market as it prepares the launch of an international board in Shanghai, Chinese media reported on Tuesday. After considering the views of many parties, the regulator has come to the conclusion that the international board should first consider companies on the world's top 500 list, the China Securities Journal reported on Tuesday, citing a source it described as authoritative. But the report said that the authorities haven't decided whether red-chip companies - domestic companies that are registered overseas - will be allowed to list on the international board. A press officer at the China Securities Regulatory Commission told China Daily on Tuesday that there is still no timetable for the launch of the long-awaited international board and the delay may be caused by the lack of agreement among higher-level officials and concerns of the Hong Kong Stock Exchange, a potential competitor of the Shanghai bourse in the market of new share sales. Some government departments believe that the board should focus on the red chips in the initial stage while others wanted the board to focus on the world's top multinationals, according to industry players. Local media reported earlier this month that China's securities regulator may allow about 10 foreign companies in the first batch of listings on the international board. The 10 companies will comprise multinational corporations such as HSBC Holdings PLC and Unilever PLC, as well as foreign-incorporated Chinese firms such as China Mobile Limited and China National Offshore Oil Corp, the 21st Century Business Herald reported, citing a government proposal. Foreign companies looking to list in Shanghai must have a market capitalization of at least 30 billion yuan ($4.6 billion) and a combined three-year net profits of at least 3 billion yuan, according to the proposal. The companies must have posted a net profit of at least 1 billion yuan in the most recent 12 months, the proposal said. China has long said it plans to open its stock market to foreign listings because it wants to raise the global profile of Shanghai, which aims to become an international financial center. The government also hopes the board will broaden investment channels for its swelling yuan savings. There had been constant speculation about an immediate launch of the international board since 2009. Fang Xinghai, director-general of the Shanghai Financial Services Office, said late last year that the city government was hoping to launch the board in 2011. Rules for the international board are largely ready, although no timetable for its launch has been set, Geng Liang, president of the Shanghai Stock Exchange, said in March.

Gillard raises rights issues but still seals US$600m iron ore deal - Wen Jiabao shows the way for Australian Prime Minister Julia Gillard as they inspect a guard of honour during a welcoming ceremony in the Great Hall of the People. Australian Prime Minister Julia Gillard appeared to have struck a balance between pressing her host on human rights and seeking more trade as she walked away with a US$600 million iron ore deal on the second day of her visit to China. Gillard arrived in Beijing on Monday for a four-day visit as part of a tour to north Asia, which includes Japan and South Korea. This is her first visit to China since she took office last year from Kevin Rudd, who, despite being fluent in Putonghua, oversaw one of the lowest periods in Sino-Australian relations, tarnished by state secrets lawsuits and blocked investment deals. Like many other Western leaders, Gillard faced the awkward challenge of prodding Beijing over human rights abuses while wooing the country for more trade; but more than any other advanced economies, Australia depends on China, which buys up a quarter of Australian exports and is Australia's biggest coal and iron ore purchaser. Gillard said after a one-hour meeting with Premier Wen Jiabao that "the relationship with China is in good shape". She said the talks had focused on trade and investment, but she also raised human rights concerns. "I did have the opportunity to raise with Premier Wen issues associated with Australia's concerns with human rights," she said, pointing to concerns over treatment of ethnic minorities, rights activists and the question of religious freedom. "[Wen] did indicate his view that China has not taken a backward step on human rights." According to Xinhua, Wen told Gillard that "China and Australia share broad common interests in maintaining regional stability, promoting regional and world economic growth and coping with global challenges". He urged the two states to establish "long-term and stable strategic co-operative ties" and to encourage co-operation in the areas of new, clean and renewable energy, as well as the construction of information networks, railways and ports. Gillard said she raised the cases of detained Australians, mining giant Rio Tinto's Stern Hu and entrepreneur Matthew Ng. Hu was sentenced to 10 years in prison for accepting bribes and industrial espionage in March last year, while Ng is detained for embezzlement charges, for which the maximum jail term is 20 years. Another tricky issue that she raised was North Korea, where Australia joins Japan and the United States in wanting China to exert more pressure on Pyongyang. Wen and Gillard witnessed the signing of five co-operation pacts in science and technology, customs, tourism and the service trade, and the US$600 million deal on Chinese financing for an iron ore project with Western Australia's Karara Mining.

Australian PM tours Forbidden City - Australian Prime Minister Julia Gillard (R) and her partner Tim Mathieson walk through a doorway at the Forbidden City in Beijing April 27, 2011.

The US State Department denied a newspaper report on Wednesday that Washington could make it more difficult for senior Chinese officials to secure visas. "The US has not contemplated, nor is it considering any changes to our visa policies in China," State Department spokesman Darragh Paradiso said by telephone. "As in other countries, the US embassy and consulates in China process visas following strict criteria and in accordance with US law." The report appeared in the Financial Times as two days of Chinese-US talks on human rights were due to get under way in Beijing. China's Foreign Ministry on Tuesday warned against using human rights disputes as "an excuse to interfere in China's domestic affairs". The Financial Times quoted a US official as saying Washington could toughen visa procedures in response to China's cancellation of bilateral meetings.

The People's Liberation Army chief of staff will visit the United States in May, state media confirmed on Tuesday, as the two countries try to improve military relations despite their growing rivalry. “I will visit the United States next month at the invitation of Mike Mullen, Chairman of the Joint Chiefs of Staff,” Chen Bingde, PLA chief of staff, was quoted as saying by Xinhua news agency. It did not give specific dates in May. Chen told a visiting US Congress delegation: “I look forward to having an in-depth and candid discussion with US political and military leaders on bilateral military relations and other issues of common concern.” “The relations between our armed forces face good opportunities now,” Chen was reported as saying. However, he stressed that US arms sales to Taiwan accounted for the “largest obstacle” in bilateral military relations – themselves a major point of friction in wider China-US ties. Tensions soared early last year when Beijing suspended high-level defence contacts with the United States over Washington’s sale of more than US$6 billion in arms to Taiwan, which Beijing considers part of its own territory. Tentative plans for US Defence Secretary Robert Gates to visit were subsequently called off, but he finally came to China in January – his first trip to Beijing since 2007. US military leaders and China’s neighbours are increasingly anxious about the PLA’s pursuit of sophisticated missiles, satellites, cyber-weapons and fighter jets.

The mainland dairy industry suffered another blow after authorities seized 26 tonnes of melamine-contaminated milk powder, while the latest poisoning scare sent shares of a company plunging yesterday. The seizure from the Jixida Food Company and a transport company in Chongqing is the largest haul so far this year. It rekindled fears that not all melamine-tainted milk had been confiscated and destroyed as the government promised in 2008 after six children died and more than 300,000 were sickened from drinking melamine-tainted baby formula. Melamine was added to raw milk to artificially improve the level of protein. More than 27,000 tonnes of recycled milk powder were confiscated in a crackdown last year. It was not immediately clear whether the latest seizure was part of the milk that should have been destroyed three years ago. A police investigation found the powder had originated from a dairy in Inner Mongolia and was sold by a Guangxi dairy firm. The powder had not been processed because Jixida was doing maintenance on its equipment. Three people were detained for their involvement. Meanwhile, the share price of China Mengniu Dairy (SEHK: 2319) slumped 10.4 per cent in early morning Hong Kong trading yesterday, reflecting investors' concerns over the possibility of milk poisoning after 251 primary school pupils in Shaanxi fell ill after drinking Mengniu milk on Friday. The stock closed at HK$24, down 3.42 per cent or 85 HK cents on the day. Analysts said the latest incident would weaken consumer confidence in Mengniu products, but to a relatively smaller extent. "We believe this is an extremely rare case," Gary Lau of Bocom (SEHK: 3328) International wrote in a research note. "It might have an adverse influence on consumers and put pressure on the company's stock price ... But this isn't in the same league as the melamine scandal of three years ago." The children in Yuhe town showed symptoms of fever, abdominal pain and diarrhoea after drinking the milk, which had been bought by the district Education Bureau. The initial diagnosis suggested they had bacterial food poisoning. The nine who stayed overnight in hospital were discharged on Saturday. Tests of milk samples from the school inventory found all indicators were in accordance with the national standard. Laboratory tests did not find any disease-causing bacteria, according to a statement by Yulin city government's food safety commission posted on Mengniu's website. But the statement did not say what caused the pupils' illness. Mengniu earlier suggested the schoolchildren were probably suffering from lactose intolerance as most of them drank the milk on empty stomachs at around 7am, but that explanation has drawn strong criticism online and in the media. The school served several kinds of dairy products, including yogurt and milk with fruit, and those who showed the symptoms drank the milk. The Mengniu facility in Baoji , which provided the milk to Yulin, also provided milk to a primary school in Zhouzhi county, Shaanxi, where 18 pupils experienced similar symptoms after drinking Mengniu milk in April last year. However, tests found the milk was up to standard. Kenny Tang Sing-hing, general manager of AMTD Financial Planning, said investors had become sensitive to such food poisoning scandals. "But this time it's only a regional incident and the affected students all recovered in a short period of time," he said.

The former top engineer of China Southern Airlines stood trial yesterday accused of taking over 7 million yuan (HK$8.36 million) in bribes, mainland media reported. Zhang Heping looked frail and spoke in a weak voice, the Procuratorial Daily reported on its website. The trial judge at the Hengyang Intermediate People's Court in Hunan repeatedly asked him to speak up, it said. On this first day of the trial, the court heard that Zhang, 58, had taken a total of 7.19 million yuan in bribes in exchange for helping six people win business contracts for such things as underwriting tickets for certain air routes, infrastructure construction projects and aircraft maintenance while he served as a senior manager in Guizhou , Hunan and Guangdong between 1999 and last year, the report said. He was charged in June. Several veterans of the mainland's civil aviation sector have been detained in the past year. Huang Dengke , former northern regional chief of the General Administration of Civil Aviation of China, and Zhang Zhizhong , ex-chairman of Beijing Capital International Airport (SEHK: 0694), were detained after investigations last summer. Four million yuan of Zhang Heping's money came from a Hunan-based air ticket underwriter, the report said. Zhang used his position to help it become the sole agent for several new airlines after he became general manager of China Southern's Hunan branch in 2003, it said. The court was told that he accepted 2.23 million yuan from a property developer in Hunan for helping him obtain a piece of land originally owned by the airline in early 2007. Zhang Heping worked in Hunan for several years until his promotion to chief engineer and general manager of the Aircraft Engineering Department of the Guangzhou-based carrier in 2009.

China's uncertain demand for imported oil will be one of the key influences that will affect tanker markets in the medium to long term, according to leading shipowners. Charter rates for supertankers have slumped since the fourth quarter of last year. Average daily earnings for a 300,000 deadweight tonne very large crude carrier were down last week to about US$18,670 for a voyage from the Middle East to Asia compared with an average of US$41,600 per day last year. This reflected lower demand for oil coupled with an influx of new vessels into the tanker market. Tim Huxley, chief executive of Hong Kong's Wah Kwong Maritime Transport Holdings, said: "Chinese oil demand will remain vital to a recovery in the large tanker market. A good chunk of the tanker order book has now been delivered and newbuilding orders are well down compared to last year, and longer term, the outlook for demand looks positive, particularly from China." Wah Kwong has three very large crude carriers being built in Dalian which will be put on long-term charter to Chinese companies starting in August when the first supertanker is delivered. His views were echoed by Morten Arntzen, president and chief executive of Overseas Shipholding Group, who added that the United States and Europe could see a recovery in oil import volumes, but "China demand is a wild card". Arntzen thought growth in mainland demand for oil would have a greater positive impact on tanker charter rates because of the longer transportation distances involved. "I see tonne-mile growth with vessels taking more cargo east. I don't think that is going to slow down," he said. More China-bound oil cargoes would come from Venezuela and Colombia, a 45 to 55-day voyage compared with equivalent Middle East to China voyage of around 30 days. Saudi Arabia accounted for 1.03 million barrels per day of the total imports of 5.13 million barrels per day in March. China imports about 400,000 barrels of crude oil and refined products a day from Venezuela but this is likely to increase as mainland refinery projects start. China's National Energy Administration has forecast the mainland's total oil consumption will rise 8 per cent this year to 265 million tonnes. By comparison, mainland crude oil imports were 21.67 million tonnes last month, up 8.6 per cent from February, according to China's General Administration for Customs, and up 2.9 per cent year on year. Overseas Shipholding is part of the Tankers International shipowners pool "which puts more oil into China than anybody", Arntzen said. Huxley said Wah Kwong's 318.65 deadweight tonne supertanker, Ardenne Venture was on charter to European tanker owner Euronav and trades in the Tankers International pool. Other members of the Tankers International pool include Hong Kong shipowner Oak Maritime, IMC Marine, which is controlled by legendary Hong Kong maritime figure Frank Tsao Wen-king, and Singapore's GC Tankers. Huxley said: "The tanker market is indeed in pretty desperate territory now and high bunker costs mean achieving break even is a struggle." But longer-term period charter rates are quite positive. "It will take a bit of time, but overall the tanker market is still probably a good medium to long-term bet for shipping investors. "In the meantime, historically the only certainty in the tanker market is volatility, so you could easily end up with a surprise or two before the year is out."

Just two years ago, mainland investor Jim Zhang finished capital-raising for his first real estate private equity fund. Today, he is calling on fellow investors to contribute to his fourth real estate fund. "There is a lot of liquidity in China. Many wealthy individuals are interested in investing in real estate private equity funds in anticipation of a positive market outlook in the long run," he said. Zhang studied for a master's degree in Australia. He worked for several mainland developers when he returned to China and also wrote books on the mainland property market before he turned his attention to private equity funds. That move came after he took up a lecturing job at Tsinghua University for an external course on the role and function of a real estate company chief executive. That put him into contact with investors interested in property, which he made use of when he set up Huafang Capital, a private equity real estate fund, in November 2009. "All the investors were members of the course," he said. Zhang said Huafang Capital had just raised 500 million yuan (HK$597.43 million) to invest in tourism-related property projects and he was now planning to raise capital for a fourth fund. Several potential targets for investment are being studied, including one in the country's north. Raymond Wang, head of investment at DTZ's Northern China division, said real estate private equity funds such as those set up by Zhang were on the rise. He cited figures from Zero2IPO Group which show that capital raised by real estate private equity funds accounted for just 2 per cent of the total value of new private equity funds in the first quarter of last year. The web portal reports venture capital and private equity news in China. Twenty-five private equity funds were approved on the mainland in the first quarter, five of which were real estate funds that raised US$969 million in capital. The three main types of property private equity funds on the mainland are formed by developers, financial corporations and those that are owned or backed by the government. Developers have been actively raising funds from the real estate private equity market because the central government has been tightening credit since last year, Wang said. Developers are also working with foreign investors to raise capital. For example, Gemdale Corp and UBS Global Asset Management earlier this month raised about US$100 million for their joint venture to invest in the mainland housing market. Wang anticipated further strong growth in the sector this year amid continuing credit-tightening measures and with the central bank expected to raise interest rates. The market will also be boosted by a rule change which allows mainland insurers to invest up to 5 per cent of their assets under management in private equity. The insurers have already begun experimenting with the new asset class. "Fund-raising is easy as liquidity is strong," Wang said. The mainland's real estate financing industry will be worth 910 billion yuan by 2015, according to consultancy McKinsey. Wang said most of that investment capital will come from real estate private equity funds. But he warned there were risks involved with betting on small real estate funds. "I've taken some of Tsinghua University's external courses - it's a good way to establish a network," Wang said. "Many people on those courses are entrepreneurs with plenty of cash to invest. "But the risk is very high as we're talking about smaller, less competitive companies." Wang advised investors to look at larger private equity funds as the industry expands. Private equity firms with assets under management of more than 500 million yuan are now required to register with the National Development and Reform Commission. That rule is part of measures introduced recently to protect retail investors.

Hong Kong*:  April 28 2011

InvestHK targets Latin America in local office push - InvestHK is gearing up to entice Latin American firms to set up businesses in Hong Kong. Director-general Simon Galpin told The Standard it will partner with Zhuhai and Macau to launch joint promotions in Bogota, Colombia, and Sao Paulo, Brazil, next month. "Brazil is a major trading partner with China," Galpin said. "We have to make sure Hong Kong has a role to play." InvestHK will target Brazilian resources, aircraft and hi-tech firms to open offices in the the city. In December mining giant Vale (6210) became the first Brazilian firm to list here. It was also the first firm to issue Hong Kong depositary receipts. The Shanghai Stock Exchange and Brazil's BM&FBovespa - the operator of Latin America's biggest securities exchange - inked a deal on cross-listings of stocks in February. InvestHK helped 284 firms - mostly from China, the United States, Britain, Australia and Japan - set up local offices last year. "We also eye BRIC [Brazil, Russia, India and China] economies as well as smaller enterprises which have the potential to grow quickly," Galpin said. Among the more unusual entrants the agency helped last year was a Fiji-based airline and a natural resources firm from Kazakhstan, he said. Despite Japan's suffering one of its most devastating natural disasters last month, no Japanese company has called off their plans for Hong Kong, Galpin said, adding: "One Japanese consumer electronics company will move its treasury department to Hong Kong." The imposition of a minimum wage in the city from May 1 was not a concern as "our clients mostly offer high-value jobs." Also, the proposed competition law is not an issue as similar legislation overseas is much stricter, he said. As for rocketing rents, Galpin said the city still offers a range of options. "Most of the time, investors' perception of rental cost in Hong Kong is bigger than what they see in reality."

"Dual-tranche" initial public offerings, from which a listing candidate can launch both a Hong Kong dollar and a yuan- denominated IPO at the same time, may kick off this year following approval by the local bourse, Computershare Hong Kong Investor Services said. "A dual-tranche listing is totally practical after the successful listing of Hui Xian REIT, the first yuan IPO here in Hong Kong," Computershare managing director Pamela Chung Kong- hung said. "Technically we are ready. The idea is similar to the rights issue of HSBC Holdings (0005) both in the Hong Kong dollar and the British pound," she said. To prepare for the flotation of Hui Xian, Computershare has upgraded its registration system to handle yuan IPO application forms, refund and dividend distribution, she said. Subscribers only need to open a yuan account in a local bank, Chung added. Hong Kong Exchanges and Clearing (0388) boss Charles Li Xiaojia has said the HKEx is in talks with a few firms on launching dual-tranche IPOs. "Companies are interested in rolling out yuan IPOs but many international funds do not hold the Chinese currency," Chung said, citing investment bankers. Taiwan grocery chain RT- MART International and local jewelry giant Chow Tai Fook are apparently interested in launching a dual-tranche IPO in Hong Kong this year.

Developers are gearing up to grab more sales during the May 1 Golden Week holiday as competition quickens in the primary property market. Cheung Kong (0001) plans to host eight roadshows in Shenzhen on Thursday and Friday, targeting more than 1,000 potential mainland millionaire homebuyers for its Yuen Long project Uptown. "We have also reserved lucky number flats at low, medium and high levels especially for these buyers," Cheung Kong Real Estate director William Kwok Tsz-wai said. More than 100 flats in Uptown were sold over three days of the Easter holidays, each priced at an average of HK$4,900 per square foot. About 12 percent of buyers were from the mainland. Effective today, the developer has raised the price on 18 flats by at least 8 percent. Sun Hung Kai Properties (0016) also plans to lure mainland buyers with its flats at Avignon in Tuen Mun. "Sales during the holidays went well, and we plan to put more four-room flats on the market during Golden Week," said Sun Hung Kai Real Estate Agency senior sales and marketing manager Tam Sik-cham. The developer put 192 flats in the project on the market over Easter, expecting to reap more than HK$1 billion. Emperor International (0163) plans to put the rest of its flats at Upper East 18 in Sai Wan Ho on the market during Golden Week. More than 60 of 94 flats have been sold since their launch a week ago. The project has a total of 108 homes, with the prices of 14 yet to be revealed. Meanwhile, Sino Land (0083) sold the first 50 flats of Maison Rose, its new residential project at Cheung Sha Wan, over Easter, priced from HK$2.4 million, or HK$6,270 psf. The developer offered another 28 flats yesterday, priced between HK$2.5 million and HK$3.31 million, or HK$6,553 to HK$8,366 psf. The project has a total of 96 flats, sized from 363 to 396 sq ft. The developer introduced the first 50 flats last Thursday, and immediately received around 400 reservations from interested buyers. Construction is complete and the developer has received the occupation permit from the government.

Tycoon Lee Shau-kee has so far donated more than HK$1.8 billion to education, which he believes will provide good returns. But he finds the SAR government's giveaway of HK$6,000 to each permanent resident questionable. The Henderson Land Development (0012) chairman donated 300 million yuan (HK$357 million) to Tsinghua University to build a technology building. "Education is always a long-term investment. A correct choice will give a very good return," he told Sing Tao Daily, sister paper of The Standard. "I look for better results with minimal efforts. The SAR is giving Hongkongers HK$6,000 each, which will be helpful. But how big is the effect?" Lee said in Beijing, during a ceremony to mark the start of construction of the technology building. The 10-story facility, with a gross floor area exceeding 100,000 square meers, is expected to be completed in 2014 and will be a research center for several engineering and computer science faculties. The university, which is celebrating its 100th anniversary, earlier this year received another donation of 100 million yuan from Lee - an honorary director of the prestigious institution. Hong Kong has received the bulk of Lee's largesse, HK$1.12 billion, while more than HK$674 million and HK$20 million went to the mainland and the United States, respectively. The biggest local donation was in 2007 when Lee gave away HK$500 million to the University of Hong Kong. Lee also noted that more than 1.2 million farmers were trained under his Pei Hua Education Foundation. The billionaire, nicknamed "Asian God of Stocks," said he now spends less time on work. Lee also spends a limited time on studying the stock market, and says his tips on shares are "no longer useful." "Instead of paying attention to work and studying the market, I focus on resting and relaxing," Lee said, adding that he goes to the office at 4pm every day to work for a couple of hours.

A one-day look at the life of a People's Liberation Army soldier has become the hottest show in town with all 23,000 tickets for the two-day open day snapped up in just over two hours. The Hong Kong Garrison barracks at Ngong Shuen Chau, Shek Kong and San Wai will be open on Sunday and Monday, with units staging musical and martial arts shows as well as anti-terrorism and rescue exercises. A total of 16,000 tickets were distributed for Ngong Shuen Chau and Shek Kong, with 7,000 for San Wai. One of the first in the queue at Shek Kong was a man surnamed Keung who said he arrived at 2am. `Shek Kong is quite special as I often see helicopters and vehicles moving about," he said. Many of the parents in the queue said they want their children to understand the discipline and lifestyle of soldiers. This will be the 13th event since the handover.

The new vice-chairwoman of the city's largest political party is targeting the middle class and professionals for support. The Democratic Alliance for the Betterment and Progress of Hong Kong, long dependent on its grass-roots political base, needs to reprioritise, said Starry Lee Wai-king. The Kowloon West lawmaker was elected last week as one of four deputy leaders after long-time party steward Carson Wen Ka-shuen stepped down. "We hope to tap more into the fields we used to touch on relatively lightly - the middle class and professionals - including teachers, welfare workers and youth," she said. "We want to show the public the DAB's real face, which is not only confined to the grass roots." Education and welfare are widely regarded as the bridgeheads for pan-democrats' support, and several pro-government parties - including the recently established New People's Party - aim to woo the middle class and professionals. "We are proud of our strength in grass-roots work and - using corporate language - we should open up new markets," said Lee, an accountant who has a master's degree in business administration. Now a deputy party leader at the age of 37, Lee has worked her way up the political ladder quickly. She was elected as the youngest district councillor in the city - then 25 for the Kowloon City District Council - in 1999. In the 2008 Legislative Council election, she topped the poll in Kowloon West, getting 39,013 votes. Now, all eyes are on her to run for the new district council functional constituency seats but she said she was not that interested in the so-called super lawmaker seats. "If I contest those seats, residents in Kowloon West may feel I, and the DAB to a larger extent, have abandoned them," she said. "The media says it is super - but it is still the same power as other Legco seats, after all." A product of an electoral reform plan passed last June, each of five new district council functional constituency seats offers a vast mandate, compared with fewer votes gained by directly elected lawmakers. Lee said the DAB, widely seen as a close ally of the government, needed to be seen in a new light. "It is somehow sad when the public feels we always stand with the government - a distance is needed," she said, citing the no votes the DAB cast against hosting the Asian Games and over the Tseung Kwan O landfill expansion plan. With many professional duties and a mother of an eight-year-old, Lee said she had to make a deal with her daughter. "I used to reach home by 9pm to be with her, but we have just agreed to extend the deadline to 9.30pm, on the condition I prepare an activity for her every Sunday."

Japanese restaurants put faith in quality food to lure diners back - Kunihiro Orihara from Japanese restaurant Robatayaki Ichiban is increasing advertising in his efforts to bring back diners. Deluxe Japanese restaurants were once among the most favoured fine-dining options in Hong Kong - until last month's earthquake in Japan and the ensuing radioactive contamination began deterring customers. Now the restaurants are rolling out a range of measures to reassure their customers about the safety of the food on their menus. For some that has meant switching to beef from the United States or Australia, and using Californian rice and Taiwanese vegetables - all of which have added to their costs and prompted them to appeal to their landlords to cut their rents to ensure their survival. Once their proudest boast, the "grown in Japan" declaration the restaurants made to their customers, is now their biggest burden. Damage done to the nuclear plant near the site of the earthquake and the subsequent leakage of radiation into surrounding land and water has led to a Hong Kong government ban on vegetable imports produced in five high-risk prefectures in Japan. There are about 4,000 Japanese restaurants in Hong Kong, with 800 run by Japanese chefs on behalf of investors, and the rest operated by local owners. Kunihiro Orihara is managing director of Robatayaki Ichiban, which he co-founded in 1990 and is now one of the longest-established Japanese restaurants in the city. Ichiban was once crowded with noisy and enthusiastic diners but from the middle of March, tables have been vacant, even on weekends. Orihara said the nuclear crisis had cut customer numbers by 30 per cent. Japanese and Hong Kong diners were staying away, he said, and he had increased his advertising in both Japanese and Hong Kong magazines to try to lure them back.

The Hong Kong dollar and the yuan are the most undervalued currencies in the world, trading at discounts of 40 per cent or more versus the US dollar, based on the relative cost of Big Mac hamburgers. McDonald's signature burger cost the equivalent of US$2.18 on the mainland at the end of last year, US$1.90 in Hong Kong and US$3.71 in the US, The Economist's Big Mac Index found. China's discount has narrowed to 40 per cent from 41 per cent since then due to yuan gains, while Hong Kong's pegged currency has kept its gap at 49 percent, according to Bloomberg data. Steven Barnett, deputy Asia-Pacific division chief for the International Monetary Fund, said last month the yuan was "substantially below levels consistent with medium-term fundamentals" and US Senator Charles Schumer estimated in January the currency was undervalued by up to 40 per cent. Forward contracts projected the most appreciation in five months at the end of last week after People's Bank of China Deputy Governor Hu Xiaolian said a more flexible exchange rate would help tame inflation. "It is quite clear that the yuan is undervalued," said Gavin Redknap, an emerging-markets strategist in London at Nikko Asset Management. "Most tellingly, the PBOC continues to accumulate foreign-exchange reserves, which is by definition a clear indication that the yuan would be significantly stronger were the authorities not influencing its value." Central bank governor Zhou Xiaochuan said on April 18 that the nation's foreign reserves had exceeded a "reasonable" level. The yuan has risen 4.8 per cent since a two-year US dollar peg was scrapped on June 19, lagging behind a 14 per cent gain in the Brazilian real and 11 per cent appreciation in the Russian rouble. "Given the fact that other central banks have stepped aside in their currencies tells us that there is a global awareness that faster yuan appreciation is on the cards; be it through a steeper slope of appreciation or a one-off revaluation followed by a gradual move stronger," Douglas Borthwick, head of foreign-exchange trading at Faros Trading, wrote last Wednesday. China's Commerce Ministry said on April 22 that there was "relatively large" pressure for the yuan to appreciate, noting that currency gains have hit export orders. Imports exceeded overseas sales by US$1.02 billion in the January-March period, the first quarterly trade deficit in seven years. "There won't be any one-off move in the foreseeable future especially when the trade surplus is narrowing," said Liu Dongliang, a Shenzhen-based senior analyst at China Merchants Bank (SEHK: 3968). The Big Mac Index uses the theory of purchasing power parity, the concept that the dollar should buy the same amount in all countries. The magazine's "basket" compares prices of the Big Mac, which is produced in about 120 countries. McDonald's said it raised prices by an average 2 per cent from April 21 in Hong Kong to reflect higher wages. The company hasn't raised prices in its mainland stores this year.

 China*:  April 28 2011

China, Australia sign science, tourism deals - Chinese Premier Wen Jiabao (C) walks with Australian Prime Minister Julia Gillard as they inspect an honour guard during an official welcoming ceremony in the Great Hall of the People in Beijing April 26, 2011. China and Australia on Tuesday signed five cooperative agreements in Beijing with an eye to advance their constructive cooperation. The signing ceremony was held in the presence of Chinese Premier Wen Jiabao and visiting Australian Prime Minister Julia Gillard, who is making her first visit to China since taking office in 2010. The cooperative documents include a minister-level statement on science and technology, memorandums of understanding (MoU) on customs, tourism and establishment of a China-Australia service trade forum, as well as a deal on financing for iron ore project of Western Australia's Karara Mining Ltd. Before the signing ceremony, Premier Wen said in talks with Gillard that China highly values relations with Australia and views the country as "an important partner" in mutually beneficial cooperation. Gillard arrived in Beijing on Monday for a four-day official visit. Chinese President Hu Jintao is also scheduled to meet with Gillard, Chinese Vice Premier Li Keqiang and Gillard will attend the China-Australia Economic and Trade Cooperation Forum. 

Countdown begins for space station program - Authorities in charge of the manned space program unveiled plans on Monday to build a 60-ton space station, made up of three capsules, and develop a cargo spaceship to transport supplies. The China Manned Space Engineering Office said at a news conference that it also wants the public to get involved by suggesting names for the space station, due to completed around 2020. According to documents provided by the office, the space station, weighing about 60 tons, is composed of a core module and two others where experiments will be conducted. A cargo spaceship to transport supplies will also be developed. The 18.1-meter-long core module, with a maximum diameter of 4.2 meters and a launch weight of 20 to 22 tons, will be launched first. The two experiment modules will then blast off to dock with the core module. Each laboratory module is 14.4 meters long, with the same maximum diameter and launch weight of the core module. "The 60-ton space station is rather small compared to the International Space Station (419 tons), and Russia's Mir Space Station (137 tons) which served between 1996 and 2001," said Pang Zhihao, a researcher and deputy editor-in-chief of the monthly magazine, Space International. "But it is the world's third multi-module space station, which usually demands much more complicated technology than a single-module space lab," he said. The office also said that China will develop a cargo spaceship, with a maximum diameter of 3.35 meters and a launch weight less than 13 tons, to transport supplies and lab facilities to the space station. Pang said it is the first time that the office confirmed plans to build a cargo spaceship, which is vital for long-term space missions. The public is being asked to submit suggestions for names and symbols to adorn the space station. "Considering past achievements and the bright future, we feel that the manned space program should have a more vivid symbol and that the future space station should carry a resounding and encouraging name," Wang Wenbao, director of the office, said at the news conference. China previously named the space lab "Tiangong" meaning heavenly palace, and the spacecraft to transport astronauts was named "Shenzhou", divine vessel. Its moon probes were named after the country's mythical Moon Goddess "Chang'e". But the names were selected without public input. "We now feel that the public should be involved in the names and symbols as this major project will enhance national prestige, and strengthen the national sense of cohesion and pride," Wang said. The public is welcomed to submit suggestions for the space station and its three modules, as well as symbols for the China Manned Space Engineering Program and the space station. Suggestions should be submitted between Monday and July 25 via websites including www.cmse.gov.cn or e-mailed to kongjianzhan@vip.qq.com. The result will be decided before the end of September. Suggested names for the cargo spaceship, however, should be submitted far earlier - between Monday and May 20. The result will be announced before the end of June, Wang said. According to Zhou Jianping, chief designer of the manned space program, the different deadlines are "due to time schedules for various projects", which indicated that the cargo spaceship project could soon begin development. China is now in the second phase of its manned space program. According to the schedule, a space module Tiangong-1 and the Shenzhou VIII spacecraft will be launched in the latter half of this year in the first unmanned rendezvous and docking mission. Shenzhou IX and Shenzhou X will be launched next year to dock with Tiangong-1. But problems in ensuring long-term missions for astronauts need to be overcome. Wang Zhaoyao, spokesman for the program, said that developing technology needed to guarantee mid-term missions in space (a stay of at least 20 days), and developing cargo supply technology will be among the tasks to be met during the 12th Five-Year Plan (2011-2015) period. The manned space program will lay the foundation for possible missions in future, such as sending men to the moon, according to the office's documents.

China is asking the public to help come up with a name and logo for its future space station in a sign of growing confidence in its ambitious program. The appeal is the latest indication of how China’s military-backed space program is emerging from its veil of secrecy as leaders seek to galvanize public support and maximize its educational and patriotism-inspiring aspects. Eight years after China became only the third country to put a human into orbit along with Russia and the United States, the program has chalked up a string of successes, including launching a lunar probe and conducting its first space walk in 2008. China expects to launch the space station’s first module later this year, followed by a manned spacecraft to dock with it. Names are being sought for the station, due for completion before the end of the decade, along with its command module, two laboratory modules and supply ship. The program is also seeking new logos for the station and the manned space program. “Considering the glorious achievements of the program and its majestic blueprint for the future, we feel the program should have an even brighter and more distinctive logo and a resonant and inspiring name,” Wang Wenbao, head of the Chinese Manned Space Engineering Office, said in a statement posted Tuesday on the program’s website. There is a deadline of May 20 for naming the ship and July 25 for naming the station. The space program has in the past looked to traditional culture for grandiose-sounding names. Ships have all been named Shenzhou, or “Sacred Vessel,” while the lunar exploration program set to launch an unmanned lander next year has been christened Chang’e after the ancient Chinese goddess of the moon. Models of the planned space station had borne the provisional name Tiangong, “Celestial Palace” in English.

China's economy to surpass US in 2016: The International Monetary Fund (IMF) predicted that China's economy will exceed the United States' in 2016. According to IMF's forecast based on "purchasing power parities", China's GDP will rise from $11.2 trillion in 2011 to $19 trillion in 2016, while the US' economy will increase from $15.2 trillion to $18.8 trillion. Correspondingly, China's share of the global economy will ascend from 14 percent to 18 percent, while the US' share will descend to 17.7 percent. The Economist predicted on Dec 10, 2010 that China would overtake the US in terms of nominal GDP in 2019. 

Property rights linked to innovation - Nanjing Customs officials seize a batch of what are believed to be counterfeit cosmetics in Jiangsu province on Feb 9. Xi Xiaoming, vice-president of the Supreme People's Court, encouraged courts nationwide to continue cracking down on violations of intellectual property rights and sales of counterfeit goods. "After 30 years of fast development, China should see technological innovation playing a bigger role in its economy. But severe infringements of intellectual property rights are detracting from the motives (behind innovation)," Xi said during an inspection tour in East China's Jiangsu province. Li Xueyong, governor of Jiangsu, echoed Xi's remarks, saying Jiangsu's way of development should be changed by encouraging more technological research and innovation. According to Li, about 10,000 companies in Jiangsu have applied for patents, a number accounting for only 3 percent of the companies in the province. And fewer than 20 percent of the companies in Jiangsu make products under their own brands. By April 15, authorities had cracked down on 59,500 cases of trademark infringement and counterfeiting in China this year. More than 9,600 of the cases concerned foreign trademarks, Fu Shuangjian, vice-minister of industry and commerce said at the Forum on Trademarks and Enterprises Growth held in Beijing Monday. Kong Xiangjun, president of the Supreme People's Court's Intellectual Property Tribunal, said protecting intellectual property rights in China now costs more than violating them. The causes of that situation are complex. "First, we do not have a tradition of protecting intellectual property rights, and most people, or even companies whose intellectual property rights have been violated, do not know how to protect them," Kong said. "Besides, the local economy in some places relies heavily on the production of counterfeits. Because of the local interest in protecting such industries, the courts find it difficult to shut down illegal producers." And new types of violations, especially those that occur on the Internet, pose difficulties to both the police and the courts. Liu Liang, deputy general manager of Changzhou Software Park Development Co Ltd in Jiangsu, said he is often surprised by how fast the company's products are illegally copied. Yet he can do little to stop that from happening, he said. "It's very difficult to find these people, and there are so many of them," Liu said. "I cannot sue everyone. Even if I win one or two lawsuits, they won't give me much compensation. So why bother?"

Trucks laden with cargo containers yesterday appeared to operate as usual on roads leading to Shanghai ports, as officials sought to calm truck drivers who went on strike last week over rising costs. Over the weekend the Shanghai government cut fees in a bid to defuse anger over high fuel prices among the independent contractors who haul goods to and from the city's string of ports. Many drivers working as company employees on fixed wages did not join the protest. The strike, which began last Wednesday, was a telling symptom of pressures over inflation, which in March hit 5.4 per cent . By yesterday morning, it appeared the Shanghai government's push to douse the discontent was working. Roads leading to the city's docks were busy with traffic. But several drivers said that despite their success in cutting fees, making a decent living from the fiercely competitive trucking sector would remain tough. "The government's response has been fairly reasonable, but this is largely a problem with the market. With so many drivers out there competition is tough, and it won't be so easy to fix. The strike is just a way to communicate to the government," said Li Wenbing, 31, a truck driver from Henan province, many of the aggrieved drivers' home. "The government's new regulation won't have much impact on my wages. At least after four days parked here I am well rested." Large numbers of police officers continued to line streets around the Baoshan port area, and officials set up six outdoor stands where drivers could register any complaints. "The situation has only been resolved to a degree. Frankly, the new rules aren't that much help," said a 26-year-old independent driver from Henan. The drivers complain about high operating costs, citing fuel-price increases, low salaries, and irregular fees and fines imposed by authorities. Some said logistics companies were colluding to charge higher fees.

Sohu pushes expansion of games business after 48pc profit surge - Sohu.com, which posted better than expected earnings in the first quarter, aims to accelerate expansion of the online games business run by subsidiary Changyou.com with a strategic US$100 million acquisition on the mainland. The Beijing-based internet firm yesterday reported a 48 per cent rise in net profit for the quarter to March to US$44.8 million, from US$30.2 million a year earlier, on strong sales from its core games, brand advertising and search services. Revenue climbed 35 per cent to US$174.4 million from US$129.5 million. Nasdaq-listed Sohu had earlier projected first-quarter net profit would be US$40 million to US$42 million, while turnover would be US$164.5 million to US$169.5 million. Its reported net profit also beat the US$41.8 million average forecast from analysts' estimates compiled by Bloomberg. Online brand advertising sales reached US$57.2 million, up 45 per cent from US$39.5 million in the same quarter last year. Income from internet search, under the Sogou brand, grew 183 per cent to US$8 million from US$2.8 million. Online games remained Sohu's leading revenue contributor, with sales climbing 32 per cent from US$72.1 million to US$94.9 million. Chairman and chief executive Charles Zhang Chaoyang said buying a majority stake in Shenzhen 7Road Technology "will expand Changyou's product portfolio to cover not only multiplayer online role-playing games but also web-based games". Changyou, which is also listed on the Nasdaq stock market in the US, will spend US$101.02 million for a 68.26 per cent controlling stake in 7Road. That sum comprises US$68.26 million in upfront cash payment and US$32.76 million in further cash consideration based on certain performance milestones up to December next year. The acquisition is expected to be completed by June 30, subject to regulatory approvals and other specified conditions. "Web-based games, which can be played in a browser without installation of a client application, are experiencing rapid growth and this is the right time to invest and enter this space," Changyou chief executive Wang Tao said. Changyou operates seven online role-playing games on the mainland, while 7Road has launched its highly popular DDTank web-based shooting game in markets such as Vietnam, Taiwan and Brazil.

Australian Prime Minister Julia Gillard was scheduled to land in Beijing on Monday for her first visit to China since taking office, attempting to make her mark on an increasingly complex economic and security relationship. Ms. Gillard, whose Beijing visit coincides with what's being billed as Australia's biggest-ever trade delegation to China, intends to discuss trade, investment flows, regional cooperation and human rights in meetings with officials including President Hu Jintao and Premier Wen Jiabao, according to the Australian government. Australia's close economic ties with China helped its economy weather the global financial crisis far better than many developed economies. Unlike in many developed countries where people regard China's rise as having diminished their own economic prospects, Australians are broadly positive about their relationship with China. According to poll results released Monday by the Sydney-based Lowy Institute for International Policy, three quarters of respondents believe China's growth has been good for Australia. But mounting unease over Beijing's increasingly assertive stance in the region, and over Australia's dependence on Chinese demand and the growing inflow of Chinese capital, has colored the relationship. The Lowy Institute poll, for example, also showed that 57% of respondents think the government has been allowing too much Chinese investment into the country, and 44% believe it is likely China will become a military threat to Australia in the next 20 years. The China trip, which ends Thursday, will be an important test for Ms. Gillard, who took office in June as a relative foreign-policy novice. Australia's former Prime Minister Kevin Rudd, a fluent Mandarin-speaker and former diplomat, dominated Australia's relationship with China during his stint as leader. Mr. Rudd continues to have a hand in China relations as Australia's foreign minister. Reflecting the importance of the business relationship, Ms. Gillard, who has also traveled to Japan and South Korea on her trip, will be speaking in Beijing to the Australia China Economic and Trade Cooperation Forum, a conference of dozens of senior executives from some of Australia's largest companies, including BHP Billiton and Australia & New Zealand Banking Group Ltd. "Australia is more dependent on the Chinese economy than any other economy in the world other than Taiwan's," Australian Ambassador to China Geoff Raby said in remarks to reporters in Beijing last month. "No other country on earth can ever or will ever replace China in importance for the Australian economy." Australia has benefited from China's enormous demand for resources, a hunger that's not showing any sign of letting up. In the latest mega-deal between the two countries, China Petrochemical Corp., known as Sinopec Group, last week signed an agreement to buy 4.3 million tons of liquefied natural gas annually over the next 20 years from a project planned for Australia's eastern coast—a deal worth billions of dollars. In the 2009 to 2010 fiscal year, China was the third-largest source of foreign investment into Australia, while two-way trade totaled around 90 billion Australian dollars (US$96.68 billion). The world's second-largest economy accounts for some 25% of Australia's exports, up from just 4% a decade ago. Relations between China and Australia have fluctuated in recent years, reaching a low point in 2009 when Rio Tinto executive and Australian national Stern Hu was detained and subsequently imprisoned on corruption charges. That episode coincided with domestic political opposition to a burst of Chinese investment proposed for Australia's resources sector. The security implications of China's rise have also become a concern, with muscle-flexing from Beijing over territorial disputes last year rattling governments around the region. Security issues were on the table for Ms. Gillard's discussions with Japan and South Korea's leaders. At the end of 2009, then-Prime Minister Rudd singled out China's military mobilization as warranting increased spending on Australia's defense. "We encourage China to engage as a good global citizen and we are clear-eyed about where differences do lie," Ms. Gillard said in an address to the U.S. Congress last month.

Hong Kong*:  April 27 2011

There has been a significant drop in the number of people applying to settle in Hong Kong since property was taken off the list of investments that open the door for them. The government dropped property from the Capital Investment Entrant Scheme's list last October. The vast majority of those investing in property to gain residency were from the mainland. Immigration Department data shows that the number of applicants dropped from 1,148 in October to just 188 a month later. And in the January-to-March period this year, the number of applicants averaged 195 a month. That compares with an average of 559 a month for the same period last year. Along with property being temporarily dropped from the list of acceptable investments when the government tweaked the scheme in October, the minimum investment was also raised to HK$10 million from HK$6.5 million. Democrat lawmaker Lee Wing-tat, whose party supported the removal of property from the entry scheme, said he is not surprised by the drop. "It had to be taken out of the list as it only encouraged more people to invest in the local property market, causing prices to rise," he said yesterday. Instead, Lee suggested, potential migrants should be encouraged to invest in creative industries that will also mean more jobs. But Liberal Party legislator Miriam Lau Kin-yee views the fall-off trend as worrying. "To some investors, real estate is an attraction because they not only make a good investment but also live in their property," she said. Additionally, Lau claimed, the number of people making use of the scheme account for only a small proportion of investors overall and so they cannot have a significant affect on the local property market. "Other countries such as Canada and Singapore have policies to attract foreign investors," she added. "The government should think about how to improve the current scheme." Immigration expert Eddie Kwan King-hung expects more mainland investors to start buying insurance products as a way to make it into Hong Kong. Given the change of lifestyle they are experiencing, he said, mainland people are increasingly concerned about their health and their overall quality of life. "Compared with the insurance market in the mainland, we have lots of insurance experts and agents who can provide professional information," Kwan said. One of his clients last week, he added, spent HK$6.5 million on insurance products in Hong Kong. Still, Kwan also called on the government to reinstate real estate on the list of eligible investments. "Some mainland investors point to the fact the central government has policies to control the mainland property market," he said. "On the other hand, Hong Kong's free market is an attraction." Kwan also said that the raising of a basic investment to HK$10 million had caused many mainland investors to lose interest in the Capital Investment Entrant Scheme. According to the Immigration Department, some 9,700 investors from overseas have been accepted since the scheme started in 2003, producing around HK$68 billion in investment.

Hong Kong is to bring in new regulation for credit rating agencies on June 1, requiring them and their analysts to be licensed by the city’s securities regulator. The move follows the agreement by the Group of 20 leading economies to step up supervision of credit rating agencies, which were blamed for failing to spot risks attached to complex financial instruments in the run-up to the financial crisis. “We believe that the licensing and regulation of credit rating agencies in Hong Kong is in the public interest and will bring Hong Kong’s regulatory regime in line with international developments in this area,” Martin Wheatley, chief executive of the Securities and Futures Commission (SFC) said. The industry, which is dominated by three major players – Moody’s, Standard & Poor’s and Fitch, has come in for criticism for not having enough independence from the clients they rate. Under the new rules credit rating agencies operating in Hong Kong will have to obtain a licence from the SFC and follow a code of conduct that includes new rules to try and prevent conflict of interest. Analysts at the agencies will also have to obtain a licence, which will require them to take qualifying examinations unless they have been employed by an agency for at least two years. The European Union has introduced similar new licensing requirements for agencies while the United States recently imposed additional regulation to improve rating transparency and encourage more competition in the industry.

China Everbright Bank Co. said the mainland banking regulator has approved its plan to sell no more than 12 billion shares in a Hong Kong initial public offering. Everbright Bank had said in February it will sell up to 10.5 billion shares in the Hong Kong deal, with an option to allot an additional 1.5 billion shares to investors if demand is sufficient. Everbright Bank said in February it will use the proceeds of the offering to increase its core capital base. Everbright Bank is the latest midsize Chinese lender to repeatedly tap the capital markets to boost its capital amid the government's tightening efforts to cool the economy. In January, China Minsheng Banking Corp., which raised US$4 billion in a Hong Kong IPO in 2009, said it intends to raise as much as 21.5 billion yuan from the sale of new Shanghai-listed shares.

New China Life Insurance Co., China's third-largest life insurer by premiums, hired UBS AG to handle its up-to-US$4 billion dual listing in Shanghai and Hong Kong, a person familiar with the situation said Thursday, in one of the biggest initial public offerings in the region this year. New China Life's IPO comes six months after AIA Group Ltd., the pan-Asian life insurer floated by American International Group Inc., raised US$20.5 billion in October ahead of a Hong Kong listing, in the city's biggest IPO and the largest insurance IPO globally ever, according to Dealogic. Bankers say Taikang Life Insurance Co., China's fifth largest insurers by premiums, is also looking to list in Hong Kong this year, with plans to raise between US$3 billion and US$4 billion in an IPO. New China Life may add more banks to handle the IPO, another person familiar with the situation said Thursday. China has been a lucrative investment destination for a number of large foreign investors from the financial-services sector. Analysts say China and India -- both of which currently have low take-up rates for life insurance -- will be the main drivers of global life insurance premium growth, as strong economic growth in these countries boosts the size of their middle class. New China Life's fundraising plan will put its IPO among other heavyweight deals due in Hong Kong this year, such as Swiss commodities trader Glencore International PLC's up to US$11 billion IPO ahead of Hong Kong and London listings, the up to US$3 billion IPO of Chinese construction machinery producer Sany Heavy Industry Co., and the around US$7 billion IPO of China Everbright Bank Co. The strong activity could help Hong Kong vie to keep its crown as the world's No. 1 by funds raised for the past two years. New China Life has been restructuring itself ahead of the IPO, three people familiar with the situation said earlier. Last month, it placed 14 billion yuan (US$2.1 billion) worth of shares through a rights issue to 12 existing shareholders in March, allowing it to meet the solvency requirements imposed by the China Insurance Regulatory Commission and to promote further business development, one of the people said Thursday. Among shareholders it placed shares with privately last month were the domestic investment arm of China's sovereign wealth fund, Central Huijin Investment Ltd.; Baosteel Group Corp.; Zurich Insurance Co.; Singapore state-investment firm Temasek Holdings Pte. Ltd.; Standard Chartered Bank; and International Finance Corp., the person added. The transaction boosted New China Life's registered capital base to 2.6 billion yuan from 1.2 billion yuan, raising its solvency margin to above 100%, the person said. New China Life submitted its request to list in Shanghai and Hong Kong with the CIRC last week, another person familiar with the situation said Wednesday, adding that the insurer is likely to lodge its initial filing with the Hong Kong stock exchange by the end of May at the earliest. The filing is the first formal step in the listing process in Hong Kong. Once submitted, the Hong Kong stock exchange holds a hearing in the following weeks to approve the listing. The company begins pre-marketing and meetings with potential investors if the listing is approved. New China Life had gross written premiums of 93.6 billion yuan in 2010 and a compound annual premium growth rate of 40% from 2005 to 2010, giving it an 8.9% share of the Chinese life insurance market as of December 2010, according to the CIRC. New China is the third largest life insurer by premiums after the first largest player, China Life Insurance Co., and the second largest Ping An Insurance (Group) Co. of China, according to CIRC. Taikang, which couldn't immediately be reached for comment, has yet to mandate bankers, although on April 8, Goldman Sachs Group Inc. announced it bought a 12.02% stake in Taikang. Other partners, including the Government of Singapore Investment Corp., also joined Goldman in acquiring the 15.6% stake in Taikang previously held by French insurer AXA SA, a person familiar with the situation said earlier. New China Life may add more banks to handle the IPO, another person familiar with the situation said Thursday. New China Life had gross written premiums of US$13.8 billion in 2010 and a compound annual premium growth rate of 40% from 2005 to 2010, giving it an 8.9% share of the Chinese life insurance market as of December 2010, according to a mainland industry body, the China Insurance Regulatory Commission.

Hong Kong’s (Direct) Mongolian Connection - Mongolia just got a little bit closer to Hong Kong, partly thanks to the city’s banking community. MIAT Mongolian Airlines says it will start flying direct from Hong Kong to Ulan Bataar. The new schedule—with flights Thursday and Sunday—will go into effect June 2. MIAT, whose executives have been talking about the possibility of a direct route for at least a year, says the decision was driven by the growing business connections between Hong Kong and Mongolia. “Emerging development in the mining sector creates a huge interest of foreign investment and mining associated trade in Mongolia,” an MIAT representative said. “In this regard, there is a potential demand on business travel between Mongolia and Hong Kong.” Hong Kong Exchanges and Clearing Ltd. has made a big push to lure resource firms onto the HKEx recently, with executives touring resource-rich destinations, including Mongolia. With companies such as Mongolian Mining Corp. and SouthGobi Resources now listed in Hong Kong, resource-sector bankers from the city have been making regular trips north to Ulan Bataar. And starting June 2, they will be able to do that without having to change planes in Seoul or Beijing.

A Classic French Bistro in Hong Kong - La Marmite doesn’t break the mold. The latest in a recent rash of French restaurants to open in Hong Kong, La Marmite, which means “cooking pot” in French and is not a reference to the British spreadable treat, plays it safe with all the classic bistro touches: steak frites and bouillabaisse on the menu, vintage Parisian posters on the wall and a Serge Gainsbourg soundtrack. Clearly, the restaurant’s creators studied the “French Food for Dummies” formula copied around the world. But sometimes that’s good enough. La Marmite may not have much culinary ambition but it delivers on the promised simple fare. Moreover, its airy, light-filled room offers a relaxing contrast to the Hong Kong hustle outside. On a recent visit, the prix fixe — a three-course menu for 118 Hong Kong dollars (US$15) that changes every two weeks — began with a salade Niçoise rich in anchovies and perfectly cooked boiled eggs (a hint of creaminess in the middle). The greens went beyond a store-bought mesclun mix to include mizuno greens and frisée lettuce. Unfortunately, the other starter, goat-cheese toast served with a small jar of mushrooms, wasn’t nearly as good — the cold mushrooms and bacon were underseasoned and lacked the vinegary zip required. The mains, though, were stars: A pan-fried sea bass served with a medley of zucchini and sun-dried tomatoes — inaccurately called “tomato marmalade” on the menu — paid homage to Provence. The fish was moist and a perfect match with the thyme-infused vegetables. And the pot-au-feu — braised beef with vegetables — was robust in its beefy flavor and generously portioned. It would have been wise to skip the cheese platter — the two cheeses were cold and included a flavorless commercial Brie — but the dessert on this visit hit the mark. A pistachio pot de crème was a mildly nutty pudding rescued from humdrumness by a dab of whipped cream and sprinkling of candied pistachios on top. That finishing touch is proof that the restaurant does care about details when it wants to. Service is prompt and lunch is an efficient affair, clocking in at 75 minutes, making La Marmite a possible destination for managers on a tight schedule. La Marmite, 46 Staunton St., Soho, Hong Kong. Tel: 852-2803-7808

Warning to children on Einstein exhibition - Hong Kong authorities say display's section on Nazi Germany is unsuitable for children - Spectators in the section of the Einstein exhibition dealing with Nazi Germany and the persecution of the Jews, which carries a warning that it is not suitable for children. 

Waffle pioneer sees big future for young franchisees - Neil Ip Cheuk-man makes waffles at Louis Xu's Wan Chai shop. Egg waffles may be disappearing from Hong Kong hawkers' carts under pressure from health inspectors, but they have made their way into hundreds of mainland stores, thanks to a Hongkonger who turned the traditional treat into a national brand. Louis Xu Siu-ting introduced the local pastry to the mainland in 2007 when he founded the franchise Hong Kong QQ Bubble Egg. Franchisees, which at one time peaked at 800, learn from him how to make the food and use waffle makers he developed. Xu said that while the recent prosecution of Tai Hang hawker Ng Yuk-fai sparked an outcry, it also indicated it would be difficult for the waffles to remain part of street culture. "It's hard for a few individuals to keep the tradition going ... Things have to be done to make it a profession, or it will fade as the older generation dies," he said. "In 2007, people laughed at me when I told them I would be selling egg waffles in Shanghai. But this is my dream: to create a Hong Kong brand that will be continued by others." Waffles could be found in Guangdong years ago, but it was Hongkongers after the second world war who started to make them in the shape of small puffs - which look like bubbles to Xu. What sets the waffles apart from other local delicacies such as fish balls is the difficulty of making them: an accurate formula, a longer cooking time and the use of specially designed cooking pans are necessary. Traditional pans were scarce on the mainland and were not up to modern safety standards, Xu found. As the pans are heated to 200 degrees Celsius for long hours, pieces would flake off and attach to the food. So Xu developed his own electric baking pan made of aluminium alloy. Electric cooking could disappoint those fond of food roasted over charcoal, but use of charcoal was banned in shops because it released a poisonous gas, Xu said. To make sure waffles made by all franchisees are very similar in taste, Xu provides the powder mix and the operators add eggs and water according to a standard formula. "I tried to make egg waffles based on online recipes. They didn't work out. Then I hired a baker and tried again for months. It wasn't until a year later that I succeeded," he said. The waffle wave peaked on the mainland two years ago, and the number of franchisees has dropped to about 300. Turning his attention to other places, Xu plans to open a shop in Macau this year and is preparing to expand into Britain. On his return to Hong Kong last year, he opened a shop in Wan Chai, which is profitable despite high rent. "The monthly rent is HK$40,000. Together with staff and food costs, we have to make 400 egg waffles a day in order to balance the books," he said. But if youngsters rented a small place and were willing to work long hours, selling egg waffles could be a decent career, he said. A couple selling the treat in Tsim Sha Tsui managed to raise two children and buy a private housing flat, he said. Now he wanted to attract young locals to the trade. In discussion with a youth organisation, he was evaluating the possibility of opening an egg waffle shop as a social enterprise. Teenagers would be taught how to make waffles and how to manage their own businesses. It would be a win-win for the city and the youngsters, he said: "They can obtain skills and make a living, and the traditional culture can be sustained."

Disney spreads a little magic to water kingdom - Disneyland's Inspiration Lake, which stores rainwater and makes the theme park almost self-sufficient in watering its gardens. Water Supplies Department officials made an odd discovery in 2006 - Hong Kong Disneyland, in its first full year of operation, did not seem to be drawing any water to irrigate its 18,000 trees and one million shrubs. After some investigation they found it was not a fault in the metering system, and although this was the Magic Kingdom, there was nothing magical involved - not quite anyway. But it was reminiscent of a scene from a Disney movie. At midnight, after the last guests have left, a computer goes into operation, directing hundreds of sprinklers to pop out from under the soil and spray artificial rain across the 250-hectare theme park's thirsty greenery. And here's the real magic: each plant and tree receives exactly the amount of water it needs, calculated according to its individual requirements and the weather at the time. The water comes from Inspiration Lake, the purpose-built 12-hectare freshwater reservoir, which collects rain and run-off from the nearby hills. For eight months of the year the park is self-sufficient in water, drawing from the government only during the dry season at the end of the year. The state-of-the-art, weather-driven computer system achieves a 40 to 45 per cent water saving compared with the manual irrigation systems usually used in the city. "It's an environmental issue," says Tee Song-thye, construction manager of the resort's field operations-irrigation unit. "I feel so proud that we have saved so much water." Here's how it works. The computer stores data known as an evapotranspirations - or ET - rate, representing the loss of water from the leaves of the different trees and plants. This reference rate is then adjusted based on daily calculations of the temperature, humidity, solar radiation and wind. From these calculations, the computer works out exactly how much water each plant requires every day. Water preservation was an important goal in the theme park's design, Tee says. "From the design stage, 10 years ago, our company looked into environmental issues very seriously." The system has achieved a 70 per cent reduction in use of fresh water compared with what would normally be required for a similar venue, and is the type of environmentally friendly behaviour that was celebrated at the park as part of the 41st Earth Day on Friday.

A huge rise in enrolment on study tours is expected this summer after the government's announcement that underprivileged pupils will receive cash from the Community Care Fund to travel abroad. Under the plan, about 240,000 primary and secondary pupils will receive subsidies totalling HK$165.9 million for study tours over the next three years. Each pupil can apply once in that time and receive a maximum of HK$3,000. Long and short-haul study tours have become more popular among primary and secondary school pupils in recent years, said Jason Wong Chun-tat, director and general manager of Hong Thai Travel Services. "Now even more children, especially those in underprivileged families, will be able to join study tours with the help of the Community Care Fund," he said. He expected 80 per cent more pupils would join study tours this summer compared with last year. Wong said HK$3,000 was enough for a four-day trip to the mainland or a southeast Asian country. He said the company had started contacting schools to see if they wished to collaborate on organising trips. Wong was speaking as a study tour departed for Beijing yesterday morning. The one-week Beijing tour costs HK$8,000 per pupil, but one mother said that it was money well spent. "The fees are quite expensive, but if that can ensure our children's safety, parents will be willing to pay," she said. One pupil said he was excited by the thought of touring the capital. "Our textbooks teach us only little. I want to step outside Hong Kong and see for myself," he said. Hong Thai has organised 40 study tours this Easter, twice more than last year. Details of how the Community Care Fund can support study tours will be revealed next month. The fund was announced last year in Chief Executive Donald Tsang Yam-kuen's policy address. It is designed to complement the existing social security system in helping the underprivileged. Last week the government announced details of 10 projects that will be supported by the fund, which has so far raised HK$1.6 billion from the city's tycoons - well short of the HK$5 billion target. The government is also providing HK$5 billion. The committee is chaired by Chief Secretary Henry Tang Ying-yen and includes the heads of the bureaus of labour and welfare, education, health and home affairs.

 China*:  April 27 2011

1st Beijing international film festival kicked off Saturday - Jackie Chan and Zhang Ziyi, image ambassadors for the 1st Beijing International Film Festival walk the red carpet at the festival's opening ceremony in Beijing's the National Center for the Performing Arts Saturday night, April 23, 2011. The first Beijing International Film Festival kicked off on Saturday night, April 23, with a star-studded red carpet walk and a grand opening ceremony at the National Center for the Performing Arts. Among the celebration were heavyweights from Chinese film industry like actor Jackie Chan, Zhang Ziyi, the festival's image ambassadors, and directors John Woo, Peter Chan as well as big names from key international film festivals like Marco Muller from Italy, Cameron Bailey from Toronto and Lee Yong Kwan from Busan. Renowned director Darren Aronofsky from Oscar-winning film "Black Swan" and Rob Minkoff, helmer of "Lion King" and "The Forbidden Kingdom" also showed up for the spectacular gathering. This event marks another world shaking event in Beijing after it successfully hosted the Olympic Games in 2008, and a big stride the modern metropolis has made to have the same influence in the world's cinema culture alongside sports. As the culture center of China, the capital city produced the very first Chinese film "The Battle of Dingjunshan" in 1905 and takes up 50% in the country's film output, said Guo Jinlong, mayor of Beijing at the ceremony. He noted Beijing gathers most of the resources in the country's filmmaking and distribution industry; and the festival aims to be a professional and high-level platform for the communication and cooperation between China and the world's films. Marco Muller, director of Venice Film Festival, acquainted himself with the full house audiences with fluent Chinese. Marco said he already felt the aura of the festival and hospitality of Beijingers when his plane touched down. He spoke highly of the capital city and the film festival, saying "all of us can see and feel Beijing is well on the path to becoming one of the world's great modern metropolises," and "this event will enable the best from Beijing, from the region and from the world." He added, the birth of BJIFF is a great event for the international film industry, and the latest outcome of communication and cooperation in world films. The 1st Beijing International Film Festival plans no competition section while 100 foreign and 60 domestic films will be screened in 20 selected cinemas scattered all over the city, offering easy access to all moviegoers. Actress Zhang Ziyi said on stage this is her favorite film festival, because there's no competition, no winner, no loser, only beautiful films." The film festival opens amid people's great confidence and enthusiasm to showcase the excellent homegrown movies to the outside world. It has scheduled events like Beijing film panorama, director forums, Beijing film marketing negotiation, film music concerts and contest for best documentary short in the upcoming six days, providing an extensive platform for movie makers, buyers, and distributors from China and the world. During the opening ceremony, ten domestic films with successful box office receipts last year were honored, including Aftershock, Confucius, Bodyguards and Assassins and Ip Man 2.

A delicate tea set produced in China's capital of porcelain, Jingdezhen, and embedded with rich culture traditions, is expected to arrive at Buckingham Palace for the royal wedding this week, media reports said. The gift originated from Zhu Xiaoju, a Chinese woman who once studied in the UK and came up with the idea during a chat with her friends a month ago. After approaching the royal family, she received a letter from the royal family on March 21 accepting her contribution to the wedding of Britain's Prince William and Kate Middleton on April 29. The next day, Zhu went back to Jingdezhen in East China's Jiangxi province and sought assistance from local workshops to design and make the tea set. She spent 10 days meeting with renowned masters of porcelain about a well-crafted set that "wishes the best for the lovers and can show Chinese traditional culture," in the words of Zhu. Finally, Zhu picked a hexagonal design teapot in a blue and white rice pattern porcelain. Besides the names William and Kate engraved on its surface, both the teapot and cups are decorated with intricate patterns of plum blossoms, orchid, chrysanthemum, and bamboo. They are not merely four plants but regarded as the four gentlemen of great virtues in Chinese culture and frequently featured in ancient paintings to express loftiness, righteousness, modesty and purity. Zhu Xiaoju also put a lot of deliberation into naming the tea set and finally decided to call it "Dian Xi." The choice of these two Chinese characters was inspired by Cao Xueqin's epic novel The Dream of Red Mansions, which describes a drinking vessel used by one of the principal characters, Lin Daiyu, as "Dian Xi." The characters can also be traced to a popular poem by the late Tang Dynasty poet Li Shangyin (813-858), indicating mutual affinity and agreement. "I wish Prince William and Kate mutually attached with each other and live a happy life." "With this tea set, I want to congratulate the royal wedding and also hope it can be the medium for a cultural exchange between the West and East."

China's CPI to rise around 5% in Q2: official - China's consumer price index (CPI), the main gauge of inflation, will rise between 4.9 and 5.1 percent year on year in the second quarter of 2011, an official with the National Development and Reform Commission (NDRC) said Sunday.

Beijing wary as new US military strategy emerges - PLA officer warns of response to Pentagon plan to integrate forces - It is known as the AirSea Battle concept for the Western Pacific - and, depending on whom you listen to, it is either a dangerously provocative piece of cold war-era strategy from the Pentagon or a shrewd US approach to new threats underpinning China's rise. Mentioned briefly first in a major strategic review last year, the concept is fast evolving on the desks of strategists in the Pentagon and the Pacific Command in Hawaii - and is starting to resonate across the region. Chinese envoys are quietly eyeing developments, while one senior PLA officer studying in the US has publicly voiced concerns. Senior Colonel Fan Gaoyue, a resident fellow at the Pacific Forum of the Centre for Strategic and International Studies, warned that if the US developed such a concept, the PLA would be forced to develop its own counter in return. "This cycle is not beneficial to China or the US," he said in a Pacific Forum exchange last month. "In fact, the PLA will never target the US military except if it intervenes in a Taiwan conflict or launches a pre-emptive strike against China. "If AirSea Battle aims to stop a growing tilt in the balance of power, it means that the US intends to obtain even greater advantages over regional militaries. The US already enjoys the balance of power in the Asia-Pacific; the US has the strongest military and has no counterpart in the world." Under the concept, the US Navy and Air Force are trying to fully integrate their forces, weapons and systems to be able to defeat "adversaries equipped with sophisticated antiaccess and area denial capabilities" to counter "growing challenges to US freedom of action", according to the Pentagon's current Quadrennial Defence Review. China, in other words. Anti-access and area denial weapons refer to the PLA's expanding array of advanced ballistic and cruise, missiles, radars, ships and submarines that some analysts believe would effectively make large swathes of East Asian waters effectively no-go zones for US aircraft carriers in a conflict. Intriguingly, the concept has just one clear parallel. In the 1980s, the Pentagon successfully developed the so-called Land Sea Battle concept to maximise the capabilities of US forces defending western Europe. This point has not been lost on Beijing. If the latest concept is similar to the AirLand Battle concept, Fan said, "then the US has made a wrong decision at a wrong time and a wrong place". The AirLand Battle was conceived amid serious cold war threats in contrast to now, when the US "is not realistically threatened by a nation or groups and the Asia-Pacific region is a relatively stable area". While China "does not challenge and even welcomes the US presence in the Asia-Pacific", that did not mean China would tolerate US behaviour detrimental to its national interests. US Defence Secretary Dr Robert Gates last month raised the spectre of shrinking budgets as he outlined the need for the concept amid "high-end, asymmetric threats" from China as well as North Korea and Iran. Such threats, he told the US Air Force Academy, "appear designed to neutralise the advantages the US military has enjoyed since the end of the cold war - unfettered freedom of movement and the ability to project power to any region across the globe by surging aircraft ships, troops and supplies". "The leadership of the air force and the navy, who are collaborating closely on this new doctrine, recognise the enormous potential in developing new joint war fighting capabilities - think of naval forces in airfield defence, or stealth bombers augmented by navy submarines - and the clear benefits from this more efficient use of taxpayer dollars." But a statement from the US Department of Defence to the South China Morning Post (SEHK: 0583, announcements, news) last week insisted that the evolving concept was not designed with a specific country in mind. Instead, department spokeswoman Commander Leslie Hull-Ryde said it was "designed to counter a set of proliferating capabilities that present significant anti-access/area denial challenges". The concept would help guide defense spending near-term and "far into the future to ensure US forces continue to possess and advance the capabilities required to assure operational access and decisively project power in support of America's national interests and those of our allies and partners", Hull-Ryde said. Elements of the concept would be shared with those allies and partners to ensure "integrated and effective coalition forces". "We welcomed their support to field capabilities that will deter or defeat anti-access/area denial threats in the future," she said. Senior US naval officials, meanwhile, have in recent days highlighted the use of submarines to support air strikes in the ongoing Libyan campaign as a sign of the doctrine at work. The USS Florida unleashed Tomahawk missiles to take out air defences so fighter jets could enforce a no-fly zone - a sign of navy and air force co-operation at work. While the Pentagon has yet to release extensive details on how the concept will be put into operation, a 120-page study produced by a well-connected Washington think tank on strategic issues has pinpointed China as the key. The Chinese military posed the most formidable challenge in terms of area denial, according to the study by the US Centre for Strategic and Budgetary Assessments. It noted that the concept went beyond specific scenarios, such as Taiwan, and was ultimately about setting conditions to sustain a "favorable" military balance in the Western Pacific. "This means maintaining an ability to deter China from acts of aggression or coercion in that region and, if necessary, to respond effectively in the event deterrence fails," the study notes, warning that the US risks being "locked out" of a region that has been a vital security interest for the last six decades. The study has already resonated in Australia, where a strategic debate is intensifying about how the country will best support its major ally during looming decades of decline. One Australian survey has already warned that PLA advances meant US assets such as aircraft carriers were already vulnerable within 1,500 nautical miles of the Chinese coast and its bases on Japan and Guam could be attacked "within hours". Dr Sam Bateman, a veteran maritime scholar based at Singapore's Nanyang Technological University, said that while the concept contained elements Beijing would certainly find provocative, its ultimate audience was a domestic US one. "Yes, it will be a bit provocative but I don't want to overstate this ... it is about the Pentagon dealing with inter-service rivalries and doing something proactive to stave off budget cuts," he said. "The air force has been a loser in decades past, so it is about keeping them happy and making sure they are aligned as closely as possible with the navy at a time when money is going to get increasingly tight." The lack of a meaningful and deep strategic Sino-US dialogue meant there was always room for misunderstandings over what otherwise might be perceived as a routine military-bureaucratic review. "There is a risk here that the promulgation of the concept might have gotten ahead of diplomatic measures ... and this may have some way to play out," Bateman said. Gary Li, a PLA analyst with the private sector intelligence firm Exclusive Analysis, said it would be closely scrutinised among Chinese military elites but had yet to surface extensively in internal commentaries or among military internet users. "Yes, it could be said that ... it is quite annoying and biased and hawkishly put together, but [military] planners always need to play for something and unfortunately the only scenario that's worth anything - or likely to get you funding - is the Sino-US confrontation scenario," Li said. He noted, too, that fiscal constraints meant that the US was taking a sensible approach of trying to get the best use out of existing facilities and systems rather than simply seeking to throw money at costly new weapons.

Tsinghua marks century of scholarship - VIPs celebrate centenary with pride, despite unease over university's direction, status - A star-studded line-up of politicians, academics, presidents of world-class universities and business tycoons - including six of the nine members of the Politburo Standing Committee - joined a grand celebration for the centenary of Tsinghua University yesterday. President Hu Jintao , one of the school's most prominent alumni, seized the opportunity to call again upon universities to make raising the level of teaching and research a top priority, to help the mainland become more creative. The celebration came as Tsinghua leads a government-sanctioned push by top mainland universities to seek international prestige. "To build several world-class universities and many more with higher standards in teaching and research is a major step for a country with strength in cultivating talent and creativity," Hu said. The high-profile celebration at the Great Hall of the People and a late-night gala climaxed two weeks of festivities at Tsinghua, which included international forums and alumni activities. It also came as critics point to a rigid school-governance regime that has compromised academic freedom and independent thinking - two of the core values Tsinghua was built upon 100 years ago. It is clear that Tsinghua and other top schools cannot hold on to the mainland's brightest students, who are increasingly choosing to continue their studies overseas. Perhaps indicative of the problem is the fact that Tsinghua officials cannot reach a consensus on a target date for becoming a world-class university. In 1993, it laid out a road map to join the ranks of the elite institutions, but one version set this year as the date, and another said 2020. The vagueness continued yesterday, when Tsinghua president Professor Gu Binglin set the goal for the middle of this century. This much is evident: whatever the target, Tsinghua is not there yet. Professor Xiong Bingqi , vice-president of the 21st Century Education Research Institute, said that the different interpretations of Tsinghua's world-class university ambition indicated that Tsinghua officials had no idea what a world-class university was. "So, they can claim that status whenever they feel the time is right," Xiong said. "But a world-class university is not about how much money a school spends or the number of research papers it churns out, but its core values and the way it approaches schooling." Tsinghua ranked 58th on Britain's Times World University Rankings for last year, up four places compared with 2005; and a distant 151st on the 2010 Academic Ranking of World Universities compiled by Shanghai-based Jiao Tong University, up two places from five years before. Xiong said the Jiao Tong rankings gave academic achievements more weight than school infrastructure and the state of research facilities, so it was far too early to talk about world-class status for Tsinghua. The university started off as Tsinghua College, established with surplus money from indemnities China paid the United States following the Boxer Rebellion. It first functioned as a preparatory school for students who were sent by the government to study in the United States. Authorities changed its name to National Tsinghua University in 1928, and it enjoyed its best period of development under visionary president Mei Yiqi , who devoted the university to education for all-round development, greater academic freedom and autonomy. In its early years, the school was known for a star-studded line-up of professors and other scholars including Dr Qian Xuesen (also known as Hsue-shen Tsien), the mainland's father of space technology, and Dr Mao Yisheng , a Carnegie-Mellon University-trained structural engineer. The school's academic excellence was best exemplified by two of its alumni, Dr Chen-Ning Yang and Tsung-Dao Lee, who graduated from Tsinghua in the 1940s and continued their studies in the US, where they won a Nobel prize in physics in 1957. Of the 23 scientists and engineers who were honoured during the National Day celebration in 1999 for their contributions to the nuclear bomb and satellite programmes in the 1960s, 14 were from Tsinghua. When the People's Republic of China was established in 1949, the Communist Party overhauled Tsinghua's philosophy, drastically cutting back on its liberal arts faculty and turning it into an engineering mill to serve economic development, according to Dr Chu Zhaohui of the China National Institute of Educational Research. "The goal of study at Tsinghua has since shifted from the cultivation of top-flight talent in the pursuit of truth to the teaching of manufacturing know-how," he said. After the Cultural Revolution (1966-76), Tsinghua made a swift comeback by introducing Western curriculums. More recently, it has been able to headhunt top-flight Chinese and foreign academics to lead some of its key laboratories with handsome government funding. "But in general, the way Tsinghua is run is far different from most modern universities, where decision-making bodies are made up of academics instead of bureaucrats. So, the consensus is that Tsinghua is not yet a world-class university," Chu said. Like almost all universities on the mainland, Tsinghua is controlled by a Communist Party committee, which appoints the president and other bureaucrats from party ranks. They control much of the school's resources, with little regard for academic freedom and originality. In 2008, the journal Science cited a study showing that of all the PhDs awarded by American universities in 2006, the No.1 undergraduate alma mater of those new doctors was Tsinghua. Peking University was No.2. Dr Wang Huiyao , the director general of the Centre for China and Globalisation, said it was common for students in advanced technology and hi-tech fields from less developed countries to continue their studies elsewhere. He added that 80 per cent of Tsinghua's graduates in those fields since 1985 had gone to the United States. But 80 per cent of Chinese science and engineering students who earn those PhDs overseas do not return, and that is a grave concern for Chinese officials. Liang Yi - founder and chief technology officer of Mobim Technologies, a communications company - went to Stanford after he graduated from Tsinghua in 1992. He said that although he was proud of his Tsinghua legacy, as a major in electronic engineering it was a natural choice to go to Stanford to further his studies. He said more than half of the Tsinghua graduates with the same major in 1992 to 1994 left to continue their studies overseas. To him, if Tsinghua wants to be one of the world's best universities, it must strive to create more opportunities for up-and-coming academics. Even so, Liang, who came back to China from the US four years ago, praised Tsinghua and the whole country for coming a long way in school infrastructure and research facilities, saying he is proud of his associations with both Tsinghua and Stanford. Wu Guozhen , a Tsinghua physics professor who graduated from National Tsinghua University in 1970, deplores the school's declining status, saying public affection and Tsinghua's status as a "dream school" among mainland students has more to do with what it used to be rather than what it is today. "Now it basks in the glory of the old Tsinghua," he said. "If you asked me to say definitely whether Tsinghua is better than Zhejiang University, I'll bet I couldn't." Wu said there was nothing wrong with pursuing world-class status, and it was even better if more funding could improve teachers' conditions. But what is more important to him is a fundamental issue - that Tsinghua has lost teachers with integrity and a passion for teaching. "The key for Tsinghua is to nurture a moral virtue among teachers who can make an impact on campus culture and teach students to learn on their own."

Jeweller to UK royalty takes a shine to China - Replica royal engagement rings at a Chinese plant. Royal Asscher Diamond, which cut stones set in Britain's Crown Jewels, will open stores in China, competing with the Tiffany and Cartier brands as jewellery demand and production grow in the world's most populous nation. Amsterdam-based Royal Asscher plans to have an outlet in Beijing by the end of this year and eventually expand to at least four locations in China with Hong Kong-based partner Sparkle Roll Group, said Mike Asscher, head of business development in Asia and son of company president Edward Asscher. "Brand image is everything in China, and we have a very strong story," said Asscher, a member of the founding family's sixth generation. King Edward VII in 1907 asked his great-great-grandfather, Joseph Asscher, to cut the 3,106-carat Cullinan Diamond, the largest rough diamond ever found, to make the centrepieces of the British crown and sceptre. China's spending on luxury clothes, bags, shoes, watches, jewellery, cosmetics and perfume probably rose 23 per cent to 84 billion yuan (HK$100.3 billion) last year, consultant Bain estimates. Chinese demand helped boost polished diamond prices 10 per cent last year, according to Rapaport Group, a provider of diamond prices. Cartier has 34 stores in the country and Tiffany has 14. Tiffany has gained 30 per cent in the year up to April 19 in New York trading. Cartier's parent, Geneva-based Richemont - the world's largest jewellery maker and owner of brands including Chloe, Montblanc, Piaget and Shanghai Tang - climbed 31 per cent in the same period. Underpinning Asscher's expansion is a jump in expertise and technology in China for cutting and polishing gem-quality stones, typified by Beijing Huapu Diamond, which turns as much as 35 per cent of the Dutch company's rough diamonds into jewels. "The quality of workmanship there is now among the best in the world," said Asscher in an interview. Polishing quality in China has improved over the past 10 years as much of the work has become automated, using computer-guided lasers, said Russell Shor, a senior analyst at the Gemological Institute of America. "China has the expertise and equipment now" to produce high-quality cuts, he said. While 90 per cent of diamonds sold globally are cut in India, those stones are typically 1.5 carats or less, he said. The wedding of Prince William and Kate Middleton, scheduled for Friday, has increased interest in merchandise related to Britain's royal family. The occasion may boost British retailers' sales by £527 million (HK$6.76 billion) as consumers commemorate the occasion, the Kelkoo shopping website said last month. China has 960,000 people with personal wealth of at least 10 million yuan each, 9.7 per cent more than last year, according to the Hurun Report. Closely held Beijing Huapu polishes stones for 15 clients including top-tier European, American and Japanese jewelers, said the company's owner, Zevi Klausner. Founded in 1854, Royal Asscher is entering China later than some competitors. Tiffany opened its first store in the Asian nation in 2001 and Cartier in 1997.

Hong Kong*:  April 26 2011

It's up, up and away when it comes to the number of flights operating at Hong Kong International Airport. Chek Lap Kok handled 1,003 flights on Friday, the first 1,000-plus movements achieved in a single day, setting a new daily record, a spokesman for the Civil Aviation Department said. The 1,003 flight movements broke the previous single-day record of 983 flight movements, which was only set last month, and it exceeded the daily average of 891 movements by 12.57 per cent. This is still less than the likes of Heathrow where 1,318 flights come in and out of the airport on a daily basis, or at JFK in New York which deals with 1,136 flights a day. In Asia, only Beijing Capital International Airport (SEHK: 0694) can compete in terms of flight numbers with 1,000 daily. The increase in flight movements was also attributed to the demand during the Easter holidays. Most of the extra flights operated by airlines were to destinations in northeast Asia and Southeast Asia. Taipei was the most popular destination, followed by Bangkok and Kota Kinabalu. As well as these impressive numbers, 521 flight movements also operated through the Hong Kong Flight Information Region on that day, making a total of 1,524 flights handled by the Civil Aviation Department within the 24-hour period. Buoyed by the robust economy in the region, flight movements are increasing. Between January and March this year, 80,242 aircraft movements were handled at Hong Kong International Airport and 44,840 aircraft movements operated through the Hong Kong Flight Information Region. That represents respective increases of 14 per cent and 15.2 per cent compared with the same period last year.

Classic Hong Kong ghost film remade 24 years later - Cast members attend the movie premiere of their latest movie 'A Chinese Ghost Story' in Hong Kong, Saturday, April 23, 2011. When "A Chinese Ghost Story" hit movie screens in 1987, it wowed audiences with its novel plot of man falls for female demon in an ancient Chinese setting. The unlikely couple played by late Hong Kong superstar Leslie Cheung and Taiwanese actress Joey Wang quickly became a classic romance, and two sequels followed, as well as an animated movie. Twenty-four years later, Hong Kong director Wilson Yip has re-imagined the love story for a wider audience with a new cast, a new plot twist and modern special effects. While the original was released during the heyday of Hong Kong cinema, the remake is largely targeted at the lucrative mainland market, where censors once averse to superstition are now more open to supernatural-themed productions. The 1987 version, directed by veteran filmmaker and action choreographer Tony Ching, takes inspiration from "Strange Stories from a Chinese Studio," Qing Dynasty writer Pu Songling's famed collection of ghost stories. Cheung's scholar-turned-tax collector Ning Caichen becomes smitten with Wang's Nie Xiaoqian, a lonely demon who serves as a hunter for a tree devil who preys on human beings. Ning solicits the help of demon catcher Yan Chixia to free Nie of her enslavement. Yip, whose career has taken off with the recent success of the kung fu biopics "Ip Man" and "Ip Man 2," both starring Donnie Yen, has cast two baby-faced young Chinese actors as the new couple. Yu Shaoqun, who rose to fame as a young Mei Lanfang in Chen Kaige's 2008 biopic of the late Peking Opera singer, plays the innocent scholar. Liu Yifei, who made her Hollywood debut in "The Forbidden Kingdom," the 2008 kung fu picture that marked the first collaboration between Jackie Chan and Jet Li, is the distraught ghost torn between love and servitude. But the director has also spiced up the drama by adding a back story of Nie's earlier romance with Yan, casting Hong Kong heartthrob Louis Koo as the gruff ghost hunter. Veteran Hong Kong actress Wai Ying-hung, who is enjoying a career renaissance, plays the tree devil — a role taken on by actor Lau Siu-ming in the original. And then there is the advancement in computer graphics in the nearly 2 1/2 decades between original and remake. While the original boasted convincing creature effects and won a Hong Kong Film Award for Yee Chung-man's art design — Yee went on to receive an Oscar nomination for his work on Zhang Yimou's 2006 costume drama "Curse of the Golden Flower" — Yip has the benefit of an unfettered digital canvas, backed up by a $10 million budget — some 70 percent of which was devoted to special effects. Yip said he was drawn to Yu's innocence in the Mei Lanfang biopic, "Forever Enthralled," while by casting Liu as Nie, he wanted to instill a livelier personality. "Her emotions are like that of a small animal, like a fox. Her active personality is unlike the melancholic tone of the previous version," Yip said at the movie's Hong Kong premiere late Saturday. The film was released on Chinese mainland on Tuesday. Koo said that he thought Liu captured Nie's otherworldliness and unvarnished beauty well while Yu pulled off the scholar's contrasting qualities of physical weakness and mental determination. Meanwhile, the addition of the ghost-ghost catcher romance creates dramatic tension. "I tried to evoke the question of whether (ghost catcher) Yan is jealous of (scholar) Ning," Yip said. Modern computer technology allowed him "to construct a world that is truly magical," the director said. Yu had the unenviable task of trying to match the performance of the late Cheung, who committed suicide by leaping off a luxury hotel in 2003. Cheung was one of Chinese pop's biggest acts and earned critical acclaim for his on-screen performances in works such as "Days of Being Wild," "Happy Together" and "Farewell My Concubine." Yu said he didn't think too much about following in Cheung's footsteps during shooting but is now aware of the comparisons after the movie's release. "There is that classic performance whose fans won't allow you to alter it," Yu said. "I am no match for Ge Ge in terms of acting skills," he said, using Cheung's nickname. "Ge Ge's artistic heights are hard for me to surpass at this stage. All I can say is that I devoted my full emotions and my hard work to perfecting the role the director assigned to me as much as possible."

Manufactured Asian girl band aims to conquer the West - The backers of girl band Blush are confident they will be a hit in the key Western music market. They're a long way from being the next Spice Girls or Pussycat Dolls, but five Asian women are hoping to take the world by storm in what is being billed as the first pan-Asian girl band. "Blush" is made up of five girls from the Philippines, India, China, Japan and South Korea who beat off competition from hundreds of other pop star wannabes during a talent search across Asia last year. After surviving weeks of gruelling training and an elimination process, the five are ready to make a big splash on the music scene - both in the East and the West - as they prepare for the release of their first single in May. "We are hoping we can get global and touch everyone's heart out there with our music," India's Alisha Budhrani said, taking a break from dance practice in a Hong Kong studio. "For us we are really happy that all of our countries can come together through music and we could go out there to show the diversity of Asia, how wonderful it is as a whole. We got real different cultures, languages, dialects and [there are] all kind of crazy things going on in Asia," said a self-assured Alisha, breaking into laughter with the other four girls, aged between 18 and 28. The group's bid for superstardom may be a long shot, but they have been supported by an A-list of Los Angeles-based producers who have worked with top names like Lady Gaga, the Black Eyed Peas and Beyonce. "Each one of these girls can be a superstar on their own," Steve Schnur said from his Los Angeles studio through Skype, alongside co-producer Darrell Brown, who has worked with Bon Jovi, Faith Hill and LeAnn Rimes. Schnur has produced more than 150 soundtrack albums and worked with Florence and The Machine, a British band which was nominated for best new artist at the Grammy Awards this year. "Each of them blend together [to] create something we have never experienced before. It's not the same old, same old girl band, boy band," Schnur said. The girls were in Hong Kong to prepare for their debut after winning a place in "Project Lotus", a talent programme led by a former Disney executive who wants Blush to be Asia's music ambassador in the West. "It started with a very simple question of why there has never been an Asian singer that made it big in the West," said Project Lotus producer Jon Niermann, the former president of Disney in Asia-Pacific. "We want them to take on the world's stage successfully, we want them to be a very successful group, we want them to achieve the top hits in America, in Europe." Many Asian artists who gained fame in their home countries have tried but failed to crack the West. The band - named "Blush" to reflect the members' "feminine, fun, innocent and sweet" side - have recorded six songs so far, mainly pop. Blush have yet to set a date for the release of their as yet untitled album but an eight-episode television programme, Project Lotus, which documented the selection process, will air around the world from late April.

Ex-policeman finds family ties to Kate - It might be a distant link but Hong Kong has its own British royal family - and they live in Sai Kung. Chris Hanselman, an ex-Hong Kong police officer with 15 years service, found out he was related to Kate Middleton, wife-to-be of Prince William, last November when a British tabloid reporter contacted him. "Kate's mum's grandmother was my grandmother's sister so basically, Kate's mum and I have the same great-grandparents. So my kids and Kate have the same maternal great-great-grandparents," he said. "Kate's great-grandmother was Elizabeth Temple, the sister of my grandmother, Esther Temple." Hanselman, 51, remembers spending time with his grandmother in his home region of County Durham in northern England. "She was very petite, very polite, very much a churchgoer and an amazing musician; she played piano. There was lots of happiness and laughter." On Friday, two billion people are expected to watch the royal wedding on television. Hongkongers can watch a live telecast on TVB (SEHK: 0511) Pearl, which will stream the BBC coverage from 3pm to 8.40pm with a half-hour news break from 7pm to 7.30pm. At 8.40pm, it will show a one-hour documentary called William, Kate and 8 Royal Weddings. An ATV spokesman said it was still awaiting confirmation on possible coverage. Hanselman, who left the Hong Kong police force in 1997 and now runs a sustainable seafood import business, said the bloodline to British royalty was far-removed and changed very little. "It's such a distant relationship, it doesn't mean much. The nice part about it is that they have actually identified my grandmother and she was such a special person. My daughter Hannah is quite excited and my friends are all taking the mickey out of me now because of this very vague relationship and calling me `Sir Chris'." He said the family would watch the wedding at Hebe Haven Yacht Club as they had not been invited to Westminster Abbey. "It will be nice to watch it with a crowd of people rather than sit at home. Of course it would have been nice to have been invited but it's unrealistic. If perchance an invite had come this way ..." A self-confessed royalist, Hanselman came back from London two days ago and said the wedding frenzy had brought a ray of sunshine to a gloomy city. "I don't go back to the UK very often because Hong Kong is home, but it does seem to have lifted the whole country. London was absolutely heaving, you couldn't get anywhere near Westminster Abbey. There was a real air of expectation and real happiness. With the debt crisis and the [problems with the] students, the Brits like this sort of thing. "When you look at the pomp and the circumstance and the pageantry, we do it well. I believe that the Hong Kong people have good strong ties and memories of Britain, albeit it was a colony. They will get behind it." The British Chamber of Commerce, in conjunction with HSBC (SEHK: 0005), will host a sold-out garden party on Friday at the Hong Kong Club. The Dublin Jack, an Irish pub in Lan Kwai Fong, will switch all its five screens to the wedding coverage on Friday afternoon and host a private party, complete with Union Jack bunting. The Globe in SoHo, a lively British pub, will put on her party heels for an event organised by female expatriate website Sassy Hong Kong with prizes for women who wear their best Kate Middleton-inspired outfits. Jewellery store Accessorize is selling replica wedding rings for HK$85, and the Mandarin Oriental is offering fancy headwear just like those favoured by Kate. Supermarket chain Great has a range of teas, jams and shortbread from Duchy Originals, affiliated with Prince Charles' Charities Foundation. Hanselman said he would love to meet his extended royal family members one day but he was not holding his breath. "Would I like to meet Kate? I think it would be a very nice thing to do if perchance she came and said I'd like to see my third or fourth cousin removed."

 China*:  April 26 2011

China pushing to be Asia's top draw among students - State Councilor Liu Yandong (center right) attends the Global Summit of University Presidents and the Association of Pacific Rim Universities' 15th Annual Presidents Meeting at Tsinghua University on Saturday, where she delivered a keynote speech. China is aiming to become the most popular destination in Asia among international students, said State Councilor Liu Yandong. She made the remarks on Saturday at the Global Summit of University Presidents and the Association of Pacific Rim Universities' 15th Annual Presidents Meeting. The gathering was held at Tsinghua University and was one of many activities held to celebrate the university's centenary. Liu, who is an alumna of Tsinghua University, said that to achieve the goal, China is expanding the number of students it sends to study overseas and the number of international students who come to China through cooperative educational programs with the United States and the Association of Southeast Asian Nations. The government will increase the number and size of scholarships to attract more foreign students, she said. The Ministry of Education said earlier this year that the country plans to use cooperative educational programs to draw 500,000 foreign students to China by 2020. The number of US students in China is set to become one of the largest, with Beijing and Washington working together to bring 100,000 to China during the next four years. Beijing will provide 10,000 more scholarships to students from the US to study in China, Liu said earlier this month during a visit to Washington. The central government provided 800 million yuan ($123 million) in scholarships to such students in 2010 and local governments offered about 110 million yuan in scholarships, according to Zhang Xiuqin, director of the department of international cooperation and exchange under the Ministry of Education. The government's scholarships benefited 22,390 international students last year, 22.7 percent more than in 2009. As a result, the number of foreign students in China has risen dramatically, hitting a record high of more than 260,000 in 2010, according to the latest statistics released by the ministry. Liu also said at the summit, which has attracted the presidents of more than 130 universities from 35 countries, that China will adopt a "zero tolerance" attitude toward academic plagiarism at universities. She made the comment amid growing criticism of the country's academic integrity. "Universities should inherit a humanistic spirit and become pure places for the scientific spirit," she said. Chinese students have the advantage of being "hard working" and have a "solid foundation of knowledge" but are weak in "creative ability" and "practical ability", she contended. "We should encourage students to think independently, have great expectations and be indifferent to fame and wealth," she said on Saturday. China's top science and technology official also poured scorn on research frauds and those who engage in academic plagiarism during an earlier interview with China Daily. "We will set up a mechanism to facilitate supervision over research programs and dig up the past of those researchers who fake their work and punish it," said Wan Gang, the minister of science and technology.

Construction of high-speed railways linking southwestern China and Asean countries is set to commence tomorrow, to make possible a 10-hour, 3,900-kilometre trip between Kunming and Singapore in the future, state media reported. Analysts said the railways would boost China's integration and influence with Southeast Asian countries. China National Radio said the new railways will link Kunming of Yunan province with Vientiane, capital of Laos. Under a pan-Asian high-speed railways plan, the line will later extend to Bangkok, Kuala Lumpur and Singapore, it reported. Wang Mengshu, a deputy chief engineer with China Railway (SEHK: 0390) Tunnel Group, was quoted by 21st Century Business Herald as saying that, besides the line with Southeast Asia, China is planning two other high-speed railway links, to central Asia and Russia. Talks of building these lines are still under negotiation and it was hoped the networks would be completed by 2025, Wang said. He added that complex terrain may restrict the speed in some parts to below the 200 km/h standard. However, the Herald quoted officials at Laos' embassy in Beijing as saying that construction work on the section through their country may be deferred because of amendments to the co-operation agreement between China and Laos. The proposed high-speed rail link will integrate Asean (Association of Southeast Asian Nations) members with China and spread prosperity (SEHK: 0803) from the wealthier to the less developed Asean nations, according to researchers in Southeast Asian affairs. They say it will boost economic activity, especially tourism, which will be an effective way of promoting intra-Asean plus China economic activity. A high-speed railway will have greater economic and social impact on the region than air travel because trains stop at several places, while air travel connects only two cities. The proposed high-speed link pushed by China bypasses Vietnam, which is planning its own 1,570-kilometre high-speed link between Hanoi and Ho Chi Minh City. Vietnam will adopt Japanese technology for its project, which will cost US$55 billion and take 10 to 15 years to build.

Coal imports likely to decline as prices soar - The high international price of coal will hit Chinese demand for imports, as consumers turn to cheaper, domestically produced coal. Imports fell by 26 percent in the first quarter of 2011 on a year-on-year basis, the National Energy Administration (NEA) said on Friday. China imported 32.4 million tons of coal in the first quarter of the year, 26.4 percent less than in the same period in 2010. The international coal price had increased to $120 a ton by March 31 from $90 a ton in the same period last year, boosted by strong demand from reconstruction projects in Japan after the March 11 earthquake, and the diminished supply from Australia in the wake of widespread flooding late last year. Meanwhile, the domestic coal price soared to its highest level in the three months between December and March. The rise was partly because of the resumption of operations by industries that consume large amounts of energy. Their activities were suspended last year in a move to meet government energy-saving targets, according to a research note from China Investment Consulting. However, the domestic coal production capacity is expected to grow after consolidation in some provinces has been completed, the NEA said in its quarterly briefing. Following Shanxi province, the country's major coal producer, which has successfully restructured its coal industry, the other coal-rich regions will also push for further consolidation: the provinces of Shandong, Shaanxi and Guizhou, and the Inner Mongolia autonomous region, with mergers and restructuring to begin later this year. Shaanxi province is expected to scale back the number of coal mining enterprises by 80 percent - from 522 to 120 - while the Inner Mongolia autonomous region has set its minimum capacity at 1.2 million tons for local miners. China plans to form 10 large-scale companies, each with a production capacity of 100 million tons in the next five years, and they are expected to account for 90 percent of the country's total output. "Coal miners should increase production capacity to ensure a stable supply while the power-generation companies should beef up their inventories," said Wang Siqiang, a senior official at the NEA. "Trans-regional electricity distribution is also being encouraged," Wang added. China's electricity consumption is expected to grow by as much as 12 percent year-on-year in 2011 to 4.69 trillion kilowatt hours, while newly installed capacity may reach 80 gigawatts, the NEA said. According to the China Electricity Council, coal demand in the power sector will reach 1.92 billion tons in 2011, an increase of 9.9 percent. China imported 146 million tons of coal in 2010, 42 percent more than in the previous year.

China CYTS Tours Holding releases annual and quarterly reports - CYTS, a major travel service provider in China, reported on Sunday a 4.53% year-on-year increase in 2010's net profit and a 23.9% year-on-year profit decrease in the Q1.

Shanghai's municipal government was cutting some fees to defuse striking truck drivers' anger over high fuel prices, an official spokesman said yesterday after days of confrontation last week disrupted the world's busiest port. The government's promised steps, which include "lowering standard fees and removing non-standard fees", came after the strike made global headlines amid worries that it could disrupt the flow of trade flows in China's biggest commercial hub. Shanghai was actively taking measures to respond to the strike, Xinhua reported early yesterday, citing an unidentified Shanghai government spokesman. All ports in Shanghai were operating normally, the spokesman added. Separately, the Shanghai Municipal Transport and Port Authority said yesterday it would cancel certain fees, such as a fuel surcharge, while lowering a few other fees for the container road transport sector. The new measures, which also specified how certain fees should be charged and promised help to companies facing operational difficulties, were aimed at "easing rising inflation and cost pressures on transport companies", the port authority said in a statement on its website, without mentioning the strike by the truck drivers. Up to now, Shanghai officials have not commented publicly on the strike, a boldly public demonstration of anger against rising consumer prices and fuel price increases on the mainland. Xinhua's report about the Shanghai government's steps was in English only, and the tightly controlled state media otherwise made scant mention of the unrest. On Friday, a crowd of about 600 people milled about outside an office of a logistics company near the Baoshan Port, one of the city's string of ports. Some threw rocks at trucks whose drivers had not joined the strike, breaking the windows of at least one truck. The situation appeared calm in the Baoshan area yesterday, with no organised activity by the drivers and only a small security presence. Some drivers said they had heard about the city government's offers, while many complained they did not have enough information and vowed to continue the strike unless concrete results were achieved in negotiations with the authorities. "There is still a strike on. There are supposed to be organisers in talks but I won't believe it until I have the money in my hand," a driver from Henan province, who would not give his name, said. "If I earn 10 yuan, and it costs me 11, what's the point?" he said. Another driver named Li said he was confident that the government would have to take measures to resolve the situation. "If the situation doesn't change, there won't be any truck drivers left here. We'll all go back and find other jobs," he said. "It's not that I'm striking. I just can't continue to do a job where I end up losing money." Authorities will meet truck drivers' representatives tomorrow for talks aimed at ending the strike, a policeman told the striking drivers on Friday, when security officers tried to disperse the crowd. Text messages containing threats of violence against drivers who do not take part in the strike were still circulating among drivers yesterday.

Hong Kong*:  April 25 2011

Hong Kong clinic beats bureaucracy to open in Guangzhou - (From left) Dr Peter Cheung, Dr Jay Kay and Dr Nelson Kung Nam-shing at their Hong Kong Wan Zhi Medical Services Centre. Nearly three years after the cross-border free trade pact opened the way to wholly-owned Hong Kong clinics on the mainland without any minimum investment requirement, the first one has finally opened in Guangzhou. The Hong Kong Wan Zhi Medical Services Centre, with three specialists and one family doctor, rented 240 square metre premises in Guangzhou and opened in February. Now half its patients are Pearl River Delta residents who used to travel to Hong Kong to see specialists. Most other patients are Hong Kong people working in Guangzhou. Heart specialist Dr Jay Kay Foon-lok, who works at the clinic, said the main reason for opening in Guangzhou was to save patients the hassle of having to get Hong Kong visas. He believes Hong Kong clinics will play a role in reducing the mainland's reliance on public hospitals. But he said dealing with rules and regulations on the mainland was a challenging process. "We are the first one, which means there is no precedent. So officials handling our application had to work out how to make it work," he said. He expects cultural differences to present more challenges. "On occasions the patients want us to prescribe Chinese medicine." The Closer Economic Partnership Arrangement (Cepa) allows Hong Kong doctors to set up clinics and specialists with a required level of experience to run solo practices in Guangdong without sitting the mainland's professional examination. The Wan Zhi clinic filed its application in August 2008, shortly after the signing of a supplementary agreement under Cepa, which eliminated an investment threshold of 10 million yuan (HK$11.92 million). "The approval came in February 2010 allowing us to start renting a place and making other arrangements," clinic manager Brian Man Tak-tsuen said. "But it didn't mean we could treat patients. We needed another licence to do so. We got that in February."

HK's Anglo-Eastern picked to run first 'Chinamax' ship - Traditional bulk carriers (above) are of 180,000 deadweight tonnes, while the "Chinamax" series are 400,000 dwt. A Hong Kong ship management company is overseeing the day-to-day operation of the first in a series of "Chinamax" ultra-large dry bulk cargo ships that are the biggest of their kind in the world. The 400,000 deadweight tonne ships, which have more than double the cargo carrying capacity of a traditional 180,000 deadweight tonne capesize bulk carrier, have been dubbed Chinamax because they are the largest dry cargo ships afloat that can be handled by mainland ports. The vessels will be used to transport iron ore from Brazil to China. Anglo-Eastern Ship Management Services is providing the 22 crew and technical management for the first of the ships, the Vale Brasil, which is on its maiden voyage to Brazil after being delivered in March, about a month ahead of schedule. The 360 metre long and 65 metre wide ship is the first of seven vessels that are being built by South Korea's Daewoo Shipbuilding and Marine Engineering for Brazilian iron ore miner, Vale. The ships, which will cost about US$130 million each, will be delivered between now and 2013. Vale also has 12 similar-sized ore carriers on order at China Rongsheng Heavy Industries Group at a total cost of US$1.6 billion. The first of these ships was due to be delivered by last month, but the arrival has been delayed until at least August, although sources at a ship safety organisation said delivery may not take place until November. Despite the record-breaking size of the Vale Brasil and its sister ships, Vale has given a muted response to their arrival. The Brazilian company excluded the media from the Vale Brasil's naming ceremony and has stopped Anglo-Eastern from talking about the ultra-large ore carriers. Anglo-Eastern is on course to manage all seven of the ships built by Daewoo Shipbuilding and some of the vessels constructed by China Rongsheng. This would continue a relationship that started almost two years ago when Anglo-Eastern was chosen by Vale to manage three capesize bulk carriers, varying in size between 150,000 and 169,000 deadweight tonnes. These ships, together with Vale Brasil, are owned by Vale Shipping Holding in Singapore, while Vale in Brazil operates a further 16 dry cargo ships. Part of the reason for Vale's publicity shyness is thought to be because of the political sensitivity of its iron ore shipments into China, even though the mainland is Vale's largest market. Vale generated 33.1 per cent, equivalent to US$15.38 billion, of its US$46.48 billion operating revenues last year from exporting 126.4 million tonnes of iron ore and ore pellets to China. All the Chinamax vessels are being built specifically for the Brazil-China iron ore trade and because of their size would find it difficult to operate to other countries. Vale has two ore pelletising joint ventures on the mainland. One is a US$95 million pelletising plant developed in partnership with Anyang Iron & Steel Group, which began operating this month. The company also has a 25 per cent stake in Zhuhai YPM, which owns a pelletising plant in part of the Yueyufeng steel making complex in Zhuhai. Other partners are Zhuhai Yueyufeng Iron and Steel and Pioneer Iron & Steel Group. But the company has also faced challenges in China since the surge in iron ore prices, fuelled by the mainland's property and infrastructure boom. These difficulties included the rejection of Vale's plans to build a strategic iron ore stockpile in China, which led the Brazilian company to instead decide to move the concept to Malaysia.

Actor Chow details mainland cinema plans - Funnyman says his company will build 36 movie houses, hundreds of screens - Funnyman and director Stephen Chow has added "cinema investor" to his roles with the announcement his company plans to spend hundreds of millions building movie houses to grab a slice of the fast-growing mainland cinema industry. Director and comic actor Stephen Chow Sing-chi addressed the media this week - not to discuss the progress of his latest movie but to disclose his new identity as mainland cinema investor. Chow's Bingo Group will open four cinemas within a month - two in Chongqing, one in Shanghai and one in Dongguan. Each year for the next three, the company will construct at least 12 cinemas with a total of 100 screens. Cities in the pipeline include Xian, Hangzhou, Tianjin, Chengdu and Daqing in Heilongjiang. Mainland box office receipts grew 65 per cent to 10.2 billion yuan (HK$12.18 billion) last year, becoming the fourth-largest market after the United States, the European Union and Japan. In 2009, receipts grew by 40 per cent. Still, the gap between the first and the fourth is huge. Last year, US box-office revenue was US$10.6 billion, seven times that of China. The country's 12th five-year programme set a target for box office receipts to top 30 billion yuan by 2015 and to double the number of screens to 12,000. Chow said he believed the momentum that Chinese film makers had gained in recent years would be maintained over the next 10 years, and he estimated box office receipts on the mainland in 2011 would reach 14 billion yuan. Yin Hong, deputy dean of the School of Journalism and Communication at Tsinghua University, who focuses on film and television studies, said China's movie industry was experiencing a revival. In 1992, the mainland movie audience reached 2.8 billion and the average ticket price was 10 fen. Last year, the audience number was just 250 million. Yin blamed the huge decline on the advent of DVDs, rampant piracy and a big jump in ticket prices up to 80 yuan. "There is about one screen for every 250,000 mainland residents," he said. "In the US there are more than 10 screens for every 100,000 people. Cinemas don't have enough competition so the ticket price remains high." Chow wants to change that. Ticket prices at his cinemas will be between 30 and 40 yuan, half the price moviegoers are paying now in big cities such as Beijing and Shanghai. Yin Gang, chief executive director of CineChina, a cinema operator that co-operates with Bingo, said: "Profitability will come from high attendance." He said each of Chow's cinemas, equipped with six to eight screens, would cost 15 million yuan to 20 million yuan to build. The company, with net cash of 110 million yuan at hand, will raise 100 million yuan to 200 million yuan in Hong Kong, though details were not given. The 2010 China Film Yearbook revealed that on average, only 4 per cent of the seats in a cinema were filled. Bingo is aiming at a 20 per cent attendance rate. Though the number of screens has risen threefold to 6,000 in three years, exhibitors still have plenty of room to grow said Yin. "In the first-tier cities, the number of cinemas is still far from saturation," he said. "The small cities often have not even one well-equipped cinema." The biggest challenge now, he said, is skyrocketing property prices. Even so, he expects investors to recover their costs after three or four years. "Cinema generates stable revenue and is a cash business," he said. Other international players in the picture include Imax Corp, which announced a plan to open 75 cinemas in China by 2014. Lotte Cinemas of South Korea plans to have 70 screens in China by year's end.

Soccer star jumps to his death after row - Tributes pour in for former most valuable player and world record holder Cheung Sai-ho. One of Hong Kong's most famous soccer players yesterday jumped to his death following an argument with his wife at their home in Tin Shui Wai. Cheung Sai-ho, 35, was once the city's most valuable player and was the holder of a world record. At the age of 18, Cheung scored for the Hong Kong youth team 2.8 seconds after the start of a match in the Portsmouth Cup in Britain in 1993. News of his death was announced on the website of Happy Valley Athletic Association Football Club, which Cheung joined from 1996 to 2008 as midfielder and skipper. In the afternoon, players and spectators observed a minute's silence and gave Cheung a final salute at Yuen Long Stadium before the match between South China and TSW Pegasus kicked off. Tributes have poured in from sportsmen. "He was always the leader of the team," said Pegasus assistant coach Yeung Ching-kwong, who met Cheung 23 years ago. "I was also there when Cheung scored that quick goal. It was just amazing." Former Hong Kong coach Tsang Wai-chung said Cheung was skilful. "He played an attacking midfield role for the Hong Kong team and always scored," said Tsang, who coached Cheung from the late 90s to 2006. "He had good vision with good reading powers of the game. He could have been a good coach. His death is a loss to the soccer community." Cheung ran a pub in Tsim Sha Tsui and joined Wing Yee football club after his retirement from the international sport in 2008. Yesterday, he returned home at about 4am and began arguing with his wife, 29, in their 36th-floor flat of Heng Cheuk House at Tin Heng Estate. Police said the couple argued over their relationship and money. At about 6am, Cheung jumped out of window from the living room of the flat. A woman security guard, 39, heard a loud bang and found Cheung lying unconscious outside the building. She called the police. He was declared dead at the scene. The legendary midfielder is survived by his wife - an air hostess - a two-year-old daughter and a one-year-old son. About a month ago, Cheung and his family moved into the flat and lived with his parents-in-law who could look after his two children, according to the father-in-law. The club yesterday expressed condolences to his family. 

The government-controlled MTR Corporation (SEHK: 0066) and its media consultant apologised for sending a letter threatening to withdraw advertising if the media ran negative reports about the rail operator. The MTR said the consultancy, OMD, misunderstood its instructions in sending the letter which was condemned by journalists as "brutal interference" with press freedom and by a legislator as a "nasty blow" to one of Hong Kong's core values. "We apologise for the misunderstanding caused to the public," corporation acting chief executive officer Thomas Ho Hang-kwong said yesterday. "We respect freedom of the press and have never had any intention to interfere with it." OMD, which has worked for the MTR for more than seven years, retracted the letter. The government - the biggest shareholder in the MTR - said it did not know about the letter and refused to comment. Dated April 19 and sent to 15 media groups, the letter said the MTR reserved the right to "cancel or reschedule any media insertion booked" with any organisation that published "negative news coverage about the brand image of the MTR Corporation". It said this also applied to negative coverage of "rail incidents that happened in other markets" which the local audience might associate with the MTR. The agency also asked the media to "communicate [it] clearly to your internal staff including traffic team and editors/journalists". This came after an MTR advert on rail track safety was placed next to a feature story in the April 4 issue of the Chinese-language daily Ming Pao that criticised an MTR property development in Tseung Kwan O. Ho said that what the corporation had asked OMD to do was to "optimise the effectiveness of its advertisements through better positioning in newspapers". He said the consultants had misunderstood the instruction, although he admitted his company's marketing unit had raised no questions when presented with the draft letter. "We were led to believe it is a standard arrangement in the field ... there was a lack of sensitivity by the marketing people in handling this matter," Ho said. Apologising in a separate statement, OMD said its staff misunderstood the MTR's instructions. Hong Kong Journalists Association chairman Mak Yin-ting said the incident was unacceptable. "[OMD] seems to be treating the media as a unit of the company and telling it what to do," Mak said. "It is a brutal interference with press freedom." The Hong Kong News Executives' Association also expressed concern. Independent legislator Andrew Cheng Kar-foo said it was a "nasty blow" to "one of the core values of Hong Kong society". "The government is the biggest shareholder of MTR Corp. It should direct the company to rectify the mistake." Professor Clement So York-kee, director of Chinese University's School of Journalism and Communication, said the incident would further tarnish the public image of the MTR. Early this year, it was accused of trying to cover up a spate of cracked rails and in recent weeks the company was criticised for raising train fares despite running a huge surplus. This week, a group of Tin Shui Wai residents staged a protest against a plan to build a high-rise block on top of a Light Rail station. They said the high-rise could block air circulation in the area and worsen air quality. Last year, as the major shareholder of Octopus Cards, it was dragged into a privacy scandal in which the card issuer collected and sold cardholders' personal data to third parties.

Facebook reunites Hong Kong family as father lies dying - Webpage locates daughter who left home 10 years ago after a family dispute - Chan Pui-ki (left) and her parents before she left home in 2001. A couple who lost contact with their daughter after she left home following a dispute 10 years ago have been reunited with her - thanks to Facebook. Chan Pui-ki, 30, who reportedly left home in 2001, rushed to a hospital on Monday to see her parents after learning via the social networking website that her father was suffering from cancer and his condition was deteriorating. Commenting on the rapidity with which the family was reunited, a media scholar said the incident was an example of the power of new media over more traditional news media, through which people might have been expected to appeal. The parents' goddaughter, Catherine Tsang, opened a Facebook page on Sunday to appeal for information on Chan's whereabouts. She said yesterday the appeal was a success and hoped the news media would leave the family alone. "The whole incident is over. They have found their daughter. Thank you for your care," she said. The Chan family could not be reached for comment. Tsang helped set up the page on Facebook because Chan's mother wanted her daughter to grasp her last chance to see her dying father. "Miss Chan Pui-ki's father is now in hospital in critical condition," Tsang wrote on the Facebook page. "So her mother wants to get in touch with her as soon as possible so that she can see her father for the last time in the hospital." Chan reportedly left home after a family dispute. Within a few hours of being set up, the page attracted thousands of Facebook users who circulated the message to friends, and in less then 24 hours Chan was found. But while the Facebook page brought success, it also caused the family great disturbance. The original page appealing for information on the missing woman was deleted by Tsang after a Chinese-language newspaper secretly photographed the family's reunion at the hospital. Tsang set up another Facebook page condemning the newspaper, saying that its reporters had been disturbing the family. "My godmother, her daughter and her family have been disturbed and annoyed very much. They are psychologically threatened," she said on the page. "Why do they need to treat the mother and daughter, who had just reunited, like that? Are they celebrities or public figures?" To Yiu-ming, a media critic and assistant professor in Baptist University's department of journalism, said traditional media had not been as influential as they once were since the proliferation of social networking services. "Traditional media are merely bystanders when news events take place on the internet. They are not involved in it," he said. But social networking on the internet was a more personal affair, where the information provider was more intimate with the receivers, compared to traditional mass media. So more people trusted social media and used them as platforms to solve personal problems, such as searching for a missing person, To said.

Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority, received HK$8.4 million in pay and benefits last year. That was more than the combined earnings of the bosses of the European Central Bank and America's Federal Reserve, Jean-Claude Trichet and Ben Bernanke. And the HKMA, which is the closest thing Hong Kong has to a central bank, does not even have the politically sensitive job of setting interest rates because of the city's currency peg to the US dollar. According to the HKMA's annual report, Chan received a HK$6 million salary, HK$1.5 million in performance-related pay and HK$858,000 in other benefits, including healthcare and life insurance. ECB head Trichet earned €367,863 (HK$4.18 million) last year, while Bernanke earned US$199,700. Chan's pay and benefits amounted to over a tenth of the HK$831 million the HKMA spent last year while Bernanke's pay came to 0.04 per cent of the Fed's US$425 million operating budget for last year. When Chan took up his post in October 2009, the HKMA said his annual fixed pay would be HK$6 million. Civic Party legislator Ronnie Tong Ka-wah said he had "no idea" why Chan was paid an additional HK$1.5 million for his work last year. The HK$1.5 million represented the maximum variable pay the authority said the chief executive would get in his first full year in the job. Tong added the investment returns on the Exchange Fund, the quasi-sovereign wealth fund that the HKMA manages on behalf of taxpayers, were "frankly disappointing". The Exchange Fund made a 3.6 per cent return on its investments last year while the Hang Seng Index rose 58 per cent. The fund is permitted to buy stocks, although it mainly holds US government bonds. "How much will Chan's bonus be if the Exchange Fund ever has a bumper year?" Tong asked. "Will it have to rise further?" Chan has at least accepted lower pay than his predecessor Joseph Yam Chi-kwong, who took home HK$12 million in 2008, making him the world's highest-paid central banker that year. An HKMA spokesperson could not be reached for comment by press time.

Taiwan's Yulon and China's Dongfeng motor companies have set a 2012 sales target of 70,000 cars for their new joint-venture factory in Hangzhou, according to a senior executive. In one of the biggest cross-strait joint ventures to date, Dongfeng Yulon Motor, a 3.4 billion yuan (HK$4 billion) partnership, plans to start production of its first model in July this year, according to Pai Chingyuan, a vice-president of the joint venture. It aims to produce and sell 15,000 units of Yulon Motor's Luxgen 7, a gadget-heavy SUV that will attempt to take on big sellers like the Honda CRV, Toyota RAV-4 and Volkswagen Tiguan in the 200,000 to 300,000 yuan price range, Pai said in an interview this week at the Shanghai Auto Show. Wuhan-based Dongfeng Motor Group (SEHK: 0489) is one of the mainland's biggest carmakers and has existing joint ventures with Nissan, PSA Peugeot Citroen, Honda and Kia. Yulon is one of the largest home-grown carmakers and importers in Taiwan, where it works closely with Nissan. "The mainland market is huge but still developing and there are a lot of differences from Taiwan, where you don't have the regional distinctions in the consumer preferences," said Pai, who has been based in Hangzhou since 2009. "Probably 80 per cent of mainland customers are first-time car buyers, and they are very brand-focused," he said. The joint venture, which is awaiting a formal green light from the Ministry of Industry and Information Technology to begin production, plans to begin small-batch production of the Luxgen SUV in July and full operations in September. Cars should start arriving in the showrooms before the end of the year. The Hangzhou plant in the Linjian industrial zone will have an initial annual capacity of 120,000 units which can be doubled in a second-phase expansion. Next year, Dongfeng Yulon plans to add Luxgen's MPV, or minivan, and a yet-to-be unveiled saloon to its line-up alongside the SUV. The partners hope to have eight models in production as early as 2014. Dongfeng's various joint ventures had more than 3,000 sales outlets on the mainland at the end of last year, and even more after-sales service outlets, according to its stock exchange filings. Dongfeng Yulon plans to use that network where it can, with a focus on tier-1 to tier-3 cities in the mainland's wealthier coastal areas. The company has already signed up 57 dealers and hopes to make that 80 by the end of this year and 150 by the end of next year, Pai said. Yulon's Luxgen brand presented a new model, Neora, at the Shanghai Auto Show, a concept pure-electric saloon that offers a glimpse of what Dongfeng Yulon's petrol-powered saloon might look like. Luxgen has already manufactured a small fleet of electric SUVs and MPVs in Taiwan. In line with Beijing's push to develop new energy vehicles on the mainland to cut pollution and China's dependence on imported oil, Dongfeng Yulon will also add electric vehicles to its line-up. "This is a condition as part of the joint venture," says Pai. "We have already signed an agreement to do so with the Hangzhou government ... But it is a process and will take time."

Struggling Asia Television is facing another legal challenge as one of its directors seeks a court order to make the station and its top management surrender records and documents concerning the company's operations that are being kept from its board of directors. Kevin Tsai Shao-chung, a director appointed by Taiwanese snack tycoon Tsai Eng-meng, filed the application in the High Court yesterday, calling for the company, executive director James Shing Pan-yu, secretary Michelle Ng Yue-wei and ATV Secretarial Company to provide the documents. According to the court papers, the documents being sought include accounting records and documents concerning ATV's affairs, as well as board papers and correspondence between ATV and the Broadcasting Authority that have been withheld from Kevin Tsai since August of last year. Minutes of all management committee meetings beginning in September of last year are also being sought. The legal action was a follow-up to Monday's fruitless action by director Rebecca Huang Bao-huei, also appointed by Tsai Eng-meng, who stormed ATV's headquarters in Tai Po to demand the documents. A statement issued by Tsai Eng-meng said Kevin Tsai had been repeatedly requesting information on the company's operations and financial status "in order to enable him to properly discharge his duties as a director" since August. Kevin Tsai previously wrote to ATV and stated that the requested information should be delivered by noon on Monday. Huang went to ATV in the company of a lawyer after that deadline had passed, but "ATV yet again refused to comply with [Kevin] Tsai's request and was unable to provide any justifiable basis for its refusal", the statement said. That had left Kevin Tsai with no alternative but to file an application with the High Court. Tsai Eng-meng added in the statement that he questioned ATV's corporate governance because a board meeting had not been called for five months. Tsai Eng-meng owns 49 per cent of the voting shares of Antenna, which controls more than 47 per cent of ATV. The remaining stake was bought by businessman Wong Ben-koon last year and the transaction was approved by the Broadcasting Authority last September. A hearing has been scheduled on July 7.

Protest banners at the Mei Foo construction site. The project's developer is seeking damages from some of its neighbours, who object to a high-rise development near their homes. Hundreds of residents opposed to a high-rise residential project at Mei Foo Sun Chuen face a costly court battle after the developer filed a claim against them for more than HK$1.4 million and sought an injunction against further protests. Billion Star Development said it had suffered losses as a result of the protests over the site northwest of Sham Shui Po and has asked for "exemplary damages". It is also seeking an injunction that will forbid protesters from approaching the construction site, arguing that their attempts to block access to the site have been unlawful. The company has named six of the respondents - Sham Shui Po district councillor Wong Tak-chuen, who supported the protestors, campaign leader Yip Siu-chau and four Mei Foo residents, Lo Chung-cheong, Cheung Chi-yin, Lee Wai-kuen and Yu Wai-kan. A seventh respondent is referred to only as "others persons" who blocked the entrance of the site during this month's protests, when hundreds of residents from the large private housing estate next door, including many elderly people and retirees, lay across the street outside the construction site. Lo said he had received Billion Star's writ on his birthday on Wednesday, describing it as the "darkest birthday present" he had ever received. He said he was disappointed at the developer's action. He said the residents had taken to the streets only because the developer had not kept an undertaking to inform them first before starting to work on the site. Lo said Billion Star was trying to intimidate them. "They are now bullying us with their wealth and power. It's unreasonable that they sue all the protesters." The residents would consult their lawyers before deciding whether to oppose the lawsuit or to settle the dispute with the developer, Yip said. He said Mei Foo residents Lee and Yu had not been particularly outspoken in their actions and had never entered the site. "They are suing whomever they can without any particular reasons," he added. The protesters are mostly Mei Foo residents opposed to a plan to turn the former LPG storage site into a high-rise development near their homes, and who fear it could lead to more such developments. In March, residents tried to block trucks and workers from entering the site on several occasions. On March 14, some residents entered the site. The conflicts escalated on April 3, when 1,000 people blocked the entrance to the construction site in protest at the development. The Development Bureau issued a statement at the time saying it had no reason to interfere in a lawful project. Billion Star said in the writ that delays in the project had cost it HK$1.4 million. It would also have to spend Hk$17,600 a month on security guards to protect the site. It accused the residents of unlawful trespassing and said their protests were conducted "in a highly sensational and high-profile manner so as to attract maximum media attention and to exert maximum pressure" on them to drop the project. Billion Star asserted its presence at the site yesterday morning by sending some workers to rearrange concrete blocks loaded on a truck outside, where it has been parked since residents prevented it from entering on March 14. Billion Star was not available for comment yesterday.

Rising rent and food prices push annual inflation up to 4.6pc - Surging residential rents along with rising prices for seafood and cigarette prices have pushed the city's price levels to a new peak, and natural disasters have made matters worse. Overall, consumer prices in March were 4.6 per cent higher than a year ago, larger than the year-on-year increase in February of 3.7 per cent. While depreciation of the US dollar and a global shortage continued to push up food prices, the increase became steeper because natural disasters cut supplies. Prices of saltwater fish and other fresh sea products have risen 28.4 per cent and 25.5 per cent over the past year. Overall food costs, excluding meals bought away from home, increased 8.8 per cent. A lot of high-priced fish and seafood are imported from Australia, where January's floods have caused prices to rise since the Lunar New Year, Hong Kong Food Council chairman Simon Wong Ka-wo said. "Fish served in banquets, such as grouper, come from Australia. So do lobster and abalone," he said. But more increases are in store after the March 11 earthquake and tsunami in northeast Japan. South African abalone used to be half the price of abalone from Japan but have risen in price by a third as supplies from Japan ran out. Meanwhile, rents for private housing rose 4.9 per cent in March from a year ago. The increase in tobacco duty and higher fuel costs also contributed "somewhat" to the increase in inflation, a government spokesman said. The price of cigarettes jumped from HK$39 to HK$50 a pack after the government increased duty by 50 HK cents per cigarette in the budget. Concerning CSSA Review Alliance chief community organiser Lee Tai-shing said the increase in cigarette prices had had a big impact on single, middle-aged working-class men. "They don't have a lot of entertainment ... and construction workers usually take a puff when they are waiting and moving around," he said. Many poorer families were eating less meat, but they had also been hit by price rises for eggs and vegetables. "People told me the prices of beans have more than doubled," he said.

 China*:  April 25 2011

Zhu Rongji resurfaces to criticise education reforms - Former premier Zhu Rongji made a rare public appearance yesterday, delivering a scathing criticism of the mainland's education system and other policies during a visit to his alma mater, Tsinghua University. Zhu (pictured) lashed out at the much-criticised reform of tertiary education and urged mainland officials and scholars to speak the truth. He said a newly published directive on trial reforms of the education system was "full of empty talk and nonsense", according to excerpts of his remarks posted on the popular microblog platform Sina Weibo. The 82-year-old made the unusually harsh comments two days ahead of the prestigious university celebrating its centenary. Zhu, who studied at Tsinghua more than six decades ago, was the founding dean of the university's school of economics and management, established in 1984, and resigned from the post in 2001. While students and internet critics of the education system expressed admiration for his candid remarks, witnesses said accompanying education officials, including State Councillor Liu Yandong and Education Minister Yuan Guiren, appeared to be embarrassed. Zhu also appeared to be critical of the expansion of university and college enrolment, which his administration began in the late 1990s. China National Institute for Educational Research professor Chu Zhaohui said the enlargement of tertiary enrolments had been shrouded in controversy from the outset as it was initially designed to stimulate the stagnant economy. But the move ran out of control soon after and has been blamed for contributing to declining academic morality and rampant plagiarism. Lamenting the state of rural education, Zhu said a luxury car could sell for more than 100 million yuan (HK$119.17 million) at the Shanghai Auto Show, yet many rural children still could not enjoy the free education they had been promised. Although analysts said it was hard to interpret Zhu's message from scattered reports of his speech, they said his comments must have been carefully crafted to defend his legacy. Zhu was also critical of a best-selling book published seven years ago that exposed the dark side of rural life and the plight of mainland farmers, and fiercely attacked his agricultural policies. He also made a vigorous defence of the much-criticised revenue-sharing system between central and local governments adopted during his time in office. Zhu's fourth book will reportedly be published soon. It is being reviewed by the leadership as it contains criticism of officials from his time as vice-premier and premier.

Solar power firms feel heat from China - Mainland suppliers elbowing out European rivals - Chinese companies are attacking the last stronghold of Western dominance in solar power, undercutting bigger rivals and winning orders in the booming US$12 billion photovoltaic power equipment industry. Rapid solar-power expansion in energy-hungry Asia and the ability to provide equipment at much lower rates to an industry looking to cut costs and stay competitive are helping Chinese companies find a firm foothold after elbowing out Western rivals in photovoltaic modules and cells. Expectations of strong demand for alternative energy are boosting orders for furnaces and slicing equipment used to make the solar cells of panels that convert sunlight into electricity. HSBC (SEHK: 0005) expects a 20 per cent growth in global solar-power demand this year to 20 gigawatts, thanks to solid demand from Europe and rising orders from markets such as Canada and India. Renewed interest in clean energy since the nuclear crisis in Japan would also boost demand. Germany's Centrotherm Photovoltaics and US firms Applied Materials and GT Solar were the biggest equipment suppliers in 2010, according to California-based research firm VLSI, but Chinese companies are catching up fast. State-owned China Electronics Technology Group Corp (CETC), through its unit 48th Research Institute (CETC-48), was the industry's No9 in VLSI's ranking, marking the first mainland company to make it to the league of big equipment makers. Analysts expect more Chinese names to populate the top tier in the next three years as an increasing number of equipment makers are boosting production capacity and winning orders. Earlier this month, Zhejiang Jinggong Science & Technology said it won a 649 million yuan (HK$773.40 million) contract to supply solar equipment to the country's largest polysilicon company GCL-Poly Energy Holdings. The company has an order backlog of up to 1.8 billion yuan as of March, according to KGI Research. Mainland equipment makers' biggest advantage yet could be their captive home market, providing an entry point into the industry that is expected to grow 19 per cent to US$12.4 billion globally this year. China is the world's biggest buyer of PV equipment, representing 51 per cent of the market in 2010, up from 35 per cent in 2006. It will remain the biggest buyer of PV equipment this year and next with the country's plan to build 2,000 new solar cell manufacturing lines over the period, according to Nomura Securities. "The year 2011 should see China's PV equipment sector grow in leaps and bounds," said Stephen Wang, an analyst at KGI Research, who predicts most PV equipment on the mainland will be locally sourced in the next few years. Home to the world's largest solar cell producers such as Suntech Power Holdings and Yingli Green Energy Holding, China had been the biggest buyer of PV equipment from mostly European suppliers such as Centrotherm, Meyer Burger Technology and Manz Automation. But as local manufacturers like CETC, Jiangsu Huasheng Tianlong Photoelectric and Beijing Sevenstar Electronics Co improved product technology and boosted capacity, an increasing number of Chinese cell and panel makers are turning to locally produced machines. "No point buying a Ferrari if a Kia can be just as good to bring you to your destination," said Jason Chow, chief financial officer at mainland wafer maker Solargiga Energy Holdings, which taps local suppliers for more than 50 per cent of the machines used for its production. "The point is it gets the job done," Chow said. Local firms are using their pricing prowess to win orders, with some undercutting rivals' prices by as much as 30 per cent. Price tags on these machines are a powerful lure for mainland cell and panel makers trying to bring down costs. Last year, Chinese makers of equipment such as ingot-casting furnaces, screen printers and cutting blades held about 17 per cent of the global PV equipment market, up from 10 per cent in 2006, VLSI said. That compares with European manufacturers, whose market share declined to 42 per cent last year from 57 per cent five years ago. More than half the number of machines in China last year were from local suppliers, a market which less than a decade ago was dominated by global brands. For the production of solar cells alone, CETC holds the single biggest share of 17.6 per cent of the mainland equipment market, according to solar-focused research firm ENF. KGI's Wang favours local makers of ingot casting furnaces such as Zhejiang Jinggong and Jiangsu Tianlong, which he expects could snatch business from top furnace makers like GT Solar. Wang forecasts Jinggong's earnings per share to jump nearly five-fold this year and Henan Hengxing's EPS to triple. Analysts also favour Chinese makers of cutting wires like Henan Hengxing Science & Technology, whose wafer-cutting steel wires are winning over local solar wafer firms. Mainland makers are also eyeing Taiwan, South Korea, India and Japan where the market for solar equipment is growing fast. The China threat is felt among global equipment makers such as Applied Materials' Baccini and Centrotherm, many of them keen on reducing costs. "With joint activities in research and development ... we play a crucial role in further reducing the costs along the value chain in photovoltaics," said Meyer Burger chief executive Peter Pauli, announcing its acquisition of Germany's solar cell equipment maker Roth and Rau on April 11. "This is just another step to sustainably reduce the costs of solar power."

Chinese leaders meet US Senate delegation - BEIJING - China's top legislator Wu Bangguo on Thursday called for more parliamentary exchanges between China and the United States, saying that dialogue and communication could help improve mutual trust. Wu, chairman of the Standing Committee of the National People's Congress (NPC), made the remarks when meeting with a delegation of senior US Senators in Beijing. Wu said the NPC has established a regular exchange mechanism with the US side, which has already played a positive role in developing Sino-American relations. "I hope the two sides could keep improving dialogue and communication to continue to help enhance mutual trust and cooperation between China and the United States," Wu said. Talking about bilateral relations, Wu stressed that China and the United States share many more common interests than differences. China will work with the United States to actively implement the consensus reached between President Hu Jintao and President Barack Obama, and hopes that the two countries could take each other's key concerns into consideration, and foster cooperation and promote friendship to a higher level, Wu said. The delegation was led by Senate Majority Leader Harry Reid and consisted of nine other senators. Reid said the United States and China share similar views on many significant issues, and the US Senate hopes to work with the NPC to push forward the bilateral cooperation in fields such as trade, environment and clean energy. Chinese Vice President Xi Jinping also met with the delegation on Thursday. China-US relations cannot develop without the participation and support from the US congress, Xi said. Xi said he hopes the US Senators will actively promote and support bilateral exchanges and cooperation, and play constructive roles in promoting the cooperative partnership between the two countries. Xi said China and the United States are building a cooperative partnership based on mutual respect and mutual benefit. China hopes to improve political trust with the United States, promote mutually beneficial cooperation and improve coordination in international affairs. Xi also briefed the US Senators on China's 12th Five-Year Plan (2011-2015), calling on the two sides to seize the opportunities to expand mutual investment, cement cooperation in clean energy and infrastructure construction and further improve economic and trade cooperation. He also said he hopes that the two countries could overcome the interference of protectionism and properly resolve trade disputes through consultation on an equal footing. China is the United States' second largest trading partner and its third largest export market with bilateral trade totalling 38.534 billion US dollars in 2010, according to China's Commerce Ministry. Reid said the cooperation between the United States and China has contributed to world peace, stability and prosperity and the US Senate will make unremitting efforts to promote US-China relations. Lu Yongxiang, vice chairman of the NPC Standing Committee, also met the delegation on Thursday. On Thursday morning, the delegation took the high-speed train to Tianjin and visited a clean energy company in Langfang of Hebei Province. The week-long tour will also take the delegation to the cities of Chengdu and Xi'an in west China.

China's Phoenix New Media filed with US regulators on Thursday to raise up to US$200 million in an initial public offering of American depositary shares (ADSs). The company, which traces its roots to Chinese language TV network Phoenix Satellite Television Holdings, said it plans to list its ADSs on the New York Stock Exchange under the symbol “FENG.” Phoenix intends to use proceeds from the offering to invest in content, production, technology and marketing, but did not reveal the number of depositary shares it planned to sell. In a filing with the US Securities and Exchange Commission, the company said the proposed IPO amount was estimated for the purpose of calculating the registration fee. Phoenix, which generated revenue of US$80.1 million last year, said Morgan Stanley & Co International Plc, Deutsche Bank Securities Inc and Macquarie Capital (USA) Inc are among underwriters for the IPO.

More than one million tablet computers were sold in the mainland in the first quarter, spurred by high demand for Apple's popular iPad and an abundance of cheaper models from home-grown brands. According to market research firm Analysys International, tablet sales in the mainland grew 33 per cent to 1.04 million units in the quarter to the end of March, from about 780,000 units in the fourth quarter of last year. At that pace of growth, total domestic tablet sales this year would easily reach the 4.5 million units forecast by Analysys in January. United States-based Apple, which also makes the iPhone and iPod, accounted for a dominant 78.3 per cent domestic market share, it found, followed by Korean electronics giant Samsung Technologies and Beijing-based tablet maker eBen with shares of 5.1 per cent and 4.5 per cent respectively. Analysys said in a report that stores selling tablet computers, including some priced at below 1,000 yuan (HK$1,190), encouraged sales during the Lunar New Year with increased marketing and promotions. There was also brisk demand in the country's grey market for smuggled units of Apple's new iPad 2, a thinner and lighter model built with two cameras for the front and back. Analysys estimated about 4.4 per cent of Apple's market share last quarter was from smuggled iPad 2 sales. The device was officially released last month by Apple in the US and other selected markets. "Lenovo's LePad, Motorola's Xoom and devices from other major brands will exert influence on the tablet market, starting this month," Analysys said. Hong Kong-listed Lenovo Group (SEHK: 0992, announcements, news) , the world's fourth-largest supplier of personal computers, started selling its LePad on March 28 through more than 5,000 stores in 400 cities across the mainland. According to Shanghai-based research firm RedTech Advisers, there is more competition for the major brands in the mainland's tablet market due to plenty of low-cost devices churned out by small electronics manufacturers in Shenzhen. "Pricing is attractive," Michael Clendenin, the managing director at RedTech Advisers, said in a report. "More than 100 tablets from 50 different manufacturers have already hit the market." So-called tier-3 and tier-4 tablets from small manufacturers cost from US$199 to less than US$99 each. Pricing for tier-1 and tier-2 devices - from the likes of Apple, Samsung, Lenovo, Acer Group, AsusTek and Dell - range from US$700 to US$200 each.

The Earth Day, which is celebrated on April 22 every year, marks an annual effort to raise public awareness about the environment and encourage public to take actions on environmental protection, to live a green lifestyle. A girl watches a dinosaur model at Nanjing Geological Museum in Nanjing, Jiangsu province April 22, 2011. A woman and her daughter touch a structural model of the earth's core at Nanjing Geological Museum in Nanjing, Jiangsu province April 22, 2011. 

Sina CEO named to 2011 TIME 100 - Sina Corp's CEO Charles Cao has been selected by Time Magazine as one of the world's most influential figures of the year. Cao launched a micro blog service called Weibo while dealing with an adverse situation and has built it into one of the most open online platforms in China, the magazine said. According to Sina's financial results released on March 1, the total number of registered users on Weibo has surpassed 100 million. The company's unaudited net revenues grew 12 percent year-on-year to $402.6 million in 2010, according to a financial report. The 2011 TIME 100 selected other tech gurus including Facebook CEO Mark Zuckberg and Google CEO Larry Page.

China signalled on Thursday it was ready to buy more debt from the euro zone's weaker states, in a move to help stabilise the bloc's fragile finances and protect its business interests. After investing billions of euros in Portuguese and Greek bonds to diversity its "huge" foreign exchange reserves away from the dollar, China was now considering buying more, Song Zhe, Beijing's ambassador to the European Union, said. China was also in talks to invest in Spain, including in the reorganisation of troubled Spanish savings banks, the Ministry of Foreign Affairs said earlier in Beijing. China is keen to diversify its currency reserves -- which rose in the first quarter to $3.05 trillion -- with the euro the primary alternative to the dollar, which accounts for around two thirds of its holdings. But Daniel Gros, a euro zone expert with a Brussels-based think tank, the Centre for European Policy Studies, said heavy bond buying in Europe by China was unlikely. The foreign affairs ministry's remarks confirmed earlier comments from Spain that Madrid and Beijing were discussing possible investments. Worried that it too may be engulfed by Europe's debt crisis, Spain wants to attract new capital into its banks to assure investors its financial system does not need be bailed out like Greece, Ireland and Portugal. To that end, Spanish Prime Minister Jose Luis Rodriguez Zapatero visited China and Singapore last week to persuade them that Spain's public debt and banks were a good investment. Some confusion accompanied the trip however, after China's wealth fund denied a comment from a Spanish government source that it may invest $9 billion in Spain. Song, meanwhile, cautioned on Thursday over any restructuring of Greek debt, which could force losses on bondholders including China, saying: "We hope governments can ensure the security of our investments." "The EU is China's most important business partner," said Song, adding that Beijing has an interest in "the stability of the European economy and early recovery from the crisis" as he reiterated his country's support for the euro. Outlining how China had already bought several billions of euros of Greek and Portuguese government debt, Song said: "This is still in the beginning phase. In the next step, it's possible we will purchase more."

The iamge of a participant is reflected in the mirror at the 109th Canton Fair, in Guangzhou, capital of south China's Guangdong province, April 19, 2011. The Canton Fair, opened last Friday, ended its first five-day session April 19 this year with transactions reaching $23 billion. The session also witnessed 107,000 overseas buyers, up 8.4 percent from the previous first session, but buyers from Middle Eastern countries declined sharply. The 109th Canton Fair, the largest trade fair in China, ended its first session this year with transactions reaching $23 billion in value, which is 1.85 billion dollars more compared with the first autumn session last year. Although buyers from Middle Eastern countries declined from 8 percent to 80 percent compared with the previous first session, the session witnessed 107,000 overseas buyers, up 8.4 percent from the previous first session, defying predictions of a drop in visitors, said Canton Fair spokesman Liu Jianjun on Thursday, who is also deputy director of China Foreign Trade Center, the organizer. It is the first time visitors took up 4 percent of the total, Liu said. The 109th Canton Fair opened its first session for the year in the southern city of Guangzhou last Friday. The second session will open on Saturday. The Canton Fair, or officially known as China Import and Export Fair, spreads over three five-day sessions, twice a year.

Wheels made by a Chinese manufacturer on display at an auto parts trade show in Beijing. The United States has officially launched an anti-dumping and anti-subsidies probe into imports of Chinese-made steel wheels, according to an industry association and the companies involved. It's the first time the US has launched an investigation into Chinese automobile-components, according to the China Chamber of Commerce of Imports and Exports of Machinery and Electronic Products (CCCME). A claim filed by the US steel-rim and wheel makers - Accuride Corp and Hayes Lemmerz International Inc - prompted the US International Trade Commission (USITC) and the Department of Commerce (DOC) to open the investigation, which began on April 5, according to the CCCME. Around 16 companies are involved, said Chen Huaisheng, a lawyer for the CCCME, who said the value of 2010 Chinese steel-wheel exports to the US is estimated to be less than $20 million. Xingmin Wheel Co Ltd, a Shandong-based company listed on the Shenzhen Stock Exchange, has set up a legal team to deal with the investigation, said Cui Jihe, the secretary of the board. "We have confidence in the competitiveness of our products overseas and this investigation won't make us change our strategy," Cui said. "The wheel makers who launched the petition might have felt a growing threat from their Chinese rivals, who can supply both high quality and a competitive price," he said. Another of those involved is Zhejiang Jingu Co Limited, which supplies Chrysler Group LLC and Daimler AG's Mercedes-Benz unit, according to its website. Zhejiang Jingu, which is listed on the Shenzhen Stock Exchange, has an annual production capacity of 15 million wheel sets. Its overseas operations manager, Ye Xiu, said the company is preparing for legal proceedings and is also seeking opportunities in other markets to offset the possible loss of its US business. Three major US importers have voiced opposition to the investigation and will attend the relevant hearings to further declare their stand, according to the CCCME.

TCL to add Samsung into the picture - The Samsung Electronics Co booth at the 2011 Consumer Electronics Show in Las Vegas. TCL Corp announced that it will invest $100 million to form a joint venture with Samsung. Samsung Electronics Co is set to obtain a 15 percent stake in Shenzhen Huaxing Photoelectric Technology Co Ltd, a joint venture between TCL Corp and Century Corp. Shenzhen Huaxing is the LCD TV panel production plant for TCL, which owns 55 percent. Century currently holds the remaining 45 percent. After the equity swap, TCL will retain its 55 percent stake and Century's share will drop to 30 percent. TCL said that the transfer is part of a strategy to deepen its business in the upstream of the TV industry through cooperation with Samsung, one of the world's largest manufacturers of flat screen TVs and mobile phones. Shenzhen Huaxing was established in November 2009 with investment totaling 24.5 billion yuan ($3.76 billion), as TCL launched its production line for 8.5-generation panels, so far the highest-level of domestic thin-film transistor liquid crystal display (TFT-LCD) production. Under a five-year coordinating agreement, Shenzhen Huaxing will supply Samsung with 2.55 million LCD TV modules annually as an Original Design Manufacturer, accounting for 15 percent of Shenzhen Huaxing's annual total production capacity. The Shenzhen-listed TCL said the equity transfer won't alter Shenzhen Huaxing's initial development strategy. Once production begins in August, Shenzhen Huaxing will produce 17.5 million units of LCD TV modules annually in sizes ranging from 26 inches to 55 inches. TCL also announced that it will invest $100 million to form a joint venture with Samsung. Suzhou Samsung Electronic LCD Co Ltd, which produces 7.5-generation LCD panels in Suzhou, Jiangsu province, will receive the investment and TCL will own 10 percent equity of the company. "The cooperation between TCL and Samsung will increase the international competitiveness of China's electronics industry and perfect the LCD TV industry chain," said Zhang Xiaoqiang, vice-minister of the National Development and Reform Commission of China. Gao Hongjin, director-general at the LCD Branch of China Optics & Optoelectronics Manufacturers Association (COEMA), said that, apart from complementing its product lines, TCL will also take some of the profits from Samsung's project. Samsung and Suzhou's local government will invest a total of $2.25 billion in Suzhou Samsung's 7.5-generation panel plant. The LCD panel is a core component of TV screens, representing 40 percent of the total price of a typical TV. At present, domestic producers mainly rely on LCD panels from Japan and South Korea. "We will continuous to extend the industrial chain to the field of core components and complete the integration of the flat-panel TV industrial chain to coordinate the upstream and downstream within the industry," said Li Dongsheng, TCL's chairman. According to Display Search, a global market research and consulting firm, China will become the world's largest market for LCD TVs by 2012, accounting 21 percent of the global LCD TV market. Display Search also estimates that the global sales volume of LCD TVs will reach 188 million units in 2012.

Consumer confidence rises in Q1 - A vegetable vendor at a marketplace in Yuncheng, Shanxi province. Consumer confidence rebounded in the first quarter this year, after previously falling for two consecutive quarters. Consumer confidence rebounded in the first three months of this year after a slide in the last two consecutive quarters, as inflation concerns began to ease and people's willingness to spend increased. The consumer confidence index, jointly released on Thursday by the China Economic Monitoring & Analysis Center (CEMAC) of the National Bureau of Statistics (NBS) and The Nielsen Company, showed that China has a score of 108, up from 100 in the fourth quarter of last year and representing the highest level of confidence since 2009. "With government policies to stabilize inflation coming into effect, as well as a commitment to carefully monitor prices going forward, consumers have regained their confidence swiftly," said Mitch Barns, president of Nielsen Greater China. The consumer price index, a main gauge of inflation, hit 5.4 percent year-on-year in March, reaching a 32-month high, the NBS statistics showed. Since October, the central bank has raised the benchmark interest rates four times and told the country's lenders to lock up a record 20.5 percent of their deposits as reserves to curb inflation and mop up excessive liquidity. Pan Jiancheng, deputy director-general of CEMAC, said the bounce back in consumer confidence is in line with expectations as the nation's economy continues to show steady and relatively high growth. China's economy expanded by 9.7 percent in the first quarter, marginally lower than the 9.8 percent registered in the last quarter of 2010 but beating economists' expectations of 9.5 percent, according to the NBS. "Despite the rebound, we still need to be careful, as further price hikes remain a very real possibility and could hurt consumer confidence in the future," said Pan. The survey showed gains in almost every facet of consumer sentiment this quarter; people's willingness to spend registered a strong increase and consumers' expectations of future price increases dropped slightly, with a decline of 2 percentage points from the last quarter. Moreover, consumers were increasingly optimistic about their job prospects over the next 12 months. In the largest survey of its kind, Nielsen and CEMAC surveyed more than 3,500 shoppers across China's cities, towns, and villages. "The good news is that income is rising faster than inflation, particularly in rural areas, and people's living standards continue to improve. As a result, we continue to see strong growth in marketplace demand, even in discretionary categories," said Barns. In a bid to boost domestic demand, the proposed move to raise the personal income tax threshold from 2,000 yuan ($306) to 3,000 yuan will also have a positive effect on consumer confidence. "As middle- and low-income families account for a major proportion in our survey sample, the change of personal income tax levy will help boost China's consumer confidence index in the second quarter," said Barns. According to the data organized by city tiers, confidence among consumers in the rural areas continued to strengthen, increasing 6 percentage points to 113, near the record high set in 2009. "This was largely driven by a strong optimism among the consumers about future job prospects," said Barns. Although inflation has been on consumers' minds, the number of those who believe it is a good time to spend went up by 8 percentage points from the previous quarter to hit 38 percent. Willingness to spend improved across all regions and city tiers, according to the survey. However, most consumers believe real estate prices will continue to rise. Almost three-quarters of those people surveyed said home prices would rise over the next 12 months, up 6 percentage points from the fourth quarter of 2010.

China Securities Journal, NASDAQ sign MOU - CSJ signed a memorandum with NASDAQ OMX in New York, focusing on sharing market information and database.

Kunqu opera finds new markets in popular Chinese entertaining venues - Photo taken on April 15, 2011 shows Liu Na performing on stage during a live show in Wulingge tea house in Chenzhou, central China's Hunan Province. In order to attract more customers, Wulingge, a famous local tea house, invited Hunan Provincial Kunqu Opera Troupe to hold live performance regularly at Friday and Saturday evenings. Kunqu opera, a traditional Chinese art form, found its new markets in such popular Chinese entertaining venues.

Hong Kong*:  April 24 2011

Nurses' tired and angry faces in hospital show - Thousands of nurses began a three-day "silent" protest yesterday for higher pay and better conditions, with those on duty at all 43 public hospitals wearing stickers showing tired and angry faces. Organizer the Association of Hong Kong Nursing Staff, which said most of its 24,000 members are involved, also put adverts in newspapers, urging the Hospital Authority to stop a brain drain. The ads said 700 nurses quit last year compared with 300 in 2005. The most noticeable losses involved nurses with up to three years' experience and those with more than 10 years. The association is also handing out more than 10,000 packets of tissue to nurses to underline what the job takes out of them. Chairman and health services lawmaker Joseph Lee Kok-long said the tissues "represent nurses' sweat and tears." High turnover has caused a shortage of experienced nurses, Lee said. "The authority's relief measure of employing new nurses does not address the core problem - the continuous loss of experienced nurses." What is needed to "give nurses hope," Lee argued, is for the authority to come up with initiatives that include enhanced promotion opportunities and wage rises based on performance. Hospital Authority chief manager (nursing) Sylvia Fung Yuk- kuen has said HK$200 million is being spent this year to employ about 1,600 new nurses and part-time experienced nurses to help train them. She also admitted that last year was the worst since 2006 for a loss of nurses from public hospitals: 971 of them, or 5.1 percent of the nursing workforce. Kwok Choi-fung, chairwoman of the Hong Kong Chinese Civil Servants Association's nursing branch explained: "Most of us work with a passion to serve patients, but ... we don't know how long we can last without seeing promotion prospects and improved conditions like a five-day work week." Employing additional nurses helps, she added, but solutions are needed to retain experienced staff and enhance morale. A spokesman for the authority said it is "always concerned about manpower in public hospitals and understands the pressure faced by frontline nurses." Doctors too are increasingly agitated about their workloads, with threats of radical action now being voiced.

The Civil Aviation Department (CAD) of the Hong Kong Special Administration Region said Thursday it has given approval to three airlines to raise the upper limits of passenger fuel surcharges for the period from May 1 to May 31, 2011. The new maximum levels of fuel surcharges will be 222 HK dollars (around 28.51 U.S. dollars) for short-haul flights and 1,030 HK dollars for long-haul flights, which represent an increase of 14 percent and 17 percent respectively from the current levels. The three airline companies are All Nippon Airways, Cathy Pacific Airways and Singapore Airways. According to a CAD release, the applicable surcharge levels are based on the ticket issue date. CAD regularly reviews passenger fuel surcharges and makes adjustments to fee standards so as to help airlines to partially recover cost increase due to fluctuation in aviation fuel prices. The last review by the department was done at the end of March when the maximum surcharge levels approved by the CAD were 194 HK dollars for short-haul flights and 884 HK dollars for long-haul flights.

The government is facing the prospect of having to refund more than HK$300 million to the tobacco industry as lawmakers from major parties attempt to veto or slash the 41 per cent increase in cigarette duty introduced in the budget. As well as being another embarrassment for the administration and Financial Secretary John Tsang Chun-wah, it would also deal a serious blow to public health efforts and leave the city lagging further behind in tobacco control. Legislators from several major parties, including the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), the New People's Party and the Liberal Party, are primed to challenge the increase in what one person familiar with the situation described as "the most uncertain" debate over tobacco duty the government has faced. A Legislative Council committee studying the Dutiable Commodities (Amendment) Bill, under which the increase was introduced, will meet on April 29, while Legco will have to vote on the bill by late June. In his budget on February 23, Tsang increased tobacco duty by 50 HK cents per cigarette. But while the move was widely applauded by the public health sector, it has run into stiff opposition from legislators in the run up to several key elections. Lawmakers from the major parties want the tax increase lowered to between 20 and 25 HK cents per cigarette because they feel the original cut is too heavy for smokers from the grass roots. If the bill fails to pass through Legco or is amended, the government will be forced into an embarrassing situation of having to give back money to the tobacco industry. To prevent illegal profiteering, the tobacco tax increase was introduced immediately after the budget, even though the bill technically still needs Legco approval. The retail price of a packet of cigarettes jumped from HK$39 to HK$50 and the government started to collect the new duty from tobacco firms. But if the increase was cut to 25 HK cents per cigarette, the retail price would drop to about HK$44 per pack. Under the law, the government is required to refund the difference to the direct taxpayer - in this case the tobacco importers and distributors. Although the new duty was passed on to consumers, legally they are not the direct taxpayer and therefore ineligible for a refund. "What the government is trying to do is clearly in the public's interest. If the bill is not passed, it will be a mockery of our political system," said the person familiar with the situation. Based on 2009 figures, the government taxed about 11 million cigarettes per day. This means the possible refund could add up to about HK$330 million if the duty increase is slashed to 25 HK cents per cigarette. This is the second time the government has faced a revolt over its tobacco tax. In 1991, a proposed 200 per cent increase in tobacco duty was cut by Legco to 100 per cent after the administration struck a deal with lawmakers, narrowly avoiding major embarrassment. The government is unlikely to repeat the 1991 feat when it tabled the bill twice, as agreed with the legislature, first to increase the duty and then to cut it back. Lee Mer, convenor of the I Smoke Alliance, said a duty increase below HK$4 per pack was acceptable. The group urges the tobacco companies to donate all the tax refunds, if any, to charities or services to help people quit smoking. Deanna Cheung Kin-wah, chairwoman of an alliance of major tobacco companies called the Tobacco Control Concern Group, said it welcomed any cuts. Asked if the tobacco industry would donate any tax rebate, she said it was a hypothetical situation.

Consumer prices in Hong Kong rose 4.6 per cent in March year-on-year because of higher prices of food, housing rents and cigarettes, government figures released on Thursday showed.

Beijing's nuclear safety agency is making positive noises about opening up the way it reports minor incidents at nuclear plants, Hong Kong's top environmental official said yesterday. Secretary for the Environment Edward Yau Tang-wah was speaking as he led a Hong Kong delegation to the National Nuclear Safety Administration at the Ministry of the Environment in Beijing. Yau also said Hong Kong would receive direct information about lessons learnt from the Fukushima nuclear crisis from mainland officials, who would be attending an international conference on nuclear safety. Yesterday was the first time Hong Kong has sent such a large delegation to the mainland authority. About 20 officials, academics and energy advisers made the trip to get a measure of the mainland's nuclear strategy and safety rules. Yau said: "Experts on both sides agreed that it is important to step up notifications on issues of public concern as this can help boost public confidence. But the mechanism should not be just tailor-made for one single nuclear power plant, but should be adopted for all plants if this is found to be practical." Hong Kong is facing growing pressure from nuclear concern groups in the wake of the crisis at the Fukushima plant. The groups are also calling for greater transparency from the Daya Bay nuclear power station, which is 50 kilometres from Hong Kong, and in which CLP Power (SEHK: 0002) has a 25 per cent stake. Under an improved notification mechanism with the station, minor incidents not involving any radiation leakage will be disclosed to the Hong Kong public in two days, which is regarded as more stringent than mainstream international practice. However, no similar mechanism has been set up with the Ling Ao nuclear plant, which is just one kilometre from Daya Bay and is solely owned by China Guangdong Nuclear Power Holding. Meanwhile, Yau said the government had not yet decided whether to appeal against a court ruling that quashed the environmental permit for the Hong Kong-Zhuhai-Macau Bridge on the grounds that it failed to present a standalone analysis of the environmental conditions without the bridge project. "We are still looking at what the implications of the ruling are and we also need to study carefully what really the ruling is asking and whether it is justified," he said. An environment official in Hong Kong yesterday also said the ruling on Monday could have a far reaching impact of changing the game of the environmental impact assessment process.

Schoolchildren from poor families will get help with lunch costs and study tours thanks to planned payouts from the joint government-business Community Care Fund. These were among 10 initiatives put forward by the fund yesterday which will cost HK$727.33 million and help about 300,000 people. As well as school pupils, beneficiaries will include elderly and disabled people, patients with chronic diseases and ethnic minorities from the HK$10 billion fund - half of which will come from the government and the rest to be raised from business. Recipients of government assistance will be eligible for four of the 10 programmes, raising questions as to whether this is in line with the fund's stated objective of helping those who fall through the welfare net. The chairman of the fund's executive committee, Dr Law Chi-kwong, said those receiving financial assistance could be easily recognised as people in need. "We are open to any suggestion that can help those really in need," Law said after the second meeting of the fund's steering committee. "And these initiatives are not the only 10 we are going to put forward, we are looking at other schemes." The two most costly projects are a HK$165.9 million project to subsidise 240,000 primary and secondary pupils on study tours over three years and another HK$192.78 million project to pay for the lunch expenses of 51,000 primary pupils. For the study tour scheme, each pupil can apply once in three years and receive a maximum of HK$3,000. "We believe that learning outside Hong Kong is essential to children to facilitate all-round learning and broaden their horizons," said Chief Secretary Henry Tang Ying-yen, chairman of the steering committee which oversees the fund. But legislator Cyd Ho Sau-lan said it looked as though it was designed to sponsor more pupils for national education. "For HK$3,000, pupils can only visit China. I think they should go to places with different cultures to broaden their horizons," she said. Other initiatives included sponsoring medical expenses for patients with chronic diseases, home-care services for the elderly, rehabilitation services for the disabled, rental sponsorship for the poor, and language-related examinations for ethnic minorities and new migrants. The fund also allocated HK$170 million for three other potential initiatives to be put forward after studying their feasibility. Details of the controversial plan to give a HK$6,000 handout to all low-income new migrants were not finalised at yesterday's meeting. It would be discussed in its next meeting. The fund was announced last year in Chief Executive Donald Tsang Yam-kuen's policy address. The Monetary Authority will invest half the money. The committee will apply to the Legislative Council finance committee on May 6 for HK$5 billion, but refused to disclose how much had been raised from business so far.

HKEx working on new yuan product - Chief executive Charles Li Xiaojia and chairman Ronald Arculli during Hong Kong Exchanges and Clearing's annual general meeting at Exchange Square. The bourse would finish preparation work for a new yuan product by September, Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) chief executive Charles Li Xiaojia said. The planned equities trading support facility (TSF) is designed to let investors to use Hong Kong dollars to buy yuan-denominated shares in the secondary market. The TSF will source yuan from banks in Hong Kong and provide the yuan to investors through brokers. TSF users will have to buy yuan from the TSF with Hong Kong dollars, and invest the yuan in yuan-denominated shares in the secondary market. Once the yuan-denominated shares are sold, they have to "return" the yuan to the TSF, swapping the Chinese currency for Hong Kong dollars. HKEx chairman Ronald Arculli said it would continue to study the possibility of the same stock listed in both Hong Kong dollars and yuan, but warned that this would be technically complex. Asked about an investigation into the recent suspension of HK$600 million worth of Nikkei-linked warrants issued by Goldman Sachs, Arculli said HKEx would not interfere in any decision-making process. "Hong Kong stock exchange has been in talks with the SFC [Securities and Futures Commission] and Goldman Sachs over the warrant suspension issue," Arculli said. "However, Goldman Sachs will be the one who decides what should be the solution. The stock exchange is taking a back seat." He also advised retail investors to "take their time" in studying derivatives to avoid making hasty decisions. Goldman Sachs reportedly submitted several proposals to both the stock exchange and the SFC, Chinese media said. Goldman Sachs was not available for comment yesterday. Trading was suspended on March 31 after a dramatic increase in prices and turnover. Prices of one of the four warrants rose more than 10 times in just hours. Goldman Sachs told the stock exchange at the time that there were errors in the formula. The cash settlement amount per board lot for warrants is determined by a mathematical formula. The formula in the prospectuses issued by Goldman Sachs in February, when the four warrants were launched, gave them a higher value than the one given in the correction. Such mistakes are rare because listing prospectuses are often reviewed by the sales and trading teams of an issuer, an internal and external legal adviser and the Hong Kong stock exchange.

Macau splashes cash again - All Macau residents are in the money again with another government cash handout. This time permanent residents will receive 3,000 patacas (HK$2,912) each and others 1,800 patacas. It comes as Hongkongers wait for the government to work out how to distribute its first cash handout - HK$6,000 for permanent residents only - announced more than a month ago. This is the fifth time Macau has handed out cash to its people, and the second dose in less than six months. Macau Chief Executive Fernando Chui Sai-on announced the giveaway yesterday - his second after three handouts by predecessor Edmund Ho Hau-wah - during questions and answers in the Legislative Assembly. He said the decision on the "wealth- sharing scheme" was made after taking into account surging inflation and other factors, including public views, polls and government reserves. "We expect the cash subsidy will have only a short-term effect on the consumer price index," he said. The effect on inflation is expected to be less than 0.45 percent. The move brings to 24,000 patacas the total amount each permanent resident will receive since the first "sharing" in 2008. The new handout will cost the Macau government 1.7 billion patacas. Other measures announced by Chui include a special stamp duty and tighter lending to curb speculation in the property market of the former Portuguese enclave. In Hong Kong, the government is said to be still working out details of how to distribute the handout to adult permanent residents. However, those eligible are expected to get the money before the end of this year - probably before November to avoid the handout becoming a political issue in the district council elections. A source said one option is for claimants to register online or to complete forms available from 20 banks with branches across the city. The money will then be paid in phases, with the first eligible group being senior citizens. It is believed the government will ensure those who prefer to save the cash in a special fund will receive an interest rate not less than the inflation rate. A problem that needs to be overcome is how to register residents of homes for the elderly and those with mobility problems. Democratic Party chairman and lawmaker Albert Ho Chun-yan said it seems unfair to make banks shoulder the handling charges for the payout. "The government should not force them to accept its social responsibility," Ho said. However, Economic Synergy lawmaker Jeffrey Lam Kin-fung said he believes banks will be willing to assist. Hong Kong Federation of Trade Unions legislator Wong Kwok-kin said the government should consult lawmakers on how to distribute the cash. 

 China*:  April 24 2011

The 109th Canton Fair, the largest trade fair in China, ended its first session this year with transactions reaching 23 billion U.S. dollars in value, which is 1.85 billion dollars more compared with the first autumn session last year. Although buyers from Middle Eastern countries declined from 8 percent to 80 percent compared with the previous first session, the session witnessed 107,000 overseas buyers, up 8.4 percent from the previous first session, defying predictions of a drop in visitors, said Canton Fair spokesman Liu Jianjun on Thursday, who is also deputy director of China Foreign Trade Center, the organizer. It is the first time visitors took up 4 percent of the total, Liu said. The 109th Canton Fair opened its first session for the year in the southern city of Guangzhou last Friday. The second session will open on Saturday. The Canton Fair, or officially known as China Import and Export Fair, spreads over three five-day sessions, twice a year.

Private hospital starts China’s 1st medevac program - China's first emergency evacuation helicopter goes into service at a private hospital in Changyuan county, Central China's Henan province, April 20, 2011. The inside of the emergency evacuation helicopter now in service at a private hospital in Changyuan county, Central China's Henan province, April 20,2011. The plane can carry five people and travel up to 700 kilometers in a single flight. It aims to facilitate prompt medical aid for patients who live in remote areas and to invite more experts from other provinces to help with diagnosis. A manager at the hospital said the helicopter cost over 10 million yuan, and it plans to buy about 10 more in the next five years to form an "air-120 medical aid network" in Henan province. 

Apple's new iPhone to hit markets in Sept - A worker at Hon Hai Precision Industry Co Ltd's assembly plant in Shenzhen, Guangdong province. Apple Inc's next-generation iPhone will have a faster processor and will begin shipping in September, three people with direct knowledge of the company's supply chain said. The production of the new iPhone will start in July or August and the smartphone will look largely similar to the iPhone 4, one of the people said on Wednesday. The iPhone - introduced in 2007 with the touchscreen, on-demand application template now adopted by its rivals - remains the gold standard in the booming smartphone market. Reports on the timeline of the new iPhone launch vary, though it is largely expected that Apple will likely refresh its iPhone 4 later this year. The sources declined to be identified because the plans for the new iPhone were not yet public. An Apple spokeswoman in Hong Kong was not available for comment. The iPhone is one of Apple's most successful products, with more than 16 million sold in the last quarter of 2010 and the product accounted for more than a third of the company's sales in the quarter. The current iPhone 4 was launched by Apple Chief Executive Steve Jobs in June last year and began shipping the same month. Apple sources many of its components from Taiwan-based suppliers, many of whom are expected to benefit from an uptick in sales as some of them rely on the US-based company for about 20-40 percent of their business, said Vincent Chen, an analyst at Yuanta Securities. "For some suppliers, Apple is their cash cow, or their bread and butter," Chen said. "With all these versions being launched so frequently, it will be the so-called low-margin suppliers, such as those that assemble the phones, who will benefit the most." Suppliers to the new iPhone include camera module maker Largan Precision Co Ltd, touch screen panel maker Wintek Corp and case maker Foxconn Technology Co Ltd, two of the people said. The companies would begin production either in July or August before shipping the components to Hon Hai Precision Industry Co Ltd, the flagship of Foxconn Technology Group, for assembly, they said. Officials at Largan, Wintek and Foxconn declined to comment. On Wednesday, Largan's shares ended up 3.7 percent, Hon Hai rose 4.3 percent and Foxconn rose 6.6 percent. Apple, a big purchaser of touch screen displays and flash memory, is also dependent on Japan for some of its key components, sparking concern that the disruption due to the crisis there may hurt its gross margins. Apple is expected to report another spectacular quarter on Wednesday, tempered by growing caution over how supply constraints will squeeze margins and restrain iPhone and iPad sales.

Chinese president inspects Tsinghua University - Chinese President Hu Jintao visited the country's top-notch Tsinghua University Wednesday on the eve of its centennial anniversary.

Oil giant Sinopec (SEHK: 0386) on Thursday signed China's second-largest gas purchase agreement, worth around US$85 billion over 20 years by one estimate, in a deal that also gives it 15 per cent of an Australian gas-export project. Sinopec will pay US$1.5 billion for the stake in the Australia Pacific liquefied natural gas (LNG) project, completing a preliminary deal agreed in February with project developers ConocoPhillips and Australia’s Origin Energy. ConocoPhillips and Origin announced the deal at a joint news conference overseen by Australian Resources Minister Martin Ferguson. “Australia very shortly become the second-largest exporter of LNG in the world and we have effectively now got a very important new industry in Queensland,” Ferguson said, referring to the northern state where the project is to be built. Australia has around US$200 billion in LNG projects on the drawing board. Much of their exports are destined for China, which is looking to lock in supplies to feed its rapid growth and cut its reliance on polluting coal energy. Australia Pacific LNG will have initial capacity of 4.5 million tonnes per annum (mtpa) of LNG, eventually ramping up to 18 mtpa, and is expected to come online at the end of 2015. Sinopec’s deal to take at least 4.3 million mtpa could be worth around US$85 billion if pricing is similar to that of recent coal seam gas supply deals done by Australian gas firm Santos, said CLSA analyst Mark Samter. The project holdings of Conoco and Origin are now 42.5 per cent each following Sinopec’s equity investment. China aims to boost gas consumption to 10 per cent of its total energy use by 2020 as it tries to reduce greenhouse gas emissions by cutting the use of dirtier burning coal. It has spent tens of billions of dollars buying into energy resources from Africa to Latin America. Energy consultancy Wood Mackenzie has forecast China’s LNG imports to rise five fold to 46 million tons by 2020. Sinopec’s deal will be second only to China’s first LNG import deal sealed in 2002 when China National Offshore Oil Corporation (CNOOC (SEHK: 0883)) secured 3.7 mtpa of gas from Australia’s Northwest Shelf project for 25 years. CNOOC, parent of CNOOC Limited, is the leading Chinese LNG developer with three receiving terminals in operation and another two under construction. PetroChina (SEHK: 0857)’s two terminals were scheduled to begin operation from April. The deal will also be Sinopec’s first venture into foreign unconventional gas assets and moves Australia Pacific LNG one step closer to meeting its target of making a final investment decision this year. Sinopec is building its first terminal in eastern Shandong, which will be fed from ExxonMobil’s Papua New Guinea LNG project. The latest deal will enable Sinopec to accelerate work at the proposed 17 billion yuan (US$2.61 billion) terminal in the southern coastal city of Beihai in the Guangxi region, which is expected to open in 2014. The Beihai terminal will have an initial capacity of 3 million tonnes per year, expandable to 5 mtpa by around 2015 when Australia Pacific LNG comes online.

China's great electric dream has big car brands on notice - The McCar by Geely – its name packed with ready-made global appeal – is one of China's big electric hopes on show in Shanghai. The electric cars at the Shanghai Auto Show may look like they have come out of a toy store but they offer a glimpse of the hi-tech automotive future to which China aspires. They also represent how China is using its fast-growing market as leverage to develop its own technology and they may prove the harbinger of major disputes with trading partners. The McCar by Geely, the Shuaike microvan by Dongfeng, the four-seat M1 REEV from Chery and others promise a range of more than 100 kilometres per battery charge. Most are still in development but some are already appearing on China's streets. Beijing is pushing its fledgling car industry to create its own products and believes it can lead the world when it comes to electric cars, helping to transform China into a creator of technology. However, foreign manufacturers operating in China have been told to hand over the technology for one of the three "core components" - the battery, the motor or the power-management system - to the local joint venture. And they fear they may have to give away more valuable technology as the price of being allowed to sell electric cars in China. "They certainly worry about that," said John Zeng of JD Power and Associates. "They are still at the stage of investing heavily in research and development. So right now, they are not ready to transfer technology." Draft investment rules issued last month would allow foreigners to own a minority stake only in Chinese manufacturers of electric car components. Next month, Beijing is due to release a 10-year industry development plan for "new-energy vehicles", and foreign car companies are concerned it will impose further curbs on production as well as imports. Developing powerful but safe batteries has been a key challenge for mainland electric car makers, with plenty of small explosions during development, according to the business magazine Caijing. China passed the United States in 2009 in the number of electric vehicles sold annually, and producers are looking to China to drive their sales, putting them under pressure to co-operate. While China requires foreign carmakers to operate in joint ventures in the hope the local partners will benefit, Beijing has been disappointed with the results. Today, China's market is dominated by General Motors, Volkswagen and other big foreign brands. Local producers such as Chery and Geely, the new owner of Sweden's Volvo Cars, are still far behind. Electric cars offer a fresh start in a field with no entrenched leading brands. "They see it as a big opportunity. They want to be dominant in some vehicle market and the old technologies have already been taken," said Deborah Seligsohn, a researcher in Beijing for the Washington-based World Resources Institute. Electric cars are also a key part of China's efforts to curb its voracious appetite for imported oil and gas, which communist leaders see as a strategic weakness. "The energy security advantages for them are enormous," said Seligsohn. "Switching people to electricity that you can produce domestically is very appealing." Beijing has long required the transfer of technology in fields from high-speed railways to clean energy as a condition of contracts or licences. Its bullet trains are based on European and Japanese technology but are now being marketed in Latin America and the Middle East, prompting complaints it is violating the spirit of such agreements. China's car making policies have provoked disputes with Washington and other trading partners in the past. The US, Europe and Canada launched a World Trade Organisation case in 2006 challenging Beijing's efforts to force the car industry to use Chinese components by imposing higher taxes on cars with more than 40 per cent foreign parts. The WTO ruled against Beijing in 2008, but by then car makers had developed local suppliers. Still, car makers are lured by the size of the market and the pace at which it is switching to electric cars. Beijing is generating demand by promising subsidies of 60,000 yuan (HK$71,300) per electric vehicle, often matched by local government subsidies. And cities are being given grants to buy electric buses and taxis.

Mainland sales up 10 times for Rolls-Royce - Luxury carmaker pushes forward with 17cm longer version of its Ghost - at 1m yuan extra - Paying an extra 1 million yuan (HK$1.18 million) for a car that is 17cm longer than its standard version may sound like extravagance. Which, of course, is precisely the point - especially if you happen to be uber-rich and from the mainland. Rolls-Royce Motor Cars, the ultra-luxury British brand owned by Germany's BMW, launched the extended wheelbase version of its popular Ghost car in Shanghai this week - the first time the firm has debuted a global car model in Asia. The new model adds 17cm to the Ghost's overall length, mostly for backseat legroom (nearly all buyers in China have chauffeurs). It will retail on the mainland from 5.12 million yuan compared with 4.2 million yuan for the standard version, which is already far from stubby at a length of 5.4 metres. "The space in the back with the regular wheelbase is enough," Rolls- Royce chief executive Torsten Muller-Otvos said on the sidelines of the Shanghai car show. "But it can't be enough here, you need to have even more in these markets," he said. "Okay, fine, we are doing that." The standard version of the Ghost, the younger brother to the bigger and pricier Phantom, features 1.075 metres of rear legroom, according to the Rolls-Royce website. Rolls-Royce is one of several luxury carmakers, including Volkswagen's Bentley and Audi, Daimler's Mercedes-Benz and BMW that are enjoying a multi-year sales bonanza driven by the rising ranks of newly rich on the mainland. Rolls-Royce plans to add three new mainland dealerships this year in Chongqing, Tianjin and Wuhan, bringing its total number of mainland sales outlets to 10 - second only to the United States. The company has 81 showrooms worldwide. The expansion comes as the luxury marque's mainland sales soared by more than 1,000 per cent last year, to 336 cars from 29 cars in 2009, according to data from automotive consultancy J.D. Power and Associates. The mainland, Hong Kong and Macau together now rank as Rolls-Royce's No 2 global market after the US. "It might be a head-to-head race this year," Muller-Otvos said. "Last year the US was a comfortable No1 in volume. But let's wait and see what happens this year." Part of the challenge now for Rolls-Royce is not to overexpand its network of dealers on the mainland. "First I want to see the growth and see it is sustainable, then it will be the right time to think about more dealers," Muller-Otvos said. "We have thousands of applicants who want to be Rolls-Royce dealers on mainland China." Last year's explosive sales growth was driven by the mainland launch of the standard version of the Ghost. Rolls-Royce sold 238 Ghosts on the mainland last year and 98 Phantoms, larger cars that start at over 7 million yuan for the standard version. An extended wheelbase version of the Phantom stretches 6.09 metres from bumper to bumper and retails on the mainland from over 9 million yuan. Its 1.36 metres of backseat legroom? Priceless. While sales aren't growing as fast on the mainland, Hong Kong famously remains the city with the world's most Rolls-Royce's per capita, according to Muller-Otvos. "That mirrors in general the different structure of the total auto market in Hong Kong, which is 50 per cent luxury," he said. "You won't find any other city or country in the world that has that structure to its car market." Muller-Otvos sees no signs that the growth of ultra-luxury car sales on the mainland will let up anytime soon. "Look at the number of millionaires that will be created in the coming years, look at the economic growth rates. "I believe there is still a lot of growth potential to come here in the next few years."

2011 Green Book on the Rural Economy, which was jointly published on Tuesday by the Chinese Academy of Social Sciences' rural development institute, the National Bureau of Statistics' department of rural social and economic survey, and the Social Sciences Academic Press. To those who want the difference in income to become even smaller, the report offered little reason for hope. Rather than predicting further decreases, it held that the difference in incomes will rise to 326 percent this year. The report went on to suggest that the disparity in incomes results from faults in the country's "land mechanism" and "Hukou system". "We have narrowed the differences among the incomes made by rural residents in different regions," Zhu Gang, a professor of the rural development institute under the Chinese Academy of Social Sciences, said at a news conference on the report on Tuesday. "But the differences between the incomes of rural and urban residents remain unsatisfactory." In 2010, for the first time since 1998, rural residents' incomes rose faster than urban residents' incomes, according to the report. "The regularly increasing prices of agricultural products and increasing wage incomes are the main causes of the rise in rural residents' incomes," said Zhang Hongyu, a senior official of the Ministry of Agriculture. The incomes of urban and rural residents continued to increase in the first quarter of the year, according to the National Bureau of Statistics. In the first three months of the year, the disposable income of urban residents per capita rose to 5,963 yuan ($913), up 12.3 percent from the previous year, although the subsequent deduction of an inflation variable left the actual growth at 7.1 percent, Sheng Laiyun, a spokesman for the National Bureau of Statistics, was quoted by Xinhua News Agency as saying. At the same time, the incomes of rural residents per capita rose to 2,187 yuan, a 20.6 percent increase over what they had been in the same period of the last year, meaning the rise in rural incomes outpaced that of urban incomes in the first quarter. After inflation was taken into account, the actual increase for rural incomes was of 14.3 percent, Sheng said. By the end of 2010, 26.88 million people deemed to be poor were living in rural areas, 9.09 million fewer than in 2009, according to the National Bureau of Statistics. China's Gini coefficient, an indicator of inequality, is approaching 0.5. Throughout the world, a commonly recognized "red line", or point where society should start to be worried, is 0.4, while 0 represents an equal distribution of national wealth. The coefficient's approach to that important threshold has already incited debate on the Internet. Many netizens contend that enough evidence exists to show that the rich are becoming richer and the poor poorer in China and that the government should take steps to lessen such differences.

Hainan duty free gives shoppers a good deal - Shoppers dash for bargains on Wednesday as the duty free store opens in Sanya, Hainan province. The opening of a duty free store in Sanya, Hainan province, on Wednesday has grabbed the attention of shoppers across China, many of whom will be relishing the prospect of being able to purchase luxury imported goods at competitive prices without embarking on long trips abroad. By 7 pm on Wednesday about 14,000 customers had visited the 7,000 sq m store that offers 18 types of imported commodities, including jewelry, handicrafts, watches, perfumes and cosmetics. The launch of the pilot duty-free project is another step by the provincial government to build the island into a more attractive tourist destination for both foreign and domestic visitors. "We have been hearing about these good deals for months," said Wei Qinan, a tourist from Jiangxi province. "Now, it's real and I am thrilled," she said. China's southernmost island province hopes to take advantage of its "4S" reputation - sea, sand, sunshine and now, shopping. Before the store even opened for business at 10 am, members of staff were preparing for 16 tourist groups that had made reservations. A crowd was also waiting anxiously outside the door, eager to hunt bargains. "I was in Hong Kong when I heard the news that duty-free shopping was going to be launched here, so I didn't buy any luxuries," and took a plane to Sanya, said Wei. She purchased cosmetics valued at 2,410 yuan ($370) and estimated that she saved at least 30 percent on prices in her hometown. "I will come here again and tell my friends to buy duty-free products if they fly to Hainan for holidays," Wei said. Teng Rui, the store manager, said they were gearing up for the large crowds expected over the 3-day Labor Day holiday from April 30. "We have sufficient stock to meet expected demand," Teng said. China International Travel Service (CITS) added duty-free shopping to their Hainan tour schedules. "We have added duty-free shopping to all our tour packages to Hainan and will arrange regular shopping-themed tours in the future," Zhang Lingjie, deputy director of the domestic tour department at CITS in Beijing, said. Zhang added that each tourist enrolled in the package would be rewarded with a discount coupon of 150 yuan at the store, plus a free drink. Ten tourist groups flew from cities including Shanghai and Beijing to Sanya on Wednesday afternoon and headed straight to the store. Ctrip, one of China's largest travel portals, signed a contract with the China Duty Free Group, manager of the Sanya facility, and offered their customers discount coupons worth 100 yuan and a free drink. "I've already put the Hainan shopping tour on my must-do list for this year as I don't have enough money to go abroad for duty-free goods," said Zhou Lihua in Shanghai. Hotels near the store are preparing for an influx of guests. "Dozens of people have called the hotel since the beginning of April and the number of bookings have increased dramatically since last week," said Zhang Shuzhen, from Intercontinental Sanya Resort. Airline companies, too, are expecting growing demand for Sanya flights. "We definitely will add extra flights to meet the demand," said Luo Zhuping, Board Secretary of China Eastern Airlines. The pilot program sets a rebate cap on commodities worth no more than 5,000 yuan for each purchase. Eligible tourists, 18 years and older, can purchase tax-free commodities twice a year, while island residents can purchase commodities once a year. Customers have to fill in their personal details and purchase a shopping card from the cashier before buying and the duty-free products are available for collection at the airport in Sanya. Tourists have to finish shopping at least six hours before flight departure. Despite the store's expected success, experts believed that Hong Kong's preeminent position will not be under threat. "I don't see a very serious impact since we need to consider the motivation of tourists choosing their destinations. Mainland tourists come to Hong Kong not only to shop but also for cultural events and entertainment. Hong Kong has its unique attractions that cannot be replaced," said Qu Xiao, assistant professor at the School of Hotel and Tourism Management at Hong Kong Polytechnic University.

Dating site Jiayuan.com International on Wednesday filed for an initial public offering, the latest in a series of Chinese social networking companies to apply for US listings. The website targets single, city-dwelling adults and has a stated goal of sparking relationships that end in marriage. The company’s shares are expected to trade on the Nasdaq under the symbol “DATE”. In a filing with US regulators, Jiayuan said it aims to raise up to US$100 million in its IPO, but the amount is preliminary and could change. The filing did not specify a price range or the number of American Depositary Shares to be sold. Jiayuan said it operates the largest online dating platform on the mainland and had more than 40 million registered users at the end of March. Only 4.74 million of those user accounts were active, on average, during the first quarter of this year, and less than 1 million of them were paying accounts. The Beijing-based company is profitable on an operating basis. But after several line items – the biggest of which are income allocated to participating preferred shareholders, the accretion of Series A redeemable convertible preferred shares and taxes – the company posts a loss. The loss borne by ordinary shareholders widened to 8.69 million yuan (HK$10.33 million) last year, or 9 per cent more than it was a year earlier. Net revenue grew more than 160 per cent to 167.59 million yuan during the same period. Jiayuan plans to use proceeds from the IPO to pay dividends to its owners – Series A preferred shareholders including organisations owned or managed by Jiayuan board members – and for general corporate purposes. Underwriters of the IPO are being led by Bank of America Merrill Lynch and Citi.

Hong Kong*:  April 23 2011

Billionaire Li Ka-shing’s Hui Xian real estate investment trust raised 10.48 billion yuan (HK$12.46 billion) in an initial public offering, pricing Hong Kong’s first yuan-denominated IPO at the low-end of its indicative range, two sources said. A surge in yuan-denominated deposits in Hong Kong, coupled with a growing list of yuan-dedicated funds, could be a boon for companies looking to sell reits denominated in the Chinese currency. A source involved in the Hui Xian IPO sees “a queue of renminbi reits” in the weeks ahead as other companies look to benefit from growing demand from those investors. However, pricing at the low end indicates demand for Hui Xian shares may not have been as strong as previously anticipated as investors looked for other high-yield alternatives in which to park their funds. Still, the outlook for growth in commercial rents in China, coupled with an expected strengthening of the yuan, or renminbi, should bode well for Hui Xian, analysts said. “The reit is being underappreciated because people are looking at the yield comparison with other reits, which I don’t think is the right way to look at it, because the growth rate is a big swing factor,” said Nicole Wong, regional head of property research at brokerage CLSA. “The yield is slightly lower, but the growth going forward for China assets is going to be much stronger than for Hong Kong assets. Plus there will be a renminbi appreciation angle as well,” she added. Hui Xian sold 2 billion units at 5.24 yuan each, at the bottom of the 5.24 yuan to 5.58 yuan indicative price range, the sources with direct knowledge of the matter said on Wednesday. The reit was priced to yield 4.33 per cent this year and 4.73 per cent next year, according to a term sheet of the offering seen by Reuters. By comparison, other reits listed in Hong Kong offer higher returns, although all of those are denominated in Hong Kong dollars. Link reit is forecast to yield 4.5 per cent this year, Regal reit 4.8 per cent, GZI reit 6.9 per cent, Prosperity (SEHK: 0803) reit 5.8 per cent and Champion reit 5 per cent. Investors holding yuan deposits in Hong Kong get paid rates of 0.4 per cent to 0.6 per cent, while yuan-denominated bonds yield between 1 per cent and 3 per cent, making IPOs denominated in the Chinese currency an attractive option for yield-hungry investors. Yuan deposits in Hong Kong totalled 407.7 billion yuan at the end of February, more than quadrupling from a year earlier, with authorities and analysts expecting the amount to rise to nearly 1 trillion yuan by the end of this year. The Hui Xian reit will be managed by Hui Xian Asset Management, a joint venture between Citic Securities , Singapore’s ARA Asset Management and Cheung Kong (Holdings) (SEHK: 0001), the property company controlled by Li Ka-shing. Hui Xian controls the Oriental Plaza complex in Beijing, which includes a shopping centre, two serviced-apartment towers, a high-end hotel and eight office buildings. The reit is set to start trading on April 29. Office rents in Beijing are a fraction of the rents in Hong Kong or Shanghai because of an abundance of space in the Chinese capital, but that situation should reverse in coming years, CLSA’s Wong said. “That kind of oversupply has ended and office supply for the next few years is going to ease, so we think office rents will normalize,” she added. The IPO was split, with 80 per cent sold to institutional investors and hedge funds overseas and 20 per cent to retail investors in Hong Kong, the terms said. BOC (SEHK: 3988) International , Citic Securities and HSBC (SEHK: 0005 were hired as joint bookrunners for the Hui Xian offering.

Legislator Starry Lee Wai-king has become a vice-chairwoman of the Democratic Alliance for the Betterment and Progress of Hong Kong, a sign that the leadership of the city's biggest political party is passing to a new generation. The 37-year-old Kowloon West lawmaker was elected one of the four deputy leaders during the inaugural meeting of the DAB's new central committee. Previous incumbent Carson Wen Ka-shuen stepped down and did not run for the 50-member central committee. Lee is the second vice-chairwoman of the pro-Beijing party, alongside incumbent Ann Chiang Lai-wan. The other three incumbent leaders - chairman Tam Yiu-chung, vice-chairman Lau Kong-wah and Horace Cheung Kwok-kwan - were re-elected in the two-yearly leadership reshuffle. Lee's election marks a further step for the DAB's younger generation in taking the reins of the party after Young DAB chairman Horace Cheung succeeded lawmaker Ip Kwok-him as vice-chairman in the previous leadership election in 2009. Cheung was aged 34 at the time. Legco president Tsang Yok-sing, former chairman of the DAB's predecessor party, the Democratic Alliance for the Betterment of Hong Kong, earlier expressed support for Lee. "It is good if she can join the leadership. She is young and professional and has substantial experience of political participation," he said on Saturday as the party elected its central committee. Lee, an accountant, was the youngest district councillor in 1999, when she won the district poll in Wong Tai Sin at the age of 25. She became a lawmaker in the 2008 Legco election. A 20-member standing committee - comprising the core leaders - was also elected last night. Besides Wen, deputy secretary general Albert Wong Shun-yee also stepped down. A person close to the DAB said Central and Western district councillor Chan Hok-fung, 34, was elected to the post. Of the 50-member central committee, 10 are new candidates, including seven district councillors.

From next week, consumers will be able to check whether an agent or company has broken the rules in the past two years on the Estate Agents Authority website. The Estate Agents Authority will launch an online search service next week, giving fast access to its disciplinary records so that buyers can find out if an agent has been penalised in the last two years. "It will be easier and more convenient for the public to search for information about their agents, which will significantly reduce the time required to find such details," said Ma Ho-fai, chairman of the authority's disciplinary committee. At present, the watchdog's website has details of disciplinary action for the last 12 months - including the agent's name and licence number, a description of the offence and the penalty. But there is no search function - users must trawl through the database looking for an agent's name. From next week, after checking that the person or company is still a licensed agent by entering their name or licence number, it will take just one more click to find out if any disciplinary action has been taken against the agent or company in the past two years. "We hope this can enhance the disclosure of public information and increase our transparency," Ma said. The search facility is part of efforts by the authority to improve its services. It also recently increased penalties against agents for some rule breaches. The fine for agents who fail to conduct or supply a land search result to a client was increased from HK$1,000 to HK$2,000 in October, as the authority sees it as "a very basic responsibility of an agent", Ma said. Agents who repeatedly fail to sign an estate agency agreement with clients also face tougher punishment. Apart from being reprimanded, repeated offenders will now be fined and ordered to take training courses. The number of disciplinary hearings involving failure to enter into an estate agency agreement with a client rose to 45 last year from 23 in 2009, Ma said. Last year, there were 28 cases of agents failing to supply a land search result, down from 37 in 2009. Ma said the authority had consulted the industry before making the changes. He said most agents supported the move and believed the measures could deter misconduct and enhance their image. He said the authority received 620 to 640 complaints a year. A Consumer Council spokeswoman said it welcomed the move to improve disclosure on disciplinary action. Willy Liu Wai-keung, managing director of Ricacorp Properties, said the search service would give consumers a clearer picture of agents who had broken the rules. There were 31,984 individual licensees - including sales and estate agents - at the end of last month, up from 29,335 on June 30 last year, according to the authority. And there were 2,512 licensed companies at the end of last month, up from 2,177 in the nine-month period.

Gold hit a fresh record above US$1,500 in Hong Kong on Wednesday as traders sought out the safe haven amid concerns over the global economy. The precious metal closed at US$1,500.00-US$1,501.00 an ounce, days after Standard & Poor’s downgraded its US sovereign debt outlook to “negative” from “stable”. It had opened at US$1,495.80-US$1,496.80. Analysts said that against the background of rising prices, ongoing tensions in the Middle East and North Africa, and eurozone and US debt concerns, the metal could go even higher. Darren Heathcote, head of trading at Investec in Sydney, told Dow Jones Newswires: “It doesn’t take much in this geopolitical and economic environment to push more safe-haven buying, so you have to accept the trend is intact.” The ratings agency’s move Monday challenged Washington’s gold-star “AAA”-rated standard as it warned that politicians seemed unable to agree a plan to reduce a huge budget deficit, which is running at around 10 per cent of gross domestic product. S&P said it could not foresee a deal between Democrats and Republicans on cutting the fiscal deficit until after the November next year presidential and congressional polls, and that without one, the problem would only worsen. The budget gap is expected to be almost 11 per cent of gross domestic product by the end of the year. “Because... the path to addressing these problems is not clear to us, we have revised our outlook on the long-term rating to negative from stable,” S&P said. The move sent global shares tumbling and it also comes as concerns grow over global inflation, with China and India struggling to control prices and the European Central Bank also being forced to hike rates to ease costs. Gold is considered a safe haven bet against high inflation.

Some of the puppies that were rescued in a raid on a trader in Kwun Tong suspected of illegally selling dogs online. People have been urged to avoid buying puppies on the net. Raid reveals cruelty behind web puppy trade - An animal welfare group is urging people to avoid buying puppies over the internet after 44 pure-bred dogs, some just three weeks old, were rescued in a raid on a trader in Kwun Tong suspected of illegally selling dogs online. The puppies are all too young to have been separated from their mothers and as a result many are sick and in the care of the Society for the Prevention of Cruelty to Animals. Sandy Macalister, SPCA executive director, said the puppies were evidence of the cruel trade that was feeding the growing demand in Hong Kong for pedigree pet dogs. "We continue to be appalled and sickened by the cruelty behind the pet trade, both the breeding and the internet trading," Macalister said. "Unfortunately, there is a lot of it out there. These people treat the dogs like a commodity. To them it is like stocking a warehouse with toys or T-shirts." Selling dogs online in Hong Kong was illegal, Macalister said. He warned that people should not confuse local and mainland websites offering dogs for sale with those of reputable overseas breeders. "The sad thing is that people think buying through the internet is better than buying from a pet shop, but they don't see what is going on behind the internet trade," Macalister said. "This cruel trade survives because of the huge demand. But if the public was aware of what they were supporting, I am sure they would not want to be a part of it." The number of pet dogs has boomed in recent years. The Agriculture, Fisheries and Conservation Department says there are now about 175,000 licensed dogs in Hong Kong, up from 125,000 in 2005. However, with just two licensed breeders in the city, illegal breeding and selling had become a lucrative business, Macalister said. The 44 puppies were rescued in a sting on Friday in which an officer from the department posed as a prospective buyer to contact the trader, who had advertised the puppies on the internet. A man and a woman were detained for questioning. Before the raid, the SPCA had been looking for new owners for almost 150 dogs rescued from a suspected illegal breeding centre. So far, it has found new homes for about 50 dogs, helped by an appeal last week. The dogs were discovered in September living outside, cooped up in filthy, cramped metal cages in Lau Fau Shan in the New Territories. They range in age from two to around eight and include poodles, chihuahuas, corgis, huskies, daschunds, schnauzers and bulldogs - "There are some wonderful dogs and we would urge anyone thinking of getting a dog to come and take a look at these dogs," Macalister said. Anyone interested in adopting any of the 100 remaining dogs should contact the SPCA on (852) 2232 5529.

British aircraft carrier could end up as a Sai Kung shipping school - The former British aircraft carrier HMS Ark Royal will be based at Sai Kung for most of the year, operating as a youth centre, shipping school and club if a bid by a Hong Kong organisation for the mothballed 30-year-old warship succeeds. The Hong Kong Ship Art Club, a private seafaring school formed in 1994, plans to join the race to buy the ship in competition with a dim sum chef from Hong Kong. Club chairman and chief instructor Philip Li Koi-hop said he would go to Britain in early May to visit the vessel and file the bid but would not say how much he was prepared to pay. It is the second attempt to buy an aircraft carrier by Li, who failed in a bid for a Russian ship in 2002. The Ark Royal would initially serve as a base for the club's 200 members, who pay US$10,000 to join. However, Li has plans for a more public role for the ship. "Concerts can be held and a hotel can be built inside," he said. The club would also use the ship to store its boats and might also offer a similar service to the public. "It's difficult to find shelter for boats in Hong Kong. We would discuss it with the government and see whether they could subsidise the mooring fee for the warship if we are offering so many services to the public." The Ark Royal would be based in Sai Kung from February to September and spend the rest of the time travelling the world. The 210-metre warship was posted on the Ministry of Defence's auction website in March, two weeks after decommissioning. The auction will close on June 13. Sister ship HMS Invincible was sold on the same website earlier this year to a Turkish ship scrap merchant and is now due to be turned into girders, bridge cables, chairs and even razor blades. The dim sum chef, Lam Kin-bong, who is currently based in London, said that if he won the auction, he would be locating the ship off Hong Kong, Macau or the mainland. He also tried to bid for HMS Invincible.

 China*:  April 23 2011

The threshold of China's personal income tax (PIT) will be raised to 3,000 yuan ($455) if China's top legislature passes the first reading of the proposal. The Standing Committee of the National People's Congress began to assess the draft on Wednesday. The second examination will start in June. Once agreed upon, the new tax rate will become effective in the second half of this year. Xie Xuren, minister of China's Ministry of Finance estimated that a higher threshold will eliminate 99 billion yuan in tax revenue. Vice-minister Wang Jun said earlier that it would reduce the number of taxpayers by 48 million, or 12 percent of the tax base. This is good news for consumers, as inflation recently hit a 32-month high in March and is continuing to increase. It is also a necessary measure to realize the country's goal of closing its widening income gap, and make consumer spending a major driver for the world's second largest economy. In 2010, China collected over 480 billion yuan in PIT, which accounts for only 6.3 percent of the government's total tax revenue. However, as far as boosting consumer spending is concerned, this amount will be significant. Liu Huan, the deputy dean of the School of Taxation of the Central University of Finance and Economics, said that the PIT threshold hike is good news for most people, since the current 2,000-yuan PIT threshold is already lower than average living costs in big cities such as Shanghai and Beijing. "Raising the PIT threshold will boost the purchasing power of low-income groups and help subsidize low and middle-income workers amid soaring prices." he said. China's retail sales of consumer goods rose 16.3 percent year-on-year to reach 4.29 trillion yuan ($657.29 billion) in the first quarter of this year, the National Bureau of Statistics (NBS) announced last Friday. Consumption was slowed down by higher commodity prices and interest rates. The growth of retail sales in the first quarter slowed down by 2.5 percent from the fourth quarter in 2010, a decrease of 1.6 percent from a year ago. The People's Bank of China, China's central bank, announced its second interest rate hike this year on April 5. This was the fourth such increase since the start of the year. To use an example, if 100 million people enjoy a tax cut of 200 yuan, their purchasing power will be increased by 20 billion yuan in total, a number that is approximately as much as the total sales revenues of 50 department stores and 20 large-sized supermarkets combined, according to an analysis from the Da Cheng Fund, a leading Chinese fund management company. The PIT adjustment, combined with the construction of low-income housing, may add as much as 200 billion yuan to the country's total consumption power, according to a report from Honghuan Securities. The PIT threshold was raised from 800 yuan to 1,600 yuan in 2006, and bumped up again to 2,000 yuan in 2008. The 800 yuan minimum was established in 1980, when China's first tax law was enacted. Chi Fulin, Executive Director of the China (Hainan) Institute for Reform and Development, said that making ordinary people wealthier should be a top priority for the government over the next five years.

A model demonstrates the Toyota i-REAL concept car at the 2011 Shanghai Auto Show, April 20, 2011. The i-REAL is a 'Personal Mobility Concept' made by Toyota, which is a 3-wheeled electrically powered one-passenger vehicle, running on lithium-ion batteries that can travel under 30 km/h.

Electric cars take spotlight in Shanghai - Workers set an electric moped into the back of new Geely's 'McCar' concept at the Shanghai Auto Show on Wednesday. Honda plans to start producing electric cars in China as early as next year, the boldest step so far by a global carmaker to tap as yet unproven demand for green cars in the world's largest automotive market. Honda, Japanese rival Toyota, Ford and their local partners are all looking to electric and low emission vehicles as a way to tackle stricter emissions standards being introduced around the world. While car makers are bullish about the future of the “green” vehicles in China, questions remain over the country’s use of coal to generate the majority of its electricity, consumer perceptions about the safety and convenience of electric cars and not least, the Beijing’s plans and policies for the electric-hybrid industry. Honda wants to produce electric cars in China next year, Chief Executive Takanobu Ito said at the Shanghai Auto Show on Tuesday, adding that the car maker has reached a deal with with the city of Guangzhou and the Guangzhou Automobile Group to conduct demonstration testing of EVs. “This test will verify how practical and convenient the EVs Honda is currently developing will be within the city of Guangzhou and the ideal infrastructure for society toward achieving the widespread use of EVs,” Ito told a news conference. At a roundtable discussion at the show, Honda’s China chief, Seiji Kuraishi, was asked about the significance of introducing an electric car in China.

How hot is hot? Budding cooks who dither about how many chilli peppers to add to a spicy dish may soon have help at hand - thanks to the mainland's most-famous producer of the tongue-scorching crop. Chongqing is testing a new system that grades its Shizhu peppers according to a 10-point scale of spiciness, Xinhua reported. Developed by Southwest University, in collaboration with "other units", the heat scale is being evaluated by experts from the Chongqing Science and Technology Commission following a pilot scheme, which the state news agency said was the country's first attempt to produce a scientific rating for fiery flavors. It ranks all 14 varieties of Shizhu pepper - named after Shizhu county, in the east of the municipality, where they are grown - on a scale of one to 10, and divides them into four categories; "mild", "medium", "highly spicy" and "exceedingly spicy". Professor Kan Jianquan, who led the research at Southwest University's food science department, said the investigation had found Shizhu's famous scarlet peppers - known as "chaotian red" - to be among the spiciest grown in the key pepper-producing regions, which include Guizhou , Hainan , Henan and Hunan provinces and Chongqing municipality itself. The chaotian red had been given the scale's top ranking of 10, Kan said, the same ranking given to Hainan's "emperor pepper" and the "ghost chilli" grown in India. The mainland is far and away the world's biggest pepper-grower. In 2007, its 14 million-tonne fresh pepper crop accounted for 53 per cent of world production, according to the United Nations' Food and Agriculture Organisation. That was an increase of 7.7 per cent on the preceding year and just under double the harvest a decade earlier. Shizhu county is one of the mainland's top five pepper growing areas. In 2008, its pepper fields covered just under 17,000 hectares of land, almost 40 per cent more than in 2007.

Tainted meat processor's shares plummet after suspension - Henan Shuanghui Investment & Development Co, the listed unit of meat processor Shuanghui Group, resumed trading and plunged by the 10 percent daily limit on Tuesday after a one-month suspension because of its tainted meat scandal. The Shenzhen-listed company had been suspended from trading since March 16 after China Central Television reported that Jiyuan Shuanghui Food Co Ltd, a subsidiary of Shuanghui Group, purchased pigs fed with the banned substance clenbuterol. Shuanghui spent 31 million yuan ($4.75 million) on product recalls and its revenue dropped by 1.34 billion yuan in March, the company said in a statement to the Shenzhen Stock Exchange on Monday. The company said that its current daily supply of meat products hit 3,200 tons, a rebound to about 71 percent of pre-scandal levels. In the first quarter, Shuanghui's profit is expected to reach 265 million yuan to 270 million yuan, up 10 percent to 12.5 percent from the previous year, according to the statement. However, analysts and consumers are not as optimistic as the company. "The scandal may drag Shuanghui's sales down by 2 billion yuan to 4 billion yuan this year," said Tong Xun, an analyst at Shenyin & Wanguo Securities Co Ltd. "Although Shuanghui made some efforts to restore its image by recalling products and making a public apology, it is still hard to lure consumers back. It will take a long time," said a senior analyst at Changjiang Securities, who declined to be identified. Since resuming trading on Tuesday, Shuanghui's share price will continue to drop for some time, and it may take several months to rebound, he said. According to an online survey by China's Web portal Sina.com, about 57.5 percent of market watchers polled expect Shuanghui's share price to hit the 10 percent daily decrease limit for at least five consecutive trading days, while 15.1 percent of the respondents forecast a plunge lasting for three consecutive days. The government has attached great importance to food safety, and it will intensify its supervision of the quality and safety of animal products, according to the Ministry of Agriculture. The central government plans to launch a one-year investigation of illegal additives in pig feed. The investigation will focus on monitoring the entire pork supply chain to ensure product safety, said the ministry in late March.

French frigate "Vendemiaire" visits Zhanjiang, China's Guangdong - A female navy officer of the French frigate is seen with a bouquet at a welcome ceremony. The frigate embarked on a four-day visit to China's South Sea Fleet.

Beijing countered a Philippine diplomatic protest at the United Nations by saying it has indisputable sovereignty over the Spratly Islands that Manila “started to invade” in the 1970s. China’s diplomatic note to the UN, a copy of which was seen by reporters on Tuesday, said the Philippines’ occupation of some islands and reefs in the Nansha Islands infringes upon China’s sovereignty. The Spratly Islands are known as the Nansha Islands on the mainland. A Philippine protest filed to the UN earlier this month said China’s claim to islands, adjacent waters, seabed and subsoil in the South China Sea has no basis in international law. The territorial claims were detailed in a map submitted to the UN in 2009. The Philippines, China, Brunei, Malaysia, Taiwan and Vietnam claim in whole or in part the Spratly Islands – a group of islands, reefs and atolls in the South China Sea believed to be located on top of vast oil and gas reserves. Vietnam and Malaysia filed protests in 2009 against China’s map, and Indonesia, a non-claimant to the disputed territory, also protested last year. The protests are registered with the UN Commission on the Limits of the Continental Shelf, which will help mediate conflicting claims on territories. China said the contents of the Philippines’ diplomatic note “are totally unacceptable to the Chinese Government”. Manila has said the Kalayaan Island Group in the Spratly archipelago was an integral part of the Philippines, which has sovereignty and jurisdiction over nearby waters and geological features under the international law principle that land dominates the sea. China said the Kalayaan Island Group is part of its Nansha Islands and its sovereign and related rights are supported by abundant historical and legal evidence. It said before the 1970s, the Philippines never made any claims to the islands in a series of treaties defining its territory. “Since the 1970s, the Republic of the Philippines started to invade and occupy some islands and reefs of China’s Nansha Islands and made relevant territorial claims, to which China objects strongly,” said China’s April 14 note to UN Secretary General Ban Ki-Moon. China said the doctrine that a legal right cannot arise from an unlawful act applied, thus the Philippines could not rightfully claim the islands.

Hong Kong*:  April 22 2011

Hong Kong-based Green Tomato is feeding the city’s seemingly insatiable appetite for mobile devices, having launched more than 80 applications for the iPhone and iPad since 2009. The developer is behind apps for Pizza Hut, the newspaper Apple Daily and Hong Kong Disneyland. Established in 2003 as a mobile-solutions consultancy, in 2007 Green Tomato was named one of Red Herring magazine’s 100 top private technology companies world-wide. In addition to its 80 mobile applications, the company has created 150 mobile websites that it says reach around three million subscribers in all. Business started off locally, says chief executive Sunny Kok, but has expanded globally—with projects that include the world-wide app for car maker BMW. Green Tomato now has offices in Singapore and Qatar, and Mr. Kok wants to prove Asia’s gift for innovation around the world. “People think that China can only copy something,” he says. 

Hong Kong’s jobless rate continued to drop in the January-March quarter on the back of a stronger economy, latest government figures released on Tuesday showed. The seasonally-adjusted unemployment rate for the period between January and March was 3.4 per cent, down from the 3.6 per cent rate seen between December and February last year, figures from the Census and Statistics Department showed. This is Hong Kong’s lowest jobless rate since the global financial crisis of September 2008. More jobs were created in the postal, courier service, wholesale, and cleaning sectors in the January to March quarter. However, the underemployment rate – which measures those who work a few hours each week only – increased from 1.7 per cent to 1.8 per cent in January-March. This was because the number of job losses in the wholesale and construction sectors increased. Secretary for Labour and Welfare Matthew Cheung Kin-chung said the January-March period saw employment numbers rise by 1,800 compared with the December-February period. Cheung said the short-term outlook looked positive, however. “In view of the still strong economic performance and positive hiring sentiment in the corporate sector, the unemployment rate is likely to remain at low levels in the near term,” he said. The territory’s jobless rate rose in the year following the global financial crisis in 2008. It peaked at 5.5 per cent in August 2009.

The government on Tuesday approved a 3.6 per cent fare rise for Kowloon Motor Bus (KMB) routes - starting from middle of next month. But the franchised bus operator said the rate was too small and would not cover its increased fuel costs. Fares on KMB routes would rise by an average 3.6 per cent while routes of its sister company Long Win Bus (LWB), mainly running on Lantau, will increase by 3.2 per cent. The new fare structure will come into effect on May 15. A government spokesman said the two companies had originally proposed greater increases. The KMB asked for 8.6 per cent, while Long Win requested 7.4 per cent. The spokesman said officials had considered several factors in approving the increase including public affordability, future revenue forecasts, and changes in operating costs and revenue since the last fare adjustment in June 2008. However, the bus operators said they were disappointed the rates of increase they had requested were slashed. A KMB spokesman said the increase would be insufficient to allow the company to meet rising fuel prices and inflation. He said that when KMB and LWB applied for a fare increase last July, the price of near-zero sulphur diesel, which is used by both bus fleets, was US$86 (HK$669) per barrel. He said the price had now risen by 60 per cent, to US$138 per barrel. “As fuel expenses accounted for about 18 per cent of KMB’s total operating costs in 2010, the 60 per cent fuel price hike alone will drive up KMB’s total operating costs in 2011 by about 10 per cent, which is far higher than the approved rate of fare increases announced by the government today,” the spokesman said. He said the bus operator had also seen a 3.8 per cent decline in commuters because of the expansion of rail networks since 2008. This has made business conditions more competitive, the bus operator’s spokesman explained. The government spokesman said officials had to minimise the impact of the fare increases on passengers. “In processing KMB and LWB’s application, the government considered there was a case for fare increases for the two franchised bus companies to maintain their financial viability and service sustainability,” he said. “On the other hand, the government understands that, in an inflationary environment, the public is very concerned about the impact of bus fare increases on their livelihoods. “The government has, therefore, handled the fare increase applications with caution,” the spokesman added.

Former district councillors jailed for vote bribes - Electors were offered seafood meals, free flu vaccines, court told - Two former district councillors and three accomplices who spent HK$2 million to bribe about 10,000 voters with seafood meals, free flu vaccines and cash coupons shortly before a 2009 Sha Tin by-election were sent to jail yesterday. Lee York-fai, 42, a doctor and Sha Tin councillor for 13 years, who masterminded what a District Court judge called an "ambitious, elaborate and well-planned" scheme, was jailed in the District Court for a year and nine months on nine counts of corrupt and illegal conduct in his desperate bid to win the election. Chiang Sai-cheong, 54, a former Kowloon City councillor for 21 years, was jailed for one year for assisting Lee in his corrupt conduct. As many 10,000 of 12,164 potential voters in the by-election were bribed and about 5,000 voted on polling day, the court was told. The pair and their three accomplices were together found guilty of 10 charges in relation to corrupt and illegal conduct in the two months leading up to the poll on March 29, 2009, for the Mei Lam Estate seat in Tai Wai constituency. The court heard that the five set up a welfare institute to hand out free flu vaccines, cash coupons and books to potential voters. They also took residents of the estate on a day trip on election day and treated them to lavish seafood meals at a nominal charge, with all expenses paid in the name of their bogus welfare institute. Judge Douglas Yau Tak-hong said he had to pass a deterrent sentence and rejected pleas for suspended sentences, despite Lee and Chiang's contribution to the city as district councillors for years. "The court has to send a clear message that corruption is not accepted. Corruption will hinder democratic development and negatively affect society," Yau said. "I must pass a deterrent sentence. A lenient sentence would become an international joke." The judge said elections were the foundation of a democratic society and every citizen was responsible for keeping them clean. The crime was serious, he said, because the welfare institute was set up in a very short time and was well-organised and the campaigning expenses reached HK$2 million, which was about 40 times the statutory limit on such spending. He criticised Lee for breaking the law knowingly. Despite the big spending, Lee secured just over 700 votes to the 2,820 won by the Democratic Party's Leung Wing-hung. Simon Liang Chun-yip, 40, who was the chairman of the welfare institute and Cheung Shing-kai, 43, who sponsored the illegal activities, were each jailed for 21 months. Yu Wai-chi, 36, a member of the welfare club, was jailed for a year. The court heard that as Lee was designated candidate No1 in the by-election, staff at the welfare group repeatedly chanted "China is No1," "Health is No1" and "Hong Kong is No1" at 12 seafood banquets held for potential voters. The banquets cost more than HK$1 million, but as many as 7,000 potential voters were each charged only HK$20. On polling day, the five arranged for 10 buses to take 500 Tai Wai residents on a day trip. When the estate residents were being taken home, they were first dropped off near a polling station where Lee's campaigners were waiting for them. The court was also told that almost 3,000 people took part in a local tour that was organised by the welfare institute. Lee was previously embroiled in election scandals and expelled by the Liberal Party for insisting on taking part in the Mei Lam Estate poll. In January last year, he was struck off the medical register for a year for issuing two untrue and misleading certificates of attendance to a patient, breaching professional conduct.

Construction work on the giant bridge linking Hong Kong to Zhuhai and Macau may be further delayed after the High Court ruled an environmental impact assessment was not done properly. The judge ruled in favor of Tung Chung resident Chu Yee-wah, 65, who filed a judicial review. Court of First Instance Justice Joseph Fok ordered the permits for some infrastructure work granted by director of environmental protection Anissa Wong Sean-yee in 2009 to be quashed. Justice Fok said the absence of an analysis of the environmental conditions without the project in place in the assessment reports means they do not comply with a government technical memorandum and the study briefs of the project. "It therefore follows that the director had no power to approve them, nor did she have power to grant the environmental permits" for the parts of the project questioned. He said it is "highly material" for the director and public to know the predicted nitrogen dioxide levels with and without the projects in place so that the director can determine whether those increases are acceptable. In so doing, he said, the public can be made aware of the extent to which the proposed project will change the environmental conditions. The Environmental Protection Department said it will study the judgment and seek legal advice on its next step. Hong Kong construction work on the bridge was scheduled to start early this year and be completed by 2016. A spokesman for the Transport and Housing Bureau said: "We will continue to press ahead with the advance works of the local projects, and will look into ways on how to carry forward the works - such as to proceed or complete the works in phases - to endeavor to tie in with the target of completing and commissioning the bridge in 2016." The assessment reports are on the boundary crossing facilities to be built on reclaimed land in the northeastern waters near Chek Lap Kok and a nearby link road. Construction was due to start in the third quarter last year but has not yet started, while the link road was slated to be built from this year. A member of the Legislative Council's panel on transport, Lau Kong-wah, said the later the start of the construction work, the higher the cost may go. Another panel member, Wong Sing- chi, said the government should not appeal the decision and instead fix the problems in the environmental assessment as soon as possible. Solicitor Wong Hok-ming, who represented Chu, said he is satisfied with the ruling. Although the bridge will enhance the economic development of the Pearl River Delta, he insisted the environmental impact assessment of such a large-scale development must not be "carelessly done." Wong, a member of the Civic Party, denied Chu has any political affiliation, though she had volunteered for the party.

MGM China, a Macau casino and hotel co- owned by tycoon Stanley Ho Hung-sun's daughter Pansy Ho Chiu-king and MGM Resorts International, will list in May. Expected to raise about US$1 billion (HK$7.8 billion), the firm's listing hearing is scheduled for Thursday next week. Meanwhile, Hui Xian REIT, the first local yuan-denominated initial public offering, saw its international placement fully covered. But local brokerages say margin financing orders total only HK$662 million, making up just 29.7 percent of the retail tranche. The real-estate investment trust closes its retail books on Tuesday. Chinese restaurant chain Tang Palace (1181) surged 27.27 percent to HK$2.10 each on the grey market yesterday from the offer price of HK$1.65, according to Phillip Securities. Shareholders posted a paper gain of HK$900 per board lot of 2,000 shares. In other action now taking shape: Shanghai Pharmaceutical plans to sell 665 million H shares to raise up to HK$14 billion. Shanghai property developer Cifi Group intends to raise up to US$600 million (HK$4.68 billion) this month. Mainland swimsuit maker Hosa plans an IPO in the third quarter to raise US$100 million. Yuanda, which makes curtain walls for building exteriors, wants up to HK$4.17 billion from selling 1.5 billion shares. Expect a May 6 float. 

 China*:  April 22 2011

About 7% of China's foreign trade in the first quarter was done in transactions denominated in yuan, up from 0.5% a year earlier, illustrating the Chinese currency's rapidly growing—though still small—international role. China's banks handled a total of 360.3 billion yuan ($55.2 billion) in cross-border trade deals denominated in the Chinese currency in the first three months of the year, Xinhua news agency reported Monday, citing a central-bank official. The volume was up from 309.3 billion yuan in the fourth quarter of 2010, or 5.7% of foreign trade, and was nearly 20 times the 18.4 billion yuan in such deals.

Spring Air plans overseas JVs - Spring Airlines, China's first budget airline, is hoping to set up joint ventures in Japan and South Korea to expand its presence in the neighboring markets, said the carrier's chairman of the board. The Shanghai-based airlines, the aviation subsidiary of Shanghai Spring International Travel Service, will become the first budget airline in China to set up an overseas joint venture. The company is also scouting for local partners in South Korea, Hong Kong and Macao, said Wang Zhenghua, chairman of the board of the airlines, on his personal blog last week. The move is to grab more market share and ease bottlenecks, such as shortage of pilots, during its current fast development, Wang said. "To set up a joint venture in Japan, where pilots are relatively abundant, will boost business in Japan and increase the number of routes between China and Japan, and Japan and South Korea," he said. But Zhang Wu'an, spokesman for Spring Airlines, told China Daily on Monday that the plan is still in its infancy and it is too early to reveal any details, despite the company's confidence in the Japanese market. Zhang Lei, an aviation analyst at Citic Construction Co Ltd, said among international routes, competition on flights to Japan and South Korea is less fierce than those to the US and Europe, while flights to North Asian countries are still profitable given its short distance. Zhang said that a local partnership will be a boon to a budget carrier such as Spring Airlines by providing more access to market resources and local customers. On July 28, Spring Airlines launched its first international route, connecting Shanghai and Japan's Ibaraki Airport, about 80 kilometers away from Tokyo. On Sept 28, the airline kicked off its route from Shanghai to Hong Kong. Established in 2005, the budget carrier has a fleet of 22 Airbus A320 aircraft, with passenger occupancy of more than 95 percent. Its proposed second route to Japan - between Shanghai and Takamatsu - was scheduled to begin on March 27 with four flights a week, but it was postponed because of the recent earthquake. Additional routes to Honshu, Hokkaido, Kyushu and Shikoku are in the pipeline. Other routes linking South Korea, Southeast Asian countries and Russia are also in the planning. Given the frequent business and leisure travel between major cities in Japan and China, the popularity of such air routes make them stimulating investments, according to Spring Airlines. Japan's leading air carrier ANA was reported by China Business News in February to be planning a budget airline joint venture based in Osaka by September, with investment from First Eastern Financial Investment Group in Hong Kong.

For generations, pecan prices have fallen with bumper crops and soared with lousy ones. But lately, they've only been going up. A pound of pecans in the shell fetched $2.14 on average last year, according to the U.S Department of Agriculture, nearly double what they brought three years earlier. The reason: The Chinese want our nuts. Five years ago, China bought hardly any pecans. In 2009, China bought one-quarter of the U.S. crop, and there's no sign demand is abating. At a Carrefour store near Beijing's Sanyuan Bridge, Liu Wei, a 61-year-old retired chemistry teacher, is buying a 260-gram (9.1-ounce) bag of Orchard Farmer U.S.-grown pecans for 38 yuan ($5.78). That's nearly six times Beijing's official minimum hourly wage. "We used to eat only walnuts, and then we saw on TV that pecans are more nutritious than walnuts," she says. "Pecans are very good for the brain. We older people should eat more pecans so that we don't get Alzheimer's," Ms. Liu adds. "My husband has cardiovascular disease, and Beijing TV said eating pecans can help." She has asked her pregnant daughter-in-law to eat two pecans a day because, she says, "pecans are very good for baby's brain development." Pecans offer a case study in how China is reshaping entire industries for its trading partners—and not only by exporting goods made by its low-wage workers. Nearly $1 of every $5 China spent on U.S. items last year went to buy food of some sort, $16.6 billion worth, according to the U.S. Department of Commerce. U.S. exports of goods of all sorts to China more than doubled between 2005 and 2010. Exports of crops and processed foods—soybeans, dairy, rice, fruit juice—more than tripled. Exports of pecans rose more than 20-fold. "What's changed in our business?" asks second-generation pecan merchant and sheller George Martin, president of Navarro Pecan Co. in Corsicana, Texas. "The Chinese entered…and they have been getting bigger and bigger and bigger."

China is striving to increase the average Chinese wages by 15 percent annually in a bid to achieve a two-fold increase in pay by the end of 2015, the Ministry of Human Resource and Social Security (MHRSS) said according to a report in the Beijing Times Tuesday. Yang Zhiming, vice-minister of human resources and social security, speaking during a national labor relation conference Monday, said 13 provinces have raised their minimum wage by an average of 22.8 percent, with more cities likely to see a pay raise within the year. Addressing the widening income gap between the wealthy and the poor, Yang said the income of officials should be transparent and payment regulations should be re-examined for people with a high income. The report says heads in 90 percent of major Central State-Owned Enterprises can earn in excess of a million yuan a year. Yang said the 12th Five-Year Plan (2011-2015) is therefore set to narrow the income gap and re-distribute human resources and money among the high wage earners. The problem of migrant workers failing to get paid on time will also be addressed by the newly-revised Criminal Law, which added "malicious arrears of wage crime" into its articles thanks to the ministry's lobbying the Standing Committee of National People's Congress earlier this March during China's "two sessions." "We'd spare no effort step by step to ensure there's no wage-arrears in China by the end of 2013," Yang said.

Fire put out before reaching Mount Tai - Fire is seen burning on top of a mountain near Shandong's capital city of Jinan, April 18, 2011. Firefighters extinguished a raging mountain fire Tuesday, stopping it from reaching the tourist resort of Mount Tai in East China's Shandong province, local authorities said. No casualties or serious property damage were reported except for a single storehouse, which was completely consumed by the fire, said local firefighting authorities. The fire, boosted by strong winds, moved toward Mount Tai after it broke out in the mountainous area near Shandong's capital city of Jinan around 9 am Monday, forcing the evacuation of 1,000 villagers. More than 17,000 people were mobilized to help extinguish the fire, said the firefighting authorities. Mount Tai, one of China's Five Sacred Mountains, holds great historical and cultural significance. Its peak, referred to as the "Jade Emperor Peak" is approximately 1,500 meters above sea level.

Dog rescue sparks pet law debate - A Beijing animal lover who stopped a shipment of dogs on their way to hotpot restaurants in North China has told METRO how he acted in the heat of the moment. An Lidong, who works for a foreign-owned company, attracted the help of at least 200 netizens last Friday when he blocked the truck carrying the animals at an expressway toll booth in Tongzhou district. "I was driving home and the idea just struck me," he said in a phone interview on Monday. "I'd known there were trucks transporting dogs on the Jingha Expressway for a long time. Luckily, that day, I saw a shipment. I turned on my lights and I managed to stop the truck; then I posted the news on my micro blog." Animal rights campaigners flocked to his aid and staged a 15-hour standoff. After negotiations, the logistics company agreed to release the dogs in exchange for 115,000 yuan put up by the Lee Pet Vet animal hospital and Shangshan Foundation, an animal rights charity. "It was one of the people who arrived that suggested we take the dogs to the China Small Animal Protection Association (CSAPA) shelter," added An. Instead of heading to dinner tables in Jilin province, most of the 460 dogs were instead transferred to the association's Beianhe base in Haidian district. The worst injured were sent to animal hospitals across the capital, while at least 10 were already dead. The incident has sparked a nationwide debate over the consumption of dog meat, with campaigners quick to point out that, although many pets were saved from the plate last week, many more are no so lucky. "We saved a truck of lives, but the sad fact is this keeps happening every day," said Lu Di, 80, director and founder of CSAPA. "Since last Friday, there have been already two more shipments of dogs by the same route. We feel powerless to help those all poor creatures." Almost all of the animals rescued were suffering dehydration, malnutrition or infectious diseases. One had fractures to all four legs, while another even had pneumonia. Roughly 30 percent of the dogs are expensive breeds with nametags and bells, while the majority are tame, which means they are likely stolen family pets, added Lu, a retired biologist at Remin University of China. "It is time to show our attitude and determination, and we hope the government will take the incident seriously and quicken the legislation of small animal protection laws," she said. "It's more than 100 years since Britain passed the world's first animal protection law in 1888, but China still has no such laws. "A friend of mine from Britain was so shocked to learn that golden retrievers and huskies are eaten in China because they can be ideal guide dogs. There are much more restaurants in Beijing selling dog meat than eight years ago. We frequently talk about building a civilized society, so shouldn't we quit this inhumane habit first?"

Hong Kong*:  April 21 2011

Legal changes proposed in the wake of last year's scandal over the sale of personal data by the issuer of the Octopus smartcards leave what critics - including the privacy commissioner - say is a big loophole that still leaves consumers' data at risk. In amending the privacy law, the government has backed away from an "opt-in" approach outlawing the use of data without a customer's clear consent, saying so few would give this permission that it could kill off the direct-marketing industry. It has chosen an opt-out approach where a consumer would be deemed to have consented unless stated within a specified period. Privacy Commissioner Allan Chiang Yam-wang said this "would in effect legalise the sale of personal data". "The commissioner considers that an opt-out approach is out of keeping with the strong public distaste expressed after the Octopus incident against the sale of personal data without the data subjects' consent," his office said in a statement. Democratic Party legislator James To Kun-sun said many people did not have time to read the small print on forms or ignored direct mail. "So, in such circumstances, is it fair to presume we are very pleased to allow the company to use our personal data?" The proposed changes seek to tighten regulations to protect privacy and make sales of personal data a criminal offence, with a maximum penalty of a HK$1 million fine and five years in prison. Explaining the opt-out approach, the report says: "If the data subject does not respond to the data user, the data user may deem that the data subject has not opted out if no opt-out request is received within 30 days after the information and option are given to the data subject." The undersecretary for constitutional and mainland affairs, Adeline Wong Ching-man, said this was aimed at striking a balance between the protection of privacy and allowing room for businesses to operate. "If the opt-in system is adopted, the opt-in percentage will be extremely low and this could kill the direct marketing industry, which has been creating employment opportunities and contributing much to the Hong Kong economy," she said. The review of the privacy ordinance, which was enacted in 1996, was triggered after public uproar over the sale by management company Octopus Cards of the personal information of millions of its clients to business partners. Octopus Cards at first denied the sale but later admitted it had made HK$44 million by selling cardholders' data. A later inquiry found some of the company's business partners had resold the information. There were calls to give the privacy commissioner more power to investigate complaints and launch prosecutions. But such views were rejected by the government. Meanwhile, the Legislative Council secretariat said it had now put up notices after eight surveillance cameras were discovered to have been installed on and around the council building. Two other temporary cameras installed by police to monitor anti-budget protests have been removed.

Rebecca Huang, one of the two directors on the board appointed by tycoon Tsai Eng-meng, leaves the ATV building in Tai Po, accompanied by a lawyer. A long-standing row among ATV shareholders was reignited yesterday. A director of the broadcaster's board representing the camp of Taiwanese snack tycoon Tsai Eng-meng flew in from the island and went to the TV station's headquarters in Tai Po, accusing it of withholding information from the board. Rebecca Huang Bao-huei, one of the two directors on the board appointed by Tsai, also accused the broadcaster of violating its company articles by not calling a board meeting in over three months. She met the station's marketing and sales senior vice-president Stephen Luen Chun-kwok, but came away empty-handed and frustrated. "He said something, told [us] nothing, and gave [us] nothing. He asked us to give them a few more days for communication," Huang said. Huang's action came after fellow ATV director Kevin Tsai Shao-chung, also appointed by Tsai, repeatedly tried without success to contact ATV's management in the past six months. He has been seeking access to board papers and other corporate information ever since the Broadcasting Authority forced Tsai Eng-meng out of the game by approving Hong Kong businessman Wong Ben-koon's acquisition of 52.4 per cent of ATV's voting shares. Antenna Investment - a company jointly owned by Tsai and Payson Cha Mou-sing and Johnson Cha Mou-daid - owns the rest of the shares. Tsai only owns 49 per cent of the voting shares of Antenna. Huang said she and Kevin Tsai had been trying to get the facts of the company's financial and operational status. Other directors, including Payson Cha and Peter Brown, appointed by the Chas, also demanded that board provide the information, but their demands were not satisfied. Tsai Eng-meng's office said in a statement yesterday: "ATV deliberately ignored Mr Kevin Tsai's right to the full and proper information and refused to provide him with up-to-date ATV financial and corporate information." Tsai also expressed "deep concern" over ATV's situation and supported the directors' action. ATV pointed to a current lawsuit involving Tsai, the Chas and ATV, which allowed the broadcaster to withhold the information requested by Kevin Tsai and Huang. An ATV spokesman said the matter was being handled by its legal advisers and would make no further comment. Kevin Tsai's legal advisers last week sent a letter to the board protesting over its corporate governance practices, including "the failure to call a meeting of the board as required and the apparent inability to provide clarification on whether ATV was [or is] a part of a consortium bidding for a piece of prime property in Beijing". Kevin Tsai gave the board until noon to comply, or else Huang would take action to come to collect the information in person. At about 11.45am, Huang showed up at ATV's Tai Po plant, arriving straight from the airport from Taiwan, accompanied by a lawyer. She said that although she was a director on the board, she had no clue about the company's operation. "We still do not know who Wong Ben-koon is," Huang said. Wong Ching, the mainland property tycoon who has been acting as ATV's front man, previously told the media that he was pumping HK$20 million each month into the struggling TV station. The Broadcasting Authority said that neither the Broadcasting Ordinance nor the licence conditions applicable to ATV, a domestic free television licensee, specify the frequency of board meetings.

The multibillion-dollar bridge being built across the Pearl River estuary might be delayed for months after a court quashed the environmental chief's decision to approve key elements of the Hong Kong section. The Court of First Instance ruling yesterday was in response to a judicial review brought by retired Tung Chung resident Chu Yee-wah, 65, who has diabetes and a heart condition. She contended that the construction and operation of the projects would affect her health. The court said Anissa Wong Sean-yee, director of environmental protection, had no power to grant the environmental permit for construction and operation of the Hong Kong-Zhuhai-Macau bridge boundary crossing facilities and a 12-kilometre link road. Mr Justice Joseph Fok ruled that the absence of a separate analysis of likely environmental conditions without the projects meant the impact assessment reports approved by Wong in 2009 did not meet the required standard. She therefore did not have the power to approve them. Fok said the quashing was not a judgment on the merits of the project. "Once the adverse environmental impact of the projects are properly assessed and presented in compliant environmental impact assessment reports, those will be the decisions for the director and not for the court." The Environmental Protection Department said it was seeking legal advice. But whether it appeals or complies with the ruling, it will delay the start of work on the Hong Kong section of the bridge for which the mainland has already begun building the main span. Complying would mean the environmental permits issued to the Highways Department in 2009 would have to be withdrawn. Adding the missing information would take at least six months. The Transport and Housing Bureau said it would still strive to complete the Hong Kong section on time and would study phasing the construction while pressing ahead with advance work. Counsel for Chu, Philip Dykes SC, argued that the environmental impact assessment reports fell short of the required standard in seven areas. He succeeded on one of the grounds. Fok said lack of the separate analysis meant that the environmental footprint of the projects could not be ascertained. Paul Shieh Wing-tai SC, for the government, argued unsuccessfully that such an analysis was not specifically required. Construction of the Hong Kong section was scheduled to begin at the end of last year and be completed in 2016, but work has yet to begin. The estimated cost of the entire project, including the bridge and its connecting facilities, is 72.9 billion yuan (HK$83 billion). Dr Ng Cho-nam, a former environment adviser who scrutinised the bridge impact report in 2009, said it would be wiser for the government to provide the additional information. "An appeal will be uncertain both in the time needed and the eventual outcome, while it might take as little as six months to bridge the gap of information," he said. It was the second time the department had been defeated in court over the environmental impact assessment process since the law was introduced in 1998. In 2006, the Court of Final Appeal ruled in favour of Shiu Wing Steel over the assessment of an aviation fuel storage next to its factory; the assessment report was later supplemented with an additional study.

 China*:  April 21 2011

Shanghai hopes to set up a tax-free shopping zone for tourists beside its Disney theme park - still under construction - or around Pudong International Airport, mainland media reported yesterday. Municipal Tourism Administration director Dao Shuming was quoted as saying the city was "researching" the possibility of applying to the central government for permission to establish shops offering tax rebates to overseas visitors in light of a trial scheme being piloted on Hainan island. "A tax rebate for tourists is a very good policy," Dao told the Labour Daily. "Tourists would obviously be delighted to buy lots of things while spending a small amount of money. "This will depend on our communication with relevant central government departments." Dao's comments followed reports that the Hainan pilot scheme, implemented in January, could be extended to domestic tourists in time for the May weekend holiday. The Shanghai tourism chief did not specify where in Pudong the tax-free shopping zone would be but suggested it could be in "a resort area". The city's official news portal, Eastday.com, cited a report by the Shanghai Municipal Commission of Commerce late last month as saying the shopping zone was under feasibility study, with sites around the airport and the future Disney park two possibilities being considered. The Disney amusement park and adjacent tourism zone - the 3.89 square kilometre first phase of which will include two hotels, a huge man-made lake and extensive conference facilities - is to be built on the southeastern outskirts of the city. Construction of the 29 billion yuan (HK$34.5 billion) park was officially launched earlier this month and is due to be completed in 2015 or 2016. However, concerns have been raised in Shanghai about the park's chances for success in light of Hong Kong Disneyland's financial difficulties - it has failed to break even in a single year since its opening in 2005. Dao said the Shanghai park - the US-based entertainment giant's third in Asia and sixth in the world - would be distinguished from others due to "Chinese characteristics". "Many residents of the city are worried that this brand is an American brand, and they have already visited the Tokyo one, so there would be no interest in going again," he said. "I think these residents' worries are unnecessary." The Disney park and resort is a core plank of a drive the Shanghai government is making to boost the city's reputation as an international tourism destination over the next five years, to build on the perceived success of last year's World Expo.

Safety check on track for rail - A police officer for the Tongren Railway Station, Guizhou province, checks safety along the line as a passenger train passes in February. The Ministry of Railways has launched a 10-day nationwide safety check following its decision last week to lower the operating speed of high-speed railways for safety reasons. According to a statement on the ministry's website published on Saturday, the check focuses on safety measures along the tracks, including both high-speed and slower railways. Local railway bureaus are urged to patrol lines and check whether all required protective measures are in place, especially at spots where railways cross roads and bridges, and in sections where roads and railways lie side by side, the statement said. All venues that produce or sell dangerous goods but lie too close to rail tracks will also be cleared out, it said. According to China's regulations, areas from 8 to 15 meters on each side of the tracks are special zones where construction and excavation are forbidden. The regulations also ban any production, storage and sale of flammable, explosive and radioactive articles 200 meters from the tracks. Explaining the ongoing safety campaign, the ministry said that the current safety situation along the lines is "severe", but did not elaborate. However, Zhang Junbang, head of the Zhengzhou railways bureau and a deputy to the National People's Congress, said in March that after some new high-speed railways were built, railway workers on regular patrols found that villagers had built pigpens under bridges where tracks run. The illegal construction poses a safety hazard for fast trains, he said. The safety check was kicked off on Friday, the same day President Hu Jintao inspected the high-speed railway in Hainan province in South China. After riding on the island's high-speed railway, Hu urged government departments to "make all efforts to guarantee its safety" and crack down on corruption related to railway construction. The safety check is the second measure targeting safety taken by the ministry in a week, and follows the appointment of the new Minister of Railways Sheng Guangzu, who took on the role on Feb 25, replacing Liu Zhijun. Last Wednesday, Sheng announced that the country's high-speed trains will run at 300 kilometers per hour starting from July 1, instead of the previously announced 350 km/h. The measures are said to make the network operate more safely and provide a wider range of ticket prices due to lower operating costs. "Two new measures in a week concerning railway safety show that the new minister is paying great attentions to high-speed railway safety," Zhao Jian, a transport professor at Beijing Jiaotong University, said on Sunday. "High-speed railways have high risks. If there is any accident on a high-speed railway running at 300 km/h, it could kill hundreds of people, and its impact both at home and globally would be huge," he said. By the end of 2010, China's high-speed rail network reached 8,358 km, the world's longest. "It (the safety check) is the right thing to do, but not enough," Zhao said, expecting that more measures are likely to be taken by the new railway minister in the coming days.

Shenzhen saw just 3.6 per cent growth in container throughput in the first quarter, while the average rise in the major ports was 12.3 per cent in the first two months of the year. The role of Guangdong and Hong Kong as the world's manufacturing and export powerhouses may be on the wane as the mainland's inland cities grow into new manufacturing hubs, according to industry insiders. Weak shipping data for Hong Kong and Shenzhen in the first quarter of this year already shows a decline as the world's leading ports. And an upcoming rail service from central China to Germany could accelerate that fall. Container throughput at the 10 leading mainland ports grew 12.3 per cent on average in the first two months of this year, according to official data. By comparison, the container throughput of Shenzhen, the world's fourth-largest port, rose just 3.6 per cent to 5.1 million 20-foot equivalent units (teus), according to the Shenzhen Ports Association, while cargo throughput fell 2.3 per cent to 50.3 million tonnes in the first quarter. The container throughput of Hong Kong, the world's third-busiest container port, rose 2.4 per cent to 5.6 million teus in the first quarter, according to the Hong Kong Port Development Council. "In the coming years, Hong Kong and Guangdong ports will continue to see weak performance because of the shift of factories away from the Pearl River Delta," said Willy Lin Sun-mo, chairman of the Hong Kong Shippers' Council. In contrast, container throughput in Shanghai, the world's busiest port, jumped 12.3 per cent to 7.3 million teus in the first quarter, while its cargo throughput rose 9.1 per cent to 111.4 million tonnes, according to the Shanghai International Port Group, Shanghai's port operator. Manufacturing in the Yangtze River Delta, served by Shanghai, has not suffered as it has in the Pearl River Delta. That is because Yangtze River Delta companies ship higher-value, less labour-intensive goods and the factories enjoy economies of scale because they are larger than the Hong Kong-owned factories in the Pearl River Delta, Lin said. Douglas Sheridan, a United States shoe trader and a shareholder in HDS Group, a Chinese shoemaker, said: "The southern provinces have lost the manufacturing of shoes, apparel and toys. "In a few years, Guangdong may upgrade to electronics, but I don't think Pearl River Delta ports will be up to the level of the last 10 years. Those days are gone." HDS plans to open a shoe factory in the central city of Chengdu in 12 to 16 months, and its shoe factory in the coastal province of Fujian will become mostly an administrative facility in three to five years, he said. Factories in central mainland cities such as Chongqing and Chengdu will ship goods through Yangtze River ports such as Shanghai and Ningbo, but not Hong Kong or Shenzhen, said Sheridan. "In the short to medium term, Shanghai will benefit a lot from the move of manufacturing inland." Guangdong has lost some ski jacket factories to northern China, which is why northern ports such as Qingdao have enjoyed double-digit container throughput growth in the past few months, Sheridan said. "All the big US buyers are telling Hong Kong manufacturers to move their manufacturing to India," said Lin. "If not, they will have no business." India now accounts for 40 per cent of the cheap garments sold in the US, while Guangdong accounts for only a third, he said. Five years ago, Guangdong accounted for more than half the cheap garments sold in the US, while India accounted for only 15 per cent. Later this year, DB Schenker hopes to gather enough customer interest to start a regular container rail service between China and Germany once or twice per week, said a DB Schenker spokesman. The rail service would take 16 days, while the same journey by sea will take 35 days, he said.

The rapid accumulation was putting pressure on the sterilisation operations of the People's Bank of China, he said. "Foreign-exchange reserves have exceeded the reasonable levels that we actually need," Zhou said. "The rapid increase in reserves may have led to excessive liquidity and has exerted significant sterilisation pressure. If the government does not strike the right balance with its policies, the build-up could cause big risks," he said, although he did not elaborate. Foreign-exchange reserves rose US$197 billion in the first quarter, reflecting global imbalances that Group of 20 finance ministers agreed last week to address through deeper scrutiny of their economic policies. China's surging holdings are fuelling inflation that accelerated last month to the highest in 32 months, prompting the government to boost banks' reserve requirements on Sunday for the fourth time this year. The world's second-biggest economy grew 9.7 per cent in the first quarter from a year earlier, faster than economists had forecast, and consumer prices climbed 5.4 per cent in March, Beijing said last week. Currency holdings jumped by the second-biggest amount on record in the January to March period, even as the nation reported its first quarterly trade deficit in seven years. Economists attributed much of the increase to capital inflows betting on the appreciation of the yuan. Zhou said speculative inflows of funds were not a major concern. Still, liquidity was excessive and the government needed to "remain vigilant" over the property market and take "counter-cyclical" measures to curb surging real-estate prices, he said. Diversifying the nation's reserves through investment agencies such as China Investment Corp, the country's sovereign wealth fund, was a consideration, Zhou said, while declining to answer questions on whether CIC will receive more capital from the foreign-exchange holdings. "One option is to consider some new types of investment agencies which focus on new investment areas," Zhou said. "It's inappropriate for me to detail the next stage of the plan, but the direction is clear." Fitch Ratings lowered its outlook on China's "AA-minus" long-term local-currency rating to negative from stable last week, the first time in 12 years the nation's debt rating faces a cut. Fitch said there was a "high likelihood of a significant deterioration" in banks' asset quality after a record jump in lending in the last two years. "The ratings given by international credit agencies shouldn't be taken too seriously," Zhou said yesterday. "They may have good insights on many projects and companies but it's hard for me to comment on their sovereign ratings." Loans to companies and households rose to about 140 per cent of the gross domestic product last year from 111 per cent in 2008, Fitch said. Much of the increase was linked to property lending and credit to the local governments' financing vehicles. Zhou said letting local authorities sell debt, whose repayment could be partly supported by property tax revenues, was a subject that "merits discussion", although such a move would require a change in the law.

China needs to reduce its foreign-exchange reserves as they exceed the level the nation requires, central bank governor Zhou Xiaochuan said. The management and diversification of the holdings, which topped US$3 trillion at the end of March, should be improved, Zhou said after a speech at Tsinghua University in Beijing yesterday. Beijing is poised to raise power prices to address widening losses among power-generating companies but the size of the increase will be less than the industry hoped, according to analysts and business insiders. Beijing has tentatively decided to raise the prices coal-fired plants charge to power distributors by an average of 7.3 yuan (HK$8.68) per megawatt-hour, or 1.9 per cent, according to a report by Pierre Lau, head of Citi's Asia utilities research. Of that amount, 2.7 yuan per MWh, or 0.7 per cent, will take effect retroactively from January last year, and 4.6 yuan per MWh, or 1.2 per cent, starting this month. Of the nation's 30 administrative regions, 25 will see a retroactive rise from January last year, of which 12 will receive both the retroactive increase and another gain this month. Three senior officials at listed power producers said they had been informed about the price rises, but had nAluminiumot yet got official documents. The move was designed to stem losses at power plants mostly in inland provinces in the northwest. Coal-rich Shanxi province will see the biggest increase, totalling 8.3 per cent, followed by 7.2 per cent in Gansu province, 6.1 per cent in Shaanxi and 5 per cent in Shandong. Zhejiang and Jiangsu, where coal-fired power generation is still profitable, were left out. Lau estimated the adjustments would translate into a 3 per cent average price rise for Huadian Power International, followed by 2.2 per cent for Datang International Power Generation (SEHK: 0991), 2.1 per cent for China Power International (SEHK: 2380) Development, 1.6 per cent for Huaneng Power International (SEHK: 0902) and 1 per cent for China Resources Power Holdings (SEHK: 0836). For each percentage point rise in power prices, Huadian is estimated to see a 102 per cent net profit jump, followed by 21 per cent for Huaneng, 12 per cent for Datang, 10 per cent for China Power and 6.9 per cent for China Resources (SEHK: 0291). The power price increases will not affect retail prices. The nation's power distribution monopolies State Grid Corp and China Southern Power Grid - both wholly state-owned - will absorb the costs. More than half the nation's 436 coal-fired power plants, which are controlled by the five state-owned generating groups, are said to have been losing money because of rising coal prices.

Hong Kong*:  April 20 2011

Best actress Carina Lau (Detective Dee) and best actor Nicholas Tse (The Stool Pigeon) at last night's Hong Kong Film Awards. Filmmaker Tsui Hark was the big winner at last night's 30th Hong Kong Film Awards, as the city's A-list movie stars braved an amber-signal rainstorm to attend the annual event in Tsim Sha Tsui's Cultural Centre. Tsui's Tang dynasty thriller, Detective Dee and the Mystery of The Phantom Flame, clinched six of categories, including best director and best actress for his leading lady, Carina Lau Ka-ling. Lau won her award, after being nominated for the sixth time, for her portrayal of China's first empress, Wu Zetian. "I've prepared a speech six times but never got a chance to say it the previous five times. I never knew I would feel so happy now that I finally got it," she said, Best actor went to Nicholas Tse Ting-fung for his portrayal of a police informant in Dante Lam Chiu-yin's The Stool Pigeon. Gallants was the other bigger winner of the night, with four awards - best film, best supporting actor, best supporting actress, and best original score. It has been the surprise hit of the year - an entertaining kung-fu comedy with its abundance of old-school Hong Kong movie references. Gallants producer Gordon Lam Ka-tung thanked Andy Lau Tak-wah, who invested in the film, for believing in the nostalgia action comedy cast with martial arts veterans such as Chan Koon-tai and Leung Siu-lung. "It's the Hong Kong spirit behind the film that matters," said Lam. The film beat Detective Dee, Ip Man 2, Reign of Assassins and The Stool Pigeon in the best film category. Teddy Robin and Susan Shaw Yin-yin, Gallants' supporting actor and actress, trembled with excitement after winning their awards. Robin, both an actor and a composer, said backstage: "I've received nominations for my composing before but tonight I won't be humble - I can really act." Robin came up to the stage for the second time to pick up the best original film score with Gallants' co-composer Tommy Wai Kai-leung. Referring to his own, sometimes troubled past and to his actor-father, Patrick Tse Yin, Nicholas Tse said: "My dad always tells me how he starred in hundreds of films and TV series when I was still a kid. "Today, I can finally put my best actor trophy in front of him. I hope you can forgive me, a once messed-up kid." He also thanked his actress-wife, singer Cecilia Cheung Pak-chi, who was crying in the audience. The couple had said on the red carpet that if Tse won, they would consider having more children. Pang Ho-cheung's Love in a Puff, which portrays a romantic relationship between two chain smokers, won the best screenplay. The best Asian film went to Japan's Confessions, a dark drama directed by Tetsuya Nakashima, starring Takako Matsu.

Restaurant's fish tanks bring success in Sydney - Hong Kong couple introduces Australia to the real deal - Eric Wong and wife Linda established the Golden Century Group of restaurants in Sydney 22 years ago, revolutionising the Chinese restaurant business there with live fish tanks. King Crab with steamed eggs is a Golden Century signature dish. When Eric Wong Kam-wah first installed fish tanks in his Sydney restaurant two decades ago to introduce Hong Kong-style live seafood dishes to Australia, his friends teased him, saying he might end up having to keep ornamental goldfish in them. "My friends and some of my staff said live seafood wouldn't sell well in Sydney because Westerners were used to frozen fish and prawn and not interested in eating fresh fish, lobsters or crabs," Wong said in his Golden Century Seafood Restaurant in Sussex Street in Sydney's Chinatown. But Wong had the last laugh. Twenty-two years later, the initial six fish tanks are now 24, capable of holding one tonne of live crabs, fish, shrimps and mega-size king crabs, ready for selection by diners. Steamed fish, poached shrimps, spicy crabs or king crabs in their shells with steamed egg are popular. Until Wong and his wife Linda Wong Kam Yin-ling introduced Hong Kong-style seafood dining, Chinese restaurants in Sydney mainly served dishes favoured by Westerners such as sweet and sour pork, fried rice and spring rolls. When the couple and their two sons emigrated to Sydney in 1989 to take over a restaurant, they found chefs used frozen shrimps or fish fillets as ingredients. This is heresy in Hong Kong where diners expect to select their seafood while it is still swimming. The Wongs' trailblazing work has paid off: Golden Century is a landmark in the Sydney's Chinatown, serving thousands of customers seeking authentic Cantonese cuisine. Customers include celebrities and high-ranking officials: Hong Kong Chief Executive Donald Tsang Yam-kuen, former Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong and movie stars Andy Lau Tak-wah and Jackie Chan have all visited. Both the Wongs were born and bred in Hong Kong. After finishing school, Eric became a banker in the 1970s, staying in the sector for 19 years to become head of the Shenzhen branch of a commercial bank. Linda helped run a restaurant in Hung Hom. The couple said their decision to move to Australia had nothing to do with the 1997 handover to China, but related to their sons' education. Wong wanted Alex, 12, and Billy, six, to study in Australia. "My friends said if I spent the minimum A$500,000 [HK$4 million] under the investment migration scheme to migrate to Australia, my sons would enjoy free education in Australia," Eric said. "This was cheaper than the tuition fee I would have needed to pay if they were overseas students studying in Australia." So the couple decided to migrate to Sydney in 1989, investing A$600,000 to take over Golden Century, a 180-seat Chinese restaurant founded by Chinese immigrants. A year later, the couple teamed up with friends in Hong Kong to buy a 20,000-square-foot property with 600 seats. This was when they decided to revolutionise the Sydney restaurant scene with fish tanks and live seafood. Now they have two restaurants and a third is due to open in September. Their son Alex is an interior designer who is married with a daughter, and Billy works for Credit Suisse in Australia.

Overseas and larger domestic retailers are being lured to Hong Kong malls by the acceleration in local retail sales and the growing number of wealthy mainland shoppers. Luxury brands to force local retailers out of prime sites - Global giants have clout and ability to win bidding battle. A sensible pair of shoes or basic household items may become increasingly hard to find in Hong Kong's prime retail districts as wall-to-wall luxury brands force out local retailers. Property consultants say home-grown retailers are being driven out of Hong Kong's prime shopping districts by big- and mid-range luxury brands which are rapidly building up their presences in the city. Lured to Hong Kong by the acceleration in local retail sales and the growing number of wealthy mainland shoppers who visit the city, overseas and larger domestic retailers are bidding aggressively for prime locations within which to expand their retail footprint. Since new supply is limited, less competitive players are being forced to move to suburban shopping centres where rents are lower. With their business network and financial ability, big global brands usually outbid local players, said Joe Lin, senior director of retail services for CB Richard Ellis. The result is already visible in the shift in the retail mix in Hong Kong's leading shopping malls and shopping precincts toward international luxury brand retailers. "So local retailers will disappear from prime shopping districts and they will be forced to move to sub-districts," Lin said. Given the city's cosmopolitan image as well as product reliability, Hong Kong has long been attractive to luxury brand retailers. That can be shown in the property consultant's newly released survey. Hong Kong has maintained its position as the most popular destination for luxury retailers, with 84 per cent of the luxury brands covered in the 2011 edition of CBRE's "How Global is the Business of Retail?" present in the city. CBRE's annual survey - now in its fourth year - mapped the global footprint of 323 of the world's top retailers across more than 200 cities to identify trends in global retail expansion at national and local levels. Hong Kong has ranked number one in the past four years in terms of having the highest percentage of global brands present in the city. "Hong Kong's ranking reflects the continuing love affair that local residents and increasingly visitors from mainland China have with luxury fashion," said Nick Axford, head of Asia Pacific research for CBRE. Hong Kong's retail sales have been driven higher by the improving domestic environment and the robust economic growth on the mainland. More than 22 million mainland tourists visited Hong Kong last year, accounting for 63 per cent of the total number of visitor arrivals. Apart from luxury brands, there is a new wave of mid-ranged international brands coming to Hong Kong, a new source of pressure to drive local players out of the prime shopping areas. "Rental is not their major concern. Because of the Hong Kong currency, international brands are willing to pay the rising rents in Hong Kong. It is limited space that is the issue," Lin said. Lin recently introduced some mid-ranged global brands to landlords of Hong Kong's major shopping arcades. But even though the clients were interested in having a local presence, they could not find space at the time. When will home-grown retailers be totally extinguished from prime shopping precincts? Helen Mak Hoi-lun, director of retail services at Colliers International, said there was no easy answer to that question. "But the trend is under way. We have seen some home-grown fashion retailers such as G2000 facing mounting competition from international brands such as Zara and H&M," Mak said. "I recently brought one international retailer to visit the major shopping malls. They were curious to know why most of the shops were global brands," she said. Other examples of local retailers being forced out of prime shopping areas include US-based fast fashion retailer FOREVER 21 taking up space formerly occupied by local brand Giordano (SEHK: 0709) in Capitol Centre in Causeway Bay, and German luxury goods brand MCM taking over space previously occupied in Entertainment Building by another local clothing brand, Episode. But some home-retailers that offer iconic cultural merchandise, such as Kee Wah Bakery that sells traditional bakery products such as mooncakes and bridal pastries, may be more difficult to dislodge from their premises, Mak said. Both Lin and Mak believe that the trend will nonetheless continue in the wake of the continued growing retail sales and rising mainland shoppers.

Angela Leong has emerged from a bruising fight with the other members of ailing casino magnate Stanley Ho's family to stand atop one of the world's most lucrative gambling empires. Angela Leong, the youngest of the four women with whom ailing casino magnate Stanley Ho has produced more than a dozen children, has emerged from a bruising fight with his heirs to stand atop one of the world's most lucrative gambling empires. The former dancer, 50 years old, has steadily amassed influence within Mr. Ho's sprawling family, and, following a recent family reconciliation, she now controls a $1.2 billion interest in Mr. Ho's core casino holdings. Ms. Leong fended off a messy public challenge mounted by two of Mr. Ho's other wives and their children to box her out, winning the power to shape the future of Macau's most lucrative gambling operation, which earned $457 million on revenue of $7.4 billion from its 20 casinos last year. The family agreement reached last month allows Ms. Leong to remain as executive director of the Ho-empire flagship SJM Holdings Ltd. for six years, according to people familiar with the agreement, consolidating her influence on the company's board. "For now, it's basically resolved," Ms. Leong said in an interview. "Everybody has their different roles....I manage the casino to figure out how to make it bigger, how to earn more money."

’3-D Sex and Zen’ Opens - The cast of ’3-D Sex and Zen’ at the Hong Kong premiere - The highly anticipated “3-D Sex and Zen: Extreme Ecstasy” had its world premiere in Hong Kong on Tuesday night, giving moviegoers their first peek at what the movie’s producer describes as the world’s first 3-D erotic film. Producer Stephen Shiu Jr. and director Christopher Sun were all smiles as they joined cast members and other guests on a makeshift stage at a busy intersection in the heart of Causeway Bay, one of Hong Kong’s busiest and most crowded shopping, eating and entertainment districts. Hundreds of curious onlookers wielding cameras (video, digital single-lens reflex, smartphones and everything else) clamored with news photographers for a glimpse of the film’s star, Hiro Hayama, and his leading ladies. “It’s exciting,” Mr. Shiu shouted above the noisy crowd before jumping onto the stage with the cast, which shook up bottles of a bubbly drink with the intention of spraying the crowd. (The bottles fizzled.) The idea for the 3-D film came two years ago — as a remake of “Sex and Zen” (1991), which was produced by Mr. Shiu’s father and spawned a cottage industry in Hong Kong of big-screen soft-porn movies. Both films were inspired by a 17th-century erotic novel from Chinese author Li Yu, “The Carnal Prayer Mat.” While the Cantonese-language movie has been the beneficiary of much media attention in recent months, it remains to be seen whether that will translate into box-office success. But on Wednesday morning, a sampling of advance-booking websites in Hong Kong revealed several nearly sold-out screenings for Thursday and Friday nights. Ticket sales could be getting a bump from curious cinephiles in China. According to recent news reports, travel operators are organizing moviegoing excursions to Hong Kong and Taiwan for tourists from the mainland, where strict censorship rules will prevent any screening of the film. “3-D Sex and Zen” opens in general release in Hong Kong on Thursday and Taiwan on Friday. Other markets include Australia, New Zealand, Peru and Europe. Mr. Shiu says he is still negotiating a release date for Singapore, whose censors presumably would require a less sexually charged version. In Hong Kong, it has been rated Category III, which bars anyone under the age of 18 from seeing the film.

In Hong Kong, Ferragamo’s No Prada - The latest fashion in the fashion world has been for companies to go public on the Hong Kong stock exchange, leveraging the story of all those brand-conscious Chinese consumers nearby. First there was cosmetics maker L’Occitane International. And more recently, fashionistas Prada SpA has announced its intention to list in Hong Kong. Hong Kong bankers were hoping to make it a trend with a third fashionable name. But shoe maven Salvatore Ferragamo SpA has officially decided to stick to the catwalks of old Milan with a request to list in Milan, reports The Wall Street Journal. The case for Ferragamo in Hong Kong was strong despite protestations from the company’s chief executive that it was committed to Milan. While Ferragamo doesn’t break down its sales by region, it did disclose that in 2010, Asia, particularly Greater China, accounted for more than 50% of the company’s turnover, helping swing the company to a profit. By contrast, about 40% of Prada’s sales come from Asia. While it might hurt Hong Kong’s pride that it failed to lure a brand that so many locals adore, should Ferragamo investors care?

Hong Kong airport sets new flight movements record - Flight movements at the Hong Kong International Airport in March rose 15.5 percent year on year to a monthly high of 28,140. A new single-day record of 971 flight movements was also set on March 31, breaking the previous record made on April 20, 2008. The airport handled 4.2 million passengers and 369,000 tons of cargo during the month, up 1.8 percent and 6.2 percent, respectively. The growth in passenger traffic was mainly driven by Hong Kong resident travel, which increased 6 percent over the same period last year. Airport Authority Chief Executive Officer Stanley Hui said the strong increase in flight movements was attributable to airlines increasing flights on the back of the robust regional economy, while the moderate growth in passenger traffic reflected partly the immediate aftermath of the recent earthquake and nuclear crisis in Japan, which has led airlines to reduce flights to the country.

Hong Kong Chief Executive Donald Tsang held a meeting with Russian President Dmitry Medvedev at Government House and hosted a luncheon in his honor on Sunday. Both sides agreed to work towards an early start of negotiations on agreements on avoidance of double taxation and investment promotion and protection. They agreed to strengthen collaboration in science, culture and education. They noted the negotiation of an agreement for mutual assistance in criminal matters is approaching conclusion. The value of trade between Hong Kong and Russia grew by more than 62 percent year-on-year, totaling almost 20 billion HK dollars ($2.6 billion) last year. In the past two years both sides have signed a mutual visa-free travel agreement. Hong Kong has launched direct passenger flights to Moscow and both sides have staged various business events in each other's cities. "Another breakthrough last year was the first listing of a Russian company on the Hong Kong stock market. So far two companies with a Russian background have listed here," Tsang said. He welcomed the trend of Russian firms making the most of Hong Kong's capital-raising expertise. He also encouraged Russian firms to issue Renminbi-denominated bonds in Hong Kong and expand their reach on the Mainland through CEPA. Medvedev said Russia is keen to tap Hong Kong's rich experience in financial services to develop its own and wants to see more Russian firms listing in the city, and more participation of Hong Kong companies in his country's economic development. He said Russia-Hong Kong cooperation is becoming a significant component in the strategic partnership between Russia and China. He encouraged Hong Kong businessmen to participate in the implementation of the 2009-2018 Cooperation Program between Russia and China, and Russia's regional development programs.

The Hong Kong's Consumer Council urged caution in making online group purchases on Friday, saying complaints about this form of shopping are rising. Group-buying websites sell vouchers and offer bargains, allowing consumers to sign up for deals that are only activated when a minimum number of sign-ups is reached within a specific time period. Prepayment by credit card or bank transfer is required even before the deal is sealed. The council warned shoppers can be left vulnerable if the websites fail to pay the merchant and run out of business. Most of these websites do not offer a warranty or money-back guarantee. Some impose exemption clauses specifying the operators will accept no responsibility for loss caused by inaccurate information or errors. Consumers should ensure the transaction data is encrypted when making online group purchases and choose a payment method that does not require disclosure of the credit-card information. The council received 11 complaints on the issue in the first quarter this year, two last year and one in 2009. 

Two former district councillors were on Monday sentenced to jail for bribing voters in a 2009 by-election with lavish seafood meals, cash coupons and free flu vaccines. Lee York-fai, 42, a doctor and a councillor with 13 years experience, was jailed for 21 months over 10 charges of corrupt and illegal conduct in the two months leading up to the by-election on March 29, 2009. Chiang Sai-cheong, 54, a former Kowloon City councillor who served for 21 years, was convicted of the same charges and sentenced to 12 months in jail. The District Court heard that the offences took place when Lee was contesting the Mei Lam Estate seat in Tai Wai constituency. The court heard Lee and Chiang set up a welfare institute that distributed free flu vaccines, cash coupons and books to potential voters shortly before the by-election. The pair also provided potential voters with extravagant seafood meals. Lee and Chiang offered these advantages with the aim of inducing voters to vote for Lee in the by-election, the court heard. Lee spent more than HK$2 million on campaigning expenses – 41 times more than the statutory limit of HK$48,000, the court heard. The pair last week pleaded with the court to pass non-custodial sentences, arguing it should take into account their contribution to society and their good character. But Judge Douglas Yau Tak-hong said in passing sentence on Monday that their offences were serious and had involved a large amount of money, local radio reported. Three other accomplices – Simon Liang Chun-yip, aged 40, Yu Wai-chi, 36, and Cheung Shing-kai, 43, – were sentenced to jail terms ranging from 12- to 21-months for helping Lee and Chiang offer advantages to voters.

 China*:  April 20 2011

Nestle, the world's biggest food company, agreed to take a 60 per cent stake in China's Yinlu Foods Group for an undisclosed price, becoming the latest multinational to target China’s fast-growing food and beverage sector. Family-owned Yinlu had sales of about 750 million Swiss francs (US839.6 million) this year, Nestle said in a statement on Monday. Nestle did not disclose financial details of the deal and said it was subject to regulatory approval in China. Yinlu, from China’s southeastern Fujian province, is known for its peanut milk and instant porridge products. Analysts said the deal is most likely to be approved because Yinlu operates in a niche segment of the market despite being a brand with a large regional presence. In last year, China’s regulators killed Coca Cola’s bid to buy well-known juice maker China Huiyuan Juice Group for US$2.4 billion, on monopoly concerns. Huiyuan’s this year revenue was smaller than Yinlu’s at 3.71 billion yuan (US$568 million). “There is a decent chance the deal with get approved because it is not a complete takeover. But there will still be some regulatory scrutiny because right now the government is wary of foreign companies making too much money here,” said Shaun Rein, managing director of China Market Research Group. Marie Jiang, an analyst at Shanghai-based research firm Pacific Epoch, said Yinlu is a giant regional brand, whereas Huiyuan was more famous because it had a larger presence in first-tier cities. Big global food conglomerates have spent the last few years researching and coming up with products for the Chinese market. Earlier in the year, Coca Cola said its made-for-China juice brand Minute Maid Pulpy had become a $1 billion brand globally. The trend is likely to continue as rising incomes spur Chinese consumers to become more selective about the products they use. Analysts said the deal is beneficial to both Nestle and Yinlu. It provides Nestle a way into a different market segment and lower-tier cities. The deal gives Yinlu the expertise, backing of a much bigger brand and exposure to upper-tier cities. Nestle has been operating in China for more than 20 years and employs 14,000 people.

Private jet manufacturers are looking to China for sales to soar. But with undeveloped infrastructure, tight regulations and limited hanger space, it could be a while before the industry is flying high. With the U.S. and European markets taking a hit after the 2008 financial crisis, private jet manufacturers and operators are hoping China’s wealthy buyers will revive business. Last month’s Asian Aerospace International Expo and Congress in Hong Kong featured a stand-alone convention for private aviation for the first time, wooing costumers with 17 planes on display. At the second annual Hainan Rendez-Vous April 1-4, some of China’s richest were flown to the resort town of Sanya on private jets for the four-day luxury show, which displayed jets along with yachts, property, jewelry and wine. The exhibit’s 10 or so planes spurred several sales, according to organizers. 

Hamilton storms to win the Chinese GP - Lewis Hamilton claimed the first race title for McLaren this season as he overtook Sebatian Vettel with only four laps to go to win the Chinese Grand Prix on Sunday.

Photo taken on April 12, 2011 shows the Tianjin Middle School in Ningqiang County, northwest China's Shaanxi Province. The school was built mostly with donation of Tianjin government and put into use in 2009. Three years after the deadly Wenchuan earthquake on May 12, 2008, a total of 66 new schools with advanced facilities have been built and put into use in Ningqiang County, one of the quake-stricken areas in 2008. 

Hong Kong*:  April 19 2011

Hong Kong's first 3-D porn film tops Avatar for first-day take - http://www.vimeo.com/21256891 - Stars Hiro Hayama and Vonnie Lui Hoi-yan attend the launch party in Sham Shui Po. Sex and 3-D have worked their magic as Sex and Zen: Extreme Ecstasy surpassed on its premiere the first-day local box office takings achieved by Hollywood 3-D epic Avatar. The local production, billed as the world's first 3-D soft porn movie, is estimated to have drawn about 30,000 viewers and took in HK$2,785,918 on Thursday, according to the Hong Kong, Kowloon and New Territories Motion Pictures Industry Association. Avatar earned HK$2.5 million on its first day. A mainland couple were caught and fined trying to film the movie with their mobile phones. Two "ladies only" screenings held last night at Times Square and Langham Place were sold out. More women-only screenings will be held during the Easter holiday. "We had responses from a lot of women saying that they wanted to watch this movie, but they did not want to be surrounded by men in the cinema," said the film's producer Stephen Shiu, who initially expected the movie to open by taking about HK$2 million. The HK$25 million production also surpassed the opening-day box office of another category III film Lust, Caution, which earned HK$2,634,133 on its first day. The award-winning movie by legendary Taiwanese director Ang Lee grossed HK$48,758,480. The original 1991 erotic cult sensation Sex and Zen, on which the latest 3-D version is based, grossed HK$1,908,227 on its first day, and eventually took HK$18 million at the box office. "Considering the fact that we are a category III film and we opened on a weekday during the non-holiday season, this is beyond our expectations," Shiu said. With more and more blockbusters being produced jointly by Hong Kong and mainland studios, Shiu said the popularity of his film proved that making movies catering to the mainland market was not the only formula for success. "Because we have freedom of speech, we do not have to follow the mainland market and our film is a good example," he said. The mainland does not have a film classification system and movies with adult content are banned. Shiu said he had gathered from cinema operators that around 20 to 30 per cent of 30,000 viewers on Thursday were mainland tourists. "They cannot see the film in China, and they are curious to see the movie, just like anyone else." The film, based on a piece from classical Chinese erotic literature, The Carnal Prayar Mat written by Li Yu in the 17th century, had apparently drawn attention from a female audience, Shiu sad. He was already thinking about a sequel. The mainland couple caught filming the movie with their mobile phones were each fined HK$2,000. Businessman Wang Manhua, 34, and his wife Zhou Jeihong, 32, pleaded guilty in Kwun Tong Court to possession of video recording equipment in a place of public entertainment. Cinema workers at Kowloon Tong's Festival Walk spotted the couple and two others sitting in the same row filming during an afternoon showing and alerted the Customs and Excise Department. Wang told customs officers who arrived at the scene that he did not know filming was illegal, and that he was only doing it for fun. The prosecution yesterday applied for their two mobile phones to be confiscated, but Wang asked the court if they could keep them. He said his phone contained his bank account details while his wife's phone contained their son's homework. Acting Principal Magistrate Rickie Chan Kam-cheong refused to return the phones as they were used to commit the offence. The movie will be opening in Australia, New Zealand, South Korea, Taiwan, Singapore, France, Italy, Russia and Peru, among other countries.

Kung fu training proves a big hit with cabin crew members - Hong Kong Airlines cabin crew member Lumpy Tang (left) and airline ambassador Rose Chan go through their kung fu training at a martial arts studio in Wan Chai – part of a company initiative to give new recruits the confidence to deal with aggressive passengers. Hong Kong Airlines is asking all new cabin crew members to channel their inner Bruce Lee by undergoing wing chun training, a form of kung fu characterised by short, sharp movements. One new crew member, 22-year-old Lumpy Tang, said she never imagined martial arts training would be part of her job. "We were surprised in the beginning, but after a few lessons we really liked wing chun," Tang said. Tang has yet to start work as she is still undergoing training, but she values her new skills. "You cannot predict what will happen on the plane, so wing chun is good because it's so fast," she said. "I feel safer because I can defend myself and I'm really happy to be one of the first cabin crew to learn wing chun in the world." Eva Chan, the airline's deputy general manager of corporate communication, said all staff had been invited to enrol in the training but it was only compulsory for cabin crew. On average, the airline has about three incidents with disruptive passengers every week, Chan said. Just a fortnight ago, a crew member had to use her martial arts training while on a flight from Beijing to Hong Kong. "One of the passengers was sick but he was probably drunk and felt unwell. The crew member attended to him and she realised her fitness was helping her especially because the guy was quite heavy. "Normally, a female cabin crew can't handle a fat guy, especially if he's drunk, but because of the training, she can handle it quite easily." Katherine Cheung from the Hong Kong Wing Chun Union in Wan Chai was one of the instructors who taught the 23 cabin crew recently. "Wing chun can be used in small, confined spaces so it's suited for an airplane," Cheung said. "It's easy to learn but difficult to master." The idea to incorporate martial arts training came during a company function last year when senior managers watched a wing chun demonstration and a dance performance by cabin crew. A tailor-made course was then developed for the airline. A spokesman for Cathay Pacific Airways (SEHK: 0293) said self-defence was part of the training for cabin crew. "This is just part of the routine training as they may need to restrain unruly passengers," he said.

Hong Kong's hunger for the newest, fastest and prettiest electronic gadgets is so robust that the industry is expected to hit US$3.9 billion this year, but what happens to the older models that are tossed aside? For a city that is struggling to dump its own rubbish in an efficient and sustainable manner, Hong Kong also imports waste from other countries which includes waste electrical and electronic equipment (WEEE). E-waste presents a range of issues because it involves hazardous materials that must be recycled using proper methods. In 2009, Hong Kong generated 72,000 tonnes of electronic waste, up 7 per cent from 67,200 tonnes in 2005. Of the 72,000 tonnes, Hong Kong kept 7,700 tonnes in its own landfills and exported almost 59,000 tonnes to developing countries for reuse and recovery. This is usually done through second-hand dealers. Last week thousands of consumer electronic companies displayed their wares at the spring trade fair at the Convention and Exhibition Centre amid news that sales of one of the hottest items last year, the media tablet, will continue to skyrocket. Figures from IT research firm Gartner last week predicted sales of tablets like the iPad would increase from 70 million this year to almost 300 million by 2015. In Hong Kong, the consumer electronics market is forecast to hit US$3.9 billion this year, while on the mainland it is expected to grow from US$127 billion last year to US$142.2 billion this year, say research firms BMI and GfK. Computers make up more than 54 per cent of the consumer electronic sales in Hong Kong followed by smartphones, digital cameras and tablets and economic woes have done little to curb the desire. "Spending on consumer technologies has done better than spending on all goods in aggregate," said Shawn DuBravac, chief economist of the US-based Consumer Electronics Association. "Over the last 40 years, in good economic years and bad ones, consumers have again and again allocated a growing portion of their spending to consumer electronics." However, the government is still playing catch-up in terms of dealing with electronic waste. "I believe they are not doing enough," said Basil Wai, chief executive of the Hong Kong Electronic Industries Association. "We have many concerns about electronic waste, if we don't treat it properly. Some items we need to treat in Hong Kong, maybe some we can share with the PRC." But this is no longer an option because since January 1, the mainland banned the import of hazardous electronic waste. Last April, the government wrapped up several months of public consultation on a new producer responsibility scheme which proposed visible and invisible consumer fees for proper waste disposal under a "polluter pays" approach. The findings were due out early this year but an Environment Bureau spokeswoman said this was now scheduled for later this year. This delay was not acceptable because Hong Kong desperately needs its own legal framework for dealing with electronic waste, said Friends of the Earth senior environment officer Michelle Au Wing-tsz. "I'm not sure why it's so late. Electronic waste is building up and they are focused on incinerators only."

The port of Hong Kong is about to lose one of its great characters. After four decades ministering to the welfare and spiritual needs of seafarers, Mission to Seafarers chaplain Reverend Peter Ellis (pictured) is retiring next month from the Mariners' Club in Tsim Sha Tsui to the northern English countryside. Ellis' has been a most colourful parish, his daily visits to ships of all stripes in Hong Kong harbour charting changes of the often-neglected world of life at sea. In Hamburg, the UK, Singapore and through more than 20 years in Hong Kong in the mid-1970s and from 1992 onwards, he's stared down tight-fisted shipowners, broken up Fijian sailors brawling over dances with nurses and tried in vain to spread a little Christmas cheer aboard detained North Korean tramp steamers.

Medvedev makes Hong Kong landmark visit - Dmitry Medvedev meets Financial Secretary John Tsang. Russian President Dmitry Medvedev is due to meet Chief Executive Donald Tsang Yam-kuen at Government House today as part of the first visit to Hong Kong by a major foreign head of state in more than a decade. Medvedev arrived last night after being hosted by President Hu Jintao during the BRIC nations' summit at the Boao Forum for Asia on Hainan Island. Growing bilateral investment and trade as well as possible crime and corruption co-operation are expected to be on the agenda in talks and lunch with Medvedev and his delegation, which includes Russian businessmen. He is due to depart by mid-afternoon. Medvedev's aides spoke ahead of the visit of considerable room for growth in the China-Russia relationship, with the Interfax news agency quoting Sergei Prikhodko describing "an atmosphere of close partnership between Moscow and Beijing" and "Hong Kong's growing attention to the possibility of a mutually beneficial partnership with Russia". Hong Kong's rich experience in fighting crime and corruption would also be of interest to Russia, he said. Hong Kong officials have been quietly expanding ties with eastern European nations generally, highlighted by Tsang's visit to Moscow last August, when he formally invited the Russian President to the SAR. Moscow, meanwhile, has been eyeing Hong Kong as part of a broader commercial and diplomatic push underscoring its ambitions as an East Asian power. They also want to lift Moscow's status as a financial centre. The visit "will be a big boost to our bilateral relationship", Tsang said. Hong Kong government figures show that since 2006, annual bilateral trade has grown by an average 25 per cent. Last year, it surged by more than 60 per cent compared to 2009, reaching US$2.5 billion. Russian tourists have been granted visa-free access to Hong Kong since mid-2009. Last year, 87,000 Russian visitors came to Hong Kong, doubling the figure of 2009. And aluminium giant Rusal became the first Russian firm to list here in January. "The deepening of financial co-operation is useful for Russia with an eye to plans to make Moscow an international financial centre," the Kremlin said, adding that it also wanted to boost trade and investment ties. Medvedev will seek to persuade Hong Kong investors to take part in the development of a hi-tech hub outside Moscow which the Kremlin chief sees as Russia's answer to Silicon Valley, it said.

Hong Kong bosses toughest in Asia-Pacific - Hong Kong bosses are the toughest in the region and expect staff to work during their holidays, a study has found. A survey of more than 1,600 professionals in the finance, accounting and human resources sectors across the Asia-Pacific region found that 68 per cent of employers in the city expect their staff to be available while on annual leave or after work hours. In Singapore, 45 per cent of bosses expected their staff to work during their holidays, while in Australia it was 22 per cent and in New Zealand, 20 per cent. The regional average was 40 per cent. The results of the Robert Half workplace survey, which included 410 participants from Hong Kong, comes amid debate on the implications of a minimum wage in Hong Kong with discussions on compensation for meal breaks, overtime and annual leave. Andrew Morris, managing director greater China for recruiter Robert Half International, said cultural differences were a key factor in the range of figures. "Hong Kong's work ethic is intense. To avoid burnout and maintain morale, bosses must make it a priority to give their staff a break," he said. However, he pointed out that Hong Kong employees were also to blame because they chose to stay in contact with their workplace while away from it, with 77 per cent saying they did so, compared to the regional average of 66 per cent. Finance professionals in Hong Kong said they felt they had to stay connected in case there was an emergency, but also because they could keep in touch through technology. Some said they just could not switch off. "While technology can keep us connected 24/7, employers should resist the temptation to phone or e-mail employees outside of work hours unless it's truly urgent," Morris said. Hong Kong bosses expected the most from middle managers, the survey found, with 76 per cent saying middle managers should be available all the time, compared to 47 per cent for senior managers or directors and 23 per cent for junior or entry-level staff. "This trend is unhealthy in both the short and long term. An employee that is under a great stress or one that seems to be experiencing burnout can easily create a toxic environment." Morris said employers must respect workers' need to properly unplug or risk workplace problems. "Employee burnout in the short term can reduce productivity, decrease morale and increase both absenteeism and presenteeism," he said. The latter occurs when a sick employee still comes to work. A positive result for Hong Kong employees was that if they did work during their holidays or outside office hours, most were compensated. Just 16 per cent of employers said they did not make up lost time through either pay or time in lieu, well below the regional average of 33 per cent.

Seafood exported from Japan will come with a safety certificate to allay public fears about radiation contamination, the Japanese consul general in Hong Kong said yesterday. Hong Kong is the No 1 market for exported Japanese food products, accounting for 27 per cent of Japan's total food exports. Nearly half of the products exported to Hong Kong are seafood. But the recent nuclear radiation crisis at the Fukushima Daiichi nuclear power plant alarmed many people here. Some Japanese restaurants have announced that their food does not come from Japan. Consul general Yuji Kumamaru said officials realised the need to restore consumers' faith in Japanese food. He said while all food exported from Japan already had to go through stringent inspection, many people still felt unsafe. Kumamaru said the Japanese government had earlier introduced a safety certificate system for seafood exports to Europe to boost consumer confidence. "Hopefully, the same certificate will be introduced for food coming to Hong Kong soon," he said, adding that there was no timetable yet. The catering industry here will undoubtedly welcome the measure. Federation of Restaurants and Related Trades' president Simon Wong Ka-wo said fears about radiation-tainted food were high in Hong Kong. "There are 600 to 700 Japanese restaurants in the city and they are struggling," he said. Hong Kong has banned all fruit, vegetables and dairy products from five prefectures in Japan and all food imported is checked for radiation before entering the market. Wong said although not all Japanese food exported here was from affected areas, people were still wary because of a lack of information. The envoy also urged Hongkongers to visit Japan again. It has been a favourite holiday destination for city residents, and April - cherry blossom season - is usually a peak time for travel there. "There are lots of places that are not affected by the earthquakes, tsunami and the threat of radiation," he said. While he respected the Hong Kong government's decision to issue travel warnings about Japan, he believed that the authorities should consider cancelling some of those warnings. Hong Kong's Security Bureau said it was closely monitoring and assessing the situation. While most travel agencies have suspended organised tours to Japan, about 80 people joined tours organised by EGL Tours which leave for Japan today. Other travel companies have decided not to run package tours to Japan this month and next over fears relating to the nuclear disaster at Fukushima. Japan this week raised the severity level of the incident to seven, which is the same classification used for the Chernobyl nuclear disaster in the former Soviet Union in 1986.

France invites local port investors - Hong Kong and mainland companies are welcome to invest in French port activities as continuing reforms open the door wider for foreign interests, said French minister of state for transport Thierry Mariani. "In France, we are about to complete port reforms to put French harbours on regained competitiveness. As part of the reform, non-essential activities can be performed by private companies. If foreign investors want to invest in port activities, they are welcome," said Mariani (pictured) during a visit to Hong Kong yesterday. "In the past, the state controlled port activities ... now it's much easier for foreigners to invest in port activities." However, he stressed the French government would retain ownership of the ports. He estimated the reform would be completed in a few weeks. French President Nicolas Sarkozy launched the reforms in 2008, when the country's Senate approved plans to privatise container-handling operations at the ports, which were all state-owned. In the past, French ports failed to benefit from the sharp growth of international container shipping as they suffered from inefficient governance and recurrent strikes, said a document by law firm Freshfields Bruckhaus Deringer. The port reform will regroup all French terminal operations to be exercised by independent private port operators, said the document. As for railways, there will be both competition and co-operation between Chinese and French companies, Mariani said. Mariani said he met Patrick Alstom, chairman of Alstom, a French transport and power conglomerate, on Wednesday in Shanghai. "There is excellent co-operation in urban transport. Shanghai's metro has equipment from Chinese joint ventures with Alstom. In high-speed rail, there is more competition. In many high-speed rail projects, French and Chinese companies are competing." Mariani also held talks with senior executives of Commercial Aircraft Corporation of China (Comac), a state-owned aerospace manufacturer. Mariani noted Comac planned to build aircraft such as the C919, which is expected to take flight in 2014 and will compete against Airbus and Boeing jets. However, the C919 was built in co-operation with French companies, using French components, Mariani said. When asked when Chinese planes would be able to compete with Airbus, Mariani said he did not know.

Hong Kong is expected to record growth of 5.5 per cent this year, but the economy will be at risk of overheating amid solid mainland growth and recovery in the United States and Europe, cautioned HSBC (SEHK: 0005). There are three key drivers for Hong Kong's growth. First, we have the China effect - mainland-driven sales for trade and retail shopping," said the bank's Greater China economist Donna Kwok Ho-jong. "Second, we have very loose monetary conditions. This has been underpinned by the US interest rates which we are expecting to stay at the bottom until 2012 at the earliest. "The third is domestic demand. Local consumer demand has been very strong since consumer confidence recovered from pre-crisis levels. Not only that, but the overall sentiment has never been better." Kwok said domestic demand was backed by rising salaries and a falling unemployment rate, which stood at just 3.6 per cent in February. She forecast the March figure, to be announced next week, will fall to 3.5 per cent. According to the bank, the city's gross domestic product rose 5.3 per cent and 4.9 per cent year on year in the first and second quarters respectively, and will grow to 5.5 per cent for the year. The government expects a rise of between 4 and 5 per cent this year. "It's a very rosy picture, but on the flip-side of the coin, there is a cost. Strong growth means there will be inflationary pressures," Kwok warned, citing an inflow of liquidity due to two rounds of quantitative easing measures in the US which had pushed up prices. "Despite soaring growth, rising wage pressures and stubborn inflation, the fiscal emergency brake has not been pulled," she said. "For the economy, the risk is that prices will keep climbing, especially if growing geopolitical risks drive up oil prices further to push inflation beyond the government's control." The bank predicts consumer prices will grow 4.4 per cent for the year. The government forecast 4.5 per cent. It added that solid mainland growth and an increasingly secure economic recovery in both the US and core European economies mean Hong Kong remains at risk of overheating this year. Credit Suisse earlier predicted Hong Kong's GDP and consumer price index would increase 4.8 per cent and 5.3 per cent respectively this year.

Shipowners are being urged to register their Hong Kong-flagged ships with an anti-piracy military co-ordinating centre when sailing through the Indian Ocean. The call comes after military surveys in the past two months found that fewer than 40 per cent of Hong Kong ships passing through the area were registered. Simon Church, the maritime industry liaison officer with European Union Naval Force Somalia, said navy ships and helicopters would be in a better position to respond to ship attacks in the Indian Ocean if there was a record of vessels' movements. His comments come amid an escalation in the scale and violence of pirate attacks, with more attempted and actual hijackings close to the west coast of India. Latest figures from a piracy reporting centre in Kuala Lumpur show there have been 107 attacks by Somali pirates in the Indian Ocean and the east coast of Africa this year. Seventeen ships have been hijacked and seven seamen murdered by pirates since January 1. Church said owners of mainland and Singapore-flagged vessels were also apparently reluctant to register their ships with the naval forces at the Maritime Security Centre (Horn of Africa), known as the MSC-HOA. Information about each ship and its route would allow naval forces to help track the ships. "If we don't know where you are, we can't help you," Church said, speaking on the sidelines of an anti-piracy conference in Singapore. Asked why he thought owners had not bothered to log their ships, Church offered possible reasons, including the perception that the centre covered only the Gulf of Aden and east coast of Africa, or that the centre was interested only in Western-flagged vessels. Owners may also feel there was a reduced risk if they were sailing closer to the coast of India or on north-south trade routes rather than towards the west. "Half the ships transiting around the Indian Ocean are a mystery to us," he said. Roger Tupper, director of Hong Kong's Marine Department, said: "[It] seems like Simon Church assumes that the significant rates of ships of all flags not reporting to the Maritime Security Centre (HOA) when in the eastern Indian Ocean is because the masters are not aware that MSC-HOA covers those waters. "He may well be correct in that assumption. However, we will continue to advise HK-flag shipowners to contact the relevant naval centres when in piracy areas." Church said shipowners felt they could be protected by the existing naval convoys but these convoys could only provide protection through the Gulf of Aden. He urged more countries to allow access to long-range identification and tracking data. So far, 42 flag states, including Hong Kong, had signed up to provide data but more than 100, including a core group of 55, had failed to do so. Separately, Lee Yin-mui, assistant director of research at the Asian government-to-government body ReCAAP Information Sharing Centre, warned of a likely increase in armed robbery and piracy attacks in the South China Sea from this month. Speaking at the same conference, she said changing weather conditions meant pirate attacks were more common in the main east-west transit route in the southern part of the South China Sea from April to June and August to September. She urged co-operation between military and coastguard forces from states bordering the area to combat a rise in piracy.

The redevelopment of the Central Government Offices in Central has been criticised on a host of grounds linked to the environment, preservation and unnecessary waste. The latest reason put forward by concern groups? Poor fung shui. Qualified architect and fung shui disciple Michael Chiang Hong-man said that water - which represents money - comes in from the north. The chief executive's house behind the offices represents the "brain of the dragon", which is Hong Kong. So to place a large office block in front of Government House would be to block the flow of money into Hong Kong. "Right now the government has obvious problems even with so much money," Chiang said. "What are they going to do if they have no money?" But Abraham Razack, the lawmaker representing the real estate and construction industry, said although there were good reasons to preserve the site, fung shui was not one of them. "Whether it's built or not should not be based on fung shui," he said, chuckling. "But we live in a society that's superstitious." The government plans to pull down the 52-year-old West Wing of the current Central Government Offices after staff relocate to the Tamar site. In its place will be a 32-storey commercial block with 23,000 square metres of floor space and an underground mall, owned privately. The Government Hill Concern Group, a collection of 20 advocacy associations, says the buildings are structurally sound and part of Hong Kong's history. Last month, the group submitted a petition with 2,000 signatures to the Town Planning Board in protest, and in February submitted an alternative proposal to the board. The group includes the Professional Commons, an independent lobby organisation, as well as some retired government officials and veteran architects. Yesterday, they arranged for Chiang to give his analysis on how the government could balance its chi. "At the moment no architect can predict whether once you build a beautiful house and live there you'll be prosperous and happy forever," he said. But according to Chiang, fung shui has been developed over hundreds of years and is an "environmental science". Chiang is a member of the Royal Australian Institute of Architects and Royal Institute of British Architects, a class-one registered architect in China and an assistant professor of architecture at the University of Hong Kong. Chiang also said the 32-storey block replacing the West Wing combined with the 10-storey East Wing block would create an imbalance. In fung shui, they represent a protective "green dragon" and "white tiger" respectively and in practical terms they create a buffer from typhoons. Architect Lee Yuet, who is not a fung shui expert, agreed. "You are immediately making an imbalanced thing," he said. "From simple common sense, it's no good." But setting up an office building might not be all bad vibes. The design of the building would open up more space in between the current East and West Wings, said Professor Patrick Lau Sau-shing, who represents the architectural sector in the Legislative Council. In fung shui terms that would mean opening up Government House to the north, leading to better chi. However, Lau said that it all depended on the person living in Government House - Chief Executive Donald Tsang Yam-kuen. Whether the fung shui was good or bad depended on the natural levels of iron in an individual's blood and the way they combined with magnetic fields. "But I'm not an expert," he added.

Rosemary Vandenbroucke in Hong Kong yesterday - she says she has emerged from her nightmare last year a stronger person. Fashion model Rosemary Vandenbroucke faced the cameras in Hong Kong again yesterday after emerging from the nightmare of two arrests in 24 hours in the United States last year a "stronger person". The 28-year-old beauty was held on suspicion of a drug offence and then crashed her hired motor home. She was fined US$1,000 for obstructing a police officer after a charge of possessing a controlled substance was dropped. She was also fined US$1,400 for careless driving. Yesterday, speaking to Hong Kong journalists for the first time since the cases were closed last month, she said the experience had been "traumatic but valuable". She went on: "Everything around me seemed to be crumbling down. "I was terribly misunderstood and I just wanted a chance to come out and explain myself. But I find that I've become a stronger person because I had time to reflect on myself." In an interview before her press conference, Vandenbroucke said she was just "in a bad place at the wrong time" when she was arrested at the Burning Man festival in the Black Rock desert near Reno, Nevada, in September. "I'd heard from so many different friends how amazing the Burning Man was," she said. But things went wrong after she watched the festival's climax - the burning of a giant effigy in the desert - at a venue known as the playa. Vandenbroucke said she was on the way to check on a friend who had been harassed by someone when "I was asked by the cops what I was doing and they arrested me". A local sheriff alleged she was seen passing a substance to someone else and she was detained overnight. "I thought nothing could go wrong, but when it dawned on me that I wasn't being taken back [to the playa] I ... had a breakdown." Released on US$15,000 bail, she picked up a motor home, planning to drive to Reno and fly to Los Angeles. But she crashed into Reno's famed "Biggest Little City in the World" arch and was arrested again. "It was a nightmare. I couldn't believe it was happening," the model said. "I really didn't think. I wasn't fit to drive an RV [recreational vehicle] to begin with." She said the arrests plunged her into one of the most troubled periods of her life. "At first, I didn't think that it would be, until it came out in the press. Everyone called me asking me, `What on earth is going on with you?' "That's when I thought, `This is not going to go down so well.'" After her arrests, Vandenbroucke - who began modelling at the age of 14 - stayed out of the limelight. She said: "I started asking myself a whole lot of different questions. What do I want to do? What do I see myself as in the future? What are my inner strengths? What do I already have?" She realised she needed something else to add to her modelling career, and decided to launch a new sideline in health and well-being. She has enrolled in the certified personal trainer programme with the National Academy of Sports and Medicine and is looking into studying nutrition. "This is very exciting. I will be certified by summer," she said "By the time I'm 33 to 34, I'll be able to open my own holistic spa."

Commander in chief of Macau's turf wars - Triad boss raked in millions from a gambling racket while defying the authorities - When Macau's judiciary police director Antonio Marques Baptista watched his car explode in flames as he went jogging with his dog on Macau's Guia Hill on May 1, 1998, he may as well have been watching "Broken Tooth" Wan Kuok-koi's reign of terror going up in flames also. Hours after the car bomb went off, Wan, the leader of a faction of Macau's 14K triad society, was behind bars - and he's been there ever since. He was never charged over the car bombing, but the attack was the final straw for Macau's Portuguese authorities. In the six weeks prior to Wan's arrest, six murders were linked to triads - including a Marine Police officer, a gambling inspector and the chauffeur of the enclave's most senior crime fighter. But it was only after Baptista's car was blown up that Wan was arrested. His imprisonment sparked a furious response and his gang went on the rampage. The enclave was hit with firebombings that damaged almost 100 vehicles, and shopfronts were gutted in 24 separate arson attacks. Senior government prosecutor Lourenco Nogueiro and his pregnant wife were gunned down in a motorcycle drive-by shooting. Both survived. It said much for the muscle Wan had at his disposal, but exactly how formidable he was has long been a source of conjecture. At the height of his power in the mid-1990s, when Macau was rocked by violent turf wars between rival triad gangs, Wan raked in tens of millions of dollars from his loan sharking and illegal gambling operations, and painted himself as the Godfather of South China. It was even rumoured that he was trying to join all the triad factions together under one umbrella. In reality he may have been just a talented spin doctor. While some analysts described him as Southeast Asia's "most powerful triad leader" before his arrest, those who followed his trial came to the conclusion he was nothing more than a common or garden gangster suffering from megalomania and delusions of criminal grandeur. During the trial it emerged that Wan had just 2 - 1/2 years of formal schooling and an army numbering hundreds, not the thousands of which he bragged. He had a strange nickname, but he'd earned it. Wan cut his teeth - and lost several - in vicious street fights as a young, aspiring gangster. One veteran crime reporter recalled Wan being rushed to hospital as a teenager, "blood dripping from half a dozen stabs". Flamboyant and arrogant, in 1998 he produced a HK$14 million autobiographical film called Casino, a tacky tale of triad mayhem. Hong Kong star Simon Yam Tat-wah starred as Wan, and the film's premiere took place in Hong Kong just five days after his arrest. "He is a good boss and I respect him as a friend. Films often exaggerate things," Yam said at the film's premiere. "I spent time with him when we were filming and he is like a kid. Everyone in Macau respects him." Wan boasted of his mob activities in interviews with several international and Hong Kong newspapers and prosecutors turned those boasts against him in their evidence. Prosecutors also produced some 50 witnesses to testify against him. The list of charges against him was lengthy, and included allegations of a plot to ship a vast array of weaponry from Cambodia to Macau. During the trial, Wan claimed he was an honest businessman who made his money through legitimate gambling and who knew about the 14K triad society but had nothing to do with it. He claimed to be a bona fide promoter (he organised several Canto-pop concerts), a real estate investor, gaming chip trader and high-stakes gambler. After the sentencing at the Court of First Instance, he flew into a rage and jumped on to a bench, screaming at officials: "You've taken dirty money ... This is the worst verdict of the century." When a policeman asked Wan to leave the courtroom, the triad boss glared hard at the officer, put his fingers menacingly like a gun to his own temple and screamed an obscenity. Throughout the outburst, which lasted several minutes, court officials stood by. Eventually, security guards subdued him and led him away in handcuffs. Since his conviction, Wan has been held in a tiny windowless cell in a high-security jail on Coloane Island. The prison was purpose-built to hold Wan and his henchmen and is one kilometre from the main prison. His lawyer Pedro Redinha said the conditions there had at one time plunged Wan into a deep depression, but with his release date only 10 months away, the lawyer says Wan - who will be 56 by then - is now looking forward to leaving prison and putting the record straight. The jury's still out on whether he'll get his satisfaction lawfully or by much more sinister methods.

 China*:  April 19 2011

Beijing gives verdict on rest of world economies, and the forecast is grim - Europe has the worst economy in a world full of bleak markets. That was the verdict from China at the Boao Forum for Asia in Hainan yesterday. However, its in-depth analysis of markets beyond the mainland also suggested Europe was still a good place to invest. The study on the outlook of world economies in 2012 was carried out by China Investment Corp, the mainland's sovereign investment fund, to serve as a guide on how to spend its US$300 billion. Chairman Lou Jiwei said: "World economies are looking grim next year, with Europe the grimmest - internal demand is weak, banks are in need of recapitalisation and regional gaps are widening. "But our negative forecast on the performance of the European economy does not mean our investment will stop. Quite the contrary, as the money we have invested in the EU in the last few years has generated quite good returns. "We believe the infrastructure in EU is better than the United States, and we will continue to invest." Europe's biggest problem, Lou said, was sluggish internal demand. He added world economic growth was likely to slow down in December and Europe was in line to take the first and the worst hit. On a global level, Lou said: "We are relatively optimistic about 2011, but for 2012, it is possible there will be a big drop in economic growth or even recession." Regarding Japan, the markets were losing confidence in the country's ability to recover following the earthquake and tsunami and the ongoing struggle to contain the damage at the Fukushima nuclear plant. Meanwhile, in the United States, the world's biggest economy, President Obama had promised Congress a tight budget and would be unable to try to stimulate the economy with fiscal policies any longer. The property market there also remained sluggish. "We don't see any encouraging signs of change in the US yet. We don't expect them to contribute much to global growth," he said. The unrest in North Africa and the Middle East would be likely to disrupt oil supplies, heaping more misery on the global economy, Lou added. The European Union also had to contend with the sovereign debt crisis in some euro-zone countries, such as Ireland and Portugal, and there was no sign of an end to that soon. "Debt crisis is a shadow over the euro's future," Lou said. Spanish Prime Minister Jose Luis Rodriguez Zapatero was more upbeat in Hainan on Thursday when he said that Spain would recapitalise its saving banks thanks to promised continued investment from China and Singapore.

Combat ship set for key role in military diplomacy - While China's first aircraft carrier nears completion at a wharf in Dalian , international scrutiny is mounting over another large ship almost finished in the Changxing shipyard off Shanghai - the PLA Navy's second amphibious assault vessel. The 200-metre Jinggangshan will be one of the most closely watched of the navy's modern fleet and could signal a further expansion of its involvement in non-traditional efforts, such as the fight against piracy and international relief work. While foreign military attaches and analysts believe the Type 071 ships could form a key part of future carrier strike groups and the core of any Taiwan invasion plan, it is involvement in "soft power" projection that is likely to give the vessel a high profile in the short term. Carrying up to 800 troops, four hovercraft, fast patrol vessels and two large Z-8 helicopters, the Type 071 is more versatile than any other ship in the modern Chinese fleet. And with a third vessel expected to move into full construction shortly, China will have an amphibious landing capacity that could rival any country outside of the United States. The first Type 071 in operation, the 20,000-tonne Kunlunshan, has already been used extensively in the ongoing fight against piracy in the Indian Ocean. Its deployment in August last year represented a fresh PLA push to take the fight to the pirates plaguing vital sea lanes linking Asia and Europe around the Horn of Africa, and its firepower has been used to break up several attacks. The recent evacuation of Chinese nationals from Libya, overseen by the presence of a PLA frigate, was the kind of operation considered perfect for the Type 071, given its ability to handle a range of emergencies. News of its looming completion comes amid a range of signs that the PLA is keen to burnish its international role. The recent defence white paper highlighted the need to respond to a range of non-military threats, while this week state military media confirmed that PLA ships would be flying bigger, brighter naval ensigns to match international standards. Gary Li, a London-based PLA analyst with private-sector intelligence firm Exclusive Analysis, said the completion of a second Type 071 and the prospect of a third ship would significantly expand the navy's operational reach in both hard and soft power terms. It would bring a range of options to any future expeditionary carrier strike group - including possible anti-submarine and electronic warfare operations - and could also serve as a command and control platform for a variety of operations. "Overall, I think the PLA is thinking more and more of how to use their ... assets for future examples of soft power," Li said. "As Chinese interests increase around the world, it will need to boost its presence and to be able to realistically tackle increasingly threatening problems such as piracy." Even with both the Varyag and a new Type 071 poised for completion this year, Li expected it would be another three to four years before China would be ready to form a carrier strike group - the range of ships, planes and submarines that must routinely surround an aircraft carrier on even a basic offshore deployment. Such a deployment required intricate integration of both crews and technology and extensive sea trials would still be needed before the PLA Navy felt confident enough to deploy such a group internationally. "As exciting as the developments of these new ships may be, the bottom line is that putting them all together is still a stretch for the PLA. "In that regard, the importance of involvement in an ongoing operation, such as the fight against piracy in the Indian Ocean, to the PLA Navy's development cannot be underestimated. The experience they are gaining is vital." Both Asian and Western diplomats said the Type 071 was closely watched for its hard and soft power potential. Strikingly similar in profile to the US navy's modern San Antonio-class warship, the ships were expected to be prominent in China's military diplomacy in years ahead. "As a multidimensional platform, they are a powerful symbol of the ability to project power, both good and bad," said one veteran Asian naval attache. "They are ships few other regional navies can match ... so there will be a lot interest in quite what China intends to do with them. I expect to see them use every opportunity to exploit them in a peaceful way to soothe ruffled feathers."

BRICS economies have to consolidate their partnership to play the role they deserve on the international stage - The third BRICS summit concluded on April 14 with the signing of the Sanya Declaration, highlighting the strengthening of the five-nation bloc and promoting common prosperity. The meeting of Brazil, Russia, India, China and newly admitted South Africa (BRICS) in Sanya, Hainan province, drew worldwide attention because the five countries together account for about 40 percent of the world population and about 18 percent of GDP. The BRICS economies have become increasingly important for the world economy not only because they overcame the impact of the global financial crisis earlier than the rest of the world, but also because they have maintained relatively rapid economic growth. Compared with the world average of 3 percent, the bloc achieved 6 percent growth last year, accounting for 60 percent of the global economic growth. The rise of the BRICS economies is an important reason why the world economy did not go into deeper recession - akin to the Great Depression - after the global financial crisis. No wonder, the international community has hinged its hopes on the sustained and fast recovery of BRICS to propel the global economy. The high economic complementariness of the BRICS economies shows that they have huge growth potential and can be the engine of growth for the world economy. But BRICS is still a fledging bloc, and has to strengthen its intrinsic cooperative mechanisms to play the role it deserves on the world stage. In the Sanya Declaration, the bloc has expressed its determination to transform its hopes of strengthened political cooperation into reality. To do that, the five countries have vowed to take a series of measures to strengthen mutual cooperation on a wide range of issues. But to play a bigger role on the world stage, the BRICS economies also have to consolidate their economic relationship. For example, China is the largest trading partner of India, Brazil and South Africa, but its bilateral trade volume with the three countries is only dozens of billions of dollars. The bilateral trade volumes of India, Brazil, South Africa and Russia are even smaller. This shows that the BRICS economies have a lot of room to increase and expand mutual trade. Besides, the five countries need to further strengthen mutual coordination on some international issues to boost the bloc's influence in the international arena. Since all the five countries are members of the United Nations Security Council this year, with China and Russia being permanent members, they have promised to closely cooperate on world peace and security initiatives, strengthen multilateralism, and promote democratization of international relations. Since all the BRICS economies are developing countries, it is imperative that they work together to develop their bloc into a viable channel for greater South-South cooperation. The entry of South Africa into the bloc is expected to push BRICS in that direction. Because of historical factors, many of the developing countries, including the least industrialized ones, are in Africa, which is the focus of the UN Millennium Development Goals' poverty reduction efforts. Again, South Africa's entry into the bloc is expected to build a bridge of cooperation between the bloc's other members and African countries. This is important because, according to the Sanya Declaration, the bloc is committed to helping African countries eradicate poverty and hunger, and meet the UN Millennium Development Goals' target by 2015. As developing countries, the BRICS economies are in the same or similar development stage and face identical problems. These factors will help make the bloc not only an important platform for South-South cooperation, but also a vital South-North communication channel. The bloc has already given an example of what its future role will be by demanding greater say and representation for emerging and developing countries in world affairs, and calling for truly multilateral international relations. The BRICS economies have thrown their weight behind G20 to achieve that goal. Since the G20 membership is evenly distributed between developed and developing countries, both from the North and South, the BRICS economies want to turn it into the main platform for promoting international economic cooperation and more intensely pursuing better global governance, as the Sanya Declaration says. The BRICS economies should play a bigger role in G20 and other West-dominated international financial and economic groupings, and take initiatives to change their biased rules. Their call for reforming the international financial system and efforts to participate in the making of the international financial rules are good examples of what their role should be. On major global issues such as climate change and environmental protection, food security and renewable energy, the BRICS economies should try to assume a decision-marker's role rather than being passive participants - for only the active participation of the bloc and other developing nations will help build a more just and reasonable international political and economic order. The author is a senior research scholar with the Center for US-China Relations at Tsinghua University.

A pair of spotted deer and two goats sent by Taiwan as gifts to the Chinese mainland arrived at their new home, the Liugongdao National Forest Park, in Weihai of eastern Shandong Province Saturday afternoon. A Boeing 737 jet carrying the animals landed at Weihai Airport at 12:35 pm, some two and half hours after taking off from Taoyuan International Airport in Taiwan at 10:08 am. Also aboard the plane are more than 480 kg of feed for the animals, including paper mulberry leaves, forage grass, low protein feed particles, vitamin and block salt. The animals arrived at the park on the Liugongdao Island in the Weihai Bay at 3:30 pm after a further three hours of land and sea journey. The pair of critically endangered Sika deer are named Fan Xing and Dian Dian (when linked, the names mean "dotted stars" in Chinese), while the two serows are named Xiyangyang and Leyangyang (both names mean "happy" in Chinese). A grand ceremony was held at the park to greet them Saturday afternoon, with some 400 participants from both the mainland and Taiwan. Addressing the ceremony, Wang Peiting, secretary of the Weihai Municipal Committee of the Communist Party of China, hailed the arrival of Taiwan's animals as another significant development in boosting exchanges and cooperation, after the mainland sent a pair of giant pandas, "Tuan Tuan" and "Yuan Yuan" (together meaning "reunion"), to Taiwan in December 2008. Jason Yeh, director of Taipei Zoo, the original home of the four Taiwan animals, said he believed the exchanges in animal care between the mainland and Taiwan will become more open and transparent following the gifting of the pandas and the deer and goats. "(I believe) The cooperation between the two sides will pick up speed," Yeh said. Located at the Weihai Bay to the eastern edge of the Shandong Peninsula, Liugongdao covers an area of 3.15 square km and is some 3.89 km away from Weihai city proper. A state-level forest park launched in 1992, the park is famed for natural scenery and has an 87 percent of forest coverage, which makes it an ideal place for animals to live in. Yuan Xueen, director of the Administration Commission of Liugongdao Island, said the Island will make every effort to ensure a healthy and happy life for the two pairs of Taiwan deer and goats, which will become "goodwill messengers" between compatriots across the Taiwan Strait. Wang Jiansong, head of the administrative office of the park told Xinhua that after passing a quarantine procedure of at least 30 days, the two pairs of deer and goats can meet tourists at the park. Wang said that according to researchers, the mulberry and elm leaves grown in Weihai can serve well as qualified feed for the deer and goats. All arrangements have been put in place to ensure the animals have adequate and safe food supply, which will mainly come from within Liugongdao, Wang added. Among those efforts to make the animals well-prepared for their new life, they will be fed in the first week the food stuff that arrived at the park along with them from Taiwan, according to Wang.

Brazilian President visits Xi'an, NW China - After taking part in the Boao Forum, Brazilian President Dilma Rousseff traveles to the city of Xi'an in northwest China's Shaanxi Province.

Exchange rate warning if higher yuan found to blame for deficit - China's President Hu Jintao gestures to Russia's President Dmitry Medvedev as they arrive for the opening ceremony of the 10th Boao Forum For Asia in Boao, Hainan province. Beijing might change tack on the yuan's steady appreciation if the currency's higher value is to blame for the sharp decline in mainland exports, Commerce Minister Chen Deming has indicated. It follows new trade data which suggests the world's largest exporter had experienced its first quarterly trade deficit in seven years. "If the exchange rate is to blame for the deficit, it would have an influence on the appreciation," Chen told the 10th Boao Forum for Asia yesterday. "If the deficit is not caused by the exchange rate of the yuan, then I don't think we need to slow down or adjust the pace of yuan exchange rate revaluation." Meanwhile, central bank governor Zhou Xiaochuan said China would continue to reform its monetary and financing systems to allow more flexibility in the yuan's exchange rate. The yuan has risen about 4.5 per cent since June. It hit a record high of 6.53 to the US dollar yesterday. China, the world's second largest economy, had a trade deficit of US$1.02 billion in the first three months of the year, compared with a surplus of US$13.9 billion a year earlier, the customs authorities reported last Sunday. Imports jumped 32.6 per cent to a quarterly record of US$400.7 billion. In Wednesday's State Council meeting, Premier Wen Jiabao said soaring commodity prices was the major factor of import surge. He said China did not want to reduce its trade surplus by creating more expensive imports. China's trading partners, including the US, say faster yuan appreciation is needed to help address China's huge trade surplus, which American critics say has also contributed to global imbalances and to the financial crisis. Chen said it was possible that the mainland may see small trade deficits for the rest of the year. But in the longer term, he believed China, the world's largest exporter, would continue to enjoy trade surpluses, although they would become smaller. China's trade surplus has decreased steadily in recent years, from a record US$298 billion in 2008, to US$196 billion in 2009 and US$183 billion last year. Analysts said the dramatic change this year was a result of exporters' rising labour and raw material costs, while imports were being supported by strong domestic demand. Chen said he expected import growth to be 5 to 6 percentage points higher than export growth in the future, due to the government's policy of achieving balanced trade. In a keynote speech to open the forum in Boao, Hainan province, President Hu Jintao vowed to promote balanced trade by boosting domestic demand and imports. "In the next five years, China will make great efforts to implement the strategy of boosting domestic demand, especially consumer demand," Hu told delegates at the annual international forum. "We will bring into play the important role of imports in achieving macroeconomic balance ... and promote basic balance of our trade. "This will provide important opportunities for countries in Asia and the rest of the world to increase exports to China." Echoing Hu, Chen said China would focus more on imports, and more on outbound investment than attracting foreign investment. The Boao Forum for Asia has brought together government, business and academia every year since 2001 to discuss pressing issues.

Hong Kong*:  April 18 2011

A restaurant owner in Yau Ma Tei has come to the assistance of a popular egg-waffle hawker – who has been repeatedly arrested – by offering him a place to continue to sell the traditional Hong Kong snack. The news came as 74-year-old Ng Yuk-fai, a local man known to residents as “the old egg-waffle man”, was fined by a court for illegal hawking on Friday. Ng has been selling the Hong Kong-style treat to students and residents in Tai Hang, Causeway Bay for more than 30 years, but has been arrested repeatedly. His latest arrest on Sunday sparked a protest by dozens of bystanders and residents. On Friday, Ng appeared in Eastern Court and pleaded guilty to one count of obstructing a public place, one of illegal hawking and one of selling cooked food without a licence. He was sentenced to a fine of HK$780 for the charges. A group has been set up online to help Ng. Its convener told local radio the owner of a Yau Ma Tei restaurant was now offering to provide Ng with a place at the restaurant to sell his egg waffles. “The restaurant owner contacted us and told us that he is willing to give Ng a place near the restaurant’s entrance so he can continue to sell egg waffles without worrying about anti-hawking crackdowns,” the manager, surnamed Chan, was quoted as saying. “The restaurant owner makes the offer voluntarily. No rent, no water fees and no electricity fees will be involved,” he added. Chan also said about 900 people had requested via the internet to buy Ng’s egg waffles. Ng’s arrest on Sunday involved about 30 officers from the Food and Environmental Hygiene Department and the police, as reinforcements arrived to deal with a growing crowd of angry supporters of the hawker in Tung Lo Wan Road. It was the third time Ng had been arrested in a week, and the fifth time this year. In recent years, authorities in Hong Kong have taken a tougher stance against illegal hawking activities in the city.

Six pre-war tenement buildings in Wan Chai would be preserved and converted into an arts hub – under a revitalisation plan unveiled on Friday. The Urban Renewal Authority (URA), which oversees the redevelopment, said the historic buildings in Mallory Street would feature small restaurants, performance venues and a 300-metre public open space for cultural events. URA chairman Barry Cheung said on Friday this was the first project under the authority to blend redevelopment with arts and cultural elements. He said the Hong Kong Arts Centre was selected as the main operator to manage the buildings, organise events and promote the arts under the project. The revitalisation project is expected to be completed in 2012. Cheung said the development cost is estimated to be about HK$200 million. The tenement cluster was built in the first decade of the 20th century and is listed as a Grade 2 historic site. Formerly used as shops, restaurants and flats, the cluster is known as the “Green House” after government workers painted the blocks green in the 1980s. Cheung said the project in Wan Chai was different from other URA redevelopment projects. He said the operator of the project would not need to pay rent. It would instead receive a monthly operating fund from the authority. “Under such an operating mode, together with an incentive arrangement, the main operator could focus on planning, promotion and organisation of their programmes and activities for the ‘arts community’,” he said. Nine cultural organisations and professional institutes have expressed interest in running the tenement buildings after the authority offered tenders for the project in July 2010. They include large commercial companies, such as Sino Land and the Emperor Group, as well as arts organisations, including the Fringe Club, Zuni Icosahedron, Osage Art and Ideas.

The drug users' rehabilitation school whose efforts to move into an empty school in Mui Wo put it in conflict with residents has been given a temporary solution to its overcrowding. Christian Zheng Sheng College has been granted 5,000 sq ft of government land near its campus on a rocky Lantau cove, where 109 students live in a building with space for 59. It plans to erect two no-frills buildings on the Ha Keng site, which students will use while the existing premises are renovated. But the grant is only for five years and the school still hopes to move eventually into the vacant Heung Yee Kuk Southern District Secondary School in Mui Wo. "We are very happy the government has finally come to realise we really need some more space for our students," principal Alman Chan Siu-cheuk said yesterday. "Even though it is temporary, we are happy to accept the offer as we have no idea when we can finally move to Mui Wo." The government told the school of the land offer early this week after lobbying by education-sector legislator Cheung Man-kwong. "Students of the school should have a more comfortable place to study and live," Cheung said. "And since there is no sign that the school's relocation can be realised in the near future, I think it is a realistic approach to offer them a temporary site." At present, 30 students and five teachers spend the night in accommodation at Lung Tsai Tsuen on Cheung Chau because there is not enough space in the cramped, poorly ventilated cabins that serve as dormitories on the Lantau cove. The school has sought since 2006 to take over the Mui Wo school but has run into vehement opposition from residents who want the site used as a school for local children. The government has repeatedly told Zheng Sheng that residents' objections have to be ironed out before a move can proceed. Cheung said the temporary campus offered a good transitional arrangement. "This does not mean we have given up the Mui Wo relocation plan," he said. "But at least the students can enjoy a better environment for their studies." The government had said it could extend the lease of the land if necessary. Chan said the school would not give up the fight to move. "I have to admit that we do not see the matter being settled soon," he said. "So for the sake of the students, we are happy to have the land for an extension." He said the school would seek government funds set aside for fighting drugs to construct the new buildings. "We don't know yet how much we need or will seek from the government. But for every four dollars we get from it, we also have to contribute one dollar of our own under the funding requirements," he said. A spokesman for the Narcotic Division of Security Bureau said it would continue to support Zheng Sheng in its relocation efforts.

Taiwan's parliament formally approved on Friday a special tax on real estate investments and luxury goods, part of the government’s efforts to curb surging prices that threaten an asset price bubble.
The so-called “luxury tax” needs final approval by President Ma Ying-jeou, expected within seven to 10 days. Ma has already said he supports the tax. Under the plan, a 10 per cent tax will be levied on any investment property sold within two years, rising to 15 per cent if the property is sold within one year. The tax will not apply to properties the owners live in. Construction shares had plunged 20 per cent since early this year, reflecting investor concern the tax would dent property developers’ earnings. The sub-index stood up 0.5 per cent at 11.20am against a flat broader market. The special tax is aimed primarily at controlling soaring housing prices in the capital Taipei and other major cities, where many average income earners can no longer afford to buy property. The rises have been blamed in part on speculation. With presidential elections due in early next year, the ruling party is keen to show voters it has their interests at heart. The ratio of home prices to disposable income in Taipei has reached its highest in 20 years, with the average price for existing apartments at about US$442,100 in the first eight months of last year, 11.5 times average yearly household incomes. Taiwan’s central bank has ordered increased oversight of mortgage lending, and in December cut the maximum mortgage allowed for second homes to 60 per cent from 70 per cent and extended the rule to more areas around Taipei. The tax also includes a levy of 10 per cent on private aircraft, yachts, some luxury cars valued at more than NT$3 million (US$100,000) and golf club memberships, as well as coral, leather products and fur coats worth more than NT$500,000.

 China*:  April 18 2011

EU's rules on traditional treatments to cost millions - Traditional Chinese Medicine (TCM) herbal treatments will be outlawed in European Union (EU) countries starting in May in a move that is likely to cost the industry $500 million a year and put about 100,000 practitioners out of work. Under the EU legislation, named the Traditional Herbal Medicinal Products Directive, all traditional herbal medicines that have not received official approval will be pulled off store shelves. And, so far, none of the TCM products sold within the EU have been approved. "The coming ban will deal a huge blow to the TCM industry in the EU," said Shen Zhixiang, secretary-general of the World Federation of Acupuncture-Moxibustion Societies. The European market consumes about one fourth of the total TCM exports from China, according to statistics from China's State Administration of Traditional Chinese Medicine. In response, Chinese commerce and TCM administrations are talking to EU officials in a bid to defer the ban to 2019, he noted. Under the directive, which came into force in 2004, a seven-year mercy period was given to manufacturers of herbal medicines so manufacturers could register their brands. "But the requirements were too tough for Chinese manufacturers," said Huang Jianyin, deputy secretary-general of the World Federation of Chinese Medicine Societies. Experts estimate that the cost of getting a single TCM product into the EU market, including the cost of registering it and meeting all other legal requirements, ranges between $80,000 and $120,000. The requirements, such as a real-time stability test, also need extra investment and effort. Many TCM producers hesitated while they waited for others to register their products first, said Shen, who explained that once a specific TCM medicine is registered, all manufacturers of that product would have been able to take a free ride. However, with the mercy period set to end and the knowledge dawning on producers that it would have been easier to register products during the mercy period than it will be in future "it will now be even harder for TCM products to enter the EU market," he said. A staff worker with the Beijing-based Tongrentang, a time-honored TCM brand and the biggest TCM producer in China, told People's Daily that the requirement to provide academic proof, such as the results of a large-scale clinical study, to show that a TCM product had been in use in the EU for at least 15 years, was another major barrier to getting products registered. Other factors, like whether the production of the medicine harms wildlife and the fact that TCM medicines sometimes contain excessive levels of heavy metals and pesticides, as well as reports about adverse reactions, have also affected the chances of TCM products being officially recognized in the EU, Huang noted. "A lack of understanding of TCM as a medical science among foreigners is the root cause of such problems," he said. Fu Yanling, a professor with the Beijing University of Chinese Medicine, told Guangzhou Daily that TCM companies must improve product quality if they hope to be accepted in such markets.

Medvedev takes high-speed journey to Boao Forum - Russia's President Dmitry Medvedev takes pictures as he travels by high-speed train from Sanya to Boao to take part in the 10th Boao Forum for Asian Annual Conference, April 15, 2011. 

Stamps of Chinese ancient calligraphy issued - Photo taken shows a set of newly issued stamps in Shengzhou, East China's Zhejiang province, April 15, 2011. A set (four pieces a set) of "Chinese ancient calligraphy cursive writing" special stamps was issued by China Post on Friday, with a face value of 1.2 yuan for each piece. 

Asia's largest yacht show opens in Shanghai - A showgirl poses next to a yacht model at the 16th China International Boat Show 2011 (CIBS) in Shanghai on April 14, 2011. CIBS, Asia's largest yacht show, began April 14, 2011, and around 300 yachts gathered at the marine and on-land exhibit areas.

Starbucks plans to have 1,500 stores in the mainland by 2015, the firm's Greater China chairman told reporters in an interview on Friday. Starbucks plans to expand into eight to ten new cities every year, Wang Jinlong said on the sidelines of the Boao Forum for Asia on the southern Chinese island of Hainan.

Hong Kong*:  April 17 2011

At least 200 of the 337 units at One Regent Place launched yesterday were snapped up by eager buyers who did not seem deterred by the strong probability that more local lenders will be raising their mortgage rates soon. The latest project of Sun Hung Kai Properties (0016) in Yuen Long boasts units ranging in size from 461 square feet to 1,122 sq ft, with an average price of HK$6,371 psf. The average asking price of similar flats in the area's secondary market is about HK$6,300 psf. The robust selling of SHKP's units in Yuen Long came despite Cheung Kong (0001) getting ready to launch 621 units at its Uptown project today. The units will cost at least HK$2.95 million, or HK$4,090 psf. "We are not in a hurry to sell our flats, as we have already cashed out HK$10 billon from flat sales in the first quarter of this year," Cheung Kong real estate director William Kwok Tsz-wai said. Yesterday, Cheung Kong revealed the prices of Uptown's 22 town houses, which measure from 2,148 sq ft to 2,233 sq ft. They range from HK$14.87 million to HK$16.89 million, or from HK$6,737 psf to HK$7,844 psf. Meanwhile, SHKP said it expects to receive permission to pre-sell flats at its Imperial Cullinan project around the Easter holidays. The 1,000 sq ft flats in this project are likely to be priced at a minimum of HK$35 million, or HK$20,000 psf. Situated above the Olympic Station, this development has a total of 650 flats, ranging in size from 800 sq ft to 1,900 sq.ft. Victor Lui Ting, executive director of Sun Hung Kai Real Estate Agency, said mainland buyers are likely to account for more than 10 percent of sales at this development. "Flats around the Kowloon MTR Station are usually very popular among mainland buyers," he said.

Jacky Cheung presents passionate show in HK - Jacky Cheung embarked on the Hong Kong stop of his tour concert on Thursday.

Cliff Buddle (third from left), the Post's acting editor-in-chief, congratulates this year's Citi Journalistic Excellence Award winners (from left) Sandy Li, Denise Tsang and Eric Ng. The South China Morning Post (SEHK: 0583) has scooped the prize pool in the Citi Journalistic Excellence Award 2011 announced yesterday. The Post's business reporters won three of the awards, with the top award in Hong Kong going to deputy property editor Sandy Li for her article "Shanty towns are no place to call home". Li won the first runner-up title in the 2010 competition. Denise Tsang and Eric Ng were first and second runners-up respectively. The Post's acting editor-in-chief, Cliff Buddle, said the three prestigious awards were testament to the strength of the newspaper's business reporting. "Congratulations to Sandy, Denise and Eric on their achievement," Buddle said. "Their winning stories covered very different issues, but were all thought-provoking, thoroughly researched and well-written." Li's article examined one of the most serious problems the mainland faces today - soaring home prices and the government's inability to provide low-cost housing for the poor. Now the world's second-largest economy, the mainland has more than 10 million people who cannot afford even low-cost housing and are forced to live in slums. Tsang's report "Managers struggle to connect with Generation Y" revealed how China's one-child policy shaped the labour market and what strategies senior managers took to get along with and communicate with younger workforces. In interviews with chief executives of large corporations, factory owners and university students in Shanghai, Tsang looked at the new labour regime from different perspectives. Ng's story about the United Nations probing claims that some firms are faking carbon credits earned the second runner-up award. In his article, Ng looked into claims from carbon credits market watchers that some refrigerant makers have been abusing a UN-run subsidy system to maximise their financial gains against the spirit of global efforts to reduce emissions. The system subsidises emission reduction projects in developing nations, by allowing polluters in developed nations to buy credits from developers of qualifying emission reduction projects in developing nations. The report shed light on why and how the abuses came about.

Graftbusters have arrested 11 people for bribery in the fraudulent trading of warrants. Those seized - aged 20 to 60 - are two senior staff members of the warrant issuer, an investor and eight others, two of them licensed representatives of another securities firm. The Independent Commission Against Corruption confirmed the 11 were arrested on Tuesday. It did not identify them or the bank. But market reports said Deutsche Bank was involved. Yesterday the bank denied any improper operations in warrant trading and refused to comment on whether any employees were involved or arrested. "Deutsche Bank's warrant business is operating normally and we are fully committed to meeting our clients' market requirements," the bank said. "There has been no suggestion of any misconduct by Deutsche Bank." The ICAC said it started the investigation, codenamed "Leap Over," after receiving a corruption complaint. "It is suspected that the two bank staff conspired to accept advantages from the stock investor and other persons for quoting favorable prices to them in their trading of the bank's derivative warrants, thereby enabling them to make profits," the ICAC said. "It is also suspected that the arrestees might have conspired to defraud the bank and investing public by creating a false or misleading appearance of active trading in the derivative warrants issued by the bank." The amount involved has not been disclosed but those detained are said to have made a profit of more than HK$10 million, according to market sources. The Securities and Futures Commission refused to comment, but the ICAC said the bank and the regulator are helping in the investigation. Deutsche Bank used to be one of the top five traders in terms of warrant turnover. But its trading volume has declined dramatically since Tuesday. Its turnover fell to just 0.83 percent of the total derivative trading volume yesterday. Warrant transactions through the bank accounted for 8 to 9 percent of overall turnover in derivatives last year. An earlier case was linked to warrant issuer Macquarie Capital Securities. The SFC identified heavy trading in certain warrants between two clients from two participating brokerages from January 2004 to January 2005. The clients repeatedly traded the warrants at or near the same prices at short intervals. The turnover for the warrants was falsely inflated by 80 percent, or more than HK$450 million in value. They earned a net profit of about HK$1 million. The two traders were jailed for market manipulation last year. Macquarie was reprimanded and fined HK$4 million.

 China*:  April 17 2011

China's top customs authority announced Friday that the country's foreign trade with the other four BRICS nations surged by 45.8 percent to reach 59.9 billion U.S. dollars in the first quarter of this year. The first-quarter foreign trade growth between China and the other four nations of BRICS (an acronym for Brazil, Russia, India, China and South Africa), was 16.3 percentage points higher than China's average foreign trade growth during the period, China's General Administration of Customs said in a statement on its website. During the first three months, China's imports from the other BRICS countries reached 33.05 billion U.S. dollars, up 57.2 percent year on year. Exports to those countries hit 26.85 billion yuan, up 33.8 percent. China's Q1 trade deficit with the other four nations reached 6.2 billion U.S. dollars, up by more than five times the amount in the same period of last year. In March alone, China's imports from these nations rose 48.8 percent to reach 11.93 billion U.S. dollars, while exports grew 48.5 percent to hit 9.93 billion U.S. dollars, creating 2 billion U.S. dollars in deficit.

Chinese president meets Spanish PM on bilateral ties - Chinese President Hu Jintao met Spanish Prime Minister Jose Luis Rodriguez Zapatero on Thursday in China's southern resort city of Sanya.

Chinese economy expands 9.7 percent in first quarter 2011, while the consumer price index (CPI) rose 5.4 percent in March from a year ago, down 0.2 percent from February, the National Bureau of Statistics said on Friday. Inflation battle set to redouble.

Former US treasury secretary talks at Boao Forum - Zhou Wenzhong, secretary-general of Boao Forum for Asia and former Chinese ambassador to the United States, talks to Henry Paulson, former US treasury secretary, during the 2011 annual meeting of the Boao Forum for Asia, in Boao, South China's Hainan province, April 15, 2011. The dialogue focused on financial regulation, China's financial market, clean energy, and environmental protection cooperation between the two countries. The Boao Forum, now on its 10th year, has been hailed as the Asian equivalent of the World Economic Forum in Davos.

Pazhou Exhibition Hall, the venue for the China Import and Export Fair. According to the organizers, the number of categories for imported goods exhibited at the latest fair has been reduced to seven from 12 last year. Number of domestic buyers will reach 3,019 at Canton Fair in Guangzhou - China's imports are expected to get a boost during the 109th China Import and Export Fair, the country's largest trade exposition. And the number of domestic buyers targeting imported goods will hit a record high, Liu Jianjun, spokesman for the fair, said on Thursday. Held biannually since it began in 1957, China Import and Export Fair, also known as Canton Fair, opens in Guangzhou on Friday. "The number of domestic purchasers, who intend to buy imported goods from foreign-registered sellers, will reach 3,019 during this session, 2,991 more than in 2010 and the largest number for five years," said Liu. He said that the import volume will witness an obvious increase and the fair will help further fuel China's imports over the next five years, as the fair is seen as a key barometer of China's trade development. According to Liu, the trade volume of exports transacted during Canton Fair last year amounted to $70 billion, accounting for 4.4 percent of China's total export volume in 2010. The fair was previously export-oriented and foreign companies were only invited to participate for the first time five years ago. "We have seen an improvement in import deals in recent years and the import trade volume will be announced once the fair has ended," Liu said. According to China Foreign Trade Center, which is organizing the fair, 534 enterprises from 53 countries, including the Netherlands, Turkey and Malaysia will showcase their products at the imported goods zone. "In order to boost import deals and achieve complementation of imported and exported goods, the categories of imported goods exhibited during this session has reduced to seven from 12 last year," Liu said. He said the exhibition, consisting of electronic and household appliance products, building material, hardware products, agriculture, medical and healthcare goods, and is tailored to China's industrial upgrade and economic transformation to a more domestic consumption-oriented, will be the mainstay of the imported goods exhibition. "The main target of the fair this year is to help transfer the development mode of China's foreign trade from volume distension to quality enhancement," Liu added. China's monthly trade surplus reached a record high in the latter half of last year and since then the country has initiated moves to boost imports as a method of balancing trade. Earlier this month, China reported its first quarterly trade deficit in seven years, registering a shortfall of $1.02 billion in the first quarter, compared with a surplus of $13.9 billion last year. It was the first deficit since the first quarter of 2004 when one of $8 billion was reported. According to the General Administration of Customs, imports rose by 32.6 percent to $400 billion in the first quarter of 2011, while exports increased 26.5 percent to $399 billion.

Customers choose tomatoes at a supermarket in Beijing. Analysts said that the faster-than-expected growth in money supply and lending may aggravate the country's already high inflationary pressure and prompt policymakers to adopt more monetary-tightening measures. China's bank lending and money supply accelerated at a faster-than-expected pace in March. That's exacerbating policymakers' concerns about excess liquidity in the world's second-largest economy, where inflation is expected to accelerate at its fastest pace since 2008. New yuan-denominated loans stood at 679.4 billion yuan ($104 billion) in March, while the country's broad money supply (M2) rose 16.6 percent from a year earlier to reach 75.8 trillion yuan. The figure exceeds the whole-year target of 16 percent set by the People's Bank of China (PBOC) at the beginning of this year, a statement on the central bank's website showed on Thursday. Analysts said that the faster-than-expected growth in money supply and lending may aggravate the country's already high inflationary pressure and prompt policymakers to adopt more monetary-tightening measures. Tackling inflation has become the biggest economic priority for the Chinese government. The nation's total bank loans rose to 52.61 trillion yuan by the end of March, a increase of 17.6 percent year-on-year, while new yuan-denominated loans in the first quarter reached 2.24 trillion yuan, according to the central bank's statement. Sheng Songcheng, head of the statistics department at the PBOC, said on Thursday that China's inflation rate is likely to be more than 5 percent in March, and that "prudent" monetary policies will not be eased over the coming months. Sheng's comments came the day before the release of the country's first-quarter economic data and inflation figures for March, and there is speculation that China will again raise the required reserve ratios for lenders to absorb excess liquidity. "The latest numbers reflect the fact that China is still facing with daunting inflationary pressure, although the central bank has achieved some success in controlling loan growth," said Zhuang Jian, a senior economist with the Asian Development Bank. Zhuang said the accelerated bank lending is likely to lift consumer prices to a higher-than-expected level. According to economists' forecasts, China's Consumer Price Index in March is likely to jump to 5.2 percent or 5.3 percent, higher than November's 28-month peak of 5.1 percent. "Formal and informal loans have substantially raised liquidity in the Chinese capital markets, overtaking food prices to become the major driver of inflation," said Qu Hongbin, chief China economist at HSBC Holdings in Hong Kong. Qu predicted another increase in the reserve requirement ratios for banks and one further hike in interest rates during the first half of the year. The central bank on Thursday also made public for the first time an index of financing across the various sectors of society. The figure for the first quarter was 4.19 trillion yuan higher than that a year earlier. It was the first time that the PBOC had used the indicator to monitor liquidity in financial markets. Apart from bank loans, the financing gauge also takes into account money raised by corporate bonds, shares issued by companies outside the financial industry, and insurance company compensations. The aggregate new figure is better able to measure the total of funds raised, said Xu Hongcai, an economist from the government-backed think tank China Center for International Economic Exchanges. On Wednesday, Premier Wen Jiabao told an executive meeting of the State Council that the funds raised, excluding those from the financial industry, should be managed within a "reasonable range" by controlling money supply and adjustments to required reserve ratios and interest rates. The Chinese authorities, who believe the concept of "social finance" is closely related to consumer prices, are expected to use the indicator as an important reference point for the development of monetary policies to tame inflation.

Ford said on Friday that it will bring 15 new vehicles to China by 2015 as it accelerates expansion in the world’s largest automotive market. The Detroit carmaker, which competes with General Motors and others in China, said in a statement that it would double its dealerships in the mainland over the next five years from 340 now, and add 1,200 new jobs. The steps mark the latest round of initiatives that Ford has taken in the country since its Asia and Africa chief Joe Hinrichs took the helm at its China operations in October last year. Ford makes Focus, Fiesta, Mondeo and other models in China in partnership with Chongqing Changan Automobile and Mazda. It also holds a 30 per cent stake in Jiangling Motors, a major mainland light commercial vehicle maker. In March, it sold 53,440 vehicles in China, up 20 per cent from a year earlier, vastly outpacing the 5.4 per cent gain of the overall market, which as lost some steam after two consecutive years of breakneck expansion. Larger rival GM sold 233,014 vehicles in March, up 1.3 per cent, while Honda’s monthly sales declined 5.3 per cent.

CSR, one of the mainland's two dominant train makers, plans to expand the international portion of its revenue from 4 per cent in 2010 to at least 15 per cent in 2015, said its chairman Zhao Xiaogang. "Over 20 nations are looking at high-speed railway. Many countries are planning to build urban metro railway," he said. The Hong Kong- and Shanghai-listed company hopes to win high-speed train contracts in the United States, but competition is intense with seven players. Last December, CSR formed a joint venture with US conglomerate General Electric to produce high-speed trains for that country and Zhao estimated that the first US tender for high-speed trains will take place next year for the California high-speed railway. Overseas contracts accounted for 13 billion yuan (HK$15.4 billion) of the 100 billion yuan of the state-owned company's outstanding orders at the end of 2010. Last year, CSR won nearly US$1 billion in overseas contracts, and its products have been exported to over 60 countries. "The company has become one of the three largest rolling stock manufacturers in the world," said Zhao, adding that it would "register an increase of over 20 per cent in revenue for 2011. We plan to invest 7.74 billion yuan [this year], mainly in high-powered locomotives, high-speed MUs [multiple units, which is industry jargon for trains], intercity MUs, railway freight wagons and proprietary technologies." A Bloomberg consensus of 18 analysts forecast CSR's revenue will grow 37.3 per cent to 87.77 billion yuan this year. In 2010, its turnover rose 40 per cent to 63.91 billion yuan, while net profit soared 50.9 per cent to 2.53 billion yuan. The company's 2010 net profit of 2.53 billion yuan was 10.1 per cent lower than the Bloomberg consensus forecast, said Jenny Zhen in a Citi report. "The lower net income was mainly due to lower-than-expected revenue from passenger carriages and rapid transit vehicles [used in city metro railway], impairment loss on patents of 132 million yuan and a foreign exchange loss of 66 million yuan," Zhen said. Despite the dismissal of railways minister Liu Zhijun in February and a lower-than-expected 2.8 trillion yuan budget for China's rail construction from 2011 to 2015, Zhao said: "We are bullish on our future growth." JP Morgan analyst Karen Li said in a report: "Demand outlook remains solid despite recent changes in the Ministry of Railways' leadership. Orders look secure, given they are from half-completed railway tracks, while further upside can be derived from subway, wind power and overseas markets."

Hong Kong*:  April 16 2011

Hong Kong's Legco approves HK$6,000 (US$775) cash handout - Legislative Council on Thursday approved the government's controversial proposal to give HK$6,000 (US$775) to all adult permanent residents in Hong Kong. The cash handouts are an amendment to Financial Secretary John Tsang Chun-wah’s original budget and will cost an additional HK$37 (US$4.78) billion. On the second day of a two-day debate on Tsang’s budget, 34 legislators voted in support of the cash handout, 11 abstained and none voted against. Tsang said that about 6.1 million people were expected to qualify. He explained that officials were now working out how the money would be distributed. The financial secretary announced his cash handouts plan in an unprecedented policy U-turn on March 2 after his original budget announcement received widespread criticism. Tsang’s initial plan – to inject HK$6,000 into the Mandatory Provident Fund accounts of Hongkongers – was criticised as unfair because it excluded the unemployed, retirees and housewives. The budget and later amendments sparked protests by people concerned that the government was not doing enough to address the Hong Kong’s long-term economic and social problems. Many are also concerned about rising living costs and what they see as the government’s inability to control the manipulation of the housing market by a few wealthy speculators. Tsang said on Thursday his amendments to the budget had been made in response to public concern. “They aim to respond to these concerns and [to] give people financial assistance,” he said. The budget is expected to receive Legco endorsement by the end of the week.

Controversial budget approved without any fireworks - Financial Secretary John Tsang Chun-wah's controversial budget easily secured approval in the Legislative Council yesterday, clearing the way for the government to give all permanent residents a HK$6,000 cash handout. It was passed by 33 votes to 19, with one abstention. A feared repeat of last month's street battles with demonstrators failed to materialise, with hundreds of police officers including those from the police tactical unit and plain-clothes officers, deployed in a heavy security cordon thrown around the Legco buildings. Two dozen police vehicles were parked nearby and a double layer of steel-wire barriers was erected to prevent any protesters from disrupting senior officials arriving to attend the meeting at which lawmakers resumed their debate on the budget. Human Rights Monitor director Law Yuk-kai said police might have been acting on mistaken intelligence of possible protests outside Legco. "As far as we know, many groups which used to stage protests outside the Legco building when crucial bills or issues were discussed at the legislature were not interested in coming this time," he said. "Senior police management may have taken recent remarks by Chief Secretary Henry Tang Ying-yen too seriously and made a wrong judgment," Law said. Tang said on Tuesday any behaviour that crossed the line of peaceful demonstration would not be condoned. Inside Legco, lawmakers voted 34-0 in favour of an amendment tabled by John Tsang to give each of Hong Kong's six million permanent residents HK$6,000 in cash. Eleven lawmakers from the Democratic Party and the Civic Party abstained. Tsang said the government had earmarked HK$37 billion for the handout and was still working out the details for distributing it. All 16 amendments tabled by the pan-democrats were voted down. They included one proposed by Wong Yuk-man, of People Power, to slash the HK$85 million funding for the Central Policy Unit, and another put forward by social welfare sector lawmaker Peter Cheung Kwok-che to cut one month's salary from Secretary for Labour and Welfare Matthew Cheung Kin-chung.

Graceful Hepburn-style sweeps "Love Plus Hope" show in HK - Models present creations of local brand "Love Plus Hope" at the Chinese General Chamber of Commerce in Hong Kong, south China, April 14.

Hong Kong played a role in establishing diplomatic relations between China and South Africa, six months after the 1997 handover, according to a former deputy foreign minister. Ji Peiding, the head of Beijing's de facto embassy in Pretoria in 1994, when Nelson Mandela won South Africa's first post-apartheid election, wrote in his 2007 memoir that it took almost four more years to establish diplomatic relations because of the hurdle posed by Taiwan's long-standing ties with Pretoria. Just weeks before the 1994 election, Taiwan gave US$11 million to Mandela's African National Congress, Ji said. In gratitude, Mandela decided to maintain diplomatic ties with Taiwan, despite entreaties from mainland diplomats. The turning point came, however, with the approach of Hong Kong's return to Chinese sovereignty in July 1997. Ji said Pretoria's continued recognition of Taipei put its consulate in Hong Kong in jeopardy because it did not recognise Beijing's sovereignty over the special administrative region. To protect South Africa's interests, he said a "flexible solution" was agreed to, with a six-month grace period allowing the consulate to operate normally until the two countries established diplomatic ties on January 1, 1998. Despite the belated start, the bilateral relationship has grown fast and generated amazing numbers. According to Chinese customs data, bilateral trade surged more than 11-fold in the first 10 years of diplomatic ties, rising from US$1.56 billion in 1998 to US$17.85 billion in 2008. South African President Jacob Zuma visited China last year during a tour of the four BRIC countries - Brazil, Russia, India and China. South Africa was invited to join the foursome in December and Zuma will return to China this week for today's BRICS summit in Sanya. South Africa's ambassador to Beijing, Bheki Langa, says Zuma will head a large delegation, including 80 South African business leaders.

 China*:  April 16 2011

China's foreign reserves, by far the world's biggest, soared 24.4 percent over a year ago to $3.04 trillion at the end of March, the central bank reported Thursday. China's reserves are nearly triple those of second-place Japan, which reported $1.1 trillion as of March 31. The makeup of China's reserves is secret but Beijing is believed to keep a big part in US Treasury securities and other US government debt. The government has diversified its holdings in recent years, trying to earn a better return by putting some of its reserves into agencies that invest in stocks and other foreign assets.

The BRICS countries leaders (L-R) Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao, Brazilian President Dilma Rousseff and South African President Jacob Zuma meet the press during the BRICS Leaders Meeting in Sanya, South China's Hainan province, April 14, 2011. Leaders from five of the world's largest emerging economies meet in South China's resort city of Sanya Thursday morning for a summit to coordinate stance on major economic and international issues. The leaders -- Chinese President Hu Jintao, Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma -- started a closed-door meeting after a group photo was taken. The meeting, chaired by President Hu, is expected to strengthen coordination and mutual cooperation among BRICS members on reform of the international currency system, commodity price fluctuations, climate change and sustainable development. Following their talks, the leaders will jointly meet the press and issue a statement indicating their consensus on the key topics. The term of BRIC was first coined by Goldman Sachs economist Jim O'Neil in 2001 to group four fast-growing economies -- Brazil, Russia, India and China. The countries now seek to use the idea to forge a platform for communication and cooperation. In 2009, Russia hosted the first summit of BRIC state leaders and the second such gathering took place in Brazil last year. South Africa was invited to join the grouping in late 2010. The five countries' population made up 42 percent of the world's total and their combined gross domestic product (GDP) accounted for 18 percent of the global GDP in 2010. Their trade volume took up 15 percent of the world's total last year. 

Pact paves way for gradual shift from dollar to local currencies - The world's five largest emerging economies have decided to move away from the US dollar and use local currencies more in global business, in one concrete result from the just-concluded BRICS summit. This was the central theme of an internal banking co-operation agreement signed by Brazil, Russia, India, China and South Africa yesterday in Sanya , in the southern island province of Hainan. The combined gross domestic products of the five countries accounted for 18 per cent of the global total last year, according to the International Monetary Fund. South Africa joined the group this week as a representative of Africa. Banking technicalities would be ironed out over the next year before India hosted the next scheduled BRICS summit, said banking officials from participating countries. They will allow increasing the use of the real, rouble, rupee, yuan and rand for the settlement in their mutual trade and investment. The BRICS nations have been seeking a greater say in global economic affairs, according to President Hu Jintao in his statement during the five leaders' joint meeting with the media. That, according to Chinese think-tank researchers, can be boosted by less dependence on the dollar. Fluctuation in the dollar's exchange rate, especially at a time of a rising threat of inflation, can be a worrying factor for all emerging economies, said Jabu Moleketi, chairman of the Development Bank of Southern Africa. The intra-BRICS local currency mechanism, once the technical issues are worked out, could certainly help the member countries diversify their financial risk, Moleketi said. One of the technical issues will be how traders and investors can profit from their China business when the yuan remains inconvertible for the capital accounts. "A third country's currency has to be agreed upon as an alternative," he said. "Or, of course, we can use the Hong Kong dollar." A set of concrete agreements were expected next year in the use of local currencies, Moleketi said, adding that there would be intense efforts on the working group level from the central banks of all member countries. Such arrangement will help South Africa to absorb more Chinese funds into long-term projects in power supply, transport infrastructure and agriculture, he said, and for investors to use South Africa as a springboard to expand to other economies in the region. In a briefing, Chen Yuan , chairman of the State Development Bank of China, said the co-operative banking mechanism may even lead to member countries issuing stocks and bonds in one another's financial markets. But he admitted that that was only "a future direction" or an open possibility. Chen said the co-operation was expected to increase the number of projects led by government funds and protected by international agreements - especially in key growth industries such as natural resources, new technologies, and environmental protection - and increase the exchange of financial information.

Gamesa Corp Tecnologica SA signed Memoranda of Understanding with three Chinese power companies - China Longyuan Power Group Corp Ltd, China Resources Power Holdings Co Ltd and China Datang Corp Renewable Power Co Ltd - which is likely to lead to supply contracts of 900 megawatts in wind turbine capacity in coming months. Gamesa Corp Tecnologica SA, a top global wind turbine manufacturer, will join hands with China Longyuan Power Group Corp Ltd to co-develop international wind projects, primarily in the United States, Europe and Latin America. Under the agreement - the first ever signed by Chinese and Spanish companies in the industry - Gamesa and Longyuan, the world's third-largest wind power operator by market share, will research suitable sites for the joint development of wind farms, including some that Gamesa already has in its wind farm project portfolio and new ventures in strategic countries. The Spanish company has a wind farm portfolio totaling more than 22,600 megawatts (mW) at varying stages of development in Europe, the Americas, and Asia, giving its Chinese partner access to overseas markets that otherwise might take longer to enter. This year, Gamesa has invested in 300 mW of wind farms in the US, where it has two manufacturing plants. "We will offer our know-how for finding potential wind farm sites and project management of joint ventures in the world's most promising wind markets," Gamesa Chairman and CEO Jorge Calvet said. The company also signed an agreement with Longyuan to jointly develop 200 mW of wind farms in China by 2015. Meanwhile, Gamesa signed Memoranda of Understanding with three Chinese power companies - Longyuan, China Resources Power Holdings Co Ltd and China Datang Corp Renewable Power Co Ltd - which is likely to lead to supply contracts of 900 mW in wind turbine capacity in coming months. Gamesa believes that China's pace of growth in wind energy will continue and the company is making its strategy accordingly. "The percentage of wind power in the energy portfolio will be increased," Calvet said, adding that Gamesa has heard more questions about the feasibility of wind farm development since the nuclear accident in Japan. However, integrating wind power into the grid in China has been an issue keeping the green energy source from making a larger contribution. Spain, Europe's top wind energy producer, got 16.4 percent of its electricity from wind power last year. Last month, the Spanish grid operator Red Electrica de Espana SA signed a general cooperative agreement with State Grid Corp of China, under which State Grid will work closely with the Spanish company in developing grid-access technologies for renewable energies. "In Spain, we have been using technology that can predict the amount of electricity generated by our wind farms four days in advance and inform the grid of the amount," Calvet said. "That way, the grid can mix different energy sources accordingly." "This is the type of agreement that will be developed with our Chinese partners," he said.

Visitors at the 2011 Shanghai International Business Aviation Show on Wednesday at Shanghai Hongqiao International Airport Business Aviation Center. Around 100 companies including jet manufacturers, ground service providers, maintenance operators, and training providers took part in the exhibition. Encouraged by China's promise of a gradual opening of its low-altitude airspace, jet manufacturers have started to shift their focus to China's general aviation market, which is expected to grow 10-fold in the next five years. Around 100 companies including jet manufacturers, ground-service providers, maintenance operators, and training providers took part in the Shanghai International Business Aviation Show on Wednesday. The manufacturers showcased about 30 aircraft in the 44,000 square meter exhibition space. The event attracted substantial interest inspired by the joint announcement of the State Council and Central Military Commission last November that the nation's low-altitude airspace will gradually be opened, which means a huge potential market. At the end of 2009, China had a total of 997 aircraft in the general aviation sector, and this figure is expected to exceed 10,000 by 2012, according to a People.com report. Steve Taylor, president of Boeing Business Jets told China Daily, that Asia has become one of the world's strongest growth markets for business jets, and China will lead Asia in this area with its robust economic growth. As the world's second-largest commercial-plane maker, Boeing Co has sold eight business jets to China in recent years, and it will deliver another three in 2011. "We hope to win 50 percent of China's large business jet market (18-seats or above) in the future," said Li Bing, sales director with Boeing Business Jets Greater China. Li added that the competition is mainly between Boeing and Airbus SAS. The world's largest plane maker by orders delivered and won in 2010, Airbus has sold more than 20 such aircraft to China in the past five years. Currently, China's business revenue accounts for 25 percent of Airbus' global corporate jet sales. Between 2011 and 2015, Airbus is expected to sell five new corporate jetliners each year, said the European company. The world's third-largest plane maker, Bombardier Inc has built its presence in China over more than 50 years. The Canadian company holds a 27 percent share of China's business-aviation market, and more than 50 Bombardier business jets are operating in the country. Bombardier builds and distributes 11 models of high-performance business jets through three brands - the Global, Challenger and Learjet models. "We have a very strong order book from China, and it is a significant market for us," said Bob Horner, senior vice-president of sales of Bombardier Business Aircraft. "Our clear objective is to increase that (27 percent) market share as the years go by," he added. According to Bombardier's forecast, there will be an additional order of 600 business jets over the next 10 years from China. More than 10,000 business jets operated at airports across the nation in 2010, of which about 3,500 were in Shanghai. "The operations of business jets in Shanghai will grow steadily at an annual rate of between 10 and 15 percent," said Wang Guangdi, chairman of Shanghai Hawker Pacific Business Aviation Service Center, a joint venture set up by the Shanghai Airport Authority and Australia-based Hawker Pacific. The center, opened in March 2010, is the first of its kind on the Chinese mainland.

China's first aircraft carrier could begin sea trials this summer and its deployment would significantly change the perception of the balance of power in the region, the chief of US forces in the Pacific said Tuesday. China bought the vessel, Varyag, from Ukraine more than a decade ago, and it is viewed as emblematic of the communist state's ambition to be a military power that can challenge America's decades long supremacy in the west Pacific. China's state news agency this month carried photos of the carrier in what it said was the final stages of reconstruction. "Based on the feedback from our partners and allies in the Pacific, I think the change in perception by the region will be significant," Admiral Robert Willard told a hearing of the Senate Armed Services Committee, also noting the "remarkable growth" of China's military. But he viewed that impact as largely symbolic, as there would be a long period of training, development and exercises before the carrier becomes operational. Shanghai-based military expert Ni Lexiong said that outsiders shouldn't be surprised by the fast reconstruction work of Varyag and its coming sea trials as it will be just a symbolic achievement. "Even when our carrier becomes operational, it could only bring military deterrent force to our neighbours, but it will be nothing to the US, who has 12 carriers," Ni said. "I think Beijing will develop only as many as four aircraft carriers, which is matching its national image and military scale. We couldn't afford the huge operational cost like the US." "No matter how much China will spend on its new weapons projects, it would not create military conflicts with other countries, especially the US. China realises that in today's peacetime, developing new weapons doesn't aim at triggering conflicts, but deterring other countries from violating its national core interests," Ni said. The US Pacific Command has five aircraft carrier strike groups, which it has used to project American power across a region key to global trade. However, China's military build-up has spooked its neighbours and could potentially crimp the US forces' freedom to operate. Willard said that China has increased and improved its fleet of both conventional and nuclear-powered submarines, which had prompted a proliferation of submarines in the Asia-Pacific. He mentioned Malaysia, Vietnam, Indonesia and Australia which have all either acquired or signaled their intention to acquire or expand their submarine fleets. Willard said China's navy has been less aggressive in its operations this year than last. He described that as a "retrenchment" by China following US statements that it has a national interest in the peaceful resolution of territorial disputes in the South China Sea — where China's claims of sovereignty are challenged by several Southeast Asian countries.

Hong Kong*:  April 15 2011

A new round of mortgage rate hikes has kicked off after the Hong Kong Monetary Authority issued a circular to lenders asking them to beware of rapid credit growth. Bank of East Asia (0023), the fifth-largest mortgage lender by market share, has taken the lead, revising its loan offer to HIBOR plus 1.3 percent - from a range of HIBOR plus 0.9 to 1.3 percent. It also ended cash rebates for new applications. With the one-month Hong Kong interbank offered rate at 0.2 percent yesterday, HIBOR plus 1.3 percent would effectively mean a rate of 1.5 percent. Based on the previous rate of HIBOR plus 0.9 percent, a buyer of a HK$2 million home - after a 30 percent downpayment for a 20-year loan - would pay HK$6,501 monthly. With the new rate, HK$254 will be added. The revisions follows a letter sent by HKMA chief executive Norman Chan Tak- lam to lenders, warning that loan growth has been too rapid and could hurt the quality of bank assets. "The HKMA has remained vigilant to the risk that a credit-fueled property bubble may pose to banking and financial stability in Hong Kong," Chan wrote. The revision was not unexpected as lenders have been reducing loans. "We can see banks increasing their mortgage rates several times over the next couple of months," said Chinese University professor Andy Kwan Cheuk-chiu. "And they have been cutting mortgage loans without explicitly lowering the interest rates, such as lowering valuations, or imposing tougher reviews of applicants." At least 10 banks - including HSBC and Bank of China (Hong Kong) (2388) - had revised mortgage loan offers to HIBOR plus 0.9 to 1.3 percent last month, compared to HIBOR plus 0.8 to 1 percent in February. Hong Kong Mortgage Corp said new drawdowns under the Mortgage Insurance Plan grew 13.9 percent to HK$41 billion. However, only 13 percent of total mortgage loans were guaranteed through the plan, compared to 18 percent in 2009. HKMC said 96 percent of the loans drawn down were secured on properties in the secondary market.

Zero tolerance - olice are standing by to deal firmly if rowdy protesters attempt to charge or break police cordons as legislators debate the budget today. The warning came after Chief Secretary for Administration Henry Tang Ying-yen fired a fresh volley of criticism at violence in recent protests. "No violence and disorderly behavior which constitute criminal acts or threaten public safety and public order will be tolerated," a police spokesman said. "Police will deal with such situations in a resolute and professional manner in order to protect the wider interests of community." The police said protesters should refrain from blocking the entrances to the Legislative Council or the roads and pavements near the building. Police will intervene at any attempt to charge or break the police cordons, or to seize or climb on barriers. Under the Legislative Council (Powers and Privileges) Ordinance, the obstructing of movement of lawmakers in and out of Legco is an offense. Police Commissioner Andy Tsang Wai-hung has already taken a tough stance on maintaining law and order, refusing to apologize for strong police tactics at an anti-budget rally last month. The legislature will continue its debate on the budget today, with pan- democratic lawmakers moving 16 amendments and Financial Secretary John Tsang Chun-wah moving one to the Appropriation Bill - the largest number since the handover. They will be put to the vote after the discussion, but all bar Tsang's are expected to be vetoed. Democratic Alliance for the Betterment and Progress of Hong Kong chairman Tam Yiu-chung said his group will support the budget and vote against all amendments by pan-democratic legislators. Most pan-democratic lawmakers plan to vote "no" to the budget and to abstain from voting on Tsang's proposed amendment to allocate an extra HK$7.1 billion for the HK$6,000 cash handout to adult permanent residents. The chief secretary, meanwhile, weighed in to criticise protesters who confronted government officials over the weekend. "A radical approach will merely intensify conflicts, instead of narrowing differences and resolving problems," Tang said. But his voice was almost drowned out by protesters at the Central Government Offices demanding rights for mainland-Hong Kong families. Tang said he "totally disagrees" with the attempts by some protesters to launch clashes. He was referring in particular to Sunday's demonstration by young activists who stormed a stage during an event in Central. One snatched a microphone from Secretary for Transport and Housing Eva Cheng.

Four out of five Hong Kong people consider it socially acceptable to leave shark fin soup off the menu for a wedding banquet. The message comes in a survey by shark conservation-minded group BLOOM - a sign of hope in efforts to protect the endangered fish. However, while 78 percent of respondents to the survey of 1,000 people from 2009 to 2010 felt that way, more than 70 percent said they consume shark fin soup at weddings, or at least once a year. Despite tradition, the study shows "shark fin soup won't be much missed from wedding banquets," BLOOM president Claire Nouvian said yesterday. About two-thirds of respondents also said they were uncomfortable with eating endangered fish, and 85 percent support banning shark fin imports, despite the majority of respondents having eaten the soup. Almost all shark fin soup was consumed as part of a set menu. Scientists blame "shark finning" - slicing fins off fish and throwing them back in the sea to die - for a collapse in shark populations. Hong Kong was the world's largest importer of shark fin in 2007. Fins worth about US$277 million (HK$2.15 billion) were brought in, UN data show. One kilogram can sell for more than HK$900.

Henderson Land Development (0012) said its chairman Lee Shau-kee has spent HK$10 billion by exercising warrants and plans to make further investments in the firm that he controls. Lee exercised 172.4 million warrants at HK$58 apiece, giving him the equivalent number of stock, Henderson Land said. He also bought 28.2 million shares from the market since March 18, giving him 200.7 million shares, or about 9 percent of the developer. The billionaire exercised the warrants as he has confidence in the outlook for the company, said Bonnie Ngan, a spokeswoman. Lee will continue to increase his stake in the company in the next couple of months at reasonable prices. The billionaire aims to add at least 228.5 million shares. Lee's holding company has indicated that it would not be easy to acquire such a significant amount of shares in Henderson Land if not for the subscription made through the exercise of warrants held by it, the company said. Henderson Land's shares lost 2.1 percent to HK$54.75 yesterday. The stock surged 20 percent since March 17, the day before Lee started adding to his stake in his company. The Hang Seng Property Index has climbed 12 percent in that time. Lee was ranked by Forbes magazine this year as Hong Kong's third-richest man with a net worth of US$19.5 billion (HK$152 billion). 

Financial Secretary John Tsang Chun-wah pledged an increase in land supply to cool the overheated residential property market as he worked to garner support for his latest budget on Wednesday. Tsang was speaking at the beginning of a two-day debate on his budget in the Legislative Council. He unveiled plans to put up a total of 12 new property development sites for sale by June. He noted that the number was larger than usual. Nine of the sites will be residential and are expected to provide 2,650 flats. Three commercial sites will also be offered. All will be sold through auction or tender. Tsang also said the government would consider announcing an advance schedule for land sales each quarter. The financial secretary said he understood Hong Kong people’s concerns about the overheated property market. Tsang said he would introduce further measures to reduce the risk of a property bubble – if necessary. “I am deeply concerned that overall property prices in February have surpassed the peak in 1997. I shall pay close attention to developments,” he said. Legislators are expected to vote on the budget at the end of the debate. Police on Wednesday stepped up security outside the Legislative Building as protestors demonstrated against Tsang's budget. They demanded resumption of the House Ownership Scheme and an improvement in retirement welfare. Pro-establishment groups – including the Democratic Alliance for the Betterment and Progress of Hong Kong, the Federation of Trade Unions, Economic Synergy, and the Liberal Party – have vowed to support the budget in the poll. However, a majority of pan-democrats said they would vote against it. Tsang urged legislators to support his blueprint. He said relief measures in the proposal were strongly supported and well received by the public. “For members who have yet to show their support, I earnestly ask you not to veto these relief measures for the sake of short-term political interests,”he said. The budget is Tsang’s fourth since he took office, but is his least popular. The financial secretary has made a number of adjustments to his original plans, announced on February 23. Following public pressure, he made an unprecedented U-turn, discarding a plan to inject money into Hongkongers’ individual retirement funds and announcing a HK$6,000 handout to all adult permanent residents.

 China*:  April 15 2011

 

Chinese tourists big spenders overseas - A Chinese tourist takes a photo with a whale in the background at an ocean park in San Diego, California, in October 2010. Travelers spend more on shopping than food, hotels, other expenses - More mainland Chinese tourists are expected to spend money on overseas travel this year, according to a report released to the national tourism authority on Tuesday. The Annual Report of China Outbound Tourism Development 2011, released by the China Tourism Academy, estimates that mainland tourists will make 65 million trips to foreign countries as well as Hong Kong, Macao and Taiwan this year, up from 57.39 million in 2010. They are expected to spend $55 billion overseas, up from $48 billion a year earlier, the report said. Since 2009, mainland travelers have been the fourth-biggest spenders among tourists in the world. They follow just behind travelers from Germany, the United States and the United Kingdom, said Ma Yiliang, a researcher at the academy's international tourism development institute and a compiler of the report. "The main reason for this (ranking) is that mainland tourists prefer to shop during their trips," he said. The academy surveyed more than 2,000 tourists in six big cities last year, and found 26.85 percent of the respondents said they spend more money on shopping than on food, hotel rooms or other expenses. The survey also showed that 76 percent of the money mainland tourists spent in Hong Kong in 2010 went to shopping. For those who visited Macao, the number for shopping expenditures was 63 percent and it was 50 percent for those who went to Taiwan. Hong Kong and Macao are the two overseas destinations most popular among mainland tour groups. Japan and South Korea occupied the two next highest places in the ranking. In one change in the list, Taiwan overtook Vietnam this past year and became the fifth most popular destination for mainland tourists, receiving 1.66 million of them. The number is expected to continue rising, largely because tourism authorities across the Straits plan to let individual tourists from Beijing and Shanghai visit Taiwan without joining tour groups. The change could come as soon as July, insiders say. The US attracted 1.08 million mainland tourists last year, making it the seventh most popular destination on the list. Russia, meanwhile, managed to occupy the No 10 spot in the ranking by attracting 710,900 mainland tourists in 2010. It and the US are the only two destinations among the top 10 that are not Asian countries. But despite researchers' optimism for the tourism industry this year, industry insiders see things differently. Zhong Hui, general manager of Beijing-based China Environment International Travel Service Co Ltd, said 2011 "began with bad luck", alluding to the unrest in North Africa and the Middle East, flooding in Australia and the earthquake and tsunami that hit Japan, which is still contending with a nuclear emergency. "My company has suffered big losses, after tour groups to Egypt, Australia and Japan were canceled," he said. Xu Daoming, general manager of the marketing department of China Travel Service, said: "There will be no tour groups heading to Japan before June or even later." Fei Fei, from Chongqing municipality, said the company she works for has canceled a plan to take employees to tour Japan this year in response to fears about the ongoing nuclear emergency. She was instead offered a trip to Taiwan island, South Korea or Thailand's Phuket island. Settling on one will be "a difficult choice to make". Dai Bin, head of the tourism academy, said it may take travelers some time to overcome their radiation fears enough to visit Japan. But Dai believed that despite the recent disasters, the number of mainland tourists going to places outside the mainland will continue to increase. The latest official figures show that 16 million mainland tourists visited overseas destinations in the first quarter of this year, up 16 percent from the same period last year. With 100 million people expected to travel overseas by 2020, China now contains the largest native population of tourists in Asia. 

Siemens aims to get in sync with China - Siemens AG has reorganized its business and added an infrastructure and city development division, which includes its energy-saving operation. According to the company, China's industrial upgrade and its focus on promoting businesses related to environmental protection coincide exactly with Siemens' new strategy. Despite an anticipated slowdown in global revenue growth, Siemens AG, Europe's largest engineering company by sales revenue, is adopting a new expansion strategy. The new global approach also aims to be in sync with China's 12th Five-Year Plan (2011-2015), as the company looks to ride the rapid growth of the industrial sector. "Our industry sector will witness its fastest growth in China over the next five years. That's as the growth of the industry market in the country will surpass 5 percent, on the back of the vast business opportunities brought by the country's 12th Five Year Plan (2011-2015)," Siegfried Russwurm, CEO of Siemens' industry division, told China Daily during the Hannover Industrial Fair, which ended on Friday. "We will increase our investment and deepen our presence in second- and third-tier cities and in western China, whose development will drive the county's economic growth over the next five years," Russwurm added. According to Siemens, the global market for the manufacturing and processing industries is expected to grow to more than 200 billion euros ($288 billion) by 2016, as it rises 5 percent on average annually during this period. "China is now the third-largest industry market in the world, and Siemens Industry Sector's (one of four divisions of the group) business growth in the market will absolutely be higher than its global average," Russwurm said. Last week, the Munich-based company said its net profit for the three months to March 31 this year will be between 1.4 billion and 1.9 billion euros. However, its business will expand at a slower pace in the second half of this year. "I assume that growth will cool down in the second half of the year," The Financial Times quoted Joe Kaeser, Siemens' chief financial officer, as saying. Siemens announced at the end of March that it will revamp its Industry Sector unit in a move to strengthen the company's services business in automotive manufacturing, mechanical engineering and the chemical industry. According to Siemens, it has added a fourth sector to its business, focusing on infrastructure and city development, and which includes a bundle of select operations from its industry and energy businesses. "With the planned reorganization of Siemens AG, our industry sector unit intends to strengthen its vertical market and services business and further expand in industrial software. The reorientation will not only help to increase our customer's productivity, but will also drive the growth of our own business," Russwurm said. Marc Wucherer, President of Siemens Industry Sector Northeast Asia Cluster, said that thanks to China's new five-year plan focusing on industrialization and urbanization, "Siemens Industry Sector, which concentrates exclusively on industry customers and the industry services business, will have more opportunities to cooperate with our business partners in China". Siemens said that it plans to increase the innovative abilities of Chinese companies engaged in key fields of the country's urbanization process, including transportation and shipping, railways and the logistics industry over the next five years. Wucherer said that China's industrial upgrade and its focus on business related to environmental protection coincide exactly with Siemens' new strategy. "We expect buoyant business growth in the Chinese market over the next five years", he said. China's GDP is expected to increase to 55 trillion yuan ($8.4 trillion) by 2015 from 39.8 trillion yuan in 2010.

Chinese, South African presidents meet on bilateral ties - Chinese President Hu Jintao and his South African counterpart Jacob Zuma met Wednesday in Sanya City of south China's Hainan Province. Leaders from the world's five emerging economies gathered in south China's beach resort of Sanya for the BRICS summit on Thursday. The meeting will be chaired by Chinese President Hu Jintao and attended by Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma. The BRICS Leaders Meeting will send a signal of confidence, solidarity and cooperation to the international community, China's Assistant Foreign Minister Wu Hailong told reporters this month. China hopes BRICS countries can strengthen coordination and mutual cooperation on reform of the international currency system, commodity price fluctuations, climate change and sustainable development, Wu said. A document expected to be released after the summit will sum up BRICS countries' consensus on the global economy, international financial issues and developmental affairs. The five leaders are expected to meet the media on Thursday and President Hu is scheduled to deliver a speech to elaborate on China's views on the current global economic situation and other major issues. All the four foreign leaders have arrived in Sanya. Hu held talks with Medvedev, Singh and Zuma on Wednesday respectively. Hu met with Brazilian President Rousseff during her stay in Beijing on Tuesday. The term of BRIC was first coined by Goldman Sachs economist Jim O'Neil in 2001 to group four fast-growing economies -- Brazil, Russia, India and China. The countries now seek to use the idea to forge a platform for communication and cooperation. In 2009, Russia hosted the first summit of BRIC state leaders and the second such gathering took place in Brazil last year. South Africa was invited to join the grouping in late 2010. The five countries' population made up 42 percent of the world's total and their combined gross domestic product (GDP) accounted for 18 percent of the global GDP in 2010. Their trade volume took up 15 percent of the world's total last year. Cast members promote movie "Rest On Your Shoulder" in Beijing - Actresses Gigi Leung, Lun-mei Guey, actor Chen Kun attended a news conference of the movie "Rest On Your Shoulder" in Beijing April 12, 2011.

Woods and Liu Xiang meet in Beijing to inspire youth - U.S. golf great Tiger Woods and Chinese star hurdler Liu Xiang met students of Beijing Sports University in Beijing on Wednesday.

Cast members promote movie "Rest On Your Shoulder" in Beijing - Actresses Gigi Leung, Lun-mei Guey, actor Chen Kun attended a news conference of the movie "Rest On Your Shoulder" in Beijing April 12, 2011.

Shanghai office space snapped up by overseas firms - The Shanghai World Financial Center in the Lujiazui financial district in Shanghai. Many multinational companies significantly expanded their office space in Shanghai. Recovering demand for office space from foreign companies has chopped the vacancy rate in Shanghai's central business district's Grade A offices to 5.6 percent, down 2.9 percentage points quarter-on-quarter, analysts said on Tuesday. The first quarter of this year saw extremely strong demand and no new supply in the nation's financial hub, driving up the occupancy rate and rents, which rose to 8 yuan ($1.22) each square meter (sq m) a day on average, an increase of 6.6 percent over the previous quarter and 24.1 percent year-on-year, according to figures released by Jones Lang LaSalle (JLL), a US-headquartered global real estate service company. "Multinational occupants continue to implement expansion plans, fueling confidence and pricing power among landlords," said Anthony Couse, managing director of JLL Shanghai. Driven by a much better business outlook and confidence in China's economy, many multinational companies significantly expanded their office space in Shanghai. The financial company Morgan Stanley leased a total of 14,000 sq m in the Pudong New Area, while the international accounting firm PricewaterhouseCoopers (PwC) expanded its quarters by about 100 percent, taking an additional 5,400 sq m of space. And manufacturer Mitsubishi Electric Corp expanded its space by about 50 percent and leased about 3,000 sq m in the city, said Alan Li, head of Pudong markets and capital markets with JLL Shanghai. Along with the heated office market, investment is also booming. The total sales value of en-bloc transactions reached 10.5 billion yuan in Shanghai in the first quarter, up 11.5 percent year-on-year. Different from 2010, when the investment market was dominated by foreign investors, both domestic and foreign investors remain interested in the retail and office sectors because of strong growth prospects this year. In the first three months alone, domestic buyers made up more than 60 percent of the market. The soaring demand for real estate investment in the first-tier cities shows China's mature investment atmosphere, said Zhang Lin, assistant manager of Savills China research. China's tallest building, the Shanghai World Finance Center (SWFC), has sold out five floors, showing the strong capital flow of buyers. Unlike the Taiwan property company Tomson Group Ltd, the only publicly identified buyer, the buyers are keeping a low profile and their identities are not publicly known. Sources said they are mostly domestic players. A report released by real estate services company DTZ Holdings said a total of $104 billion in capital is flowing in the Asia-Pacific region for real estate investment in 2011, up 45 percent from last year. Among investment destinations, China and Australia remain the most popular. However, in contrast with the generous spending in office leasing and commercial property transactions, the residential housing market is beginning to wither after the central government announced a slew of tightening measures starting in late January. These measures include purchase restrictions, a property tax in Shanghai and Chongqing, and lending restrictions. Statistics from the China Real Estate Index System index showed that Shanghai's housing prices rose by 0.5 percent month-on-month in January and 0.7 percent in February.

Shenzhen will spend up to 500 million yuan (HK$594 million) annually over the next five years to draw overseas professionals to the city's new energy, internet, biotechnology and industrial sectors and boost its competitive edge. The ambitious "Peacock Initiative" campaign will see the the municipal government spend 300 to 500 million yuan each year on living allowances and research subsidies to attract some 10,000 talents in high technology, finance, logistics and culture, Xinhua News Agency said. Those joining the scheme will be eligible for overall subsidies ranging from 800,000 yuan to 1.5 million yuan. They will also enjoy privileges such as medical insurance, children's education allowance and employment opportunities for spouses. Special assistance on immigration and housing will also be provided. Apart from individuals, the scheme will also recruit talented teams, with each standing to get up to 80 million yuan in subsidies for research and business development. Fifty teams along with at least 1,000 individuals will be brought to the city under the scheme, attracting a total of 10,000 talents, the Shenzhen government said. Other than overseas professionals, mainlanders returning from overseas studies will also be eligible for the scheme. Officials stressed that standardized procedures will be applied when screening applicants. President Hu Jintao has repeatedly said that an innovative workforce is the key to success for Shenzhen and officials say the Peacock plan aims to sharpen the city's competitive edge based on Hu's advice. It is hoped the scheme will help develop new industries that will play a strategic role in turning Shenzhen into an international city, aiding its transformation into an Asian hub for innovation and a melting pot for overseas talents, the Xinhua report said. Shenzhen party secretary Wang Rong pointed to consistent challenges from other mainland cities. "To attract talents, a region should have an opportunity to develop, a high quality of life, and a moderate cost of living," he told mainland media.

Hong Kong*:  April 14 2011

The government is likely to be spared a political crisis tomorrow as the majority of lawmakers seem ready to pass the budget and a controversial HK$6,000 cash handout. Already suffering a record dissatisfaction rating after voting down the interim budget bill last month, a majority of legislators are expected to vote for it this time, although most pan-democrats will vote against. Dr Joseph Lee Kok-long, an unaffiliated pan-democrat who represents the health services sector, said he had not decided how to vote on either the main bill or an amendment seeking funds for the handout, but he added: "How can I explain to my constituents if I object to the handout? [They] will beat me to death." Cyd Ho Sau-lan, convenor of the pan-democrats' weekly meetings, said not everyone needed HK$6,000 and the government should use its resources more appropriately. "However, I do understand that the HK$6,000 will help people in need solve immediate problems, so I won't vote against it," she said. Financial Secretary John Tsang Chun-wah will table the budget bill at a two-day Legislative Council meeting which starts today, as well as an amendment seeking an extra HK$7.1 billion. That follows his decision, a week after the budget, to hand out cash to all adult permanent residents, instead of putting it into Mandatory Provident Fund accounts. A survey by the University of Hong Kong's public opinion programme showed that dissatisfaction with lawmakers had risen to an eight-year high after they voted down a bill for interim funding when the government first tabled it on March 9. The interim funding bill was rejected at a time when 13 pro-government lawmakers were in Beijing. A slightly revised bill was passed on their return. In the poll, conducted between March 14 and 23 and released yesterday, 51 per cent of the 1,006 respondents expressed dissatisfaction with legislators' overall performance, 10 percentage points up from December and the worst since 2003. Pollster Dr Robert Chung Ting-yiu said the finding was probably due to the vote on interim funding. Pro-establishment groups, including the Democratic Alliance for the Betterment and Progress of Hong Kong, the Federation of Trade Unions, Economic Synergy and the Liberal Party, have vowed to support the budget and the handout. A majority of pan-democrats said they would vote against the budget but abstain on the handout proposal. Independent Paul Tse Wai-chun, representing the tourism sector, said he would vote for the main bill and was likely to abstain on the handout. "In principle I am against giving away cash. There are better priorities on which the government should spend money. "Abstention effectively means opposition. It's just opposition without doing it so strongly," he said. People Power's Wong Yuk-man and Albert Chan Wai-yip, normally staunch opponents of the government, said they would vote for the handout but against the budget bill. "We have been advocating it [the handout] for three years," Wong said. Pan-democrats will table 16 amendments, including proposals to cut the salaries of four senior officials and funding for the Constitutional and Mainland Affairs Bureau. But they are expected to be defeated. Liberal Party chairwoman Miriam Lau Kin-yee: "Bureaus and officials are bound to have people who dislike them. For the entirety of the budget, we will support the bill but not these 16 amendments."

Chu Ip-pui, executive director of Kerry Properties, said that while home prices were quite high, there was still demand for them - Kerry Properties (SEHK: 0683) plans to start launching its 968-unit residential development Lions Rise in Wong Tai Sin by the Easter holidays, with an average targeted price of HK$12,000 per square foot. Chu Ip-pui, executive director of Kerry Properties, said the company has used another of its developments, Island Crest in Sai Ying Pun, as a price reference rather than the older properties in the area. "Flats at upper floors of Island Crest have been sold at more than HK$20,000 per sq ft," said Chu, who said the quality of Lions Rise was comparable to Island Crest. "We are confident in the project as it is the first new major development to be built in Wong Tai Sin over the past decade," said Chu. The company does not expect any new sizeable developments in Wong Tai Sin in the next decade. Prices of many housing developments, aged about 20 years old, in Wong Tai Sin are mainly sold at around HK$3,500 per sq ft to HK$5,500 per sq ft. Chu expects to obtain pre-sale consent from the government in the next two weeks. "We hope to launch the project by Easter and the property will be sold in phases." The development comprises five towers providing 968 units, with most of the apartments offering three or more bedrooms. Lions Rise has 140,000 sq ft of club facilities and landscaped gardens, and is next to the Wong Tai Sin MTR station. The project is expected to be completed by the end of this year, while the handover will start in the third quarter of next year. In the face of a number of residential developments being sold in the coming weeks, Chu said these projects together comprise a total of more than 3,000 flats. Chu said home prices in the city are generally quite high. "But there is demand for flats in the market," he said. Meanwhile, Cheung Kong (Holdings) (SEHK: 0001) announced the price list of its 734-unit Uptown development in Yuen Long. The first batch of 108 units go on the market at an average price of about HK$5,000 per sq ft. Another developer, Kowloon Development (SEHK: 0034), yesterday said it would raise prices of the remaining units at Mount East in North Point to HK$13,000 to HK$18,000 per sq ft. This compared to the selling price of HK$11,000 per sq ft in 2010. Lee Wee Liat, head of regional research at Samsung Securities (Asia) said: "We expect a divergence in sales performance as six new primary launches are set to hit the market over the Easter holidays and the May 1 "golden week". We are more optimistic on projects with flexible pricing and offerings, while remaining cautious on those that are aggressively priced." Kerry Properties is part of the Kerry Group, the controlling shareholder of SCMP Group, which publishes the South China Morning Post (SEHK: 0583).

Elderly waffle maker Ng Yuk-fai has proved the maxim that to make an omelette you need to break a few eggs. After being prosecuted six times this year for illegal hawking, the 74-year-old was yesterday told by the food and health chief that the government would help him find a way to carry on his business within the law. As an internet army of 4,000 signed up to a Facebook group in his support, Secretary for Food and Health Dr York Chow Yat-ngok said he was sympathetic towards the hawker who has been dubbed the "old egg-waffles man" by his customers in Tai Hang. "He seems to be determined to continue working instead of getting Comprehensive Social Security Assistance. I find this virtue respectable," Chow said. The health minister said it was up to the Food and Environmental Hygiene Department to ensure food safety and act against illegal activity. "We would like to give him suggestions on locations, such as wet market stalls, where he can operate legally," Chow said. Licences for hawkers to sell food on the street have not been issued in Hong Kong since the 1970s. Ng, who was prosecuted for the sixth time on Sunday and had his cart confiscated, was unavailable to respond to the government's offer last night. Despite public anticipation, he did not reopen his stall after making a new cart. Ng went to see a doctor in the morning with fellow egg-waffle maker Eric Chiang. Then he treated Chiang to a meal, and failed to show up at his small wooden house. He also refused to pocket the HK$860 donation raised by supporters, instead giving it to a Chinese University fund for Japanese earthquake survivors, Chiang said. His absence disappointed dozens of people who visited Ng's home opposite the Rosedale on the Park hotel. Several were fans of his egg waffles and visitors to the nearby Central Library. One was Billy Chan who runs a shopping website Baby Bamboo. "We would like to offer group purchases of Ng's waffles on the site," he said. Eastern district councillor Tsang Kin-shing, also known as the "Bull", stopped by in the hope of helping the man fight his court case. The hawker will appear in Eastern Court tomorrow. "I received a call from an enthusiast, which I will not name ... we would like to arrange a lawyer for Ng and to help him pay a fine if necessary," he said. One person wrote a letter to all lawmakers demanding that they condemn the hawker for his law-breaking behaviour. "If he continues with his illegal hawking after a prosecution, it would be reasonable for authorities to prosecute him 10 times in 10 days. If people's support can rationalise law-breaking behaviour, is Hong Kong still a city ruled by law?" the writer asked.

Times may be a-changin', but Bob Dylan rolled back the years last night with a vintage performance at Kitec in Kowloon Bay. Fresh from his first performances on the mainland and a debut concert in Vietnam on Sunday, the 69-year-old delighted his Hong Kong fans by reeling off a selection ofhis classic songs on his second visit to the city – the first was back in 1994.

Chief Secretary Henry Tang Ying-yen on Tuesday strongly condemned the tactics some demonstrators used when protesting against government officials at the weekend. Tang, speaking before an Executive Council meeting at government headquarters, was referring to Sunday’s protest by two young activists. The pair ambushed an event in Central attended by government officials. One protestor stormed the stage and snatched a microphone from Secretary for Transport and Housing Eva Cheng – as she was speaking. The action was widely broadcast on television. Tang said he was concerned that some protestors were now using force to express their views. “There have recently been protestors resorting to radical action. We think that any behaviour outside of peaceful protest, which contravenes the wishes of Hong Kong people, is unacceptable,” he said. Tang said the protestors’ action would only increase conflict and not help to resolve differences. “The government does not condone physical assault ... which undermines order in society,” he added. As Tang made the remarks on Tuesday, he was shouted down at times by a group of about 10 protestors. They shouted slogans from outside government headquarters. They were protesting the recent quota system for hospitals introduced by Secretary for Food and Health York Chow Yat-ngok. This aims to restrict the number of mainland women allowed to give birth in Hong Kong. Sunday’s incident came after security reviews were promised by police to government officials after a similar incident last month. In March, Chief Executive Donald Tsang Yam-kuen was allegedly pushed by a protester during a rowdy demonstration before he officiated at a ceremony. This year has seen a number of angry protests in the city. Many people remain disgruntled with the March budget put forward by Financial Secretary John Tsang Chun-wah, believing it has not done enough to alleviate Hong Kong’s social and economic problems – or to help the grass-roots sections of society. Others are frustrated about rising livings costs, and what they see as the government’s inability to control the manipulation of the residential housing market by a few wealthy speculators.

The top earner who graduated from the University of Hong Kong last year took home HK$100,000 a month, the university disclosed yesterday. The student graduated from business school and worked in real estate for a private investment company. Another graduate set up an online business selling clothes and earned more than HK$70,000 a month. A survey conducted by the university among 3,504 graduates from September to March showed that their average gross salary rose 4.3 per cent from last year, to HK$17,336. If the relatively high salaries of medical and dentistry graduates were excluded, the average salary was HK$15,139, up 6 per cent from the year before. A university spokesman said the average salary still had not recovered to the 2008 level of HK$18,755, but the latest results showed that the economy and job market had gradually regained strength from the financial crisis. More than one in four - or 27.5 per cent - opted for business and finance, up 5 per cent, while 8.6 per cent chose the civil service, down 4.9 per cent. Each graduate received two job offers on average. For non-local graduates, 13.5 per cent chose mainland jobs, up 7 per cent, while 84.6 per cent stayed in Hong Kong, down 7.1 per cent.

 China*:  April 14 2011

To match the bigger role that the PLA Navy is playing in international waters, all its vessels will receive bigger, brighter naval ensigns by the end of next year, the People's Liberation Army Daily reported yesterday. Experts say the flag upgrade is symbolic of the PLA Navy's development into an international-standard blue-water force after more than two years of involvement in anti-piracy missions in the Gulf of Aden. "Compared with the land, air and even the strategic missile forces, the PLA Navy has many more chances to visit military officials in overseas countries, because it also plays an important role in China's diplomacy," Shanghai-based military expert Ni Lexiong said. "The flag change is not only part of the PLA's modernisation, but also indicates its determination to be a sea power, because all its new standards have been learned from Western maritime powers like the US." The actual design of the PLA naval ensign - with the PLA logo on top and blue and white lines at the bottom - has not changed, but it has been enlarged to meet international standards, the PLA Daily said, without detailing the percentage increase. The defence ministry says the navy has sent more than 20 ships in more than 10 convoys on visits to more than 30 countries. It also sent its biggest hospital ship, the Peace Ark, to underdeveloped countries in Africa for the first time last year to provide medical and humanitarian aid. "Matching international maritime standards was necessary after our navy became more engaged in international humanitarian activities," Song Xiaojun , a Beijing-based PLA Navy expert, said. Chinese officials found that compared with Western warships, the flags on PLA Navy ships were small, drab and failed to impress. Just over four years ago, top naval leaders ordered a naval equipment research institute to study new flags for the navy, the PLA Daily said. The institute spent more than two years preparing eight variations for different kinds of vessels, with the main improvements being increased size, brighter colours and better fabrics. The army newspaper said that all flagpoles and related equipment would also be upgraded. The new ensigns made their debut at a ceremony two years ago marking the 60th anniversary of the PLA Navy, when President Hu Jintao inspected a flotilla off Qingdao , Shandong , the PLA Daily said. Just five months before that celebration, the first PLA Navy vessels were sent to the Gulf of Aden to join the anti-piracy mission. The flag change will involve nearly 280 main PLA Navy warships, including submarines, destroyers, frigates and coastal patrol craft, according to data of the United States Office of Naval Intelligence. The PLA Navy normally flies at least four types of flag during special celebrations, including the national flag, army flag, naval ensign and international maritime signal flags, the PLA Daily said.

A chamber of commerce representing China's steel wheel manufacturers said on Monday they are seeking to resolve trade friction with US counterparts through negotiation and consultation while preparing for legal proceedings in response to a possible US probe. On behalf of Chinese steel wheel makers, officials from China Chamber of Commerce of Imports and Exports of Machinery and Electronic Products said that they hope to negotiate directly with industrial representatives from the United States. The Chinese chamber's request came after auto parts manufacturers in the United States petitioned US investigative agencies earlier this month to launch anti-dumping and countervailing probes into Chinese imports of steel wheels. US Accuride and Hayes Lemmerz International Inc appealed on March 31 to the United States International Trade Commission (USITC) and Department of Commerce (DOC) against the import of steel wheels from China. The two US companies wanted anti-dumping and anti-subsidy investigations into these products. The DOC will decide whether to start the probe process on April 19, while the USITC will hold a hearing on the initial damages related to the case. "As the representative of Chinese steel wheel exporters, we resolutely oppose trade protectionism in any form, and we will actively help enterprises cope with the case," said Chang Zhong, a spokesman for the chamber. After the US firms' petition, the Chinese chamber and the China Association of Automobile Manufacturers (CAAM) convened an industrial meeting for 16 Chinese steel wheel makers to discuss ways to respond to the US allegations. As China's auto parts industry grows, some manufacturers are now reaching first-class international standards. However, some foreign companies frequently resort to trade remedy measures to restrict China's exporters because they can not prevail in normal commercial competition, Chang said. China's steel wheel producers have been subject to anti-dumping investigations by South Africa, India, Australia and the European Union in the past. If the DOC and USITC support the US companies' petition, it will be the first anti-dumping and countervailing investigation against China's machinery and electronic industry by the United States since 2009.

Chinese President Hu Jintao (R) shakes hands with Brazil's President Dilma Rousseff during a signing ceremony at the Great Hall of the People in Beijing, April 12, 2011. The presidents of China and Brazil on Tuesday signed a joint communique after talks in Beijing, which said the two countries will continue to promote cooperation in trade and investment. Speaking positively of the achievements the two countries have scored in trade and economic cooperation, the joint communique said the two sides are satisfied with the fast growth of bilateral trade and two-way investment. The two countries should continue to strengthen dialogues in this regard. The Chinese side will encourage companies to increase imports of high value-added products from Brazil. Brazil reaffirmed it will rapidly deal with its commitment to recognize China's market economy status according to terms of the two countries' joint action, the joint communique said. The two countries vowed to expand mutual investment through the cooperation of companies, especially in the high-tech industry, automobile, energy, mining and logistics sectors. The joint communique also said dialogues between the two countries' companies are of great importance to the development of bilateral trade and an economic relationship, and they will encourage the establishment of partnerships among companies. The two countries vowed to deepen cooperation in the field of aviation, especially in business jets and regional aircraft, the joint communique said. The two countries are facing the broad prospect of cooperation in infrastructure construction. Brazil welcomed Chinese companies to bid for its high-speed railways projects. The two sides also thought that a partnership is expected to be established in infrastructure construction for the 2014 World Cup and 2016 Olympic Games, both hosted by Brazil. The two countries pledged to strengthen dialogue in animal and plant quarantine and food safety. The two sides agreed to promote the registration progress of Brazil's poultry and beef companies, and vowed to fulfill all procedures as soon as possible so as to make Brazil's gelatin, corn, tobacco leaf, bovine embryos, bovine semen and citrus fruits as well as China's pear, apple and citrus fruits into the two sides' imports and exports products lists. The two countries vowed to strengthen contact between financial institutions and expand their cooperation. They welcomed the establishment of branches of financial institutions within each other. The two sides also vowed to encourage companies to expand two-way investment. Brazilian President Dilma Rousseff kicked off her six-day state visit to China on Monday. She and President Hu Jintao held talks in the Great of Hall of the People in downtown Beijing on Tuesday afternoon. Rousseff will also attend the third BRICS summit, a meeting of leaders from Brazil, Russia, India, China and South Africa, and the annual meeting of the Boao Forum for Asia, both slated for mid-April in China's southern island province of Hainan.

A bottle of vintage Moutai Liquor with an initial biding price of 2.6 million yuan (US$397,730), but sold at a price of 8.9 million yuan (US$1,369,231), is seen at an auction in Guiyang city, capital of Southwest China's Guizhou province, April 10, 2011. 

China is stepping up construction of its electric grid infrastructure, an important move amid the international doubts about the safety of the nuclear industry following the crisis in Japan. Though it leads the world in installed wind-power capacity, the nation faces a growing problem with grid integration. More than half of the electricity generated by wind farms ended up unused last year, according to a report by the State Electricity Regulatory Commission. The nation plans to complete the basic construction of its smart grid by 2015, when it will be able to connect 10 gigawatts (gW) of wind power to the system, the State Grid Corp of China, the country's largest power distributor, said in March. Meanwhile, the government is expected to release new national standards for wind-power integration at the end of April, the China Securities Journal reported. The new standards, replacing those released in 2009, will place an emphasis on the stability and predictability of wind technology, adding to the operating costs of wind farms. As of 2010, the State Grid has invested 41.8 billion yuan ($6.39 billion) to support the integration of wind power, according to Wang Yimin, director of the smart grid department of the company. Wang added that integrated wind power generated 2.8 gW in State Grid's network last year. Connected wind-power capacity accounted for only 3.2 percent of the country's total power generation capacity in 2010, while the installed wind capacity stood at 4.4 percent, said Dai Huizhu, senior consultant of the China Electricity Power Research Institute. Although in some windy regions, such as Northeast China, wind-generated electricity accounted for 12 percent of the total, grid integration remains an issue preventing the clean-energy source from making a bigger contribution. In Liaoning province alone, a total of 760,000 kilowatts (kW) from wind turbines was wasted last year because the grid system lags behind wind-power installation. China hopes to get 15 percent of its energy from non-fossil fuels by 2020 and wind power is expected to contribute 15 gW. The smart grid will be a long-term solution to wind-power integration, but experts still disagree about details, such as methods of energy storage. Meanwhile, equipment manufacturers are searching for solutions from power generation. "Smart generation is what we are looking for," said Patrick Zhao, director of Vestas' plant power system. Vestas Wind Systems A/S, the world's largest wind-turbine manufacturer by market share, is working on increasing the efficiency of wind-power generation. Technology developed by Vestas was installed at a wind farm operated by China Datang Corp in Chifeng county in the Inner Mongolia autonomous region, and helped increase the stability and efficiency of power generation. "The current nuclear crisis in Japan helped the wind power industry in the sense that people switched their focus to safer power-generation technology," said Zhao. "But a crisis will not help the industry indefinitely unless wind power becomes a reliable energy source."

Chicago Mayor Richard Daley and Chicago Public Schools (CPS) officials announced 480,217 U.S. dollars in grants that will be used to support the school system's Chinese language and culture programs on Monday. The announcement was made at a press conference held Monday morning in Chicago. The grants are from two private parties including Wanxiang Company of China and Motorola Solution Foundation, and the federal government. The Mayor also announced that he has been appointed by the State Department to be Co-Chair of the "100,000 Strong Initiative" Advisory Committee. The program was created by President Barack Obama and its goal is to dramatically increase the number and diversify the composition of American students studying in China. "I intend to do everything I can to achieve that goal. We need the private sector to step up and increase its commitment to support Americans studying in China," Daley said in the news conference held at the architectural firm of Skidmore, Owings and Merrill in downtown Chicago. Daley said education is the most important investment the city had made over the years to support its long-term economic health. "Our vision is to give all our students the kind of global education that prepares them to be leaders in Chicago, in our nation and in the world. The grants announced today will help us reach that goal," he said. The first grant is for 100,000 dollars from the Wanxiang Company of Hangzhou, China, to create two four-week sessions in the summer of 2012 and 2013 for as many as 20 Chicago Public School students to study Chinese in Hangzhou. "Programs such as this one are critical to helping further the dialogue between cultures and helping students improve their fluency in Chinese," Daley said. The CPS will also receive a grant of 100,000 dollars from the Motorola Solutions Foundation that will also support sending CPS students to study in China. The program aims to increase significantly the number of Americans who have the opportunity to study in China. Students representing a variety of Chicago neighborhoods will get the opportunity to learn side-by-side with Chinese students, fostering a sense of understanding. In addition, the CPS will receive 99,970 dollars through the federal government's "Startalk" program and a grant of 180,247 dollars through the National Security Language Initiative for Youth Program. "These grants provide a wonderful opportunity for our young people to meet other young people with similar interests. It is cooperation like this that builds strong, diverse economies that help improve the quality of life for residents and help us compete in the new global society," Daley said. During Daley's recent trip to China with a delegation of Chicago business leaders, he visited Beijing No. 4 High School. Walter Payton College Prep, the school that President Hu Jintao visited in January, and Beijing No. 4 High School have agreed to be "Sister Schools" and that this summer, when Payton students visit Beijing on the invitation of President Hu, they will be hosted at the Beijing No. 4 High School.

China Development Bank has agreed to provide a credit line of 43 billion yuan (US$6.58 billion) to support the growth of the country’s largest privately-owned carmaker Chery Automobile, Xinhua news agency said. The money, which will be used during the 12th five year plan ending 2015, will support Chery’s research and development, its projects in China and overseas and the development of its markets, it said on Monday. Chery, China’s biggest homegrown carmaker, sold a total of 682,060 vehicles last year. It is the biggest Chinese passenger car exporter and has plants and production facilities in 16 countries and districts, it added.

A US-proposed target to limit countries' current account imbalances is a "political tool" aimed at containing China's economic growth, China Vice Finance Minister Li Yong said on Tuesday. In what is China’s fiercest rebuttal so far to the US proposal to limit countries’ current account deficits or surpluses to below 4 per cent of gross domestic product, Li said such curbs overlook the “right” of nations to develop and grow. The remarks underscore the difficulties that finance ministers from the Group of 20 (G20) nations face when they meet on April 15 to discuss how to rebalance the global economy, among other issues, on the sidelines of IMF meetings. “It is another political tool, along with the exchange rate issue, of the United States and developed countries to contain China’s economic development,” Li wrote in an article published on the ministry’s website. “The external imbalance is a sensitive issue regarding the rights of China and other emerging economies to develop and grow,” Li said. China has opposed the idea of targeting countries’ current account imbalances ever since it was suggested by US Treasury Secretary Timothy Geithner as a measure to use to rebalance the world economy. Analysts say while China is amenable to importing more to help rebalancing efforts, it does not want to be assessed on its huge current account surplus because that includes interest payments on nearly US3 trillion of foreign reserves accumulated over the years. Instead, China prefers to be assessed on its trade surplus, which has been narrowing as it imports more. At a G20 meeting in Paris earlier this year, Chinese Finance Minister Xie Xuren said the G20 should assess distortions in the economy by measuring trade rather than current account balances, and also rejected using real exchange rates and currency reserves as measures. That left China as a major impediment to a G20 deal, and cast doubts over the group’s ability to agree to a set of guidelines to improve the world economy. Li on Tuesday sought to draw attention away from China, however. Reiterating China’s long-standing assertion that the United States has a hand in much of the world’s economic woes, Li said super-loose monetary policies in the United States and elsewhere were fuelling inflation. He also said the European debt crisis could worsen by spreading from the peripheral euro zone region. He said loans from the International Monetary Fund and European Union to struggling euro zone countries do not address “underlying structural problems”, among which is the dearth of a unified fiscal policy in the euro zone. “Austerity measures that are being imposed may worsen the economic and debt conditions in the countries,” Li said. “The euro debt crisis may continue to spread and deteriorate.” As such, Li said he expected the US dollar and euro to weaken. That will be a headache for China since its $2.85 trillion foreign reserves are primarily invested in the two currencies.

Hong Kong*:  April 13 2011

Li Ka-shing's Beijing Oriental Plaza will be the sole asset for the first yuan-denominated real estate investment trust in Hong Kong. When tycoon Li Ka-shing launched the Beijing Oriental Plaza in the 1990s, little did he know that the controversial development would become the asset for the first yuan-denominated real estate investment trust in Hong Kong. The original design of the complex, which included malls, offices, tower apartments and a hotel, was criticised for being too high, spoiling the ambient environment surrounding the Forbidden City, one of the most famous ancient palatial structures in the world. Construction work stalled a number of times during the first three years of the project, causing expenses to surge. By 1997, development costs had reached a total of US$2 billion, from 1995's estimated US$1.3 billion. After a decade of investment, Li is now riding on the yuan fever and Hui Xian, a real estate investment trust (reit) of which Oriental Plaza is its only asset, will use the majority of the proceeds from the initial public offering to pay off its shareholders. Li's flagships Cheung Kong (Holdings) (SEHK: 0001) and Hutchison Whampoa (SEHK: 0013), along with other investors such as the state-owned Bank of China and China Life (SEHK: 2628, announcements, news) Insurance, would collectively own 60 per cent of Hui Xian after the listing, assuming the over-allotment option, which enlarges the share capital, is not exercised. According to the listing prospectus, based on the maximum offer price of 5.24 yuan, 11.7 billion yuan (HK$13.9 billion) raised would be spent on repaying shareholders' loans and borrowings, leaving 362 million yuan to cover the costs of the offering. Hui Xian has said it would have to borrow again to buy assets to diversify its portfolio but did not disclose details. The reit forecasts its profit will be 140 million yuan between April 29 and June 30, on revenue of 404 million yuan. Having just one asset in the portfolio has put off some investors, according to brokers, who said they had received many queries but orders had not been overwhelming. Steven Leung Wai-yuen, a director of institutional sales at UOB Kay Hian, said the brokerage firm was still in the process of arranging a loan with banks to offer margin financing. Philip Securities, which operates the only platform in the city that allows for pre-listing trading, said it had received 80 million yuan worth of margin financing yesterday. Alvin Cheung, an associate director with Prudential Brokerage, said: "If you leave out that the fact this is a yuan IPO and compare it with other Hong Kong-listed mainland-based reits, Hui Xian might not be as attractive." Apart from foreign exchange risk, there's a policy risk in the offering, as pointed out by the Securities and Futures Commission, which issued a circular on investing in reits on Friday. Although Hui Xian has said it would distribute dividends in yuan, investors must remember that the payment could be made in a currency other than yuan if it is not able to source sufficient yuan on "satisfactory terms", said the SFC. China still keeps a tight control on capital flows and the yuan is not fully convertible. This is why borrowers in the city's offshore yuan bond market have only been able to remit proceeds back following approvals in relatively small amounts. Not every developer is as enthusiastic as Li. Hang Lung Properties said it had no plans to launch yuan reits. There will be more yuan offerings and products in the pipeline. In a recent report, Daiwa Securities forecasts yuan listings would reach 50 billion yuan a year by 2013 and yuan bonds could amount to 60 billion yuan a year.

Lomography photo exhibition opens in Hong Kong - A 22-day-long lomography photo exhibition opened here on Monday, highlighting the photographic approach of Holga style.

In a move reminiscent of the People's Bank of China, the Hong Kong Monetary Authority's boss yesterday chastised local banks for a sharp hike in lending last year. Norman Chan Tak-lam suggested local banks tighten lending and ordered them to present new business plans to the HKMA by April 30. Total loans surged 29 percent last year to HK$4.18 trillion from 2009. Mortgages jumped 19 percent to HK$1.62 trillion while lending to large state-owned enterprises and other red- chip firms soared 47 percent to HK$1.38 trillion, heightening serious concerns of the de facto central bank. "The vast majority of [non-local loans] were [made to] large state-owned enterprises, red- chip companies or their subsidiaries, or companies owned by provincial or municipal governments in the mainland," Chan complained in the circular. Only 60 percent of these loans were fully collateralized by deposits or guaranteed by mainland banks, the circular said. The HKMA has sent a clear message to local banks to toe the line of mainland regulators, said Chinese University of Hong Kong economics associate professor Andy Kwan Cheuk- chiu. "The central government has been raising the reserve requirement ratio to limit lending in the mainland. Such measures will be useless if those corporations can obtain loans in Hong Kong easily," Kwan said. The PBOC has raised the banks' required reserve ratio twice this year by 50 basis points each time in January and March. The central bank also lifted its benchmark interest rates by 25 bps earlier this month, with the one-year lending rate now standing at 6.31 percent. Kwan said the HKMA is also worried about over-lending that may hurt the stability of the Hong Kong banking system. For the first two months of this year, total lending by local banks jumped at an annualized rate of 26 percent. The loan-to-deposit ratio in Hong Kong dollars hit 81 percent versus 71 percent during the first week of January. The ratio hit a high of 78 percent last year. But current levels are still lower than those of the mid 1990s, when they surpassed 100 percent. "Should the current trend continue for much longer, it will inevitably lead to pressure on funding, liquidity and concentration, as well as concerns about possible lowering of credit- underwriting standards," Chan warned. Kwan said lenders are aware of such risks and have reduced mortgages.

Court of First Instance judge Andrew Cheung Kui- nung has been recommended to become chief judge of the High Court. Cheung will take over from Geoffrey Ma Tao- li, who became chief justice in September following the retirement of Andrew Li Kwok-nang. Cheung, 49, is known for his decision in 2010 denying a transsexual woman the right to marry her boyfriend, ruling that "allowing a post-operative transsexual to marry ... would be tantamount to sanctioning same-sex marriage." His appointment was recommended by the Judicial Officers Recommendation Commission and accepted by the chief executive. It has to be endorsed by the Legislative Council before taking effect. Cheung said yesterday he will do his utmost to discharge his duties. Ma said he has every confidence that Cheung will make an excellent chief judge. Barrister and Civic Party legislator Ronny Tong Ka-wah said Cheung is a good choice as the High Court chief judge, an administrative post. "Its mission is to ensure that the High Court will work in an efficient way so it has nothing to do with him being a conservative or liberal judge," he said. "Mr Justice Cheung has a very good temperament and he basically gets along well with most people." Chief Executive Donald Tsang Yam-kuen said: "Mr Justice Cheung is a man of high integrity and an outstanding lawyer who commands strong respect within and outside the judiciary." Cheung obtained his bachelor of laws and postgraduate certificate in laws from the University of Hong Kong and his master's in law at Harvard. He was in private practice in Hong Kong from 1986 until he joined the Judiciary as district judge in 2001. He started sitting as a deputy High Court judge in December 2001. He was appointed judge of the Court of First Instance in 2003. He is married with three children. The commission recommended yesterday the appointment of Lord Collins of Mapesbury and Lord Clarke of Stone-cum-Ebony, justices of the Supreme Court of the United Kingdom, as non- permanent judges from other common law jurisdictions to the Court of Final Appeal.

Authorities in Guangdong, a leading food supplier to Hong Kong, have found traces of radioactive iodine-131 in four types of vegetables. But the central health ministry sought to allay public concerns, saying the radioactive residue may be washed clean. Chinese Center for Medical Response to Radiation Emergency director Su Xu urged the public not to panic, saying: "The amount we've detected on the surface of vegetables, including spinach and lettuce, are minor and people don't have to panic. "We can wash away 50 percent of the tiny traces of iodine-131 at first wash, and after three washes more than 90 percent can be removed." Su also said the current radiation level in seawater is negligible. "The diffusion of radioactive substances in the ocean is comparatively slow, unlike the faster diffusion in the air. The substances sink gradually under the moving ocean current." The mainland General Administration of Quality Supervision, Inspection and Quarantine and the Guangdong Entry-Exit Inspection and Quarantine Bureau have stepped up inspection of exports to Hong Kong. "The bureau has adopted effective measures to ensure the safety of Japan-imported food and the export of vegetables to Hong Kong and Macau," a spokesman said. Secretary for Food and Health York Chow Yat- ngok said the level of radioactivity detected is tiny and will not affect human safety and health. "Guangdong and Shenzhen authorities will closely monitor from the source and not allow exports of affected vegetables to the SAR," he said. "Hong Kong will also continue to monitor imported vegetables and farm produce from Japan." The observatory said iodine-131 levels at King's Park had fallen to 136 microbecquerels per cubic meter by noon on Sunday, while the cesium-137 found the previous day was no longer detected. The Water Supplies Department said there was no observable change in the radioactivity level in any of the tap water samples tested. The Centre for Food Safety tested 68 food samples imported from Japan - seven by air and 61 by sea - in a 24-hour period. All were found satisfactory.

To protect Hongkongers from being exposed to the vagaries of the international financial crisis, the Hong Kong Monetary Authority is requiring foreign banks to incorporate a subsidiary in the SAR, instead of a branch, to conduct their retail banking business. HKMA's chief executive Norman Chan Tak-lam explained that capital is required to set up a subsidiary, in which the subsidiary and its parent have separate accounts. As an example he cited the case of the relationship between AIA Group (1299) and American International Group. "The Asian arm is still safe and sound although its US-based parent was in trouble during the financial tsunami," Chan said. Meanwhile, foreign banks are still allowed to open their branches in Hong Kong to conduct wholesale business. "Some of their multinational clients prefer to borrow from the parent bank. In this case, a branch in Hong Kong could be a facilitator," Chan said. The HKMA's requirement is also a means to encourage banks to lend locally, given the amount of deposits they have. Chan noted crossborder banking capital reached US$1.3 trillion (HK$10.14 trillion) in 2010, of which only US$226 billion was lent by Hong Kong banks. He added while Hong Kong financial institutes receive a lot of deposits, the capital flows out from Hong Kong banks to overseas banks which do the lending. Most of the borrowers are from Asia, he said. "For example, Walmart Asia borrows from banks in the US instead of banks in Hong Kong or China," said Arthur Yuen Kwok- hang, HKMA deputy chief executive.

Dealmaker Charles Chan Kwok-keung provided more than half of the funds used to acquire media mogul Run Run Shaw's controlling stake in Television Broadcasts (SEHK: 0511) (TVB), according to a senior company executive. Mark Lee Po-on, an executive director and group general manager at TVB, disclosed that detail yesterday before a Legislative Council meeting that looked into the change in shareholding at Hong Kong's biggest free-to-air television broadcaster. Chan, the chairman of investment holding firm ITC Corp, led a group of investors in buying the entire 26 per cent stake in Shaw Brothers (Hong Kong) owned by Shaw for HK$6.26 billion. A well-known dealmaker, Chan was behind the 2000 takeover of Sing Pao, one of Hong Kong's oldest news publications. Lee did not provide how much the other members of Chan's group contributed to the TVB share purchase. The two other investors are Taiwanese information-technology entrepreneur Cher Wang Hsiueh-hong, who co-founded smartphone maker HTC Corp and semiconductor firm Via Technologies, and Providence Equity Partners, a United States-based private equity company that manages US$22 billion in capital and investments worldwide. TVB managing director Mona Fong Yat-wah, who is Shaw's wife, retains a 0.26 per cent shareholding in the company. Ambrose Ho Pui-him, chairman of the Broadcasting Authority, told the Legco meeting that the regulator had checked the financial resources and residential status of each member of Chan's investor group after they made their application to acquire TVB. The authority approved the change in TVB's shareholding last month. It said the change would not affect TVB's investment commitment of HK$6.3 billion from 2010 to 2015 made during a mid-term review of the broadcaster's licence last year. Chan, Wang and Jonathan Nelson, the chief executive of Providence, were named as non-executive directors of TVB on April 1. The share price of TVB, the world's biggest distributor of Chinese-language TV programming, rose 0.52 per cent to close at HK$48.40 yesterday.

 China*:  April 13 2011

Huawei targets Obama's 4G projects despite US security fears - Huawei Technologies, unfazed by a fresh round of criticism from politicians in Washington, aims to compete for tenders under US President Barack Obama's ambitious, multibillion-dollar wireless network development initiatives across the United States. The mainland's biggest telecommunications equipment manufacturer has also advised US authorities about its efforts to pursue fourth-generation wireless network trials in the country, a company spokesman said yesterday. Shenzhen-based Huawei's plans follow an unprecedented move it made in February, when it released an open letter that challenged the US government to conduct a sweeping investigation of the company to prove it is not a national security risk. Ken Hu, the deputy chairman at Huawei and head of its US operations, was quoted in a US report last week that it had not yet received a government response to that open letter. With or without an official response, Huawei has apparently moved on to pursue opportunities in the world's largest telecommunications equipment market. Spokesman Ross Gan said: "We continue to actively invest in our US research and development, and commercial operations." Privately held Huawei, which is also the world's second-biggest telecommunications equipment supplier, has informed the US Department of Homeland Security that it intends "to openly compete for tenders under [the Nationwide Wireless Network for] Public Safety and public broadband wireless solutions, areas we have been actively discussing with a number of state governments and local organisations", Gan said. He also said Huawei was "in dialogue with the US Department of Commerce's National Institute of Standards and Technology related to US trials" of the company's 4G solutions based on the Long-Term Evolution standard. Obama had unveiled in February the National Wireless Initiative, which seeks to make high-speed 4G wireless services available to at least 98 per cent of Americans within five years. Under the programme, the Obama administration has called for a US$10.7 billion commitment to build a nationwide wireless broadband network that supports public safety agencies and a US$5 billion investment for 4G network development in rural areas. Reports from the US last week said Huawei and ZTE Corp (SEHK: 0763), the mainland's No2 telecommunications equipment maker, have already made it on the US Department of Agriculture's Rural Utilities Service official list of approved equipment suppliers for rural networks. Gan pointed out that Huawei does not comment on specific opportunities, but said the company is "seeking to bring its industry-leading technology and innovation to more customers in the US". A group of US politicians, however, wrote to the White House last week warning about the potential national security risks should mainland telecommunications gear suppliers like Huawei and ZTE participate in government-funded projects. "It is no coincidence that whenever there is news regarding Huawei's business in the US, our critics also revive their efforts to discredit our company with unfounded and unproven allegations," Gan said. Huawei has more than 1,000 employees in the US.

China builds world's largest underground theater - An aerial view of the Shanghai Culture Plaza Theater in Shanghai, April 11, 2011. Occupying an area of 650,000 square meters, including 570,000 square meters underground, the theater will become the largest and deepest underground theater, with the most number of seats, when it opens in July. 

Hong Kong*:  April 12 2011

You can be part of history for 5,580 yuan (HK$6,634.79). That is the cost of one board lot of Hui Xian Real Estate Investment Trust (87001) - Hong Kong's first initial public offering priced in yuan. Cheung Kong Holdings (0001) - Hui Xian's parent firm - opens the issue up for subscription from today. Retail investors have until April 19 to subscribe. The REIT is expected to start trading from April 29. Application forms will be available in more than 100 branches of BOC HK, HSBC, Standard Chartered, Bank of East Asia, Hang Seng Bank and CITIC Bank. The REIT is being offered between 5.24 yuan and 5.58 yuan apiece, and traded as 1,000 units per board lot. It is forecast to pay annual yield of about 4 percent to 4.26 percent. The issue is expected to raise between 10.48 billion yuan and 11.16 billion yuan by offering two billion units - 20 percent of which is for local retail investors and the rest for institutional investors. The funds will help repay the company's existing debt of 11.69 billion yuan. Hui Xian's main asset is the Beijing Oriental Plaza, an 800,000-square- meter complex with a shopping mall, hotel, service apartments and offices. It owns the complex with a local partner under a joint venture that expires in 2049. "We will still have 38 years of income generated by the complex. It is hard to say whether the joint venture will be extended at this point," said Kam Hing-lam, chairman of Hui Xian Asset Management. But Champlus Asset Management director Ricky Tam Siu-hing thinks Hui Xian's valuation is too high. "The market capitalization is expected to be around 20 billion yuan versus the company's pricing of 26.2-27.9 billion yuan," he said. Tam advised local investors not to take margin loans as the higher value of the yuan versus the Hong Kong dollar may entail a 1 percent conversion loss. First Shanghai Securities chief analyst Linus Yip Sheung-chi urged investors to focus more on performance of the REIT rather than yuan appreciation gains. With an expected 5 percent yuan appreciation versus the local currency, the total annualized return would range between 9 and 9.26 percent. Brokerages, meanwhile, have drawn more than 1.16 billion yuan in margin financing orders for Hui Xian's IPO. And around 42.7 billion yuan has been earmarked for these orders.

Financial Secretary John Tsang Chun-wah yesterday lifted a line from a speech by Britain's wartime Prime Minister Winston Churchill to urge legislators to pass the budget this week so that measures beneficial to the public can be rolled out as soon as possible. "Give us the tools and we will finish the job," Tsang wrote in his blog, in which he elaborated on how the sick will benefit from the health- care provisions proposed in the budget. During World War II, Churchill made the same plea in February 1941 when urging the United States to show its support by sending arms to Britain. The budget is expected to get the nod from the Legislative Council on Wednesday despite plans by pan-democrats to cast a "no" vote or to abstain. But Tsang is still under pressure to make more concessions and alter his plan to raise the first registration tax on motor vehicles by 15 percent. The proposal may be discussed in Legco on May 4. The pro-establishment Democratic Alliance for the Betterment and Progress of Hong Kong and the Liberal Party, as well as the Democratic Party, have expressed reservations about the idea. Meanwhile, protesters against the budget again took their anger to the streets, following a rally on March 6. Hundreds marched from Victoria Park to the Central Government Offices to demand a budget with a long-term vision. Organizers said 800 took part but police put the figure at about 360. With the turnout much lower than last month's protest, Confederation of Trade Unions lawmaker Lee Cheuk-yan said: "It doesn't mean the public has already accepted the budget. Some didn't join because they had already expressed their opinions in the previous rally." The turnout last month was estimated at between 6,000 and 10,000. Lee added: "Protesters are upset that the government only plans short-term measures despite such a huge reserve and surplus." The protesters called for the revival of the Home Ownership Scheme, an increase in the supply of public housing flats, universal retirement protection, scrapping of the Mandatory Provident Fund scheme, 15 years of free education, small-class teaching and pay for meal breaks. Security guard Sum Wai-lan, 60, said: "The government is so short- sighted that it fails to deal with the city's long-term problems ... the HK$6,000 cash handout [in the budget] may help us stop bleeding, but our wounds are yet to be healed."

The search to replace Rita Lau Ng Wai- lan, who abruptly resigned as secretary for commerce and economic development, will be tough, experts warn. Lau, 57, resigned on Friday, less than three weeks after undergoing surgery to remove a tumor in her colon. Lau said she needs time to receive follow-up treatment and to rest. Her resignation, she said, is "in the public interest and a responsible one." A successor is expected to serve only 15 months in the post as the next chief executive will appoint his own top ministers. Undersecretary Greg So Kam-leung has been appointed acting commerce minister. However it is widely believed So is not the preferred choice to replace Lau. "It is not a problem of the political appointee system, it is merely a matter of So's personality," said Ma Ngok, associate professor of the Chinese University's department of government and public administration. So was mired in controversy when he used his name card to support the visa application of his domestic helper. "Even the Democratic Alliance for the Betterment and Progress of Hong Kong, the political party of which So is a former vice chairman, did not say he was a suitable candidate," Ma said. Political commentators believe it will be difficult to find someone from the private sector to replace Lau. "Even someone from the business sector with the expertise to handle the competition law and trade development with Taiwan, are unlikely to be familiar with tourism, governance of RTHK and the six economic areas proposed by the Task Force on Economic Challenges for further development," said James Sung Lap-kung, academic coordinator at the City University's School of Continuing and Professional Education. Sung believes Yvonne Choi Ying- pik, who retired last November as the permanent secretary for commerce and economic development, is a suitable candidate thanks to her experience and relatively good relationship with the business sector and media. However, Ma said choosing Choi will set a bad example and create the impression that no talented individual is willing to join the government, or there is no talent in the civil service. Ma suggested one replacement may be Secretary for the Civil Service Denise Yue Chung-yee. Lau's predecessor, Frederick Ma Si- hang, who resigned in June 2008 after being diagnosed with blood vessel tumors in the brain, praised her for a "wise decision."

The negative impact of Japan's twin disasters on global economic recovery should not be overlooked, Hang Seng Bank (0011) chief executive Margaret Leung Ko May-yee said, warning that recession may return after 2012. Although the global market has rebounded since the Japan quake and tsunami a month ago, Leung is not very optimistic as Tokyo holds a lot of US treasury debt. "The impact of Japan's earthquake shouldn't be underestimated," Leung told The Standard. "The Japanese government spent a lot of its reserves to buy US treasury bills, which they may sell to finance reconstruction. This will slow down economic recovery." Japan holds nearly US$1 trillion (HK$7.8 trillion) of US treasury debt - the world's second-largest holder after China. Last month's disaster may have cost Japan US$300 billion. "The US government will have to tighten its belt again should the treasury bond holders redeem. But it may not react that soon since the presidential election will take place in 2012." Also, Japan latest fiscal measures had helped to raise global inflation. "The effect of Middle East uprisings is still uncertain. If there is unrest in Saudi Arabia which affects oil output, the oil price will inevitably rise. "The world may return to recession should the oil price surge to US$140 per barrel." Last Friday, oil rose above US$111 a barrel in New York and passed US$124 a barrel in London for the first time since August 2008 amid a fire at a Libyan oil field and speculation that polls in Nigeria this week will curb output. Although economic growth is strong in the emerging BRIC [Brazil, Russia, India, China] markets, it can hardly offset the impact of Japan, she said. "The economies of countries with rich raw materials will outperform" amid higher reconstruction demand, Leung said. "However, their growth will slow down as the world supply chain has been hard hit by the Japan disaster."

The government wants the city's two medical schools to accept substantially more students to address a severe staff shortage at public hospitals. The plan calls for the institutions to raise the number of first-year admissions from the present total of 320 to about 420, starting next year. The Food and Health Bureau said it expected a "substantial increase in demand for health care practitioners in the future". "The final student number targets for individual disciplines will be worked out taking into account many factors, including the capacity of the institutions, institutions' assessment of manpower needs and competing demand for student places and resources," a bureau spokesman said. The exact number of medical students will be based on the government's manpower projection and approved by the University Grants Committee, which will come up with a final figure in the fourth quarter of the year. The government has been repeatedly criticised for lack of long-term manpower planning and secrecy surrounding how it works out staffing needs. Amid intense debate over staff shortages at public hospitals and threats by public doctors to take industrial action, health officials believe one solution is to train more doctors. The Hospital Authority admits it does not have manpower projections for planning purposes. It says hospitals have different doctor-patient ratios based on their own needs. Some leaders in the medical profession have warned that comprehensive, long-term manpower planning must be done before taxpayers are asked to train more doctors. "The government has never told us how it decides on the number of medical students every year. No one knows the rationale behind it. Members of the public can't take part in the discussion at all," Medical Council member Dr Ho Pak-leung said. Intakes of medical students have fluctuated over the past decade - from 340 in 2001 to 280 in 2003, then down to 250 in 2006 and up again to the present 320. The two deans of medicine agreed on the need to train more medical students to meet growing demand. University of Hong Kong dean of medicine Professor Lee Sum-ping said many places around the world were facing shortages of medical professionals. Training more students was a "rational and positive step forward", he said. "The evolution of any supply-demand equilibrium is never going to be static and we should be prepared to adjust this balance in a continuous and dynamic way." Lee's counterpart at Chinese University, Professor Fok Tai-fai, believed Hong Kong needed more doctors to meet the growing demand of an ageing population. The ratio of doctors to population in Hong Kong is one of the lowest among developed cities. Government figures show there were 1.8 doctors per 1,000 people in Hong Kong in 2009, compared with 2.2 in Singapore and 2.3 in South Korea. Many European countries have three to six doctors per 1,000 people. Britain has 2.7 and the United States 3.1. The figure is even higher in Italy (6.2) and Finland (4.5). Concerns have been raised that adding an extra 100 medical students could mean the universities would have to dig into the budgets of other courses. Medicine is always the most costly course. According to the UGC, the average annual cost of training a medical student has reached HK$647,000, which is 3.6 times the average of HK$180,000 for humanities courses. It costs more than HK$3 million to train a doctor. But medical legislator Dr Leung Ka-lau warned against a sudden increase in medical students. "If we continue to produce 320 doctors per year at the current speed, there will be about 2,000 doctors in the coming eight years. I doubt if the authority can hire them all, even taking into account the normal wastage in both the public and private sector." He urged the authority to allocate 10 per cent of its workload to contracted doctors from the private sector so it could be more flexible in adjusting its staffing levels. Medical Association president Dr Choi Kin said the doctor shortage at public hospitals did not mean the city was short of doctors. "Many public doctors left public hospitals because of poor working conditions," he said. "There are still many doctors in the private market. There is an imbalance between the two sectors." Yeoh Eng-kiong, professor of public health at Chinese University, said manpower planning was always complex. "Good manpower planning needs to look beyond the demand in the public sector. It should look at the system as a whole, the service delivery models and the health care financing situation."

Government and industry put heads together to beat rivals - Moves to strengthen HK's position as maritime centre - After wallowing in the doldrums, moves are under way to strengthen Hong Kong's position as an international maritime centre, with at least two separate initiatives launched by the shipping and logistics sector and the government. The initiatives coincide with Beijing's support for Hong Kong's maritime industry in its 12th five-year plan to 2015. Under the first action, 24 industry groups recently launched the Hong Kong Maritime Forum that will focus on five tasks to develop the shipping and logistics sector. These include finding ways to improving the industries' competitiveness, raising their profile locally and internationally, and sustaining Hong Kong's status as an international maritime centre. Separately, officials will launch a study in the next few months specifically looking at the latter topic. Doris Cheung Mei-chu, deputy secretary for transport and housing, confirmed that a brainstorming meeting, possibly through the Maritime Industry Council, would be held before the consultancy study started. She said the new investigation would use a similar study completed eight years ago as one of its references, but pledged that it would result in a completely new report. The earlier 277-page study, published in January 2003, resulted in the creation of council as a government-industry advisory body, and highlighted a looming jobs crisis with too few young people being attracted to replace an ageing workforce. Since then other issues have been raised including the need for a shipping minister who could tackle specific worries. These include the lack of double taxation agreements between Hong Kong and other jurisdictions which financially hurt Hong Kong shipping companies, and the drift of maritime and logistics companies from the territory to Singapore. Other industry commentators would like to see a study of competitors such as Singapore, South Korea or Britain to see if they offer better co-ordinated services, aside from financial incentives, and if these should adopted by Hong Kong. Others called for efforts to make Hong Kong and the Pearl River Delta as a "green port" with active, possibly legislative moves, to cut toxic emissions from ships and supporting industries. So Ping-chi, chairman emeritus of the Institute of Seatransport, who was also chosen as the maritime forum convenor, said the shortage of people in the sector would be the main issue initially covered by the forum. Other objectives would be to improve the business environment and raise the profile of the industry. The group, which includes representatives from the Hong Kong Shipowners' Association, the Institute of Chartered Shipbrokers, logistics bodies, maritime unions, and universities and training organisations, will be formally launched in the next few weeks. Plans for the forum were suggested at the end of last year when the Amalgamated Union of Seafarers put forward its own nine-point plan to develop Hong Kong as a global maritime hub. So said a manpower report carried out 12 years ago indicated Hong Kong would face a shortfall of about 10,000 people from about this time unless more young people were attracted to the industry. He added that while there were doubts about the report's accuracy, there was still a need for a long-term solution to the manpower shortage. The forum would carry out a matching exercise to estimate future staff needs across the shipping industry, taking into account age demographics and the likely growth of the maritime sector. The exercise would involve shipowners, shipbrokers, ship management companies, and legal and shipping support firms, he said. The forum would then ask training organisations, such as the Hong Kong Polytechnic University, Maritime Services Training Institute and the Institute of Vocational Education, how many youngsters were likely to qualify in the coming years. The aim would be identify the potential shortfall and examine ways to attract more youngsters to careers in shipping and logistics. "If the matching exercise is successful then we could make the industry more sexy," So said. Pointing to the significance of the reference to Hong Kong's maritime sector in Chapter 57 of Beijing's latest five-year plan, So said the central government had given its full support to Hong Kong being an international maritime centre for the first time. Beijing had "opened the main door to a mansion full of opportunities", So said. "It's up to us to open the smaller doors ." So thought there would be opportunities to work more closely with Shanghai to develop maritime connections, and that while Hong Kong had a strong international ship finance base there were possibilities of developing stronger links with Shanghai-based shipbuilders.

Rackspace Hosting, the world's leading specialist in managed hosting services, expects to sign up more small- and medium-sized enterprise (SME) customers in Hong Kong and the mainland with the introduction of so-called cloud computing offerings later this year. The United States-based firm also plans to boost sales and marketing spending across the Asia-Pacific region to raise awareness of its expanded service offerings, especially to potential mainland customers. "I think when we get our cloud [hosting] products over, our SME business will really explode," Lew Moorman, the chief strategy officer and president of cloud hosting at Rackspace, said. Rackspace, which invested more than US$20 million to establish its Asia-Pacific operations in Hong Kong in September 2008, has more than 5,000 customers across the region. It has some 400 customers in the city, about 80 per cent of whom are multinational and regional businesses, and 20 per cent SMEs. "We're still learning about this market and where the opportunities are," Moorman said. "We'll continue to invest here and generate good returns." Listed in New York, Rackspace posted revenue of US$780.5 million last year and had 130,291 customers worldwide as of December. It provides managed hosting services to Asian customers from its data centre in Sha Tin. A data centre is a secure, temperature-controlled facility built and equipped to house large-capacity server computers to run enterprise applications and data-storage systems to store corporate data, which are maintained with multiple power sources and high-bandwidth links to the internet. Jim Fagan, the managing director of Rackspace Asia-Pacific, said the majority of customers in the region were companies involved in digital media, internet gaming, applications development and so-called software-as-a-service (Saas) offerings. One mainland SME client, Gridsum Technology, is a software-as-a-service provider that uses Rackspace facilities in Hong Kong to support its growing online client base around the world. Beijing-based Gridsum's cloud solution helps businesses track, analyse and optimise their online marketing campaigns across websites, search engines and video. Rackspace's cloud service offerings enable companies to subscribe to a secure, automated and managed virtual computing infrastructure to run their applications or store their data for a regular fixed fee and on demand, just like the electric grid. This "infrastructure-as-a-service" set-up is expected to provide Rackspace with an opportunity "to partner with Saas providers and help them go to market", Fagan said.

People join 10 hours' yoga marathon in Hong Kong - Participants take part in the Yogathon, a group yoga challenge raising fund for the Hong Kong Breast Cancer Foundation in Hong Kong, south China, April 10, 2011. Dozens of participants joined the 10 hours' yoga marathon to promote health awareness among Hong Kong citizens via yoga practice. 

 China*:  April 12 2011

China reported its first quarterly trade deficit in seven years, but analysts said it will not be repeated in the coming months as tighter monetary policies, introduced to combat inflation, slow import growth.

Brazilian President Dilma Rousseff arrived here Monday kicking off a six-day state visit to China. During the visit, Rousseff will hold talks with Chinese President Hu Jintao. She will also meet with top legislator Wu Bangguo and Chinese Premier Wen Jiabao. Rousseff and Chinese Vice Premier Wang Qishan will attend a seminar between Chinese and Brazilian entrepreneurs. Rousseff will also attend the third BRICS summit, grouping leaders from Brazil, Russia, India, China and South Africa, and the annual meeting of the Boao Forum for Asia, both slated for mid-April in China's southern island province of Hainan. In a recent exclusive interview with Xinhua before she travelled to China, Rousseff emphasized Brazil's interest in deepening the existing strategic partnership between Brazil and China. She said China was a strategic partner of Brazil "in all areas" and the China-Brazil relationship based on reciprocity would allow the two countries to gain mutual benefits in strategic sectors.

China launches 8th satellite for global navigation - A Long March-3A carrier rocket lifts off at the Xichang Satellite Launch Center in Southwest China's Sichuan province, April 10, 2011. China early Sunday morning successfully launched its eighth orbiter which will form part of its indigenous satellite-navigation and -positioning network. A Long March-3A carrier rocket carrying the "Beidou," or Compass, navigation satellite took off at 4:47 am Sunday from the Xichang Satellite Launch Center in Southwest China's Sichuan province. It will join seven other satellites already in orbit to form a network which will eventually consist of more than 30 satellites. The launching of the satellite marks the establishment of a basic system for the navigation and positioning network, said an unidentified spokesperson for the Xichang Satellite Launch Center. China will launch more satellites within the coming two years to finish a regional network to provide navigation services with high precision and credibility for industries and sectors such as mapping, fishery, transportation, meteorology and telecommunication, in the Asia-Pacific regions, the spokesperson said. The network is scheduled to be able to provide global services by 2020.

The third "Chinese Bridge" language proficiency competition was held at Sweden's Stockholm University on Sunday - Middle school students sing a Chinese song during the "Chinese Bridge" Chinese language competition of Swedish middle school and university students in Stockholm, capital of Sweden, April 10, 2011. Fifty-one students from across Sweden took part in the competition on Sunday. Nine students from Stockholm, Lund and Linkoping Universities and 42 students from a dozen middle schools in Sweden participated in the competition jointly organized by the Chinese Embassy in Sweden and Nordic Confucius Institute in Stockholm. Professor Thorbjorn Loden said at the opening that more and more Swedish students began to study Chinese. "I like you to follow the Chinese principle that friendship comes first, competition comes the second and enjoy the process of taking part in the competition," he said in a pep talk before the competition kicked off. Incomplete statistics show that all the Swedish Universities and over 60 middle schools in Sweden have opened the Chinese courses. The Swedish government has identified Chinese as a second foreign language in an equal position with English, French and Spanish. In his speech, Chinese Ambassador to Sweden Lan Caijun highlighted the significance to learn the Chinese language. "First, it opens a good opportunity for your future if you can speak Chinese as Chinese economy is developing rapidly," said Lan. He also said that it is also better to contact Chinese directly with their native language even though English is mostly spoken in the current world. The competition includes a prepared speech in Chinese, a Chinese art and cultural show including Chinese pop song singing, poems reading, Taiji Boxing and drama performance.

Brazil will not join the United States in pressuring China to revalue the yuan, said deputy minister of development, industry and foreign trade, Alessandro Teixeira. "My government is not in commercial war with China and will not try to push China to change its policies. Brazil will not ask China to revalue the yuan," Teixeira said during a visit to Hong Kong en route to Beijing last week. In Beijing this week, Brazil and China will sign at least 10 co-operation agreements during the visit of a 350-strong delegation led by Brazilian President Dilma Rousseff. In February, during a trip to the Latin American nation, US Secretary of the Treasury Timothy Geithner urged Brazil to do more to lobby China to revalue the yuan, according to media reports. "I can't comment on Geithner. We don't have this perspective of siding with the US to fight China or vice versa. We place great importance on our economic relations with China and the US, as they're our two biggest trade partners," Teixeira said. "We don't take this as a triangular relation. We're not married to any single economy." In 2009, China overtook the US as Brazil's biggest trading partner, accounting for 14 per cent of Brazil's exports and 13 per cent of its imports. Last year, Brazil's exports to China amounted to US$30.78 billion while imports from China stood at US$25.59 billion. In 2010, China also overtook the US as Brazil's biggest investor, investing more than US$10 billion in the country. Early last month, US Secretary of State Hillary Rodham Clinton said China and the US were rivals in competition for global influence. On March 19, US President Barack Obama visited Brazil in a bid to improve ties. Rousseff's visit to China is her first trip outside Latin America since she took office on January 1, Teixeira said. "This shows how important our relations with China are. All agreements [to be signed in Beijing] have the political objective of improving relations between China and Brazil. "China is going to be the biggest or second-largest economy in the world. Brazil will be among the top five economies in 10 years," he said. Brazil is currently the world's seventh largest economy. Brazil and China are among the BRICS group of leading emerging market economies which also includes India, China and South Africa. "The world sees BRICS as important," said Teixeira. "China and Brazil need to get closer. We have an important role to play in the international scenario." In future, China and Brazil would invest more in each other, and jointly invest in third countries in Latin America and Africa, Teixeira said, pointing to the huge growth in outward investment by both nations. China's outward non-financial investment soared 68.5 per cent year on year to US$42 billion in 2008, according to the Ministry of Commerce. Brazil's outward investment tripled from US$7 billion in 2007 to US$21 billion in 2008, according to Brazilian government data. The BBC has reported that a flood of cheap Chinese-made goods into Brazil has threatened the Latin American country's manufactured products, including the Brazilian bikini. However, Teixeira said that trade tensions were not specific to China and Brazil, and occurred between other countries. "You always have international bumps. It's normal. Trade is a win-win game, not a win-lose game," he said. A public tender for a 540-kilometre high-speed railway between Rio de Janeiro and Sao Paulo may be held later this year, said Teixeira. "If a Chinese company presents the best technology and offer, it will win." The railway is planned to be open for the 2016 Olympic Games in Rio.

Hong Kong*:  April 11 2011

SPCA kennel keeper Chona Chu with three of the pedigree dogs saved from filthy, cramped conditions in Lau Fau Shan, New Territories, in September. An animal welfare group is looking for homes for more than 140 pedigree dogs rescued in a raid on a suspected illegal dog breeding centre. The dogs were discovered living outside, cooped up in filthy, cramped metal cages with very little shelter from the weather in Lau Fau Shan, in the New Territories, six months ago. Some of the dogs were pregnant, others diseased, while some showed signs of being confined to cages for years with matted coats, bad teeth and deformed paws. They were all contained in small wire cages. Dr Fiona Woodhouse, a vet who helped to clean up and treat the dogs, said some may have had their vocal cords cut to stop them from barking. "A lot of them showed signs of long-term caging with inflamed feet and long nails. They looked like they hadn't been on a solid floor for a while," she said. "Although there were no puppies on site, we strongly suspect they were being bred, because why would anyone keep such a large quantity of pedigree dogs in such conditions?" Woodhouse, deputy director of welfare at the Society for the Prevention of Cruelty to Animals (SPCA), said the dogs had medical problems associated with a low level of care and neglect. They are aged from two to eight years and include poodles, chihuahuas, corgis, huskies, dachshunds, schnauzers and bulldogs. They were rescued by the SPCA, the Agriculture, Fisheries and Conservation Department (AFCD) and the police last September. But the dogs could not be put up for adoption until the owner appeared in court. Two people faced charges in connection with the dogs. A woman who was looking after the dogs was bound over by the court in March after the prosecution offered no evidence. The owner, Lam Wai-sze, appeared in Tuen Mun Court on Wednesday and pleaded guilty to charges of having a dog without a licence and permitting unnecessary suffering of an animal. He was fined HK$5,000 and ordered to do 150 hours of community service. The court also ordered confiscation of the dogs and put them in the SPCA's care, making their adoption possible. SPCA executive director Sandy Macalister said: "When some of the dogs came out of the cages they could barely walk. They had to learn to walk up stairs. The SPCA have put in a lot of effort into caring for these animals ... as a result we have some fantastic dogs for adoption." Tony Ho Tse-tong, chief officer of the SPCA Inspectorate, said Lam was believed to have been breeding and trading the dogs, but was prosecuted for cruelty - a more serious crime - because of the horrific conditions the animals were kept in. "With a cruelty charge you can get a fine of up to HK$200,000 and a maximum of three years in prison. For unlicensed trading it is only HK$2,000 and it is very difficult to prove," he said, adding that by pleading guilty Lam avoided a big fine but lost all of his dogs.

Royal Bank of Scotland Group PLC said Wednesday it has appointed Sherry Liu, formerly of J.P. Morgan Chase & Co., as chairman and chief executive for the bank in China. Ms. Liu was previously JP Morgan's chairman for China financial institutions and vice chairman for China. At RBS, Ms. Liu will be responsible for overseeing and driving the bank's overall business strategy in China across banking, markets, wealth and various joint venture investee companies in the country, the U.K. bank said in a statement. RBS operates in China through a locally incorporated bank headquartered in Shanghai with five branches in China and 500 employees. The bank has also built multiple non-banking business platforms, including a wholly owned leasing company; a shareholding in Suzhou Trust Co. Ltd., an investment trust based in Jiangsu province; and a joint venture with Galaxy Futures--a futures-trading joint venture with China's Galaxy Securities. It received approval in November to set up a domestic securities joint venture that allows it to underwrite A-share transactions with Guolian Securities, and is setting up the joint venture.

No more mainland mothers-to-be will be allowed to arrange to give birth at Hong Kong's public hospitals for the rest of the year. Last night's announcement by the Hospital Authority followed its meeting yesterday with the heads of the city's eight obstetrics departments to decide how to deal with the overwhelming demand on their staff and equipment amid the influx of mainland mothers. The decision means that the number of deliveries by mainland mothers would be frozen at about 9,000 this year - including those who have already booked until November - compared with 11,000 last year, an 18 per cent drop. In the past two years the authority has only suspended bookings of obstetrics services for mainland mothers in September. Hospital Authority director Dr Cheung Wai-lun said last night that the decision was an initial step towards relieving the strain on the public health care system. "We have assessed our capacity and believe that the decision is necessary to relieve the strain on our services. "We will start discussions with paediatricians and the government on next year's situation soon," Cheung said. A concern group formed by senior public doctors has called on the government to fix the total number of deliveries in the city at last year's 88,000. One member, head of obstetrics and gynaecology at the Prince of Wales Hospital Dr Cheung Tak-hong, said last night's decision would provide only a "slight improvement". He said five of the eight public hospitals offering obstetric services had stopped appointments for non-local mothers several weeks ago. "The across-the-board suspension can at least standardise the policies at individual hospitals, but what really concerns us is next year's situation. In about two weeks' time, mothers will start coming to us to ask for a bed for next year's delivery. The authority is running out of time to make a decision for next year's quota." At yesterday's meeting, doctors called on the authority to stop providing obstetric services altogether for mainland women who are not married to Hong Kong people. But Cheung Wai-lun said the authority had not yet taken a position on this. "We all agree that public hospitals should serve Hong Kong mothers first, but who among the mainland mothers should have a priority? We have no position on that yet. "What the authority needs to do now is to set a quota for next year. Then we can discuss how this quota can be shared among different sectors," he said. The head of paediatrics at United Christian Hospital, Dr Chan Hin-biu, said the suspension of bookings came as a relief for the neonatal intensive care units because November and December were usually peak months for deliveries. "It is a good starting point for cutting the numbers and we now have to talk to the authority about future arrangements," Chan said. President of the Private Hospitals' Association Dr Alan Lau Kwok-lam last night said the authority was heading in the "right direction". But he said private hospitals would not be following suit as they were still working within their capacities. The Mainland-Hong Kong Families Rights Association said the government's decision covered up the fact that the mainland wives of Hong Kong residents were regarded as non-local mothers. It said it would stage a protest at an event attended by health chief Dr York Chow Yat-ngok tomorrow.

Listing plans by high-profile brands including handbag and accessories maker Coach could be just what Hong Kong's equity market needs this year after a number of withdrawals. For a stock market built on property, finance and cheap electronics the latest listing hopefuls are set to add a touch of class to the trading day. As well as Italian fashion house Prada, handbag and accessories brand Coach is eyeing a listing here, tapping mainland consumers' insatiable demand for luxury products. These high-profile share sales over the next few months could finally ignite Hong Kong's equity market, which has seen a number of withdrawals this year. Broker CLSA Asia-Pacific Markets forecasts that China would become the world's largest domestic market for luxury goods - worth €74 billion (HK$822.36 billion) or 0.6 per cent of the country's total gross domestic product - over the next decade. Handbags, leather goods, watches and jewellery are likely to record the fastest growth as Chinese consumers increasingly load up on luxury goods to display their wealth and success and as gifts for friends and family, CLSA said. Coach, a New York-listed company, has had preliminary talks with investment banks and is considering whether to simply list its shares in Hong Kong or to sell new shares in the listing, according to IFR, a Reuters publication. Prada has said it wants to raise up to €1.5 billion in an initial public offering with a listing in Hong Kong, possibly in June. Hong Kong-based jeweller Chow Tai Fook, owned by billionaire and property magnate Cheng Yu-tung, is also planning to raise between US$2 billion and US$3 billion in the first half of this year. The city is expecting the first yuan-denominated offering next week by tycoon Li Ka-shing's real estate investment trust, which could raise up to US$1.5 billion. Subscriptions of the Hui Xian reit shares will formally be made available to the public on Monday. Conita Hung Lai-ping, head of equity research at Delta Asia Financial Group, said that investment sentiment had improved after a quiet first quarter. "Whether investors will take up all these offerings will depend on market conditions," said Hung, referring to the large amounts demanded in some of the upcoming listings. "I believe if these IPOs are well received it could also enhance overall sentiment. Some investors might also want to switch to buying new shares again after making gains due to the strong performance of the stock market lately." The Hang Seng Index yesterday edged up 114.27 points, or 0.47 per cent, to close at 24,396.07 points, the highest since January this year.

The China market is big enough for two Disneylands, the local theme park's chief said yesterday. As Shanghai started work on its own Disneyland, the managing director of Hong Kong Disneyland Resort, Andrew Kam Min-ho, said the two parks would attract tourists from different parts of the country. Both would benefit from a boom in the region's travel industry. "Asia, including China, is a growing market with a population of several billion, large enough to welcome more than one Disney resort," he said. Shanghai Disneyland will target those who live in the Yangtze River Delta area, while Hong Kong's visitors came from southern China and Southeast Asia, Kam said. "Not many" people from the Yangtze River Delta visited the HK park, he said, while refusing to give exact figures. As to whether there would be a drop in numbers from overlapping markets, Kam said it would depend on the overall attractiveness of Hong Kong and Shanghai as tourist destinations. The local park, which has yet to break even, aims to attract more visitors with an expansion. Three new attractions will be added by the end of 2013. Toy Story Land will open before Christmas, while Mystic Point and the Grizzly Gulch mining town with roller coaster will open in 2012 and 2013. The two parks will have different attractions and Kam said he hoped tourists would go to both of them. HK Disneyland last year welcomed 5.2 million guests, an increase of 13 per cent from 2009. But it still suffered a loss of HK$720 million. The mainland was the biggest source of visitors - providing 42 per cent of the total. The government has a 53 per cent stake, with the Walt Disney Company owning the rest. Hong Kong Association of Travel Agents chairman Paul Leung Yiu-lam said Hong Kong would stay competitive with its other attractions. "Disneyland is not the only reason tourists come to Hong Kong," he said. "Shopping is still their number one priority. There is also Ocean Park, whose tickets are cheaper." Tourism sector lawmaker Paul Tse Wai-chun said Hong Kong still trumped Shanghai in terms of people's ability to speak both English and Chinese. This made it appeal to Southeast Asian visitors, he said.

Sotheby's Hong Kong eight-day spring auction created history, netting a record HK$3.49 billion by its conclusion last night from sales of Asian art, fine Chinese paintings, ceramics, jewellery and wine. The total take from the sale of about 3,400 lots in the auction house's first big sale of 2011 outdid the record-breaking HK$3.08 billion tally for its autumn sale last year. Entering its final day yesterday, the auction had already notched up HK$2.62 billion. The sale brought with it a wealth of surprises, further educating observers about trends in the Asian art-buying market. One of the biggest surprises came from Thursday's sale of the Meiyintang collection of imperial Chinese porcelains that yielded uncharacteristically disappointing results, netting as it did only HK$399 million, half the pre-sale estimate, with 30 per cent of 77 lots unsold. Nicholas Chow, Sotheby's international head of Chinese ceramic and works of art said: "Twelve lots sold for more than HK$10 million. There was guarded bidding on some of the top lots." Some bidders held back after learning that that a new payment structure required them to deposit HK$8 million in advance and prove that they would be able to comply with Sotheby's 30-day payment period. But private sales after the auction were lucrative with a Falangcai pheasant vase and a Chenghua palace bowl selling for an astonishing HK$200 million and HK$90 million respectively. Aside from ceramics, the sale included the world auction record for a contemporary Chinese art piece with the sale of Zhang Xiaogang's triptych Forever Lasting Love (1987-1990) for HK$79 million, more than double its original estimated sale price.

 China*:  April 11 2011

A top state oil executive is tipped to become governor of the southwestern province of Yunnan as political jockeying continues in the run-up to next year's expected leadership transition in Beijing. Jiang Jiemin , chairman of PetroChina (SEHK: 0857, announcements, news) and general manager of China National Petroleum Corporation (CNPC (SEHK: 0135)), is expected to be appointed deputy party chief and acting governor. Jiang would be the second top executive from the state oil duopoly to blaze a political trail. Just a fortnight ago, Sinopec (SEHK: 0386) chairman Su Shulin was appointed acting governor of Fujian province. Su became chairman in 2007, replacing Chen Tonghai , who was sacked for allegedly accepting bribes of more than US$28 million. Jiang, 57, has more than 30 years of experience in China's oil and gas industry. He served as vice-governor of Qinghai province between 2000 and 2003 and is also an alternate member of the Communist Party's Central Committee, a position usually seen as a qualification for the governorship of a smaller or less developed province or deputy governorship of a politically significant one. It is not unusual in China for the chief of a state-owned company to join the political elite. The party's organisation department says it has a plan for exchanges of officials between business and the government, with more corporate leaders, most from state monopolies, moving into politics and vice-versa. Political heavyweight and security chief Zhou Yongkang was once CNPC's general manager. Zhou is currently the secretary of the party's Central Political and Legislative Affairs Committee and one of nine top party leaders on the Politburo Standing Committee. Former Sinopec bosses Chen Jinhua and Sheng Huaren both went on to become top officials at economic planning bodies, and former head Li Yizhong became minister of industry and information technology. CNOOC (SEHK: 0883)'s previous chief Wei Liucheng is now party chief of Hainan province. The former CNOOC chairman and chief executive was made deputy party chief and acting governor of the island province in 2003. Meanwhile, Li Xiaopeng , 52, son of ex-premier and National People's Congress chief Li Peng , transferred from his role as general manager of China Huaneng Group, a supplier of electric power, in June 2008 to become deputy governor of Shanxi province.

China: US meddling not welcomed under the pretext of human rights issues. China on Saturday urged the US to stop interfering in its internal affairs under the pretext of human rights issues. China and the US have disagreements on human rights issues, about which we are willing to engage in dialogues based on equality and mutual respect, Foreign Ministry spokesman Hong Lei said. "But we are firmly against interfering in our internal affairs under the pretext of human rights issues," Hong said. His comment came after the US State Department released an annual report on human rights around the world and criticised China's human rights status. The Chinese government attaches importance to protecting human rights. With continuing economic growth, constantly improving democracy and law system, ever booming cultural development, all ethnic groups in China enjoy extensive freedom and rights, Hong said. The spokesman urged the US to reflect more on its own human rights issues rather than acting as a "preacher of human rights". "The US should stop interfering in other country's internal affairs with human rights report."

Liquor makers urged to keep prices stable - People cheer at a bar in Shanghai. Imports of wine increased by about 60 percent in 2010, said Liu Yuan, secretary-general of the China National Association for Liquor and Spirits Circulation. Chinese lovers of beer and white liquor are unlikely to see more sudden price rises during the coming months after the recent waves of hikes that swept the country's alcohol market, said industry insiders. China's most prestigious white liquor producer, Kweichow Moutai Co Ltd, raised its prices by about 20 percent earlier this year. Meanwhile, a host of liquor makers have lifted their prices by about 10 percent in the last few weeks. Moreover, brewers such as Tsingtao Brewery Company Limited and Beijing Yanjing Beer Group Corporation have also raised the price of their beers by around 10 percent. "After the recent average price hikes of close to 10 percent, we won't see more rises," said Liu Yuan, secretary-general of the industry group, China National Association for Liquor and Spirits Circulation. Liquor manufactures always choose a slack sales season such as spring to raise prices, giving the market a few months to absorb the price changes, he said. However, the increase has concerned policymakers. The National Development and Reform Commission, China's top economic planner, organized a meeting with the industry group and four brewers last week to discuss ways to ease the price hikes. Overall retail sales for alcoholic beverages stood at nearly 1 trillion yuan ($1.5 billion) in 2010, meaning that they comprise the largest production group in the country's food-processing industry, and price fluctuations have a direct impact on inflation expectations, Lin said. Policymakers are trying to gain more knowledge about the industry and hope that the companies will maintain relatively stable prices, given the rising inflationary pressures caused by both internal and external factors, Liu said. The government won't use administrative measures to interfere with pricing, except in extreme conditions, but most companies will commit to their responsibility to keep prices stable, he said. A stable market is vital for beverage companies, Liu added. Xing Zhijian, a food analyst at Qilu Securities, said rising production costs make it reasonable for brewers to raise prices. The price of imported barley - which accounts for about 20 percent of the overall production cost of beer - increased by about 50 percent in March, compared with the same month last year. Other costs, including bottles and packaging, have also risen rapidly, said Xing. However, he said increases in the price of white liquor, were mainly spurred by robust market demand and the "ripple effects" of Moutai's price hike in January, which allowed competitors to raise their prices and gain market share. "Once prices have been raised, they won't be lowered again, because the profits have already been spent," Xing said. Liu of China's Alcohol Association said the rise in the price of domestic liquors will enable imported wines and liquors to gain a greater market share. The import volume of wines increased by about 60 percent and the value rose by around 70 percent in 2010, he said.

China Citic Bank (SEHK: 0998), the seventh-biggest mainland lender by assets, said yesterday it would need to set aside 12 billion yuan (HK$14.23 billion) to meet new loan-provision ratio requirements announced at the end of last year. The bank added that it would also need to put aside about 2 billion yuan to meet tighter calculation standards in assigning risk weightings for local government loans not fully backed by cash flow. This refers to projects in which there is a risk that the borrowers may not be able to fund interest payments. China Citic Bank president Chen Xiaoxian said the bank did not need to go to the market for money, despite putting the funds aside to meet the new requirements. "On the premise that no drastic policy or economy changes take place, we do not need to raise capital in the equity market for at least three years after this latest round of fund-raising," Chen said. He added that the bank did not take into consideration the two new regulations when they planned the rights issue last year. China Citic is scheduled to complete a 26 billion yuan rights issue in Shanghai and Hong Kong by the end of June. For loan provisions - the money set aside for current and potential bad loans - the China Banking Regulatory Commission (CBRC) proposes raising bad loan provisions to at least 2.5 per cent of outstanding loans. Chen said China Citic's loan-loss reserve ratio of 1.5 per cent was one percentage point short of the requirement, which meant the bank needed to put aside another 12 billion yuan. "Systemically important" banks face tighter regulations and are granted only a two-year grace period to meet the requirement by 2013, while small-and medium-sized banks will have five to six years. Analysts said Citic might receive a grace period of five years. "It's more likely that only the big four commercial banks will be classified as systemically central banks at this point," UOB Kay Hian analyst Sheng Nan said. Sheng said China Citic's loan-loss reserve ratio of 1.5 per cent was much lower than the mainland's big four commercial banks: Industrial and Commercial Bank of China (SEHK: 1398), Construction Bank of China, Bank of China and Agricultural Bank of China. The bank's outstanding loans to local government financing vehicles totaled 118.4 billion yuan by the end of last year, around 10 per cent of its total loans, Chen said. He added that about 90 per cent were completely or largely covered by cash flows. Regarding China's fourth interest rate hike in six months on Wednesday, China Citic said it suffered a slight negative impact and net profits would drop by less than 100 million yuan. Citic Bank International, the bank's overseas expansion platform, officially opened its Singapore branch yesterday after a three-month soft launch from December last year. The Singapore branch will focus on wholesale banking for business between mainland and Asean countries.

Mainland China babies in a class of their own when it comes to parental expectations - On a cold, wet Friday morning, only a third of the children turn up for the 45-minute class in Shanghai's Putuo district. It's not as if the children can get there themselves. Junjun, the eldest, is just 21 months old. Nini, the youngest, is 19 months old. Their young teacher begins the class by leading the children and various accompanying grandparents on a walk around the sides of a square painted on the ground. The early education centre, which says its tuition is based on the theories of famed Italian educator Maria Montessori, says the exercise helps calm the children and concentrate their minds for learning. The teacher then shows them how to stick coloured flowers on a paper vase, saying it can help them learn to recognise different colours. Next up, the children play with toys, including beads, cups, stuffed toys and toy bricks that they fetch from a shelf by themselves. The teacher plays with each of them occasionally before a group game that only Junjun seems to enjoy. The class ends with the teacher asking each child to stand in front of the others and announce their name, age and gender. It's just one of many similar sessions offered by an early education industry that is spreading rapidly across the mainland, despite experts cautioning that it might not deliver the results desired. More city parents are bringing their children, aged from just two months to six years, to such classes, believing that an early start to learning helps lay the foundation for future success.

The Civil Aviation Administration of China has reaffirmed its intention to strengthen the growth of five hub airports including Beijing, Shanghai and Guangzhou, to boost transcontinental and regional air links. The move, outlined at an airport planning and development conference in Guiyang, capital of Guizhou province, underwrites a plan put forward by the aviation regulator in 2008. At the conference, CAAC head Li Jiaxiang also reiterated plans to expand the number of mainland airports from 175 to 230 by 2015. This comes as Beijing became the world's second busiest airport last year, handling 73.9 million passengers, up 13 per cent year on year. By comparison, Guangzhou was placed 19th in the world by airport industry lobby group, Airports Council International, after handling 40.9 million travellers, up 10.6 per cent compared with 2009. Shanghai was ranked 20th with 40.6 million passengers, a 27.2 per cent year-on-year increase. The three airports, together with Shenzhen, are among the world's top 30 busiest cargo airports. Under the CAAC's plan, Beijing Capital Airport will lead the northern airport group, while Shanghai will head the east airport group. Guangzhou Baiyun international airport will be the hub airport for central China, while Chengdu and Xian will be hub airports for the southwest and northwest of the country. Beijing is expected to help feed air traffic to northern cities including Tianjin and Shenyang and Harbin. Shanghai Pudong will remain the main gateway for eastern China and the Yangtze River Delta, but CAAC also plans to accelerate the development of Shanghai Hongqiao and regional airports such as Hangzhou, Nanjing and Xiamen. Airports such as Shenzhen, Wuhan, Changsha and Haikou will be developed in the south and central part of China to support the main international gateway at Guangzhou Baiyun. These airports are expected to foster the economic development of the Pearl River delta and tourism on Hainan Island. Kunming airport also will act as the gateway to Yunnan province for passenger and cargo traffic from Southeast Asia, although Chengdu will be the southwest's main hub. Urumqi will be the regional airport for the development of the Tianshui economic zone and Xinjiang, although Xian remains the hub. Airports at Lanzhou, Yinchuan, Yushu and Xining will also be developed, while Kashgar airport will become the major airport in southern Xinjiang. Li said: "Investment in China's aviation industry is likely to reach 1.5 trillion yuan in the next five years." The CAAC forecast that the number of domestic and international passengers would climb to 500 million travellers per year by 2015, of which about 18 per cent would be international passengers. Analysts have also said the expansion of China's aviation industry made it imperative that Hong Kong maintain its lead position as an international passenger and airfreight gateway for China and the region.

China's Ministry of Commerce (MOC) announced Friday that the country would end anti-dumping measures against cold-rolled stainless steel sheets imported from Japan and the Republic of Korea (ROK), effective on April 8.

Hong Kong*:  April 10 2011

One of the most prominent members of the government – Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan – resigned on Friday afternoon citing health reasons. Lau said in a statement that she wanted time for follow-up treatment for “a colon tumour”. Her comments end more than a week of speculation about her health. Several Chinese-language newspapers reported on March 26 that she was suffering from early stage intestinal cancer. Friday’s statement is the first time Lau and other officials have spoken publicly about her condition. Lau said she had received surgery on March 22 to remove the tumour and the operation was successful. “On March 16, I felt sick and went to hospital for a medical check-up. After diagnosis, I received surgery on March 22 ... it successfully removed a colon tumour,” she said. “I am recovering now thanks to the care of doctors and medical workers at Queen Mary Hospital,” she said. Lau then revealed she had on Friday tendered her resignation to Chief Executive Donald Tsang Yam-kuen. “As I will have to receive follow-up treatment and take more rest, my ability to carry out my duties as the secretary for commerce and economic development, both locally and abroad, may be affected.” she explained. “I decided to resign and on April 8 tendered my resignation to the chief executive,” Lau said. “My resignation is due to my health, but I believe it is also a responsible move that is in the interests of the public,” she said. The chief executive said he respected Lau’s decision. “Her contributions to various areas, including trade, commerce, tourism, telecommunications and technology, have earned her great respect from [many] different sectors of the community,” he said. Lau is one of three senior government officials who have had medical operations in recent weeks. Central Policy Unit chief Professor Lau Siu-kai on Wednesday had a “preventive operation” at Prince of Wales Hospital. On Thursday, Secretary for the Constitutional and Mainland Affairs Stephen Lam Sui-lung had heart surgery. The members’ poor health has raised concerns in some circles about their performance.

Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung returned to work on Friday after recovering from heart surgery. Lam, 55, is the third senior minister to have an operation in recent weeks. A spokesman for the Constitutional and Mainland Affairs Bureau said Lam had a heart operation, known as “balloon angioplasty”, at Queen Mary Hospital. The constitutional minister earlier said he felt pain near his heart recently and a medical check-up showed he needed surgery. Lam told journalists waiting outside the hospital that his condition was “good” and he was returning to work. “There is some important paperwork I have to take care of. My team is now preparing for the budget debate in the Legislative Council next Wednesday so I need to go back to office,” he said. Lam added that he would take more rest over the weekend and would only attend Wednesday’s Legco meeting if he felt up to it. “It is good today is Friday. I will work a half-day only and then go home. Hopefully there will be enough time for a good rest,” he said. Lam is the third senior member of the government to have had an operation in recent weeks. His condition has heightened general concerns over ministers’ health and it could affect their ability to do their jobs. Lam’s surgery came a day after Central Policy Unit chief Professor Lau Siu-kai had a “preventive operation” at Prince of Wales Hospital. The government gave no further details on Lau’s operation. Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan, 57, is also on leave after surgery on March 22. She was reported to be suffering from intestinal cancer. Rita Lau’s press secretary on Thursday said the minister’s sick leave was scheduled to end on Sunday and there were no plans to extend her leave.

China will allow the yuan to be traded against a wider variety of currencies in the onshore foreign exchange market, the central bank said in a report on Friday. The People’s Bank of China (PBOC) did not name any of the new currency pairs that will be launched for trading, though the announcement signalled a determination to continue pushing the Chinese currency towards a larger role in settling international trade. The yuan is currently tradable against seven currencies: the US dollar, the euro, the yen, the Hong Kong dollar, sterling, the Malaysian ringgit and the Russian rouble. “Relevant departments will look at bilateral economic and trade relations as well as financial interactions to launch trading of yuan and other currencies in the interbank market,” the central bank said in a report reviewing financial market developments last year. “When they announced it with Malaysian (ringgit), it didn’t really affect the Malaysian ringgit, so it’s not something that is going to move the domestic market, but it is more on the idea of letting the yuan be traded more broadly against everything else,” said Wee-Khoon Chong, an foreign exchange strategist at Societe Generale in Hong Kong. A foreign exchange trader in Shanghai said the market should not get ahead of itself in its expectations for yuan internationalisation. “I see the messages as quite mixed so far,” he said. “The regulators are quite cautious about this.” Beijing says that the yuan’s exchange rate is managed according to a currency basket, but in practice it keeps the currency on a crawling peg against the dollar. Increasing the number of currencies traded against the yuan will gradually help reduce the dollar’s weight in determining the value of the yuan, traders said. Most China-based traders believe that the dollar accounts for about 70 per cent of the Chinese nominal effective exchange rate (NEER), or its value against a trade-weighted grouping of currencies. Among other steps to promote the yuan’s use on a regional and global basis, China has launched a programme to use the yuan for settlement of exports and imports. It has also allowed the development of a nascent offshore yuan market in Hong Kong. In the report published on Friday, the central bank said that it would accelerate the opening of its domestic bond market to foreign institutions. The central bank also noted that the demand for yuan assets was on the rise in overseas markets as Beijing expands the use of the currency for trade and even investment purposes. Last August, the central bank launched a new programme allowing yuan accumulated overseas as a result of trade settlement or central bank swaps to be funnelled back into the mainland’s interbank bond market. The central bank also said in the report that it expect to see a greater volume of share and bond issuances this year, especially from small- and medium-sized enterprises.

A leading European specialist in the global fight against superbugs yesterday called on Hong Kong to use its unique experience in fighting bird flu and Sars to lead Asia's campaign against the misuse of antibiotics. "Hong Kong has been very successful in the containment of H5N1 and [severe acute respiratory syndrome]. I'm sure you will be equally successful in the containment of antibiotic resistance," said Herman Goossens, a Belgian professor who is visiting the city to raise awareness about superbugs. Goossens, founder and vice-chairman of the Belgian Antibiotic Policy Co-ordination Committee, warned that, with the advance of superbugs like NDM-1, most antibiotics could become useless within five years if steps were not taken to curb their over- and misuse. What Belgium was doing in Europe was an example for the rest of the European countries. Hong Kong hopefully would be an example for the rest of Asia, Goossens said. His appeal came as Hong Kong's Centre for Health Protection released the results of a survey which found dangerous misconceptions about antibiotics were widely held. About one in three Hong Kong people believe antibiotics can cure flu and two in three think they can treat viral infections - beliefs that could increase the city's vulnerability to the rapid proliferation of incurable superbugs. The dangers of abusing antibiotics are well-publicised yet the survey found that only half of the respondents said they had heard of the concept of antibiotic resistance, which led to evolution of superbugs such as NDM-1. Since its discovery in India in 2008, NDM-1 has spread to countries including the United States, Australia, Britain and Canada. In October, China confirmed its first three cases of NDM-1. A British study released this week found the deadly superbug in a quarter of water samples taken from the streets of New Delhi, The situation prompted the World Health Organisation to dedicate yesterday's World Health Day to promoting the sensible use of antibiotics, after it warned that "diseases due to antibacterial resistance" would be a leading threat this decade. The WHO estimates that at least 150,000 people die every year from multidrug-resistant tuberculosis - which cannot be treated by even the best drugs. Some 440,000 new cases emerge each year in 64 countries. "Misconceptions happen every day," said Dr Choi Kin, president of the Hong Kong Medical Association. "We have patients insisting on antibiotics and we have patients insisting on not taking antibiotics when they should be taking them." Although parents were often cautious if doctors tried to prescribe antibiotics to their children, there were still doctors who were keen on prescribing them, Choi said. Goossens led a campaign in Belgium over the past 10 years educating the public and doctors on how to use fewer antibiotics. The campaign has proved to be a success. Resistance to antibiotics from pneumonia-causing bacteria dropped by up to 11 per cent within a decade, says the European Centre for Disease Prevention and Control. Following Belgium's lead, European countries, the US and Canada have all developed similar campaigns.

Students invent robot that helps around house - Student Fong Chiu-tai gives a close-up view of one of the tiny dancing robots that helped her school to a Guinness World Record. It's every household's dream - a robot helper that can take care of all those time-consuming chores. And thanks to children at a Hong Kong school, it may be becoming a reality. What is thought to be the city's first domestic helper robot was unveiled yesterday by Form One and Two students from Lingnan Dr Chung Wing Kwong Memorial Secondary School. Reminiscent of Rosie, the robot maid in the popular cartoon The Jetsons, it uses pads attached to its feet to clean tables. And it was one of five robots displayed by the children at Sunshine City Plaza in Ma On Shan as part of the mall's exhibition in honour of Robocon, a Japanese cartoon robot. Their creations were produced under the guidance of the schools panel chairman of design and technology Lau Sai-Chong. Last November, the students achieved two Guinness World Records. One was for building the world's smallest running robot and the other was for having the most robots dancing together in one place. They assembled 800 small, four-legged robots on the school's basketball courts where it was hoped they would dance for one minute. Only 700 made it to the end of the minute. But it meant their school is the only one in the city to have set a Guinness World Record. Lau said his promotion of robotics at the school stemmed from his desire to help the community. He said: "Technology is important and knowledge of it will improve the lives of children in the long run. "Building robots is fun. It builds skills and trains the creative mind. When you see that you have built something, it builds confidence." Form One student Chong Yun-Wah, who helped to build the domestic helper robot, agreed with Lau, saying: "If we learn to build robots now we can be engineers in the future and help communities with technology."

Hong Kong remains best served by banks that provide a wide range of services, but under supervision - The landscape of banking has undergone very significant changes since the eruption of the global financial crisis in 2008. Some might even argue that banking will evolve beyond recognition when compared with what we knew previously. Three issues have had a profound impact on the way in which the banking industry, including that in Hong Kong, should structure itself. First, "universal banking" versus "segregated banking". Universal banking is a business model in which banks are allowed to provide a wide range of banking and other financial services to their customers, whether they are mass retail or high net-worth, small and medium-sized enterprises or large corporations. Some people describe it as a one-stop financial supermarket. Despite scepticism in some jurisdictions following the crisis, we continue to see merit in the model of universal banking. First of all, it provides what the customers need to meet their rising demand for investments in a wide range of products. At the same time, it allows some banks to provide corporate or investment services to the more sophisticated corporate clients in areas such as debt finance, equity fund raising, mergers and acquisitions and other advisory services. Universal banking also makes a great deal of sense from a bank's point of view. Under this model, a bank can better serve the diverse needs of its customers, and generate fee and commission income which is not subject to the same kind of credit, maturity and other risks associated with income derived from lending and trading activities. Customers need the services and banks provide them: it looks like a perfect match. But, as always in the real world, there is a catch in this model. This relates to the ways in which customers perceive a bank: as a deposit-taking institution versus a brokerage house or investment bank. Many customers go to banks to conduct very basic transactions such as cash withdrawals or deposits. They may come across overly keen staff trying to market investment products. The crisis and the subsequent international debate have prompted us to reflect on whether universal banking still remains an optimal model of banking for Hong Kong, as some have argued that the banking industry should revert to a simpler model of basic banking and leave the rest to brokerage houses and financial advisers. Our answer is "yes". But, this is a qualified "yes" because banks must take steps to address the potential concerns. They should offer their retail customers a high degree of protection with adequate regard to their interests or experience in investing in securities or other structured products. That is why the Monetary Authority has required banks, in selling investment products to customers, to adopt extra investor protection measures. These include audio recording of the marketing process, segregation of the investment corner from the main banking hall or counters, and a mandatory two-day pre-investment cooling-off period for vulnerable and inexperienced investors. Banks must take extra care in marketing investment products to their customers. The second issue is universal banking versus "narrow banking". In this context, universal banking refers to a business model in which banks are allowed to conduct their own proprietary trading and market-making in addition to trading on behalf of their customers and offering other traditional banking services and products. We've seen the Volcker Rule in the US, which calls for restrictions on proprietary trading, and we've heard the governor of the Bank of England speak in favour of narrow banks. Their concerns spring from the potential ability of banks to leverage their sources of funds obtained from public deposits for risky ventures. On the other hand, the proponents of universal banking note that diversification can be beneficial for banks and banking stability. If one area of business underperforms, others can make up for it - making the "whole" more resilient. The HKMA takes a balanced and pragmatic view on this issue. Our preferred response is to ensure the proper management of those parts of the operations that benefit from low-cost funding and yet cause a disproportionate amount of risk. We need to critically assess whether banks really understand what sort of risks they are taking on and seek to ensure that these are managed properly to safeguard depositors' interests. We also need to ensure our banks do not take on excessive risks in their chase for higher profits and bonuses. Banks holding customer deposits must keep their responsibilities to their depositors foremost in their minds. Another strand of the debate is whether banks should be required to operate in host jurisdictions as subsidiaries. There are two angles to be considered: supervision and resolution. Some jurisdictions believe that overseas banks operating in their jurisdictions should take the form of subsidiaries rather than branches. The main motivation is that the host supervisors will have a much stronger regulatory handle to supervise a locally incorporated subsidiary than a branch. In a resolution scenario, many also favour subsidiaries because this provides a clear legal entity structure which is easier to handle nationally under an insolvency situation. The HKMA believes that an overseas bank that wishes to undertake retail business in Hong Kong should operate in the form of a locally incorporated subsidiary. To offer appropriate protection to retail depositors in Hong Kong, the HKMA needs to have effective supervision of every aspect of a retail bank's operation, especially its capital adequacy ratio. We are prepared to take a liberal view if an overseas bank wishes to engage in both retail banking through a subsidiary and, in parallel, corporate or private banking that would more appropriately be conducted through a branch. The world's financial system has become ever more complex and interconnected. It is safe to say that there is no "one size fits all" answer to what kind of business model banks should adopt. Each jurisdiction must reflect on and determine on its own what kind of model would suit them best. No doubt there will be new international standards that all banks must comply with to make them individually and collectively more resilient. The HKMA must continue with its long-standing conservative supervisory approach.

Hong Kong is set to score from Japan's nuclear disaster as Easter and Golden Week holidaymakers switch their destinations. Radiation fears have led many Hongkongers to cancel Japan holidays and look elsewhere - or stay at home. Wing On Travel assistant general manager Daisie Sin Pui-fong expects a 10 percent growth in inbound tourists at Easter and during the Labor Day Golden Week compared with last year. "Travelers who previously intended to visit Japan may turn to Hong Kong because we have similar attractions," she said. "We expect a 10 percent overall growth, with the highest increment coming from mainland individual visitors." Tourists from Korea, the United States and Canada may also turn to Hong Kong, she said. China Travel Service (Hong Kong) general manager Ng Hi-on agrees with the 10 percent figure. "We expect many more mainland visitors to come to Hong Kong because of the Japan quake," he said. "The number of mainland tourists has already surged about 20 percent this year." Shopping malls are getting ready for a bigger slice of the tourists who would have gone to Japan had it not been for the nuclear leaks. Sino Land's retail marketing and promotions general manager, Irene So Kit-lin, said in addition to more mainland tourists many locals may stay home for Easter, boosting patronage. Olympian City is splashing out HK$2.2 million - up 10 percent from last year - to draw visitors and shoppers. Shopper traffic of 6.67 million - up 11 percent on last year - is expected. Times Square is investing HK$1 million on its Easter promotions. Up to 90 percent of its tourist visitors are from mainland, a spokesman said. But for the diehards, a five-day Easter vacation in Osaka is going for the bargain price of HK$4,399. For a little more you could switch to Kyushu, Hokkaido or Tateyama Kurobe. The travel insurance package will include health problems caused by radiation. But some travel agencies - including Hong Thai, Wing On and China Travel Service - say their Japan package tours remain suspended until late this month. Package Tours (Hong Kong) is offering the HK$4,399 Osaka trip - which is about HK$2,600 less than normal. A spokeswomen said between 30 and 40 holidaymakers a day have been booking Easter packages since April 1. Many are going for 30 to 40 percent less than the regular price. The company is also offering packages to Kyushu, Hokkaido and Tateyama Kurobe for between HK4,699 and HK$6,499. "The reaction has been much better than we expected," she said. "We will organize about 50 package tours to Japan, totalling about 1,000 tourists, starting from April 16. "We have been monitoring the four cities before deciding to resume tour packages since the hotels and restaurants there are functioning normally."

Luxury hotelier Shangri-La Asia (0069) plans to sell five-year convertible bonds to raise up to HK$4.68 billion, according to a term sheet. The yield was marked at 1.75 percent to 2.25 percent and calculated on a semi-annual basis. The notes can be converted into shares if stock prices hit a range between HK$29.03 and HK$30.64, representing a 35 to 42.5 percent premium on the HK$21.50 struck yesterday before suspension. The Hong Kong-based hotel operator hired HSBC Holdings (0005) and Bank of China International Asia to manage the sale. The funds are to be used for general operation and future capital expenses. Shangri-La has US$546.9 million (HK$4.26 billion) worth of loans maturing through 2014. It last sold convertible bonds in 2004, according to Bloomberg. Meanwhile, mainland developer Agile Property (3383) said it sold US$500 million convertible bonds with a 4 percent coupon. The notes, due 2016, have a conversion price of HK$18.26 a piece, representing a 40 percent premium on Wednesday's close of HK$13.06. The proceeds will be used for land acquisition and general operation. Agile shares fell 4.4 percent to HK$12.46 yesterday. Separately, the world's second-largest maker of shipping containers, Singamas Container Holdings (0716), plans to issue three- year bonds worth 1.38 billion yuan (HK$1.63 billion) and with a yield of 4.75 percent. The notes, with an earlier fundraising target of one billion yuan, were oversubscribed by 450 percent. Singamas shares rose 2.6 percent to HK$3.58. 

 China*:  April 10 2011

The United States fell behind China in the development of wind power, as new wind power facilities added in the US fell sharply last year from 2009, the industry’s trade group said on Thursday. A total of 5,116 megawatts of wind power was built last year, about half the level the industry added in 2009, as weak electricity prices and the global economic slowdown weighed on the industry, according to the American Wind Energy Association (AWEA). That dropped the US behind China in total installed capacity, as China added 18,900 MW to become the global leader with nearly 45,000 MW of installed capacity. The US has about 40,000 MW of capacity, enough to power more than 10 million homes, according to AWEA. Texas remains the biggest contributor, with about one-fourth the total. That total represents about two per cent of the US power supply. Wind power still contributed more than a quarter of the total new electricity supply in the country. About half the turbines installed in the US market last year were supplied by General Electric, followed by Siemens, Gamesa, Mitsubishi, Suzlon Energy and Vestas Wind Systems. Natural gas-fired power plants were the largest new source of power to be built in the country, making up about 40 per cent of new additions, followed by coal and wind power. Wind has totaled about 35 per cent of total US power plant additions since 2007, according to Denise Bode, chief executive of AWEA. The industry’s downturn has made it more efficient, she told reporters, enabling it to cut costs dramatically. “All the fat’s [cut] out,” she said, adding that in many regions of the country it is cheaper to add wind turbines than to build advanced natural gas-burning plants. The decline in costs have made it possible to sign power sales agreements at 5 to 6 cents per kilowatt hour in some places in the Midwest, according to AWEA data. That price is nearly on a par with electricity generated by coal plants there. Still, the downturn has left the industry, which employs about 75,000 people, with an overcapacity. “We have the capacity to add 13,000 megawatts next year,” she said. As of the beginning of this year, an estimated 5,600 MW of new wind generation was under construction.

China will launch the eighth orbiter into space in "coming days" as part of its construction of an indigenous satellite navigation and positioning network. The "Beidou," or Compass, navigation satellite will be launched on a Long March-3A carrier rocket, said an unidentified spokesman for the Xichang Satellite Launch Center in southwest China's Sichuan Province. The satellite and rocket are now in good conditions, according to the spokesman. The satellite will join seven others already in orbit to form a network, which will eventually consist of 35 satellites. The network will provide satellite navigation, time and short message services for Asia-Pacific regions by 2012 and global services by 2020.

IPv6 network to link 1,000 universities - As many as 1,000 universities in China will be interconnected in an experimental network of the country's next-generation Internet starting this year, industry experts said, as part of the country's effort to reach the forefront of global next-generation Internet development. The experimental network, called CERNET2 (China Education and Research Network), connects universities and academic institutions. Part of the next-generation Internet, CERNET2, uses an addressing system called Internet Protocol version 6 (IPv6), which can provide a huge number of IP addresses for devices connected to the Internet. "A large-scale test of the next-generation Internet has been a focal point in China's 12th Five-Year Plan (2011-2015), even though many designs haven't come to realization yet," said Wu Jianping, director of the CERNET expert committee and a mastermind in the development of China's next-generation Internet, at a forum in Beijing on Thursday. Wu said the plan for expanding CERNET2 is now waiting for government approval before being implemented. Liu Dong, a member of the expert committee of CERNET, estimated that altogether, 1,000 universities will join the network - there are currently 100. "It (the expansion plan) will definitely start this year, after going through approval procedures," Liu told China Daily. Their remarks came when the Internet worldwide is running out of some 4.3 billion IP addresses under the Internet Protocol version 4 (IPv4) addressing system, which will prevent more devices from connecting to the Internet. So it has become essential for countries to move onto the next-generation Internet and adopt IPv6, which will provide 340 undecillion - 340 followed by 36 zeros - IP addresses to support future Internet expansion. China had only 278 million IPv4 addresses by the end of last year, according to the China Internet Network Information Center, which is too few compared with its 457 million Internet users, the most in the world. In the years to come, China will need "far too many" IPv6 addresses, said Paul Wilson, director general of Asia Pacific Network Information Center, a not-for-profit organization responsible for allocating IP address in the region. Wilson said this is because more and more devices will need an IP address to get Internet connectivity, boosted by the country's strategy of the Internet of Things and convergence of the networks of telecommunications, Internet, and cable television. China has been engaged in developing its next-generation Internet and adopting the IPv6 system for more than a decade. The government is drawing up a guideline to develop the IPv6 featured next-generation Internet, according to officials from the Ministry of Industry and Information Technology.

China plans to take lead in new-energy vehicles - A pure-electric car, developed by Shanghai Automotive Industry Corp Motor and displayed at the World Expo 2010 in Shanghai, is expected to be launched in October 2012. China is aiming for the top position in the global new-energy vehicle sector with sales volumes of 5 million units by 2020. China will launch a development plan in energy-saving and the new-energy vehicle industry to make the country a leader in the sector over the next 10 years, with government funding of 100 billion yuan ($15.28 billion). The long-expected plan, jointly drafted by the Ministry of Industry and Information Technology (MIIT), the Ministry of Science and Technology, the Ministry of Finance, and the National Development and Reform Commission, has been submitted to the State Council for final approval, said Su Bo, vice-minister of the MIIT. According to the draft plan, which has a specific focus on hybrid and pure-electric vehicles, China is aiming for the top position in the global new-energy vehicle sector with sales volumes of 5 million units by 2020, as the government plans to invest in core technologies to build a strong and competitive new-energy vehicle industry chain. The draft plan also said that during the country's 12th Five-Year Plan (2011-2015), China aims to have a production capability of 1 million new-energy vehicles, with pure-electric and plug-in hybrid vehicles accounting for 50 percent. Moreover, to promote the development of core technologies to ensure a sustainable future for the sector, the central government will establish as many as five businesses to produce batteries and electric motors by 2015. A Bloomberg report, citing Wang Xiaoming, a research fellow at the Industrial Economics Research Department of the Development Research Center of the State Council, said the nation aims to lower the price of batteries used for electric vehicles to 2 yuan for each watt-hour by 2015 and 1.5 yuan a watt-hour by 2020 as part of a stimulus plan for the new-energy vehicle industry. With the government's heavy investment plans, Chen Qingquan, chairman of the World Electric Vehicle Association, said he expects China will lead the electric-vehicle sector with an estimated 15 percent market share for hybrid and pure-electric vehicle sales in the world's biggest automobile market by 2020. That compares with JPMorgan Chase & Co's estimate that electric vehicles will only account for 1 or 2 percent of global vehicle sales by then. "The Chinese government's focus on pure-electric and plug-in hybrid vehicles is strategic and quite reasonable to make the nation's auto industry competitive in the global market, as Western countries have dominated the traditional auto technologies," said Gao Li, an auto analyst with Huachuang Securities. "Moreover, China's competitive edge in batteries, electric motors, lithium and rare-earth resources can help the nation to become a leader in the electric-vehicle industry," Gao added. As the production costs of electric vehicles largely depend on the battery, Gao said he believes that by 2012, China will have 100,000 new-energy vehicles, which will drive a battery industry worth 6 billion yuan.

Smart cards set for a boom - Consumers can use smart cards to pay bank bills, public transportation tickets, food expenses and more. The card can also be embedded into a cell phone SIM card or even in a pen. Got a new credit card but no place to keep it because there are too many cards in your pocket already? Well, one smart card may replace all of your cards in the near future. With the smart card, consumers can pay bank bills, public transportation tickets, food expenses and more. The card can also be embedded into a cell phone SIM card or even in a pen. China has put a lot of emphasis on cutting-edge technology. The country's top technology regulator, the Ministry of Industry and Information Technology (MIIT), said that China is the biggest smart-card market globally and aims to have 10 billion smart cards in use in the near future. "In the future, Chinese people will be able to use a single card to do almost everything, from voice calls to meal purchases," Zhang Qi, general director of the electronics and IT products department at MIIT, said on March 30 at the region's biggest smart-card expo, Cartes in Asia 2011. The technology behind all this is called Radio Frequency Identification (RFID), which is a wireless automatic-recognition technology that can connect to almost everything and makes counterfeiting difficult. China launched a nationwide government smart-card project named Golden Card in 1993. After more than 1 billion first-generation ID cards were exchanged for chip-based second-generation ID cards, the country became the largest smart-card market worldwide. In 2009, China was already ranked third in the RFID industry with a turnover of 8.51 billion yuan ($1.3 billion), behind the United Kingdom and the United States. According to the data from MIIT, the smart-card industry expects to reach 20.6 billion yuan in sales next year. "France was the first country to launch smart cards about 20 years ago, but China is the biggest market now with the fastest rate of growth," said Michael Weatherseed, director of the security business unit at Milipol Cartes and IDentification Expo, the world's biggest smart card expo. He said that although China wasn't among the first countries to develop smart-card technology, Weatherseed forecast a 30 percent year-on-year industry growth rate in the country - much faster than Europe and the US - because of its huge population and government support. According to the US-based research company Frost & Sullivan, about 70 percent of smart cards are applied to the telecommunication industry. "China has more than 800 million telecom subscribers and is a huge potential market for smart SIM cards", said Jin Dongbin, chief engineer of China Telecommunication Corp. Beijing-based Watchdata Technologies Ltd, the official partner of China's three telecommunication carriers, has provided more than 3 million smart SIM cards called "SIMpass". Users can use the SIM card to make small payments or buy public transportation tickets and daily essentials by simply sweeping their phones across a sensor at the register. "Our aim is to have 10 million users by the middle of 2012," said Gao Xiang, senior vice-president of Watchdata. According to Frost & Sullivan, the mobile-payment market will reach 188.4 billion yuan in 2012 with 125 million users. "SIM application is the first step. After that, China will further develop RFID technology and sensor applications very soon," said Zhang Qi. Financial and banking services are another field for the smart-card industry to develop. China's central bank, the People's Bank of China (PBOC), announced that the nation will replace all 2.3 billion magnetic-stripe bank cards with chip-based cards by the end of 2015. Gemalto NV, a France-based smart-card maker and partner of PBOC, told China Daily that China is still in an adoption period and after the tipping point, multi-application smart cards will enter a boom phase in the country. The company makes more than 40 percent of the world's chip-based banking cards. "Chip-based bank cards will be much safer than magnetic-stripe ones," said Suzanne Tong-Li, senior vice-president of Gemalto's secure transaction business in Asia. She told China Daily that after chip-based credit cards were issued in Malaysia at the end of 2004, the fraud rate dropped 43.2 percent in the first half of 2005 compared with the previous year. "In order for multifunction smart cards to become a reality, cooperation between many industry sectors is required, which is not an easy thing," said Hover Xiao, a senior analyst at the market research company International Data Corp. "It is easier for bank cards to adopt the technology, but it will take time to add more functions to cell phone SIM cards," he said.

Work on Shanghai Disneyland starts - Construction work on the Shanghai Disney resort project began Friday, sources with the Shanghai Shendi Group said.

Eye on "Varyag", China's first aircraft carrier - The "Varyag" aircraft carrier is being built at a shipyard in Dalian, China. It is going to be China's first aircraft carrier.

Goldman Sachs has bought a 12.02 per cent stake worth more than US$900 million in China’s Taikang Life Insurance, giving the Wall Street giant a foothold into the world's biggest insurance market. Goldman’s long-overdue purchase could pave the way for Taikang’s planned initial public offering next year, bankers and analysts say, as the insurer seeks more capital to fund the rapid premium growth in China. Credit Suisse estimates China’s insurance market to grow more than 20 per cent per annum for the next decade. Goldman acquired the stake from French insurer AXA SA, which last month said it agreed to sell its 15.6 per cent in Taikang to a group of investors for US$1.2 billion. China Guardian Auctions and New Deal TEDA Investment were the others who bought the shares sold by AXA, the China Insurance (SEHK: 0966) Regulatory Commission (CIRC) said on its website. AXA put its stake on the block nearly two years ago and Goldman was picked as the preferred bidder last year. The stake purchase was approved by CIRC, a joint statement from Goldman and Taikang said. Taikang and New China Life (SEHK: 2628, announcements, news) Insurance are among the insurers which are now looking to tap the public market over the course of the next year or so. Taikang has about US$44 billion in assets and 54 million clients across China. US buyout funds Carlyle Group and TPG have generated strong returns from their bets on Chinese insurance companies. Carlyle’s investment in China Pacific Insurance (Group) is already on course for its best ever exit, after it raised US$2.6 billion. Last year, TPG sold a US$2.4 billion stake in China’s Ping An Insurance (SEHK: 2318) Group, which analysts estimate delivered strong profit for the buyout fund. Goldman beat several bidders, including Kohlberg Kravis Roberts & Company, Blackstone Group , and Singapore’s Temasek Holdings , to win the Taikang auction.

Hong Kong*:  April 9 2011

Hong Kong Disneyland will complete its expansion plan one year ahead of schedule, thanks to a lull in construction work elsewhere in Hong Kong since the global financial crisis. The early completion of the loss-making attraction, in which the government is a majority stakeholder, will also give it more time to cushion the effects of Shanghai Disneyland, opening in 2015. The HK$3.63 billion expansion will add three attractions to the theme park, including Toy Story Land, which will cash in on the popularity of the three animated films of the same name. It will be ready before Christmas. The two others are Mystic Point and the Grizzly Gulch mining town with roller coaster. These two will open in 2012 and 2013, Hong Kong Disneyland said yesterday. Disney estimated last year that the new attractions would be ready by 2013 at the earliest. Toy Story Land will feature a whirling roller coaster called Slinky Dog Spin, a Toy Soldier Parachute Drop in which visitors will plunge from a 25-metre tower, and a ride on a U-shaped race track. Disneyland began seeking tenders for the new attractions in 2009, a year that was relatively quiet for the construction industry. At the time, no other large projects were demanding the attention of contractors, who responded enthusiastically to the Disney tenders. A Disneyland spokesman declined to elaborate on the company's media release yesterday. In a 2009 statement, Disneyland said the expansion would increase the park's "physical footprint" by 23 per cent and broaden its appeal to include young adults. The new features would also "offer many unique, only available in Hong Kong, attractions". The opening of the new zones is expected to help the park attract more visitors and increase revenue. Last year, Disneyland welcomed a record 5.2 million visitors, up 13 per cent from 2009. But it has yet to break even - the park reported a net loss of HK$720 million last year. The Hong Kong government is the biggest shareholder in HK Disneyland, controlling 53 per cent of its shares. With the sixth Disneyland opening in Shanghai in 2015, the expansion's early completion would give it more time to improve its competitiveness, Democratic Party lawmaker Fred Li Wah-ming said. "We should enhance our competitiveness as soon as possible," he said. If the park was able to attract more tourists with its enhanced features, there would be a chance the government could receive a dividend. The Tourism Board said it would work closely with the theme park to promote its new facilities. "The Hong Kong Tourism Board believes that the expansion of Hong Kong Disneyland will further enhance the city's attraction to visitors, especially among families and young travellers in the region," a spokesman said. Inbound Tour Operators chairman Simon Hau Suk-kei said the expansion would encourage tens of millions if tourists who had been to Hong Kong to revisit the city. "Ocean Park and Disneyland are major attractions. It is easier for us to promote our tours with new attractions in the theme parks," he said.

Festival raises the curtain on emerging Asian filmmakers - Clockwise from top left: Cheung King-wai's documentary ''One Nation, Two Cities'' deals with issues concerning the right to live in Hong Kong; movies such as ''Nadir and Simin, A Separation''; ''Old Dog'' and ''ANPO: Art x War'' portray many different facets of life in Asia. For casual observers, this year's Hong Kong International Film Festival was mostly noted for its star-studded premieres of local productions such as Johnnie To Kei-fung's rom-com Don't Go Breaking My Heart, and sold-out screenings of art-house favourites such as Wim Wenders' Pina. But the festival, which ended on Tuesday, was more than a showcase of red-carpet glamour and established auteurs. While the local presence wasn't as strong as last year's in quantity and quality (this year yielded uneven productions such as Don't Go; Hi, Fidelity and Cheung King-wai's documentary One Nation, Two Cities) the event once again provided a platform for cutting-edge work from emerging Asian filmmakers. So it's no coincidence that the most heart-rending screen moment was a scene shot on digital video, featuring just an old man and his dog on a barren plateau. The sequence unfolds towards the end of Tibetan director Pema Tsedan's third feature, Old Dog. It is the devastating conclusion to his story about an elderly herder, Drakpa (played by amateur actor Lochey), struggling to hold onto his beloved dog. It is a nomad mastiff, a breed that has become valuable as a sought-after pet for affluent Han city folks and therefore prone to theft. Drakpa nearly loses the dog on several occasions - when a thief makes off with the animal in the night, and when his slacker son-in-law sells it to a trader in town - and he only retrieves it with the help of his nephew, a police officer. Continuously harassed by a dog-trader to sell his dog, Drakpa decides to end his relationship with his canine friend in the most brutal way, rather than hand it over to become a rich man's disposable plaything. Never resorting to melodrama, Tsedan's film is at once a moving ode to Drakpa's affection for the mastiff and a mirror to the corruption and erosion of traditional values on the Tibetan plateau as mainstream consumerist values take hold. Tsedan doesn't pander to audiences seeking cultural exotica by delivering other-worldly spiritualism. While the film features some poetic scenes, Old Dog is built on no-nonsense grit. Old Dog was the winner in the festival's Asian Digital Competition, which comprised several gems. Tsedan's cinematographer, Songthar Gyal, made a refreshing directorial debut with The Sun Beaten Path. The film follows a young man's pilgrimage to Lhasa and back - a self-imposed punishment to absolve his part in his mother's accidental death. Jeon Kyu-hwan's Dance Town is - similar to another entry in the festival, The Journals of Musan - a look at the life of a North Korean political refugee in Seoul, with Ra Mir-an delivering a nuanced turn as her character struggles to adapt to her new surroundings while awaiting news of her husband who is stranded in the North. At the other end of the spectrum is Eternity by Sivaroj Kongsakul, the latest in a line of Thai films meditating on the meaning of human existence and relationships across time and space. Divided into three chapters, the film begins with a dead man revisiting his childhood haunts as a ghostly presence. His younger self appears in a segment that charts his courtship of his future wife. The film ends with his wife and children's life after his death. Sivaroj is among prominent Thai talents featured at the festival. Palme d'Or winner Apichatpong Weerasethakul had an entry in the Quattro Hong Kong 2 omnibus. Overlooked this year, however, was Aditya Assarat, whose Hi-So gives a new twist to his explorations of schisms in Thai society by looking at how two women try to fit into different social classes. Hi-So's central character seems to be a foreign-educated actor called Ananda (Thai-Australian actor Ananda Everingham), and the main protagonists are his two girlfriends. The film begins with San Francisco native Zoe (Cerise Leang) visiting Ananda on set in a remote resort and finding herself ill at ease in his world. In the second half, the publicist May (Sajee Apiwong) has taken Zoe's place. But, having grown up in a provincial town in the north, May too feels at odds with the actor's affluent, Westernised existence - the "high-society life" to which the film's title alludes. Although there is no hint of the class-based conflicts that have divided Thai society over the past few years, Hi-So illustrates such schisms through veiled metaphors and subtle gestures. Working-class distress surfaces when a receptionist tells Zoe about his dashed hopes of relocating to the US; and when May engages in a tortured conversation with Ananda's aunt, who is clearly derisive when she finds out the young woman is from the poor north of the country. Japanese independent cinema was also very much present at the festival this year, ranging from Zeze Takahisa's hit-and-miss Heaven's Story - a 4-1/2-hour revenge thriller undermined by moments of tedium and sporadic, nausea-inducing handheld camerawork - to Soda Kazuhiro's 1-1/4-hour documentary Peace, which follows the director's father-in-law as he works as a volunteer driver for pensioners and the disabled in his town. As Kazuhiro's film veers away from hard politics, it is the Japanese-born American subtitlist-turned-filmmaker Linda Hoaglund who delves headlong into the country's history, with her ANPO: Art X War exploring how artists (and the public) have reacted against the continuous American military presence in Japan since 1960. The festival's most multi-layered Asian film is probably Iranian director Asghar Farhadi's Nader and Simin, A Separation. It begins with a couple on the verge of divorce: bank manager Nader (Peyman Moadi) and teacher Simin (Leila Hatami). As Simin moves out of the family home, Nader recuits a pious and destitute woman Razieh (Sareh Bayat) to take care of the housework and attend to his senile father. What follows is a spiral of ever-unfortunate incidents, which results in Nader and Simin battling in court against Razieh and her husband Hodjat (Shahab Hosseini). The story reveals the many kinds of oppression permeating Iranian society, as the bourgeoisie connive against the helpless working class, while women are forced to suffer - physically, economically and spiritually - to abide by the rules made by men. Different from the approach taken by Jafar Panahi, Bahman Ghobadi and Mohsen Makhmalbaf, Farhadi's film does not engage with the authorities directly. Instead, Nader and Simin indicts the whole social system by illustrating how political and religious dogma bring about tragedy and separation of people within and between social groups. What is even more poignant is how such a cynical social climate can eventually affect the development of the younger generation - a conclusion brought to focus in the distressing final scene.

Tang Palace chairman Yip Shu-ming (centre) with chief financial officer Matthew Leung and chief executive Candy Weng at a press conference in Hong Kong yesterday. Mainland restaurant chain Tang Palace (China) Holdings is hoping to list on the main board of the Hong Kong stock market as it sets out to raise up to HK$165 million. Of the 100,000,000 shares for global offering, 10 per cent are earmarked for the Hong Kong public offering. The target price is between HK$1.25 and HK$1.65 per share. The public offering begins today and ends next Tuesday. The restaurant group has 22 Chinese and Japanese restaurants in Beijing, Shanghai, Shenzhen, Dongguan, Hangzhou and Suzhou, operating seven brands ranging from fast food to high-end meals. The group now has net current assets of 24.7 million yuan (HK$29.3 million). It plans to use the money to open eight new Chinese restaurants in first-tier and second-tier cities, and 19 fast-food restaurants in first-tier cities by next year, pushing its operations into new cities including Tianjin, Nanjing and Guangzhou. But it has no plans to open any restaurants in Hong Kong. "The rent in Hong Kong is too expensive," said Matthew Leung, chief financial officer of the restaurant group. "Unless things change, opening a restaurant in Hong Kong will be like working for the developers." The group has secured between 2.5 to 10 years of leases on its venues in the mainland, Leung said. That helped control the ratio of rental costs to total revenue by capping the year-on-year increase to a range of 3 per cent to 10 per cent. That included entering into a strategic alliance with some of the major local hotel chains, including Shanghai Jin Jiang International Hotels. Rental expenses amounted to 45.3 million yuan last year, representing 7.5 per cent of the total revenue, up from 31.9 million yuan and 7.1 per cent in 2009, and 24.9 million yuan and 6.3 per cent in 2008. Revenue of the group had been growing steadily from 449.9 million yuan in 2009 to 606.5 million yuan in 2010. Net profit increased from 25.9 million yuan to 46.5 million yuan. Operating margin and net-profit margin improved despite increased operating costs. Operating margin climbed to 57.1 per cent last year from 56.8 per cent, while net profit margin rose from 7.1 per cent to 7.7 per cent. Costs of inventory and staff also increased steadily. In reaction to salary increases on the mainland, the group entered into strategic relationships with several local hotel-management schools to secure a steady supply of more than 800 qualified employees every year. Staff costs increased 36 per cent to 133.3 million yuan last year, but the ratio of staff costs to revenue remained stable at about 22 per cent. Candy Weng, chief executive officer and executive director of the restaurant chain, said the group has been able to increase revenue by increasing product prices, especially at the group's high-end restaurants, as disposable income of the mainland consumers continues to rise.

The new 50 Connaught Road Central office tower has attracted 200 inquiries. Poor planning puts HK's business status at risk - Analysts warn of serious lack of office space - A lack of long-term government planning has led to a shortage of office space and high rents, clouding Hong Kong's future as a regional business centre, analysts say. "Our firm is seeing clients consider moving to places like Singapore, Shenzhen or Guangzhou due to the lack of long-term urban planning in Hong Kong," said Wade Cruickshanks, a partner at built-asset consultancy, EC Harris. Research by consultant CB Richard Ellis underlines the extent of the planning failure. It says new office supply this year will be 1.2 million square feet, compared with an average of 2 million from 1995 to 2010. Benedict Ma, associate director in CBRE's research department, said the shortage of new supply was expected to continue for the next three years. The firm estimates there is only 1.2 million and 1 million sq ft of new office space in the pipeline for 2012 and 2013, with most of it being in Kowloon East. "Only three office buildings have been completed in Central this year. None are large-scale developments," Ma said. Among them is the 28-storey 50 Connaught Road Central, developed by National Properties Holdings and Apollo Global Real Estate Management. About 200 potential tenants - mainly mid-sized businesses - have inquired about renting space in the project. The floors range from 6,000 to 7,000 sq ft. Nigel Smith, executive director of CBRE's landlord project services department, said asking rents ranged between HK$90 and HK$130 per sq ft and 30 per cent of the space had been taken up. Analysts say the limited new office space and the smaller floors may drive large multinational corporations elsewhere. Hong Kong has long been attractive as a regional base for such tenants because it is closer to the mainland than Singapore, for instance. But analysts say Singapore has a long-term view of town planning and is expanding its commercial district to attract multinational companies, while Hong Kong has not. That has led to tight supply and high rents. CBRE says the vacancy rate for office space in Central dropped from 3.9 per cent in the fourth quarter of last year to just 3.7 per cent in the first quarter of this year. Meanwhile, average rents for grade-A office space in Central jumped 35 per cent to HK$111 per sq ft last year. The firm expects rents will surge a further 24 per cent this year as demand remains strong and the supply pipeline is limited. "The cost of operating an office in Hong Kong ranks at the top of the world already. If rents continue to go up they will dampen the competitive edge of Hong Kong as an ideal place for companies to set up Asia Pacific headquarters," David Ji, head of research at consultancy DTZ in Greater China, said. Cruickshanks of EC Harris singles out "significant bureaucratic hurdles" as one reason for the absence of a clear long-term urban planning vision. "The government should mandate one [authority] to authorise, control and execute planning of an area in Hong Kong, instead of requiring people to co-ordinate with all the different departments that may be involved," he said. "It should also understand what people want in a city, namely sustainable communities; not just office buildings to meet demand, but communities, which means planning for schools, playgrounds, transport networks, residential projects, sports projects, etc." Cruickshanks said Kwun Tong was an example of development that was not well co-ordinated. "The industrial land in the area was released seven or eight years ago for the development of new office buildings," he said. "But if you ask people who work in Kwun Tong now, nobody would say they enjoy working in the area because of its noise pollution and unattractive visual landscape." The government should tackle a re-design of the urban landscape with greater care when encouraging landlords to convert industrial buildings into offices, he said. Ji of DTZ said the government should provide suitable commercial sites and have long-term town planning based on market demand for each district. "For example, financial institutions like to stay in Central, while Kowloon Bay only attracts companies' supporting departments," he said. Ji urged the government to consider the redevelopment of old districts in order to provide commercial sites in urban areas.

 China*:  April 9 2011

US ambassador bids farewell on a Harley - US Ambassador to China Jon Huntsman rides a Harley motorcycle on a street in Shanghai, East China, April 7, 2011. Huntsman roared through the streets with another 14 Harley owners on Thursday after delivering his final public farewell speech a day earlier. He decided to step down from his post on April 30. 

Samsung sees sales revenue growing in China - A model displays the Galaxy tablet PC made by Samsung Electronics Co at an exhibition in Beijing. The company said on Wednesday that it will launch its latest Galaxy-series tablet PCs and smartphones in China by June. Samsung Electronics Co, the largest electronics company in South Korea by sales volume, said on Wednesday that its sales revenue from the Chinese market reached $39.6 billion last year and it will focus on smartphones, tablet PCs and 3D TVs this year. According to the company, China accounted for about 29 percent of its global sales revenue last year. Samsung expects sales growth to increase by adjusting its strategies and increasing cooperation with local companies, according to key executives. "Samsung will cooperate with Chinese partners to win in the mobile devices market," Samsung's President for Visual Display Business Yoon Boo-Keun said. "We will put greater emphasis on China's smartphone and tablet PC market this year." The world's No 5 electronic and semi-conductor company by market value told China Daily that it will launch its latest Galaxy-series tablet PCs and smartphones in the country by June. "Samsung will launch these products simultaneously in the Chinese market and other countries, differentiating us from other companies that launch products in China later," Yoon said. The popular iPhone 4 handset and the tablet PC iPad, manufactured by Apple Inc, arrived six months in the Chinese market after they were launched in other countries last year. According to an analyst from the US-based research company IDC, Samsung's smartphones and tablet PCs will provide strong competition for Apple products. "The iPhone will still be the most popular handset, but Samsung's popularity will increase and exceed many other companies," said Wang Jiping, a senior analyst from IDC. Samsung launched its smartphones in 2009. According to the company's financial report, smartphones and TVs were the company's core products in 2009 and 2010. Samsung's touchscreen phones and smartphones achieved about a 20 percent market share worldwide, while the company occupied top position in the 3D TV market last year. "China's PC and traditional TV markets have slowed down, so it is a good strategy to shift to the mobile-device market," Wang said. He expects smartphone shipments to China to increase to 62 million units this year, compared with 36 million units in 2010, and sales of tablet PCs to reach 4.3 million units. However, it is "too early to establish its market position", Wang said. The company sold 10 million units of smartphone Galaxy S within six months, while it sold 2 million units of Galaxy tablet PCs in the first two months after the launch. The company said it will have closer cooperation with local companies, including Sina Corp and Tom.com Corp, to develop applications for its Samsung App store, which has received 100 million downloads already.

The Chinese currency Renminbi (RMB), or the yuan, on Thursday gained 40 basis points, from Wednesday to a record high of 6.5456 per U.S. dollar. On China's foreign exchange spot market, the yuan can rise or fall 0.5 percent from the central parity rate each trading day. The central parity rate of the RMB against the U.S. dollar is based on a weighted average of prices before the opening of the market each business day.

Domestic fuel prices are hiked - China will raise the domestic price of gasoline and diesel as of Thursday. The move comes as international oil prices have been forced higher by recent unrest in the Middle East and rising demand as the global economy recovers from the financial crisis. On Tuesday, the international oil price rose to a two-and-a-half-year high, with Brent crude hitting $120 a barrel. Industry analysts said the move will put additional pressure on China's inflation battle and could impede the country's economic expansion. The National Development and Reform Commission (NDRC), the country's top economic planner, said the domestic wholesale price of regular gasoline will rise by 500 yuan ($76) for each ton, or an extra 0.37 yuan per liter. Diesel prices will be lifted by 400 yuan a ton or 0.34 yuan for each liter. It's China's second fuel price rise this year and the fifth hike since the beginning of 2010. On Wednesday, Cao Changqing, head of the price department at the NDRC, admitted at a news briefing that the price surge will add a "certain" pressure to domestic inflation, but noted that the major State-owned oil producers can no long afford the increasing gap between domestic and international oil prices. He also said the government will provide subsidies for the low-income groups such as farmers, bus companies and taxi drivers. Under China's current pricing mechanism, the NDRC has the right to adjust the fuel price if a basket of crude prices rises by more than 4 percent in a period of 22 working days. Since China's last oil price adjustment on Feb 19, the price of Brent crude has risen by more than 15 percent. On Wednesday afternoon, hours before the government's announcement, there were rumors on the Internet. That resulted in many consumers lining up at gas stations. At a Sinopec gas station near the North Fourth Ring Road in Beijing, Tian Yuanyuan, who works for a private company, said the surging price of oil has become a daily burden. "If the price of gas continues to rise, I will sell my car immediately because no one can afford to drive anymore," said Tian, who drives to work every day because of the distance between her home and workplace. Zhang Lijun, who operates a small business in Beijing, also complained about the price surge. "China's public transport system is not as advanced as that in Japan, and people want to drive under certain circumstances," he said, adding that he only drives when he has to go outside the Fourth Ring Road, but travels by bus or the subway within the Fourth Ring.

HSBC PMI hits 27-month low point - The HSBC Purchasing Managers Index (PMI) for the Chinese services sector edged down to a 27-month low in March as rising costs, especially salaries, limited the expansion of business activity. The PMI, which aims to provide a timely snapshot of conditions in industries from restaurants to computing, fell to 51.7 from 51.9 in February. A survey reading above 50 indicates expansion; a figure below 50 denotes contraction. The figures are seasonally adjusted. The March decline reflects the central bank's sustained use of monetary tightening to control inflation. In its latest move, the People's Bank of China raised interest rates on Tuesday for the fourth time since October. The HSBC China services PMI reading for March was the third-lowest in the survey's history, according to Markit, the British research firm that compiles the index. The decline contrasted with a big jump in China's official services PMI to a five-month high in March. Analysts said the official PMI does not adequately reflect seasonal factors, particularly the Lunar New Year holiday, which fell in February this year, making the HSBC version a better gauge of underlying trends. According to the HSBC survey, input prices rose markedly in March to a four-month high, with respondents pointing to higher fuel and wage costs. The latter acted as a drag on employment, which saw jobs created at a slower pace than in February. "The service sector slowed for a third consecutive month, reflecting the filtering-through of policy-tightening effects," said Qu Hongbin, HSBC's chief economist for China. "That said, there's no need to panic about a sharp slowdown in services thanks to the continuous improvement in the labor market and rapid income growth." The services sector accounted for 43.4 percent of China's output in 2009 - much less than in more developed economies.

Chinese fans charmed and puzzled by Bob Dylan at Beijing debut - Bob Dylan made a smooth debut in Beijing Wednesday night, heralding his long-awaited Chinese mainland concerts to mark the artist's 50 years on the performance stage.

China Eastern Airlines will boost its global market competitiveness to raise its international reputation, the carrier's chairman announced on Wednesday in New York. Liu Shaoyong, chairman of China Eastern Airlines Company Limited, one of the country's three major state-owned carriers, made the remarks during a keynote speech at the China Business Initiative Forum organized by the Jerome A. Chazen Institute of International Business at Columbia Business School. "China Eastern Airlines will further its global strategic deployment to continuously strengthen core profitability, raise management levels, improve operation quality and step up its exploration of the global market," Liu Shaoyong told Xinhua. Liu said that China Eastern will formally join SkyTeam, the global airline alliance, in June, 2011. The company will also raise its cargo and passenger fleets to 561 aircraft by 2015 and keep a double-digit growth rate in the next five years. Regarding the growing threat from high-speed railway lines, Liu said he was optimistic and confident, as the aviation industry still maintains the advantages of safety, comfort and low cost. China Eastern made net profit of 5.38 billion yuan (807 million U.S. dollars) in 2010, far higher than 711 million yuan (106 million U.S. dollars) in 2009. It carries almost 70 million domestic and international passengers annually.

Chinese airlines will need some time before they start to warm to the Airbus A380 super-jumbo, Airbus's China head said on Thursday. “Chinese airlines historically have not been very enthusiastic about buying a product early in the programme,” Laurence Barron, president of Airbus China, told an aviation conference on Thursday. “It will take some time for the Chinese airlines to really understand what a great aircraft it is,” he said of the A380. Barron said he saw an impact on airlines from the introduction of high-speed railway lines in China, especially on the Beijing to Shanghai route. A high-speed train linking the two major Chinese cities is set to start operating in June. This might put pressure on airlines to expand their international routes, boding well for A380 sales. So far, China Southern Airlines, the country’s largest carrier by fleet size, is the only mainland airline to have ordered the A380. China Southern has ordered five A380s and said last month that it expected to take delivery of the first in August. “We continue to see strong traffic growth in China driven very largely by domestic travel, while international traffic is also growing very steadily as well,” Barron told reporters in an interview. China is expected to buy more than 2,000 aircraft over the next five years. Boeing, which has about half of the China market, said last month it sealed deals worth US$10 billion with two airlines in the mainland.

Hong Kong*:  April 8 2011

Lawmakers on Wednesday began a two-day debate on Financial Secretary John Tsang Chun-wah’s budget proposals and the amendments he subsequently made. In his original budget speech on February 23, Tsang proposed that all Mandatory Provident Fund (MPF) scheme members, about 4 million people in total, would receive a one-off payment of HK$6,000 from the government. But this proposal angered people who did not have MPF accounts. Tsang made a u-turn one week later and announced a revised proposal to give HK$6,000 cash handouts to about six million adult permanent residents. Salaried taxpayers would also get tax reductions of up to 75 per cent tax, capped at HK$6,000. However, Pan-democratic lawmakers on Wednesday told the Legislative Council they remained unhappy with Tsang’s proposals. Democratic Party chairman Albert Ho Chun-yan explained that the budget amendments had failed to address long-term problems in society. These include the widening gap between rich and poor and the ageing population. “The budget proposals will only have temporary benefits,” Ho said. Independent legislator David Li Kwok-po, who is the chairman and chief executive of the Bank of East Asia (SEHK: 0023), said the budget amendments had disappointed the business community. They still wanted the government to cut profits’ tax by 50 per cent, Li said – noting that Chief Executive Donald Tsang Yam-kuen had earlier pledged that the government would do this. Liberal Party chairwoman Miriam Lau Kin-yee was also critical of the budget; while Democratic Party vice-chairwoman Emily Lau Wai-hing said lawmakers had lost confidence in the financial secretary. Hong Kong Federation of Trade Unions legislator Wong Kwok-hing said he hoped the government would extend the HK$6,000 handouts to benefit more young people and new immigrants. 

Hong Kong hospitals were still deciding how many mainland mothers they could provide with obstetric care this year, Secretary for Food and Health York Chow Yat-ngok said on Wednesday.

Fung shui master Tony Chan Chun-chuen faced another setback on Wednesday in his attempt to inherit the multibillion-dollar fortune of late developer Nina Wang Kung Yu-sum. The Court of Appeal rejected Tony Chan's request for permission to file an appeal of an earlier ruling that denied his claim to the highest court, the Court of Final Appeal. Mrs Justice Doreen Le Pichon said Chan's argument did not have “a modicum of merit” and refused to grant his petition for permission to file the appeal. It’s another setback for Chan, who says he and Wang, who died of cancer in 2007 at age 69, were in love. In February, the Court of Appeal rejected Chan's appeal of last year's High Court ruling, which declared as valid a will from 2002 that left Wang's estate to a charity that she and her late husband founded in 1988. Chan contends that a will dating from 2006 bequeathing him Wang's entire fortune is authentic. Chan still has one option left. He can ignore Wednesday's ruling and file an application directly with the Court of Final Appeal. His spokeswoman, Kenis Liu, said he will file an application within 28 days. Wang was once Asia's richest woman and the fortune held through her private Chinachem Group has been estimated at around HK$100 billion. The Court of Appeal said in February that Chan pursued a “a thoroughly dishonest case” in trying to claim Wang’s estate with a forged will. Chan, who among other things practiced fortune-telling, said during the trial last year that he and Wang shared a passion for cooking, travel, model helicopters and fung shui.The trial judge, however, described the 51-year-old former bartender as an opportunist who knew how to ingratiate himself with others.

Some 314,437 mainlanders settled in Hong Kong with one-way permits because of “family reunions” during the last seven years, Secretary for Labour and Welfare Matthew Cheung Kin-chung said on Wednesday. Cheung was responding to a question in the Legislative Council from lawmaker Cheung Kwok-che, who had asked how many new immigrants were living in Hong Kong and how many of them had received social security payments. In a written reply, the secretary for labour and welfare told lawmakers that according to information supplied by the recipients of Comprehensive Social Security Assistance (CSSA) since late February, there were 17,621 CSSA recipients from the mainland living in Hong Kong who had been here for less than seven years. “Among these mainland CSSA recipients, 7,405 were aged below 15 and were therefore not subject to the work requirements under the CSSA Scheme. “Of the remaining 10,216 recipients, 2,963 [29 per cent] had paid jobs and 7,253 [71 per cent] did not,” he told lawmakers. The secretary for labour and welfare said that in last fiscal year the department had paid a total of HK$640 million to CSSA recipients who had resided in Hong Kong for less than seven years.

There was confusion on the Ching Ming festival yesterday as people carried out traditional rituals amid puzzlement over what was and what was not a bona fide columbarium. Columbariums, which store funerary urns containing cremated remains, are in high demand because of a severe shortage of urn niches. Private operators are thriving, but some have breached rules. Four months ago the Development Bureau responded to public concerns about whether some operators had breached planning rules and land leases. It published a positive and negative list of columbariums on its website - naming and shaming offenders. But people paying tribute to ancestors yesterday complained they found the official lists confusing. The government has yet to issue licences for urn niches on the positive list. And many niche providers were still operating yesterday despite having been listed as errant. Stanley Cheung, who bought a niche for his mother at Memorial Park, Fo Tan, which is on the negative list, said he was searching for a substitute place. He was unhappy that the government had failed to state clearly whether it would ban the park. "It's like the way the government deals with the minimum wage issue," he said. "It fails to explain details when it implements policies." Another couple said the uncertainty had made them hesitate to buy a permanent niche for their urn. They are paying a yearly rent for a place at Hong Dao Tang in Kwai Chung. "The government should give out licences as soon as possible," husband Kenny Wong said. Both operators have promised buyers a full refund if the government closes them down. The park has begun legal action against the government, while Hong Dao Tang has offered 500 niches for free. By yesterday, nearly all of were taken up. Meanwhile, some people have resorted to finding a temporary place for their ancestors' ashes. Winslow Street in Hung Hom, a traditional funeral district, alone houses about 10 temporary urn homes, some of them upstairs in old residential buildings, or in shops. A man who paid tribute to the ashes of a relative in an upstairs urn home said he had had no choice but to pay several hundred dollars for a temporary niche there as he had been queuing for a year for the government Diamond Hill Columbarium. "There is no response from the government," he said. "We were allocated a number and need to queue up and draw lots. We may need to wait for two or three years." He said he did not bother finding out whether the upstairs urn home he had visited was legal. Pius Yum Kwok-tung, a Hung Hom district councillor, said he received more than 20 complaints last week from residents about smoke from paper offerings - 10 times more than the average complaints he usually received each week. He said the government should regulate upstairs urn stores and shops as they were creating air pollution and were a fire hazard. The temporary urn homes are not on either of the Development Bureau's lists. A bureau spokesman said it needed to study the land leases of the buildings where these facilities were located on case by case basis. Meanwhile, pet owners paid tributes at special columbariums. Jeju Chan's dog Cookie died this year. She brought Cookie's favourite food, sausage, as an offering at Goodbye Dear in Kwai Chung. Another woman honoured three of her dogs that had passed away. One, Yoyo, died more than a decade ago. "I put Yoyo here because it would be happier to be with other dogs and cats," she said. Yau Yau, who founded the company 16 years ago, said the operator offered 1,280 urn niches. It cremates about 400 animals a month. Owners of not just dogs and cats, but pets such as hamsters, rabbits and fish also became interested in the service in recent years, she said. Half of pet owners rent urn niches for a year or two. Another fifth keep them for more than five years. Some 42 hill fires were recorded as of 7.30pm. No one was hurt.

Prospective buyers look for high-end bargains among the second-hand cars at Black Label Motors at the Auto Forum in Cheung Sha Wan. The financial meltdown in Europe, the strong economy in Hong Kong and the city's ravenous appetite for luxury goods have led to a surge in the number of imported second-hand private cars. And although they are not new, they are not necessarily cheap either. Transport Department figures show the number of such imports reached 9,412 last year, compared to 2,991 in 2006. Second-hand traders say many of these are top-of-the-line examples from famous marques - adding that, despite complaints that the recent tax increase on new cars has cut demand, new-car dealers cannot keep up with demand for the really special models. "Unlike in the past, many of the second-hand cars imported to the city recently are first-grade. There are many super-cars, like Lamborghinis, and there are many other expensive makes like Bentley and Mercedes Benz," second-hand dealer Johnny Wong said. While Ferraris, Porsches and Rolls-Royces were common in Hong Kong, buyers wanted more, Wong said. "People love to have special-edition vehicles and they do not mind buying second-hand ones that are usually in excellent condition." Wong said price was no object for luxury-car customers and supply from authorised dealers could not keep up with demand. "Since the financial crisis, prices of sports cars and other luxury vehicles have dropped in the UK and Europe, but demand in Hong Kong remains buoyant. Many second-hand dealers have seen the opportunity and are importing more," he said. His remarks came as the Motor Traders Association of Hong Kong demanded that the government scrap a 15 per cent increase in registration tax for new cars, saying it had led to a 10 per cent drop in sales. The group, comprising all the authorised vehicle importers in Hong Kong, also voiced fears that more second-hand cars, which it said were less safe and environment-friendly, would be imported. But Ringo Lee Yiu-pui, chairman of the Institute of the Motor Industry Hong Kong, rejected suggestions that second-hand imported cars were second-rate. "Over the years, second-hand imported cars have usually been very new and in good condition. Moreover, every one of them had to go through government checks, including noise and air-pollution tests." Like new cars, second-hand vehicles are liable to the first-registration tax, although depreciation of up to 25 per cent per year of the car's age is allowed. Richburg Lotus chief executive Eric Wong, whose companies sell new and used cars, said second-hand cars were as "green" as new ones. "All imported used cars are examined one by one by governmentappointed emission test centres, under a very strict monitoring system dictated by the Environmental Protection Department," he said, adding that emissions standards for new and used imported cars were the same. But he said the second-hand market was still insignificant compared to new vehicle sales, with only one in four imports being used. "Customers always want to have a choice. They like to compare prices, and pre- and after-sale services," he said. "The free market mechanism is the best for the customers."

Apartments in Trump SoHo, a hotel-condominium complex in New York, are being offered at discounts of up to 25 per cent to buyers in Hong Kong and on the mainland. Trump SoHo - as a hotel-condominium, owners can stay a maximum of 120 days a year. round HK$8 million would buy a furnished studio flat in the 46-storey luxury development in downtown Manhattan. Agents claimed the rental yield would work out at five per cent a year. With areas ranging from 422 to 741 square feet, prices are pitched at US$1.02 million to US$1.92 million each, from their original off-plan asking prices of US$1.16 million to US$2.55 million in 2007. The building was completed last year. The project generated lots of interest from Hong Kong investors over the weekend," said Grace Leung, senior sales associate at Citi-Habitats, a real estate agency in New York. Leung will also launch a roadshow for the project in Shanghai later this month. She believed eight to 10 flats on lower floors could be offered at bigger discounts, taking their prices to below US$1 million. The US$450 million project is a collaboration between Donald Trump's Trump Organisation, the real estate investment and development firm Bayrock Group and billionaire Russian immigrant Tamir Sapir. Donald Trump, however, has not invested in the building but is overseeing the project. The 46-storey Trump SoHo comprises 391 apartments, with views of the Hudson River, the Statue of Liberty and the city of New York, and furniture by Italian design company Fendi Casa. Leung said one-third, or 115 of the apartments, had been sold to buyers from South America and Europe. "It is the first time the project has been targeted at buyers in Asia," she said. As a hotel condominium, no flat is allowed to be used by the same occupier for more than 120 days a year. Leung said they would be rented out for the remainder of the year. Occupancy rates at the hotel-condominium were put at between 93 and 97 per cent, giving investors an annual rental return of five per cent, and Leung said she believed buyers could secure mortgage loans of around 50 per cent from Hong Kong banks. Alva To, head of consultancy for property advisers DTZ in Hong Kong, said foreigners or investors who had relatives in New York could be attracted. "They can use the apartments for a certain number of days and lease it out for the rest of the year to generate rental income." In Hong Kong, he said, an 820 sqft flat in Taikoo Shing would cost about HK$8 million, and with rents of about HK$30 per sqft, the flats would provide an investment yield of 3.5 per cent a year. "But these Hong Kong units are in a prime location still sought after as investors bet on the appreciation of capital values. Similar cases on The Peak generate rental yields of as low as two per cent," he said. Simon Lo Wing-fai, director of research at property consultancy Colliers International (Hong Kong), said Hong Kong's grade-B office market could present an alternative target for an investor with a budget of around HK$8 million. "Sky-high grade-A office rentals will no doubt drive up rates and capital values of grade-B office spaces," he said. Transaction prices of grade-B offices were HK$5,000 to HK$6,000 per sqft, compared with HK$20,000-plus in the grade-A office market in Central, said Lo. "Under the circumstances, some investors will buy grade-B offices for their own use as well as for investment purposes in light of the potential for a rapid rise in rents." Lo believed office rents and prices in Causeway Bay could grow as much as 30 per cent this year. The sector would also benefit from a shift of capital from the residential market after the government imposed additional stamp duty and tighter mortgage conditions to curb investment demand, he said.

 China*:  April 8 2011

Chee Au gave up medicine to become a designer. Now back at Shanghai Tang as its creative chief, she may be just what the doctor ordered - In a luxury Beijing hotel, Shanghai Tang is holding a catwalk event to showcase its spring-summer collection to mainland audiences, including celebrities such as actors Fan Bingbing and Hu Bing. It is also a chance for the brand to show off its new chief creative officer, Chee Au, who recently returned to Shanghai Tang after a hiatus of four years and hopes to take it to another level. "I feel very strongly about this brand," Malaysian-Chinese Au says. "I feel like a kid in a candy store being told that I can do what I feel [like] to take this brand to where it can be. I have the business know-how as well as the design know-how to do that." Hong Kong's first luxury fashion label championed Chinese aesthetics long before it became an international fashion trend, a move Au says is fired by cultural pride. Her passion for Shanghai Tang's China chic is immediately evident. "China is so huge, with different languages religions and cultures. Shanghai Tang is now an ambassador of China ... And we present it in a quirky, fun way - hopefully they like it. "The situation with China now is ... very interesting," Au adds. "They don't want to be Western because they are proud of being Chinese, yet they don't want to look like they are totally Chinese." Shanghai Tang was founded by entrepreneur David Tang Wing-cheung in 1994. After luxury conglomerate Richemont took over the label from Tang in 2001, Au was recruited as its chief womenswear designer, a stint that lasted from 2002 to 2006. "I think it's well known that I had some difficulties with [former creative director] Joanne [Ooi] before," Au says. "It was tough and when I left it wasn't entirely friendly. But I kept in good touch with Raphael [Shanghai Tang executive chairman Raphael le Masne de Chermont] and we began to talk." She and de Chermont talked for more than a year before joining forces for a second time. And with her return, the brand is giving her more power and direction. When Richemont took over Shanghai Tang, it wanted to differentiate the brand from other expensive Chinese emporiums with a tribute to the complexities of China chic. That led to designs inspired by nomads, the countryside and ethnic-minority cultures, as well as the glittering city lights of Shanghai and Beijing. The qipao dresses, bright scarves and mandarin-collar jackets Shanghai Tang originally produced were the kitschy tip of an iceberg aimed at popularising and modernising great Chinese style. What Au hopes to bring this time around is her fascination with China's social movements. "It's strange for a designer to design based on what society is thinking ... but that's what makes me different," she says. "I come from an academic background. I was a biologist and the way I think is very structured. Fashion reflects what society is thinking or what it wants. That's how I design and think." Since Au left her small hometown in Malacca, Malaysia, she has lived around the world: Singapore, San Francisco, New York, Hong Kong and, her favourite city, Paris. The experience has influenced her aesthetic and attitude. "Being multicultural adds to your personality," Au says. "I come from a humble background - and its such an amazing thing to be doing this business but coming form this tiny spot on the map." Au is fifth daughter (and black sheep) in a family of seven girls who all went into business. Academically bright as a child, Au's family wanted her to be a doctor, so she went to University of California in Berkley to study pre-medicine, and graduated. But she soon discovered that it wasn't her calling. "It was such a struggle; I was never happy. One time, I was in the lab pipetting bacteria and the pipette broke in my hand and I just freaked out. I thought, `Do I want to spend my life doing something that I don't love?' I would probably do it well, and people would call me Dr Au, but I don't want to do this just to be called doctor." She had been sewing at home since she was seven, but at college Au hid her evening classes in dressmaking and pattern cutting from her parents, as she began learning the basic processes of fashion. After graduating from Berkley, she took a year off to prepare for medical-school exams in Singapore. Depressed at the prospect of a future she didn't want, Au began asking about art schools in New York. Advised on Parsons, she sent over a portfolio, applied and was accepted. "I didn't tell my dad I was going to New York until the day before I flew," Au says. "He didn't talk to me for a year. He said that I wasted his money. So my mum paid for my tuition and I got partial scholarship. It was a struggle." After graduating again, Au looked for opportunities in New York. She says it was almost like "the promised land" in that, if you have what it takes, New York is a city of opportunities. "It gives Asian designers a chance or a voice to express their creativity more so than in Europe," Au says. She began working for big names in the industry - Kenzo Jungle, Oscar de la Renta, Anne Klein and Nicole Miller - before joining Shanghai Tang the first time around. Like reuniting with an old boyfriend, getting back together with an old employer is always. more emotional than a new job. Au says it is "like a marriage". The label is close to her heart, not just because of their shared history but also because it focuses on Chinese aesthetics for a contemporary market at a critical time of China's rise on the global stage. "`Made in China' has shifted so much," Au says. "The value has changed dramatically, and it is so difficult to design for the whole country because it is so fragmented. "The way all these brands are trying to take a part of China," she says, referring to the trend in Chinoiserie by the big Western fashion labels such as Louis Vuitton and Ralph Lauren, "in some ways I feel that it is the wrong path to take. They are looking at China on a very superficial, `costume-y' and garish level, and they're repackaging it and giving it back to the Chinese. Most are forgetting to look deeper, beyond the old China into the new China that is giving so much inspiration and change." Au has praise for her predecessor, Joseph Li, whose last collection for Shanghai Tang is spring-summer 2011's "Metamorphosis", showing later that evening in Beijing. It's a tribute to the new and old China, using Miao minority batik, patterns and embroidery motifs with a campaign shot in the unspoiled countryside of Yangshuo, Guangxi province. "Metamorphosis" represents a changing of the guard for the label. For Au's first collection as creative chief for the coming autumn-winter collection, she wants to try out a few more personal creative signatures, but remains tight-lipped about the specifics. "The next season is about cultural pride and you'll see a side of me that is ... a bit dark."

China's economy is expected to grow 9.6 percent in 2011, the Asian Development Bank said in an annual report released here on Wednesday.China inflation may hit 6%Interest rate hike 'to fight inflation' Global economy to expand 4.3% in 2011.

China will raise the retail prices for gasoline by 500 yuan ($76.34) per tonne and diesel by 400 yuan per tonne starting Thursday, the country's top economic planner said on Wednesday.

Guide dog Yile plays with Xie Danling, on March 27 in Shanghai. Xie says the 2-year-old Labrador is a reliable "family member". The 26-year-old Shanghai native, who has visual difficulty, used a guide dog as a "bridesmaid" at her wedding ceremony last year. At first, Yile could only recognize her directions and follow. But now the dog is able to read her emotions through her voice or expressions. Xie said once she was feeling sad and weeping, and Yile came over and licked the tears on her cheek. "The dog is always here comforting me when I am unhappy. I now can't do without her and I feel uneasy if she is not around," Xie said. Even when there is food or other dogs around, Yile keeps her attention focused on Xie. She does not bark nor run away when Xie is dining at a restaurant. But Xie is worried about her "eyes" because guide dogs are not allowed in some public areas such as supermarkets and on buses. "The dogs dedicate themselves to blind people, and I hope they can be accepted more," Xie said.

Students perform a waist drum dance at the Qiaoshan primary school in Huangling county of Yan'an city, Northwest China's Shaanxi province, April 4, 2011. Waist drum dancing is a traditional collective folk dance popular in northern Shaanxi. It has been added as part of the curriculum in the physical and music classes of Yan'an's primary and secondary schools. The local government made the decision to boost the importance of the dance, also an intangible cultural heritage, in the hope it will pass down to younger students.

A sales clerk holds a pair of gold bracelets at a gold shop in Lianyungang City, east China's Jiangsu Province, April 6, 2011. On Tuesday, the combination of a weak dollar, worries over inflation and debt crisis in euro zone and ongoing unrest in the Middle East pushed gold prices to new highs. The contract for June delivery closed at a record 1452.5 U.S. dollars per ounce, up 19.5 dollars per ounce.

China's national liquor, Maotai, is seeking to conquer the world. The maker of the fiery drink, which has been served at national banquets to toast foreign leaders including Richard Nixon and Kim Il-sung, plans to improve its international exposure through sales at duty-free airport shops in London, Rome, Moscow and other key cities. "We will increase sales in foreign markets, getting more people to know the quality and culture of Maotai," said Ji Keliang, chairman of the Kweichow Moutai Distillery. The company will work with its overseas distributor, French family-controlled Camus Cognac, whose sales network covers duty-free shops in more than 140 countries and the flights of 50-plus international airlines. "I am confident that Maotai will break into the top 50 best [alcoholic] brands in duty-free shops globally this year," said Cyril Camus, president and general manager of Camus Cognac. Since starting co-operation with Maotai in 2004, the distributor has placed the Chinese spirit in airports in Paris, New York, Chicago, Las Vegas, Vancouver and almost all major Asian cities. "Visibility is very important," Camus said. "It's the first step to getting people know the brand. Sales will follow the recognition." The liquor, which has a standard alcohol content of 53 per cent by volume, is commonly presented as a gift on formal and personal occasions. It is so highly sought after in the local market that consumers often complain of short supply. About 25,000 tonnes of Maotai is produced every year, with 95 per cent sold on the mainland. The liquor, which is distilled from fermented sorghum, is produced by a single factory in a remote town in Guizhou province . It is believed that the unique climate and vegetation of the area contribute to the rich taste of the spirit. Each bottle of Maotai takes at least five years - from brewing, blending and stocking - before it reaches the shelves. The company hopes to increase the capacity to 40,000 tonnes in five years. The limited supply has led to relatively high retail prices and widespread fake Maotai liquor in the local market. Earlier this year, Kweichow Moutai announced it would raise prices 20 per cent to cover the surging cost in labour, transport and raw materials. The mainland retail price of a bottle of Maotai is now 1,300 to 1,500 yuan. The price increase sparked complaints among Maotai lovers but Ji defended it, saying it was reasonable compared with the sky-high prices of some top wine brands. "We never intended to make Maotai a luxury drink and we actually set the price at a level that an ordinary family could afford to celebrate big moments during the year," Ji said. In recent years, shopping-savvy drinkers have chosen to buy genuine Maotai in foreign markets where it is cheaper. The average retail price in duty-free shops is US$98, or 640 yuan - half the price of the mainland. Cyril Camus said Chinese travellers were the largest group of buyers in duty-free shops, followed by South Koreans and Russians. He said most people were in for a shock when they first tasted Maotai yet many came back for more because they appreciated the quality of the liquor. "There's nothing equivalent to the romantic and fragrant taste of Maotai," Camus said. "It's not a matter of whether it will succeed internationally. It's just a matter of when."

Hong Kong*:  April 7 2011

Cheung Kong (0001) opens retail books for Hong Kong's first yuan-denominated initial public offering next Monday - aiming to raise 7 billion yuan (HK$8.31 billion). The developer is set to float Hui Xian REIT, the spinoff of its mainland commercial properties, on April 29. Premarketing starts later this week, sources said. Italian luxury brand Prada is set to list locally in July, after submitting its listing application to the bourse on Friday. The deal could value Prada at about 8 billion euros (HK$88.57 billion). Glencore, the world's largest commodity trader, was given the green light to float up to US$10 billion (HK$78 billion) in the largest IPO in the SAR this year. It is likely to open retail books later this month and make its trading debut in May. Mainland chemical fiber maker Billion Industrial Holdings has received HKEx approval for its IPO plan to raise US$500 million. Shares will list by the end of the month at the earliest. SBI Holdings - set to be the first Japanese firm to list locally - saw the international placement of its Hong Kong depositary receipts two times oversubscribed. The financial firm is targeting up to HK$2.34 billion and is due to start trading on April 14. 

Henderson Land Development (0012) expects revenue of almost HK$3 billion from property sales this year. John Yip Ying-chee, executive director of Henderson, told Sing Tao Daily, sister paper of The Standard, that the firm has 1.76 million square feet of property for sale in Hong Kong. Assuming it is sold at HK$10,000 per sq ft, this would generate about HK$17.6 billion. Mainland sales are expected to bring another 10 billion yuan (HK$11.87 billion). "We plan to put on the market 12 residential projects in 8 cities during the year," Yip said. He added that the gross floor area may be as much as 6.37 million sq ft, which is 10 times last year's figure. The developer currently has plenty of low- cost sites in its land bank in China, but property sales last year contributed in a limited way to the total turnover. "We focused on the mid to high-level in low- density residential areas in second-tier cities, where strategic planning takes more time," Yip explained. Last year, Henderson booked 303 million yuan from property sales. It sold property worth another 900 million yuan which it plans to include in this year's revenue along with the 600 million yuan worth of property it sold from the beginning of the year. The developer is ready to book a total of at least 1.5 billion yuan in property sales for this year. As of December last year, the developer had a gross floor area of 150.4 million sq ft, and 83.2 percent, or 125.13 million sq ft, will be developed as mid to high-end residential units. Yip revealed that the gross profit margin of property projects in the mainland is around 30 to 40 percent. The developer hopes to maintain a land bank of between 150 million and 200 million sq ft. "This [land bank] should be sufficient for 5 to 6 years of development," Yip said. Yip added the company is also interested in developing commercial buildings next to China's high-speed rail network. The developer recorded net profit of 11 percent in 2010 amounting to HK$15.82 billion. Underlying profit, or profit excluding property revaluations, rose 9 percent to HK$5.04 billion.

Western district shop owner To Ching-shing shows the racecourse he had made for a client to use at today's grave-sweeping festival. Pets join ancestors in grave-sweepers' devotions - Along with the ancestors being honored during the Ching Ming grave-sweeping festival, animal lovers are also paying tribute to their dead pets. As well as the usual consumer products and food items burned to keep the departed contented in the afterlife, shops selling paper offerings are also producing replicas of pet food and chew toys. "More people raise pets instead of children in Hong Kong nowadays. It's no surprise that there is a market also for animal worshipping," said pet owner Tam Yuk-suen, a customer at a paper-offering shop in Sai Ying Pun. Tam bought paper clothing for his ancestors but no animal items because his pet is still alive. Shop manager Ng Shuk-fong said pet-related items were a recent trend and only made to order at present. But she was considering adding them to the product range next year. Customers could order all sorts of tailor-made products, such as golf and snooker sets for sports lovers, for less than HK$100, she said. Prices for the paper products, all from the mainland, have risen 10 to 15 per cent in the past year, along with the rising yuan. Tam said higher labour and material costs also contributed to the rise. A shop in Sai Wan Ho is selling iPad 2 replicas with a protective case for HK$38 - HK$3 or HK$4 more than last year's iPad 1, although unlike the real thing there is no difference in their functions. At another shop in Second Street in the same district, the increase is even greater at 30 to 40 per cent. "All products are imported from the mainland," manager Ho Chung-kin said. "It's getting harder to find craftsmen for paper offerings there, not to mention Hong Kong." But he said business before the festival remained hectic and he expected a 10 per cent rise in turnover this year. The owner of another shop, To Ching-shing, supplied a copy of a racecourse to the family of a keen gambler for HK$168. "Young people tend to choose more tech-savvy and fancy options such as smart phones and MP3 players, whereas the more mature customers look for practical products like clothing and shoes," To said. Food items cost the same, HK$20, whether high-end products, from bird's nest, abalone and ginseng, or fast food, such as pizza or a toast and coffee set. Sneakers labelled ming pai - designer product in Cantonese - sell for HK$18 a pair.

A pioneer in child abuse prevention and intervention, Priscilla Lui Tsang Sun-kai, is stepping down after three decades of dedicated service. Lui, director of Against Child Abuse since 1983, told The Standard she has witnessed significant progress in protection but hopes the government will take this one step further by establishing a child commission. "In the 80s, many local people lived in denial about the problem of child abuse even though it was already a devastating social plague," she said. "We received many reports about parents striking their children in the belief this was part of Chinese tradition." Lui, 59, stood up for children's rights as an administrator of the organization in 1979 when it was still an "action group." She became director four years later and retired from the position at the end of last month. Since 1979, the agency's service centers in Wong Tai Sin and Tuen Mun have handled more than 17,000 cases. Lui said she is pleased to see improvements in the child protection mechanism, including the launch of a government protective service and a police suite to handle cases involving youngsters. Lui received the Bronze Bauhinia Star in 2000 and Hong Kong Humanity Award in 2009. But she admits much still needs to be done regarding children left unattended and sexual abuse, as more working adults shift their parenting duties to helpers and with children exposed to sexual content on the internet. Of the 1,001 child abuse cases last year, 33 percent concerned sexual abuse and 11 percent neglect. More than half of abusers were parents, according to the Social Welfare Department. Lui said sexual abuse cases remain under- reported as many take place behind closed doors. Lui, who has two grown-up children, said the cycle of abuse is hard to stop as parents who are victimized when small are more likely to be abusers. Lui's retirement wish is for Hong Kong to join 31 countries and establish a child commission. "Hong Kong has commissions for women, youth and elderly - but none for children yet," she said. "Parenting is the most demanding job in the world. We need an independent platform to ensure a stronger child perspective in the local community."

Financial Secretary John Tsang Chun-wah called on lawmakers to put aside political arguments and pass the budget next week so residents may benefit as soon as possible. The call comes before the Legislative Council's vote on the budget next Wednesday. Writing on his blog yesterday, Tsang said: "I sincerely hope that residents will be concerned about the budget in which they have direct interests, and appeal to legislators not to be entangled in political arguments but pass the budget so that residents can benefit as soon as possible." Last month, lawmakers for the first time rejected a HK$60.2 billion bill for initial expenditure for the new fiscal year from April 1. It was not until a week later that HK$59.7 billion of provisional funding - HK$50 million less than that tabled in the initial plan on March 9 - was approved when many pro-establishment lawmakers returned from Beijing. Tsang said the government has speeded up work on its HK$6,000 cash handouts so the money can reach residents' hands soon. Earlier he said one possibility is to make use of 1,200 bank branches to handle the registration and distribution of handouts. He said working out the details is like "walking on thin ice." Tsang is also under pressure to alter his plan to raise tobacco tax by 41.5 percent and the first registration tax on motor vehicles. The pro- establishment camp has not yet declared its support for the proposals.

 China*:  April 7 2011

The People's Bank of China announced Tuesday it would raise bank's benchmark one-year borrowing and lending rates by 25 basis points beginning Wednesday.

As China, the world's largest producer of rare earths, tackles concerns about an over-expansion of rare earth mining and its environmental damage, analysts say that this might signal an end to cheap rare earth supplies from China. Rare earths, a collection of 17 elements in the periodic table, are among the most sought-after materials for modern manufacturing. In tiny amounts, their unique magnetic and phosphorescent properties make them vital ingredients for producing sophisticated products like flat-screen monitors, electric car batteries, wind turbines, missiles and aerospace alloys. However, mining the elements is difficult, costly and polluting. China now supplies more than 90 percent of the world's rare earth demand, even though its reserves only account for about one-third of the world's total. Over the past decades, the export prices for China's rare earths were comparatively low due to a lack of environmental protection costs. In the late 1990s, as Chinese mines started to compete in the market, prices fell and most producers outside China closed. However, supplying most of the world's demand has left China with many problems, including serious environmental pollution and sharply reduced reserves after decades of exploration. To protect the non-renewable resources and control environmental damage, the Chinese government announced a series of measures that include cuts in export quotas, crackdowns on illegal mining and mineral smuggling, a halt to new mining licenses and the introduction of production caps. Since the beginning of this year, the average price of the 17 rare earth elements have doubled in China from the end of 2010. Analysts have accused speculators of targeting rare earth for huge returns and pushing prices beyond the supply and demand fundamentals of the market. However, Xing Bin, the executive deputy general manager and chief financial officer of the Inner Mongolia Baotou Steel Rare Earth (Group) Hi-Tech Co., considers the current price increase as a revaluation process that would bring the price back to a reasonable level. "The price increase will not endure and the prices will stabilize again when it strikes a balance between the demands of suppliers and consumers," Xing said. China's latest move, a new resource tax on rare earths beginning in April, would further fuel the price rises, analysts said. The tax rate was set at 60 yuan (about 9.15 U.S. dollars) per tonne of mined light rare earths, while the rate for medium and heavy rare earths was set at 30 yuan per tonne. Rare earths were previously taxed under the category of ordinary non-ferrous metals, with tax rates between 0.5 and 3 yuan per tonne. Yang Wanxi, the director of a rare earth expert panel under the Baotou Municipal Committee of Sciences, said that rare earth prices have shot up exponentially in recent months because of many reasons, adding that China's new resource tax would add fuel to the price rises. "In a word, the era of cheap rare earth supplies might have come to an end," Yang said. He suggested that the revenue from the new levy should be used to fund research and development on rare earth processing and application technologies, set up environmental compensation funds and build rare earth reserves. Xing said that the tax would increase the cost for rare earth firms and lead to higher prices when the costs are passed to consumers. Zhang Zhong, the general manager of the Inner Mongolia Baotou Steel Rare Earth (Group) Hi-Tech Co., told Xinhua that the tax would increase the company's production costs by about 720 million yuan this year. The resource tax came after the announcement in January of tougher emission limits for rare earth mining and smelting. The emission caps on about 15 pollutants, announced by the Ministry of Environmental Protection, will take effect on October 1 this year. In addition to the new tax, the emission caps would also add companies' operation costs. Further, it is widely expected that the national reserve policy would come out soon and would push up rare earth prices, said Yang Baofeng, an analyst with the Shanghai-based Orient Securities. Inner Mongolia will accelerate the construction of a rare earth strategic reserve base and will establish a national rare earth reserve to pave the way for a potential rare earth trading platform, Hu'ercha, the deputy director of the Standing Committee of the People's Congress of Inner Mongolia Autonomous Region, said early last month. The Ministry of Land and Resources (MLR) announced in January the establishment of eleven state-managed rare earth mining zones in Ganzhou in east China's Jiangxi Province. The sites are rich in ion-absorbed-type rare earths. The MLR also said that the country would cap this year' s rare earth output at 93,800 tonnes from 89,200 tonnes last year and would not grant new licenses for rare earths prospecting and mining before June 30, 2012.

A quartet of jackstraws are displayed in a field of cole flower blossoms during the Qingming Festival in Xianju county, East China's Zhejiang province on April 4, 2011. Over a hundred of jackstraws were seen across the cole blossoms field to attract tourists during the Fouth Zhejiang Cole Flower Festival. 

Premier Wen Jiabao talks with a worker at a potato seedling farm operated by the Kangnong Potato Co Ltd in Luliang, Shanxi province, on Saturday. The premier was making a three-day visit to the mountainous region.

Taiwan and China are planning to co-operate more closely on nuclear power safety and disaster preparedness in the wake of Japan's atomic crisis, a report said on Tuesday.

The construction of Walt Disney Co's new theme park and resort in Shanghai will start on Friday, the Wall Street Journal has reported. A salesperson displays a Mickey Mouse toy at a Disney-themed store at Hongqiao International Airport in Shanghai. Walt Disney Co and its local partners have issued invitations to "a special event in Shanghai" on April 8, the paper said on April 1, quoting an anonymous source. Disney Chief Executive Officer Robert Iger is expected to attend the groundbreaking ceremony, the business newspaper said, without quoting anyone. On Sunday morning, China Daily was invited to a news briefing set for Friday through a fax signed jointly by the Walt Disney Co, an affiliate of the Shanghai government and a local business partner of Disney. The invitation didn't specify what will be announced. In a telephone interview with China Daily, a public relations official with Walt Disney Co (Shanghai) Ltd refused to divulge the subject of the briefing. "We have not disclosed any further information to any outside parties about the upcoming event," said the official, who cited corporate policy in asking to be referred to anonymously. "Nothing will be disclosed until Friday, so current media reports are based on speculation." Jenny Shen, an official with Apco Worldwide, the public affairs and strategic communication firm organizing the event, also said nothing has been disclosed about the subject of the announcement on Friday. The two parties besides Walt Disney Co that signed the invitation were the Administrative Commission of the Shanghai International Tourism and Resorts Zone and the Shanghai Shendi Group Co Ltd. The Shanghai Shendi Group, a government-owned entity, was specifically created last year by the Shanghai government in preparation for the project. An official start date for the construction of the long-expected theme park, if announced, would mark a milestone in the project, over which negotiations started in the late 1990s. On Nov 5, 2010, a decade of talk about the theme park ended when an agreement was signed between Shanghai Shendi Group and Walt Disney. Han Zheng, the mayor of Shanghai, said last month that the cost of the first phase of the Disneyland project will be 24.5 billion yuan ($3.75 billion). The total cost, though, is still unclear. The first phase, containing the theme park, hotels, car parks, service centers and a lake, will occupy 3.9 square kilometers in the city's Pudong New Area, the municipal government said last month. The total area designated for the project encompasses 7 sq km. The Shanghai Disneyland would be the Walt Disney Co's third theme park in Asia, following the construction of parks in Tokyo and Hong Kong. The company also has two theme parks in the United States and one in Paris. In the Chinese mainland, Walt Disney Co employs more than 600 people and sells its products in at least 25 cities. In January, the company announced plans to open by mid-2012 its first store selling its products directly to Chinese customers, reversing a strategy in which had sold products through authorized dealers. Work is set to begin at the long-awaited Shanghai Disney theme park, with the municipal government and the US-based entertainment giant to hold a ground-breaking ceremony on Friday. The 24.5 billion yuan (HK$29.13 billion) project, which has been the subject of negotiations for more than a decade, was given final approval by the State Council in November 2009 and is scheduled to open in 2015. The announcement comes as a month-long public consultation on zoning plans for the park and its attached resorts and entertainment district on the southeastern outskirts of the city enters its final days. Disney issued invitations to a "special event" at the Shanghai Kerry Hotel Pudong on Friday morning, in collaboration with the Administrative Commission of Shanghai International Tourism and Resorts Zone and the Shanghai Shendi Group. The commission is a municipal government body established in November to oversee construction of the park and its connected tourism zone, and Shendi is Disney's local partner in the joint venture. The invitation does not specify the purpose of the event, but states that "a large number of participants" are expected to attend. An individual close to the project confirmed it would be the park's official ground-breaking ceremony. Walt Disney chief executive officer Robert Iger is understood to be travelling to Shanghai for the event. The park will be the entertainment giant's sixth worldwide, its first foray onto the mainland and third in Asia after Tokyo and Hong Kong. Public consultation on the resort and entertainment zone's master plan was launched on March 8, four months after Disney and Shendi signed the final agreement for the joint venture. Locals have until tomorrow to comment on the designs. The plans show the resort taking up around one-third of the tourism zone's 390-hectare first phase, flanked by three hotel plots, commercial facilities, a huge car park and a public transport hub. The tourism zone will eventually expand to 700 hectares, comprising an artificial lake and man-made rivers, and connected to the city centre by two subway lines. Unveiling the plans, Shanghai Mayor Han Zheng ended months of speculation about the cost of the project, giving the figure "approved investment for the first phase". However, the project has not been free of controversy. Rather than the 1,000-hectare plot that was widely reported, many were surprised in November 2009 to discover that the park was also to be Disney's smallest. The National Development and Reform Commission approved the project to cover only 116 hectares, making it 11 per cent smaller than Hong Kong Disneyland. Questions have also been raised by local lawmakers about the funding. The municipal government has been urged to avoid a repeat of the financial troubles the Hong Kong attraction has suffered since it opened in 2005.

Hong Kong*:  April 6 2011

Public schools like King's College – where former pupils are fighting a rearguard action to get the school out of the government's class-reduction program – have been told they have no choice but to follow the policy of cutting classes. Education Bureau permanent secretary Cherry Tse Ling Kit-ching said yesterday that the government had made a decision that King's College had to reduce classes. "If public schools are not in the scheme, how can we convince the others to join?" she asked after a three-hour meeting with the college's management committee. Alumni of the elite school said they would not accept the bureau's decision, and again threatened a judicial review. "The bureau should see what suits a school the best in making its decision, instead of forcing all public schools to join the scheme," Cheng Man-yung, an alumni representative on the committee, said. Cheng, with fellow representative Chan Cheuk-biu, tried unsuccessfully to table two motions at yesterday's meeting to withdraw the school from the government's class-reduction programme and to launch a judicial review into the decision to take part. Announcing the school's participation in February, Secretary for Education Michael Suen Ming-yeung said the decision to cut one Form One class in September was voluntary. But alumni association chairman Lam Chiu-ying said the decision did not follow procedures as no votes were taken among committee members. Lam also said it was inappropriate for the bureau to announce the school was joining the scheme. "The school management committee has never passed such a motion," he said. The class-reduction program is part of the government's cost-cutting measures in response to declining birth rates. More schools face closure because they fail to meet admission quotas. Another elite school, Wah Yan College in Kowloon, pulled out of the scheme last month after some alumni members threatened to reduce their donations. The parents and alumni of many elite schools do not want to join the programme as they have no difficulty in filling classes.

Chief Secretary Henry Tang Ying-yen, the presumed frontrunner for chief executive in 2012, has approached his predecessor Rafael Hui Si-yan to help lead a team for his long-awaited election campaign, say people close to Tang. A politician said the chief secretary had confirmed to some of his close friends that he had invited Hui (pictured) about six months ago to serve as his strategist. A person close to Beijing also said Tang had asked Hui to line up a team and help map out campaign strategy. A public relations firm has been engaged to provide supporting services. The chief executive election will be held next March. The election of the sub-sectors of the 1,200-strong Election Committee, that will select the chief executive, take place in November. Hui, 63, is no stranger to campaigns. In 2005, he was chief strategist in Donald Tsang Yam-kuen's run for chief executive. Norman Chan Tak-lam, who is now chief executive of the Hong Kong Monetary Authority, was campaign manager. Hui was appointed chief secretary after Tsang was elected. He stepped down in 2007. A friend of both Tang's and Hui's who declined to be named said: "Given the friendship between the two men, it is not surprising that Hui has been invited to pull strings for Tang's campaign. Hui and Tang have an excellent mutual understanding." Hui joined the civil service in 1970 and was secretary for financial services before leaving the government in 2000. He served as managing director of the Mandatory Provident Fund Schemes Authority from 2000 to 2003. A spokesman for the chief secretary said: "Mr Tang will do his best to discharge his duty as chief secretary." Hui did not respond to the South China Morning Post's inquiries yesterday. In a related development, Executive Council convenor Leung Chun-ying, another hotly tipped candidate for chief executive, yesterday refused to dismiss the possibility of running. Asked if he would run for chief executive, Leung replied: "I have served the Hong Kong community for a long time. I shall do whatever I can to my utmost ability for the long-term benefit of Hong Kong." He smiled and nodded when asked whether he was being courted to pursue the job. "Such talk has emerged since the late 1980s ... You can imagine such things happening," he said, adding that "the public is concerned about Hong Kong's long-term development". He said he would finish his current work before confirming his candidacy. "I should get the job in hand done, including different public offices," Leung said. In an interview with the Post last Tuesday, lawmaker Regina Ip Lau Suk-yee, a former secretary for security, said Tang and Leung lacked the "necessary leadership qualities, competence and stamina" for chief executive.

A recent judgment in a long-running dispute over plans to develop a site in North Point may offer hope to Mei Foo residents fighting a proposed high-rise building near their homes. The Court of First Instance in February threw out arguments by a company that said it could make use of unused development rights from Carson Mansion in King's Road to develop an adjacent lot that was originally part of the same site. It said that if the entire development potential available to a site was not used, the unused part could not be said to "remain" with one of the component lots. Barrister-legislator Audrey Eu Yuet-mee said yesterday the same reasoning could be applied to the Mei Foo case, in which a company wants to develop a former LPG storage site next door. Opponents of the plan are meeting lawyers to discuss the case this week after staging a protest at the private housing estate on Sunday. In the Carson Mansion case, a triangular lot had been left vacant for years because it was earmarked for an MTR station, but the station plan was dropped and a company bought the unused lot. The company wanted to use 650 square feet in floor area of development potential not used on the Carson site due to previous government miscalculations. In rejecting the claim, Mr Justice Anselmo Reyes cited a 1983 Privy Council case, saying the company would have to own the original Carson Mansion site or buy it to be able to claim use of its unused development potential. He had "sympathy" with the argument of the lawyer representing buildings officials - that the development potential of a site was worked out on site's area as a whole. If the entire development potential of a site was not used, then the unused part could not be said to "remain" with one of the component lots. Reyes added that "the argument may apply to most development sites". Eu said the building density of Mei Foo Phase 8 was calculated in the 1970s based on a site area comprising the 10 blocks and the LPG plant. "The plant site contributed to the Phase 8 project. The two parts are tangled together," she said. "If you now treat the LPG site as separate, you'll have to get the permission of the owners of Phase 8. Otherwise you'll make Phase 8 an illegal project." Billion Star Development, which bought the former LPG plant site from the developers of Mei Foo, New World Development and ExxonMobil Hong Kong, in 2009, got approval in October to build a 20-storey apartment block on the lot. Residents say they never expected the 1,350-square-metre plant site, which they thought was part of Phase 8, would become the site of a high-rise that would block their views and take up parts of a private street they had paid to maintain. The government argues there is no issue of "residual plot ratio" as Billion Star's site is separate, with its own building parameters. Institute of Surveyors spokesman Lawrence Poon Wing-cheung, while not commenting on the legal issue, said the case illustrated the lack of transparency in the second-hand flat market. "Buyers have no way to find out whether a site so close to their flats is not part of their housing estate, not to mention whether there are any new buildings coming up," he said.

Private hospitals are standing firm against a Hong Kong government plan aimed at limiting the number of mainland mothers coming to give birth in the city. After a meeting yesterday with Secretary for Food and Health Dr York Chow Yat-ngok, the Private Hospitals Association said it had no plans to add or cut beds for non-local mothers, arguing it would lead to a "waste of resources" if a quota was imposed. The government aims to cap the total number of births in Hong Kong at 88,000 a year. "It is academic to talk about a limit or quota at this stage," association president Dr Alan Lau Kwok-lam said. "First, we need more concrete information on the capacities of the public and private sectors." He said a cap would result in a "waste of resources" in which private hospitals had invested to cope with the demand for obstetrics services. "We have planned our manpower and resources in view of the demand. We have the hardware and software set up. If we now have to cut the number [of mainland mothers giving birth], should we ask our nurses to take a tea or meal break instead?" In a separate RTHK interview, Lau argued: "Is it not a mismatch of resources? "So far, we have not heard any complaints from local mothers that they cannot get a place in private hospitals. And actually we have always been giving priority to local mothers," he said, referring to a series of protests in 2006, when local mothers took to the streets to demonstrate against mainland mothers "invading" Hong Kong's hospitals. Chow put on a brave face, maintaining that there had been "a positive response" at yesterday's meeting from the private hospitals. "It is good to see that the private medical sector has realised that apart from keeping a reasonable market share, they need to keep the whole health care system sustainable and offer high-quality services to patients," he said in a statement. Legislator Dr Leung Ka-lau, who represents the medical sector, said setting a quota could give rise to more questions than answers. "If there is a quota, the next question will be who is to decide who can get how much." Leung said the government should address the issue by allocating more land to build private hospitals, and by stepping up the training of doctors and nurses. The row over mainland mothers coming to Hong Kong to give birth started in 2006. Some people said the influx of mainlanders - who can gain Hong Kong residency for their children by giving birth here - was straining health facilities. To stop the influx, the government introduced restrictions in 2007 under which mainland women can be turned away at the border if they are more than 28 weeks' pregnant and have not booked a place at a Hong Kong maternity hospital. To book a bed in a public hospital maternity ward costs HK$39,000. Those who give birth after admission through an accident and emergency department are charged HK$48,000. The number of babies born to non-local mothers at public hospitals dropped to 8,776 in 2007 from 12,047 in 2006, according to the Hospital Authority. The number jumped to 10,617 in 2008 and has since remained relatively stable, with 10,232 in 2009 and 10,904 last year. As the issue appeared to fade out, a group of senior obstetricians at public hospitals called for the government to further restrict mainland mothers from coming to the city to give birth. They said they had been overloaded with work and that the fast expansion of private hospitals had also lured many public doctors into private practice. One of the group, Dr Cheung Tak-hong, who is head of obstetrics and gynaecology at Prince of Wales Hospital, yesterday expressed disappointment with the private hospitals' refusal to agree to a quota system. He said he hoped that something could be worked out at later meetings. "We are not asking the private sector to cut the number of beds for mainland mothers-to-be. We just want them to work out how many pregnant women they can accept," Cheung said. Lau said the private hospitals had agreed to attend another meeting with the government and public-sector doctors this month.

For theme park visitors as much as their owners, the queue is the enemy. Long waits reduce the fun for customers, and they may not come back for more. But with combined visitor numbers exceeding 10 million for the first time last year, Disneyland and Ocean Park are fighting an uphill battle. To tackle the problem, Ocean Park launched a multimillion-dollar hi-tech command and control room, the nerve centre from which every corner of the park is monitored through a network of more than a thousand closed-circuit cameras. The centre's operators work to spot queues and take steps to ease the waiting. But anticipating queues before they formed was a better approach, said Todd Hougland, the park's operations and entertainment executive director. "We decided to invest in something more robust," he said, comparing it with an older control room. "You never want to make guests wait to park, pay or pee. These are the three Ps of theme parks," he said. "When they are standing in lines they're not spending money or enjoying themselves." The control centre, located in an office building with a commanding view of the attractions, went live in January and was part of the redevelopment project which saw the opening of Aqua City, billed as Asia's largest aquarium. If gridlock begins to form at the Abyss Turbo Drop - a vertical rapid descent thrill ride - technicians in the control room will respond by alerting managers who will ensure the ride runs quicker, so long as safety allows. Meanwhile, managers will use the time to entertain people waiting in the line, for example, by playing live music, sending musicians, magicians, clowns and/or mascots there to hold people's attention. One of the control room's most important tasks is to ease queues most likely to form at Aqua City, Hougland said. It is highly popular as it is new and also very close to the park's entrance. Individual visitors usually arrive early in the day and tourists in groups in the afternoon. That means the park has the most people from 3pm to 4pm. The Waterfront - the lowland part where Aqua City is located - is usually more crowded than the Summit - the higher area - because most individual visitors finish touring the Summit and return to the Waterfront as group tourists flock in. "This is a challenge we face," Hougland said. "I'd love to be able to assign different people to different places so we can have a perfect distribution of guests. But we never have a perfect distribution." Hougland says the new facility enables park visitors to enjoy at least two rides or attractions in an hour. Park management has been studying visitors' movements to prepare for more attractions in coming years. A fast-queuing system, similar to Disneyland's Fastpass, is being looked at. Disneyland does not have a control centre like Ocean Park. This is ironic, given that it was Disney's famed theme parks, among them Walt Disney World in Orlando, that pioneered a top-down, hi-tech control and command centre. At Hong Kong Disneyland, managers and staff on the ground call and send text messages to each other when they see an influx of visitors. To keep people entertained, they send performers. Disneyland parades, which can draw up to 16,000 people, are a way to help crowd control. Held twice a day at times when the park has its most people, they divert visitors' attention so queues at attractions are eased, says Noble Coker, vice-president for park operations. "We observe how people behave and figure out how to improve their experience. What we don't try to do is to change their behaviour," he said. Most people, after going along Main Street, turn right to Tomorrowland "because they see this big thing spinning", he said. From there they go left to Fantasyland and Adventureland, and back to Main Street. This makes attractions in Tomorrowland, such as the Space Mountain and Buzz Lightyear Astro Blasters, prone to long queues. "We can't fight behaviour. But people, especially those who are educated, will opt out if they see a long queue. And they will get a Fastpass," he said. Autopia, where people drive cars on enclosed tracks, has been more popular than expected. "When we built it, we assumed that most people would want to go on to Buzz than Autopia," he said. But it takes about 45 minutes for a ride at Autopia. "We've asked ourselves many times, `What is it that draws people to Autopia?' What I'm guessing is that it is because driving is not as common in Hong Kong as the US or Canada," he said. An expansion due to be completed in 2014, is designed to entice people in the direction of Adventureland to balance crowd distribution. Coker said his team was continually studying ways to ease queues, including installing Fastpass systems. "If you can put one more person in each ride or show, then that person is a little bit happier. If you get to go on six rides, rather than five, then it's a better day."

After a quiet first quarter of Hong Kong's usually buzzing initial public offering market, a number of deals are now sitting in the pipeline, including one by a distributor of vaccines and pharmaceutical products and one by a maker of curtain walls. Bloomberg yesterday reported that China NT Pharma Group and its shareholders, including TPG Inc, planned to raise as much as HK$2.14 billion in an initial public offer in Hong Kong, citing a term sheet for the transaction. The company plans to sell 270.5 million new shares in the IPO, the term sheet showed. Existing investors are selling another 86.6 million shares, according to the document. According to a pre-listing document filed with the Hong Kong stock exchange, China NT Pharma markets and sells vaccines and pharmaceutical products to mainland hospitals for global manufacturers such as GSK, Sanofi Pasteur, Pfizer and Novartis, and local firms such as Hualan, one of the largest privately owned vaccine manufacturers on the mainland. Pharmaceutical firms from the mainland appeal to investors, with some priced at higher valuations compared with companies from other sectors. Cardiovascular and cerebral-vascular drug maker Sihuan Pharmaceutical Holdings Group, which went public last year, was valued between 22.5 to 26.7 times its forecast earnings, according to a research by brokerage firm VC Group. Meanwhile, Yuanda, a maker of curtain walls for buildings, planned to raise about US$500 million with a listing in Hong Kong, according to Bloomberg. The company started gauging investor demand for the share sale yesterday, according to terms for the deal obtained by Bloomberg. Yuanda will use most of the proceeds to expand production and repay debts. The Hong Kong IPO market has declined significantly in both volume and value so far this year compared with last year, according to data from Thomson Reuters. In the first quarter of this year, Hong Kong IPOs raised a total of US$2.1 billion from 13 listings, down 50 per cent compared with the first quarter of last year. Total equity offerings, including follow-on offerings, for the first quarter amounted to US$6.4 billion from 67 listings. Follow-on offerings in Hong Kong total US$4.2 billion so far this year. Performances of new listings have been disappointing too, as most of this year's IPOs have under performed the Hang Seng Index.

At least four new property projects are expected to be marketed this month, adding up to 2,689 flats for sale - even as nervous sellers in the secondary market start cutting prices. Among them, Kerry Properties' (0683) Lions Rise in Wong Tai Sin will provide the largest number of homes - 968 flats - to the market. The flats are sized between 680 and 1,470 square feet, and the developer may price them from HK$6.8 million, or HK$10,000 per square foot. Sun Hung Kai Properties (0016) is likely to sell 650 flats at Imperial Cullinan at Olympic Station that are sized between 800 and 1,900 sq ft, and priced from HK$35 million each. One Regent Place in Yuen Long, another SHKP project, consists of eight houses and 337 flats, ranging from 400 to 2,000 sq ft. Over the weekend, the developer started a roadshow in Shenzhen, attracting more than 10,000 visitors. Also in Yuen Long is Uptown from Cheung Kong (Holdings) (0001), which has a total of 37 houses, sized between 2,000 and 2,300 sq ft each. Houses may be priced from HK$18 million, or HK$9,000 psf. The developer may also offer a fixed mortgage rate - as low as 1 percent - for the whole term. Sales at other primary residential projects also performed well. Over the weekend, Henderson Land (0012) nearly sold out the 103 flats it launched on Friday at The Gloucester, in Wan Chai. Cheung Kong sold about 12 flats on the weekend at its Festival City 2 at Tai Wai. With about 100 flats left, the developer plans to cancel the 2 percent discount it had offered to earlier buyers, as well as hiking prices. More than 13,000 flats at this project were sold since its launch at the end of last year. Meanwhile, the secondary market performed poorly over the weekend. Kornhill, Discovery Park and Laguna City - three benchmark residential projects in Hong Kong Island and Kowloon - recorded zero deals. An owner at Tai Koo Shing, another benchmark project in Hong Kong, sold a 867 sq ft flat at HK$5.96 million, after cutting HK$340,000 off the asking price because of concerns over the current economic instability. A flat owner in Tseung Kwan O lopped off HK$150,000 before selling a 511 sq ft flat for HK$2.95 million.

 China*:  April 6 2011

Work is set to begin at the long-awaited Shanghai Disney theme park, with the municipal government and the US-based entertainment giant to hold a ground-breaking ceremony on Friday. The 24.5 billion yuan (HK$29.13 billion) project, which has been the subject of negotiations for more than a decade, was given final approval by the State Council in November 2009 and is scheduled to open in 2015. The announcement comes as a month-long public consultation on zoning plans for the park and its attached resorts and entertainment district on the southeastern outskirts of the city enters its final days. Disney issued invitations to a "special event" at the Shanghai Kerry Hotel Pudong on Friday morning, in collaboration with the Administrative Commission of Shanghai International Tourism and Resorts Zone and the Shanghai Shendi Group. The commission is a municipal government body established in November to oversee construction of the park and its connected tourism zone, and Shendi is Disney's local partner in the joint venture. The invitation does not specify the purpose of the event, but states that "a large number of participants" are expected to attend. An individual close to the project confirmed it would be the park's official ground-breaking ceremony. Walt Disney chief executive officer Robert Iger is understood to be travelling to Shanghai for the event. The park will be the entertainment giant's sixth worldwide, its first foray onto the mainland and third in Asia after Tokyo and Hong Kong. Public consultation on the resort and entertainment zone's master plan was launched on March 8, four months after Disney and Shendi signed the final agreement for the joint venture. Locals have until tomorrow to comment on the designs. The plans show the resort taking up around one-third of the tourism zone's 390-hectare first phase, flanked by three hotel plots, commercial facilities, a huge car park and a public transport hub. The tourism zone will eventually expand to 700 hectares, comprising an artificial lake and man-made rivers, and connected to the city centre by two subway lines. Unveiling the plans, Shanghai Mayor Han Zheng ended months of speculation about the cost of the project, giving the figure "approved investment for the first phase". However, the project has not been free of controversy. Rather than the 1,000-hectare plot that was widely reported, many were surprised in November 2009 to discover that the park was also to be Disney's smallest. The National Development and Reform Commission approved the project to cover only 116 hectares, making it 11 per cent smaller than Hong Kong Disneyland. Questions have also been raised by local lawmakers about the funding. The municipal government has been urged to avoid a repeat of the financial troubles the Hong Kong attraction has suffered since it opened in 2005.

China National Building Material chairman Song Zhiping announces 2010 annual results at the Four Seasons Hotel, Central. Domestic demand for cement would gradually slow down from double to single digits, said the president of China National Building Material (CNBM), the country's biggest cement producer. The mainland's cement demand is expected to grow 8 per cent next year, Thomas Cao Jianglin said. Demand was expected to rise 12 per cent to 2.1 billion tonnes this year, after climbing 15.5 per cent to 1.87 billion tonnes last year, the China Cement Association said. "In future, China's cement demand can no longer have double-digit growth. Its growth must slow," CNBM chairman Song Zhiping said. However, the central government plans to build 10 million flats for this year for low-income earners, Song said. "This will drive the Chinese cement industry and boost our sales. Low-cost housing also uses new building material, so it will benefit our sales of new building materials." Cement accounted for 73 per cent of CNBM's revenue last year, while lightweight building material accounted for 8.4 per cent and glass fibre 5.5 per cent. This year, the Hong Kong-listed company's capital expenditure would be 16 billion yuan (HK$18.9 billion), of which 14 billion yuan would be used to boost production capacity, said Cao. Last year, capital expenditure was at 16.3 billion yuan. Song said CNBM would raise annual production from 200 million tonnes to 250 million tonnes. In 2009, annual output was 160 million tonnes in 2009. CNBM overtook Anhui Conch (SEHK: 0914) as China's biggest cement producer last year. The state-owned firm plans to increase its annual production to 300 million tonnes by 2015, said Nick Lai in a JP Morgan report. CNBM planned to issue 10 billion yuan worth of bonds this year to reduce financing costs, said Cao. "We must improve our gearing." Its net debt to equity ratio fell from 212.2 per cent at the end of 2009 to 183.3 per cent at the end of last year, Cao disclosed. "If we're lucky, we hope to bring our gearing down to 150 per cent by the end of this year." Last year, CNBM's turnover soared 56.1 per cent to 51.99 billion yuan, while net profit rose 43.2 per cent to 3.37 billion yuan. CNBM's 2010 turnover was 23 per cent higher than JP Morgan's forecast of 42 billion yuan and higher than the consensus estimate of 46 billion yuan, wrote Lai. Its 2010 net profit of 3.37 billion yuan was slightly above the consensus estimate.

The Purchasing Managers Index (PMI) of China's non-manufacturing sector rose to 60.2 percent in March, the China Federation of Logistics and Purchasing (CFLP) said Sunday. The March index was 16.1 percentage points higher than that in February, the CFLP said in an online statement, adding that the rise indicates non-manufacturing businesses are gaining strengthen and maintaining a healthy growing trend. A reading above 50 percent indicates economic expansion. One below 50 percent indicates contraction. The figure has been staying above the boom-or-bust line since March 2010 except this February due to the Chinese Lunar New Year holiday, it said. All major sub-indices saw increases with the index for new orders sharply up 10.4 percentage points from February to 55.5 percent in March while that for new export orders rose 4.1 percentage points to settle at 50.3 percent. it added. Meanwhile, the statement noted that the retreats in the increase of two indices -- price indices for charges and intermediate input, sent a positive message in terms of easing the ongoing inflation expectation. The price index for charges fell 2.8 percentage points to 51.7 percent in March and that for intermediate input edged down 1.5 percentage points to 63 percent, it said. The PMI of China's manufacturing sector rose to 53.4 percent in March, rebounded from a previous slid for three consecutive months, adding pressure of inflation and expectation of interest rate hikes, according to CFLP's data released Friday. Statistics authority data show that China's consumer price index (CPI), a main gauge of inflation, rose 4.9 percent year-on-year in February this year and was widely expected to rise above 5 percent in March. The central bank has raised benchmark interest rates three times since last year and increased the reserve requirement ratio for commercial banks nine times to contain inflation.

Hong Kong*:  April 5 2011

HK mothers giving birth to receive priority - Private hospitals in Hong Kong would continue using a quota system in order to give priority to local mothers giving birth, Private Hospitals' Association president Dr Alan Lau Kwok-lam said on Monday. He made the comments amid concern in Hong Kong that the number of mainland mothers are coming to have children in the city was overloading its hospital maternity services. Lau met with Secretary for Food and Health Dr York Chow Yat-ngok earlier on Monday to discuss the issue. Chow has suggested capping the total number of births in Hong Kong to 88,000 a year – which was last year’s figure. Alan Lau emphasised that quotas at private hospitals remained the best solution. These had already limited the numbers of mainland mothers giving birth in Hong Kong. “Since 2006, we set quotas for mainland and local mothers at private hospitals. This has worked well. Since then, every private hospital has set different quotas for non-local and local mothers delivering babies in hospitals,” he explained. Lau said if quotas for mainland mothers were filled, then private hospitals would stop receiving them. “We will adjust the quotas and give priority to Hong Kong mothers,” Lau said. The government was also considering raising fees charged to mainland mothers giving birth in Hong Kong. “We are also trying to analyse the data [on mainland mothers provided by the government] more closely,” he added. Lau said he would have another meeting with Chow later this month. He also said it was important to maintain the reputation of private hospitals. Maternity services at these hospitals accounted for between five and 15 per cent of their total income, Lau revealed. Currently, the Private Hospitals’ Association comprises 12 private hospitals and an anti-cancer centre. He said there were no plans to increase the quotas for mainland mothers giving birth in Hong Kong. Some mainland parents have said that even if Hong Kong imposes more restrictions, they would continue to cometo the city to give birth. They have said this was Hong Kong meets high international standards for maternity care.

A new auction record for contemporary Chinese art was set in Hong Kong on Sunday, when a triptych by Zhang Xiaogang sold for HK$79 million (US$10 million) at a Sotheby's auction. Forever Lasting Love, painted for an exhibition in 1988, was described in the catalogue as “the first creative pinnacle of Zhang Xiaogang’s illustrious career”. Evelyn Lin, Sotheby’s head of Contemporary Asian Art, said the triple painting was “a monumental museum-quality work from a defining period of the Chinese avant-garde”. It was the highlight of a sale of 105 works from the collection of Baron Guy Ullens, a Belgian foodstuffs magnate and longstanding Chinese art collector whose father and uncle were both diplomats at Belgium’s embassy in the country. In recent years he has been selling works from his private collection to fund his eponymous art museum in Beijing. The Zhang price, which includes the buyer’s premium, was a record for any piece of contemporary Chinese art as well as for the artist, and was more than double the top estimate of HK$30 million. It went to an anonymous buyer. Works by several other artists also set records, with Zhang Peili’s Series X No 3 going for HK$23 million, more than nine times its top estimate, also to an anonymous buyer. A private American collector paid just over HK$19 million for Wang Guangyi’s Mao Zedong: P2, more than nine times its top estimate. Geng Jianyi’s Two People Under A Light was knocked down to an Asian collector for more than HK$18 million, more than 12 times the top estimate. In total, the sale fetched HK$427 million, against a pre-sale top estimate of HK$130 million. “From the very beginning of the auction extended bidding battles broke out among buyers bidding in the room and over the phones from around the world,” said Lin. Chinese art prices have rocketed in recent years, fuelled by the country’s economic boom and its growing numbers of super-rich.

Potential rivals for top job cross paths but refuse to be drawn - A smiling Leung Chun-ying with Regina Ip, who attacked his leadership skills last week. Regina Ip Lau Suk-yee last week poured scorn on a potential rival for the post of chief executive. Yesterday, the two found themselves side by side but refused to be drawn into any fray. Instead, Ip, chairwoman of the New People's Party, and Leung Chun-ying, the Executive Council convenor, put on their policymakers' hats at a forum to discuss Beijing's 12th five-year plan and Hong Kong's place in it. The two political heavyweights have both hinted that they are interested in the top job but have not confirmed their intention to run. Ip said last week that Leung and Chief Secretary Henry Tang Ying-yen, another potential candidate, both lacked the "leadership qualities, competence and stamina" to govern. When tackled about the comments yesterday, Leung responded: "I am not speaking." Likewise, Ip, former security minister turned legislator, refused to add to her remarks. "I am here today to discuss the implementation of the 12th five-year plan, so I will not answer other questions," she said. While the election for the top job will be held on March 25 next year, Ip said she had yet to come to a decision about running for the position and would need to consult members of the New People's Party first. Ip and Leung agreed yesterday that the next government needed to expand in order to deal with the new five-year plan, which dedicated a chapter to outlining Hong Kong's role in national development, including reinforcing the city's status as a financial centre. "The next government should consider setting up the posts of deputy chief secretary and deputy financial secretary to enhance the central planning work," Ip said. She added that the incumbent Tang was burdened with such a heavy workload that it prevented him from dealing effectively in some areas, such as population policy. She also suggested setting up a technology bureau to co-ordinate with the mainland and to strive to make the city a hub for intellectual property and data businesses. Leung said the current government should consider expanding the civil service to cope with the changing policies and public expectations. "With the next five-year plan, we have to increase human resources in both public sector - government - and private sector to seize the development opportunities," he said.

Hang Seng Bank (0011), the third-largest mortgage lender, expects to the HIBOR-based mortgage rate to hit a high of HIBOR plus 1.5 percent in the next six months. The highest HIBOR offer now is HIBOR plus 1.2 percent. This is due to a slide in liquidity in Hong Kong, said William Leung Wing-cheung, executive director and head of personal banking. Banks in the SAR, including the top five lenders, have lifted their HIBOR-based mortgage rates in the past two months. New mortgage rates now range from HIBOR plus 0.9 percent to HIBOR plus 1.2 percent from HIBOR plus 0.8 percent to HIBOR plus 1 percent. Leung links the rate hikes to the yuan. "Many people are turning their Hong Kong dollar deposits into yuan ones," he said, out of an expectation of yuan appreciation. "But there is no cash flow in Hong Kong where the yuan is concerned, which means liquidity is actually being sucked out of the SAR. Banks find it harder to lend out Hong Kong dollars, such as mortgage loans." Loan applications fell 35 percent last month after the bank started to offer HIBOR-based mortgage plans. Leung hopes other personal financial services can offset the drop in loan growth this year. "We will continue to focus on wealth management. Unsecured loans - personal loans and credit cards- will continue to run," he added, without revealing the kind of products to be introduced. "Hong Kong equity products are becoming popular, with many clients taking advantage of the recent volatility in the market," he said. The bank also plans to add 400 more frontline sales staff to its retail banking section this year. The department now employs 4,000. According to the Monetary Authority, new mortgage loans drawn down in February dropped 15.9 percent from January to HK$18.3 billion. Those approved rose by 8.2 percent to HK$30.3 billion.

Control of local broadcasting giant Television Broadcast (0511) has finally changed hands - ending Run Run Shaw's 44-year reign. Starting from today, chairman and founder Shaw and his partner Mona Fong Yat-wa will only hold 3.9 percent of the company, compared to the previous 32.49 percent stake. According to a filing to the Hong Kong Exchanges and Clearing (0388), Young Lion Acquisition Co Ltd - of which venture capitalist Charles Chan Kwok-keung, Taiwan entrepreneur Cher Wang Hsiueh Hong, and Providence Equity Partners are indirect shareholders - will altogether hold 26 percent, or 113.89 million shares. The stake is worth HK$5.26 billion, based on yesterday's closing share price of HK$45.70. That means the consortium is paying a 19 percent premium at HK$6.26 billion. Chan, Wang, and Jonathan Milton Nelson, chief executive and founder of Providence, will be the non-executive directors of TVB, effective today, and are entitled to a director's fee of HK$150,000 for the year ending December 31, 2011. Meanwhile, the Shaw Foundation Hong Kong Ltd has disposed of 2.59 percent of shares, worth HK$518 million, to various educational and charitable institutions; leaving it with 3.64 percent, or HK$728.92 million. Fong, deputy chairperson and managing director, will continue to hold a 0.26 percent stake, or HK$52.37 million. Shaw, Fong, and Norman Leung Nai- pang will remain on the board. The broadcaster said in a statement that the experience and wisdom of the new team will benefit the company. The investment plan to which the company has already committed will remain unchanged, and TVB will still be searching for new talent in Hong Kong. Shaw, 104, founded the multibillion dollar TV empire in 1967. Various investors have shown interest in the station, including Henderson Land Development (0012) chairman Lee Shau-kee. However, they were all turned down until Chan proposed a deal involving his consortium on January 26.

Property owners forced to sell by court orders and people transferring home ownership to siblings will be exempted from the additional stamp duty introduced by the government to curb property speculation. The government has agreed that the exemptions should be added to proposals being studied by a Legislative Council bills committee. Under the special stamp duty measure, announced on November 19, homes sold within two years of being purchased will incur a stamp duty of 5 to 15 per cent, in addition to the existing stamp duty, capped at 4.25 per cent. The initial announcement said transfers of property ownership between associated companies, spouses, and parents and children would be exempt. "It is in line with our anti-taxevasion policy. We agree that the transfer of property ownership among siblings can be exempted because the relations of siblings are easy to verify and there is a low chance of the system being abused through this exemption," Annette Lee Lai-yee, deputy secretary for transport and housing, told legislators at the bills committee meeting yesterday. Properties sold involuntarily by court order would also be exempted, she said. This would cover the minority owners of buildings who are forced to sell their flats by the Land Tribunal to facilitate redevelopment. But the government has refused to set up an appeals mechanism for the special stamp duty, which lawmakers have been demanding. "It is not feasible and will create loopholes for tax evasion," Lee said. People selling their properties due to bankruptcy and businesses doing so due to involuntary winding up were already exempted under the original legislative proposal.

Being born female set sometime actress Christine Liao on the road to a career in ballet, but it could all have been so different. Growing up in a traditional, male-dominated environment, the founder of the Christine Liao School of Ballet and the Hong Kong Ballet Company may never have had such an impact on the art form had she not seen other career paths blocked. And that's precisely why she is backing a new campaign called "Because I am a Girl", which will promote the rights of girls. Liao began dancing when she was eight and, at the age of 19, she became a film actress using the stage name Mao Mei, and starred in eight films from 1955 to 1962. After graduating from the University of Hong Kong with a degree in languages and literature, she turned her back on the silver screen and considered becoming a lawyer or working in an office. "I wanted to be a lawyer, but my father said it was a man's world," she said. She almost got a job working for a large company, but was rejected at the last moment. "I was told that the company did not hire women. The position required three years of training and they thought female employees would leave after that to get married." The gender divide was also apparent at home. Her husband came from a conservative family, so much so that Liao had to eat her meals away from men. "Men ate dinner together, and the male servants had their round. I ate with the other women." Such experiences prompted her to wonder what women could do better than men, and she chose ballet. In 1964, she returned from Britain, where she had studied the art form. At that time there were no professional ballet companies, and she founded the school in her own name. As her school expanded to more than 30 branches, it came to her that she could do more for women by becoming the ambassador for a global campaign to promote girls' rights. In endorsing the campaign by child rights advocate Plan International, she hopes to raise awareness of the harsh lives many women lead in developing countries. More than 100 million girls are involved in child labour, and a million are forced into the sex trade every year. "By virtue of education, I'll be able to show women can do as well [as men] given the opportunity," she said. Those who have seen the Oscar-winning movie Black Swan might have second thoughts about a career in ballet, but students going down the tortured road of Natalie Portman's character is the last thing Liao wants. The dancer values her students, and the loss of ballet school principal Chui Moon-fan, murdered in a suspected robbery at her school last year, was a terrible shock. "My immediate reaction was to take over," said Liao, who also promised support to the victim's son and daughter. "Although students felt they had lost someone they loved, they knew immediately I was there." Liao, an adviser to various arts groups in the city, said she wanted to the government to do more to nurture artistic talent as the West Kowloon Cultrual District takes shape.

 China*:  April 5 2011

'Beautician' for the Yangtze River - Zhu Wenfu and his wife Li Xianmei still rely on the Yangtze River for their livelihood - despite the fact the building of the Three Gorges Dam displaced them and forced them to stop fishing for a living. Today, they are working to keep the river clean, being part of the Wanzhou environmental sanitation team, set up in 2003 to ensure that floating garbage would not reach the dam's generators. "If the river is not clean, there will be difficulty in fishing," Zhu told Xinhua News Agency. "My wife and I joined the team for the sake of next generation." The couple is among 100 workers of the Wanzhou team, in Chongqing municipality, who work 12 hours a day on vessels rented and operated by the Three Gorges Corporation and the local government for the clean-up work. Originally, 200 people - including Zhu and Li - joined the team, but many quit after a couple of years. But not them. "I feel very honored to be able to make a contribution to the safety of the Three Gorges Project, and I'm also very delighted to work here, accompanied by my wife," Zhu said. But regulations say they have to work on different vessels, so it's only when their respective vessels pass each other are they able to see one another during working hours. Frequently, they even have to stay on board around the clock since their home is far away from where they work, so the only time they are together is after work and off the vessels. Although they are veterans at the work, their total earnings are less than 2,000 yuan ($305) a month, which just covers their daily expenses, leaving no surplus. But they don't seem to mind. "My biggest wish is that I'm able to work safely until retirement and could get my retirement pay at that time," Li, 47, said. And Zhu said he will stick to the job for the sake of his family - and the Yangtze River.

Local governments have been warned not to abuse the rural land-use reform by forcibly occupying farmers' land and demolishing their homes. China's State Council, or Cabinet, said protecting rural residents' rights and interests must always be the top priority of the reform. A circular published on the central government's website (www.gov.cn) said measures must be taken to correct anything done wrongly. The reform, which began in 2008, is intended to encourage rural dwellers to move from old homes into new residential buildings while the houses would be demolished and land is cultivated into farmland. The move is designed to add farmland while improving farmers' living conditions. China faces a challenge of balancing land use as the country has to preserve sufficient farmland for food production, while cities are expanding into rural areas. The reform, a pilot program in selected areas, allows local governments to use a portion of land, often the same amount as the newly added farmland, for urban construction. But the circular said some local governments abused the policy by putting excessive land for urban property development, which had resulted in problems such as the forced eviction of farmers.Local governments in more than 20 provinces have been found to have forced farmers to abandon their homes and to move into department buildings, the Ministry of Land and Resources said. In January 2010, dozens of villagers in Batou village of Jiangsu province were beaten up after they had rejected the forced demolitions of their homes by the local government and its order to move into department buildings, Beijing News reported. Such moves are banned and the farmers' decisions should be taken into consideration, the circular said. Local governments are likely to sell the right of land use to developers as a way to boost revenues and local GDP. The circular ordered that local government officials be held responsible for exchanging farmland for construction land without approval. In addition, the State Council said the aim of the reform should be to increase grain output and improve the livelihood of farmers. "Farmers' interests must be always put first and their wishes must be fully respected," said the circular. The land gained through moving farmers to new apartment buildings should first be reclaimed as farmland and then used for rural development. A portion of what is left can be used for urban construction with the approval of authorities. But benefits from any increase in the value of the land must be returned to the countryside, the circular said. From this month, the Ministry of Land and Resources will draft measures of punishments and corrections that will be imposed in cases of illegal land uses, Hu Cunzhi, the ministry's chief planner, said in February. Local land authorities, meanwhile, will begin to crack down on these acts during that period, Hu said.

High-speed rail cuts into airlines' success - Scheduled flights between Wuhan, Nanjing halted until September - The advantages of China's high-speed railways are becoming clear since they forced air authorities to suspend flight services between two major cities. All flights linking Wuhan, the capital of Hubei province in Central China, and Nanjing, the capital of Jiangsu province in East China, have been suspended since March 27, according to the General Administration of Civil Aviation of China. The suspension will stay in place until September, when the air authority will re-evaluate the use of air services. This is the first air route halted at Wuhan's airport as the city emerges as a hub of China's expanding high-speed railway network, which had a total length of 8,358 kilometers at the end of last year. Previously, two daily flights linked Nanjing and Wuhan, about 520 km from each other, and a full price one-way ticket cost 730 yuan ($111). The intercity bullet trains, which began service in 2009, running at up to 250 km per hour, offer second-class tickets for 180 yuan. The high-speed trains have an occupancy rate of about 90 percent, outperforming the flights, which had an occupancy rate of less than 50 percent on workdays. With additional bullet train services coming in the third quarter of this year, the rail system, which has drawn international attention, is expected to consolidate its advantage. "Our flights were seriously affected after the high-speed rail lines opened," Meng Qian, deputy director of the marketing department of Lucky Air, said on Friday. The Yunnan-based budget airline was making a scheduled round trip passenger flight daily between Wuhan and Nanjing. Meng said the flight, which had been in service for five years, had been suffering big losses since 2009. Even after Lucky Air offered up to 80 percent discounts on tickets, the flights were less than half full on non-holidays, according to a previous report. China Southern Airlines had the same experience with flights it offered. Peng Guohua, 53, a Wuhan resident who made regular business trips to Nanjing, said he preferred the trains because when the amount of time traveling to and from the airports was factored in, the airliners were not much faster than the three-hour trip on the bullet trains. This is not the first time in China that high-speed rail has forced airlines to halt intercity flights. In November 2009, flights between Chongqing and Chengdu were halted after bullet trains started running. Last year, a high-speed line linking Zhengzhou and Xi'an edged out airline competitors, stirring speculation that the growth of high-speed railways would hit airlines hard. Ji Jialun, a professor of transportation at Beijing Jiaotong University, said on Friday that bullet trains currently have the advantage, with cheaper fairs, travel safety and increasingly higher speeds. "Railways will play a bigger role after more high-speed lines are added to form a network," he said. But he also said the aviation industry can find a market niche by offering long-distance trips or regional air service for more affluent passengers. "Passengers will ultimately benefit from the competition offering more options," he said. According to the Ministry of Railways, China will have a total of 12,000km of high-speed rail by 2012, the largest such network in the world.

French firms like Louis Vuitton see China as land of opportunity - An outlet of the French luxury brand Louis Vuitton in Fuzhou, Fujian province. Global revenue generated by French companies in China hit 35 billion euros ($49.75 billion) last year, tripling that from France's direct exports to China. Seeing the strong potential of China's economy, French companies want to deepen their presence in the Chinese market to benefit from the fast growth of the world's second-largest economy, driven by the country's new five-year plan. "The challenge for French firms investing in China is currently how to address the Chinese market rather than to export from China," Annick de Kermadec-Bentzmann, president of the French Chamber of Commerce (CCIFC), told China Daily. De Kermadec-Bentzmann said China's attraction for French companies is based on the upward trend of the economy, which will bring vast business opportunities and generate revenue for French investors. "French companies plan to adjust their global industrial and commercial strategies for the Chinese market and strengthen their research and development capabilities to be in line with China's new economic strategy in the 12th Five-Year Plan period (2011-2015)" she said. China intends to create a balanced economy with measures including upgrading its industry, developing its western region and developing green energy during the coming five years. "For French companies, China is not a global production factory anymore, but a top investment destination with large potential in terms of high-technology business and domestic consumption," said De Kermadec-Bentzmann. Global revenues generated by French companies in China hit 35 billion euros ($49.75 billion) last year, tripling that from France's direct exports to China. According to the CCIFC, French exports to China reached 11 billion euros in 2010, rising 39.4 percent from a year earlier. De Kermadec-Bentzmann said French companies are eager to engage in China's economic transition, the engine of the country's development over the next few years. "Furthermore, presence in the Chinese market provides a very important indirect opportunity by inducing partnerships with Chinese companies to tackle foreign markets such as Africa and Europe," she added. According to the CCIFC, 1,000 French companies in the chamber have more than 2,300 branches in China, employing 500,000 workers. "Sectors including space, automotive, aviation, railway, nuclear, environment, agriculture and food processing that were stated in the joint France-China statement last November in Paris constitute wide opportunities for French firms that want to invest in China," she said. China and France signed billions of euros worth of business deals in the aviation, telecom and nuclear industries during President Hu Jintao's visit to France last November. "French companies are also accelerating their steps to enter China's second-tier cities, including Qingdao, Changsha, Kunming and Xi'an, buoyed by the country's plan to stimulate consumer markets in second- and third-tier cities," De Kermadec-Bentzmann said. The French luxury brand Louis Vuitton announced it will further expand business in China's second-tier cities this year, after opening its first store in Zhengzhou, Henan province, in January.

Waterfowls are seen rest and fly in the Sand Lake Bird Island in northwest China's Ningxia Hui Autonomous Region, April 2, 2011. Covering an area of 4,247 hectares, the Island is a paradise for birds and it attracts more than 1 million migrant birds every spring.

Murders at the Qing court - A gay British nobleman's memoirs, to be published this week more than a century after the Empress Dowager died, claims to reveal the true manner of her death - It was the morning of November 15, 1908 in a reception room of the Imperial Palace in Beijing. The Empress Dowager was meeting two senior officials, one of them a senior military officer, Yuan Shikai. The two asked her to abdicate and appoint them as regents to the young emperor. Incandescent with rage, she ordered the two to be dismissed, tried and executed for treason. Yuan took out a six-chambered revolver and shot her three times in the stomach. As she bled profusely, she called for the two men to be beheaded and breathed her last. The eunuchs around her screamed their grief. This remarkable account of the death of the most powerful person in the empire comes from a book, Decadence Mandchoue - the China memoirs of Sir Edmund Trelawny Backhouse, to be published in Hong Kong on Wednesday. Born into a noble family in England in 1873, Backhouse moved to Beijing in 1898 and spent most of the rest of his life there, until his death in 1944. He wrote the memoir in the first half of 1943, at the suggestion of a Swiss doctor, Reinhard Hoeppli; the doctor had it typed out and gave one copy each to four libraries - the Bodleian in Oxford, the British Museum, Harvard College and the Bibliotheque Nationale in Paris. Backhouse asked that it be published after the death of Hoeppli, which was in 1973. The memoirs have never been published. They were shown to an eminent Oxford University historian, Hugh Trevor-Roper, who chose not to publish them but instead to write Backhouse's biography, in 1976. He described Backhouse's life story and virtually all of his scholarship as a fraud. In 1983, however, Trevor-Roper's sense of judgment was put into question when he authenticated diaries by Adolf Hitler, later found to be forgeries. Trevor-Roper's judgment discredited Backhouse in the eyes of scholars but Earnshaw Books and New Century Press have chosen to publish them, in English and Chinese respectively, believing that, even if they are not completely accurate, they contain valuable and unique historical material. Bao Pu, publisher of New Century Press, said: "It is time for a wider audience to make their own decision about the value of this material. "Backhouse had an extraordinary talent for languages and the best Chinese I have ever seen of anyone learning it as a foreign tongue," he said. "He had a mastery of the Beijing dialect which people from Shanghai and Guangzhou would not even be able to appreciate fully. He gives us texture and details of a life in Beijing and the imperial court at the end of the Qing dynasty that is forever lost. "There will be enormous interest among Chinese in this book. No Chinese would have written it in the way that Backhouse did. Only a foreigner in his situation would make note of the details of everyday life that the Chinese themselves would have taken for granted," he said. In the appendix, Hoeppli says that the memoirs were "fundamentally based on facts", even though age and confused memory may have led to some mistakes. "Sir Edmund firmly believed he was stating the truth." It is undisputed that, due to his linguistic skills, education and connections to Beijing's diplomatic and journalist community, Backhouse had an access to the Qing court during its final 12 years that was unique among foreigners. Publishers on the mainland were eager to publish the book but would have had to remove a substantial amount of the content because of its explicitly sexual nature. Earnshaw Books wanted it to be published in its entirety. "His accounts of the death of Emperor Guang Xu and the Empress Dowager the next day is the only unique alternative we have to the official version that offers such a detailed scenario," Bao said. Guang Xu died on November 14, 1908, one day before the Dowager Empress, at the age of 37, 10 years after she had removed him from power because she opposed his attempts at reform. Official court documents and doctors' records at the time said that he died from natural causes after having been in poor health. In 2008, the government conducted an investigation on the 100th anniversary of his death. It conducted an autopsy on his corpse and found lethal levels of arsenic. In Backhouse's account, the Dowager Empress sent a eunuch and a court attendant armed with revolvers, with a servant carrying stuffed pillows and cushions, with orders to kill him. They arrived at his room at 11pm and paid the sentries on duty 50 taels of silver each. The two ordered the emperor to kneel to receive a decree from the Dowager Empress. His eunuch moved to shield him and was shot dead. The two then said that they had orders to take his life. They pushed him down on the bed, partially strangled him with a rope and then suffocated him slowly with pillows. When she heard, the Empress Dowager was delighted at the news. "She was beaming with satisfaction and in the highest spirits." In Backhouse's version, palace eunuchs had bought arsenic from a Beijing drug store and put small doses in the sponge cakes which the emperor liked to eat. But the British legation asked to send a physician to examine him, a request which the dowager could not refuse; so she ordered his death by a quicker method. As for the dowager, the official version is that she died of diarrhoea, aged 73. "But she was in very good health," Bao said. Backhouse describes the woman who ruled China for nearly 50 years as a person who ordered the murder of people without a second thought in pursuit of power, a character similar to that of Lady Macbeth, with contempt for human life. Her victims included political rivals, those whose policies she opposed and enemies within the palace, including the favourite concubine of her son and Emperor Tongzhi. In 1900, she had two eunuchs throw the woman down a well in the palace, after she had insulted her. "At first sight, the Old Buddha (one of her names) gave the impression of a dear, good-natured, elderly lady ... now and then her expression changed as she alluded to some person or some incident which had caused umbrage, those eyes which could fascinate and terrify ... it was the basilisk glance before which China's greatest men had quailed, even her nearest and dearest Junglu himself." Junglu was the grand secretary, the second most powerful person in the empire. She ate light, slept badly, had an opium pipe night cap and liked her attendants to stay in her bedroom until she fell asleep. "Whatever her incomparable charm, she could not have succeeded without unrivalled statecraft and the consummate flair which enabled her to catch the passing breeze and turn it to her purposes," Backhouse said. He said that the dowager had many lovers, of whom he was one. "In certain respects, the Old Buddha was a disciple of Sade, although in others she was tender-hearted and pitiful." Chinese historians have described the dowager as sexually active; she may have taken foreign lovers for their novelty value. But many do not believe that a Chinese empress in her 60s would have taken as her lover a European in his 30s, and one who was openly homosexual. The memoirs open with Backhouse's arrival in a male brothel, the Hall of Chaste Joys, in Beijing on an April afternoon in 1899. The street had many such brothels. The manager of the brothels presents two "beautiful boys. Peony and Chrystanthemum, about 18 or 19, well dressed and perfumed." They showed the foreign visitor all their attributes. Backhouse was to spend much of his time in these male brothels. He found a culture far more accepting of homosexuality, across all classes of society, than the one he had left behind in England. In May 1895, author Oscar Wilde, the most famous homosexual in the country, had been sentenced to two years hard labour for "gross indecency". The population of Beijing in the late Qing era was nearly 70 per cent male, many of them men who had passed the imperial civil service exam and came in search of work but could not afford to bring their families. Unlike in the west, there was no religious disapproval of homosexuality. As a student at Oxford in the early 1890s, Backhouse had been an active homosexual and avid fan of the theatre. He was able to repeat these passions in Beijing, often with members of the Manchu aristocracy. He said the Emperor Tongzhi died from syphilis contracted during a visit to a male brothel. According to the official record, he died in January 1875, at the age of 18, of smallpox. Backhouse's version corresponds with what many Beijing people say; the mention of a sexually transmitted disease as cause of death was taboo at that time. Bao said that readers had to get over the psychological barrier of graphic descriptions of sex before they could appreciate the book's historical value.

Hong Kong*:  April 4 2011

Bank of China (BOC) Hong Kong Ltd has cut its interest rate for yuan deposits in Hong Kong. That's after money held in accounts rose to a record in February, reflecting increased demand for trade and investment in the currency. The lender, the city's sole clearing bank for yuan banking services, cut the annual rate to 0.629 percent from 0.865 percent, spokeswoman Angel Yip said on Thursday. Deposits climbed 10 percent in February from the previous month, or more than fivefold from a year earlier, to a record 407.7 billion yuan ($62.3 billion), the Hong Kong Monetary Authority reported. "People have been converting Hong Kong dollars into yuan because of expectations that China's currency will appreciate, and we're slowly having growth of yuan investment products," said Gavin Parry, managing director of Parry International Trading Ltd in Hong Kong. "If the deposits continue to increase at a faster pace than existing investment opportunities, rates may fall further as banks can't find many uses for deposits." China is seeking to promote the use of the yuan to make it more internationalized. The People's Bank of China said last week that it will broaden cross-border use of the currency and facilitate the repatriation of overseas yuan funds. "The move is to boost yuan liquidity in Hong Kong so that enough capital is available to be invested in yuan-denominated financial products in the near future," Lu Ting, an economist at Bank of America Merrill Lynch wrote on Friday. The yuan has risen 4.2 percent in the past year and touched 6.5478 per dollar on Thursday, the strongest level since 1993. Non-deliverable forward contracts show expectations that it will climb 2 percent in the coming year. The central bank earlier this month expanded the trial use of yuan for international trade settlement to the entire country from 20 provinces. The settlement amount reached 506.3 billion yuan last year, according to the central bank's data. The program started in July 2009. China also approved 29.2 billion yuan of quotas for five foreign institutions to invest in its interbank bond market as of December. The lower rates were unlikely to change the trend of rising deposits given the expectations of yuan appreciation and the dominance of the city's exports to the Chinese mainland in local-currency settlement, according to a report from Citigroup Inc's Hong Kong-based economists on Friday. Hong Kong's trade settlement denominated in yuan rose "significantly" to a monthly average of 95 billion yuan in the first two months of 2011, Peter Pang, deputy chief executive at the Hong Kong Monetary Authority, said in a transcript published on the regulator's website on March 25. That compared with a monthly average of 57 billion yuan in the second half of 2010, he said. People will need more better-yielding products to keep the currency as deposits, said Frances Cheung, a senior strategist at Credit Agricole CIB in Hong Kong. Li Ka-shing, Hong Kong's richest man, is planning to sell shares in a Chinese real-estate investment trust in Hong Kong's first yuan-denominated initial public offering, according to a sales document obtained by Bloomberg last week.

Preview of paintings at Christie's evening sale in Hong Kong - A staff member looks at Pablo Picasso's Les femmes d'Alger (Version L) with an estimate value of 20 million to 30 million US dollars during a preview before an auction in Hong Kong, south China, April 2, 2011. Christie's New York will hold the Impressionist and Modern Art Evening Sale on May 4, 2011 and the Post-War and Contemporary Art Evening Sale on May 11, 2011 in New York. Seventeen paintings are displayed in a preview from April 2 to 4 in Hong Kong.

Photo taken on April 1, 2011 shows the building in the King Yin Lane, which was declared a historical monument in 2008, in Hong Kong, south China. The King Yin Lane, after more than two years' restoration, will be open to public at weekends and holidays between April 2 and April 25. 

Hong Kong "Song of Hope" Raised HK$100 million (US$12.9 million) for Japan Earthquake Victims - Singer-actor Andy Lau Tak-wah is backed by a huge choir as he performs at the Artistes 311 Love Beyond Borders concert in aid of Japan in Victoria Park last night. Donations to earthquake victims in Japan continue to pour in, taking the total raised in Hong Kong to more than HK$100 million. That does not include the money raised last night at the star-studded show in Victoria Park - Artistes 311 Love Beyond Borders. The three-hour event featured 173 local and overseas artists, including some from Japan, such as veteran singer-actor Masatoyo Nakamura. Some of them performed while others manned the 150 lines of the donation hotline to take telephone pledges from viewers watching the show live on the city's free-to-air and pay TV stations and people listening on radio. Within half an hour, HK$6.8 million was raised, but with the hotline running until 11.30pm, organisers were hoping to pass the HK$20 million target, with all proceeds going to the Salvation Army. A minute's silence was observed for victims of the quake before the show started shortly after 7pm in front of an audience of 8,000. Movie superstar Jackie Chan was among the Hong Kong celebrities. He said: "At the core is the belief that we care for one another, especially in difficult times. Love knows no borders." As well as providing financial help, the event was also to offer hope and support to the Japanese people and send a message of courage in the face of hardship. There was a front-row seat for Japan Consul-General Yuji Kumamaru and his wife, who couldn't contain their tears at the outpouring of sympathy for their country's plight. Up until last night, World Vision Hong Kong has raised HK$32 million, the Salvation Army HK$15 million, the Red Cross HK$70 million and Unicef HK$1.5 million. Kumamaru earlier thanked everyone for their donations, saying all the money would be used to help the victims of the quake. "We are grateful and we appreciate all incoming donations and the organisations that are actively engaging in donation efforts," he said. While financial assistance was welcome, Kumamaru said: "We are not encouraging people to provide goods, not at this particular stage." He said the country was still suffering from serious logistical problems due to its severely damaged transport network. "How to deliver the goods to the people in need is a big operational difficulty," he said. He added that there would be problems of co-ordination for local governments if a huge amount of goods arrived from overseas.

Quake may help to heal rifts in ties, says envoy - People take part in a concert at Victoria Park last night to raise funds for victims of the earthquake and tsunami in Japan. Consul general Yuji Kumamaru has been overwhelmed by the sympathy shown by Hongkongers. Consul general Yuji Kumamaru has been overwhelmed by the sympathy shown by Hongkongers. An earthquake, tsunami and nuclear radiation leak may have left Japan devastated but its gravest crisis since the second world war offers an opportunity to mend Japan-China relations, the country's representative in Hong Kong says. Consul general Yuji Kumamaru said he had been overwhelmed by the extent of sympathy and support shown by China, including Hong Kong, after the disaster. "When the immediate dealing is done, something struck me through this experience in that we are indeed very much connected; Japan and the outside world, Hong Kong and China," he said. His comments came yesterday as Tokyo released its annual diplomatic report, the Blue Book, which said relations were tense after the arrest of a Chinese fishing boat captain at the disputed Diaoyu Islands last year, but they were improving. China has supplied assistance including fresh water, fuel, food, first-aid supplies and other relief materials. Hong Kong has raised more than HK$100 million in donations and is sending counsellors offering psychological help for victims. Kumamaru, who was a minister and counsellor at the Japanese embassy in Beijing and consul general in Shanghai before coming to Hong Kong last year, said he hoped there would be a rainbow after the rain. "This is a difficult time for Japan and hopefully it is working in a positive way to bring both countries together," he said. "We feel very appreciative of the Chinese government and Chinese people which gives us a sense that we are part of Southeast Asia; that we are together. I hope that this sense of solidarity prevails both in China and Japan," he said. At odds over territorial and security issues, tension between China and Japan has prevailed for decades. Last September, the row over the arrest of the trawler skipper after a collision between his boat and Japanese coastguard vessels sparked protests in both countries and in Hong Kong. But Kumamaru said relations were not only on a government-to-government level. "It is a lot more complicated because of sentiment, history and closeness. How people feel about each other is a very important factor in managing the Japan-China relationship," he said. Kumamaru said the two nations should help each other to better prepare for regional disasters. In Hong Kong, the donations, the many origami cranes and banners with messages of support have moved Kumamaru. He said even without any publicity, more than 800 people went to the consulate to sign a book of condolence. Since the quake, Kumamaru has received a lot of encouragement from the Hong Kong government and people in the city. "Many times, as I get out of a taxi the driver will turn to me and say, `Good luck , I am sure that Japan will overcome over the problem'," he said. "I am deeply impressed."

Designs for Central Market unveiled - Four teams put forward their ideas, but Hongkongers will still have their say in final plan - Four very different designs - ranging from the minimalist to the radical - were unveiled yesterday for the 72-year-old Central Market building. But Hongkongers will be asked to "interpret and develop" the final design with the Urban Renewal Authority, instead of just picking one from the four. David Lung Ping-yee, chairman of an advisory committee for the Central Market revitalisation project, said: "The four schemes visualise the views expressed by the community in past forums and questionnaires. "This is a prime site and we hope residents will help us work towards a final plan." A public forum will be held a week tomorrow at Caritas Community Hall on Caine Road, at which the four architectural teams will explain their plans for the market. An exhibition will run this month and 4,000 questionnaires will be collected, asking people whether they would prefer the building to retain most of its original features or be more broadly redesigned. The four teams suggested similar uses of the building, based on feedback from a previous survey. These include open space, shops, art galleries, leisure facilities and cheap food outlets. But they took different approaches towards conservation of the structure. Two recommended alterations and the others were less invasive. Barrie Ho Chow-lai said his team's "Urban Cocoon" would see the demolition of about 60 per cent of the internal structures. It would keep the shell, the two grand staircases and several market stalls. He said the building's heritage should not be "mummified", adding: "We boldly suggest removing some internal parts to widen the atrium for more natural light and adding three storeys for different use." Vincent Ng Wing-shun, of AGC Design, which designed the Avenue of Stars in Tsim Sha Tsui, said his team's "Urban Floating Oasis" would feature a swimming pool. "I remember an old lady at the forum said she hoped there would be a pool for young people. `Why not?' I thought, and people have said they want recreation facilities anyway," Ng said. The pool and a gym would be housed in a new storey, supported by structural light tubes that would help improve air ventilation. But more respect to the building's original Bauhaus design is emphasised by Kyran Sze, executive director of Aedas, which designed the terminus of the cross-border high-speed railway at West Kowloon. Sze's "Central Gateway" proposes to keep key elements of the Bauhaus, including a large proportion of the market stalls and the general floor layout. "The market is a starting point of the Mid-Levels escalators. "We suggest improving the site connectivity by creating new entrances and an internal corridor to better link Des Voeux Road and Queen's Road Central," he said. Britain-based TFP Farrells also advocated a more conservative approach. "The market is a welldesigned building as it stands," said Gavin Erasmus, the firm's director. "The original layout is very flexible, providing first-class space. It doesn't need any addition." The firm's design features a reinstated market on the second floor, an open-air courtyard garden and a mosaic of coloured glazing. But Woo Pui-leng, an architecture professor at Chinese University who has studied the Bauhaus, said she did not agree with the idea of the authority relying on the public to make a decision on how far the new design should go. "The market was saved several years ago because people wanted to conserve it. The authority should take the responsibility to make the decision," Woo said. Paul Zimmerman, chief executive of advocacy group Designing Hong Kong, which will organise its own forum on April 16, said more discussions may be needed if a more dramatic design for the market building was favoured. The four design teams have each been paid more than HK$1 million in consultancy fees. The Urban Renewal Authority will launch a tender in a few months to appoint an architect to work on the final plan, which is scheduled to be put before the Town Planning Board early next year.

'Fruit money' rules force the old and destitute back to city - Bureaucracy blamed for return of retirees from Guangdong - Shiu Kin-po, head of the Dongguan branch of the Federation of Trade Unions, helps 75-year-old Leung Pak-yau (right) return to Hong Kong. After bidding a tearful farewell to his brother, 75-year-old Leung Pak-yao finally left the village in Zhongshan where he had lived for nearly two decades and returned to Hong Kong. But it was a painful homecoming: Leung has no family or friends left in Hong Kong and his 71-year old brother is the only person he can rely on. He returned so that he could get the HK$1,000 old age allowance or "fruit money" paid to Hong Kong permanent residents provided they spend at least 60 days a year in the city. His life's savings eaten up by rampant mainland inflation, he relied on his brother's 300 yuan (HK$356) monthly payout from the mainland welfare system. He saw the fruit money as a matter of survival for both of them. Leung was excluded from the mainland welfare system because he was a Hong Kong resident and unable to get Hong Kong benefits because of what the union group who helped him described as the "pointless" residence policy. He was one of 40 elderly Hong Kong people helped by the Federation of Trade Unions to return from Guangdong in the first three months of this year. Last year there were 142. "Just in Dongguan city, we had eight such cases in 2008 and 10 in 2009. But last year the number jumped to 50," said Siu Kin-po, head of the federation's Dongguan branch. "Leung is the third case [we have handled] in March. And we have several other similar cases waiting for our help. Some have been thrown out by their mainland relatives because they ran out of money," he said. Leung, a Hong Kong permanent resident who worked in the city for decades, retired in 1993 and expected his savings to support him for the rest of his life. He was wrong. Siu said most of the elderly people helped by the FTU would not come back to Hong Kong if they had a choice, as they knew that life in the city was going to be extremely lonely and isolated. Last year, a disabled elderly woman tried to commit suicide with her crutch near the border checkpoint as social workers tried to help her return to Hong Kong. The FTU estimates that 50,000 to 60,000 elderly Hong Kong people live on the mainland without any government assistance and more and more are returning to live in government-assisted nursing centres. Siu said the resources Hong Kong spent on these returnees would have allowed them to enjoy a comfortable retirement with friends on the mainland, if it wasn't for government bureaucracy and lack of long-term planning. "It is pointless for the government to require these people to stay at least 60 days in Hong Kong to get these allowances. [This requirement] is a nuisance to everyone and only leads to a waste of public resources," Siu said. He said simply removing the 60-day rule would allow thousands of retired people to meet their basic living costs on the mainland. "It is also a good choice for the government. Otherwise it will spend much more on these people if they all come back. What is holding up the government? I don't understand. The only explanation is that those top officials have no understanding of real life outside their office," Last year, the Hong Kong government relaxed the restrictions on applicants for the old age allowance by reducing the minimum length of stay in Hong Kong from 90 to 60 days a year, but refused to totally lift the requirement. Lawmaker Peter Cheung Kwok-che, who represents the social welfare sector, said it had not made much of a difference. "The government is worried about possible abuse of the system if the requirement for a minimum length of stay is completely scrapped. It doesn't want to transfer money into bank accounts of elders who have already passed away," Cheung said. Cheung said he expected more elderly Hong Kong people to move back to the city if they did not receive welfare, since they could not afford the rapidly rising living costs on the mainland. "This will then generate other problems. For example, they may already have given up public housing in Hong Kong and have to reapply for a flat."

The New Territories power brokers of the Heung Yee Kuk have a new headquarters - a HK$200 million, three-storey, 40,000-square-foot complex complete with a grand theatre and ambitions of becoming a wedding venue. And even pan-democrats are free to use it, provided they pay, says the politically conservative kuk, led by Executive Council member Lau Wong-fat. Chief Secretary Henry Tang Ying-yen and former Legislative Council president Rita Fan Hsu Lai-tai looked on as the facility in Shek Mun, Sha Tin, was inaugurated yesterday, replacing one in Kowloon the kuk has used for more than three decades. Its theatre, designed for Cantonese opera, can hold 1,300. Lau said it would be available to any organisation wishing to stage performances, conferences or receptions. Applications would be accepted from all groups. Another auditorium will host smaller-scale performances. A library will be installed for public use and an exhibition hall will showcase relics to demonstrate tradition village life in rural parts of the New Territories. For lovers who fancy a traditional wedding, the kuk is seeking a business partner to provide such a service at the new building. "The design of the building was based on the theme `preserve traditions, herald the future'... Its completion marks a new stage of the kuk's work," Lau said. With a patio in the centre to allow sunshine in and a rooftop in ancient Chinese style, the building incorporates both traditional Chinese architectural features and more modern facilities, kuk vice-chairman Cheung Hok-ming said. The construction and renovation together cost HK$200 million - double the original estimate set four years ago. The kuk pays a token rent of HK$1,000 per year to the government for the land lease. Lau said the new building would be put into service in late May, while the kuk's old site in Cumberland Road, Kowloon Tong, which it acquired in 1975, might be sold, redeveloped or let out. The market value of the Kowloon premises has been estimated at HK$200 million. Kuk members have been discussing the possibility of selling it to cover the cost of the new building. The kuk will hold internal elections in June. Lau is expected to stay as chairman, despite being embroiled in a scandal in September over reports he failed to declare a number of property transactions to the Executive Council. He was cleared of any wrongdoing.

More than 250 top-ranking professionals from Japan have been given Hong Kong work visas in just two weeks under an unprecedented fast-track approval system put in place following last month's devastating earthquake and tsunami. As well as the 270 approvals, the Immigration Department received a further 300-plus inquiries from professionals in Japan worried about radiation from the crippled Fukushima nuclear fuel plant and further earthquakes. "Many applicants were very glad that we could grant the visa within two days," said newly appointed director of immigration Eric Chan Kwok-ki as he disclosed the figures. They are the first official confirmation of a trend which has been apparent as Japan struggles to cope with the aftermath of the twin disasters which have left 11,800 people confirmed dead and 15,500 missing and with the crisis at the Fukushima plant 250 kilometres northeast of Tokyo. Nuclear power shutdowns triggered rolling power blackouts across much of the country. Chan said fast-track approval was necessary because professionals leaving Tokyo were eyeing other jurisdictions as potential alternatives. He said most of those given visas were senior managers of multinational companies in Japan, mainly in the financial sector. Their titles include chief executive officer, vice-president, senior investment manager, analyst and strategist. "We have received inquiries from multinational companies and human resources companies applying for visas for their staff working in Japan, who would like to leave Japan after the quake," Chan said. "Those applicants can bring economic benefit to Hong Kong. We hope that they consider long-term settlement in Hong Kong." The 270 applications were received and approved between March 17 and Thursday. An assistant director of immigration was appointed to speed up the process so that applicants could have a visa within two days. Chan said it was the "first time in immigration history" such procedures had been put in place. It usually took six to eight weeks to process an application. "Those applicants might decide to go to other countries if we did not provide a speedy approach," he said. The applicants included Europeans, Americans and Japanese working in Japan. A large number of them were earning between HK$100,000 and over HK$200,000 a month, according to the Immigration Department. One Tokyo executive who arrived in Hong Kong told the Post that executives in Japan were fleeing to Hong Kong, Taiwan, and even far away as Australia and the United States after the quake. The man said worries about radiation were not the only reason people were leaving Tokyo. Their business had been affected as offices were badly damaged. "Time is money in my business," he said. Among the 270 applicants granted a one-year visa, 158 were granted on an employment or investment basis, 62 were for their dependants, one for studying, and 49 applied to extend their visas as they were in Hong Kong right after the earthquake happened. Last year, 26,881 working visas were granted for employment or investment in the city and 20,385 dependant visas in the same period.

Macau gambling revenues surge 48% in 'quiet' month of March - In the first three months of the year, Macau's casinos have recorded 58.52 billion patacas in revenue. One analyst forecast full-year revenue would increase 25 to 30 per cent. Macau casino revenue broke through 20 billion patacas for the first time last month as gambling volumes in the city continue to gather momentum. The new mark represented a record for the second consecutive month, soaring 48 per cent from a year ago to 20.09 billion patacas and surpassing February's 19.86 billion patacas, data released yesterday by the Macao Gaming Inspection and Co-ordination Bureau show. In the first three months of the year, Macau's casinos have recorded 58.52 billion patacas in revenue, a 43 per cent increase from the same period a year ago. That puts Macau on track to add revenue equivalent to one Las Vegas Strip this year. "Clearly no negative impact was felt as a result of the events in Japan during the month," Union Gaming Group analyst Bill Lerner wrote yesterday in a research note. Lerner forecast Macau's full-year casino revenue would grow 25-30 per cent this year to as much as 245 billion patacas, or slightly more than US$30 billion. That would be on par with 2009 gaming revenues from all commercial casinos in the United States, according to American Gaming Association figures. Last year, the Las Vegas Strip booked US$5.78 billion in casino revenue while the state of Nevada recorded US$10.4 billion, according to data from the Nevada Gaming Control Board. Macau's March windfall is all the more remarkable given that it came during a seasonally soft month. Casinos typically take a breather in March and April between the twin "golden week" holidays of Lunar New Year (which occurred in February this year) and May Day. The growth continues to be driven by surging high-stakes gambling volumes as high rollers from the mainland with abundant credit test their luck on the baccarat tables. In the first two months of the year, casino revenue rose 40 per cent to 38.43 billion patacas. However, visitor arrivals to Macau grew by only 3.3 per cent to 4.24 million people, while arrivals of mainland visitors increased only 6.5 per cent to 2.42 million. Macau's casino revenues have continued to boom despite efforts by the local government to rein-in development of the sector, including restrictions on the number of gaming tables that can operate in the city and limiting the number of foreign construction and other workers that gaming firms can import. The growth has boosted shares in most Macau casino operators to double-digit gains in the year to date. Success is already priced into the shares in most cases. The sector trades at 16 to 62 times this year's forecast earnings, compared with 12.8 times for the Hang Seng Index. Only one new casino is set to open in Macau this year, the HK$15.5 billion, 2,260-room Galaxy Macau on the Cotai strip. The property is set to open on May 15 with 450 gaming tables and 7,600 staff. It features a 1,500-room Galaxy-branded hotel (700 rooms will be ready on opening day), a 260-room Banyan Tree hotel, and a 500-room Hotel Okura.

 China*:  April 4 2011

Chinese President Hu Jintao and a girl water a tree during a tree planting event in Beijing April 2, 2011. Chinese President Hu Jintao and other senior Chinese officials joined Beijing residents in a tree planting event on Saturday to mark the 30th anniversary of the country's volunteer tree planting campaign. Top legislator Wu Bangguo, Premier Wen Jiabao, and other state and Party leaders Jia Qinglin, Li Changchun, Xi Jinping, Li Keqiang, He Guoqiang and Zhou Yongkang also took part in the event on the west bank of Beijing's Yongding River. Hu called on the public to continue to plant more trees and take up afforestation activities. Hu also urged relevant departments to improve their efforts to build a "conservation culture" in China and to achieve sustainable economic and social development by relying on public aid, technological breakthroughs and government reforms. Altogether 1.9 million people in Beijing took part in Saturday's tree planting campaign from different sites across the city. According to a 1981 decision by the National People's Congress, China's top legislative body, Chinese citizens from ages 11 to 55 should plant three to five trees every year as a way to increase China's overall forest coverage. Chinese volunteers have planted about 58.9 billion trees across the country over the past three decades, statistics from the State Forestry Administration show.

Fonterra to expand in China with more NZ-raised cows - Dairy firm plans second farm near Beijing to tap market - More dairy cows raised on the green pastures of New Zealand will be imported to the mainland as Beijing ramps up efforts to raise the standard of its much-maligned dairy industry. Fonterra Co-operative Group, which sells dairy products under the Anchor and Anlene brands, is planning to expand in China by importing more cows to a new farm close to the Beijing area with a fully automatic production line to make liquid milk products in the country. Fonterra is co-operatively owned by New Zealand dairy farmers and represents about 90 per cent of all farmers in the country. "We have exported 3,000 cows to China since 2007 to make milk products locally and are planing to import more cows this year," Philip Turner, the managing director of Fonterra China, said. On a farm in Hangu, those 3,000 cows have grown to 7,000 - and produce 25 million litres of milk a year. Fonterra plans to open a second farm near Beijing this year, bringing in more New Zealand-bred cows - although the total number has not been decided. "It would be better to send the cows there to produce the milk product rather than import the milk," Turner said. Fonterra saw "huge" demand for high-quality fresh milk products on the mainland and sizeable business opportunities in the industry, he said. "China is going to be the largest dairy market worldwide. It is even bigger than India and Europe," Turner said. Seventy per cent of mainland citizens do not buy brands of milk powder made in the country, according to recent surveys. That is the result of a tainted milk scandal in 2008, in which melamine was illegally added to milk to give it an artificially high protein content, costing the lives of six children and making 300,000 ill. Many mainland parents now travel to Hong Kong to buy foreign-branded formula products. After the scandal, Beijing lifted safety standards on food and milk production and the public sought better quality milk products. This situation provided big opportunities for long-established international brands such as Fonterra, Turner said. "We are keen on keeping the high quality of our products and we have full control over the whole process to make sure the products have the highest quality," he said. To finance its China expansion, Fonterra would consider issuing yuan bonds in Hong Kong, Jonathan Mason, the company's chief financial officer, said last week. But he said the company was considering other financing options. "It is natural for a company like us to issue a yuan bond to finance our investment in China as we can have the local currency to match our investment there. If we raise funds in US dollars or other currencies but need to invest in yuan, there will be uncertainty on the exchange rate swings," Mason said. Sixteen yuan bonds have been issued in Hong Kong since regulations were relaxed to allow such issues, and they collectively raised 36 billion yuan (HK$42.78 billion) last year. This came after the Hong Kong Monetary Authority said in February last year that all companies could issue yuan bonds in Hong Kong. Before that, only mainland banks or Hong Kong lenders could do so. Investors like to invest in these bonds as they offer an interest rate that is better than bank deposits, while they can also expect to profit from valuation gains of the yuan, which is expected to rise 3 to 6 per cent against the US dollar this year after a 20 per cent increase since 2004. But Fonterra, like other potential yuan bond issuers, must seek approval from mainland authorities - such as the State Administration of Foreign Exchange (SAFE) - to remit any funds back to China. The mainland still has capital controls in place, which means all fund transfers in and out of the country need approval. SAFE grants such approvals on a case-by-case basis. Mason said Fonterra and its banker were now working on the approval process and other technical issues for a bond offering and he was not concerned about securing approval. "I am optimistic as I believe China is on the way to liberalising its currency," he said. Fonterra sells dairy products to multinational companies and receives most of its payments in US dollars. But it also sells products to mainland supermarkets and retailers which can pay in yuan.

45% of China dairies ordered to shutdown - Authorities have tried to clean up scandal-hit dairies. Nearly half of the dairies on the mainland have to shut down amid a nationwide review to clean up the scandal-ridden industry, according to the mainland's top quality supervisor. Of 1,176 dairy producers, only 643 dairy producing companies, or about 55 per cent of the country's total, were granted licences to continue production by the General Administration of Quality Supervision, Inspection and Quarantine. Of the 533 which failed to obtain a licence, 107 were ordered to shut down and improve their facilities pending further inspection and 426 had their licences revoked. Of 145 baby formula producers, only 114 were given licences. The campaign, launched by the State Council in September, aimed to repair the damaged image of the dairy industry after melamine-tainted baby formula killed at least six infants and sickened 300,000 children in 2008. According to a circular in September, the authorities were to review the size and capital of dairies, as well as farms from which the dairies got their milk, to decide whether the dairies were qualified to have a licence. The review also aimed to clamp down on the common practice of subcontracting different parts of the production process to smaller companies, as well as recycling expired milk powder. The government promised to disclose the names of dairies that failed to obtain a licence and those banned from selling products. New requirements appear to favour large dairies. While the full list of those granted licences has yet to be released, among the 35 dairies given licences in Hebei province - an important production base for dairy products - many are subsidiaries of large brands such as Yili, Mengniu, and Sanyuan. Hebei is where Sanlu Dairy - a big producer of the melamine-tainted milk - is based and it is one of the areas that suffered most from the melamine scandal. In Inner Mongolia , another main dairy production base, 37 licences were cancelled. Anhui authorities said eight dairies - most of them small companies - lost their licences and their products were taken off shelves. Even after repeated pledges to step up supervision of milk products, track the use of melamine and penalise those responsible for tainted milk products since the 2008 scandal, melamine-laced milk powder occasionally resurfaces. This is despite authorities saying that all contaminated products should have been destroyed. Melamine is added to artificially increase nitrogen levels in order to pass protein tests but it can cause kidney stones and kidney failure.

Mengniu aims to make more high-end products - China Mengniu Dairy (SEHK: 2319) aims to increase the proportion of high-end products to offset rising costs and maintain its profit margin. Wu Jingshui, the chief financial officer of the country's No1 dairy products maker by sales volume, said the price of the most vital raw material for the industry - milk - increased by 15 to 20 per cent last year. However, he believed the price would remain stable this year as the "possibility for further price rises is small". The company's gross profit margin last year was 25.7 per cent, down 1 percentage point from 2009. Mengniu adjusted sales pricing for its high-end products and yogurt in October last year but Wu said the impact of that price review on annual revenue was less than 2 per cent. He said the firm this year would try to maintain its gross profit margin but would consider increasing prices if the margin fell short of the target. "We will closely follow the market behaviour of both the raw material and our products and decide if prices should be adjusted." He said Beijing had not issued any order this year barring dairy enterprises from raising prices, which it did temporarily last year to check runaway inflation. Wu said the ratio of products with high added value accounted for about 22 per cent in the company's products line, and Mengniu aimed to increase it by 1 to 2 per cent every year in the following years. "We will have more products catering for children and the elderly - two markets with big potential." Mengniu plans to invest up to 1.7 billion yuan (HK$2.02 billion) this year to expand productivity. Wu said the company's dairy product volume stood at 6.5 million tonnes last year and would be raised to between seven million and 7.2 million tonnes this year. Liquid milk was the firm's main revenue generator, contributing 88.8 per cent. The company will also pump 200 million to 300 million yuan into enlarging a pool of milk sources, on which it spent 700 million yuan last year. As part of this drive, it invested in large-scale ranches and modernised facilities. Wu said the company had no plans to raise funds as it had a comfortable net cash flow of 2.5 billion yuan at the end of last year, 350 million yuan more than a year ago. Net profit for the year rose 10.9 per cent to 1.24 billion yuan and revenue grew 17.7 per cent to 30.27 billion yuan. Mengniu has a five-year plan, under which it aims to become one of the world's top 10 dairy firms in five years with annual revenue of 50 billion yuan. Mengniu declared a final dividend of 16 fen per share, 13 per cent higher than a year earlier.

Overseas visitors talk with Chinese textile manufacturers at a trade fair held earlier in Beijing this year. For industries such as electronics, textiles and nonferrous metals, the Purchasing Managers' Index rose above 60. The official Purchasing Managers' Index (PMI) increased to 53.4 in March from 52.2 in February. The official increase was shadowed by a PMI report from HSBC released on Friday, which rose slightly to 51.8 in March. The figures indicate that the world's second-largest economy may continue to expand at a rapid pace this year, and avoid the risk of a "hard landing", analysts said. The official PMI rebounded from February's six-month low, according to the China Federation of Logistics and Purchasing on Friday. The March figure is the first gain after three consecutive months of decline since December. A PMI reading above 50 indicates expansion, while one below 50 suggests contraction. The output sub-index, one of the five component indicators of PMI, climbed to 55.7 in March from 53.8 the month before, the National Bureau of Statistics (NBS) said in a statement on Friday. For industries such as electronics, textiles and nonferrous metals, the figure rose above 60. The rising output sub-index suggests that domestic industrial production has rebounded from February, when economic activity was affected by China's seven-day Lunar New Year holiday, according to the NBS. "The rebound eases concern about a slowdown risk for the world's fastest-growing major economy," said Lu Yanjin, a senior analyst from Industrial Securities Co Ltd. Year-on-year economic growth in the first quarter could reach 9.5 percent, and is likely to maintain a rapid pace in the first half of the year. The input price component of the PMI, which gauges major purchasing prices for producers and acts as an indicator of inflationary pressure, moderated to 68.3 from February's 70.1. Given the moderation of the sub-index, inflationary pressures have eased slightly, said Nomura Securities Co. China's consumer inflation rose to 4.9 percent in February, unchanged from January, but up from 4.6 percent in December.

Foreign businesses reinvested most of their profits from their mainland operations to fund their expansion in the country last year, a move likely to intensify pressure on Beijing to revalue its currency in the face of ballooning foreign reserves. The State Administration of Foreign Exchange said yesterday that the country's capital account surplus last year reached US$226 billion, US$60.4 billion more than it previously announced. The discrepancy resulted from a revised method of calculation since the SAFE for the first time included reinvested earnings by foreign businesses. Inbound foreign direct investment jumped 17.4 per cent to US$105.7 billion last year, according to the Ministry of Commerce. The foreign exchange regulator, however, said the actual direct investment figure should have topped US$185 billion because of the reinvested earnings. The revised accounting method reflects SAFE's efforts to allay concerns of rampant hot money inflows into the world's second-biggest economy, analysts said. "The problem lies in whether the regulators can tell how much exactly the foreign companies have reinvested," said Xu Mingqi, a researcher with the Shanghai Academy of Social Sciences. "They could retain the earnings to deposit in banks, betting on a further strengthening of the yuan." The yuan gained for the third consecutive week, closing at 6.5479 per US dollar yesterday, according to the Shanghai-based China Foreign Exchange Trade System. It hit a high of 6.5452 in intraday trading, the strongest level since the end of 1993. China posted a trade surplus of US$254.2 billion last year, up 17 per cent from 2009, amid calls to revalue its currency. The SAFE said the country's current account surplus, which includes surplus from commodity trade and services, was US$305.4 billion, against US$306.2 billion previously reported. "A swelling surplus in international payments will surely prompt the government to strengthen the yuan," said Professor Zhou Dunren, an economist with Fudan University's Centre for American Studies. "Additionally, a relatively stronger yuan will, more or less, ease the hot money inflow." Beijing still has a tight grip on capital accounts as foreign investment projects cannot be implemented unless the regulators give approval. China has been taking a harsh stance on new foreign-funded businesses, granting approvals to only high-technology projects and investments in sectors that the mainland hopes to bolster. Xu said the move among foreign investors to retain their earnings for reinvestment in the country exhibited their confidence in the fast-growing economy. "Some foreign companies might be worried that if they convert their profits into foreign currencies and remit them back to headquarters, they would in future lose their opportunity to invest additional money in China now that the FDI approval procedure has been tightened," he said. China's foreign reserves were up 18.7 per cent at the end of last year at US$2.85 trillion, the world's largest. The massive foreign reserve also exacerbated the mainland's inflation rate. Beijing reportedly plans to inject more foreign exchange assets into its sovereign wealth fund soon to direct a capital outflow as part of efforts to curb soaring consumer prices in the domestic market. Early this year, the SAFE reported only US$35.5 billion of speculative money entered the mainland last year, a figure that appeared much smaller than economists had estimated. The issue of hot money - illegal speculative capital that has flooded the property and capital markets - has been a major problem for top policymakers because the funds are expected to cause severe asset bubbles.

Hong Kong*:  April 3 2011

Homeward-bound commuters leave a Star Ferry at Hung Hom pier last night. Star Ferry services from Hung Hom to Wan Chai and Central will run for the last time today due to a lack of passengers. No operators expressed an interest in running the routes during two rounds of tendering. End of the line for Hung Hom ferry routes - With no other operators interested, Star Ferry makes final sailings to Central and Wan Chai. t's shortly after 11am on a chilly weekday and the Hung Hom Star Ferry pier is - as usual - largely deserted. A staff member moors an approaching ferry at the dock and hands out takeaway lunchboxes to his on-board colleagues. For ferryman Mo, in his 50s, a bit of an odd-job specialist in his time, the Hung Hom pier is the best place he has ever worked. And it is not difficult to see why. "Working at a pier is very relaxing," he said. "Especially when there are not many passengers, you can look out at the sea and see the waves. It is comfortable and you can breathe in the fresh air." But it is this lack of passengers that explains why the ferry will no longer operate from tomorrow. Services to Central and Wan Chai are being axed as the Star Ferry Company's licences will expire today. No operators expressed interest in running the routes during two rounds of tendering, and the Transport Department pulled the plug. Mo began his career as a pier assistant at the Jordon Road pier. For him, the golden days of travelling by ferry are gone. "I served the car ferries to Sheung Wan almost 30 years ago. It was so different from how it is now - they carried many more passengers. There were hawkers and eateries near the pier area. There were so many people, it looked like it never slept," he said. Now in Hung Hom, the ferries carry only about a dozen passengers during the slow hours in the afternoon. They are mostly Whampoa Garden residents and elderly people. The pier has a staff of three - two assistants who help moor vessels and a ticket seller. There are about seven sailors on board the ferries. "When I came to Hung Hom three years ago, it was already a quiet place. We all had the feeling that it would close one day," Mo said. Ferry services between Hung Hom and Central started in 1965 as a way to ease congestion at the Tsim Sha Tsui pier. The original Hung Hom pier was about 900 metres northwest of its current site, near what is now Polytechnic University's student dormitory. In 1988, the pier was moved to a temporary site 120 metres along Hung Hom South Road to make way for reclamation. The current pier opened in 1991, with a bus terminus offering services to East Kowloon, Ma On Shan and Tin Shui Wai. Star Ferry took over the service to Wan Chai in 1999 from Yau Ma Tei Ferry, and that was when its triangular service between Hung Hom, Wan Chai and Central started. But with a planned MTR line to run from Sha Tin to Central, Mo sees a diminishing role for Hung Hom as an interchange for commuters. And he said poor transport connections from the Hung Hom ferry terminal were another deterrent. "It is no longer near the railway station, and there are no bus routes to Mong Kok or Tsuen Wan. When people want to travel by ferry, they choose Tsim Sha Tsui instead," he said. Mo is employed at the pier on a contract basis and does not know what the future holds for him when the ferry service stops. "I hope I can still work at a pier. Victoria Harbour at sunset is the most beautiful scene in the world," he said. For long-time passengers, it's goodbye to a service they have used for decades. Chan Yun-biu, 62, spent his youth in the area and took the ferry to work every day before he retired. "It was convenient, and you could time your journey accurately because the ferries come regularly," he said. The ferry service's best days were in the 1970s, he said - before the MTR and when making the journey by bus was less common. "Every evening when people finished work there would be long queues of commuters waiting to get on board the ferry," he said. Chan said he hoped another company would operate the ferry service during rush hour at least, so that Whampoa Garden residents have a cheaper option to get across the harbour. Fares for the ferry service from Hung Hom to Wan Chai or to Central are both HK$6.30, compared with about HK$10 for the bus. Lam Lai-king, 54, is also a frequent ferry passenger. She said the demise of the ferry service began when the Central Star Ferry pier was relocated in 2007. Lam said that before the pier was moved, many commuters to Admiralty took the ferry as it was just a 10-minute walk from Central Pier. Now it is no longer in walking distance. "Now when I go to Central, for example to The Landmark, I prefer taking the bus as I don't need to walk all that way," she said. Since the Hung Hom service was launched in 1999, Star Ferry has carried more than 28 million passengers to and from Hung Hom, Wan Chai and Central. Now the ferries take about 400 passengers to Central and 500 to Wan Chai during the morning rush hour on weekdays. The company lost HK$20 million over the 12 years it operated the routes, and posted losses for 10 of those. Ferries to North Point, which leave from another pier at the terminal and are operated by New World First Ferry Services, will not be affected.

Glencore International, the global commodities trader, has secured approval from Hong Kong's stock exchange for its planned initial public offering, which could raise about US$10 billion, sources with direct knowledge of the matter told reporters on Friday. Glencore is considering a dual listing in London and Hong Kong and the approval from Hong Kong exchange is the strongest sign yet that that the company is expected to proceed with the offering. Glencore declined to comment. Glencore's listing application was considered by the Hong Kong exchange at a scheduled meeting on Thursday. Commodities giant Glencore met with Hong Kong stock exchange officials on Thursday to request approval for its planned US$10 billion float, sources with direct knowledge of the plans told reporters. Hong Kong Stock Exchanges and Clearing Ltd heard the application from the world’s largest commodities trader at a scheduled meeting of its listing committee, the sources, who declined to be named, said. Glencore, valued earlier this year by one analyst at about US$60 billion, is looking to ditch its long-standing partnership structure in favour of life as a public company, which will make it easier to reward partners and make acquisitions. The company has been keeping its listing plans under wraps since briefing analysts at the start of this month, but is expected to list shares in both Hong Kong and London in what could be the UK’s biggest ever initial public offering (IPO). A listing in Hong Kong would help Glencore tap deep-pocketed Asian investors, including sovereign wealth funds in China, South Korea and Singapore, as well as raising its profile among potential clients in the region. Earlier this month, a source with direct knowledge of the offering said Glencore was confident both the exchange and the city’s watchdog will back the deal, having eased rules on mining companies and steadily increased the amount of foreign companies it reviews for initial public offerings (IPOs). The company has met with investors in the past few weeks to gauge interest in an offering, with several of its key trading partners in Asia showing interest in buying the stock. With April 1 the deadline for sell-side analysts to complete their research notes on the company, anticipation is mounting that the firm is close to launching its offering with a so-called intention to float announcement in London. If Glencore were to follow the usual month-long European listing timetable, it would need to launch its offering by around mid-April in order to complete it before mid-May. Otherwise it could face having to delay its plans to refresh its accounts in order to comply with US accounting rules.

Fans commemorate 8th anniversary of Leslie Cheung's death - Fans of Leslie Cheung, a Hong Kong super star, commemorate the 8th anniversary of his death outside the Mandarin Oriental Hotel in Hong Kong, April 1, 2011.

The insurer that came under fire over the amount of compensation paid to two survivors of last year's Manila hostage tragedy has made new offers to the victims, a lawmaker helping the pair said yesterday. The offers were made before one of the two, Yik Siu-ling, showed her disfigured face publicly for the first time in a bid to seek a higher payout. Legislator Fred Li Wah-ming, who is helping Yik and friend Joe Chan Kwok-chu pursue compensation, said Chartis Insurance had made some offers in the past two weeks which he described as "a reply with good intention". "But it is still under negotiation and I cannot disclose the amount," he said. "If an agreement can be reached through mediation, it may not need to be solved in court." Yik, 34, whose lower jaw, left thumb and right index finger were shattered by bullets in the August 23 siege, allowed herself to be photographed by Chinese-language media without the mask over her injuries. She said she struggled for a week to make the decision after a magazine approached her. The pictures were published on Wednesday and yesterday, and she decided she would never do it again. Chan said he knew Chartis replied to Li before Yik's photos appeared but he did not know the details. Chartis issued a statement on March 16 saying it had paid HK$350,000 in total to Chan and Yik. But Chan said they had only received HK$8,000 and HK$5,000 in cash respectively, and that the amount mentioned in the statement also covered the expenses of a medical charter. The day after the shooting, a Chartis representative said at a press conference with Hong Thai Travel that each of the insured victims could get up to HK$1 million in compensation. "I want to let the insurer know how serious the injury is," Yik said. "This is done for justice, I am not begging anything from them." The pictures show part of Yik's upper lip has been stitched to her lower lip, turning her mouth into a small "o" shape. At least four scars can be seen on her chin. Yik said she felt upset after the photos were published. "When I went out today, many people stared at me. I am very scared." Chan, whose hands were shot, said Yik had no choice but to reveal her injuries. "The insurer had forced us into a dead-end. They are just oppressing us." A recent medical report showed Yik also suffered speech impairment because of damage to her tongue as well as hearing loss. She will have a check-up today to see if she needs another piece of bone grafted from her hip to reinforce her painful jaw. She has already had seven major operations, including the grafting of a piece of bone from her right leg and muscles from her left thigh to her jaw. A spokeswoman for Chartis said it had nothing to add to the statement.

Britain yesterday released guidelines for the world's strictest anti-bribery legislation, which affects UK companies operating in Hong Kong and on the mainland. The UK parliament passed the 2010 Bribery Act last April, which affects not only British firms but any company that conducts any part of its business in the country, as well as those that provide services to British companies. It goes into effect in July.

In his first visit to Hong Kong in 1922, Albert Einstein compared the scenic city to Switzerland. If he were to see the city today, the father of modern physics would probably change his mind. German-born Einstein could not have imagined that almost 90 years after the visit, more than 200 of his possessions, writings and pieces of furniture will go on display here. The exhibits, from the Historical Museum of Bern in Switzerland, will be on loan to the city for a coming Einstein festival that will feature seminars, conferences, music composition workshops, an exhibition, and even a writing competition. Guests will include prominent scientists, a Nobel Prize-winning physicist and an authority on Einsteinian physics from Peking University. The 4 1/2-month exhibition, at the Hong Kong Science Museum, is organised by the Swiss Federal Department of Foreign Affairs and the Ministry of Foreign Affairs to celebrate 60 years of diplomatic relations between the two countries. Simply titled "Albert Einstein (1879-1955)", it will run from April 18 to the end of August. The opening date had been timed to coincide with the official openings of the Science Museum and the Hong Kong University of Science and Technology, in 1991, and Einstein's death on that day in 1955, said Karen Sit Man, the museum's curator. Tony Chan Fan-cheong, the university's president, said he was excited about the exhibition. "Einstein's intellectual legacy gave us many technologies that we now take for granted," Chan said. "There's something higher than exams and job-hunting. We need more young people who are willing to explore basic science", even though the impact of their exploration would not be felt for decades. The South China Morning Post (SEHK: 0583) reported on Einstein's second visit to the city on January 6, 1923, when he was treated to a party at the then Jewish Recreation Club in Mid-Levels. When his wife was asked whether she could explain the theory of relativity, she said: "I don't want to understand it; I am far happier without [it]." It was on his first visit, while travelling between Hong Kong and Shanghai, that Einstein received the news that he had been awarded the Nobel Prize for services to theoretical physics.

Foxconn says intense market competition by major brands led to falling handset prices that put pressure on results. Its shares dropped 4.5 per cent to finish at HK$4.67 yesterday. Foxconn International Holdings (SEHK: 2038) (FIH), the world's largest contract manufacturer of mobile telephones, plans to consolidate resources and sell assets to parent company Hon Hai Precision Industry after posting a sharp fall in earnings. "Our alarming setback in 2010 has created a sense of urgency in the organisation," chairman and chief executive Samuel Chin Wai-leung said in a filing with the Hong Kong stock exchange. Taipei-based Hon Hai, the world's biggest electronics manufacturing services provider known by the trade name "Foxconn Technology Group", has a controlling 70.58 per cent stake in the Hong Kong- listed FIH. There are five publicly traded firms among the many subsidiaries and affiliates of Hon Hai with operations on the mainland. The group's Taiwan-listed companies include thermal solutions supplier Foxconn Technology, semiconductor-manufacturing equipment and light-emitting diode assembler Foxsemicon Integrated Technology, printed circuit board maker Pan-International Industrial and flat-panel displays provider Chimei Innolux. FIH yesterday reported a net loss of US$218 million for last year, representing a 659 per cent fall from its net profit of US$39 million in 2009. Chin said falling handset prices due to intense market competition by the major global brands had put pressure on FIH's results, despite efforts to diversify its customer base and sources of revenue. The company has among its top-shelf clients Apple, Nokia, Sony Ericsson and Motorola. "Higher manufacturing overhead resulting primarily from lower utilisation of facilities and relocation, changes in product mix, impairment losses, continued long-term investment in research and development activities, as well as higher consolidated income tax also affected our financial performance," Chin said. Revenue decreased 8.2 per cent to US$6.63 billion from US$7.21 billion in the previous year. Basic loss per share reached 3.06 US cents. Shares of FIH dropped 4.5 per cent to finish at HK$4.67 yesterday, their lowest close since hitting HK$4.05 on April 29, 2009. To trim its fixed expenses and move away from high-cost production areas, FIH last year continued a relocation programme it started in 2008 by focusing on plant expansion activities in Beijing, Tianjin and Langfang, Hebei province. It also initiated discussions to transfer some underused assets to other enterprises of Hon Hai. FIH, through subsidiary Grand Champion Trading, agreed on March 18 to sell its entire equity interest in handset-manufacturing enterprise Foxconn Precision Electronics (Taiyuan) for 463.27 million yuan (HK$550.4 million) in cash to China Prime Rich Holdings, a wholly owned subsidiary of Hon Hai. The transaction, which includes the transfer of land and buildings in Taiyuan, Shanxi province, is subject to the approval of independent shareholders and the relevant government authorities in Taiwan and on the mainland. Chin said the deal would allow Hon Hai to further expand in Taiyuan, while FIH focused on improving services to existing clients and signing up new customers. A report by Yuanta Securities, however, said there was "limited opportunity" for FIH to secure new clients in the near term.

A new policy making it easier for the grown-up mainland offspring of Hongkongers to emigrate to the city goes into force today after years of debate and anguish for split families. About 160,000 mainlanders were eligible, but no more than 100,000 were expected to move to the city, a person familiar with the policy said. The new immigration policy ends a decade-long saga over the right of abode, and the city is preparing for this group to be a new workforce to ease mounting demand in the construction and catering industries. Under the new arrangement, the grown-up children of Hongkongers born on the mainland who were under 14 when their natural father or mother obtained a Hong Kong identity card, before November 2001, will be eligible for right of abode. According to a government study in 1999 on the number of people who would come to Hong Kong, a total of 169,000 mainland children born within registered marriages would be eligible - the first-generation legitimate children of Hong Kong permanent residents on the mainland. "If we assume that about 60 per cent of them will come here in the end, we are talking about 100,000 people here," said the person familiar with the policy, after analysing mobility of the grown-up mainlanders. "We expect some 60 to 70 people will come every day and this means all will arrive in town in four to five years," he said. This would be a healthy, youthful influx given the the city's ageing population, with the majority of people aged between 30 and 50, he said. Security Bureau principal assistant secretary Maggie Wong Siu-chu said yesterday it was still difficult at this stage to make an accurate estimate of the number of eligible mainlanders who would come to Hong Kong under the scheme. "The number of eligible applicants would be around the tens of thousands," Wong said. It would take about three months for applicants to get through the process once they provided sufficient documents for the proceedings, she said. Fu Bing, an officer of the New Home Association, set up last year to assist new immigrants, said the group had received about 200 calls from grown-up mainlanders on application procedures. The association was helping to arrange jobs for new migrants in construction, such as bar bender work, and in catering or security.

Star-studded show at Victoria Park to raise funds for earthquake victims in Japan will see 173 local and overseas artists taking part. The three-hour "Artistes 311 Love Beyond Borders" begins at 7pm and will be broadcast by free-to-air and pay-TV stations TVB (SEHK: 0511), ATV, Cable TV, Now TV and Phoenix TV. Joey Yung Cho-yee, Andy Lau Tak-wah, Miriam Yeung Chin-wah and Alan Tam Wing-lun are among the local stars taking part, while video clips of Kelly Chen Wai-lam, Tony Leung Chiu-wai, Lionel Richie and Kenny G will be played on stage. Chen, who lost her twins in a miscarriage last month, decided not to show up because she did not want to steal the limelight, said organiser Eric Tsang Chi-wai. Other stars who will take part include Japanese actor Nakamura Masatoshi, the Korean group Wonder Girls and three members from the Japanese female act AKB48. The minimum donation expected from the audience will be HK$20 each. "They will be given a wristband, a card to write on and a candle," host Dodo Cheng Yu-ling said. Tsang said the event would be different to previous charity shows in that there would be less singing, and more video sessions with people who have been to the disaster-hit area sharing their thoughts. The most difficult part of organising the show was co-ordinating artists across the region, Tsang said. "I am very thankful for their attendance - they don't mind when they will appear on stage." During the show, 220 donation hotlines will be made available in Cantonese and Japanese. All donations will go to the Salvation Army.

The Diamond Federation of Hong Kong and the Shanghai Diamond Exchange (SDE) plan to strengthen co-operation to lift diamond exports from Hong Kong to Shanghai to more than US$800 million this year. In 2010, the total value of polished diamonds exported from Hong Kong to the SDE - the only diamond import and export trading platform on the mainland - amounted to US$557 million, accounting for 43 per cent of the total imports by the exchange. China has surpassed Japan to become the world's second-largest market for the precious stones. SDE president Lin Qiang said demand for diamonds from the country's newly rich would continue to remain strong. "Diamond demand in China is still increasing bullishly," Lin said. According to the SDE, the value of diamonds imported in the first two months of this year rose 70 per cent from last year. In 2010, the value of diamond imports and exports by the exchange was US$2.8 billion, and Lin forecasted this would increase by at least 10 per cent this year. That was a conservative estimate, he said. "In fact, I think it will be higher." Wu Chor-nam, president of Wu Leung Lee Jewellery, said mainland consumers were so enthusiastic that supply could hardly meet their need. "The most popular kind of diamonds are those bigger than three carats, as the resource is highly limited." Chinese have traditionally favoured gold, but Wu said they were beginning to set their eyes on diamonds. Young people generally bought small stones of some 0.5 carat but the rising middle class was showing a rising interest in diamonds larger than one carat because their value would rise more over time. International dealers have been attracted to the growing market for diamonds on the mainland, and in December, Harry Winston, a New York-based retailer of pricey jewellery and watches, said it would establish a subsidiary on the mainland and "open two to three stores within the next 10 months", according to president Frederic de Narp. Winston Chow, the chairman of the Diamond Federation of Hong Kong, said it would provide a bridge between the mainland and overseas diamond dealers. "Together with the SDE, we will organise more trade fairs for Hong Kong and international industry players to access the domestic market," he said. To date, 49 Hong Kong diamond enterprises are members of the SDE, making up 18 per cent of their total members.

 China*:  April 3 2011

Hu Jintao warns over violation of UN resolution on Libya - Hu Jintao and French President Nicolas Sarkozy at the Great Hall of the People in Beijing yesterday. Coalition military strikes on Libya could violate the intention of the UN resolution if civilians suffer, President Hu Jintao told visiting French leader Nicolas Sarkozy. The tough talk from Hu came during a meeting yesterday at the start of Sarkozy's mini-tour of Asia, which will include a Group of 20 meeting on global monetary reform and a stop in disaster-struck Japan. A lengthy statement in unusually strong language for a diplomatic meeting was a further display of China's pique at what it sees as an overly broad use by Western countries of UN Security Council authorisation to protect Libyan civilians rebelling against leader Colonel Muammar Gaddafi. "The aim of the UN's resolution is to stop violence and protect civilians," Hu said in talks with Sarkozy in Beijing, according to comments published on China's foreign ministry website. "If the military action brings disaster to innocent civilians and creates a bigger humanitarian crisis, that would violate the original intention of the Security Council resolution," Hu said. "China disapproves of using military force in international affairs." China, which opposes moves deemed to interfere in the affairs of other countries, abstained from the UN Security Council vote, although it did not use its veto power. "Dialogue and other peaceful means are the only way to resolve this problem," Hu said, adding that China supports an immediate ceasefire to prevent further loss of civilian life and restore stability as soon as possible. Sarkozy - who has spearheaded the coalition operation against Gaddafi - told Hu that the strikes had not caused any civilian casualties "as far as we can make out", a French official said after the talks. "There is just a subtle difference and slightly worried questioning coming from China," the official said, adding that Hu and Sarkozy had also discussed nuclear issues in light of the atomic crisis in Japan. The French leader was due to head later to the eastern city of Nanjing , where he is due to open a meeting today of finance ministers and central bankers of G20 nations on global monetary reform. France currently holds the rotating presidency of the G20 leading economies. The meeting aims to hone in on key ways to reform the monetary system. Sarkozy's aides have already made it clear that Paris is not expecting any decision or conclusion from the Nanjing meeting.

A shiny golden sports car is exhibited in Nanjing, capital of East China's Jiangsu province, March 31, 2011. Five technicians spent more than four months plating the car with 24K gold.

The Group of 20 industrialised and emerging nations has broadly agreed to include the yuan in a basket of currencies that some say might potentially offer an alternative to the US dollar as a global reserve, French finance minister Christine Lagarde said yesterday. Speaking after the group's advisory meeting in Nanjing , Lagarde said that although no timetable had been set, the yuan's convertibility was one of three criteria it would need to meet for inclusion in the International Monetary Fund's Special Drawing Rights (SDRs). European Central Bank president Jean-Claude Trichet also said currency convertibility was a ticket to SDR inclusion. "A number of conditions are probably necessary for the yuan or any new currency to enter into the basket. And these conditions, I think, would be full convertibility and free-floating," Trichet said. However, his comment was countered by a deputy governor of the People's Bank of China, Yi Gang, who said there was no link between yuan convertibility and its inclusion in the basket that forms SDRs. Speaking at the seminar yesterday, French President Nicolas Sarkozy argued for the currencies in the SDR basket to be widened. "Is it not time today to reach agreement on a timetable for expanding the basket of SDRs to include new emerging currencies, such as the yuan?" Sarkozy told the meeting of the world's top financial ministers and central bankers in a strongly worded opening address. "Who could contest the importance of the yuan to the international financial system?" US Treasury Secretary Tim Geithner stopped short of making any explicit references to the yuan, but said the US supported the addition of "currencies of large economies heavily used in international trade and financial transactions" to the SDR basket. He said that support was based on the condition the "concerned countries should have flexible exchange rate systems, independent central banks, and permit the free movement of capital flows". Before the seminar, Beijing had attempted to rule out discussion of its controversial exchange rate mechanism, despite continuing criticism from a number of its trading partners that the yuan is undervalued. Vice-Premier Wang Qishan described the seminar as a "gathering of the wise", but stressed it was an "unofficial and academic gathering", in a possible hint Beijing was reluctant to be bound to any agreements made. Wang said the global financial crisis had focused thoughts on the need to reform the international monetary system, which he said was necessary to "prevent drastic fluctuations" of global trade and commodities prices. "Excessive global liquidity, intensifying fluctuation in international finance markets and commodities market, the still severe European sovereign debt crisis, and the turbulent situation in the Middle East and northern Africa, the catastrophic earthquake and subsequent tsunami and nuclear leak in Japan are all aggravating the instability of the world economic recovery," Wang said. The basket of SDRs is limited to the US dollar, the British pound, the Japanese yen and the euro. The fund is used by the IMF to supplement member countries' official reserves, with its value determined daily in US dollars based on a weighted amount of the four currencies. Some economists have floated the idea that SDRs might one day replace the US dollar as the world's de facto reserve currency but Lagarde categorically rejected that suggestion yesterday. The one-day G20 "High-Level Seminar on the International Monetary System" was called to address issues including the prospect of a "currency war". "What is at stake is huge and it is huge to all of us," said Sarkozy, who holds the G20 presidency, adding that France was determined to deliver real reforms during its leadership of the group and to set new rules to keep a more flexible exchange rate system in check. "Without rules, the international monetary and financial system is simply incapable of preventing crises, financial bubble and the widening of imbalances," he said.

Beijing issued its seventh defence white paper in 13 years yesterday, including for the first time a separate chapter on military confidence-building measures such as consultations, joint training missions and exchanges between border units in apparent recognition of the need for greater communication. Military experts said China's desire to enhance military confidence-building with countries and its participation in international peacekeeping missions in the past few years were aimed at easing "China threat" worries among neighbours. But neither the paper nor an accompanying news conference shed much light on what China intends to do with its growing military budget, including its first aircraft carrier project and other sophisticated new weapons such as its DF-21D anti-ship ballistic missile. Instead, the white paper gave specific details of the People's Liberation Army's achievements in peacekeeping and international humanitarian activities over the past two years, including the establishment of defence consultation and dialogue arrangements with 22 countries. It said China also signed border peace agreements with India, Kazakhstan, Kyrgyzstan, Russia and Tajikistan to help preserve peace and stability in the region. Referring to the maritime build-up, it said the PLA had sent more than 20 naval ships in more than 10 convoys to visit more than 30 countries, and had received port visits from more than 30 naval ships representing over 20 countries. It sent its biggest hospital ship, the Peace Ark, to underdeveloped countries in Africa for the first time last year to provide medical and humanitarian aid. "Many countries have been concerned about China's rise over the past decade because of the `China threat' theory, so we have to ease their worries by showing them that China is a peace-loving country and enhance military confidence-building with other countries," Shanghai-based military expert Ni Lexiong said. "However, it's impossible to enhance military confidence without mutual political trust, with the United States being the key obstacle hindering China's military confidence-building with other countries." The white paper also failed to detail the PLA's military expenditure on specific items or details about its forces and weapons. Beijing-based military expert Song Xiaojun said China would not copy other countries in disclosing such information because it did not care about complaints about its so-called lack of transparency from Western countries, especially the US. "China just needs to tell its nationals how much it is spending on military modernisation, and what the PLA has achieved because the money is paid by our people, not the US or other countries," Song said. "That's why we have a chapter in the military legal system to tell people that we've also built up an inspection mechanism to check the army's finances and expenses to prevent corruption." Beijing has made some eye-catching moves in recent months, with the first test flight of its J-20 stealth fighter jet surprising the world. Military sources said China could also launch its first aircraft carrier - after spending more than a decade refitting a Soviet-designed Varyag carrier - this year, a year earlier than US analysts had expected. PLA officers refused to give details about new weapons development at yesterday's press conference, but when reporters asked whether the PLA would focus on developing offensive weapons like the J-20 and the DF-21 missile, changing China's military policy from a defensive focus to an offensive one, Senior Colonel Fan Jianjun from the General Armaments Department said: "When mentioning about weapon functions, in a sense, an offensive system could be either unified with the defensive one or become an independent weapon, there is a conversation between both. "In fact, there is not a purely defensive weapon in the world." But Defence Ministry spokesman Senior Colonel Geng Yansheng stressed that China's defensive policy would never be changed.

Beijing has for the first time in a policy paper raised the possibility of military exchanges with Taiwan - an apparent move to reflect warming ties in other areas. The defence white paper for 2010 released yesterday said: "The two sides of the Taiwan Strait can establish contacts and exchanges on military issues at an appropriate time, and explore establishing a military security mechanism of mutual trust." It is the first time that Beijing has listed a potential military exchange mechanism - an issue that has been raised in talks since the two sides mended fences in 2008 - as a goal in a policy document. The PLA has more than 1,000 missiles targeting the island. The highly-charged issue of missile deployment "could be discussed at the stage where two sides explore setting up a military trust mechanism", Defence Ministry spokesman Geng Yansheng said yesterday. The white paper stresses the need for "utmost effort" from both sides to avoid repeating previous military conflicts and calls for a "positive outlook" in handling historical issues. Beijing's proposal was also seen as part of its ongoing effort to ease overseas concerns about its military modernisation programme. The policy paper, the seventh since 1998, for the first time included a new section on building military trust, highlighting defence consultations, joint training missions and exchanges between border units. It also repeated Beijing's irritation with Washington's support for Taiwan. US arms sales to the island were "severely impeding Sino-US relations and impairing the peaceful development of cross-strait relations". Ma Ying-jeou of the Kuomintang was the first to propose cross-strait talks on measures to build military confidence during his campaigning to become Taiwan's president. After he became leader in May 2008 and adopted an engagement policy towards Beijing, his proposal was echoed by mainland leaders, including Premier Wen Jiabao , who said he hoped Taiwan would start to hold political talks with the mainland now that they had active economic exchanges. But Ma shelved the proposal in the face of mounting opposition from the pro-independence camp and fears that military talks might lead Beijing to push for reunification talks with Taipei. Political analyst George Tsai Wei, of Chinese Cultural University in Taipei, said: "If the Kuomintang wants to remain in office after next year's election, it certainly has to take into account concerns from the public; almost half of Taiwan's electorate either support or sympathise with the pro-independence camp." Taiwan's government yesterday stressed that there was no plan or timetable to hold talks with Beijing on military issues. "For an agenda like that, we don't think the time is ripe for the two sides to talk on this," said Jonathan Liu Te-hsun, spokesman for the Mainland Affairs Council, Taiwan's top mainland policy planning body. Liu said both sides shared a responsibility to maintain stability over the Taiwan Strait, and the security of Taiwan was the "key to any major development of cross-strait ties". If any further strengthening of ties were to happen, "the mainland side should take the initiative to remove its military deployment against Taiwan".

Hong Kong*:  April 2 2011

After nine months of delay Hong Kong has quietly enacted regulations that implement last year's United Nations sanctions against Iran. The city's action comes amid increasing scrutiny from the West over China's dealings with Iran. The new regulations went into effect late on Friday afternoon. They update Hong Kong's existing sanctions against Iran "to implement decisions" of the Security Council's fourth round of sanctions, which were passed with the support of China on June 9 last year. Soon after passage of the UN resolution, the Ministry of Foreign Affairs in Beijing instructed the Hong Kong government to implement the resolution fully, according to a memo submitted to Legco last week. The administration said it took nine months to implement Beijing's directive because the UN resolution "covers a number of new prohibitions and strengthened measures that are not commonly found in previous UNSC decisions." In January, the United States blacklisted 20 shipping companies in Hong Kong for operating as fronts for the Islamic Republic of Iran Shipping Lines, which was censured by the UN in 2008 for aiding Iran's nuclear and military programs. A South China Morning Post (SEHK: 0583) investigation found that the companies were created at the IRISL's request, in an effort to mask the identity of its fleet in the wake of UN censure and unilateral sanctions. It is not clear whether the new legislation will have an impact on IRISL's operations in Hong Kong. Last week, Colombian UN ambassador Nestor Osorio, who chairs the Security Council's Iran sanctions committee, told the council that the committee was investigating new attempts by Iran to import banned goods from China and North Korea. A shipment of phosphor bronze, a commodity banned by the sanctions, was seized in South Korea from a Chinese company, a Security Council diplomat told Reuters. Malaysia has also announced an investigation into whether equipment found in two containers headed for Tehran from China could be used to make nuclear weapons. Beijing has faced increasing scrutiny in the West over its relationship with Iran. Earlier this month, a bipartisan slate of US senators pressed the Obama administration over its policy on Sino-Iran relations. "We cannot afford to create the impression that China will be given free rein to conduct economic activity in Iran when more responsible nations have chosen to follow the course we have asked of them," the senators said in a letter to the White House. After the EU, China is Iran's second-largest trading partner. At last week's Security Council meeting, Chinese ambassador Li Baodong said Iran was entitled to peaceful use of nuclear energy, and emphasised that negotiation and dialogue was the best approach.

Taiwan said on Wednesday its economy could lose more than US$650 million as a result of the quake-tsunami and resulting nuclear crisis in Japan, one of the island’s key trade partners. Growth this year would likely fall by up to 0.20 percentage points to 4.81 per cent as a result of the disasters, said the Council for Economic Planning and Development. The figure is equivalent to about NT$15-20 billion (US$500-667 million) being taken off from gross domestic product, the council said. Taiwan’s economy grew 10.82 per cent last year, its fastest rate for 24 years, while government forecasts last month put growth this year at 4.92 per cent. Taiwan’s exports to Japan rose 24 per cent last year to a record US$18 billion while imports grew 43 per cent to US$51 billion, according to the finance ministry.

Authorities are looking at tightening immigration policies to stem the flow of mainland women coming to Hong Kong to give birth. This is an option being studied as the number of newborns to mainlanders reaches 40,000 a year - close to half of all births. It follows complaints that a surge in mainlanders using obstetric services is taking a toll of doctors and straining the SAR's overall health-care system. There has been a massive surge in the number of mainland women giving birth in Hong Kong during the past half-dozen years, Secretary for Food and Health York Chow Yat-ngok said yesterday. It's a situation that must be resolved to avoid services for the entire community being affected, he warned. In 2004-2005, "there were only a few hundred of these babies. Now it's about 40,000. It really puts pressure on our obstetrics services." The number of births by mainland women accounted for more than 40 percent of 88,000 newborns in Hong Kong last year. Since 2007, the government has prevented visits by women beyond their 28th week of pregnancy unless they can produce proof of a booking with a local hospital. Although initially successful in slowing the increase of mainland women giving birth here, its effects have been blunted in recent years. There will be an estimated 92,000 births in Hong Kong this year, and the number is expected to surpass 100,000 next year - the Year of the Dragon, which traditionally sees a boom in births. A 100,000 figure would be the highest for more than 40 years. "We hope the figure will not reach 100,000," said Cheung Tak-hong, chief of service in obstetrics and gynecology at Prince of Wales Hospital. Cheung, who also helps coordinate the Hospital Authority's obstetrics services overall, said the public hospital system "could collapse" if nothing is done to curb the rise. The health system is already short of obstetricians, he added, and the situation is worsened by the fact that many senior doctors have left public hospitals for higher pay in the private sector. Prince of Wales alone has lost more than 10 doctors in the past two years, he noted. But it is public hospitals that have the facilities to deal with birth complications. For every 100 births, 2 percent of infants need intensive care. Very few private hospitals have such facilities, Cheung said. The reality is that public hospitals cannot deal with an expected increase of 4,000 to 8,000 babies a year over the next few years. Chow said previously that banning mainland women from giving birth in the SAR would be inhumane. Yesterday, he did not offer any thoughts on what can or should be done. But doctors are looking for a cap on the number of pregnant mainlanders using Hong Kong's services. The key question, Cheung said, is whether Hong Kong has the capacity to cater for them, and he wants public and private hospitals to get together for discussions on the need for a limit. A spokeswoman of the Food and Health Bureau said yesterday that officials will be meeting with professionals to look at measures needed in view of the current strains.

Galaxy profit falls 18pc despite growth - Macau casino operator Galaxy Entertainment Group on Wednesday posted an around 20 per cent drop in full-year net profit, despite strong growth in the world's largest gaming market.

Fujian signed US$8.66 billion worth of deals in Hong Kong yesterday as the coastal province seeks to boost its finance and tourism sectors. At a signing ceremony for a total of 59 projects, Fujian party secretary Sun Chunlan said the delegation had focused on modernising the province's service sector. She said she wanted to see more Hong Kong financial institutions setting up branches in Fujian and supporting Fujian companies listing in the city. About 70 Fujian companies have listed in Hong Kong, raising over HK$40 billion. Fujian has been outshone by its affluent neighbours, Zhejiang and Guangdong provinces, which have been at the vanguard of the mainland's economic growth over the past 30 years. "Fujian has been a laggard in economic development compared with Shanghai or Guangdong because, in the past, the central government made relations with Taiwan a priority," said Dr Zheng Youguo, a researcher at the Fujian Academy of Social Sciences. "Now Fujian is in a critical period of economic development. Being less developed also means there are more potential opportunities." Dr Zheng said Beijing attached "great importance" to the province, which connects two of the mainland's most important economic drivers, the Yangtze River Delta and the Pearl River Delta. While Fujian's per-capita gross domestic product reached US$5,000 last year, comfortably beating the US$4,000 mainland average, Zheng said it was still far behind the average, for eastern coastal areas, of US$8,000. Sun said Fujian would gear up during the 12th five-year plan for 2011-2015, aiming to double its total GDP, which topped 1.4 trillion yuan (HK$1.66 trillion) last year. Kerry Group will invest US$960 million to build four five-star hotels in the Fujian cities of Fuzhou, Xiamen, Quanzhou and Putian, plus a logistics base at Putian. Kerry Group is the controlling shareholder of the SCMP Group, which publishes the South China Morning Post (SEHK: 0583). Among the other deals signed, Fujian-based Industrial Bank and Hang Seng Bank (SEHK: 0011) have agreed to strengthen their co-operation in cross-border yuan settlement, import and export trade-financing and investment banking. NetDragon Websoft will pump US$500 million into the third phase of a park in Fuzhou, focusing on the animation and gaming sectors. Linca Group will invest US$270 million in a tourism project in Fuqing city, and TPV Technology (SEHK: 0903) will invest US$120 million to build the first phase of a project in Pingtan county, an island governed by the province.

Industrial and Commercial Bank (1398), the world's largest bank by market value, booked a better-than-expected 28.38 percent hike in annual net profit. Net profit for last year reached 165.16 billion yuan (HK$196.28 billion), beating a market forecast of 161.86 billion yuan. A final dividend of 18.4 fen per share was proposed on earnings per share of 48 fen. Yuan-denominated loans amounted to 898.1 billion yuan, a 16.9 percent increase over 2009. Chairman Jiang Jianqing expects loans this year to increase by up to 14.2 percent to between 820 billion and 880 billion yuan. Net interest income rose to 303.75 billion yuan, up 23.6 percent, with the net interest margin widening 0.18 percentage points to 2.44 percent. The non-performing loan ratio was 1.08 percent, down 0.46 percentage points. The NPL ratio on lending to local governments to finance vehicles was 0.3 percent last year, ICBC president Yang Kaisheng said. The lender's provision coverage ratio climbed to 228.2 percent, up 63.8 percentage points. Provisions to total loans ratio fell slightly to 2.46 percent, compared with 2.54 percent in 2009. "Although the ratio is high enough, we will increase it slightly this year to meet the required ratio of 2.5 percent," Jiang said. Yang added the bank can easily fill the gap as only 2.6 billion yuan are required. The commercial lender has received regulatory approval to tap into India, Pakistan, Brazil and Peru. It had extended 14.4 billion yuan for affordable housing in the mainland by the end of last year. ICBC shares climbed 1.27 percent to HK$6.38 yesterday.

 China*:  April 2 2011

President Hu Jintao meets with Sarkozy called for an immediate ceasefire in Libya to prevent further civilian casualties and to "give peace a chance". He made the remarks during a meeting with his French counterpart Nicolas Sarkozy, whose country has championed the Western-led military attack against Muammar Gadhafi's forces. President Hu Jintao meets his French counterpart Nicolas Sarkozy at the Great Hall of the People in Beijing on Wednesday. Sarkozy will attend a seminar on the international monetary system on Thursday in Nanjing, capital of Jiangsu province. Hu said that the UN resolution on a no-fly zone in Libya was meant to end violence and protect civilians. Any military action that causes a greater humanitarian crisis runs counter to the "original intention" of the resolution. He reiterated China's opposition to the use of force, and expressed support for any political move to ease the Libyan crisis. "History has repeatedly proved that the use of force is no answer to any problem. Instead, it will only make the problem more complicated," Hu said, adding that the ultimate solution lies in dialogue and other peaceful means. Hu noted that some countries and regional organizations had put forward "constructive" proposals and suggestions to solve the Libyan crisis, which "deserve a positive response". "Let's give peace a chance. This conforms to the interests of all sides concerned," he said. China abstained from the UN Security Council vote that authorized the no-fly zone in Libya. But since military action taken by Western coalition forces caused rising civilian casualties, Beijing has become increasingly critical of allied airstrikes. Besides Beijing, other major players on the global stage, including the African Union (AU) and Russia, have opposed airstrikes in Libya. AU Commission Chairman Jean Ping, who has opposed any military intervention in Libya, shunned the international conference held in London on Tuesday to discuss Libya's future. Russia has been voicing concern about civilian casualties and excessive use of force since the operation began. Russian Foreign Minister Sergey Lavrov warned the West on Wednesday against supplying weapons to Libyan rebels and called for a quick end to hostilities. Yet differences on Libya between China and France have not impaired ties, which both leaders pledged to advance during their talks. Sarkozy is visiting China to attend a seminar on the international monetary system on Thursday in Nanjing, capital of Jiangsu province. As France holds the rotating presidency of the Group of 20 leading developed and emerging economies, Sarkozy proposed to hold the French-organized seminar in a Chinese city, seeking to enroll Beijing's support in reforming the international monetary system. The Nanjing seminar will be attended by finance ministers and central bank chiefs from most of the major economies, and is to be chaired by French Finance Minister Christine Lagarde. The one-day seminar will feature closed-door group sessions and a keynote speech from International Monetary Fund chief Dominique Strauss-Kahn. The seminar will focus on strengthening global financial safety nets and liquidity provisions to deal with systemic crises. It will also discuss the better monitoring of global capital flows as well as boosting the role of the International Monetary Fund's special drawing rights as an alternative reserve currency. The seminar comes as the global recovery faces major challenges such as Japan's quake-tsunami disaster and ongoing euro-zone debt woes. After China, Sarkozy is scheduled to visit Japan as the first head of state since the March 11 earthquake.

China may double its target for photovoltaic power capacity over the next five years in the wake of Japan's nuclear crisis, Reuters reported, citing a China Securities Journal report. Citing unnamed sources, the China Securities Journal said the government may be looking at a new target of having installed capacity of 10 gigawatts (gW) of PV power by 2015, up from its existing target of 5 gW. China is the world's largest exporter of photovoltaic products and home to some of the industry's top players, such as Trina Solar, JA Solar, Suntech Power and LDK Solar. The China Electricity Council (CEC), an industry body, has asked the government to lower its nuclear capacity target for 2020 and scale back reactor construction in interior regions, the China Business News reported on Monday. China was again the world leader in clean-energy investment last year, ahead of Germany and the United States, according to a report by the Pew Charitable Trusts released this week.

To legally sell dairy products, retailers in China must apply for new operating licenses or renew their old ones by the end of July or face punishment, the State Administration for Industry and Commerce has announced. Starting in April, dairy retailers will be required to apply for one of two types licenses. One will allow them to sell dairy products that contain baby formula and the other will allow them to sell formula-free dairy products, the administration said on its website on Monday. Retailers that sell infant formula without a proper approval will be punished, according to the regulations. The central government has tightened its supervision of food products in response to public concerns over food safety, which have grown more intense following discoveries of the toxic substance melamine in baby formula in 2008 and, more recently, of illegal additives in pork. Among the foods of most concern to safety inspectors are dairy products, edible oils, meats, health foods, food additives and liquors, according to a statement released this month by the Office of the Food Safety Commission under the State Council. The licensing requirement for dairy retailers is the latest step in China's campaign to ensure the safety of its food supply. "I hope the licensing will act as the last line of defense against toxic milk products," said Dong Jinshi, executive vice-president of the International Food Packaging Association, a Hong Kong-based non-government organization. Despite the work, some potentially dangerous milk products still enter the market under the noses of quality inspectors, Dong told China Daily on Tuesday. "The new regulations, if successfully put into effect, will push retailers to become more prudent in choosing dairy suppliers because their licenses may be revoked if they sell counterfeit or toxic dairy products." A shopkeeper interviewed by China Daily on Tuesday applauded the new policy. "Strict supervision will be good for consumers, including myself," said Zhang Mingshen, the owner of a grocery in Beijing's Chaoyang district. "We all need it." "I'll apply for the license as soon as I receive a notice from the local industrial and commercial department." Even so, opponents argue that adopting a licensing requirement for a few products will not be enough to ensure the safety of China's food supply. "Imagine that if someday noodles were found to be tainted," said Li Zhimin, a resident in Shijiazhuang city, North China's Hebei province. "Would authorities then come up with the idea of issuing licenses for noodle sellers?" "It's more important to find and fix the flaws in the administration sector, which allow unscrupulous producers to bring unsafe food to market." A dairy-industry expert also said the regulations will "have few effects" if they do not apply to online sellers of dairy products. "Online shopping has become more and more popular in China, and it's a pity that the supervision of cyber businesses has lagged far behind," said Wang Dingmian, former chairman of the Guangdong Provincial Dairy Association. He said he has noticed an increase in the number of phone calls he has received complaining about milk powders. Wang said online retailers of dairy products and those selling the products in stores should be made subject to the same supervision, which will help to protect consumers' health.

Industrial and Commercial Bank of China, the world’s largest bank by market value, said on Wednesday that its fourth-quarter net profit rose 32 per cent, in line with forecasts.

Ping An profit up 23pc on premium income - Ping An Insurance (Group) of China will use the money it raised from a controversial share placement in Hong Kong to shore up the capital base of Shenzhen Development Bank.

Air China posts strong profit on demand - Flag carrier Air China saw posted a better-than-expected rise in profit last year thanks to growing Asian demand for air travel and major events such as the World Expo.

French President Nicolas Sarkozy arrived in China yesterday at the start of an Asian mini-tour that will include a G20 seminar on the world monetary system and a stop in disaster-struck Japan. Sarkozy was to have a working dinner with President Hu Jintao. Aides to Sarkozy said those talks would touch on key bilateral concerns but also hot-button global issues - notably the coalition military campaign against Libyan leader Muammar Gaddafi, backed by Paris but opposed by Beijing. Following his meetings with Hu, the French leader was to head for Nanjing, where today he will open a meeting of finance ministers and central bankers from G20 nations on global monetary reform.

Hong Kong*:  April 1 2011

The Hong Kong Observatory detected radioactive dust from Fukushima in Hong Kong, but levels had been extremely low, it said yesterday. The observatory rejected suggestions it had delayed releasing the results, saying it needed time to verify the samples collected four days ago before making the data public. The radiation level of 0.0001869 becquerels per cubic metre detected in Hong Kong on Sunday is less than 1/300,000th of the level of 661.38 becquerels that the Hong Kong Radiological Protection Advisory Group believes warrants health concerns. It was the first time Hong Kong had detected radioactive dust since the devastating earthquake in Japan on March 11 which led to leaks from a nuclear power plant in Fukushima. Coastal provinces on the mainland also reported finding traces of iodine-131 on Monday, after Heilongjiang province reported the first such find on Saturday. The observatory said minute amounts of radioactive iodine-131 - a man-made radioactive substance believed to be originating from the Fukushima nuclear plant - were detected in air samples taken on Saturday and Sunday. No other radioactive materials, such as the more toxic plutonium, were detected. Ma Wai-man, acting assistant director of the observatory, said the dust had travelled a long way around the world via the westerly wind belt and its radioactivity had been greatly diluted to almost negligible levels. "It would take 800 to 2,500 years of continued exposure to the detected levels in order to receive the radiation dosage equal to one X-ray," he said. At the observatory's King's Park radiation laboratory, air samples were being taken for 22 hours a day, instead of every three hours before the crisis, to identify the sources of radiation. Chan King-ming, an environmental science professor from Chinese University said it would normally only take one working day to finish testing and he hoped the observatory could release the results faster. But Ma said the test results had to be verified manually by staff and the process could not be replaced by a computerised or automated system. The observatory would announce the results of the tests on samples taken on Monday and Tuesday today. Ma said the ongoing radiation data released hourly on the observatory website only showed the intensity of radiation levels in the air at 10 monitoring sites in Hong Kong, without pinpointing the composition and sources of the radioactive substances.

Hong Kong Panel backs powers to oust unruly members - Lawmakers look set to endorse a proposal that will give all Legislative Council committee chairmen the power to expel disruptive members from individual meetings. Consensus on the move was reached by the Committee on Rules of Procedures yesterday, following an incident last month in which League of Social Democrats lawmaker "Long Hair" Leung Kwok-hung threw four empty plastic bottles at Secretary for Labour and Welfare Matthew Cheung Kin-chung. Unlike full council meetings, from which Legco president Tsang Yok-sing can expel people, panel chairman Lee Cheuk-yan was authorised only to suspend the meeting, which resumed five minutes later. Chief Secretary Henry Tang Ying-yen later wrote to Tsang to complain about Leung's behaviour, urging lawmakers to review Legco rules. Under present rules, only the chairman of a committee of the whole council or the chairman of a standing or select committee can expel a member from a meeting if his behaviour is "grossly disorderly". But most of the members at the Committee on Rules of Procedure yesterday agreed that this power should be extended to the chairmen of panels and all other committees. "It is not a major change," said Democratic Party chairman Albert Ho Chun-yan. "In fact, we misunderstood before that panel chairmen had this power." Ronny Tong Ka-wah of the Civic Party also supported the move but his party colleague Margaret Ng Ngoi-yee disagreed. "The full council, standing and select committees make binding decisions, whereas panels are for discussions ... If panel chairmen expel lawmakers ... this is very ugly," she said. "Besides, legislators who hurl things will not stop hurling things because the chairman can order them out." The proposed amendment is expected to be tabled at a full council meeting for all legislators to vote on in about two months' time.

Japanese restaurants in Hong Kong hit by nuclear contamination fears plan to cut prices and ask the government to provide safety certificates for food imported from Japan in a bid to stay afloat. Since the March 11 earthquake and tsunami that crippled the Fukushima nuclear plant, the city's 600 Japanese restaurants have lost an average 20 per cent in revenue, said Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades. Yiu Yat-chun of the Saikou Japanese Restaurant in Central said that since the earthquake, sales were down by half as customers knew that they mostly imported from Japan. "It is hard to lure people back now. We will probably offer discounts and do some promotions on how safe our food is," he said. They would also state clearly on the menu where the ingredients came from. Traces of radiation linked to the nuclear plant have been found in rainwater in the United States and Britain, but officials say the levels are too low to pose any danger to health. Wong has asked the government to issue certificates for products that have passed radiation tests. He said he received a verbal promise from Centre for Food Safety controller Dr Constance Chan Hon-yee to do so.

Li worries about future of politicised city - 'I can only hope those who care about the territory will act for the benefit of Hong Kong' Speaking at the Cheung Kong results announcement yesterday Li Ka-shing said he thought there were still some financial difficulties ahead in the market. Tycoon Li Ka-shing claimed that Hong Kong has been politicised and that he worried about the city's future. Li, the richest man in Hong Kong ranked by Forbes Asia magazine, said he was becoming increasingly concerned about the outlook for the city. "Hong Kong has been politicised. For the problems facing Hong Kong, I can only hope that those who care about the territory will act for the future benefit of Hong Kong," said Li, speaking after his two flagship companies, Cheung Kong (Holdings) (SEHK: 0001) and Hutchison Whampoa (SEHK: 0013), announced their full-year results yesterday. The two companies - with a combined market value of HK$662.31 billion on the Hong Kong stock market - have businesses in the city that include property, hotels, telecommunications, retailing and container terminals. Asked how to describe the current political climate and its animosity towards property developers, Li said he was "speechless". "I came to Hong Kong [from the mainland] in 1940, and have witnessed its progress," he said. "It is easy to criticise, but I will not pass judgment." Commenting on the economic outlook for Hong Kong and the global challenges, Li said abundant global liquidity following the extension of America's quantitative easing measures would boost the prospects for a faster economy, but it also increased the risk of inflation. "As a result of the financial crisis, a number of countries have implemented measures to protect themselves, including loosening monetary policy, and this is understandable," he said. "These measures have helped the concerned countries themselves, assisting business operators with their capital needs. However, they may not be good for other countries. "In the coming year, I do not think the United States is likely to increase interest rates. However, inflation is expected to continue and will be more serious later on." Faced with rising inflation, Li said if one was buying property now for one's own use, with an adequate down payment of about 30 per cent to 40 per cent, buyers could not go wrong. "In the past, even if one bought at a price which was considered expensive at the time, after 10 years or so, the price would look low," he said. Speaking about the controversy over the minimum wage issue in Hong Kong, Li said: "Livelihoods for the masses are difficult; running small businesses is also difficult - a balance needs to be sought." However, deputy chairman Victor Li Tzar-kuoi said that for big corporations like Cheung Kong and Hutchison, the cost of implementing the minimum wage was relatively small. "The new rules only apply to a very small number of our employees. It will be more difficult for small enterprises," he said.

Li gets numbers right as 3G finally brings home a profit - Hutchison Whampoa ready to reward patient shareholders - Hutchison Whampoa chairman Li Ka-shing cannot hide his pleasure as he announces his company's annual results yesterday and increases dividend payments to its shareholders. A relieved Li Ka-shing announced his company Hutchison Whampoa (SEHK: 0013) was increasing its dividend payout for the first time in a decade after its 3G mobile-phone unit made its first profit since its launch nine years ago. Li said the group "has entered a new era when the 3 Group will no longer be a drag on profits and instead make a positive contribution". Every year since 2005, the billionaire has promised shareholders that their massively expensive investment in its 3G telecoms division was just about to pay off. The 3 Group made HK$2.93 billion last year before interest expenses and taxation - its first full-year positive earnings and a marked turnaround from its loss of HK$8.92 billion in 2009. The figure included two one-off gains: HK$6.01 billion from 3 UK's revised network-sharing deal and HK$1.48 billion related to the assignments of spectrum, or frequency ranges, for 3 Italia. All 3G operations except Ireland's achieved growth, with the total registered 3G customer base increasing by 13 per cent last year to more than 29.6 million customers. Average revenue per user increased by 5 per cent to €29.67 (HK$325.41) last year. But in local-currency terms, that dropped 5 per cent year on year due to reductions in the regulated connection and international roaming fees in Britain. Li pledged last year to consider raising the dividend payout when its 3G operations became profitable. To reward its patient shareholders, Hutchison increased the final dividend 16 per cent to HK$1.41 per share, bringing the full-year payout to HK$1.92 per share. Since 2003, Hutchison has poured billions into the 3G business in Britain, Ireland, Italy, Australia, Sweden, Denmark and Austria. But despite huge outlays for licences and networks, 3G failed to be the money-spinner Li originally envisioned. However, he said, the billions spent also counted as an investment in the next generation of mobile services. "We don't have any problem in terms of capital and technology if we have to move to 4G," Li said. Driven by a turnaround in its 3G operations and growth in other businesses ranging from hotels, retail and ports in 52 countries, the conglomerate posted a 47 per cent gain in net profit to nearly HK$20.04 billion for the year to December. The results beat market forecasts, which expected Hutchison's earnings to increase by 15 per cent to HK$15 billion. Its property and hotel business was also a bright spot for the group. Its earnings before interest expenses and taxation, excluding property revaluation gains, grew 40 per cent to HK$8.99 billion. The retail arm recorded growth of 38 per cent. Earnings before interest expenses and taxation were HK$7.86 billion. Total revenue from Hutchison's port portfolio grew 13 per cent to HK$37.72 billion. Li said he remained upbeat about the group's prospects. "I am very optimistic in the short, medium and long term. All our existing businesses will see organic growth," he said. Li also said that the disaster in Japan would have little effect on the company beyond a small impact on its port businesses. The billionaire did not reveal any spin-off plans, although some analysts expect a Hutchison spin-off after it made HK$45 billion from the initial public offering of the Hutchison Port Holdings Trust in Singapore this month. Shares of Hutchison fell more than 2 per cent to HK$88.80.

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.

Hong Kong's strategic location outweighs high shop rents, says MCM - German luxury goods company MCM Products, which took over home-grown retailer Episode's shop to open its flagship store in Central, said the strategic position of Hong Kong as a gateway to the mainland would outweigh the cost of high shop rents in the city. Global brands would be undeterred by rising rents, it said. "Hong Kong has always been an important and strategic city for luxury brands because it is international and it is where trends start. It is uniquely positioned as a gateway to China," said Alex Tang, head of sales and marketing for MCM. "There are many factors to consider in planning business expansion and rent is only one of them. The merits of having a presence in the world's top cities and the opportunity to appeal to some of the world's most devoted customers may well outweigh the cost of high rents." Hong Kong was therefore a strategic expansion point for MCM, Tang said. The company, owned by the Korean-based Sungjoo Group, will open its largest outlet in the world later this year in the Entertainment Building in Central. Property consultants believe MCM is paying about HK$2.4 million a month in rent, but the company has not commented. It opened its first store in the city in Tsim Sha Tsui. Episode closed its Central store on February 13 after the company failed to agree on the owner's revised asking rent of around HK$2.4 million a month. That represented a 70 per cent rise from the old lease. Tang said the decision to expand in Hong Kong was prompted by the sharp growth in the sales of luxury goods, backed by wealthy Hong Kong buyers and affluent mainlanders. "MCM has a presence in the world's most stylish cities in 27 countries. We have seen robust growth in the luxury fashion market in Hong Kong, and it is very strategic for MCM to establish a strong presence here as we plan to expand into the mainland." Tang said while the company targeted local buyers, mainlanders would comprise a large part of its customer base. As long as Hong Kong kept its unique identity and charm it would always be a top destination for the world's travellers, he said. MCM now has two stores in Shanghai, one in Three on the Bund and the other at Hong Kong Plaza. "We are planning to open a new store in Shin Kong Place in Beijing and other cities in the near future," sad Tang. Apple, the maker of iPhone and iPad, will open its first 15,000 sq ft Apple Store at IFC Mall, in Central, by the end of this year, people familiar with the plan said. In the third quarter of next year, Apple plans to open a 20,000 sq ft store at Hysan (SEHK: 0014) Place in Causeway Bay. United States-based fashion retailer Forever 21 is taking up space soon to be vacated by Giordano (SEHK: 0709) in Capitol Centre in Causeway Bay.

Former actor Alan Tang Kwong-wing, known as the "Student Prince", has died at home. He was 62. The family said he was checked by a family doctor for a heart problem at home in Kadoorie Avenue, Kowloon Tong, yesterday afternoon. He was found collapsed on a bed by a maid around 9.30pm. Ambulance staff confirmed him dead at the scene. Police found nothing suspicious. Tang, who earned his nickname for his impressive first starring role, at age 16, in 1963's The Student Prince, established his fame when he moved to Taiwan during the 1970s. There he made over 60 feature films, including dramas and romances. When he returned to Hong Kong in 1977, he formed a production company with his elder brother, The Wing-Scope Film Production, and made triad-genre films, which he acted in or produced. He left the industry in the early 1990s and turned to the catering business. But he still showed up frequently on television screens. In 2008 he hit the news for angrily saying at a vigil for his late close friend and actress "Fei Fei" Lydia Sum Tin-ha that her former husband, actor Adam Cheng Siu-chow, had been absent when Sum was dying. Robert Chua Wah-peng, veteran television producer and Tang's neighbour for more than 10 years, said he was overwhelmed with shock at Tang's death. "He was such a nice man," Chua said. "He was such a filial son, who treated his mother so well." Chua said Tang had been living with his mother, wife, two daughters and more than 10 dogs. "He was a good-looking man, a mature actor. He was always smiling." Tang's daughter said he died peacefully and naturally.

Shoppers look for bargains at the fair, held at Fanling Recreation Ground yesterday. The Federation of Trade Unions is also helping organise fairs in Tin Shui Wai and Sha Tin. Hundreds of people flocked to an "anti-inflation fair" - a market meant to give shoppers a break from inflation, which hit a 29-month high of 3.6 per cent in January. The fair, organised by the Federation of Trade Unions and shopping website CRVMore, started yesterday and runs until Sunday. There will also be fairs in Tin Shui Wai, from next Tuesday until April 10, and Sha Tin, from April 12 to 17. The 40 stalls in Fanling offered household goods - appliances, food, toys and toiletries - at discount. Cheung Kam-shing, project manager of the union's Preferential Services Centre, said the fairs were not the union's only effort to help people deal with inflation. "The 10 service centres of the union are also selling goods at discounted prices," he said. "Customers who can't find their bargains in the fairs can visit our service centres, which have a much larger scale of goods on offer. "We could set the price so low because we have secured a lot of factory owners to serve as sponsors." The goods in Fanling were 25-80 per cent of the original price. Eight toilet rolls sold for HK$21.50. A rucksack went for HK$50. Ho Lai-kwong, selling rucksacks at a stall, said the original price had been HK$200. "We are not doing it to earn money," Ho said. "We just want to help the grass-roots people." Jason Au-yeung, owner of a stall selling food for distributors Wing Sang Cheong, said nearly all the goods were sold out by midday. Six packs of Korean noodles went for HK$10 and a bottle of Italian olive oil for HK$35, half the original price. "Corn oil, which sold for HK$40 for three bottles, is the most popular item," he said. "We give out a free pack of noodles for every purchase of corn oil." All the goods on sale were sold at cost price. "We won't make any money. "We want to support the union's anti-inflation event." Crystal Li, merchandise officer with CRVMore, said they had sold more than 40 cans of organic baby milk formula at HK$129 each. "The most one can buy is three cans," Li said. "We hope the event can promote our online shopping website." Housewife Christy Poon said she spent HK$100 buying biscuits and spaghetti. She said the food was cheaper than at supermarkets. Office clerk Ng Wing-yan said she had bought three bottles of soy sauce for HK$55. "Things are very expensive now," she said. "There should be more such concessionary events." Last year, Hong Kong reported it had 1.26 million people making less than HK$3,500 a month.

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

A Chinese warship successfully completes its first escort of a ship carrying World Food Programme aid along the lawless coast of Somalia, and more such escorts are expected.

Spanish Queen Sofia poses with twin pandas Po and De De at the Madrid Zoo & Aquarium March 29, 2011. Twin pandas were born on Sept 7, conceived through artificial insemination in a joint effort by Spain's National Research council and scientists from China. The cubs are the first of their species to be born in Spain since 1982 and only the third litter to be born in Europe, according to Chinese veterinarian Yuan Bo, who travelled from Beijing to assist the birth and the first months of the newborns. 

The oil tanker "Shengchi", loaded with 10,000 tons of gasoline and 10,000 tons of diesel to help earthquake relief in Japan, is ready to leave a deepwater port in China's northeastern city of Dalian for Japan on March 29, 2011. China has offered Japan 20,000 tons of fuel for free as part of its response to the quake that hit the country on March 11. The tanker is expected to arrive in Japan early next month. 

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