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Top-ranked Tsinghua and Peking universities are among 63 mainland tertiary institutions that will accept Hong Kong students based on their new secondary school examination results. Candidates sitting the Hong Kong Diploma of Secondary Education examinations and Hong Kong Advanced Level Examination next year are eligible for enrolment under the pilot scheme. The universities will consider the admission of SAR students based on the local exam results - exempting them from taking the Joint Entrance Examination for Universities in the mainland, the Ministry of Education announced. No such exemption was granted for the Hong Kong Certificate of Education Examination, which was held for the last time this year. Vice Premier Li Keqiang announced the pilot scheme during his visit to Hong Kong in August. An Education Bureau spokesman said yesterday the new academic structure for senior secondary education and the qualifications of the diploma examinations are "nationally accepted." "This will not only provide an alternative route for Hong Kong students and relieve their pressure in getting entry into universities, but also help them in their career development in the mainland or Hong Kong, and nurture talent for our country," the spokesman said. The institutions are located in 11 provinces and municipalities, including Beijing, Tianjin, Shanghai, Chongqing, Guangdong, Jiangsu, Zhejiang, Fujian, Hubei, Sichuan and Yunnan. Students can apply online from February 20 to March 5, and perform on-site confirmation at the China Education Exchange (HK) Centre from March 1-15. The Hong Kong Examinations and Assessment Authority will provide students' exam results to the Joint Enrolment Office, and the results will be forwarded to the institutions for admission confirmation. Institutions will announce admission results before August 3. The Ministry of Education and the Education Bureau will jointly organize the 2011 Mainland Higher Education Expo on December 10 and 11 to help students and parents gain a better understanding of the pilot scheme. All 63 mainland institutions that are taking part in the scheme will set up exhibition booths and organize talks at the expo, to be held at Queen Elizabeth School in Mong Kok. Admission is free.

US luxury handbag maker Coach says its dual listing will start trading on Thursday in Hong Kong as it seeks to raise its brand profile with Asia's newly wealthy. Coach is already traded on the New York Stock Exchange. It’s issuing Hong Kong Depositary Receipts instead of new shares and won’t raise any money through the secondary listing. In Asia, about a fifth of sales come from Japan. China is a smaller market but is Coach’s biggest “growth opportunity.” The company had 66 stores in the mainland in the year to July 2 and plans to open 30 more the following year. Coach follows other Western brands such as Prada that have gone public in Hong Kong this year as they aim for greater exposure to China’s growing luxury market.

China Lifestyle Food and Beverages is upbeat about prospects for its initial public offering despite having to compete for funds with at least eight other share sales including Chow Tai Fook Jewellery, which is seeking as much as HK$22.05 billion. The company, whose global offering runs from today to Friday, is seeking to raise HK$541.9 million. Of the 282 million shares on offer, only 10 per cent are sold in Hong Kong and the rest are offered globally. It is understood that half of the overseas allotment has been covered. China Lifestyle, the mainland's second-largest jelly manufacturer in terms of sales, delisted in Singapore in 2009, blaming low turnover and a low valuation. Its chairman, Zheng Yulong, said any impact from the volatile stock market should only be short-term. "Food and beverages is one of the fastest growing markets in China. We are a long-established brand. Investors will realise our value," he said. The shares, priced at HK$2.65 each, are in board lots of 1,000 shares. They will begin trading on December 9. The offer price values the company at about 12 times forecast earnings, which is cheap in comparison to Want Want China, for example, a snack producer that has a valuation of about 30 times. Zheng said half of the money raised would be used to expand and improve facilities to cater for future sales growth, which is expected to come in light of continuous urbanisation and an expansion of retail sales networks. On top of an expansion plan for its two plants in Sichuan and Tianjin, which will nearly double the company's production capacity, China Lifestyle also plans to build a fourth plant in Chuzhou, Anhui, which is expected to open in 2013. It also has a plant in Jinjiang, Fujian. While jelly products would continue to dominate sales in the next two to three years, Zheng said they would seek to diversify products to lower the company's reliance on the jelly products to about 40 per cent of sales from 83 per cent now. The company saw net profit soar to 115.6 million yuan (HK$141.1 million) in the first five months of this year from 58.6 million yuan in the same period last year. Revenue grew in the past three years, with sales jumping 20 per cent to 931 million yuan last year, although net profit dropped 22 per cent in 2009 because of a provision. 

Car dealer Baoxin Auto is seeking up to HK$4.1 billion in an initial public offering in Hong Kong as the mainland's fragmented motor retailing market consolidates. Baoxin aims to sell 328.7 million new shares and 50.6 million existing shares within a price range of HK$8.50 to HK$10.80 apiece, Bloomberg reported. The deal would see the company raise HK$3.2 billion to HK$4.1 billion to help expand its network of dealerships, which centres on luxury car brands such as BMW, Jaguar Land Rover and Audi. Passenger car sales on the mainland, the world's biggest vehicle market, rose 5.86 per cent to 11.76 million cars in the first 10 months of the year. That marked a sharp slowdown from the 20-40 per cent growth rates seen in the previous two years, and has challenged motoring manufacturers and their dealers to find ways to protect profitability and preserve market share in the face of cooling retail demand. The situation for car dealers is especially precarious as against the backdrop of rising competition and industry consolidation the sales slowdown means they must also work to offset rising inventory levels via discounting. "For dealers, the trend now is consolidation and many are going public to raise funds in order to keep growing," says Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight. "The dealer business is not as profitable as 10 years ago but the required investment keeps rising. Many smaller operators are shutting down, especially if they are not in good locations," Zhang said. The emerging winners in the sector are the bigger and better capitalised dealer groups, which continue to grow organically and through acquisitions - often by tapping equity markets for funding. Pang Da Automobile Trade, the biggest mainland auto dealer by market value, raised 6.3 billion yuan (HK$7.69 billion) in an April IPO in Shanghai. China Zhengtong Auto Services, the biggest Hong Kong-listed dealer, raised HK$3.13 billion in an August share sale that followed on its HK$3.65 billion IPO last December. Smaller rival Zhongsheng raised HK$1.3 billion selling shares in January. The company last year raised a combined HK$4.66 billion via a March IPO and a follow-on offering in October. Pang Da, Zhengtong and Zhongsheng trade at valuations of 14 to 22 times forecasted earnings. Baoxin's pricing range implies a valuation of 9.5 to 12 times expected earnings, IFR reported last week. Baoxin operates 28 full-service dealerships on the mainland, mainly concentrated in affluent eastern coastal cities, and has plans to open 14 new one-stop showrooms and service centres by next June, the company said yesterday in a preliminary listing document. Baoxin saw revenue rise 54 per cent in the first half of the year to 5.23 billion yuan, with luxury car sales accounting for 86 per cent of the total by value. The focus on the top end of the market helped Baoxin's profit growth outpace the rise in revenue, with gross profit surging 72 per cent to 519.06 million yuan in the first half of the year. The company forecast net profit for this year of not less than 600 million yuan—highly conservative given its first-half performance. Morgan Stanley and JP Morgan are handling Baoxin's IPO.

China Nonferrous Metal Mining (Group) (CNMC) received approval from the Hong Kong stock exchange for a US$1 billion initial public offering, IFR reported on Tuesday, citing two sources with direct knowledge of the plans who could not speak publicly on the matter. CNMC won approval from the listing committee of the exchange on Monday, but it has no plans to push forward with the IPO this year, said IFR, a Thomson Reuters publication, adding that a listing would likely take place after volatility in global markets eases. The company, founded in 1983, owns mines in Zambia, Mongolia and Thailand, with a focus on copper, zinc and nickel, among other minerals. China International Capital Corporation (CICC), JPMorgan Chase & Company and UBS were hired to manage the deal, IFR reported.

China Everbright Bank has revived its Hong Kong listing plan and has submitted an application to the HKSE with a scaled-down offering of HK$15 billion, a report said on Tuesday.

The Polar Adventure begins early for these children at a ceremony in Ocean Park marking the arrival of animals from mainland China. Lack of interest from property developers was one reason Ocean Park's hotel tender fell through last week, the chairman of the 34-year-old amusement park said yesterday. "[The tender] came through a very difficult property market where most developers were more concerned about building residential and commercial, because the payback ... is much faster," Allan Zeman said at the unveiling of the design for the Polar Adventure attraction due to open next summer. "And even though the government offered many hotel sites, not many were taken up." Last week, Zeman said the tender had been allowed to lapse because the terms were "not in the best interests of the parties concerned". The tender would have required the developer to build and run the hotels and share profits with Ocean Park for 30 years before transferring ownership to the theme park. He said the new terms would be outlined at a meeting of the hotel steering committee next month, and a fresh tender would hopefully be presented early next year. If this plan is successful, the hotels could be running in late 2014 or early 2015. The tender had originally called for two hotels - one at the main entrance and a second at the Tai Shue Wan entrance to Ocean Park - to open by 2013 and 2015 respectively. The park has talked about building hotels for more than a decade, with firm plans set in the last few years. However, completion dates have been revised several times. "We still believe that hotels are very important for Ocean Park, and very important for Hong Kong. This year the tourism board is estimating around 40 million people coming to Hong Kong," Zeman said. "I'm not sure there's enough hotels to accommodate all the visitors and in talking to my mainland friends, they expect in the next few years, many, many more visitors to come to Hong Kong. If we don't have hotels, we won't be getting the increases that we're looking for." He said a record number of visitors had come to the park in the last five months. Attendance earlier this month was 30 per cent higher than last year. "This Saturday alone we had 36,000 visitors through the park," Zeman said. He also said there were no plans to raise admission fees. Meanwhile, after six years, the Polar Adventure will feature three species of penguin, largha seals from Japan and China, and a restaurant. Five giant salamanders will feature in the Amazing Asian Animals exhibit. The park earlier scrapped plans to import beluga whales.

Leung Chun-ying on an RTHK radio show yesterday. He said: "When there are people donating money, it is a move to show their support." Chief executive candidate Leung Chun-ying might take his electioneering to the streets with a fund-raising campaign to increase the public's participation in what critics have dismissed as a "small-circle election". The move is seen as part of Leung's efforts to develop a man-of-the-people image while his rival Henry Tang Ying-yen has largely used his star power as former chief secretary to amass support. A political observer said Leung's campaign might embarrass him if it received a lukewarm response. Speaking on radio yesterday, Leung said he was considering a street fund-raising campaign to "increase a sense of participation" in the chief executive election in March. "The [fund-raising] campaign is to let the public know that the future government does not only belong to the 1,200-member Election Committee, but to all Hongkongers," said Leung, the former Executive Council convener who formally declared his candidacy on Sunday. "When there are people donating money, it is a move to show their support," he said. The Election Committee, which will choose the chief executive, is expected to be dominated by Beijing loyalists. Leung attempted to project his grass-roots credentials by recalling hard times in his childhood when he declared his candidacy. Tang, who announced his candidacy on Saturday, declined to comment on Leung's strategy yesterday and tried to play down his wealthy upbringing as the grandson of a Shanghainese textile industrialist. "I had no choice regarding my origin, but I can choose how I want to serve," he said. A person close to Tang said his camp had no plan to run a street fund-raising campaign. Before Tang's announcement, financial heavyweights lined up to offer their support, including HSBC Asia-Pacific chief executive Peter Wong Tung-shun, former Monetary Authority chief Joseph Yam Chi-kwong and Bank of East Asia (SEHK: 0023) chairman David Li Kwok-po. Leung was questioned by radio callers about the lack of heavyweights among his backers. He said he had no intention of showing off any "stars". "I need talented people who can perform - rather than just those who voice support and then disappear right afterwards - to join my governing team," Leung said. Chinese University political scientist Ivan Choy Chi-keung said street fund-raising could be risky, as political parties generally receive only a lukewarm response. "Even though Leung is not aiming [primarily] at raising funds, the public might still look at the amount he could raise and if it was low, it would be embarrassing to him." Meanwhile, Ocean Park chairman Allan Zeman likened the election as a "big panda versus baby panda" race. "I would say Henry is a panda, because a panda is loveable. You want to hug him," Zeman said. Leung, he said, was a baby panda, "learning on the job, just about to mature". Other observers have called it a fight between wolf and pig, an allusion to Leung's perceived cunning and Tang's apparent stupidity.

Democrats Victor Yeung (left), Kam Nai-wai and Winfield Chong consult over election vote-rigging, at police headquarters in Wan Chai. Voter listed Four Seasons hotel as a home - Complaints in ballot-rigging probe include 100 people registering addresses in buildings being demolished - Almost 100 voters in Central registered offices and hotels, including the luxury Four Seasons, as their homes. Other complaints aired yesterday included one by a candidate who lost by 24 votes and later found that more than 100 voters registered their addresses in six buildings that were being demolished. The cases take the number of suspected incidents of vote-rigging in the district council elections to 800. As the row in the wake of the November 6 polls intensified, Chief Secretary Stephen Lam Sui-lung vowed to tighten voter registration and electoral arrangements if needed and said all suspected vote-rigging cases would be followed up. A rough count by the South China Morning Post (SEHK: 0583, announcements, news) found at least 800 possible false or inaccurate registration claims in the election, based on information provided by political parties or reported by media. Hui Chi-fung, a Democrat who won the Chung Wan seat in Central and Western District, said he had found nearly 100 voters who had registered their main residential addresses at offices and hotel rooms in Central and Admiralty. "I believe there might be vote-rigging in those cases. I will lodge complaints to the Registration and Electoral Office and the police after compiling more information," Hui said. Hui was among seven Democrats who protested at the electoral office and at police headquarters in Wan Chai yesterday morning. His complaint included a rival, Wai Pui-shuen, who ran as an independent. Hui said Wai had moved into a 250-sq-ft home in Tung Tze Terrace on Aberdeen Street with five other family members a year ago and planned to move out soon after losing to him by a margin of 151 votes. Another complainant was Winfield Chong Wing-fai, a Democrat who lost by 24 votes to Democratic Alliance for the Betterment and Progress of Hong Kong vice-chairman Horace Cheung Kwok-kwan in Sai Wan constituency, Central and Western District. Chong said 118 voters had registered their addresses at six buildings in his constituency that were in the process of being, or had already been, pulled down. "The suspected number of voters involved was about five times the difference I lost to my opponent. This is a matter of concern," Chong said. Major pan-democratic parties are asking their candidates to gather problematic voter registrations. Lam Kin-man - a candidate for the Association for Democracy and People's Livelihood, who was defeated by two votes in King's Park constituency, Yau Tsim Mong District - took the case to the Independent Commission Against Corruption. He claimed to have collected 57 questionable registrations in seven flats and would also report it to the police. "We checked with the land registry and found none of the voters concerned own or have ever owned the flats they registered at," said Lam. Allegations of vote-rigging emerged earlier this month and prompted an investigation. Some 388 complaints have been filed with the ICAC over the election, 12 related to alleged vote-rigging. Police have received at least 16 reports.

PCCW (SEHK: 0008)'s telecoms business spin-off, HKT Trust, was little changed in its trading debut in Hong Kong on Tuesday as volatility in global markets and a rich valuation weighed on the high-yield investment trust after its US$1.2 billion IPO. Controlled by Hong Kong tycoon Richard Li Tzar-kai, PCCW launched the initial public offer (IPO) on November 9, braving volatile global markets that have forced companies around the world to cancel or delay listing plans in recent months. HKT Trust traded at HK$4.54 in early afternoon, up slightly from the HK$4.53 price of the initial public offering. The company offered 2.05 billion share-stapled units and priced it at the bottom of an indicative range of HK$4.53 to HK$5.38, putting the total deal at HK$9.3 billion (US$1.2 billion). Shares of PCCW were down 1.1 per cent at HK$2.81, in a broader market up 1.6 per cent. The trust was priced to yield nearly 9 per cent next year, high when compared with near-zero interest rates in most developed economies or a dividend yield of around 3.9 per cent for Hong Kong’s Hang Seng Index as a whole. Despite that, the company said in a securities filing the deal was only “moderately over-subscribed” and demand from retail investors fell well short of the total offered. “The yield they are offering is pretty high right now, but some investors are doubtful whether that can be sustained,” said Alan Chan, director of financial services firm Taishan Capital. HKT enjoys a strong position in the fixed line and broadband internet business, which will be attractive for investors. But in the longer term, it faces stiff competition from other players such as Hutchison Whampoa (SEHK: 0013) and SmarTone in the mobile phone services sector in Hong Kong, which has one of the world’s highest penetration rates. Retail investors snapped up only 1.2 per cent of the total offering, far below the 10 per cent set aside for them, HKT Trust said in a securities filing. Analysts said the valuation limited its appeal to Hong Kong retail investors who normally focus on potential quick-money “first day pops” for IPOs. The stock was offered at 21 times to 25 times its forecast earnings for fiscal next year, compared with an average of 15 times for the sector, said Alan Kam, an analyst at Daiwa Capital Markets in Hong Kong. “After the events of 2008, this is the worst market we’ve seen for some years,” Alexander Arena, PCCW’s group managing director, told a news conference at the Hong Kong stock exchange. “I can understand why retail investors were cautious.” PCCW will be able to use the money raised to expand its remaining media business by expanding its TV operations and investing in content providers in China, fund managers and analysts said. Shares of PCCW plunged about 18 per cent since the company received stock exchange approval for the IPO in early September, more than double the 7 per cent decline in the Hang Seng Composite Index of eight telecommunications stocks. Concerns over Europe’s debt troubles and rising volatility in global markets has weighed on equity offerings in Asia and around the world in recent weeks. Several deals in Hong Kong were postponed in September and some IPOs coming to market, such as the up to US$2.8 billion from Chow Tai Fook Jewellery Group, have seen no demand from so-called cornerstone investors unwilling to have their funds tied up for an extended period of time. “In our lifetime, these are probably as bad markets as we are ever going to see,” PCCW’s Arena said. HKT Trust faces competition from Hutchison Whampoa’s “3” service, SmarTone Mobile Communications and CSL, a unit of Australia’s Telstra in mobile phone services. It also competes with Hutchison in household broadband internet services, which has a penetration rate of 85.2 per cent, Hong Kong government data showed. In a report issued on Tuesday, ratings agency Moody’s Investors Service confirmed HKT’s ratings at Baa2 and left it with a stable outlook because of plans to use $1 billion of the IPO proceeds to pay down debt. Moody’s had put the ratings on review for a possible downgrade in March. Moody’s also raised concerns over market competition in the telecoms sector, which could erode HKT’s dominance, and possible use of its funds to boost returns for the trust’s investors. “Downward pressure on the rating could materialise should HKT Group pursue a more aggressive distribution strategy such that debt levels rise to fund shareholder returns,” Moody’s said in a statement. HKT Trust offered so-called share-stapled units in the IPO, each comprising a unit of HKT Trust, a preference share in HKT Limited and an interest in ordinary shares of HKT Limited held by the trustee manager. China International Capital Corporation (CICC), Deutsche Bank , Goldman Sachs and HSBC acted as joint global co-ordinators for the offering, with JPMorgan, Standard Chartered and Singapore’s DBS also helping to underwrite the deal.

Legislation to better protect buyers of new homes from dishonest real estate developers took another step forward on Tuesday morning – with the launch of a two-month public consultation on the government’s new bill. Housing Minister Eva Cheng Yu-wah told a press conference: “We understand buying a property is an important decision and a long-term commitment for many people. Their rights ought to be protected.” The consultation will last until January 28, and the administration wants the bill to become law within the term of the current government, Cheng said. The measures in the bill are generally unchanged from the package of items discussed earlier at the committee stage. The bill sets out different levels of penalties, including a maximum punishment of seven years’ imprisonment and a HK$5 million fine against developers – including everyone from company directors to secretaries – who provide false or misleading information to buyers. The bill creates requirements and forbids misrepresentation in sales brochures, arrangements, orders and show flats. Price lists must be issued at least three days before a sale begins, and sales brochures made available seven days in advance, it says. Developers will have to describe flat sizes in terms of “saleable area” instead of “gross floor area”, it says, because the latter includes common areas and can be confusing or misleading. Under the bill, developers must provide at least one unmodified show flat for buyers to visit, if the flats for sale are not yet completed. Further, they must not reserve flats for buyers until the price list is issued. The bill calls for property transactions to be disclosed online within 24 hours of a deal being completed. An enforcement arm will also be established under the Transport and Housing Bureau to implement the new law. Cheng said the bill will be tabled to Legco in the first quarter of next year. After that it will take about one year to take effect, because of the time involved in setting up the new enforcement arm.

 China*:  Dec 1 2011 Share

TCL Thomson Electronics would go on to lose 143 million yuan by the end of the next year. Li Dongsheng (left), chairman of TCL, and Charles Dehelly, CEO of Thomson, shake hands in 2003 over their joint venture. Last month, as Li Dongsheng stood in front of China's most advanced plant for making LCD flat panels, he recalled a muggy evening 35 years ago when he saw a television set for the first time. At that time Li - now chairman of TCL (SEHK: 1070), the giant electronics company - was a zhi qing, an educated youth, in a small village named Maan in Guangdong. The whole village came out to welcome its first small black-and-white television and carefully placed the luxury item in the town's public dining hall. Every evening after the villagers finished their long day in the fields, they gathered around the television and watched in awe, though they kept the screen dimmed and the sound low in an attempt to save electricity. Still, when Li saw this modern electronic device, he marvelled at the advanced technology. "What a magical gadget", Li remembers thinking to himself. He did not know it would become a key fixture in his life, the centre of his best and worst moments. With his sleek, jet-black hair, his dark suits and red tie, Li looks for all the world like a conservative official in the Communist Party. Yet Li, who has embraced risk and free enterprise, leads one of the most ambitious consumer-electronics makers in China. With a 4.8 per cent market share in the liquid crystal display TV market globally, TCL is now the seventh-largest TV brand, according to DisplaySearch, a market research firm that specialises in the display-related industries. Li is a member of the first generation of mainland entrepreneurs, and his success at TCL has mirrored the country's rise in the past 30 years. By internationalising his company, he is leading a Chinese foray into the global marketplace. Sitting in one of the company's buildings in Huizhou, Li remembers that the winter of 1977 was remarkably cold. He was living in a tiny straw shed and studying for the first college entrance examination since its abolition in 1966, when the Cultural Revolution started. "When I hit problems along the way, I think: 'This is nothing like what I faced down on the farm,' " the 54-year-old said in his spacious office. "I didn't want to stay there and do farm work for the rest of my life, so I had to pass the exam." He did pass, and entered Southern China University of Technology in 1978, graduating with an engineering degree. The nation was changing rapidly during his college years. In 1978, Deng Xiaoping encouraged the creation of a market economy and businesses that ran on more of a capitalist, for-profit model. The epicentre for reform was Shenzhen - then a group of fishing villages along the Hong Kong border. Li's village of Maan in Huizhou was only an hour's drive away. When people returned from a visit to Hong Kong, he said, they would display their purchases and boast of their trip to the capitalist world. At the same time, Japanese consumer electronic brands were becoming popular and their advertisements appeared all over Huizhou. Li turned down a job offer at the Huizhou Committee of Science and Technology when he graduated in 1982. A stable government job made sense, but, he said, he "didn't want to sit in an office all day doing nothing". He had noticed the popularity of imported tape recorders, and with government investment he helped form the mainland's first cassette-tape joint-venture, TTK, located in a ramshackle warehouse that originally stored farm machinery. The name TTK was intended to imitate TDK, a famous Japanese brand, but it also had a Chinese meaning that evoked good luck. TTK was an acronym for Tian Tian Kaigong, or "have work to do every day". By 1986, as incomes began to rise, telephones had become popular and the company changed its name to TCL - Telephone Communication Limited - but the company also promoted the letters as an acronym for "The Creative Life". During that time, a new business model was being developed in the special economic zones: the state-owned private enterprise. The government owned the company but it had to survive largely on its own. Lenovo (SEHK: 0992), Haier and other large companies went through that stage. "The local government didn't collect much tax on TCL in the beginning, and subsidised it as much as possible," said Zhu Youzhi, the former party secretary of Huizhou. TCL became a public company in 1996 and now the Huizhou municipal government is its largest shareholder, with a 9.8 per cent stake. Li owns 5.5 per cent. In 1999, Li launched TCL's first overseas branch, in Vietnam. "It was important that we stepped out," he said. "China has been the fastest-growing market over the past decades, but it is almost impossible to keep the same pace in the future. Internationalisation is something that Chinese enterprises have to do for their future development." In 2002, TCL entered the European market by purchasing a bankrupt German television manufacturer, Schneider Technologies. Two years later, Li paid about 4.4 billion yuan (HK$5.35 billion) for control of the TV arm of the French consumer-products giant Thomson, which owned US electronics brand RCA. Three months after the Thomson deal, TCL undertook a substantial restructuring of its mobile-phone venture with Alcatel of France. "I got direct penetration into the world's two richest markets, North America and Europe, right away," he said after the purchase. The beginning of 2004 was probably the best time of Li's business career, he said. President Hu Jintao came to the TCL-Thomson signing ceremony, standing right behind Li. And then-French president Jacques Chirac met Li in the Elysee Palace, making Li an Officer of the Legion of Honour, a French civil and military honour. Li said he couldn't sleep well the night before the signing ceremony with Thomson. "I was so excited," said Li, who coincidentally had used "Tomson" as his English first name for decades. "The chance to become a global television company just doesn't come along every day. We checked the risks, but it seemed to me that this was a unique opportunity." As it turned out, Li didn't sleep well for the next several years. The joint venture of TCL and Thomson, TCL Thomson Electronics (TTE), had lost 143 million yuan by the end of 2004. In 2005 it lost another 820 million yuan and in 2006 the company suffered a breathtaking loss of 1.93 billion yuan. The losses astonished Li. He admitted publicly that he had underestimated the challenges involved in the rescue of Thomson's business. The operation remained focused on traditional cathode-ray-tube TVs at a time when the trend was toward flat-panel screens. Zhao Zhongyao, TTE's chief executive, confessed the acquisition was done in haste and that TCL didn't know much about the European market. None of the employees from TCL could speak French and the local employees didn't trust the Chinese newcomers. "They were, like: 'Just feed us products and stay away from the management,'" Zhao said. Li agreed that Hu's visit to France was a factor that pushed him to sign the contract with Thomson at that specific time. "It was an honour, and no one would miss that chance," he said. Niu Wenwen is the editor of The Founder magazine, and he has known Li for a decade. He remembers that period vividly. "Li was almost out of control at the most difficult time," he said. "He was giving a hard time to his clients and employees. People were panicked and almost lost their confidence in the company. They felt like they were in hell just looking at his face." Employees had to check with Li's secretary to see if the boss was in a good mood before talking to him. Li said that he lost 10kg, and that he started to question himself. "Is it wrong to start to internationalise?" he asked himself. He thought about quitting. Officials from the Ministry of Commerce told him that the government would support TCL no matter what decision he made, he recalled. But from the government's standpoint, they hoped TCL would continue to expand beyond China because the results of TCL's acquisition "would affect the internationalisation process of all the Chinese enterprises", he said. "I realised that if we wanted to become a big company, like the ones from Japan or Korea, we had to suffer the pain of internationalisation," Li said. "None of the best companies in the world do business in only one area. Internationalisation might take one or two decades, and we have to be patient and walk through the whole process step by step." At the company's end-of-year banquet in 2006, after it suffered its 1.93 billion yuan loss, Li sang a song along with his colleagues called Start All Over. It was a song that had been popular in the late 1990s, when state-owned enterprises had started to reform and millions of workers in China lost their jobs. The first line of the song was "the old glories already have become a distant memory". It urged them to look forward into the future. Li said he felt the same way, and started to restructure the European business at the end of the year. The company stopped all sales and marketing activity in Europe other than its original equipment manufacturing (OEM) business. It laid off 450 local employees in Europe and kept only one factory, in Poland. The company's management style also changed. "Now we want the foreigners to work in our way," Zhao said. He said it was common to see a foreign manager give an hour-long presentation to defend why he had not made a profit. "Now if you do that - sorry, you must go. Everyone has to make a profit for the company," he said. "When we first started to work with foreign companies, I looked up to them," Li said. "Now after years of internationalisation, I still think they're big, but I can at least tell how big they are. My company is now able to compete with them in some fields, and the gap between us is getting smaller." TCL turned a profit of 380 million yuan the next year, though it did so by selling off assets - its computer division, an electrical-appliance company and land in Huizhou. Last year, net profit was 433 million yuan. According to last year's report, TCL's sales revenue reached 50.25 billion yuan, a 17 per cent year-on-year increase. Emerging markets, including Latin America, South Africa and Southeast Asia, became TCL's largest overseas markets in terms of sales volume and became a new growth driver for its business after the domestic market. For the first half of this year, TCL earned 539 million yuan, a 241 per cent increase from the year before.

Beijing's city government has relaxed one local limit on real-estate sales in a subtle move that analysts said could signal official concern that China's broader efforts to cool the property market could be hurting parts of the economy. Observers are watching to see whether other local Chinese government officials follow suit. Other cities have gone further to relax restrictions only to reverse course in the face of the central government's drive to cool prices and address widespread public worries about housing costs. "If it's Beijing city, I'm sure it had the blessing of the central government," said Wee Liat Lee, an analyst at Samsung Securities, adding that the latest move reflected official concerns that the property market could be cooling too quickly. Recent data show prices in many areas have remained steady and have even fallen, addressing the central government's concerns but putting pressure on property developers and on local governments that depend on land sales for revenue. Housing also is a key part of China's economy—as much as 25% of it may be tied up in real estate and related industries, according to economists. The Beijing Municipal Commission of Housing and Urban-Rural Development's move increases the number of homes that qualify for a preferential transaction tax treatment. In a statement dated Nov. 22 and made public on Friday, the Beijing municipal government set the ceiling for property prices of so-called ordinary homes that are eligible for the tax credit at between 17,280 yuan ($2,721) and 38,880 yuan per square meter, depending on location. The new standard raises the cap on the price of an "ordinary home" to 5.44 million yuan, compared with 2.58 million yuan previously announced in late 2008. Such homes are defined as those no larger than 140 square meters. The move considerably broadens the definition of an ordinary home. Beijing's average property price in October was 22,946 yuan per square meter, according to data from China Real Estate Index System. The Beijing housing bureau said this move is in line with the State Council's earlier pledge to improve the management of the property transaction tax and to close the loopholes exploited by tax frauds. "Some people think it's just a belated move to broaden the preferential tax base, but the government could have done it when prices were rising. It chose to do so when prices are falling, so this is an easing measure," said Johnson Hu, an analyst from CIMB-GK Securities. While the city government sacrifices some tax income with its latest move, its revenue could stabilize if the modest easing helps encourage sales. The relaxation is effectively a 2 percentage point discount on the price of the home—instead of paying a transaction tax of 3%, the buyer pays 1%—rather than an easing of home purchase restrictions, so there are doubts whether the move can actually lure buyers, said Mr. Lee of Samsung Securities. "It's not going to spur a big increase in transaction volume, but it will at least provide some downside support," he said. In October, Foshan city in coastal Guangdong province had eased restrictions on home purchases, but postponed the move less than a day after, indicating that the central government was against the easing. Analysts said it would be easier to get official approval for such fiscal fine-tuning rather than an outright reversal of home-purchase restrictions, which had been initiated and enforced by the central government. Over the weekend, Vice Premier Li Keqiang said China will maintain its property-tightening measures next year, amid speculation that authorities may ease controls on the market if a steep drop in property prices threatens economic growth. Housing sales in China in terms of floor space fell 11.6% in October from a year earlier, according to calculations by Dow Jones Newswires based on data from China's statistics bureau. "Many local governments are resistant to the central government's property tightening policies, and how the Beijing municipal government went about with the easing was quite smart. I'm sure more cities will follow suit," said Mr. Hu.

China has prepared for the worst outcome of the US investigation into the Chinese photovoltaic (PV) solar cells industry, a senior official said, indicating that the government will act accordingly if any tariffs are imposed. A worker assembles a solar power panel for Eoplly New Energy Technology Co Ltd in Hai'an county, Jiangsu province. China already communicated with US officials about the investigation during the Asia-Pacific Economic Cooperation meeting in the US, Chen Deming, minister of commerce, told China Daily after the Fifth Member Congress of the China Association of Enterprises with Foreign Investment on Monday. "Once there is any bad consequence from the investigation, we are ready to take measures," he said. In October, several US solar cell companies filed a petition with the US Department of Commerce (DOC) and the International Trade Commission, alleging that Chinese companies got illegal subsidies from the government and sold solar panels below cost on the US market. On Nov 9, the DOC held an initial hearing and then announced it was launching an investigation into the Chinese companies. Li Junfeng, secretary-general of the Chinese Renewable Energy Industries Association, said any tariffs imposed on Chinese PV solar cell products, regardless of the amount, would inflict huge damage on the industry. "The Chinese PV solar panel industry depends heavily on the overseas market, with more than 95 percent of its products for export to the US and European market, and this is dangerous for healthy and sustainable development," said Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance. "The Ministry of Commerce's statement shows that the government knows better than before how to use the international trade tools under the World Trade Organization framework to protect the development of the domestic industries, pursuing a fair global market," said Li Lei, a lawyer with the law firm Sidley Austin who is representing the Chinese solar cell enterprises. He said that the Chinese government showing its stance is good news for the Chinese solar companies, given that US President Barack Obama and the US government showed support for the US solar companies soon after their petition. "The quick action of the Chinese companies clearly shows that they know better how to protect their rights and benefits in the global market," he said. On Friday, China started an investigation into US government support and subsidies for its renewable energy sector at the request of domestic industry associations, which argue that the US subsidy and support policies created unreasonable barriers for the renewable-energy industry in China, according to a commerce ministry statement. Yingli Green Energy Holding Co, Trina Solar Ltd, Suntech Power Holdings Co Ltd and Canadian Solar Inc - the four largest solar companies in China - will hold a news conference Tuesday afternoon on the US anti-dumping and anti-subsidies investigation. This will be the first time the Chinese solar cell companies speak to the domestic media together since the investigation started.

A team of 120 police motorcycles prepare to set out for a night patrol in front of the Water Cube, also known as the National Aquatics Center in Beijing, Nov 28, 2011. A total of 500 police motorcycles were purchased by the Public Security Bureau of Beijing to prevent crimes and enhance the patrolling force on congested roads.

Foreign enterprises doing business in China are enjoying many preferential investment policies compared with their domestic counterparts, said Vice-Premier Wang Qishan on Monday. "In many sectors, the treatment provided for foreign businesses are still better than those for Chinese domestic companies," said Wang, responding to complaints by foreign companies about the investment environment in China. "If there was anything the Chinese government could improve, it could be market access." Over the last three decades, foreign businesses have enjoyed preferential policies including lower taxes and cheaper land and resources compared with domestic players, Wang told member companies of the China Association of Enterprises with Foreign Investment. "China is in a transition period, changing the super national treatment to the national treatment on a gradual basis," said Wang. Starting December 2010, China began to levy a surtax for municipal maintenance and construction and an education surtax for foreign enterprises, which signaled unification of the tax system among companies from home and abroad. But in line with a regulation to encourage foreign investment issued by the State Council in April 2010, some foreign-funded firms still enjoy preferential treatment ranging from lower land prices to more favorable policies for setting up high-tech companies. Despite their complaints, Wang said foreign enterprises are more and more concerned about the soft business environment in China, including its "legal system and governance, fairness and transparency". "Intellectual property rights protection is the biggest concern for all," said Wang, adding that China has been committed to creating a favorable environment for them. Last October, the State Council launched a six-month campaign to combat pirated goods, the most comprehensive effort the Chinese government has taken to promote copyright protection in recent years. Last week, the Chinese government said it plans to make copyright protection a long-term task by setting up an office to oversee its efforts. US Secretary of Commerce John Bryson said it is "a step in the right direction". "We have established our own rules and regulations for copyright protection, but the problem lies in enforcement," said Wang. Chen Deming, minister of commerce, said at the meeting of the China Association of Enterprises with Foreign Investment that China will "do a better job in copyright protection, as it is in the interest of companies both home and abroad". In regards to government procurement, Wang said that China, especially its local governments, have purchased quite a lot of goods from either joint ventures in China or companies from overseas. Li Xiaogang, director of the Foreign Investment Research Center at the Shanghai Academy of Social Sciences, agreed. "Many foreign companies are highly protected by the local governments, and they prefer to purchase from foreign companies rather than domestic ones, despite the higher price," Li said. So far, China has absorbed an accumulative foreign direct investment (FDI) worth $1.2 trillion, and more than 730,000 foreign enterprises have set up a presence in China. China has been the most attractive destination for foreign businesses among developing nations for 19 years, and global FDI inflow will continue to grow, said Chen. "China's stable policies and political environment, and the huge market potential, will help it maintain its appeal to foreign businesses," he said. From January to October, China's FDI surged by 15.8 percent to $95 billion, almost equal to all of last year. In April 2010, the State Council launched new FDI development guidelines, saying that China encourages foreign companies to invest in sectors including service, high-tech and new energy, as well as in the nation's central and western areas.

Hong Kong*:  Nov 30 2011 Share

Glossy photos of Chinese consumers weighed down by shopping bags litter the financial reports of global luxury companies these days. For an antidote to the bullishness, the listing prospectus of Hong Kong jeweler Chow Tai Fook offers a summary of the China risks. Much of the language is boiler-plate stuff typically found in a listing prospectus. But there are some gems. For instance, prime retail locations are scarce and the competition to secure them is intense, the company says. Chow Tai Fook, which has 1,506 outlets in China, Macau and Hong Kong, has added an average of 179 new locations each of the last three years, and plans to open 500 more in the next five years. But even with a dip in China's property market expected, further rapid expansion into good locations will be tough. Also, while Chow Tai Fook's pitch highlights China's growth potential, the prospectus warns that a downturn in the economy will take a toll. The 2009 downturn for instance, saw the jeweler's turnover growth drop by a third compared with total compound annual growth of about 38% in the three years to the end of March 2011. Beyond that, the company says competition is tough; intellectual property rights are difficult to enforce; economic reform and business law are inconsistent; and labor costs are rising sharply. All this helps explain why the company says 94% of its outlets—those in China—account for just 56% of turnover. Locations in Macau and Hong Kong lay claim to the remaining 44% of sales, boosted by tourists from the mainland who come to shop at lower tax rates—another risk, should Beijing decide to cut taxes on the mainland too. The jeweler, with a planned $2.8 billion initial public offering of 10.5% of its shares, is one of several luxury firms looking to list in Hong Kong in coming months, including Graff Diamonds and Coach. These firms cite China's potential—it could account for 44% of the global luxury market by 2020, up from about 15% last year, according to brokerage CLSA. Chow Tai Fook says China will be the largest jewelry market world-wide by 2015. That growth is alluring. But China's market is in the early stages. There is a pot of gold down the line—investors shouldn't be blinded by it right now.

The first building in Hong Kong to have zero-carbon emissions will be in operation by May next year. The HK$240 million building is a joint project by the Construction Industry Council and the Development Bureau. Work on the 14,000 square meter site in Kowloon Bay began yesterday. The council will foot the entire cost. The building aims to provide a platform that will promote green education and a low-carbon lifestyle. According to the council, there will be seven zones in the three-story building, one of which is designed to give visitors a view on how a green lifestyle may be maintained at home. The council said the public will, through the various zones, be able to experience the most advanced green designs and technology. There will also be a green office area. In explaining the concept of zero emissions, Yu Wai-wai, chairman of the special team within the council, said the amount of renewable energy generated by a building within a year may offset the amount of electricity consumed during the same period. The building will not need to pay for its power as 70 percent of the electricity used in the building will be generated by biodiesel, which comes from waste oil, while 30 percent will come from solar or photovoltaic panels located on the roof of the building. PV panels may generate electricity without polluting the environment, and without the need for any fuel. He said the release of "positive energy" as part of the renewable energy generated can be returned to the public. "There are many buildings with zero-carbon emissions in the world. But not many can generate positive energy." He said CLP Power will generate the electricity and expects the energy produced by the building to eliminate 8,250 tonnes of greenhouse gases over a period of 50 years. In addition, there will be more than 90 energy-saving facilities. The council will also put in place various equipment to monitor the whole building in real- time. Different species of vegetation will be planted outside the building.

Leung Chun-ying yesterday kicked off his campaign to become chief executive by portraying himself as a devoted family man, a consistent friend and a dedicated professional who rose from humble beginnings. The former Executive Council convener compensated for his lack of heavyweight supporters in the banking, financial and property industries by stressing his ability to reach out to people from different sectors including the man in the street. Leung, 57, appeared to choke back tears when he mentioned his late mother, saying she was a traditional woman with bound feet who nevertheless carried heavy loads to and from factories to make plastic flowers to support a family of five. His background will help him map out changes for the next generation, he said, as Hong Kong comes under increasing pressure from a rapidly changing China and a rapidly changing world. "The desire for change in our society is getting stronger by the day. It is my hope that I can make use of this opportunity to work together with the people of Hong Kong to tackle these challenges," Leung said in a hall of the Hong Kong Convention and Exhibition Centre in Wan Chai, surrounded by more than 200 supporters. "Together we shall build a more prosperous, just and advanced Hong Kong, a community into which I was born and raised." To ease doubts about the changes he is contemplating, Leung said: "What we need now is certainly not drastic reform. What we need is change, but change while preserving stability. We do not need changes that come with a bang. Instead, we need to prudently and diligently carry out appropriate adjustments to our policies, promote advancement in governance and foster social development so the entire society will benefit. "Hong Kong needs new hopes and a new outlook; we need vision and core values. We also need effective leadership." He ended with his election slogan: "One heart, one vision for Hong Kong." To highlight his contacts and personality traits, 10 supporters made brief speeches, starting with former chief secretary David Akers-Jones. His former history teacher, Peter Yeung Shu-ming, said Leung is a man who "speaks little but speaks with action." Wilson Yip Hing-kwok, who was the chairman of the Amoy Gardens owners' committee when SARS struck the estate in 2003, said Leung took the initiative to help them fix the drainage problem in what had become a "ghost city" to stop the spread of the virus - a contribution that was never publicly acknowledged. Christina Wong Ming-yan, a visually impaired music artist and a recipient of the 2008 Ten Outstanding Young Persons award, said Leung is a fatherlike figure who supports young people. "He never labeled us the 'post-80s generation,"' Wong said. "He has high moral standards." Leung also stressed his grassroots background and the fact he was never involved in any "stray" relationships. "I am blessed with a happy family, which gives me the incentive to dedicate more effort into serving the greater Hong Kong family of seven million," Leung said in a video clip shown to the audience. His wife and eldest son, who is studying for a PhD at Cambridge University, stood alongside Leung. Leung firmly denied speculation he is a secret member of the Chinese Communist Party. "I am not a communist. I never asked to be admitted, I never applied nor was I invited to join the party," he said in answer to a reporter's question. Leung Chun-ying may not have the backing of political heavyweights as rival Henry Tang Ying-yen does, but he sure knows how to tug at the heartstrings. Veteran political commentator James Sung Lap-kung said Leung made a touching speech in announcing his candidacy yesterday, successfully identifying with the man on the street by highlighting his grassroots origins. And Leung's pledge to effect changes without affecting stability should win some votes from the business sector. "This is because a lot of people in the financial sector are concerned that he may bring about big changes if elected," Sung said. However, Sung noted that a candidate's supporters do matter as the 200,000 people voting for Election Committee members tend to be more swayed by the words of well-known people. "It is very hard to compare [Urban Renewal Authority chairman] Barry Cheung Chun-yuen with [former Hong Kong Monetary Authority chief] Joseph Yam Chi-kwong," he said. Fellow veteran pundit Lau Yui-siu also applauded Leung's speech, saying it played on Tang's weaknesses without mentioning him or his alleged failings. He said Leung's emphasis on his grassroots childhood and a successful career built by his own effort set up a contrast with Tang, who was born rich. Leung also spoke of reaching out to the people long before deciding to contest the chief executive election, thus highlighting the criticism of Tang that, despite being a top government official for so long, he only began visiting grassroots families after starting to hint he was eyeing the top post. Also, Leung, with his wife and son by his side, presented an image of the head of a loving family - not a husband who may have "strayed," Lau said. Election Committee member Bernard Charnwut Chan was among the many people touched by Leung's words. "When he spoke of his background, I believe many people were as touched as I was. That gave him a lot of extra points," he told a TV program yesterday. "I have worked with him for nine years and he does not usually talk about personal issues." Chan also said he has heard that some financial sector members support Leung, though they may not wield the clout of Yam. Xinhua News Agency reported on Leung's speech and quoted him on his pledge to bring new hope to the SAR.

New mortgage loans drawn down in Hong Kong totalled HK$11.5 billion (US$1.48 billion) in October, down 16.8 per cent from a month earlier, Hong Kong Monetary Authority (HKMA) data showed. The value of new mortgage loans approved in October declined 14.6 per cent from the previous month to HK$12.5 billion, the HKMA said. Loan approvals for new property in October fell HK$2.2 billion or 14.1 per cent from September, while loan demand for mortgages on existing properties decreased by HK$8.2 billion or 16.5 per cent. Approvals for refinancing loans dropped by HK$2 billion or 6.8 per cent from September. The number of new mortgage applications fell 28.3 per cent to 6,613 cases against the previous month’s 9,218 cases while the outstanding value of mortgage loans increased by 0.2 per cent to HK$801.1 billion. The proportion of new mortgage loans priced with reference to Hong Kong interbank offered rates (HIBOR) decreased to 28.1 per cent from 46.2 per cent in September, mainly reflecting banks’ upward adjustments in the mortgage rate. However, new mortgage loans approved in October priced with reference to best lending rates rose to 69.7 per cent from the previous month’s 51.3 per cent, with the largest portion priced in the range of 2.25 per cent to less than 2.5 per cent. The mortgage delinquency ratio was steady at 0.01 per cent. The re-scheduled loan ratio decreased to 0.02 per cent in October, which has been the lowest level since September 2001 when the HKMA started to collect this information, from the previous month’s 0.03 per cent.

A "famille-rose" enamelled glass snuff bottle. The 18th-century snuff bottle sold for a record HK$25.3 million at the Bonhams Autumn Auction in Hong Kong on Monday. An 18th-century snuff bottle sold for a record HK$25.3 million at the Bonhams Autumn Auction in Hong Kong on Monday morning – exceeding the pre-sale estimate. The 8cm-high Chinese snuff bottle, in enamelled glass, dates from the Qianlong period (1735-1796), and had a pre-sale estimate price of between HK$4.9 million and HK$9 million – excluding the buyer’s premium, which covers the auctioneer’s costs. The snuff bottle went to an unnamed Asian collector, who bid via telephone. The bottle is among pieces being sold from the renowned Mary and George Bloch Collection of antique Chinese snuff bottles. Bonhams Hong Kong autumn sale continues at the Island Shangri-La Hotel.

Chief Executive Donald Tsang Yam-kuen speaks at the opening session of the Global Editors Network News World Summit at the Kowloon Shangri-La Hotel in Tsim Sha Tsui East on Monday. Hong Kong understands and defends the free flow of news, Chief Executive Donald Tsang Yam-kuen told the opening session of an international publishers' conference early on Monday. “We understand the importance of information,” Tsang said, addressing the Global Editors Network News World Summit – an international meeting of editors, publishers and executives from print, broadcast, digital and mobile media in Hong Kong. “The free flow of news is important. Therefore, Hong Kong has laws to protect the freedom of speech and the freedom of press,” Tsang said, speaking at the Kowloon Shangri-La hotel, where the summit opened. A reliable and extensive information system was vital not just for journalism and the media, but also in the fields of business, finance and education, he added. Organised by the Paris-based Global Editors Network, the summit is a meeting place for the first worldwide organisation representing editors in the digital age and boasts over 500 members in its international network. The four-day event features panels and speeches, including a live video speech by Julian Assange, founder and editor-in-chief of WikiLeaks, on Monday afternoon. Other speakers include Wadah Khanfar, former director general of Al Jazeera Network and the chairman of Next Media (SEHK: 0282), Jimmy Lai Chee-ying. In introducing Tsang, Global Editors Network president Xavier Vidal-Folch said: “From both journalism and power, there should only be one winner – the citizens.” Tsang noted that Hong Kong had 9,100 public Wi-fi locations, and many were free. “We want the whole city to be your office,” he told about 200 conference delegates. Tsang admitted he has three mobile phones and two iPads: one for government work and another for private use. The city’s mobile phone penetration rate was now 201 per cent, which means two mobile phones for every citizen, he said. His aim was establishment of a “vibrant communications sector” because innovative technologies needed a free flow of information to flourish, he added.

Carl Huttenlocher, the former Asia head of hedge fund Highbridge Capital Management, said Monday he can now launch a vehicle planning to raise up to US$2 billion next year following the all-clear from regulators following allegations of improper valuations at Highbridge. Mr. Huttenlocher received the license to launch Myriad Asset Management from December 1 on Friday, three months later than originally planned. Myriad is seeking to raise up to US$2 billion by a second-quarter close for an Asia-Pacific multi-strategy fund that will invest in corporate securities ranging from equities, convertible and corporate bonds to credit and equity derivatives. It could be one of the biggest Asia-focused hedge fund start-ups. The Myriad Opportunities Master Fund Ltd. has received $300 million from Mr. Huttenlocher and a family office he declined to name. Scott Gaynor, previously chief operating officer for Morgan Stanley Asia, will be the new COO at Myriad. "The complaint against myself and Highbridge came in late August, just before we were supposed to get our licence, so we lost some time when we could have had a soft launch of the fund," said Mr. Huttenlocher. "The SFC concluded it was false." Mr. Huttenlocher declined to comment on who leveled the allegations. Hong Kong's Securities & Futures Commission also declined to comment. The SFC delayed the launch of Myriad, originally scheduled for Sept. 1, because it was exploring allegations that Mr. Huttenlocher–who left J.P. Morgan-owned Highbridge Capital Management earlier this year–or others working for his fund, had improperly valued illiquid assets–among other actions–during the height of the financial crisis in 2008 and its aftermath. The high-profile launch by one of Asia's most prominent hedge-fund managers is being closely watched at a time when fundraising has been difficult for most. But Morgan Sze, the former global head of Goldman Sach's principal strategies proprietary trading desk, launched a US$1 billion-plus multi-strategy hedge fund in Hong Kong earlier this year. This was another closely watched, Hong Kong-based Asian hedge fund that showed the big names are getting their launches done even as less well-known managers struggle. Banks with prime brokerage businesses that cater to hedge funds have also been counting on fees from launches and new funds to boost underwriting and other fees that have fallen victim to volatile markets. Mr. Gaynor said that Myriad has appointed four prime brokers. A person familiar with the situation Monday identified them as Morgan Stanley, Credit Suisse Group AG, Deutsche Bank AG and Goldman Sachs Group Inc. One issue under review by the SFC probe was whether the valuations of Mr. Huttenlocher's fund and the timing of its asset sales and payouts to withdrawing investors unfairly benefited continuing investors–to the detriment of those wanting out--by boosting their returns and the fees to the fund's managers, people familiar with the matter said earlier. J.P. Morgan bought a controlling stake in Highbridge in 2004 for more than $1 billion. Highbridge managed about $7 billion in assets at that time. The firm now has some $30 billion in assets and is fully owned by the bank. Highbridge wound down its Asia fund after Mr. Huttenlocher, who served on Highbridge's investment committee, said he was leaving in March of this year. That fund focused on trading equities and convertible bonds, the same strategy Mr. Huttenlocher plans to employ at Myriad. In 2008, the Highbridge Asia fund suffered a roughly 30% loss by the end of October–worse than most hedge funds amid the financial crisis--prompting clients to request withdrawals of about 55% of its assets, the people familiar with the fund said earlier. Before Highbridge, Mr. Huttenlocher oversaw Asia investments in convertibles and derivatives for Long-Term Capital Management. Prior to that he traded European convertible bonds for Chicago-based hedge fund Citadel.

Asia Today: Chinese stocks are down this year, but investment-bank analysts are sticking to their "buy" recommendations. Kate O'Keeffe joins Asia Today to explain. HONG KONG—Investors have soured on many Chinese companies on fears of a slowing economy and worries about accounting fraud and corporate governance. But for analysts at investment firms, the stocks remain a hot ticket. In bullishness reminiscent of the technology bubble of the 1990s, analysts who work for investment banks based around the world rate nearly every Chinese stock they cover as a "buy." While these analysts generally are a bullish lot, they are far more positive on Chinese banks, tech companies, retailers and the like than they are on companies based elsewhere. According to data compiled by independent research firm Forensic Asia Ltd., analysts have 19.2 "buy" recommendations on Chinese stocks for every one "sell" recommendation. For stocks of companies based in the U.S., the ratio is 10.5, and for the rest of the Asian-Pacific region it is 7.3. "At sell-side firms, there is overwhelming pressure to believe in the 'China cannot fail' story," said Gillem Tulloch, Forensic Asia's founder and managing director and a former analyst at brokerage firm CLSA. Current and former sell-side analysts said other reasons for bullishness include obtaining better access to companies and their executives and a desire to get investment-banking and trading business from companies. Forensic Asia, which doesn't do any corporate-finance business or investing, issues slightly more "sell" than "buy" ratings in general, Mr. Tulloch said. Investors who followed analysts' bullish recommendations haven't fared well this year. The Shanghai Composite Index has dropped 15%, and in Hong Kong, where Chinese companies account for two-thirds of the trading volume, the Hang Seng Index has fallen 23%. The selloff in Chinese shares has come amid questions from some ratings firms, hedge funds and short sellers about corporate governance and accounting at some companies. Last Monday, claims by short-seller Muddy Waters Research LLC against Chinese advertising company Focus Media Holding Ltd. sent the company's shares down 39% on the Nasdaq Stock Market. Analysts still have 11 buy ratings and no sell ratings on the stock. A short seller bets that a stock price will fall. Focus Media disputed Muddy Waters's claims, saying the short seller's report misinterpreted LCD-display numbers and financial data. The shares gained back about 14% by the end of the week. Questions also have swirled around Sino-Forest Corp. This month, a special board committee said it found no fraud at the company in response to a Muddy Waters report this year that said the forestry firm misrepresented the value of its timber holdings. An analyst who covers Asian stocks for a major bank said that, in his experience, when analysts suspect wrongdoing at a company they will drop coverage rather than issue a negative report. "The best you can do is to suggest certain dealings are 'questionable.' Readers of our reports understand these subtleties," the analyst said. Overly bullish analysts and conflicts of interest have been a problem in the securities industry. In the wake of the tech-stock bubble in the U.S. early last decade, Wall Street's largest securities firms agreed to pay $1.4 billion to settle government charges they issued overly optimistic investment research to curry favor with corporate clients and win investment-banking business. The settlement also included a provision that securities firms erect a firewall separating analysts from investment-banking operations. At the height, analysts' buy ratings outnumbered sell ratings by 100 to 1. In an interview on his last day in office as Hong Kong's securities regulator this year, Martin Wheatley warned about the craze for shares of Chinese companies, calling China "the new dot-com" of the investment world. As with the tech bubble, the rationale behind the bullishness is growth. "For years there has been a 'who cares' attitude toward Asian company fundamentals due to high growth rates in the region," said Richard Leggett, a former Goldman Sachs Group executive who has run two independent research firms. China's big state-controlled banks were among the largest initial public offerings in the world when they listed in recent years, but their recent stock performance has been weak, as investors worry that they are carrying bad debts on their books. On average, the big-four Chinese banks are down 29% this year in Hong Kong trading, yet analysts have remained steadfastly bullish. Industrial & Commercial Bank of China Ltd., the world's largest lender by market value, has 24 buy ratings and only one sell, according to FactSet Research Systems Inc. In September 2007, as banking stocks were approaching peaks, there also was only one sell rating on the lender. China Construction Bank Corp. has 25 buy ratings and one sell, according to FactSet. In 2007, there were 17 buy ratings and no sell ratings. South Korea, where the ratio of buy to sell ratings is 22.7, is the only market where analysts are as bullish as they are in China, according to Forensic Asia. Several analysts said some Korean companies put pressure on analysts to produce positive ratings. James Antos, a banking analyst for Mizuho Securities Co., is one of the few bears on Chinese banks, with sell ratings on six of the nine Chinese lenders he covers and no buy ratings. Mr. Antos, a former Ernst & Young auditor who has been following banks since the 1980s, blamed the bullishness on the inexperience of many analysts in Asia. "In Europe, some guys have been covering banks for 20 years. There's a depth of understanding among Europeans and to some extent U.S. analysts that's just not here in Asia," he said. "It wouldn't be a bad thing to have at least lived through one economic cycle before you start telling people to buy bank stocks in a bear market."

The owner of Shark's Fin City, a dried fin wholesaler in Hong Kong, said there are only a few people who know the truth about sharks, and he is one of them. Like many Hong Kong businessmen who trade in shark fins, Kwong Hung-kwan said he believes his industry is being targeted by an anti-Chinese conspiracy led by "Western" environmental groups like Greenpeace. Talk of a dramatic decline in shark populations around the world is rubbish, he said, dismissing research showing an eight-fold jump in threatened shark species since 2000. Experts agree that much of that rise is linked to increases in consumption of shark meat, especially fins used in traditional Chinese shark fin soup, an expensive staple at weddings and banquets. "Shark fins represent our Chinese tradition. It used to be served only to royalty and is, even now, a very luxurious cuisine from the deep sea," Kwong said at his store in Hong Kong's Des Voeux Road area. The western end of Des Voeux Road and nearby Queen's Road West, not far from the central business district, are a hive of musty shops selling a vast array of dried food from mushrooms to seahorses. It is the center of the global shark fin trade, with about 10,000 tons of dried fins imported every year, according to environmental group WWF. That's about half of the world's total fin harvest. "For some people in the older generation like me, we depend on selling shark fins as our source of income," Kwong said. His fins come mainly from Spain and South America, but he will happily buy from anywhere, he said. Businessmen like Kwong and his neighbors on Des Voeux Road were shocked last week when the luxury Peninsula Hotels chain, owned by Asia's oldest hotel company, announced it was dropping shark fin from its menu as of January. Conservationists applauded the move as a breakthrough in their long battle to get Asian consumers to "just say no" to shark fin soup. But some of those in the fin business were apoplectic. "It's not cruel at all killing sharks. There are so many sharks out there and if you don't kill them, they will kill you," said a Des Voeux Road fin seller who gave his name only as Chan. On the other hand, Wong Wai-man of Wing Hang Marine Products Ltd, acknowledged that times were changing and younger generations were more environmentally conscious about what they ate than older Hong Kong people. "Some people say shark fins are absolutely irreplaceable. But what happens when sharks one day become extinct or are illegal to catch? At the end of the day, we need alternatives," he said, suggesting birds' nests as a substitute. WWF-Hong Kong says the consumption of shark fins, which has grown as China's people have become more affluent, is a driving factor behind the threat to shark populations around the world. An individual serving of shark fin soup includes about 30 grams of fin, and a 12-person bowl sells for HK$1,080 ($140). A kilogram of premium dried fin can fetch up to HK$10,000 in Hong Kong.

 China*:  Nov 30 2011 Share

China’s Newest Car Brand: Qoros - As brands mushroom in China’s slowing auto market, worries of a shake-out are mounting. Yet, despite the fear, more auto brands are being launched in China, and existing global brands are piling in to grab a piece of the world’s biggest auto market. The latest addition: a new brand called Qoros launched officially Monday by investment firm Israel Corp. and China’s Chery Automobile Co. Qoros Automotive Co., a 50-50 joint venture between the two companies, is led by Chief Executive Officer Guo Qian, a Chery official, and former Volkswagen AG executive Volker Steinwascher, who serves Qoros as vice chairman. Mr. Steinwascher said in a telephone interview over the weekend that Qoros is aiming to generate annual sales of about 150,000 vehicles a year by 2015 or 2016. It plans to manufacture those cars at a plant in Changshu, a city northwest of Shanghai, and market roughly half of those vehicles in China and export the rest to Europe. The company, Mr. Steinwascher said, is currently developing three compact cars, one of which is a sedan and is expected to hit the market in China and Europe by the end of 2013. The brand’s competitive edge, according to Mr. Steinwascher: cars that have been designed by “seasoned” engineers with experience in working for companies like Volkswagen and BMW AG – and sell some “10% lower” in retail prices compared with comparable Volkswagen cars marketed in China. Qoros engines are being designed by Austrian engine-technology firm AVL List GmbH. and will be produced and supplied by Chery. Qoros cars, Mr. Steinwascher said, “combine German design quality and craftsmanship with Japanese convenience and functionality” to appeal to “young, international-minded, urban consumers” in China. Those target consumers are “looking for quality and distinctive styling, and they’d like to be connected even when they are driving,” the Qoros executive said. As ambitious as Mr. Steinwascher and his new China auto brand may be, the field is already becoming crowded, even before Qoros’ first car hits showrooms in late 2013. “If the market continued to grow sluggishly, posting low single-digit growth, for a few years straight, a shakeout would become inevitable,” said Yale Zhang, head of consulting firm Automotive Foresight Co. in Shanghai. Mr. Zhang noted that China has about 70 brands of locally produced cars, run by homegrown Chinese companies and global auto makers. Most notably, Japan’s Daihatsu Motor Co. exited the Chinese market a few years ago when it failed to generate sales to a profitable level, he said. Yet, more foreign brands are entering China. Just last week, at the Guangzhou auto show, Volkswagen and Fiat SpA of Italy announced plans to launch the Seat and Alfa Romeo brands next year in China, respectively. By 2013, China’s auto marketplace also will see an addition of a host of affordably priced China-only brands launched by foreign joint ventures. In August, GM and its Chinese partners launched the first product for their Baojun brand — a compact sedan called the Baojun 630. The car is priced – between 62,800 yuan (about $9,800) and 73,800 yuan – to appeal to people who are becoming just rich enough to buy cars. Nissan Motor Co. and its Chinese partner are expected to launch their own no-frills China brand, Venucia, in the first half of 2012 when they start marketing the brand’s first product, also a small car. Venucia is starting with 100 retail outlets, operated mostly by current Nissan dealers and plans to add a second vehicle to the lineup by the end of next year. By 2015, Kimiyasu Nakamura, chief executive of Nissan’s main joint venture with Dongfeng Motor Group Co., said Nissan hopes to generate sales volume of about 300,000 vehicles a year – the sales scale that would rival that of carmakers like BYD Co., Chery and Zhejiang Geely Holding Group Co.

China is taking steps to nurture growth of the fledgling market for its currency outside its borders, in an apparent effort to restore its momentum amid a slowdown in world trade. Under China's guidance, Hong Kong's market for yuan has surged from nowhere over the past year to become the fastest-growing currency market in the world. But what is known as the offshore yuan market faces new constraints, including slower growth of yuan deposits as a result of weakening cross-border trade and a belief that the currency is no longer a sure-fire bet to rise in value. "It will be a lower growth environment until there is more confidence in global markets," said Gordon French, head of global markets in the Asian-Pacific region for HSBC Holdings PLC. Currency watchers say the nascent market still has plenty of room to grow. But mindful of the slowdown, Beijing has taken more steps to keep the market growing and has vowed to make further efforts. On Monday, China's state-run Xinhua news agency said officials will accelerate implementation of a previously announced program that will allow foreign firms to invest yuan they have accumulated overseas in mainland China's securities market. It also kicked off trading of the yuan versus the Australian dollar and Canadian dollar in the mainland market. In recent weeks, Chinese officials have started to allow more mainland Chinese companies to sell yuan-denominated bonds offshore and doubled the size of a currency-swap deal with Hong Kong so that foreign banks could supply more yuan to their customers. Officials have also indicated their intention to make it easier for capital to flow in and out the mainland. "To boost the use of yuan offshore, we'll continue accelerating the opening up of the domestic bond market by allowing more overseas entities to invest in it and expanding the volume of domestic entities' bond issuance offshore," Xie Duo, director general of financial markets at the People's Bank of China, said at a global debt forum on Wednesday. The moves have come after Beijing officials informally surveyed banks about the reasons behind the slowdown, according to people familiar with the matter. Officials from China's central bank met with senior Hong Kong banking executives earlier this month while in the Chinese city to attend a ceremony cementing Bank of China Ltd.'s status as its sole yuan-clearing bank, they said. "They were trying to understand why growth in renminbi deposits in Hong Kong has slowed," one of those people said. "They expressed concerns." The yuan faces big obstacles before it becomes a more relevant international currency and a store of value on par with the dollar, euro and yen. Chief among them, the currency would have to be fully convertible. That, however, would require China to allow capital to move freely across its borders—something it has been reluctant to do for fear of losing control of its developing financial system and an economy heavily dependent on exports. The most significant measure China has taken so far is allowing cross-border trade to be invoiced and paid in its currency. Yuan-settled trade now accounts for about 10% of China's total trade, compared with less than 1% a year ago. But deposit growth has slowed as the flow of trade has weakened due to the uncertain state of the global economy. As trade has slowed, companies doing business across the border have tended to pile up fewer yuan as payments. Yuan-based trade saw its first quarterly decline in the third quarter, slipping to 583 billion yuan ($91.7 billion) from 597 billion yuan in the second quarter, according to the PBOC. Meanhile, yuan deposits in Hong Kong increased 2.2% in September from a month earlier to total 622 billion yuan, down from 6.4% growth in August, according to the Hong Kong Monetary Authority, the city's de facto central bank. Many analysts are now expecting even slower growth in October; investors no longer view the currency as a one-way bet, so they may cut their holdings. "To some extent the market is at a crossroads," says Patrick Perret-Green, Singapore-based head of Asian currency and rates strategy at Citigroup Inc. "But it is still so small that it can grow a lot more before it runs into any real difficulties." Until recently, the majority of yuan trade had been by Chinese companies paying foreign suppliers in yuan. But in recent weeks, because the yuan has dropped in value in the offshore market, trading at a discount to its mainland counterpart, more Chinese exporters are willing to take payment in yuan, according to banking executives. HKMA Chief Executive Norman Chan said on Wednesday that Hong Kong saw a net outflow of 19.5 billion yuan via cross-border trade in September, as yuan payments into China exceeded those into the territory. In the near term, Beijing's new push for wider use of yuan abroad could help the offshore market continue to grow, the result of increased trade and investment flows and bond sales. The market for yuan bonds, known as dim sum bonds, has tripled in size this year, to about 210 billion yuan of debt outstanding, according to HSBC. But growth in new bond sales is likely to slow next year as investors dial down their expectations for yuan appreciation, said Michael Lam, director of Asia debt capital markets at Deutsche Bank AG. "Earlier this year, people were expecting yuan deposits to reach one trillion yuan by the end of this year," he said, "Now this is obviously looking like a very tough target." Baosteel Group Corp., a state-owned steelmaker based in Shanghai, on Thursday became the first mainland Chinese company outside the financial sector to sell dim sum bonds. The company sold 3.6 billion yuan of the bonds for yields ranging from 3.125% to 4.375%. China also is moving to lessen the red tape that issuers of dim sum bonds, especially foreign companies, face in bringing money back to the mainland. "Multinational corporations would likely find it more predictable now than before whether they can send the proceeds back," said Augusto King, co-head of debt capital markets in Asia for Royal Bank of Scotland.

A Beijing businessman says anti-Chinese prejudice and double standards are behind Iceland's decision to turn down his proposal to build a vast nature retreat in the north Atlantic island nation. Iceland’s interior ministry said on Friday it had rejected an application by Huang Nubo’s Zhongkun Group, in part because no foreign buyer had ever bought so much land in the country. However, in an interview in the official China Daily newspaper that appeared on Sunday, Huang said the rejection was indicative of anti-Chinese attitudes in the West. Huang had sought to buy 120 square miles (30,639 hectares) of land on the north shore of Iceland in a deal which would have been worth about 1 billion Icelandic kronur (HK$68.6 million).

China's yuan started trading against the Australian dollar and Canadian dollar in the country’s onshore foreign exchange market on Monday, the latest currency pairs to be introduced as part of Beijing’s efforts to promote the use of its currency. Beijing’s wants to expand the use of the yuan for trade and investment, as a way of reducing reliance on the dollar and thereby simplifying the settlement of trade in everything from energy to manufactured goods. The yuan is not fully convertible under the capital account but China has made efforts to raise the international status of its currency over the past couple of years as it works towards its goal of making Shanghai a global financial centre by 2020. “This is part of official efforts to enrich trading products in the Chinese market,” said Liu Dongliang, currency analyst at China Merchants Bank (SEHK: 3968) in Shenzhen. “In addition, both Australia and Canada are China’s important trade partners,” he said. “In particular, because of its strong links with Australia, China’s economic and market movements often have some influence on the Australia dollar.” Australia and Canada are both major producers of the commodities that have powered China’s rapid economic growth. The pricing of the yuan against the two currencies largely reflected the value of the yuan against the US dollar and the dollar’s value against the Australian and Canadian dollars, traders said. It would take time for the yuan, which has been closely linked to the US dollar, to trade more independently, they added. Trading was thin on Monday morning, but market players expect it to pick up over time along with the gradual expansion of the yuan’s use in global markets. “This morning those banks trading yuan against Australian and Canadian dollars calculated on the basis of the central bank’s mid-point and real time movements of the two foreign currencies against the dollar in global markets,” said a trader at a European bank in Shanghai. “The PBOC has so far still been pricing the fixing of other currencies based on the yuan’s near peg versus the US dollar.” The yuan opened at 6.1266 against the Canadian dollar after the People’s Bank of China (PBOC) set the yuan/Canadian dollar’s mid-point at 6.1048. It opened at 6.2769 against the Australian dollar , also slightly weaker compared with the PBOC’s fixing of 6.2491. The currency pairs were moving roughly around their opening prices, traders said. Trading in these two new currency pairs comes after the China Foreign Exchange Trade System started yuan trading against the rouble and Malaysian ringgit last year. As part of its efforts to broaden the use of its currency, the government has turned Hong Kong into a centre for offshore yuan as more and more trade is conducted in the renminbi, the official name of the currency, leading to the creation of bigger and bigger yuan pools outside the mainland. Traders and analysts said China needed to add direct yuan trading against the Aussie because of increasing deals between China and Australia, in particular, in the mining sector. Adding the Canadian dollar was a move to acknowledge the importance of one of the Group of Seven economies as well as being part of China’s efforts to gradually have trading in all major currencies versus the yuan, they said. Traders expect the Singapore dollar and Korean won to be among the next currencies to be traded versus the yuan. The yuan can rise or fall 3 per cent versus the Aussie and Canadian dollar from the PBOC’s mid-points each day, according to an exchange announcement last Thursday. The yuan can move only 0.5 per cent to the dollar in either direction from the fixing in a day. The domestic market now trades a total of nine currencies against the yuan, including the new currency pairs.

San Francisco 49ers cheerleaders helped promote the National Football League at an “NFL Experience” event held in Shanghai on Monday. The last time the National Football League tried to bring America’s favorite sport to China, in the form of an exhibition game, the league pulled out at the 11th hour to avoid the embarrassment of empty bleachers. The league’s latest attempt to introduce American football to a Chinese audience was more modest: A traveling version of the “NFL Experience” interactive marketing event held Sunday in Shanghai gave locals – and plenty of Americans – a chance to punt, pass and kick like the pros. Hall of Famer Tony Dorsett was on hand to offer tips to the city’s small contingent of local players, like members of the Shanghai Sea Dragons. “When you take a hand-off, you don’t look at the quarterback you just run where you’re going,” Mr. Dorsett instructed nine-year-old Enoch Hung. “You’ve got to get down low.” The pee-wee Sea Dragon’s player Mr. Hung took the ball from Mr. Dorsett and made a quick dash down the line. The game is “cool,” Mr. Hung said a few minutes later, as his teammates huddled for autographs with the former Dallas Cowboys and Denver Broncos running back. “You’ve got to create awareness,” 57-year-old Mr. Dorsett said Sunday, wearing jeans and a white No. 33 jersey. “China would be an important market for any sport because you have so many people here.” American football isn’t a natural sell in China. The game is complex. Kids don’t play it. The term ‘football’ here equals European soccer. Tackling seems dangerous. And the NFL so far lacks an ambassador on the scale of basketball’s Yao Ming (though Chinese American Ed Wang’s promising career with the Buffalo Bills is a start). In 2008, the NFL scheduled an exhibition game in Beijing between the New England Patriots and the Seattle Seahawks, but then canceled it. The fear was that television coverage of an empty stadium would do more damage to the league’s image than good. Sunday’s festivities included non-tackling flag-football games. Venues offered chances to test passing, catching, kicking, running and jumping skills against benchmarks set by the pros. Four San Francisco 49ers cheerleaders were signing autographs. All five rows of the bleachers were full for a match-up of the two full-tackle club teams, the Shanghai Nighthawks and the Beijing Guardians (Shanghai won 35-to-7) on an Astroturf field next to Shanghai Stadium. The NFL said 3,500 people attended the events Sunday. The NFL Experience, which has been featured on the sidelines of the Super Bowl in recent years, will move next to Guangzhou. With its renewed China push, the NFL isn’t only aiming to recruit a fresh generation of players, but is also trying to draw viewers from the world’s most populous nation. It has a new deal on the Internet to stream games live on a Chinese service called PPTV. “Giving everyday fans and families the chance to see the sport and touch the sport is the backbone of the NFL Experience,” said NFL China managing director Richard Young in a statement. One local enthusiast attending Sunday’s events was Paul Song, who takes photos of the Sea Dragons where his nine-year-old son plays. Mr. Song said he likes how football inspires “teamwork” but also has room for “individual heroes too.” Many of Sunday’s participants were Americans. Young Mr. Hung, in fact, is a recent transplant from New York to Shanghai. He said meeting Mr. Dorsett was fun, noting, “I heard about him from TV when he was going into the hall of fame.” (It was probably a re-run, as Mr. Dorsett was inducted in 1994.) “My son is telling his friends how cool it is to play football,” said Mr. Hung’s mother Ling Wu. “It’s really hard to recruit kids (in China) to sports, especially contact sports.” Mr. Dorsett didn’t sugar coat the risks. “Boys are boys,” he said. “Play is physical. It’s a demanding sport. Just like wrestling.” “You can get hurt crossing the street…It almost happened to me couple times,” the football star said with a glance at the busy road next to the field.

China hopes to further boost its imports from the U.S. next year—as long as the U.S. provides a fair and free environment for trade and investment, Chinese Commerce Minister Chen Deming said Monday. China faces increased economic uncertainties at home and abroad, with world economic growth facing increased downward pressure, but the country's economic fundamentals are still sound, Mr. Chen said in a speech at a trade-association meeting. The rise in China's consumer price index this year is likely to be around 5.5%, he added, and China's domestic demand is likely to moderate next year. Mr. Chen also said foreign direct investment to China is likely to keep growing steadily, and pledged the country will better protect foreign companies' interests in China, including their intellectual property rights. Speaking on the sidelines of the meeting, Mr. Chen said China's trade surplus is likely to continue to narrow this year and next year. China supports the bailout plans the European Union has outlined, Mr. Chen said in his speech, but the ultimate solution to the region's sovereign-debt crisis depends on Europe itself. It's unclear that the EU can carry out its plans, he added, or how effective they will be.

China's RMB, or the yuan, is getting close to the equilibrium value, a government think tank economist said, refuting the US accusation that the currency is undervalued. The yuan's previous downward moves and the slowing growth of China's foreign exchange reserve signalled the currency "may" already have entered a new stage, Li Yang, vice president of the Chinese Academy of Social Sciences at a finance forum. According to latest statistics, the country's forex reserve increment in the third quarter was $50.9 billion less than that of the second quarter, dragged down mainly by the narrowing trade surplus. Li's viewpoint on the currency's equilibrium was echoed by Shen Jianguang, chief economist with Hong Kong-based Mizuho Securities Asia, who also refuted the US claims that the RMB has space to further appreciate about 20 percent. He said the United States may have drawn conclusions from the International Monetary Fund's (IMF) forecast on China's balance of payments, which is not true. China's trade surplus has been shrinking significantly this year, accounting for 2 percent of its gross domestic output, well below the IMF's forecast of 6 percent, Shen said. A report issued by the PBOC's financial research center last month said the RMB has risen against the dollar by 30.2 percent since July 2005, when China started to reform its currency mechanism. However, US officials have repeatedly accused China of keeping its currency artificially low to help exports, despite the yuan's continued appreciation.

Hong Kong*:  Nov 29 2011 Share

High standards help business schools thrive - Professionalism and ethics make city an attractive option for business students, experts say, especially after scandals on the mainland - Hong Kong's high level of professionalism and ethical standards are a draw for business students from the region, according to many experts in the field. The city gained an edge as a business education provider because of the various scandals - from tainted milk formula to business fraud cases - on the mainland, said Professor Wong Tak-jun, head of Chinese University's business school. "There is a gap ... between the two places [the mainland and Hong Kong], and it may take a number of years for this gap to be bridged. Professional and ethical standards are areas in which we can help [mainland] China to develop." Mainland students in Hong Kong were exposed to high ethical standards, the accountancy professor said. "We believe in gradual changes through exposure. When students see the examples of business leaders, they will say `I'd like to be like them' - that's education. We emphasise professionalism." Wong (pictured) said his school had the potential to become a global business institution, attracting students from the mainland and elsewhere. "We want to be an institution that bridges East and West," he said. The school is to put much of its knowledge on business in China online, offering executive summaries of its research and providing a connection to its 20,000 alumni in the region. Its freedom of speech gave Hong Kong great potential as a hub for liberal arts, social sciences and business education, Wong said. A large market existed not far from the city for high-quality business training, he said. "Business education in southern China is underdeveloped. Shanghai has 20 top business schools, Beijing has three top ones, but across southern China, there are just one or two," Wong said. While Chinese University will open a branch campus in Shenzhen's Longgang district in 2013, consisting of business, science and engineering faculties, its business school plans to offer executive MBA (EMBA) and MBA courses at its new research institute at the Shenzhen Virtual University National Science Park. For 10 years, the Hong Kong University of Science and Technology business school has been running a part-time MBA course in Shenzhen. It is also running a bilingual EMBA course for mainland entrepreneurs, with classes held in Hong Kong and various mainland cities including Shanghai, Beijing and Sanya , Hainan province. Hong Kong was already ahead of Singapore as the number one destination in Asia for business education, said Professor Leonard Cheng Kwok-hon, dean of the HKUST business school. The city's key attractions were an international faculty and students, and exposure to eastern and western cultures, he said. His university sets stringent criteria for student performance, he said. "Employers want their staff to have high ethical standards. Our programmes are run in a stringent manner and we want our students to be willing to work hard, to share and set high goals in life."

The gates are starting to close on some fruit market merchants operating in Yau Ma Tei. Amid declining business and financial hardship, Yau Ma Tei's landmark fruit market stalls are still keeping their produce at affordable prices through friendly competition. "We are keeping the fruit supply from being monopolised - without us, your fruit will get very expensive," said Cheung Chi-cheung, a second-generation fruit seller and vice-chairman of the Kowloon Fruit and Vegetable Merchants Association. But business is difficult and Cheung said it was getting harder to survive. The area around Shek Lung Street in Yau Ma Tei was a bulk wet market from early last century, selling fish, eggs, poultry, vegetables and fruit to most places in the Kowloon area. It started off with about 20 stalls, but there were 300 in its heyday in the 1960s. By the 1970s, the fish and poultry merchants and vegetable stalls had moved elsewhere and the area became known as a fruit market. Now there are still about 200 fruit merchants, importing from all around the world to cater for Hong Kong's fruit retail outlets. The fruit market was one of many old ways of life in Hong Kong which were fading away, said Simon Go Man-ching, project director and curator at heritage group Hulu Culture, which has been organising events to promote the culture and trade of Yau Ma Tei. "Whether it's the fruit market or shops selling traditional Chinese wedding necessities like handmade bride's dresses, they are all fast disappearing," Go said. Fung Bing-hau, who grew up in Yau Ma Tei district and comes from a family of noodle makers, said the area was a cohesive community where people knew each other, looked out for each other and enjoyed living together. "You don't get a lot of that now with Hong Kong changing so fast. So I think this place is worth keeping, and I love living here," Fung said. Hulu, along with the Arts Development Council and West Kowloon Cultural District Authority is putting together an exhibition, starting on December 18, to showcase arts and culture in Yau Ma Tei. The district's offerings will be introduced in four parts - North, East, South, West. The four directions cover different cultural influences in Hong Kong - the northern mainland influence, Asian culture or oriental culture of the east, Hong Kong's position as a hub in southern China, and the colonial British influence. Tours will also be conducted of the area. Go hoped that the events could showcase the unique cultural aspects of the Yau Ma Tei area and highlight the importance of retaining local colour and culture.

Leung (centre, right) waves to supporters after declaring his candidacy yesterday, with wife Regina and son Leung Chuen-yan. Henry Tang hits the campaign trail in Sha Tin yesterday. Leung Chun-ying formally kicked off his campaign to be chief executive yesterday, saying Hong Kong needed to change - but not too drastically. A day after former chief secretary Henry Tang Ying-yen entered the race, Leung delivered his declaration speech at a rally at the Convention and Exhibition Centre. The former Executive Council convenor said "a long and winding road" had brought him to this point. Against the backdrop of his campaign slogan "One Heart One Vision for Hong Kong", Leung said desire for change was getting stronger by the day in the face of rapid global changes and deep-rooted conflicts. "While we need to communicate, we should also be ready to make decisions," he said. "We should not just tread on the old paths and stay in our comfort zone." But he sought to dispel fears that he advocated drastic change should he be elected in March to succeed Donald Tsang Yam-kuen. He said the city needed to seek change while preserving stability. "We do not need changes that come with a bang," Leung said. "Instead, we need to prudently and diligently carry out appropriate adjustments to our policies ... so that our entire society will benefit." Fighting back tears, Leung said that while writing his declaration speech the image of his late mother kept coming back. "My mother had her feet bound when she was a child. "The image of my mother walking with bound feet, carrying a load that weighed over 30 pounds, to and from the rundown plastic flowers factory for over 20 minutes on each trip, left an indelible print in my mind." Leung said every step he had taken up to this point "is like the step that my bound-foot mother had taken. It symbolises my determination in pursuing my goals". More than 300 people from various sectors were there to support Leung, including the chairman of Shui On Group, Vincent Lo Hong-sui, Housing Society chairman Yeung Ka-sing, Dr Lo Chung-mau, head of surgery at Queen Mary Hospital, and Hong Kong polar researcher Rebecca Lee Lok-sze. Ten went on stage to share personal anecdotes. Wilson Yip, who owns a flat in Amoy Gardens - the estate hit by Sars in 2003 - praised Leung for his help at that time. "He approached me saying he wanted to help Amoy Gardens, and helped us to solve the infection problem caused by water leaks in the bathrooms," Yip said. "That was when officials and the public tried to avoid us ... but he did not claim political benefits." Urban Renewal Authority chairman Barry Cheung Chun-yuen and former education minister Fanny Law Fan Chiu-fun are running Leung's campaign office. Former chief secretary David Akers-Jones rebutted the claim that Leung was to blame for the ill-fated target of building 85,000 flats a year during the tenure of former chief executive Tung Chee-hwa, which was later scrapped after property prices slumped. Leung was then cabinet adviser on housing affairs. "The fall of property prices in Singapore [in the aftermath of the Asian financial crisis in 1997-98] was more than that in Hong Kong. We, together with Singapore, were the victims of the crash," he said. Leung said he was not a member of the Chinese Communist Party, as speculated in some quarters, and had not applied or been invited to join. Observers have depicted the race as being "between a wolf and a pig" - referring to Leung's cunning and Tang's perceived stupidity - but both men said the analogy was inaccurate. Leung said people would appreciate his honesty, while Tang said: "I was born in the year of the dragon." The presence of Wong Ting-kwong, a lawmaker from the Democratic Alliance for the Betterment and Progress of Hong Kong, at Leung's rally led to speculation that the Beijing-friendly party backs Leung. Wong said he was there as honorary president of the Hong Kong Chinese Importers' and Exporters' Association. DAB chairman Tam Yiu-chung said he did not know Wong had attended.

‘Warriors of the Rainbow,’ ‘Simple Life’ Star at Golden Horse Awards - Andy Lau, left, and Deanie Ip celebrate winning the Best Leading Actor and Actress categories for ‘A Simple Life.’ An epic film about an aboriginal tribe’s rebellion against Japanese colonial rulers and a sensitive domestic drama took the top honors at Saturday night’s 48th Golden Horse Awards (金馬獎) in Taiwan. “Warriors of the Rainbow: Seediq Bale” (賽德克‧巴萊), a sprawling, 4-1/2-hour film from Taiwan, was named best feature film. The film, being shown in two parts, is based on the true story of Taiwan’s indigenous Seediq tribes, which launched an armed uprising in 1930 against the Japanese occupation. “I am very happy to be standing here,” said director Wei Te-sheng (魏德聖). “I know our production is very huge, and somehow our ability is not there yet to support such a huge production, and we have strived to finish this movie,” he said. “There were things that I could do better, and I will. Next time I will be better.” He thanked the film’s investors — and at US$25 million, it’s one of the most-expensive ever films in Taiwan — and he made special mention of legendary Hong Kong director John Woo, one of the film’s producers. “He let me see what is being talented and modest,” Mr. Wei said. The night’s biggest winner was the moving drama “A Simple Life” (桃姐), from Hong Kong about a middle-aged man who looks after his family’s life-long servant after she suffers a stroke. Ann Hui (許鞍華) scooped up the trophy for best director, while Andy Lau (劉德華) and Deanie Ip (葉德嫻) won the awards for best leading actor and best leading actress, respectively. “I am afraid I’m going to have a stroke,” Ms. Hui said. “I’m very excited to have this award. In fact, it was a gift at the very beginning.” Mr. Lau, in accepting his award, said: “To be honest, I am very surprised. … Thanks to the judges, I don’t know what to say.” Ms. Ip, who plays the servant, gave nods to her director and fellow actor: “Here I am thankful to Andy and Ann Hui, who gave me this opportunity and to be so lucky at this old age, thank you both.” The 63-year-old actress also won the best actress award for the role at the Venice Film Festival in September. The Golden Horse Awards, launched in Taiwan in 1962, is one of Asia’s most-prominent film events and focuses specifically on Chinese-language movies. While the majority of the nominated films come from Taiwan, Hong Kong and mainland China, any Chinese-language film is eligible to enter. This year’s ceremony was held in Hsinchu City, in northern Taiwan. The full list of winners can be found here.

 China*:  Nov 29 2011 Share

Premier Wen Jiabao has pledged to set aside funding to revamp student transport amid an outcry over China's ill-timed school bus donation to Macedonia following the death of 19 children in a crash. The promise came as mainland internet users vented their anger over the donation and appalling domestic school bus safety record. Wen made the remarks yesterday at the Fifth National Working Conference on Women and Children held in Beijing. "The State Council has instructed relevant departments to waste no time in coming up with school bus safety regulations; improving school bus quality on the basis of its design, production, refitting and equipping; and setting up a more appropriate bus management system," he said. Without giving details about how much would be raised and spent, Wen stressed that the money needed to improve school bus safety standards would be financed by the central and regional governments, as well as through other means. His speech came as authorities were chided over the high-profile handover of 23 school buses by Cui Zhiwei , China's ambassador to Macedonia, to the Macedonian vice-premier, Teuta Arifi, on Friday. This occurred less than two weeks after 19 kindergarten pupils were killed and 43 others were seriously hurt when their nine-seat school bus collided head-on with a coal truck in Zhengning county, northwestern Gansu province, on November 16. News about the donation of the China-made buses, which first appeared on the Foreign Ministry's official website, has been a hotly discussed topic among mainland internet users. Nearly 1 million comments were posted yesterday on the Weibo microblogging service, most of which expressed anger against authorities for being too nice to foreigners while ignoring the needs of their fellow citizens. Repeated calls to the Chinese embassy in Macedonia rang unanswered yesterday. Apart from the ill-timed donation of school buses, the fatal accident sparked public outrage on the safety of poorly equipped and overcrowded school buses across the mainland. Quoting figures saying that the per capita gross domestic product in Macedonia is higher than that in China, a few mainland web users complained that authorities kept offering aid to countries whose residents enjoy a higher standard of living than Chinese residents. Professor Joseph Cheng Yu-shek, a political scientist at City University of Hong Kong, said: "Some mainland people may think that the Foreign Ministry may sometimes not be sensitive enough in taking public opinion into consideration when they spend money, others may also get the feeling that the authorities have used resources unwisely abroad. "I believe China will continue to do this to improve its relations with other countries, to open up markets, to cultivate friendships and so on," he said. Meanwhile, around a dozen primary students were injured and sent to hospital when their school bus overturned in Dandong city in northeastern Liaoning province early on Saturday, the Dandong Morning Post reported. The bus, which was carrying more than 20 schoolchildren, was not overloaded when the accident took place, the report said. It said most of the victims were discharged from hospital after treatment.

China will maintain its tightening measures in property sectors next year and continue its efforts to construct affordable housing, state-run media reported Sunday, citing Vice Premier Li Keqiang. There has been speculation among some economists that authorities may ease controls on the property market if a steep drop in prices threatens economic growth. "Tightening measures in the property sector have had a certain effect," Mr. Li said. "The market is entering a critical period, so we must stick to the policy stance of curbing [the] overly fast increase of housing prices." The high cost of housing has been a key complaint across the country, and Beijing views the problem as a potential source of social unrest. Since April 2010, China has launched a raft of measures to curb property prices, including higher down-payments, limits on the number of residences people can own, the introduction of a property tax in some cities and the construction of low-income housing. Mr. Li also urged local governments to ensure the construction of affordable housing and the quality of such homes. "Construction of affordable housing will give a large boost to consumption and investment, which are key to China amid the global economic slowdown," Mr. Li said. "It matters a lot to maintain China's stable and fast economic growth," he added. The country plans to start construction on 10 million units of public housing this year, as part of its effort to build 36 million units of public housing from 2011 to 2015.

China is downshifting. A key measure of conditions in China's manufacturing sector to be released this week could provide further evidence of deteriorating output in the world's second-largest economy. Stock markets will be focused on whether the official purchasing managers index will fall below the 50 mark that signals contraction. It registered 50.4 in October. Expectations are already low, after a report last week from an HSBC survey of purchasing managers pointed to a fall in manufacturing output. The HSBC poll has a smaller sample than the official one and the two polls can sometimes offer differing outlooks. But markets are expecting the official reading to be similarly dour. Signs of a slowdown are already prevalent. That comes thanks to a double whammy from fading demand abroad and weaker construction activity in China. Headline export growth still looks healthy enough at 15.9% year-on-year in October. But strip out the impact of yuan appreciation as well as inflation, and growth dives into single figures. On the home front, almost two years of controls on the real-estate sector have finally started to dent investment. Wang Tao, China economist at UBS, estimates that new housing starts fell to 2.2% year-on-year in October. More alarming, that number includes government investment in affordable housing that was meant to ride to the rescue as private investment slowed. That weakness has prompted the Chinese government to begin fine-tuning policies, aiming to support growth. An official PMI reading below 50 on Thursday would raise expectations of a more decisive shift toward stimulus. For example, a reduction in the reserve-requirement ratio, freeing up resources for banks to lend more, would be a sure sign of a move to pro-growth policy. And an uptick in lending would provide some relief to Shanghai's hard-pressed stock market, which is down 15% this year. But stubborn inflation may limit the government's room to maneuver. The picture is further clouded by economic uncertainty around the globe, largely thanks to Europe's crisis, which makes it difficult to gauge the outlook for Chinese exporters. All of this may make it more likely that Beijing will bide its time before signaling a major policy shift. In that case, it will take more than continued fine-tuning policy to get Chinese stocks back into gear.

Hong Kong*:  Nov 28 2011 Share

Henry Tang Ying-yen chats with residents in Sham Shui Po on Saturday before announcing that he will be a candidate in the chief executive election next year. Former chief secretary Henry Tang Ying-yen on Saturday in formally announced that he would be a candidate in next year’s chief executive election. Tang, who resigned from his government post in late last September, made the announcement on Saturday afternoon in Admiralty after a visit to Sham Shui Po. Leung Chun-ying, the former Executive Council convenor, is expected to announce his bid for the chief executive position on Sunday. Tang said he was the right person for the chief executive job because he could “galvanise the power and the force of the people to work towards the same goal”. He said that Hong Kong had faced many challenges in the past and would no doubt have to face others in the future, and that it was therefore essential that the city have a leader who could galvanise the support of the people. <;p>Tang did not unveil any details of his election platform.

A worker cleans the windows of a New York store of Coach, which is looking to raise brand awareness in Asia via a Hong Kong listing. Coach to boost profile with HK listing - US handbag maker is the latest global brand to turn to city as way of tapping into huge mainland market - American luxury brand Coach plans to list its depositary receipts in Hong Kong next month to boost its brand profile in the mainland market. The New York-listed handbag maker said in a filing to the Hong Kong stock exchange yesterday that it plans to issue up to 293 million shares of depositary receipts in the city's bourse with dealing to begin next Thursday. The company will retain its primary listing on the New York Stock Exchange, it said. Coach is the latest global brand to turn to the Hong Kong exchange as a way of tapping the mainland market, which is expected to overtake Japan as the leading consumer of luxury goods in three to five years. A number of luxury goods sellers have listed in Hong Kong including French cosmetics retailer L'Occitane, Italian fashion house Prada and luggage maker Samsonite. "We believe there will be an on-going trend for luxury goods listing in Asia," said Aaron Fischer, head of Asian consumer and gaming research in CLSA Asia-Pacific. "For many luxury goods companies, more than 50 per cent of earnings are derived from Asian customers. [A listing in Asia] will help them raise brand awareness." Coach initially showed interest in a Hong Kong listing in May. Andre Cohen, president and chief executive of Coach Asia, said the main purpose was not to raise funds, but to improve brand awareness and enhance communication with Asian investors. Starting from a family run leather workshop in Manhattan in 1941, the brand has grown into one of the largest handbag retailers in the US with an annual profit of US$880 million (HK$6.8 billion) for the financial year of 2010-11. The China market, which currently accounts for 3 per cent of its total sales, is a key driver of growth. Turnover generated from the mainland jumped more than 70 per cent in the past two years, rising to US$185 million annually from US$50 million. The company expects turnover to reach US$500 million in two years, amounting to 10 per cent of its total. Coach said it would open about 30 new shops on the mainland annually in the next few years, mostly in second and third-tier cities. Online shopping services will also be launched for mainland consumers next year. Around 85 per cent Coach's products are manufactured on the mainland. Sitoy Group, the largest outsourcing manufacturer for Coach, is seeking to raise up to HK$986 million through an initial public offering in Hong Kong next month.

On offer are a 3.79 carat fancy pearcut diamond ring (top) at Sotheby's, and diamond earrings at Tiancheng International. Rodin's Monumental Head of Pierre de Wissant. The economic outlook may be grim and the world art market on a rocky ride, but auctioneers in Hong Kong are undeterred - they have launched a series of sales with blockbuster names that they hope will defy the financial turmoil. "There are definitely uncertainties ahead because of the global economy. The stock market has gone down drastically and this will be reflected in the auctions, especially with contemporary art," said dealer Calvin Hui, the founder and artistic director of 3812 Contemporary Art Projects. But auction houses are banking on pieces by artists whose works rarely come on the market, including Jeff Koons and Edgar Degas, and Chinese artists such as Zhang Xiaogang and Zhang Daqian , to sustain interest among Chinese buyers. Hui also said interest in fine Chinese works of art and antiques would continue to grow because of their rarity, while mid-range art - works priced between HK$500,000 and HK$1.5 million - were likely to suffer. "It depends on the quality, but mid-range art pieces by up-and-coming artists are not necessarily the must-buy items," he said. The sales began yesterday, with four regular players - Christie's, Bonhams, SeoulAuction and Est-Ouest Auctions - holding their autumn sessions, offering a combined total of more than 6,100 lots of contemporary and antique works of art, fine jewellery, rare wine and other collectibles estimated to be worth more than HK$3 billion. United Asian Auctioneers, a consortium formed by Beijing Hanhai Auction, One East Larasati from Singapore, K-Auction from Korea and Asian Art Auction Alliance, will present more than 100 lots of artworks today. Tiancheng International, a new player based in Hong Kong, will hold its inaugural auction on Monday, offering 234 lots that it hopes will to fetch more than HK$280 million. One major piece among the lots is Rodin's Monumental Head of Pierre de Wissant. Sotheby's recorded its second-biggest Hong Kong sale by value last month, taking in HK$3.2 billion, and is hosting a preview at the Grand Hyatt of London Impressionist, modern and contemporary art, including a 1951 painting by Francis Bacon, to be sold in February. Also on show until tomorrow is a range of fine and antique jewellery going under the hammer in New York next month. Even with the big names, dealers are cautious about the prospects for the latest sales. The art market in Asia has grown considerably in recent years and the international art market strengthened as the global economy gradually picked up after the crash in 2008. But, the outlook has dimmed again with the recent stock market turmoil and the succession of gloomy economic statistics. According to the US Commerce Department, the American economy grew at a 2 per cent annualised rate in the third quarter instead of the 2.5 per cent previously estimated. Meanwhile mainland China's manufacturing sector has slowed to its slowest growth rate in 32 months, and Chief Executive Donald Tsang Yam-kuen has expressed worries that Hong Kong slipped into recession in the third quarter amid Europe's deepening debt crisis. The pessimism created by such a dismal economic climate was reflected earlier this month in New York, when French Impressionist Edgar Degas La Petite Danseuse de Quatorze Ans, the famous bronze sculpture of a 14-year-old ballerina, as well as two paintings by Pablo Picasso, were among 31 lots - 38 per cent of those on offer - that failed to sell at a Christie's auction of Impressionist and modern art on November 1. The owner of the Degas sculpture, one of 27 editions of the statue cast after his death in 1917, had hoped to raise US$35 million, prompting the New York Post to opine that "rich art collectors got too greedy trying to cash out during hard times, causing a stunning flop in the US$1.1 billion season-opener of the art auction world". However, the market took an interesting turn just over a week later when Sotheby's New York had its largest contemporary art sale since May 2008, totalling US$315.8 million, with a rare Clyfford Still abstract painting fetching a record US$61.7 million. In all, Bloomberg reports, the auction at Sotheby's York Avenue headquarters raised US$315.8 million - despite striking Sotheby's workers holding a noisy protest outside along with Occupy Wall Street protesters. A few days later at the 14th Asian Art in London fair featuring Sotheby's, Christie's and Bonhams, buyers snapped up a total of £57.4 million (HK$695 million), including a Qianlong period (1735-1796) imperial vase for a record £9 million. However, just over half (56 per cent) of the items found buyers. "Market fluctuations are normal and it's positive for the market to make adjustments," said Angela Li, founder of the Hong Kong-based consultancy Contemporary by Angela Li. Though the auctions will rely heavily on the purchasing power of the affluent mainland buyers, Li said they were not as generous as many imagined. Moreover, "many [buyers] are speculators". "If something goes wrong [in the market] they will pull out immediately. They look at the dollar sign more than the intrinsic value of an art piece," Li said. Following a strong spring sale, Christie's is offering more than 3,600 lots in Hong Kong with a pre-sale estimated value in excess of HK$2.6 billion, excluding the buyer's premiums. Among the highlights are contemporary Chinese art star Zhang Xiaogang's Portrait in Yellow (1993), with an estimate between HK$25 million and HK$30 million, and a fine Chinese ink painting entitled Verdant Mountains and Layered Peaks After Rain by Zhang Daqian, which is expected to fetch between HK$20 million and HK$30 million. A Qianlong imperial white jade vase with an estimated value of HK$28 million to HK$35 million is also on offer. Christie's achieved an astonishing total of HK$4 billion - the highest season total for Christie's in Asia - from its spring sale thanks to the enthusiasm of buyers from the mainland, Taiwan and Hong Kong, who contributed 70 per cent of the auction's revenue. Despite the disappointment of the New York sale, Jonathan Stone, Christie's chairman and international head of Asian art, said he was confident about the current Hong Kong sale of Asian art. After all, the Chinese auction market still appears to be thriving, with a number a records set on the mainland this month, including an oil painting by modern master Wu Guanzhong going for a record 149.5 million yuan (HK$182.6 million) at a Beijing sale. A set of paintings by Fu Baoshi illustrating Mao Zedong's poems fetched a record 230 million yuan at Beijing Hanhai Auction just last week. Stone said collectors still desired great pieces, as blue-chip works could serve as an alternative investment during economic downturn. He added that items at Christie's Hong Kong sale, unlike those in New York, had been "well-estimated". Other than offering contemporary Chinese art pieces and historic works of art, Bonhams will continue with the Part IV auction of Mary and George Bloch Collection of Chinese snuff bottles on Monday. The 170 pieces featured have a pre-sale estimated value of HK$21 million to HK$38 million. On Monday and Tuesday Est-Ouest Auctions will offer a range of collectibles, including a 1961 oil painting by Italian artist Lucio Fontana that the house hopes will fetch HK$9 million to HK$13 million, as well as The Dog Mobile: A Car for Francis Bacon, a Mercedes-Benz decorated by maverick Chinese artist-activist Ai Weiwei , believed to be worth up to HK$2.3 million. SeoulAuction is having a modest sale offering 50 lots with an estimated worth of more than HK$195 million on November 28. Highlights included Jeff Koons' sculpture Smooth Egg with Bow, which has a pre-sale estimate of HK$55 million to HK$75 million. Another edition of Degas' ballerina sculpture is also among the blockbuster names featured, with an estimate between HK$12 million and HK$18 million - a major discount to Christie's "aggressive" estimate of US$25 million to US$35 million. Also on offer are works by Korean artist Lee U Fan, who recently had his solo exhibition at the Guggenheim in New York, and contemporary Japanese artist Yayoi Kusama. The Korean auction house has scaled down the sale by a third compared with its spring auction, which fetched a total of HK$32 million, but the estimated total value has gone up by more than six times. Managing director Soyoung Lee admits the sale is risky in this economic climate and has kept the pre-sale estimates low. She also acknowledges that the introduction of around 10 Chinese antiques for the first time in the sale was based on the thriving market for such artefacts in the region, as demonstrated in October's Fine Art Asia. "We will consider expanding this category if it is successful this time," Lee said. But, Lee agrees that bringing such blockbuster names from the West in the current economic climate has its risks. "We'd like to bring in more consignments from the West. If the Jeff Koons piece is sold, we might attract more consignments from the West," she said. "But to build up our image, we are willing to take a risk this time."

Bank of East Asia (SEHK: 0023) boss David Li Kwok-po and Ocean Park chairman Allan Zeman yesterday declared their support for Henry Tang Ying-yen as chief executive. This followed similar expressions of support from Peter Wong Tung-shun, HSBC Asia-Pacific chief executive and Joseph Yam Chi-kwong, the former Monetary Authority chief, earlier this week for the former chief secretary. Li, the lawmaker for the banking sector, went even further, saying Tang had support from bankers he knew. "I talked to 50 or 60 bankers, including local, mainland and overseas ones. They all support Henry." He praised Tang for cancelling inheritance tax, which had attracted many foreign companies to come to Hong Kong, Speaking at a separate function, Zeman said choosing Tang was a safer choice in the face of economic uncertainties. "I look upon it as safe investment ... for the next four years," he said. "I don't want to gamble. I want to be safe." With his experience as financial secretary and chief secretary, Tang could provide stable leadership in the government, Zeman said. Leung Chun-ying - Tang's main rival in the chief executive race - was an Executive Council member but had never worked in the government, he said. And although Tang was behind Leung in the opinion polls, he still had time to catch up, Zeman said. "Henry's biggest problem that I see is that he doesn't speak well in front of the public," the Lan Kwai Fong boss said. Zeman said Tang's standing in the polls were lower because he had been part of the government. Hong Kong's biggest problem is housing, and people blamed the government for it, he said. Zeman also praised Tang for admitting infidelity in his marriage, but which had contributed to his drop in the popularity polls. Tang and Zeman have known each other for two decades. They met frequently over issues concerning Ocean Park and the West Kowloon Cultural District. Zeman described Tang, the art hub's former chief, as capable and straightforward. But he said Leung was also a good friend of his. Zeman decided against him because he felt he lacked experience in the government. Despite the high-profile support Tang received this week, Leung said he had plenty of time to gather more support.

Despite the Pearl River Delta's declining role as the world's workshop, Beijing has underlined Hong Kong's status as a shipping hub. It also wants Shenzhen to evolve into a global logistics hub. Vice-Minister of Transport Xu Zuyuan, said Hong Kong would remain a vital international port, and Beijing was committed to supporting its development as a maritime centre under the five-year plan to 2015. Hong Kong and the mainland should increase collaboration in shipping and maritime activities, said Xu, who was in Hong Kong to attend the Asian Logistics and Maritime Conference. The ministry has also set out roles for Shenzhen and Guangzhou. "While consolidating Hong Kong's role as an international shipping centre, logistics and shipping services must be aggressively developed in the major ports of the Pearl River Delta, including Shenzhen and Guangzhou," it said on its website yesterday. Shippers said the government was seeking to encourage the sector despite some industries leaving the delta because of rising costs. "The central government is telling everybody it has confidence in the Pearl River Delta. Despite factories closing down, factories in southern China have to deliver their goods through Hong Kong and Shenzhen," said Willy Lin Sun-mo, the chairman of the Hong Kong Shippers' Council. On Wednesday, the Shenzhen government published its five-year plan with an aim of making the city a global logistics hub. "This is the first time the government's plan explicitly stated the notion of Shenzhen becoming a premier national logistics services city," said Qu Jian, the deputy head of the China Development Institute, a think tank. The Shenzhen government wants the sector's value-added output to rise to 150 billion yuan (HK$183.5 billion) in 2015 from 92.6 billion yuan last year. During the five-year plan period, Shenzhen would accelerate its partnership with Hong Kong in creating a joint international shipping hub and building an exchange in Qianhai, the Shenzhen Ports Association said on its website. An Asia-Pacific supply chain management centre and shipping services base would be built in Qianhai, a 15 sqkm development zone in Shenzhen. It would take time for Qianhai to develop into a logistics hub, said Lin. "The free-port status of Hong Kong will not apply to Qianhai. If Qianhai is to co-operate with Hong Kong, the government will have to change the laws for Qianhai." The exodus of factories from the delta has caused throughput in Hong Kong, the world's third busiest port, and Shenzhen, the fourth busiest, to lag behind Shanghai, the world's busiest port. In the first 10 months of this year, Shanghai's container throughput rose 10.3 per cent to 24.6 million 20-foot equivalent units, while Shenzhen's fell 0.1 per cent to 18.8 million teu, according to government data. "Shenzhen will never overtake Shanghai in throughput. In terms of throughput, Shenzhen and Hong Kong may reduce in future, but their value can increase a lot," said Anthony Wong, a former president of the Hong Kong Logistics Association. In the first 10 months of this year, Hong Kong's container throughput rose 3.6 per cent to 20.25 million teu. Export value rose 11.3 per cent in the same period, according to the government. "Hong Kong port is not just moving boxes. It has to be doing more high-value functions," Lin said.

Singer Edmond Leung Hon-man at a media event in Tseung Kwan O to push the food campaign. Most restaurants like customers with big appetites, but waiters at the Tsui Wah restaurant chain have been instructed to advise them not to order too much. The reason? It's the latest chain in Hong Kong to join a global campaign not to waste food. ''We want our customers to enjoy their food and be able to finish everything,'' Tsui Wah chairman Lee Yuen-hong said. ''It is actually far more enjoyable to just be 70 to 80 per cent full. And we want this campaign to start from the root, which is changing the mentality of consumers.'' Waiters at its 18 branches have been trained in a new campaign launched yesterday to reduce food waste by chefs and customers. The size of portions will be adjusted based on day-to-day measurements of food waste and staff will advise customers on how to order a sufficient amount of food. ''If customers still can't finish their food, we will see it as a problem with our portions and we will rethink our recipe,'' Lee said. ''We used to have huge store rooms to keep our foodstuffs, but now we don't need to. We use fresh ingredients and try to keep as few foodstuffs overnight as possible. ''This means we do not have to store large mounts of food that may be tossed out because it's expired.'' One of the first steps of the campaign is staff will be using a smaller ladle when scooping rice. Christy Lee Sin-ying, Tsui Wah's corporate planning manager, said: ''We have always had the option for customers to order less rice, but it was just based on our staff's rough estimate of what less rice is. Now we can be consistent.'' The campaign, led by Unilever Food Solutions, has so far been launched in the US, the Britain and on the mainland.

 China*:  Nov 28 2011 Share

A foreign exchange shop in Budapest. European countries are looking to China for financial aid through buying their bonds, extending loans or making direct investments. China Investment Corporation (CIC) will not be used as the main channel for any aid from Beijing to bail out debt-mired European countries, said an executive of China's sovereign wealth fund yesterday. The fund "wouldn't be the main channel" if China helps tackle Europe's debt crisis, said Jesse Wang, CIC's executive vice-president. "However, if during such a process there are good investment opportunities in Europe and if CIC's investment helped the destination company or country to recover and developed the economy, that would be indirect support," Wang said. CIC chairman Lou Jiwei's visit to Rome in September fuelled speculation that CIC, which had US$409.6 billion in assets under management at the end of last year, might buy some Italian treasury bonds, a move that would show Beijing's support. However, Wang yesterday ruled out the possibility of CIC being used as a government bailout tool. "CIC is under no obligation to follow the government's policy orders in its operations because it's a commercial entity," Wang said. "If the government carried out certain policy moves, CIC usually wouldn't participate because it has different operational targets and risk-taking capabilities." CIC, founded in 2008 amid the global financial crisis, achieved an accumulative annualised return of 6.4 per cent in its global investment portfolio for the 2008 to 2010 period. CIC is under pressure to improve the returns, analysts say, as it has to pay 4.3 to 4.7 per cent in annual interest payments to the Ministry of Finance for its borrowed capital. "As a commercial entity, CIC is seeking reasonable returns with controllable risks," Wang said, citing an investment in the exploration and production business of Paris-based GDF Suez, Europe's largest natural-gas network operator, as an example. Asked if China would buy European bonds, Wang said Beijing was studying "which way and through which products" to support the region. European countries have looked to China, the world's largest foreign reserves holder, to bail them out by buying their bonds, extending loans or making direct investments in the euro zone. However, China has not announced any concrete plans to help. Professor Zhu Chao, of the Capital University of Economics and Business, said a contribution to the International Monetary Fund would be the first choice "if China really wants to help the euro zone". World Bank president Robert Zoellick said this month that China was among the countries that might be willing to support Europe through the IMF if policymakers agreed on a plan. Economists are calling for private companies to explore investment opportunities in Europe. Li Daokui, a Chinese central banker, said last week that outbound investments by private companies would contribute to economic recovery in Europe and help China reduce its credit base.

Hollywood eager to conquer Celluloid Wall of China - DreamWorks and Disney are among the latest US firms to venture into the country's budding market. Shanghai is rarely described as a city of starry-eyed dreamers - but that could soon be about to change, with a double dose of Hollywood glitz on the horizon. Mainland media reported this week that United States entertainment giant DreamWorks Animation was eyeing a move into the mainland market by opening a studio in Shanghai to produce animated films for the China market and design theme parks. The firm's chief executive, Jeffrey Katzenberg, was in town earlier this month, Caijing magazine reported, cosying up to officials from the culture ministry and other departments, as well as wining and dining potential media partners. DreamWorks - the maker of a slew of silver-screen hits including the Shrek and Kung Fu Panda franchises - has not responded to this week's reports, but it is not the first time the move has been suggested. It follows similar rumours circulating in the US media back in September, with a spokesman for the studio at the time refusing to speculate, but stopping short of denying the plans. According to Caijing, however, the studio plans to invest some US$2 billion over the next five years in a Shanghai-based joint venture, and citing unnamed people close to the deal, the magazine said the first Chinese-produced animated feature would hit the screens in 2015. That timing would coincide nicely with the other splash of Hollywood razzmatazz coming to Shanghai: the opening of the long-awaited Disney theme park. Ground was finally broken at the site of Shanghai Disneyland in April, following a decade of wrangling between the US-based entertainment giant and the Shanghai and central governments. The 24.5 billion yuan (HK$30 billion) park plus connected resort is scheduled to be ready in four to five years' time, and is expected to be slightly larger than its much-maligned Hong Kong sibling. There has been much debate in Shanghai's public and political circles about the attraction's chances of turning a profit, given the Hong Kong park's failure to break-even after six years of operation. But for Disney, theme parks are a fantastic platform for promoting their celluloid creations and assorted merchandise to a wider market. Other than in advertisements for an offshoot that uses Mickey Mouse and Donald Duck cartoons to teach English, Disney characters are not so well known among children in Shanghai - never mind in second- and third-tier cities. The firm almost certainly hopes having a "Magic Kingdom" in the delta will sprinkle the pixie dust needed to change that. And these two firms are not the only American studios getting into the China act. In June, Legendary Entertainment announced the launch of a Hong Kong-based unit to co-produce films in mainland China, and Relativity Media followed suit with a Beijing-based joint venture in August. The mainland film industry is booming - even if you ignore the untold billions in "lost" revenue caused by pirated DVDs. Box office takings on the mainland grew by a massive 64 per cent last year, reaching 10.2 billion yuan. In dollar terms, the market still barely holds a candle to the US and Canada - where cinemas took in a combined US$10.6 billion last year - but the rate of growth is crucial. In North America, the market is fully matured - there was zero change in cinema takings on 2009, but audience numbers actually fell by about 80 million to 1.34 billion cinema visits. Mainland China, by contrast, is fresh meat for the taking, and Hollywood executives are virtually salivating at the prospect of sinking their teeth into it. There is only one problem: Beijing's protectionist approach to film regulations. Only 20 foreign movies are allowed into the market each year - despite a 2009 World Trade Organisation order to relax access to the market. DreamWorks has managed to fare reasonably well despite this regulatory straitjacket. The Kung Fu Panda movies, the studio's popcorn take on Chinese culture, have both been given mainland distributions and were lapped up by audiences - despite a loopy online campaign complaining of the main character's "evil" green eyes. The sequel was a huge hit on the mainland this summer, clocking up a record 125 million yuan in cinemas in its opening weekend - and rapidly flying off the bootleg DVD barrows. But it seems the Hollywood corporate types have cottoned on to a way around the Celluloid Wall of China altogether. By producing their China-targeted films within the country and with domestic partners, they get direct access to a larger piece of a pie that they expect to grow in tandem with rising urban wage levels. It is possible, though, that Katzenberg has another motive for trying to get a foothold in Shanghai. He was one of the co-founders of DreamWorks SKG in 1996 (the animation side became a separate entity from the main studio in 2004), as he was going through an awkward dismissal from Disney, where he had been chief executive for a decade. Katzenberg had sued the Magic Kingdom over the dispute, and settled out of court for a pay-off of US$250 million. Perhaps he secretly dreams of upstaging his erstwhile employers and now arch-rivals by building a Kung Fu Panda Adventureland, complete with high-kicking tigresses and noodle shops run by geese.

The United States' "return to Asia" has resulted in a new dynamic in the region, with many Southeast Asian countries looking to China when they need economic support, but turning to the US for security protection, a forum on international relations heard in Hong Kong yesterday. China has tried to boost economic ties with its Asian neighbours through the Association of Southeast Asian Nations framework over the past two decades to build up mutual trust on economic and security issues, said Yang Jiemian, president of the Shanghai Institutes for International Studies. But Beijing now realised it was almost an entirely fruitless strategy, Yang told the Hong Kong Forum on Asia, held at the Foreign Ministry's local office. Yang said the change in dynamic was the result of Asian countries' concerns over the rise of China and territorial disputes in the South China Sea, coupled with the United States stepping up engagement in the region. "Actually, the US has never left Asia," Yang said. "It is just reinforcing its presence now ... and its participation has made the [Asean] framework much more complicated and more uncertain because the US is so big, very powerful, and it always has a lot of ideas." For instance, US President Barack Obama proposed a Trans-Pacific Partnership (TPP) at the Asia-Pacific Economic Co-operation summit in Hawaii this month. Yang's views were backed by Ma Mingqiang, secretary general of the Asean-China Centre, Xu Dunxin, a former ambassador to Japan, and several other diplomacy specialists at the forum. "It's because the Asean countries fear they will be assimilated by China amid China's rise," Ma said. Beijing's failure to promote China and its cultural values to Asian neighbours should be blamed for such mistrust. "In the past, our country just focused on enhancing relations with overseas Chinese in the Asean countries, but ignored our ties with the majority of the people." However, China's ambassador to Asean, Tong Xiaoling, played down the concerns. She said she was optimistic about relations with Asean because of shared economic and security interests with China. Dr Richard Hu, director of international relations at the University of Hong Kong, said the weak ties between China and Asean members reflected traditional Asian culture. "The game rules in Asean are so different from those in Western countries, with everyone in Southeast Asia qualifying for membership, while in Europe or in the US you should meet several requirements before joining a club," Hu said. He drew an analogy to how marriage was viewed differently in the two civilisations. "In Asia, our cultures encourage couples to get married first and then learn how to fall in love, but it is the opposite way in Western culture." The analogy was picked up by Professor Li Xiangyang, director of the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, who said a vulnerable marriage could be broken up by a third party. "Now, obviously, the third party is the US," Li said.

Thousands of workers have crippled production for major Western brands in Guangdong. They range from shoe and bra factories in the east of province, dubbed "China's world factory", to a cluster of watch, sport and electronics plants to the south and west. At Yue Yuen Industrial (SEHK: 0551, announcements, news) Holdings' giant shoe factory in Huangjiang - a major supplier for sports brand New Balance - the mood remained tense after most of the 8,000 workers took to the streets on Thursday, blocking roads, overturning cars and clashing with police. At least four factory workers said the strike was still simmering into a sixth day, with workers clocking in but refusing to work at assembly line posts. "We are willing to work, but you must also pay us enough to survive," said one. "To guarantee the basic quality of life, even Wen Jiabao has said that," she added, referring to the premier. A middle-aged male colleague sitting beside her said: "Even during the financial crisis we didn't see pressure like this." The shoemaker, one of the world's largest, said the impact was minor with its orders still healthy. However, it conceded that cost pressures, namely wages, were building in regions like Guangdong, where another round of minimum-wage rises on January 1 could deal a further blow to factory owners. Experts and labour advocacy groups warn an external economic slowdown in debt-stricken Europe and countries like the United States could exacerbate the risk of social upheaval on the mainland. While strikes are relatively frequent in factory towns, including a spate of wildcat actions last year that afflicted major global firms like Honda, the latest labour unrest comes amid a far darker global economic backdrop and a tight domestic credit environment. As leaner times provoke aggressive factory cost-cutting and wage trimming, mainland workers increasingly hit by persistent inflation are often in no mood to compromise. In a report, consultancy Exclusive Analysis said it saw growing risks of violent labour unrest flaring in mainland factories and causing property damage and losses. It added: "Real-time use of social media by striking workers, and firms' decreased ability to meet workers' demands due to falling Western export demand are likely to drive this violence." The Federation of Hong Kong Industries recently warned up to a third of some 50,000 Hong Kong-owned factories in adjoining Guangdong and elsewhere on the mainland could downsize or close by the end of the year, potentially putting at risk hundreds of thousands of jobs. At the Hong Kong-listed Top Form bra factory, the strike by hundreds of female workers centred on reducing pay on a per-item basis, while striking workers at Jing Mold Electronics Technology in Shajing, a major supplier of keyboards for Apple, said they were forced to work late during the week to save paying them double at the weekend. "I don't eat meat to save money now," said a mother of two at the Leader Sporting factory in Songgang, near Shenzhen, which makes sports goods for US-brand K2 skates.

Botswana's diamond industry will find solace in China booming market, Botswana's biggest diamond miner Debswana said on Friday. In an interview with Xinhua on the sidelines of the Botswana Chamber of Mines Annual General Meeting in Francistown, Botswana's second biggest city in northeast, Esther Kanaimba-Senai, Group Manager for Public and Corporate Affairs of Debswana, said China is with bright spots in the global economy. "China's tariff reduction and exemption will further enhance exports from Botswana to China, and benefit the economic growth," he said, adding that it is a big chance for the diamond industry in the country especially when the recent agreement between Botswana and De Beers provides for an independent sales outlet for Botswana, which will begin at 10 percent of Debswana's run of mine production and rise to 15 percent over a five year period. During the recently concluded G-20 summit in Cannes and the Asia-Pacific Economic Cooperation (APEC) meeting in Honolulu, Chinese President Hu Jintao announced that China would give duty- free status to 97 percent of the tariff items of exports to China from the least developed countries with diplomatic ties to the country. Senai said after an unprecedented period of growth in the price of both rough and polished diamonds during the first half of 2011, prices have largely plateaued with a softening seen in some categories. However, he said diamond jewellery sales have been particularly strong in China. According to official statistics, China overtook Japan to be the second largest consumer of diamonds in 2009. Senai said an expanding upper-middle-class Chinese consumer will spend about six times as much as his or her Western counterpart on acquiring luxury goods which makes this a very exciting market for the diamond industry. Botswana is the world's biggest diamond producer by value, with diamond export accounting for about 70 percent of its foreign currency earnings and near 50 percent of its national revenue. Currently the land-locked Southern African country aspires to be one of the world's leading diamond trading and manufacturing hubs.

Russia's Proton-M carrier rocket was launched on Friday from the Baikonur space center in Kazakhstan with a Chinese communications satellite "AsiaSat-7", according to Russia's Federal Space Agency Roscosmos. Roscosmos' live broadcast on its official website showed that the Proton-M rocket atop the Briz-M upper stage was launched at 23: 10 Moscow time (1910 GMT). The separation of the satellite from the rocket was scheduled for 08:23 Moscow time (0423 GMT) on Saturday. The AsiaSat-7 which belongs to the Asia Satellite Telecommunications Company Limited (AsiaSat) located in Hong Kong, China, is a new generation satellite designed to replace AsiaSat 3S at the orbital location of 105.5 degrees East. The new satellite was expected to support a broad range of applications for the Asia-Pacific region, including television broadcast and VSAT (Very Small Aperture Terminal) networks.

China's leading private automaker, Chery Automobile Co., Ltd., is expected to export a record 170,000 units of vehicles in 2011, marking the highest annual export figure in the company's history, a company manager said Friday. Chery exported 135,556 units of vehicles in the first ten months of this year, up 77.3 percent from a year earlier. This total accounts for 35.3 percent of total passenger vehicle exports of domestic brands, said Feng Ping, deputy general manager of Chery International. The central Anhui province-based carmaker started exporting cars in 2001, when it sold ten cars to Syria, and has since led export sales amongst Chinese automakers. The company exports its products to more than 80 countries and regions, and has established 3 research institutions, a service network of 1,000 dealers and more than 800 service stations overseas.

Hong Kong*:  Nov 27 2011 Share

For Manulife Financial, the present is Canada and the United States, but the future will increasingly be Southeast Asia, where its insurance business is growing 30 per cent a year. Premium growth in the six Asean countries Manulife operates in would benefit from outsized economic growth in the region, as well as from demographics and expansion into new territories such as Cambodia, Philip Hampden-Smith, general manager of Manulife's Southeast Asian operations, said. "Really our business in Southeast Asia, the whole positioning of it, is to take advantage of this demographic wave that we have," he said. The company, Canada's largest insurer and owner of US insurer John Hancock, hopes to mine growing affluence and underpenetration by insurers. Manulife also sells wealth management and banking products. Manulife first entered Asia in Shanghai in 1897 and has since spread slowly throughout the region. In Southeast Asia, the company has a presence in Indonesia, Vietnam, the Philippines, Singapore, Malaysia and Thailand. Last week, the company said that next year it planned to establish operations in Cambodia, making it the first foreign player and holder of one of only two licences, giving it the chance to help create a market in a country of 14 million people. "My objective in Cambodia is I would like to see a 30, 40, 50 per cent share of that market by dint of being the first mover," Hampden-Smith said, adding that market penetration of 1 million people would not be inconceivable. But while any profit contribution from Cambodia is still years off, the company has plenty to keep it busy in the region. Last month, it signed a strategic partnership with Indonesia's Bank Danamon that will allow Manulife to sell banking, wealth management and insurance products to the bank's customers starting next year. "There are about 80 million bank customers in Indonesia, and there are only about 11 million insurance customers," of which Manulife has 2 million, Hampden-Smith said. "By doing the bank deals we're doing, on top of having our existing distribution through our agency of 7,000 sales people, we're going to be able to access some of that 70 million that we don't access at the moment." Manulife does not break out its Southeast Asian division's profit, but its total profit from Asia last year - which also includes Hong Kong, the mainland, Taiwan, and Japan - was C$623 million (HK$4.65 billion). The company has targeted profit of C$1.5 billion from the continent by 2015. While Indonesia is currently the division's top growth area, Hampden-Smith sees Vietnam as the next hot spot for expansion.

Mainland shoppers wait to enter the Yata department store in Sha Tin. A stronger yuan has made goods cheaper for them. The strengthening yuan continues to make Hong Kong a shoppers' haven for rich mainlanders. But it is not all good news for the retailers, who have had to buy many of their goods from over the border at inflated prices. At the opening of a five-day sale at Yata department store in Sha Tin yesterday, at least 300 mainlanders from as far away as Guangzhou had to tussle with about 3,000 local shoppers for discounted goods ranging from kitchenware to food, infant and bedding products. Yata managing director Daniel Chong Wai-chung expects the five-day sale to bring 950,000 people to its two stores in Sha Tin and Tai Po. "Shoppers are clever and they stock up partly because consumer price inflation is forecast to rise further and some have received the government's handout of HK$6,000," Chong said. "Sales are hotter than they were last year." Yata, a retailing arm of Sun Hung Kai Properties (SEHK: 0016), holds sales twice a year. Lin Ziwei and his wife took a day off yesterday, leaving their 10-month-old daughter at their Guangzhou home, to come to Hong Kong armed with HK$5,000 and a shopping list that included infant milk formula, food, quilts, clothes and shampoo. "We will spend a day at the store," Lin said after a three-hour trip on a shuttle bus to Sha Tin. "The Hong Kong dollar is about 20 per cent lower than the yuan compared with some years ago, so it is cheaper to shop here. And the goods are authentic and of better quality." Another shopper said he spent HK$588 for a set of German-made pots and pans. That was at a discount of 87 per cent and was "too cheap to resist". Chong estimated each mainland shopper would spend an average of HK$3,000 during the sale. The yuan has continuously risen against the Hong Kong dollar, which is pegged to the US dollar. Spot yuan was at 6.3636 per US dollar yesterday, against 6.359 on Wednesday. The yuan has risen 3.55 per cent so far this year and 7.27 per cent since it was depegged from the US dollar in June last year. A strong yuan, however, is bad news for retailers such as Yata as the city relies on imports. Chong said food sourced from across the border and Japan had become more expensive, with Japanese seafood costing 20 per cent more than last year. He said about 70 per cent of the products on sale had prices marked up by about 10 per cent while an additional 15 per cent were cheaper by 15 per cent. The government forecast inflation would jump 5.2 per cent this year. A Goldman Sachs research report has a higher estimate, at 5.3 per cent. Inflation rose 6.1 per cent in the third quarter after a 5 per cent increase in the second quarter, government statistics showed.

The building of two hotels in Ocean Park will probably be delayed after a tender deadline lapsed yesterday with no agreement reached. According to the original plans, the amusement park wanted two hotels - Ocean Hotel at the Ocean Park main entrance and Fisherman's Wharf Hotel at Tai Shue Wan - to open by 2013 and 2015 respectively. But the park did not select any hotel developers from the tender period that ended yesterday. "Some of the terms in the tender offers are not in the best interests of the parties concerned. We decided to let the tender lapse," park chairman Allan Zeman said. He would not give details but conceded that opening the first hotel in 2013 would not be feasible. "It's too much of a rush," he said. The lapsed tender period was based on the build-operate-transfer (BOT) model, under which bidders would build and operate the hotels and share the profits with Ocean Park. They were required to surrender ownership of the hotels to the park after some 30 years. Building costs and land premium - for changing the land zoning from entertainment to hotels - were to be paid by the developers. Zeman said the park's hotel steering committee would work on a "better way" to develop the hotels next month, but it was too early to say if the BOT model would be kept. The lapse of the tender period was the latest setback for the park's turbulent hotel development plans. Tendering bids for the two hotels were scheduled to start in June, but it was delayed for six months as the park claimed it needed more time to consider designs and financial arrangements. A source said one bidder, Great Eagle (SEHK: 0041), was not happy with the hefty amounts of land premium, but the real estate company refused to comment. Developing hotels under the BOT model is reportedly rare in Hong Kong. Most hotels can break even only after more than 10 years, and the requirement for investors to give up hotel ownership after a designated period could be discouraging. Meanwhile, Ocean Park is exploring the feasibility of developing Tai Shue Wan as a new themed zone with an indoor Water World, an ice skating rink and dining and entertainment facilities.

Henry Tang has vision and talent for top job, says Joseph Yam - Former Monetary Authority chief will offer advice in any race for chief executive but says he will refuse to accept any role in a government or public body. Former Monetary Authority chief Joseph Yam Chi-kwong yesterday announced his support for Henry Tang Ying-yen in the chief executive race, but ruled out serving as financial secretary if Tang gets the top job. He was the second financial heavyweight to back former chief secretary Tang this week, after HSBC Asia-Pacific chief executive Peter Wong Tung-shun gave his support. "I will do my best to offer [Tang] advice - as long as my retirement life is not affected - on his electioneering and policymaking. But I will not serve any full-time positions in any private and public body," Yam said. Speaking after receiving an honorary doctorate at Shue Yan University yesterday, Yam - a hot tip for financial secretary in a Tang cabinet - said Tang was "the helmsman Hong Kong needs" and had talents ranging from managing the city's civil servants, to policymaking and execution. "He has an international vision and is experienced in tackling ad hoc issues. Hong Kong could be affected by the turbulence caused by ... economic downturn ... we need an experienced helmsman to steer us and Henry Tang is such a person," Yam said. "I am confident he can lead the civil service team. He is good at picking talents and is vigilant [about possible] crisis in times of peace and tranquility. And one point of utmost importance is that he can carry on in times of adversity. He is a leader who can preserve and strive for benefits for the public." Yam's praise came despite Tang's continually flagging popularity in a series of recent opinion polls among the public and professionals, which all placed him well behind likely rival Leung Chun-ying. In the latest survey, conducted by the pro-Beijing Federation of Education Workers, more than 32 per cent of 3,200 respondents chose Leung against just 7.44 per cent for Tang. Yam said low popularity was a necessary pain for a responsible leader. "I don't have a deep understanding of popularity, but I always think that whenever a responsible leader makes decisions for the long-term benefit of the city, some of them bring inconvenience to the public in the short run - and that affects his popularity," he said. Unlike many of Tang's core supporters, Yam dismissed luck as a factor in Tang's success. "To say he was just lucky would be to underestimate Tang's ability," he said. Tang would not say yesterday whether he would announce his candidacy as expected on Tuesday, but said his cabinet "will be revealed soon".

Benny Chan and his wife Jiang Lisha shed the tears yesterday at a media conference held at a restaurant in Kwun Tong. A tearful Benny Chan Ho-man said yesterday he was remorseful and had no intention of causing Rose Chan Ka-woon any harm, after the rising kung fu starlet accused him of molesting her. The 42-year-old actor, appearing with his heavily pregnant wife Jiang Lisha at a media conference yesterday, bowed three times during the 10-minute event as he apologised to the 19-year-old for doing "something rude" to her at a dinner in a mainland restaurant. "I feel remorseful because I have disappointed those who supported me, especially my wife, who is sitting beside me, and the baby who is coming into the world soon," he said in a speech at a Kwun Tong restaurant that turned out to have been carefully scripted, including instructing him when to bow. Jiang, due to give birth to a daughter on Monday by Caesarean section, said she had forgiven her husband and hoped the public would give him a chance. She also hoped "Rose, the little girl", could forgive him. Holding his wife's hand, the actor said he had "too much alcohol and did something rude to Rose". "I admit it was really wrong. I had no intention to hurt Rose but I understand it really embarrassed and upset her." He apologised to the teenager, her family and friends, saying his "unintentional mistake" had hurt their feelings. The couple became tearful when he apologised to Jiang. Benny Chan, who previously said he was being too hospitable when the incident happened, said he would learn to become a responsible father and husband and would quit drinking. "I will see a doctor. If he thinks I need therapy, I will accept it because I really want to get rid of alcohol." A paper left by the actor showed that his speech was carefully scripted. At three points, there were instructions in brackets saying "stand up and bow". Rose Chan reported to the police and complained to the public on Tuesday, alleging that Benny Chan and actor Joe Ma Tak-chung molested her, after a magazine published photos of the actors touching and kissing the actress in a restaurant in Hengdian, a city in Zhejiang. Benny Chan, Ma and Rose Chan were making the film Princess and Seven Kung Fu Masters, directed by Wong Jing, in Hengdian when the incident happened. Rose Chan returned to Hengdian on Wednesday to continue work on the film. Ma in a statement said he had not molested her, and might take legal action against the magazine for its "untruthful reporting". But he said he was sorry for "the unhappy event that happened in Hengdian". The police confirmed that they had received a complaint of molestation from a 19-year-old woman, and would list the case as overseas crime.

The Housing Society may need to borrow up to HK$5 billion from banks to meet the city's subsidised housing demand, its chief says. "We are having a cash-flow problem as we are launching different housing projects after years of planning," said chairman Yeung Ka-sing. The society is in charge of 10 major construction projects to provide 8,000 subsidised flats from 2014. The cost of the projects is between HK$10 billion and HK$20 billion. They include redevelopment of its public rental estate Ming Wah Dai Ha in Shau Kei Wan, the rent-and-buy My Home Purchase Plan pilot in Tsing Yi, two retirement housing plans, and six for redeveloping old buildings in Sham Shui Po and Shau Kei Wan. The society, which is Hong Kong's second-largest provider of subsidised homes after the Housing Authority, only has HK$8 billion cash on hand. Unlike the Housing Authority, which is a government agency, the society is a self-financing, non-profit body whose revenue largely comes from flat sales, investment and rents. It obtains land from the government at a discounted premium. Last year, the society pocketed HK$1.85 billion from selling the last batch of flats of a shelved sandwich-class housing scheme and recorded a surplus of HK$1.5 billion. But Yeung said it was not enough to cover the ongoing projects. It would need to borrow HK$3 billion to HK$5 billion. "Either we approach the government for an interest-free loan when undertaking its projects, or a more direct way would be to get loans from banks," he said. The Ming Wah Dai Ha redevelopment in Shau Kei Wan, described by Yeung as a "multiple-win project", is one of the 20 existing rental estates built and managed by the society. A master layout plan is being finalised and will be submitted to the Town Planning Board next month. It will provide 3,000 rental flats to accommodate existing tenants and yield an extra 1,000 flats for elderly and other people, to be worked out by the society with the government. Apart from Ming Wah, redeveloping the other 19 rental estates - some of which are more than 40 years old - would be a good long-term strategy, as the government is struggling for housing land, Yeung said. "Some estates are too old and are no longer cost-effective to maintain. The plot ratios of these sites were not fully used and redevelopment can release space for more flats," Yeung said. "The government doesn't need to give us land nor do the planning. It only needs to give us policy approval. This is a multiple-win solution." The society is looking at Yue Kwong Chuen in Aberdeen for its next project. Based on a plot ratio of six and a flat size of 400 sq ft, the site could yield an extra 1,300 flats on top of the existing 1,143. The society was set up in 1948 to help the government solve housing problems.

The values of Hong Kong's total goods exports and imports both recorded year-on-year increases in October, at 11.5 percent and 10.9 percent, the city's Census & Statistics Department said Thursday. According to the released figure, the value of total goods exports, comprising re-exports and domestic exports, rose 11.5 percent over a year earlier to 305.7 billion HK dollars (about 39.2 billion U.S. dollars) in October. Within this total, the value of re-exports increased 12 percent to 300.4 billion HK dollars in October, whereas the value of domestic exports fell 12.5 percent to 5.3 billion HK dollars. For the first 10 months of the year, the value of total exports of goods rose 11.3 percent over the same period in 2010. Within this total, the value of re-exports increased 11.6 percent, while the value of domestic exports decreased 1.7 percent. As for the value of imports of goods, it increased by 10.9 percent over a year earlier to 328.8 billion HK dollars in October 2011. A visible trade deficit of 23.1 billion HK dollars, equivalent to 7 percent of the value of imports of goods, was recorded in the same period. A government spokesman noted that the value of merchandise exports resumed positive year-on-year growth in October. The rebound was almost across-the-board, with particularly distinct turnaround seen in exports to the Chinese mainland. Exports to the United States, European Union and Japan also reverted to modest growth, while those to some Asian markets re-accelerated to strong double-digit increases. However, the year-on-year growth in October has to be viewed in conjunction with the relatively low base of comparison a year earlier. The spokesman commented further that looking ahead, the external environment will continue to be clouded by the rapidly evolving eurozone sovereign debt crisis and fragile fundamentals of the advanced economies. Against this background, Hong Kong's near-term export prospect remains highly uncertain.

A jewellery retailer controlled by Hong Kong tycoon Cheng Yu-tung plans to take orders Monday for its up to US$2.8 billion offering while a Chinese firm that specializes in saving energy at power plants kicks off a $1 billion listing, the latest in the flood of Hong Kong initial public offerings that are tapping investor funds despite market volatility and investor wariness. Chow Tai Fook Jewellery Group Ltd., which will start taking orders from investors Monday, plans to raise up to $2.8 billion in a Hong Kong IPO by selling 1.05 billion shares for between 15 and 21 Hong Kong dollars (US$1.92-US$2.69) a share, people familiar with the situation said Friday. That range values the jeweller at up to US$27 billion and a valuation of around 15 times to 21 times 2013 forecast earnings for the year to March— more than the 11 times the 2013 forecast earnings at which its smaller rival Luk Fook Holdings International Ltd. trades. U.S.-listed jeweller Tiffany & Co., which has a market value of US$8.9 billion, trades at 16.4 times forecast earnings, according to FactSet. If it raises US$2.8 billion—the fund-raising size at the top end of the range— Chow Tai Fook's IPO will be the largest globally since July, when Spain's third-largest bank, Bankia S.A, raised US$4.4 billion ahead of a Madrid listing. Meanwhile, Guodian Technology & Environment Group got Hong Kong listing approval Thursday for a US$1 billion IPO, and is set to begin premarketing Monday and order-taking Dec. 5, people familiar with the situation said. Beijing-based Guodian Technology & Environment, which installs energy-saving facilities for coal-fired power plants, is a unit of China Guodian Corp., one of China's five major state-owned power generation companies. China Guodian Corp. listed its wind power unit, China Longyuan Power Group Corp., in Hong Kong two years ago. Chow Tai Fook and Guodian Technology's IPOs come as a wave of companies tap Hong Kong's listing markets before the year ends and investors close their books. Others in the market include China's No. 4 life insurer by premiums, New China Life Insurance Co., which plans to start order-taking Tuesday for its around US$3 billion Hong Kong and Shanghai IPO, and Chinese brokerage Haitong Securities, which started testing investor appetite in a premarketing process Wednesday for its around US$1.5 billion IPO. Hong Kong is set to be the world's top venue for new listings for three years running, having raised US$30.2 billion so far this year, ahead of New York at US$29 billion, according to data provider Dealogic. But market volatility has taken a toll on the few deals that have been done in recent months. Hong Kong fixed-line operator PCCW Ltd.'s telecom trust priced its US$1.2 billion IPO at the low end of its indicative price range Wednesday, though it remains the biggest IPO globally since Chinese hydropower-station builder Sinohydro Group Ltd. raised US$2.1 billion in its Shanghai IPO in late September. Xinyi Solar Holdings Ltd., which was raising US$150 million in an IPO, postponed its deal last week due to weak markets. Still, Chow Tai Fook is banking on buoyant retail sales in Hong Kong, driven by tourists from China, and growing mainland wealth that's translated to demand for consumer plays. French-Chinese hypermarket operator Sun Art Retail Group Ltd., which raised US$1.2 billion from a July IPO in Hong Kong, is trading 47% above its IPO price. In contrast, the benchmark Hang Seng Index is down 22% since that stock listed. The US$10 billion London-Hong Kong listing of Glencore International Plc, the city's biggest IPO this year as well as the world's largest, is down 31% from its IPO price.

 China*:  Nov 27 2011 Share

China issued new rules for vehicles purchased by public servants that require them to spend less and buy more fuel-efficient, smaller-engine vehicles, including electric cars, as it clamps down on growing criticism of extravagant spending. The new rules, issued jointly earlier this month by the Communist Party and state agencies, come amid rising public anger over corruption. It also comes as China increasingly identifies rising fuel consumption as a public issue on both economic and environmental grounds. Many Chinese government officials are allowed to purchase vehicles for official use, and a number of officials acquire luxury cars like the Audi A6 and Mercedes-Benz E-Class, and often use chauffeurs on private as well as official business. Car use by public officials—who often aggressively assert themselves on the busy streets of China's crowded cities—feeds into public perceptions of corruption as the central government moves to crack down on offenses such as misuse of public funds. The new rules lower the maximum amount that "regular," or mid-level, government officials can spend on their cars to 180,000 yuan (about $28,200) from 200,000. They also require officials to buy vehicles with engines smaller than 1.8 liters, according to an announcement posted on the website of the Ministry of Industry and Information Technology. Previously, those officials could purchase cars with engines as big as two liters. The party and the government also added "new-energy vehicles"—all-electric cars and plug-in electric hybrid cars—to the government's list of cars that meet purchase rules. It was unclear whether Chinese policy makers also enacted tougher rules for minister-level officials and other senior bureaucrats. According to an earlier draft of new rules seen by foreign auto officials, the maximum senior officials could spend would drop to 380,000 yuan from 450,000, while maximum engine size would drop to 2.5 liters from three liters. The new policy, and state-run media reports Friday, didn't mention those restrictions. The state-run Xinhua news agency on Friday quoted Ye Qing, a deputy with the National People's Congress, China's legislature, as saying that the new policy is aimed at helping reduce government expenses by discouraging purchases of upper-scale cars while helping to cut emissions. The current budget for official vehicles in China is more than 100 billion yuan in total a year, Xinhua said. In essence, the new rules mean that mid-level officials who used to be able to buy a lower-end Volkswagen Passat or a Toyota Camry may not be able to do so any more, said a China-based official with a foreign auto maker. They will probably have to settle for a Volkswagen Jetta or a Toyota Corolla instead, the official said. Others said auto makers like Volkswagen are introducing a version of the Passat with a smaller engine, and that might help officials keep buying upper-scale cars if dealers are willing to give them a discount or through other loopholes. Yale Zhang, an analyst with consulting firm Automotive Foresight (Shanghai) Co., said he foresees "not much impact" on what cars mid-level officials would buy, including from the "new-energy" car rules. Some two dozen cities across China are designated as model cities for new-energy cars, and they are likely to buy more Chinese-produced green cars, including the e6 all-electric car from China's BYD Co. and a plug-in hybrid version of the BYD F3, said Mr. Zhang. But supply of those green vehicles is still limited, he added, and they remain impractical for regular day-to-day use. "It would take more time for those purchases to grow," he said. China hopes to bolster its production of such fuel-efficient vehicles, however. Auto-industry officials expect that new rules set to be released in coming weeks or months will require foreign companies planning to produce and sell new-energy cars in China to hand over technology related to fuel-efficient vehicles.

Maersk Line, the world's largest container shipper by volume, plans to cut its capacity on Asia-to-Europe routes, a new sign that the euro-zone debt crisis is disrupting international trade. "Almost all carriers are losing money now ...and it looks like 2012 will going to be similarly challenging," Tim Smith, the company's North Asia chief, said at a shipping conference here. Rival shipper Orient Overseas (International) Ltd. said at the same event that it plans to cut its shipping capacity on the Asia-Europe route by 20% in the current quarter, as the Hong Kong-based company strives to maintain profitability amid the global slowdown. The shipping industry is a key barometer of the world economy's health. And after rebounding in 2010 from the financial crisis as retailers restocked inventories, shippers are now contending with the economic uncertainty fueled by Europe's debt woes and political gridlock in the U.S. over federal deficits. Mr. Smith, who said Maersk will announce the cuts next week, pointed to overcapacity as a key concern for the global shipping industry. "I think it's very clear now that we've seen, collectively, we're ordering more capacity than we really need for the short term," he said. Freight rates have plunged to unprofitable levels this year as a result of overcapacity in the global shipping market. Maersk Line, a unit of Danish shipping-and-oil group A.P. Moller-Maersk, has said it expects its container-shipping business to post a loss for 2011 mainly due to weak rates on Asia-Europe routes. "The rates we have now are not sustainable," said Mr. Smith, adding that the company will consider idling more capacity after the Lunar New Year, which falls on Jan. 23, if demand weakens in the off-peak season. While the European debt crisis weighs on demand for trade on European routes, Mr. Smith said trans-Pacific prospects are more encouraging amid signs of a gradual recovery for the U.S. economy and a better demand-and-supply balance after some shippers withdrew capacity from the region. "The U.S. [market] looks a little bit better but it's still very difficult to call," Mr. Smith said. Orient Overseas Chairman Tung Chee Chen said the company's capacity cutreflecting lower demand involves one loop on Asia-Europe routes operated by the container shipping alliance that comprises OOIL unit Orient Overseas Container Line Ltd., Germany's Hapag-Lloyd AG and Japan's Nippon Yusen KK. As a result, the alliance will operate three loops on the Asia-Europe route with 10 container ships running on each loop. Demand for the shipment of goods weakened in the second quarter, and Mr. Tung said the usual third-quarter peak season for container shippers was disappointing. He also sounded a down note for 2012. "Operating costs are high, as fuel and fuel-related transportation costs are higher than that of 2009," he said. Mr. Tung said his company, which ships finished and semifinished goods ranging from toys to garments to the West from Asia, hasn't decided whether to cut its capacity for next year and will continue to reviewtrading conditions.

China's rich flee abroad - Wealthy mainlanders are seeking access to better education prospects and health care and escape route for their families through foreign residency - Li Weijie runs his own ski and golf resort outside Beijing and considers himself a patriot: a life-size statue of Mao Zedong towers over the entrance to his resort. What would Chairman Mao say if he knew Li has a Canadian residency card? "I wanted access to the education system and health care of a developed country," says Li, 43, whose other businesses include a large private taxi company, two car dealerships and a real estate firm. Li owns a US$6 million house on Vancouver's Westside, known for its rich Chinese. His wife has a Maybach while his 20-year-old son drives a Maserati to classes at the University of British Columbia. His wife and son live in Canada. What began as a trickle a decade ago when Li moved his family to Canada has become a flood as China's new rich seek foreign passports or residency permits largely from the United States, Canada, Australia, Singapore and New Zealand. More than 500,000 Chinese have investable assets of more than 10 million yuan (HK$12.2 million), according to a joint survey released in April by China Merchants Bank (SEHK: 3968) and Bain & Co. The study says almost 60 per cent are considering emigrating, have begun the process, or have emigrated. This year, almost 3,000 Chinese citizens have applied for investor visas in the US, up from 270 in 2007. The visa requires a minimum investment of US$500,000 in a commercial project that employs at least 10 Americans within two years. If the applicants cannot generate those jobs, they may have to leave the US. The drive to emigrate makes for brisk business for people like Jason Zhang, a broker who specialises in settling Chinese in Boston. He says this year he has helped dozens of Chinese families buy homes and cars - the emigres often paying in cash. For the most part, China's richest are not permanently fleeing their country. About 80 per cent of those emigrating do not plan on giving up their passports, according to the Bank of China and Shanghai-based Hurun Report. Instead, the most common model is: wife and child get foreign passports and live abroad, husband gets a residency permit but spends most of his time in China. "If you think of emigrating like Russians, it is because they are afraid and so are leaving their country," says Hurun's founder, Rupert Hoogewerf. "This is not true of the Chinese at all. They still have businesses in China and most of their assets are in yuan." So why are they looking at residency abroad? The top reason cited is to pursue better educational opportunities for their children. The feeling is US schools beat their Chinese counterparts, and children benefit from international experience. Moving abroad and obtaining foreign residency could also prove useful in case of sudden legal or policy shifts, or if social unrest reaches a boiling point. So-called mass incidents - riots, strikes and protests - doubled in five years, to 180,000 last year, Sun Liping, a professor at Beijing's Tsinghua University, wrote in the Economic Observer in February. "Some people in China are talking about class conflicts against rich people," says Wang Xiaolu, a deputy director of the National Economic Research Institute in Beijing. "Maybe some of those emigrating or getting residency are worrying about possible policy changes turning China `left' that will put them in danger." Yang, an emigre who requested withholding his given name because he still owns a factory in China, says that if things get ugly, the rich would be targets not just for being rich but for their close connections with the government. Most wealthy people have an "original sin", or some illegality relating to earning their "first bucket of gold", he says. "China develops so fast, and the society is unstable," says Tina Tian Shengxi, a lawyer who helps wealthy Chinese emigrate to the US. She says emigres appreciate the rule of law in other countries. Some wealthy emigres are nervous talking openly about why they sought foreign residencies. "For us businessmen, we go wherever is safe," says another emigre, who runs a furniture business in Shanghai. "China's political system and legal system make us feel insecure." An issue for both the Chinese applicants and their host countries is the origin of their wealth. To ensure that those with criminal backgrounds are not let in, and to make sure they are truly affluent, the countries want thorough documentation of their assets. That can be difficult. "Wealthy Chinese almost all have a history of evading taxes," says Gao Tong, who emigrated six years ago. "They fear getting caught if they have to report their income globally." Longer term, if China's economy continues to grow, the emigration surge could abate. Li says some of his friends are reconsidering plans to get foreign residency. This is partly because of stricter rules. And while the rich still crave Canadian or US degrees for their children, they may see less reason to emigrate. "When I first went to Canada, I thought China was very backward and it would take 50 years for us to catch up," Li says. "After 10 years, we can all see that China will absolutely surpass the rest of the world."

Fast & speed: cool cars displayed at Guangzhou auto show - Have a look at these cool cars that were displayed at Guangzhou auto show.

An artist of the Chinese Northern Kunqu Opera Theater makes up before the performance of the classic piece of Kunqu Opera "Dou E Yuan" at the Austrian Academy of Sciences in Vienna, capital of Austria, Nov. 24, 2011. The Chinese Northern Kunqu Opera Theater was invited to give a comprehensive view of Kunqu Opera to the Austrian lovers of the drama, through seminars and stage shows. As part of the celebrations for the 40th anniversary of the establishment of the diplomatic relations between Austria and China, the event was jointly organized by the Austrian Academy of Sciences, the Confucius Institute of the University of Vienna and the Vienna Municipal Bureau of Culture. 

Hong Kong*:  Nov 26 2011 Share

The Antiquities Advisory Board has decided to carry out historical grading of the former Central Government Offices. The decision, which comes amid government plans to redevelop the West Wing of the CGO into a tower housing Grade A offices, was taken at the board's open meeting at the Hong Kong Heritage Discovery Centre in Tsim Sha Tsui. Chairman Bernard Charnwut Chan said even though the three buildings of the CGO - the West, Main and East wings - were constructed at different times, they will be taken together as one item for grading purposes. Some members slammed the proposed demolition of the West Wing, or the western part of Government Hill. "We could not make any repairs if it is destroyed," said Baptist University history professor Chung Po-yin. Government Hill Concern Group convener Katty Law Ngar-ning called the grading decision a good step. At the meeting, Law said even if the West Wing - built in 1959 - is listed as Grade 1, it can still be demolished unless it is listed as a declared monument. According to the Antiquities and Monuments Office, Grade 1 means every effort should be made to preserve the property if possible. But if a structure, place or building is a declared monument, the office is empowered to prevent alterations in order to protect it. "We would stay cautious and urge the Antiquities Advisory Board to declare Government Hill a special protected area," Law said. "This is a long-term solution." She added that Government Hill includes Government House and the Zoological and Botanical Gardens. The government's revised blueprint for the West Wing, following a public consultation, scraps plans for a mega mall but will go ahead with creating a 32-story office and commercial block. At the meeting of the advisory board, Law said the redevelopment plan would destroy the integrity of Government Hill. Hilary du Cros, an international heritage specialist and member of the International Council on Monuments and Sites, earlier said that instead of weighing historical, political and social value, the government has only assessed the West Wing's historical and architectural value and offered the public just one option - redevelopment. The board yesterday also listed the house at 23 Coombe Road as a Grade 1 monument. Now known as "Carrick," it was built in 1887.

About half a million people at the lower end of Hong Kong's workforce will need to contribute an extra HK$250 into their retirement account every month from June. These workers will have to do with less cash in hand after the Legislative Council passed a motion the government proposed to lift the maximum level of relevant income to HK$25,000 from HK$20,000. The upper limit has not been revised since the mandatory provident fund scheme commenced in December 2000. Affected are an estimated 424,600 workers in the HK$25,000 salary bracket, their employers, as well as 89,900 self- employed, who will have to contribute HK$1,250 each month. Once the higher MPF payments come into effect, the pool for fund managers will increase by about HK$217 million a month, according to estimates. Also, for those who make a living on a daily basis, the maximum level of relevant income will be adjusted to HK$830 from HK$650. Secretary for Financial Services and the Treasury Ceajar Chan Ka-keung said the June deadline gives employers and employees time to adapt. "We have taken into consideration the expenditure and the needs of the employees for their daily living now and their life after retirement," Chan said. Earlier, the government also got the green light from lawmakers to adjust the minimum level of relevant income to HK$6,500 from HK$5,000. This means employees earning less than HK$6,500 a month will not need to contribute starting this month. Most political parties supported the move. "The government has given thought to the impact on employers. This is a reasonable adjustment," said Wong Ting- kwong, who represents the imports and exports sector. Wong is also a member of Democratic Alliance for the Betterment and Progress of Hong Kong, the largest party in Legco. Despite supporting the move, Economic Synergy's Andrew Leung Kwan-yuen pointed to the impact on small and medium enterprises. Liberal Party chairwoman Mariam Lau Kin- yee said the adjustment will increase the burden of companies. "Considering the limited impact on enterprises, we supported the move," said Lau. Democratic Party's Wong Sing-chi said a universal retirement scheme is needed.

Architects and designers Jürgen Mayer H (left), Shigeru Ban (top right) and Ole Scheeren will host seminars at BODW. William To, of the Hong Kong Design Centre, says the event is a platform for exchanging ideas and upgrading skills. Showcase has designs on cultivating Asia's rise - Business of Design Week emphasises the important relationship between creativity and commerce - "I think it is a great effort to try and close the gap between design and business," says the award-winning anonymous Japanese designer behind the Nosigner label, just one of the high-profile international names taking part in the coming Business of Design Week. "The age of Asia is rising - and everything is centred on mainland China. The surrounding Asian countries are eagerly trying to cultivate a design culture, and Hong Kong is one of the most important cities in terms of business and design," the Nosigner leader says. Running from November 28 to December 3, this year's Business of Design Week ( will highlight the international creative superpower of its partner nation, Germany. Bringing the best of the global design world to Hong Kong, the event encourages business to consider the power of design and focus on the relationship between the two. When it began in 2002, the show's goal was "to create a `must-attend' platform in Asia that allowed the exchange of ideas for the world's most innovative thinkers and business leaders and upgrade the skills and knowledge of the local design community," says William To, project director of the Hong Kong Design Centre, which organises the annual event. Nine years on, the event consists of seminars, exhibitions and outreach programmes that target local design professionals, educators and students. "It provides a forum for better understanding of the intricate relationship between design and business, offering an opportunity for designers to upgrade skills and knowledge to stay competitive," To says. Among this year's speakers will be designers from German brands such as Audi, Hugo Boss and Porsche Design, as well as internationally known architects and designers such as Dieter Rams and Ole Scheeren (a visiting professor at Hong Kong University), the typographer Erik Spiekermann, the eco-design guru Werner Sobek and the new media artist and designer Joachim Sauter. Other high-profile speakers include Anthony Lo, the Hong Kong Chinese designer who heads the design department of Renault in France; the Japanese architect Shigeru Ban, most famous for his innovative cardboard buildings; Nosigner, whose latest project, Olive, a wiki-style web site that anyone can access to help people in disaster-stricken areas, was conceived in response to Japan's earthquake in March; and the legendary Italian furniture designer Antonio Citterio. The Berlin-based architect Jurgen Mayer H, whose portfolio includes an abstract fashion runway for Calvin Klein, a sculpture for this year's Burning Man Festival held in August, and the undulating design of Seville's new wooden Metropol Parasol (the world's biggest building to be held together by glue), is a key speaker at this year's event. "BODW is an important platform for exchanging ideas and developing collaborations on all levels for dialogue and exchange," he says. The celebrated architect is excited about visiting Hong Kong: "It's lively, it is surprising and we want to know more about it," he enthuses. His advice to local designers? "Not to be too limited. Design is continuous, it flows." In his seminars, Mayer will focus on encouraging designers "not to be anchored in one discipline ... whether you are an architect or an interior designer, [the world of design] is all explorable". His intention is to show local designers that "technological innovation and design evolution are interdependent parameters. German designers work closely with companies and manufacturers besides experimenting and researching." Nosigner concurs. "Design is not just about beauty but also function. The challenge is working behind `visible' design to create something useful and functional that doesn't just concentrate on appearance." To says bringing design talents such as Mayer and Nosigner to Hong Kong is vital for local designers and the community as a whole. "As our understanding and use of design matures, I see Hong Kong moving on to the next level, following other countries to use design as a social tool to improve the well-being of users and the social structure of our city." The strong design and business cultures of Japan and Europe are a great combination of form and function, To says. "This sophistication comes from having a very strong design culture but this needs to start with the basics: education and a creative environment. In order to nurture a strong design culture one needs to start training from a young age, not after secondary school. Personally I would like to see a change in our education system in terms of offering more courses that will trigger creativity at a young age. Then with the support of the government in terms of building new cultural projects around the city, the younger generation will benefit." For the local and international design community, BODW "raises Hong Kong's profile as a design hub in Asia", To says. "It's the place to network and learn, and to celebrate those who have demonstrated outstanding work."

Developers are releasing new flats at lower prices to woo buyers amid a lull in the market. Sun Hung Kai Properties (SEHK: 0016) yesterday released the price list of 86 more units at its development The Wings in Tseung Kwan O, with an average price of HK$7,193 per square foot. That is nearly 20 per cent lower than the average price of 49 units released last week. The latest batch of flats comprises two-bedroom units of between 692 and 697 sq ft. They range between HK$6,793 and HK$7,774 per sq ft, or HK$4.73 million to HK$5.39 million per unit. This is not the first time the developer has cut the prices of The Wings. The firm released the first batch of flats at an average price of HK$12,698 per sq ft last month and offered the next batch at HK$8,750 per sq ft, about 30 per cent lower. Property agents said it was understandable to offer the latest batch at lower prices. The units sold earlier were larger with more bedrooms, they said. "As this is the first time the developer has put some two-bedroom units from the project on the market, it has lowered the price," said James Fung Kwok-ki, a Midland Realty sales director. About 400 units, or about 40 per cent of all flats at The Wings, had two bedrooms, Fung said. Secondary flats in the district are selling for over HK$6,000 per sq ft. Crystal Tam Kwai-ching, a sales director at Centaline Property Agency, said the units sold earlier had views of the sea. However, the new flats had views of mountains, which was why they priced lower, she said. Cheung Kong (SEHK: 0001) also unveiled the asking prices for the first 65 units at the third phase of its project Festival City in Tai Wai. The average price was set at HK$8,109 per sq ft for cash buyers, about 2 to 3 per cent lower than those sold in the development's first two phases, said Justin Chiu Kwok-hung, an executive director at Cheung Kong. The cheapest unit is a three-bedroom flat priced at more than HK$7.74 million, while the costliest, with four bedrooms, is priced at nearly HK$9.63 million. K. Wah International (SEHK: 0173), Sino Land and Nan Fung Development, however, yesterday raised the prices of 25 new flats at their jointly developed Marinella project by 6 per cent to HK$21,302 per sq ft. The size of the units at the luxury development is about 1,600 sq ft.

A lock of hair from late Pope John Paul II is housed at the Cathedral of the Immaculate Conception following Vatican approval. A lock of hair from the late Pope John Paul II will be kept permanently at the Cathedral of the Immaculate Conception in Caine Road, after the Vatican approved a request from the Hong Kong Diocese, Catholic officials said yesterday. Speaking earlier this month when the relic arrived in Hong Kong, Bishop John Tong Hon said millions of mainland worshippers could visit the city to pray in the presence of the lock of hair. Its arrival symbolically completed the pope's lifelong wish to visit China, he said. John Paul repeatedly said he wanted to visit China, but never made the trip. He died in 2005. Encased in a special container for relics, the lock of hair is now in place inside the church, near the remains of five deceased Hong Kong bishops. The relic came months after Sino-Vatican ties soured, with the Vatican excommunicating mainland bishops ordained by the Chinese state-run church without papal approval. It took just one month for the Vatican - the governing body of all Catholic churches around the world - to approve Bishop Tong's application for the lock of hair, according to the diocese. "It may be because we are a Chinese city and Hong Kong people are familiar with the [late] pope," Vicar General Dominic Chan Chi-ming said yesterday of the swift approval. Father Thomas Law Kwok-fai expects the relic to attract frequent visits by mainland worshippers, which can strengthen their connection with Rome. It was not necessary to inform Beijing of the matter, he said, as the arrangement was "purely religious". "Politics should be isolated from faith," he said. With relations strained between Beijing and Vatican, mainlanders can worship only in state-backed churches, but such restrictions do not apply in Hong Kong under the "one country, two systems" policy. The Vatican has seen controls tighten over its mainland churches this year and a crackdown against underground churches. Anthony Lam Sui-ki, senior researcher at the Holy Spirit Study Centre, said the arrival of the relic had cultural rather than political significance. "The relic is precious. It is to strengthen faith," Lam said. This makes Hong Kong the only Chinese city in possession of a relic of the late pope, who had told followers during his reign that he would pray for China every day. Chan said it is also the first Asian city to house such a prized artefact. In February the local church received a hand bone from St John Bosco, the founder of the Salesian order, according to Lam. Polish-born Pope John Paul, whose charisma is credited with rejuvenating the Catholic Church during his 27-year pontificate, was beatified early this year. That brought the much-respected pope one step closer to sainthood. Earlier this year, a vial of his blood was installed as a relic in a Polish church. Some of his relics are now on five months' loan to Mexico. Hong Kong, which has about 246,000 Catholics, has not had a papal visit since Pope Paul VI came in 1970. The Catholic Church in Hong Kong was established as a mission prefecture in 1841 and became a diocese about 100 years later.

The government will scrutinise electoral registration records for the first time following widespread allegations of vote-rigging in the recent district council polls. It also says that any substantiated cases of multiple voters being registered under the same address will be referred to the police and the Independent Commission Against Corruption for further investigation. The moves could lead to the revamping of the registration system to include options such as random checks to authenticate voters' identity, says Secretary for Constitutional and Mainland Affairs Raymond Tam Chi-yuen. His statement came as the Registration and Electoral Office (REO) sent out 28 letters yesterday to suspect voters demanding proof of their principal residence within a week. In the past, the government has been reluctant to employ such measures as scouring registration records and investigating individuals for fear of deterring potential voters. Instead, it has only acted on direct complaints. But over the past week, media and political parties have been highly critical of the registration system - which does not verify information provided by voters. They say this could lead to abuses. Many candidates in this month's district council elections have complained about people using false information to register and vote. Most of these cases involve an unusual number of people using the same address to register. In one widely cited case in Mei Foo, 13 adults with seven different surnames listed a single flat as their permanent residence. More such complaints emerged yesterday. In one case, a voter was found to have registered his address on a boat, while another used the address of a wet-market. A rough count by the South China Morning Post (SEHK: 0583, announcements, news) found at least 500 possible false registration claims across 16 constituencies in the elections on November 6. The figure is based on information provided by political parties or cases reported by other media. Only 36 such complaints were received by the government in the previous district council elections in 2007. The sharp increase is partly linked to the surge in the total number of voters - there were 700,000 more voters this time than four years ago. It is also partly to do with raising public awareness of the problem, and greater media scrutiny. It is hard to gauge how many of these complaints would be eventually substantiated and how this could have affected the outcome of the elections. Still, faced with mounting pressure and criticism, the government yesterday decided to take action. "The REO would consider ... whether anyone has provided false information which has contravened the relevant electoral laws," Tam told the media yesterday. "If someone has actually forwarded false information and at the same time cast votes in the district council election that will be under existing statute. "There will be a separate legal procedure regarding questions over the election results," said Tam when asked if the poll results would be affected if a substantial number of votes were found to be invalidated. Voters giving false registration information face a fine of up to HK$5,000 and a maximum six months' jail.

 China*:  Nov 26 2011 Share

Close sight to China's J-20 Fighter - Pictures show China's stealth fighter J-20 in training.

China has said it will conduct "routine" naval exercises in the Pacific Ocean, in the week after a major diplomatic campaign by US President Barack Obama to assert the United States as a Pacific power. The defence ministry said the exercises, to be held later this month, did not target any particular country, but the announcement comes against a background of growing tensions over maritime disputes in the Asia-Pacific region. Obama, who has dubbed himself America’s first Pacific (SEHK: 0142, announcements, news) president, said last week the United States would deploy up to 2,500 Marines to Australia and tighten air force co-operation, a move seen as a response to China’s growing regional power and maritime aggression. China’s freedom of navigation “shall not be subject to any form of hindrance”, the defence ministry said in a brief statement late on Wednesday announcing the naval exercises in the western Pacific. “This is a routine drill arranged under an annual plan, does not target any particular country or target, and complies with relevant international laws and international practice,” it added. Obama flew home on Saturday after a seven-day tour of Pacific nations during which he took in a trio of summits and announced greater military involvement in the region. “Here is what this region must know. As we end today’s wars, I have directed my national security team to make our presence and missions in the Asia-Pacific a top priority,” the US president announced during a visit to Australia. Washington’s new diplomatic campaign to announce itself as a Pacific power has alarmed Beijing, which sees initiatives like stationing Marines in Australia as intruding into its recently asserted sphere of influence. Premier Wen Jiabao has warned against interference by “external forces” in regional territorial disputes including in the South China Sea, a strategic and resource-rich area where several nations have overlapping claims. The mainland claims all of the maritime area, as does Taiwan, while four Southeast Asian countries declare ownership of parts of it, with Vietnam and the Philippines accusing China’s naval forces of increasing aggression there. The competing claims have led to periodic outbreaks of tension between China and its neighbours in recent years, including with the Philippines and Vietnam in recent months, and with Japan in late last year. Asia-Pacific leaders held talks on the disputed territories at a summit on Saturday, in a major diplomatic coup for the United States, which had pushed for the topic to be raised, despite objections from Beijing. Beijing’s official comments on Obama’s trip were muted, but the official state news agency Xinhua said Asian suspicions would be raised by the plan to base troops in Australia and by US Secretary of State Hillary Clinton’s declaration that the 21st century will be “America’s Pacific century”. “If the United States sticks to its Cold War mentality and continues to engage with Asian nations in a self-assertive way, it is doomed to incur repulsion in the region,” the agency said. “The hard fact is that the Pacific Ocean belongs to all countries sharing its shores, not just the United States.” China’s People’s Liberation Army (PLA), the largest armed force in the world, is primarily a land force, but its the navy is playing an increasingly important role as Beijing grows more assertive about its territorial claims. Earlier this year, the Pentagon warned that Beijing was increasingly focused on its naval power and had invested in high-tech weaponry that would extend its reach in the Pacific and beyond. Recent trials of China’s first aircraft carrier underlined the scale of Beijing’s naval ambitions, sparking jitters in the United States, Japan and those nations with competing claims in the South China Sea and the East China Sea. The PLA navy, which publicly announced around 50 separate exercises in the seas off its coast over the past two years – usually after the event, says it is only focused on defending the country’s territory.

Chongqing Grain Group Co Ltd (CGG), one of China's largest State-owned grain corporations, said it will invest $500 million to build a soybean industrial base in Brazil, the second-largest soybean-producing and processing country after the United States. Harvested soybeans are transferred into grain carts at the Delta farm in Correntina, Brazil. Chongqing Grain Group Co Ltd will invest $500 million to build a soybean industrial base in Brazil. The planned industrial base, to be built in the northeastern state of Bahia, will require a series of infrastructure projects focusing on the processing, warehousing and logistics of soybeans. "Establishing a high-quality soybean base with Brazilian farmers, to whom we gladly offer financial support and services, including storage and logistics, is our main goal in the Brazilian market. With the establishment of a comprehensive industrial chain, our purchasing cost for soybeans will be greatly reduced," Hu Junlie, CGG president, told China Daily. "As our first step, $100 million will be devoted to setting up a soybean pressing plant, which will be completed by the end of next year," Hu said. The plant, which will start production in 2013, will have an annual capacity of 1.5 million tons of cooking oil, to be sold in the Chinese and Brazilian markets, he said. After the pressing plant, CGG will set up a soy refinery and processing plants for bio-diesel fuel and soy lecithin products within a few years. China Radio International Online reported that the Chongqing-based group plans to invest 5.8 billion yuan ($914 million) to plant 600,000 tons of soybeans on 200,000 hectares in Brazil annually. The project will be the biggest overseas investment made by a Chinese agricultural enterprise and China's largest overseas production base for cooking oil. Besides CGG, Zhejiang Fudi Agriculture Group and the agricultural bureau of Heilongjiang province have also invested $158.4 million to form a joint soybean-growing venture with a Brazilian partner, according to the Zhejiang province commerce department. Two farms will be established in the north and south of Brazil. Other State-owned enterprises are also seeking opportunities to expand abroad, including Chinatex Corp Ltd, the country's largest cotton and soybean trader by revenue, and China National Cereals, Oil and Foodstuffs Corp (COFCO). COFCO, the country's largest trader of grains and edible oils by revenue, said it will increase investment by more than $10 billion to fund overseas mergers and acquisitions over the next five years. "The company will make greater efforts in expanding abroad during the next five years, focusing on various markets, including the US, Australia and Southeast Asian nations," said Jiang Hua, a COFCO board member. Last month, Ning Gaoning, COFCO's board chairman, said the company is seeking foreign investment to help secure overseas commodities such as sugar, wheat and soybeans directly from the source to the Chinese market. Currently, nearly 80 percent of agricultural oil producing crops in China are imported, mostly from the US and Brazil. Last year, China imported 54.8 million tons of soybeans, and the volume this year will hit 60 million tons, according to the China Nation Association of Grain. CGG has imported 260,000 tons of soybeans from Brazil this year and the total volume will reach 10 million tons by 2015, reflecting expected sales revenue of 46.5 billion yuan and net profit of 4.2 billion yuan. Bloomberg reported that global soybean consumption will increase 3.8 percent to 262.24 million metric tons in the year ending Sept 30, 2012, and demand in China, the world's biggest user and importer, will rise 8.6 percent to 71.6 million tons. "Most Chinese companies import soybeans through the four largest international grain dealers - ADM Co, Cargill Inc, Bunge Ltd and Louis Dreyfus SAS. However, if importers can purchase from the producers, 18 to 24 percent of the profit could be saved," Hu of CGG said.

China's decision to grant zero-tariff status to some least developed countries (LDCs) has drawn positive responses from the international community. During the recently concluded G20 summit in Cannes and the Asia-Pacific Economic Cooperation (APEC) meeting in Honolulu, President Hu Jintao announced that China would give duty-free status to 97 percent of the tariff items of exports to China from the LDCs, provided they have diplomatic relations with his country. The decision was deemed by the international community as one of China's practical actions to help the LDCs and was believed to promote healthy development of global trade. Affected by the current economic crisis, LDCs' total exports dropped from $176.7 billion in 2008 to 156.3 billion in 2010, according to Zeljka Kozul-Wright, an economist with the United Nations Conference on Trade and Development (UNCTAD). Afghanistan, known for its carpets, leather products and dry fruits, has suffered numerous barriers when exporting its products to international markets, Waheedullah Ghazi Khil, a apokesman for the commerce and industry minister, told Xinhua. "China's tariff reduction and exemption will further enhance the economic exchanges between Afghanistan and China and benefit the economic growth, reconstruction and development of the war-torn Afghanistan," he said. Azrakhsh Hafizi, a member of the Afghan Chamber of Commerce and Industry, told Xinhua that China has a large domestic consumer market. Tariff reductions and exemptions from China will expand Afghanistan's exports, helping promote the domestic economy of the Central Asian country. As the world's largest developing country, China has taken measures such as forgiving debt and openning market to support the LDCs' economy and share with them the achievement of the development. China is among the first developing countries to give zero-tariff treatment to the LDCs. Since 2001, China has gradually opened its market to the world's 41 poorest countries by granting zero tariffs to certain goods. Kozul-Wright said most of the LDCs and developing countries sport trade deficits but their trade with China has generally maintained surpluses for eight consecutive years. The trade surplus of the LDCs to China reached $18.2 billion in 2010. To open markets to the LDCs is also a commitment from the Chinese government to push forward the Doha Round negotiations and achieve agreements on the LDCs issues, which have demonstrated China's image as a responsible developing power. Valentine Sendanyoye Rugwabiza, the WTO deputy director-general, said China has set an example in helping the LDCs.

China's domestic foreign exchange market announced on Thursday that it would launch trading of the yuan against the Australian dollar and Canadian dollar next Monday, the latest currency pairs to be introduced as part of Beijing’s efforts to promote the use of its currency. The announcement by the China Foreign Exchange Trade System (CFETS) confirmed a report earlier this week based on foreign bank trading sources. The move is part of Beijing’s efforts to expand the use of the Chinese currency for trade and investment, as a way of reducing reliance on the dollar and thereby simplifying the settlement of trade in everything from energy to manufactured goods. Traders said China needed to add direct yuan trading against the Aussie because of increasing deals between China and Australia, in particular, in the mining sector. Adding the Canadian dollar appeared to be a move to acknowledge the importance of one of the Group of Seven economies as well as being part of China’s efforts to gradually have trading in all major currencies versus the yuan, traders said. “CFETS said last November when it launched yuan/rouble trading that it would gradually list all major world currencies against the yuan,” said a trader at a European bank in Shanghai. “Both Australia and Canada are among China’s main trade partners, so the move is not a surprise,” he said, adding trading would be relatively strong because of corporate demand. Traders expect the Singapore dollar and the Korean won to be among currencies in the pipeline to be next traded versus the yuan. The yuan is currently traded onshore against the dollar , euro, sterling, yen , Hong Kong dollar, Malaysian ringgit and Russian rouble. The yuan has attracted increasing international attention as China’s economy surpassed Japan’s to become the second largest in the world. The yuan is not fully convertible under the capital account but China has made efforts to raise the international status of its currency over the past couple of years. For one, the government has turned Hong Kong into a centre for offshore yuan, as more and more trade is conducted in the renminbi, the official name of the currency, leading the creation of bigger and bigger yuan pools outside mainland China.

Hong Kong*:  Nov 25 2011 Share

The parent company of DTZ Debenham Tie Leung - of which chief executive hopeful Leung Chun- ying is chairman - has been sold for US$250 million (HK$1.95 billion), a market source has confirmed. London-based DTZ Plc will be sold to Australian company UGL. Leung has a 3 percent stake in the company, which would mean a US$7.5 million payout for him. A memo was circulated to staff saying only the company has been sold. The realty consultancy firm, of which Leung owned more than eight million shares at end April, was trading at 3 pence (HK$0.39) in London yesterday. The firm saw a pretax loss of 3.4 million for the year to June. Leung, meanwhile, said he is taking time off from all private duties - including the chairmanship of DTZ Debenham Tie Leung - to concentrate on his campaign. However, he side-stepped questions relating to reports that he has the support of former SAR chief Tung Chee-hwa, as well as some developers. Leung only said he respects Tung and has met him on several occasions. New World Development chairman Cheng Yu-tung, however, dismissed talk that support from developers will determine the outcome of the chief executive election, calling it "out of the question."

Hong Kong Exchanges and Clearing (SEHK: 0388) said developing cross-border index and equity derivative products with mainland exchanges will attract mainland investors and boost the city's market turnover, which lags those of Shenzhen and Shanghai. The Hong Kong market's daily average turnover makes up 60 to 70 per cent of total market capital, against 150 to 160 per cent in Shanghai and up to 400 per cent in Shenzhen. The rate indicates how active a market is, although a very high reading may imply speculative activity. "[The mainland] stock market does not have margin financing or high-frequency transactions and yet they can achieve such a high turnover rate. I hope a structural integration with them can help boost our turnover rate in long-term development," said HKEx's chief executive Charles Li Xiaojia. KEx said in August it was talking to its counterparts in Shenzhen and Shanghai about setting up a joint venture to develop index or equity derivative products. While no further details were disclosed in the past three months, Li said yesterday a plan would emerge in the near future. The Hong Kong exchange has been seeking to reach out to other bourses, and last month formed an alliance with six from the so-called BRIC economies - Brazil, Russia, India and mainland China - to cross-list each other's benchmark index derivatives from June next year. Li said Hong Kong should consider setting up a commodity trading platform in yuan in the longer term. Despite being the world's biggest consumer and manufacturer of commodities, China lacks pricing power. Alex Wong Kwok-ying, a director of asset management at Ample Capital Group, however, said it was not easy for latecomers to create a new platform. "The first mover has a tremendous advantage in the commodity market. Traders form a cluster and stay put. Besides, limitations in the flow of yuan will also hinder such developments," Wong said. While Li said the real internationalisation of the yuan would take a long time, he expected the mainland to relax capital controls in the next five years.

The city's civil servants could be entitled to up to five days of paid paternity leave by the middle of next year, according to a government consultation paper. The proposal might set a precedent for other employers, as the government, the city's largest employer, is planning a separate consultation early next year to consider making paternity leave a statutory requirement for all employers. A consultation paper by the Civil Service Bureau released on Monday suggested that all eligible government employees, including civil servants, judicial officers and non-civil-service contract staff, would be entitled to three to five days of paid paternity leave. However, employees of contractors and service providers to the government are not included under the proposal. The proposal came after Chief Executive Donald Tsang Yam-kuen announced in his last policy address last month that the government would take the lead in providing paid paternity leave, to promote child-rearing and family-friendly practices. Tsang said the government would consider carefully whether to extend the practice to all employers. The government said the suggested length of the leave was based on some local private enterprises and public bodies, which most commonly provide two to three days of leave. The government also referred to the Macau government, which offers five days' paid leave. The proposal stated there would be no limit on the number or location of births under the leave scheme. But the leave would have to be taken between four weeks before the expected date of birth and eight weeks after the actual date. A bureau spokeswoman said the proposal could be put into effect in the middle of next year, after consultations with employees and the Legislative Council. The proposal stated the scheme might cost an "insignificant" amount to administer but would require no new civil service positions. Wong Kwok-hing, a lawmaker representing the Federation of Trade Unions, said the proposal was not yet perfect. He said he expected the government to set an example by offering seven days' paternity leave. Peter Wong Hyo, president of the 90,000-strong Hong Kong Chinese Civil Servants' Association, said he expected the government to provide five days of leave. But he was concerned it would worsen the manpower shortage in government departments. The Labour and Welfare Bureau said yesterday the government was studying the provision of paternity leave to the city's non-government employees. A separate Labour Advisory Board consultation would address it in the first quarter of next year. Wilson Shea Kai-chuen, president of the Hong Kong Small and Medium Enterprises Association, said local businesses would accept a statutory requirement of two to three days' paid paternity leave to employees.

Fixed-line telecom operator PCCW Ltd. on Wednesday priced its telecom trust initial public offering at the bottom of an indicative price range, raising a total of $1.2 billion and underscoring Chairman Richard Li's determination to press on with the listing to raise funds despite market volatility. The IPO took place at a time when worries about a U.S. and European slowdown have dragged Hong Kong's stock market down 19% since early August. But there were expectations that interest in yield-bearing investments would support demand for the offering. The final pricing of 4.53 Hong Kong dollars (about 60 cents) represents a yield of 8.86% for 2012, a person familiar with the situation said, above those of Hong Kong-listed real-estate investment trusts of 4% to 6%. Mr. Li, the younger son of Hong Kong's richest man, Li Ka-shing, had to subscribe to a significant chunk of the units in the IPO by buying 12.5% in the trust, above the 2.75% he was entitled to subscribe to as a qualified shareholder. Mr. Li was also hoping to raise significantly more—as much as $1.6 billion including an overallotment option—but the deal fell victim to jittery markets. The retail tranche of the IPO, which constitutes 10% of the offering, wasn't fully covered, a person familiar with the situation said Wednesday, without disclosing the exact percentage taken up by retail investors. The limited prospects for growth in the underlying businesses—mainly fixed-line assets—have weighed on retail investor interest, according to records of margin financing from several local brokerages. Mr. Li bought 12.5% in the trust, above the 2.75% he was entitled to subscribe to as a qualified shareholder. Hong Kong's dominant fixed-line operator sold 2.05 billion units in HKT Trust & HKT Ltd., which holds PCCW's fixed-line and broadband assets, at 4.53 Hong Kong dollars each, at the bottom of the indicative price range of HK$4.53-HK$5.38. The trust is scheduled to list in Hong Kong on Nov. 29. For PCCW, the move will allow the company to focus on higher-growth businesses such as media and information technology solutions, while extracting value from the cash generating fixed-line assets. It also marks the end of Li's attempts over the years to cash out of PCCW's telecom businesses, which have been operating in a highly saturated market. In 2006, PCCW considered bids of $7 billion for its core telecom assets from Australia's Macquarie Bank Ltd. and U.S. buyout firm Texas Pacific Group. But those deals failed when PCCW's second-largest stakeholder, China Network Communications Group Corp., blocked the deal. Later that year, Mr. Li agreed to sell his controlling 22.65% stake in PCCW to a consortium led by former Hong Kong banker Francis Leung. But he apparently changed his mind after Mr. Leung disclosed that Mr. Li's father was involved in the acquisition. Two years ago, Mr. Li scrapped a $2.1 billion deal to take PCCW private after the Securities and Futures Commission, Hong Kong's market regulator, alleged that a shareholders' vote to approve the buyout deal had been rigged. The city's Court of Appeal ruled in favor of the SFC, effectively blocking the buyout. Mr. Li has denied the SFC's allegations. Analysts widely believed at the time that Mr. Li's plan to take PCCW private was a precursor for the company's core telecom assets to be repackaged for an eventual separate listing. Mr. Li acquired Hong Kong's dominant phone company in 2000 in a deal valued at $28 billion, which was Asia's biggest acquisition at the time. The phone company held a decades-long monopoly in Hong Kong's long-distance telephone market until the late 1990s. PCCW's fixed-line and broadband businesses generate significant cash, but operate in a low-growth market. Alex Arena, Group Managing Director of PCCW, said the transaction will generate HK$9.3 billion (US$1.2 billion) in proceeds and achieve a market capitalization of HK$29.1 billion for HKT Trust & HKT Ltd., which exceeds the minimum market cap of HK$28.6 billion approved by PCCW shareholders in October.

Hong Kong is 'a remarkable achievement' under One Country Two System - Chief Executive Donald Tsang talks to a China Daily reporter on Tuesday. Hong Kong's success has been recognized by the world, he said. The concept of "One Country, Two Systems" has succeeded remarkably well, exceeding all expectations for Hong Kong, Chief Executive Donald Tsang told China Daily in an exclusive interview on Tuesday. "For someone like me, who served in government before and after 1997, it is a remarkable achievement, recognized by the rest of the world," Tsang said as he reflected on the city's progress since the 1997 handover. "Many people, including myself, expressed concern whether this policy, introduced by late leader Deng Xiaoping, would work in Hong Kong," he said. "It turns out to be a triple-win situation for Hong Kong, the country and the rest of the world. Hong Kong people have won, the country has won and the rest of the world has also won." Tsang is entering the final months of his term as Hong Kong approaches the 15th anniversary of reunification on July 1, 2012. By that date Tsang will have completed his second term as chief executive. Hong Kong has advanced noticeably on the political, economic and social fronts in recent years, he observed. The electoral processes are far more democratic than before 1997, he said. More significantly, the National People's Congress has agreed on a timetable for universal suffrage for chief executive elections in 2017 and for the Legislative Council in 2020. "Things are moving on quite nicely, but of course they may not meet everybody's expectations," Tsang said. "If you look at it objectively, even the most critical commentators overseas have seen the advances we have made on the political front." Economically, Hong Kong is obviously an international financial center serving the entire region, in terms of the size of its market, foreign investment and market infrastructure, he said. The world has not fully recovered from the shock of the financial crisis that swept the globe in 2008, he noted, but Hong Kong has weathered the storm and remains attractive to foreign capital. Foreign investors think Hong Kong is a profitable and safe place to invest, he said. Tsang particularly cited the growth and importance of the renminbi market in Hong Kong. "This year we are able to handle 1.5 trillion yuan ($236 billion) in trade settlements and renminbi balances kept by our banks hit 600 billion yuan. Remember, we started from humble beginnings three or four years ago," he said. Hong Kong, as a testing ground, is doing a great deal for the final convertibility of the renminbi, he said. On social services, Tsang said the special administrative region has developed a better system for elderly care. ree education for 15 years is provided, with 12-year compulsory, and subsidized pre-school education, while a statutory minimum wage has been introduced to protect workers.

 China*:  Nov 25 2011 Share


Top 50 most beautiful people in China - Beijing News has listed "China's 50 most beautiful people" in 2011. 

Women in the mainland will soon get an additional eight days of paid maternity leave if an overhaul of benefits that promises to standardize and improve their labor rights gets the go-ahead. Standard maternity leave will be increased to 98 days from 90 days, according to draft regulations of the Legislative Affairs Office, a working body of China's Cabinet. The plan includes insurance coverage for claims related to childbirth and miscarriage. If adopted, the changes would make the mainland compliant with International Labor Organization standards established in 2000. "It's creating a new national standard," said K Lesli Ligorner, a Shanghai-based partner at Paul Hastings. "It strengthens the law to give women greater rights in the workplace, and also reflects Chinese public policy and the importance of family."

President Hu Jintao walks with President of Turkmenistan Gurbanguly Berdimuhamedov during a welcoming ceremony at the Great Hall of the People in Beijing on Wednesday. Berdimuhamedov is on a state visit until Friday to sign a deal to supply natural gas to China. China and Turkmenistan are expected to sign an agreement for the central Asian nation to supply more gas to the world’s second largest economy during a visit to Beijing by the Turkmen president. State-run Xinhua News Agency said on Wednesday Gurbanguly Berdimuhamedov is in China for a four-day visit, during which he will hold talks with President Hu Jintao and meet Wu Bangguo and Premier Wen Jiabao. He will also travel to Shenzhen and Hong Kong. The two nations are expected to sign an agreement for additional gas supplies of 25 billion cubic meters a year. That should bring Turkmenistan’s total gas deliveries to China to 65 billion cubic meters a year, more than half of China’s entire natural gas consumption in 2010. Beijing has been courting Central Asian countries like Turkmenistan as part of its push to diversify and expand its access to the energy resources needed to power its fast-growing economy and reduce its reliance on heavily polluting coal. On Thursday, Turkmenistan’s president is due to attend the ceremonial opening of a US$22 billion pipeline that will carry Turkmen gas to southern China. The 8,700-kilometre natural gas pipeline began operating in June, helping boost supplies to the country’s industrial zones in the south. It is slated to provide up to 30 million cubic meters of natural gas a year. China is also expected to extend subsidised credit to Turkmenistan to buy equipment for its oil and gas industry.

China's manufacturing activity slumped to its lowest level in 32 months in November, banking giant HSBC said on Wednesday, renewing fears the Asian powerhouse is losing steam amid global economic woes. The news comes just days after Vice Premier Wang Qishan, China’s top finance official, gave a dire warning that the global recession was here to stay and would impact the export-dependent economy due to weakening external demand. The preliminary HSBC purchasing managers’ index (PMI) dropped to 48 in November – the lowest since March 2009 – compared with 51 in the previous month, HSBC said in a statement. A reading above 50 indicates the sector is expanding while a reading below 50 suggests a contraction. The final figure will be released on December 1. HSBC chief China economist Qu Hongbin said he expected cooling domestic demand and weakening external demand for China’s exports heralded a further slowdown in production in coming months. But he added China had more room to ease its tight monetary policy to boost a slowing domestic economy, as inflation was now in check. Beijing, anxious about high inflation, has pulled on a variety of levers to curb price rises in the past year, including restricting the amount of money banks can lend and hiking interest rates. The measures appear to have worked, as the nation’s inflation slowed sharply in October, with the consumer price index rising 5.5 per cent year-on-year, the slowest pace since May as food prices fell. “It will leave more room for Beijing to step up selective easing measures, which should gradually filter through to keep China on track for a soft landing,” Qu said in the statement. China’s economic growth eased to 9.1 per cent in the third quarter from 9.5 per cent in the second quarter, as government efforts to tame inflation and economic turbulence in Europe and the United States curbed activity. Wang warned at the weekend that China needed to fix “structural problems” in its financial system to cope with a “long-term” global downturn that threatens the world’s second largest economy. “For an economy like China that depends heavily on exports, the key is to understand the situation and put one’s own house in order,” Xinhua news agency quoted him as saying on Saturday. Chinese leaders are trying to shift the country away from exports in favour of greater domestic consumption as the main engine of economic growth. Liu Hongke, a Beijing-based economist at investment bank CCB (SEHK: 0939, announcements, news) International, said the latest PMI would boost the case for monetary easing, such as trimming reserve requirements for banks – the funds they must put aside as reserves. “This may speed up the loosening of monetary policy,” he told reporters. China’s central bank has said in recent weeks it aims to tweak monetary policy by funding sectors in need, such as small enterprises and low-cost housing. Chinese stocks closed down 0.73 per cent on Wednesday after the PMI figures sparked renewed concerns of a domestic economic slowdown, although hopes of monetary easing offered support, dealers said. “The market didn’t fall a lot on the data, but turnover remained low,” Wu Dazhong, an analyst at Shenyin Wanguo Securities, told reporters.

China beat out the U.S. for the first time to become the world’s largest smartphone market by volume during the third quarter, according to one research firm, marking a new epicenter for the global mobile computing boom. This comes as China for the first time passed the U.S. to become the world’s biggest personal-computer market in August. “China has become a large and growing smartphone market that no hardware vendor, component maker or content developer can afford to ignore,” said Neil Mawston, an analyst with market research firm Strategy Analytics. China shipped a record 24 million smartphones—devices that allow users to surf the Web, make phone calls and also watch videos– in the third quarter compared to 23 million in the U.S., data released Wednesday by Strategy Analytics showed. U.S. smartphone shipments dropped by 7% in the three months ended Sept. 30 as top mobile vendors Nokia and Samsung Electronics placed their bets on China and India, unveiling low-cost smartphones geared toward emerging markets last August. The U.S. still remains the world’s largest smartphone market by revenue. Competition continues in the smartphone space, as the market rose to an estimated 110 million units in the second quarter, up from 62.4 million a year earlier, according to Strategy Analytics. Finnish handset maker Nokia led China’s smartphone market with 28% of the market in the third quarter, followed by Samsung’s 18%. China’s smartphone shipments grew by 57% in the third quarter. This spike is traced to Chinese companies like Huawei Technology and ZTE which manufacture hundreds of millions of cheap phones a year, many low-cost Android models. Operators in the region also subsidize high-end phones like Apple’s iPhone for customers in exchange for one to two year long contracts, making smartphones an enticing choice.

China to Cancel College Majors That Don’t Pay - College students wait in line to hand in their resumes to get interview opportunities from a company at a job fair held on the campus of Shanghai University of Finance and Economics in Shanghai, China. Much like the U.S., China is aiming to address a problematic demographic that has recently emerged: a generation of jobless graduates. China’s solution to that problem, however, has some in the country scratching their heads. China’s Ministry of Education announced this week plans to phase out majors producing unemployable graduates, according to state-run media Xinhua. The government will soon start evaluating college majors by their employment rates, downsizing or cutting those studies in which less than 60% of graduates fail for two consecutive years to find work. The move is meant to solve a problem that has surfaced as the number of China’s university educated have jumped to 8,930 people per every 100,000 in 2010, up nearly 150% from 2000, according to China’s 2010 Census. The surge of collge grads, while an accomplishment for the country, has contributed to an overflow of workers whose skillsets don’t match with the needs of the export-led, manufacturing-based economy. Yet the government’s decision to curb majors is facing resistance. Many university professors in China are unhappy with the Ministry of Education’s move, as it will likely shrink the talent pool needed for various subjects, such as biology, that are critical to the country’s aim of becoming a leader in science and technology but do not currently have a strong market demand, a report in the state-run China Daily report said. An op-ed in the Beijing News criticizes the approach for a different reason, saying that it will only spur false reporting of employment rates from schools that are looking for greater autonomy to produce more diversified, higher qualified students. Official data already shows that the country’s educated jobless, referred to as the “ant tribe,” appear to be decreasing. In 2010, 72% of recent graduates found work, up from 68% in 2009, according to the Ministry of Education. None of the reports specified which majors would be cut under the new rules, but there are signs that some universities have already started taking steps to decrease the size of programs that don’t result in paid positions. Enrollment in a Russian program at China’s Shenyang Normal University was cut to 25 students this year from 50 in previous years, according to a report in the China Daily. Education has become a heated topic in China, as the country looks to propel the rise of its own companies and its own technologies. To succeed in that quest, the government has said, the country must produce more innovators. Tight restrictions over education are seen as the reason that creativity in China has been stifled and as the reason that so many have chosen to flee overseas for their studies. Chinese have questioned whether someone like Apple founder Steve Jobs could ever emerge from an education system that seeks to push down students who stand out from the crowd. Many Chinese students with enough funding have turned to universities in the U.S., which have a history of churning out graduates who’ve gone on to become some of the world’s top innovators. Last year, 128,000 Chinese students went to the U.S., making China the country with the highest number of overseas pupils in American universities, according to a 2010 report from the Institute of International Education. But as the U.S. struggles to cope with its own generation of jobless graduates, the American education system has also come into question and many American college students are rethinking the value of their own majors. What if the U.S. government were to adopt China’s approach? According to the most recent U.S. census data, among the first majors to go: psychology, U.S. history and military technologies.

Hong Kong*:  Nov 24 2011 Share

Hong Kong's average rent is now US$1,695 per sq ft per annum. Hong Kong moved up one place to register the world's second most expensive shop rents, as tourist spending rose. With average rent at US$1,695 per square foot per year, the city ranks after New York's Fifth Avenue in a report by property consultant CB Richard Ellis (CBRE) on global retail rents in the third quarter. Annual rents have risen 52.8 per cent in the city this year. "In spite of the uncertain economic outlook, retailers see Asia as a growth area and are actively seeking opportunities either to establish a foothold or expand operations here," said Edward Farrelly, the head of CBRE's Hong Kong research division. "Hong Kong is a key destination as it has the added advantage of exposure to mainland China." Retail rent in the city rose 6.2 per cent quarter on quarter in the third quarter from 2.2 per cent in the previous quarter, Farrelly said. New York rents stayed at US$1,900 per square foot per annum. Sydney ranked third, at US$1,224, followed by London and Zurich, the report said. Guangzhou was 10th, Beijing 14th and Shanghai 20th. CBRE said rents had levelled off in many cities around the world as the euro-zone crisis continued to hammer consumer confidence. Rents in New York rose 5.6 per cent this year, meaning Hong Kong was closing the gap, Farrelly said. Joe Lin, a director of retail services at CBRE, said: "Tourist spending continued to be the growth engine of Hong Kong retail sales." Lin said rents in prime districts continued to rise on the back of demand by international brands. Hong Kong retailers continued to relocate their shops to non-prime areas, pushing up rents in second-tier retail locations as well, especially those adjacent to prime areas. Another property consultant, Jones Lang LaSalle, said the recent correction in global stock markets did not have a noticeable impact on Hong Kong's retail market. Total retail sales in the city grew 27.5 per cent year on year in the third quarter, bringing the year-to-date growth to 25.4 per cent. Visitor arrivals increased 19 per cent year on year in the third quarter. Jones Lang LaSalle said in a recent report that luxury brands in particular remained optimistic and were continuing their expansion plans. Longchamp, for example, has leased 7,974 sq ft over three floors at Silvercord shopping centre in Tsim Sha Tsui for HK$7.5 million a month. Farrelly said: "The buoyant employment situation, together with the prevailing strength of inbound tourism, continues to bode well for the retail sector in the near term." Against this backdrop, the outlook for retail demand, especially in prime locations, was likely to remain strong, with retail rents expected to maintain positive growth in the coming months, he said.

Retail investors are shying away from PCCW (SEHK: 0008)'s up to US$1.4 billion HKT Trust IPO, leaving the Hong Kong company to lean on institutional investors and fund managers to fill orders for the deal. Controlled by Richard Li Tzar-kai, PCCW launched the initial public offer on November 9, braving volatile global markets. The IPO is set to be priced later on Tuesday and the fate of the offer will have a bearing on the future of other deals, bankers and analysts said. The retail portion, which represented about 10 per cent of the HKT Trust global offering, was only about half covered when the applications closed on Monday, the Hong Kong Economic Times reported on Tuesday, citing market sources. PCCW declined to comment on demand for the offering. Hong Kong brokerage Phillip Securities, which tracks IPOs, said it saw demand for fewer than 1 million units as of Friday for the retail portion of the HKT Trust deal, far fewer than the 205.3 million units on offer. “Given the market conditions now, investors are sitting back to see what will happen,” said Jasper Chan, corporate finance officer at Phillip Securities in Hong Kong. “They don’t want to put money in the primary market and that’s what is causing lower subscriptions.” The IPO, the first single investment trust to list in Hong Kong, is being offered at a next year yield of 7.5-8.9 per cent. “The yield is attractive, but investors are afraid the price will drop in the first trading day, so they will sit back and see if they can buy it cheaper,” Chan added. Retail demand has also been tepid for other offerings in Hong Kong this year because of volatility in global markets and as investors have balked at paying top prices for IPOs. Fashion house Prada, which raised US$2.5 billion in a June IPO, only had demand for about half the shares on offer for its retail tranche. The stock has lost 12 per cent since it went public, less than the 16 per cent drop in the benchmark Hang Seng index. HKT Trust will offer so called share-stapled units in the IPO, each comprising a unit of HKT Trust, a preference share in HKT and an interest in ordinary shares of HKT held by the trustee manager. PCCW confirmed that Li exercised a preference right to subscribe to 200 million units of the offering worth HK$1.08 billion, representing 9.74 per cent of the global offering, the newspaper said. Li and his companies are subscribing for a total of around 12.49 per cent of the global offering, the paper added. HKT Trust’s IPO is being offered at 21 times to 25 times its forecast earnings for fiscal next year, compared with an average of 15 times for the sector, said Alan Kam, an analyst at Daiwa Capital Markets in Hong Kong. That makes the IPO expensive and limits the potential gains for retail investors betting on the units price appreciation, he added. “The deal is more targeted to long-term investors, for example insurance companies, who look for the yield,” Kam added. “The long-term investor may have more interest in the trust, relative to retail investors. The margin for retail investors is not that good.” China International Capital Corporations (CICC), Deutsche Bank, Goldman Sachs and HSBC were hired as joint global co-ordinators for the offering, with JPMorgan, Standard Chartered and Singapore’s DBS are also helping to underwrite the deal.

After six months of being in legal limbo, waffle seller Ng Yuk-fai has walked free after the government decided not to pursue charges against him. "The old egg-waffle man of Tai Hang" - accused of hiding the income from his unlicensed business while receiving welfare - was given the news when he reported back to Wan Chai police station on Thursday. "He was released unconditionally after police sought legal advice," a police spokeswoman said yesterday, adding that the criminal investigation had ended. The 72-year-old hawker was arrested for suspected welfare fraud in May after publicity about his numerous arrests by hawker-control officers drew him to the attention of the Social Welfare Department. The department would not comment on the police decision yesterday, saying only that it had reported Ng to the police in accordance with established procedures. Saying that unlicensed hawking was illegal, a spokesman said: "If welfare recipients are found illegally hawking and continue after being advised not to, their welfare payments will be stopped."But the department said Ng's family had continued to receive welfare payments during the police investigation. Neither Ng nor his supporters - who had said he was being left in limbo by the lack of a decision - could be reached for comment yesterday. Ng said earlier that he had been making HK$6,000 a month selling his waffles in Tai Hang, and sent HK$4,000 to his mainland family while earning extra money delivering food for a restaurant and collecting waste paper. Before the welfare department stepped in, he had also said that he refused to claim welfare, bringing him praise from the health minister for his independence.

The city's graft buster is trying to work around a serious shortage of investigators, which has forced it to promote a number of officers to the rank of principal investigator and extend one officer's term past the official retirement age. In the past two years, more than 10 officers, including some senior officers, have left the Independent Commission Against Corruption to join the Independent Police Complaints Council. Of 18 principal investigative officers who are team leaders, six are in an "acting" capacity - a six-month probationary period before a promotion becomes official. Three out of four assistant directors of the operations department are also working in an acting capacity, according to the government's directory. One expatriate chief investigator has been promoted to principal investigator - even though he is due to retire in mid-2012 when he turns 60. An ICAC spokesman said that under normal circumstances, officers must leave upon reaching retirement age. But it had extended the expat officer's term until September, 2013 because of "operational needs". He said the expatriate had five years' experience as a chief investigator. Any officer who was considered capable for the post could immediately be promoted. He was responding to a letter sent to the South China Morning Post (SEHK: 0583), signed by "a former ICAC officer", in which the writer questioned why the expatriate was chosen for promotion. The officer lacked frontline investigation experience, and "what he does best was just to write speeches" for Daniel Li Ming-chak, head of the Operations Department, the letter said. Neither the expatriate nor Li could be reached for comment. "There are other chief investigators who are more deserving because of their contribution to vigorous daily investigative work," the letter said. "Many have also acted [above their rank], for administrative convenience, as principal investigators for years, doing PI duties all the time without recognition of their abilities." The expatriate, who joined the commission in the 1990s, was previously a police officer in Britain. He was now heading a team involved mainly with support work instead of frontline investigating, the letter said. The unnamed former officer complained in his letter that there had been "unpredictable and manipulative treatment" of officers at the ICAC resulting in an exodus, as well as a number of court blunders.

Parents check to see whether their child has received a place in Primary One at La Salle Primary School, Kowloon City, yesterday. Disappointment met more than half the anxious parents who flocked to schools yesterday to see if their child had won a place at their preferred school, under the discretionary round of applications to primary schools. The success rate of applicants has dropped for five consecutive years, and this year it hit the lowest level since 1997. Only 45.5 per cent out of 45,715 children won a place in the government or aided primary school they wanted for the next academic year - 2 percentage points lower than last year. Many parents try hard to get their children into primary schools that are perceived to have the best reputation. But under the discretionary system, more than one-fifth of successful applicants are siblings of existing pupils or children of staff. Many other places must go to children, under a points system, who already have various ties to the school. Many wish the discretionary-admission system could be revamped. Nervous parents arrived at La Salle Primary School in Kowloon City yesterday morning, to look for their child's name on a list at the entrance. Joyner Luo, whose son applied unsuccessfully for a place at the school, said she felt the competition was fierce this year, and was unhappy about the admission system. "Some get admitted only because of their siblings or parents," she said. "It's unfair." Luo, housewife, said she was not especially disappointed and would pick a private or direct-subsidy school for her son instead. "It's less complicated," she said. Another parent, an alumnus of Maryknoll Convent School, learned her daughter would enter the school. "I feel relieved," the woman, who works in the financial sector, said. "My daughter is attending ballet, drawing, gymnastics and swimming classes. But these are not for primary school admission. They're only for her personal development." Education Bureau figures show there are 57,100 children of the age to enter primary school next year, compared with 50,400 this year. But there will be fewer primary school places overall, as more schools switch to "small-class" teaching under a government policy. Leung Siu-tong, chairman of the Hong Kong Aided Primary School Heads Association, expects the success rate to continue to drop, as there will be more children looking for places in the next few years. "If parents continue to pick only a few popular schools, the situation will get worse," he said. "Children can feel parents' unhappiness even though they are only six or seven years old. Parents should be encouraging even if their kids don't get into the schools they like. "Otherwise, there will be too much pressure on the kids." Successful applicants should register with the schools tomorrow or on Thursday, while those who failed to secure a discretionary place will automatically join the central allocation process in January. Government and aided primary schools allocate about half of their total Primary One places as discretionary. The other places are reserved for the central allocation process.

Consumer prices in Hong Kong rose 5.8 per cent in October compared with the same period a year ago, Census and Statistics Department figures released on Tuesday showed.

Est-Ouest Auction 2011 Autumn Sale to be held in Hong Kong - The Est-Ouest Auction 2011 Autumn Sale, which includes nearly 700 pieces of exquisite fine art works and luxuries, will be held in Hong Kong from Nov. 28 to 29.

China and Hong Kong said Tuesday they have doubled the value of a bilateral currency swap to 400 billion yuan ($62.92 billion) as Beijing seeks to expand the pool of yuan set aside to ease any strain on foreign banks that may be under pressure to access the Chinese currency. The expanded swap agreement allows the Hong Kong Monetary Authority, the territory's de facto central bank, to tap a yuan pool from the People's Bank of China. Analysts see the move as a vote of confidence in Hong Kong's central role in helping the yuan go global, and one that comes as waning risk appetite among global investors and a less bullish outlook for the yuan have hurt sentiment. Hong Kong is the primary test market for a freely traded yuan. It boasts the largest repository for the yuan outside of the mainland, with 622 billion yuan in deposits as of Sept. 30. But yuan-based cross-border trade saw its first quarterly decline in the third quarter and growth in yuan deposits in Hong Kong has slowed in recent months. The new agreement will expire Nov. 22, 2014, but may be extended if both sides consent. The agreement replaces an earlier one for 200 billion yuan, or 227 billion Hong Kong dollars, that was scheduled to expire Jan. 20. The PBOC said the new deal will facilitate trade and investment and support the development of the offshore yuan market. HKMA Chief Executive Norman Chan said the new agreement "is crucial in helping us to provide liquidity, when necessary, to maintain the stability of the offshore renminbi market in Hong Kong." Analysts said that although banks are unlikely to tap yuan funds via the swap agreement because HKMA criteria is strict and the lending terms are unattractive, it's an important gesture by the PBOC. The move "has little immediate impact... However, at times of market stress, the swap line will provide a useful psychological and potential physical cushion," said Dariusz Kowalczyk, economist at Credit Agricole. In October 2010, the HKMA drew 20 billion yuan under the original agreement to meet local companies' funding needs, after Hong Kong companies exhausted their full-year quota of eight billion yuan to settle trades with mainland companies. The expansion of the currency swap "could allow the HKMA to diversify more of its reserves into yuan assets by investing in the onshore yuan bond market," Credit Agricole senior strategist Frances Cheung said. Onshore yuan bonds are attractive to the HKMA and other central banks because they offer significantly higher yields than their offshore counterparts, and a means to diversify holdings into currencies other than the U.S. dollar, she said. Since the end of 2008, Beijing has reached currency-swap deals with a dozen countries in Asia, Europe and South America as part of efforts to promote the yuan as an international currency. The newly expanded Hong Kong deal is the largest of those signed so far.

 China*:  Nov 24 2011 Share

U.S. Commerce Secretary John Bryson and Chinese Vice Premier Wang Qishan after the signing ceremony of agreements of the U.S.-China Joint Commission on Commerce and Trade (JCCT) in Chengdu in southwest China's Sichuan province, Monday, Nov. 21, 2011. Chinese Vice Premier Wang Qishan warned yesterday that the global economy was in a grim state while the visiting US commerce secretary said China would be spending US$1.7 trillion on strategic sectors as China seeks to bolster waning growth. Wang said an "unbalanced recovery" may be the best option to deal with what he had described on Saturday as a certain chronic global recession, suggesting China would boost its own economy before worrying about global imbalances at the heart of trade tensions with the United States. "An unbalanced recovery would be better than a balanced recession," he said at the annual US-China Joint Commission on Commerce and Trade, or JCCT, in the southwest city of Chengdu. The comments, echoed by Vice Finance Minister Zhu Guangyao, stopped short of suggesting China would try to boost exports as it had done during the 2008-2009 global financial crisis when it pegged the yuan to the dollar. Instead, US Commerce Secretary John Bryson told reporters that China had confirmed to US officials that it planned to spend US$1.7 trillion on strategic sectors in the next five years. The government has previously said these sectors include alternative energy, biotechnology and advanced equipment manufacturing, underlining its aim to shift the growth engine of the world's No. 2 economy to cleaner and high-tech sectors. The investment amount of 10 trillion yuan (US$1.7 trillion) is more than twice the 4 trillion yuan stimulus package launched during the global financial crisis. "Global economic conditions remain grim, and ensuring economic recovery is the overriding priority," said Wang, the top official steering China's financial and trade policy, at the start of the second day of talks with the US. "As major world economies, China and the United States would make a positive contribution to the world through their own steady development," Wang told trade, investment, energy and agricultural officials from each government. Yesterday, Singapore and Thailand said their economies would shrink in the fourth quarter and Japan posted a bigger than expected fall in October exports. Some central banks, including those in Brazil and Indonesia, have cut interest rates. On Saturday, Wang gave the most dire assessment on the world economy from a senior Chinese policymaker to date. "The one thing that we can be certain of, among all the uncertainties, is that the global economic recession caused by the international financial crisis will be chronic," he was quoted as saying by Xinhua news agency. US officials said yesterday the discussions yielded progress on the question of "forced" technology transfers to Chinese companies, long a sore point for US businesses. In particular, China committed not to require foreign automakers to hand over new energy vehicle technology to Chinese partners, or to establish Chinese brands as a condition for market access, said US Trade Representative Ron Kirk. "China also confirmed that foreign-invested companies will be eligible on an equal basis for any subsidies or incentive programmes for electric vehicles," he said. Although the JCCT talks do not address exchange rate policies, US officials at the talks told Wang and his colleagues that they could not ignore rising "American impatience" with China's trade policies and investment barriers. However, Zhong Wei, an economist at Beijing Normal University, said the benefits to the US of yuan appreciation "are nearly zero." "Cheap Chinese goods have been a subsidy for the poor in the US, and now the US government wants to eliminate such subsidy while it's having difficulty creating jobs."

Preparation work under way on a piece of land on the Bund that was the most expensive parcel in Shanghai when it was sold for 9.22 billion yuan (US$1.44 billion) last February. Construction of two 180-meter towers will start next month on the site after its original buyer Shanghai Zendai Property reportedly sold the parcel to Fosun Group for 9.57 billion yuan on November 2. Plans of the twin towers complex attracted accusations that they would ruin the skyline of the historic Bund and the height of three side buildings has been lowered to below 80 meters to make the project more harmonious with the rest of the Bund's architecture.

New China Life (SEHK: 2628) Insurance, in which Swiss insurer Zurich Financial holds a stake, said on Tuesday it had launched the Shanghai portion of its dual initial public offering. New China Life will hold roadshows in Shenzhen, Shanghai and Beijing starting on Wednesday and will set its indicative price range on December 1 and its IPO price on December 8, the firm said in a filing to the Shanghai stock exchange. The country’s third-biggest life insurer will sell up to 158.5 million shares via the Shanghai IPO, it said in a draft prospectus. New China Life aims to raise about 6 billion yuan (US$945 million) in Shanghai and 10 billion yuan in Hong Kong, a source with the direct knowledge of the matter said. New China Life is following in the footsteps of larger rivals China Life Insurance, Ping An Insurance (Group) (SEHK: 2318) Of China and China Pacific Insurance (Group) in seeking a dual listing in Shanghai and Hong Kong.

Beijing has been caught off guard by recent US moves in the Asia-Pacific region, but analysts do not expect China to make major changes in its policies ahead of Vice-President Xi Jinping's trip to America next year. Beijing has been well aware of the US diplomatic shift to Asia for a long time, with Barack Obama declaring himself America's first "Pacific President" two years ago in Japan. But analysts said Beijing had not expected Obama to take a hard-line approach against China and confront it by raising territorial disputes in the South China Sea at last weekend's East Asia Summit in Bali, Indonesia. Premier Wen Jiabao told leaders at the summit that China did not want to discuss the territorial disputes in such a setting, while reasserting Beijing's view that they should only be tackled through bilateral negotiations. "No one would have thought the US would do something like this three to five months ago," said Shi Yinhong, a US affairs expert at Renmin University. "China will respond in a crisis but it has never been like the US, which can always strike the first blow." Foreign Ministry spokesman Liu Weimin denied that China had been isolated at the summit, saying the meeting still addressed development and co-operation issues. An editorial in Global Times said China did not need to panic about Washington returning to Asia because the US economy was weak. But analysts said the recent developments still required attention. "China feels uneasy because the US seems to be causing trouble for China," said Jia Qingguo, associate dean of Peking University's school of international studies. Days before the East Asia Summit, Obama criticised Beijing's currency and trade policies and said that the US would station troops in Australia. "China was not fully prepared for the recent actions of the US and its neighbours," said Jin Canrong, another US affairs expert at Renmin University. Jin said China has been focusing on internal development and did not fully understand how it was perceived overseas or realise that its rise has triggered fears that have pushed its neighbours closer to the US. "China believes it faces a lot of internal problems and that the country should speed up development, whereas some countries believe China should slow down," Jin said. "Some countries have overestimated the power of China, and China cannot properly address this perception gap between itself and its neighbours." Analysts expect Beijing will come under further pressure to take a tough stance against the US in the coming months. It came under similar pressure in September, when the US announced the sale of US$5.85 billion worth of arms to Taiwan, but refrained from severing mutual military ties, as it did last year. US Defence Secretary Leon Panetta described Beijing's response to the deal as relatively mild. "Some people may think China is nice to the US, and are confused why the US is not reciprocating," Shi said. Tensions between the two countries will continue in the coming months, with China's total trade volume expected to exceed US$300 billion this year, which may prompt US politicians to push harder on Chinese currency reform. The US presidential election in 2012 may push Obama to focus more on domestic issues than ties with China, while US politicians may play up perceived problems with China in their campaigns. "These factors will add to the anxiety in Sino-US ties," said Professor Yuan Peng, from the China Institutes of Contemporary International Relations. But analysts said China will refrain from taking tough action against the US ahead of Xi's visit, expected in January. "China realises that shouting will not do any good. On the contrary, it will trigger a stronger reaction in the US, which will make Beijing's diplomatic stance more passive and difficult," said Professor Zhou Yongsheng, from China Foreign Affairs University. Jia said he expected China will seek to strengthen ties with its neighbours to offset US influence, while speeding up military modernisation. "China's military needs to be geared up to better protect the country's interests," Jia said.

A salesperson checks the Volvo V60 sports wagon at the ongoing Guangzhou auto show. The Swedish luxury brand says that it is targeting sales of 50,000 vehicles in the Chinese market this year. The Swedish premium vehicle brand Volvo AB, purchased by Chinese automaker Zhejiang Geely Holding Group Co Ltd last year, will make China one of its global bases as it prepares for local production of the first model in the country in 2013. "The first locally produced model, a medium-sized sedan, will be launched in 2013, followed by a small sedan in 2014," said Shen Hui, senior vice-president of Volvo and chairman of Volvo Cars China Operations. The two models, tailored to grab volume sales in China, are under development, led by Volvo's new research and development center in Jiading district, Shanghai. According to Shen, the new cars will be launched in China and then exported. Shen also said that "the launch speed of locally produced models will accelerate in the future". He added: "Local production is crucial for Volvo to become well-established in China our home country outside Sweden. We see huge potential in China's second- and third-tier cities." However, Shen declined to disclose the production site, as Volvo is waiting for government approval to build two plants, one in Chengdu, Sichuan province, and one in Daqing, Heilongjiang province. 

Hong Kong*:  Nov 23 2011 Share

Hongkong Post Monday announced that a set of stamps titled "Hong Kong Museums Collection" will be released for sale together with associated philatelic products on Dec. 6. Hongkong Post issued its first set of "Hong Kong Museums Collection" special stamps in 2009 on the theme of Chinese calligraphy and painting. The second set on Hong Kong's culture and history to be released presents treasures from the Hong Kong Heritage Museum, the Hong Kong Museum of History, the Hong Kong Museum of Art, and the Dr & Mrs Hung Hin Shiu Museum of Chinese Medicine at Hong Kong Baptist University. This set of six stamps showcases six traditional articles. Official First Day Covers will be put on sale for one HK dollar (0.13 U.S. dollar) each from Tuesday.

Riding the 25-minute Ngong Ping 360 will cost 7 to 11 percent more from next month, the third time ticket prices have increased since the Lantau attraction opened in 2006. To soften the blow, local children and the elderly may enjoy free cable car rides for the whole of next month. Everyone else will have to fork out more from December 1. A round-trip adult standard cabin will increase HK$125, or up 8.7 percent from the current HK$115. A round-trip ticket for the crystal cabin will be HK$188, up 11 percent from HK$169. For children aged three to 11, a round trip in the standard cabin will be increased from HK$58 to HK$62, a 6.9 percent rise. Children riding in the crystal cabin will have to pay between HK$112 to HK$125, an increase of 11.6 percent. For those aged 65 and above, a standard cabin round-trip ticket will rise from HK$91 to HK$98, up 7.7 percent. Explaining the increases, managing director Wilson Shao Shing-ming said operating costs have soared. Shao said depreciation of the Hong Kong dollar has made cable car parts more expensive because they are sourced mainly from Europe. He confirmed that local children under the age of 12 may ride the standard cable car for free during the whole of next month. The same offer applies to those over 65. Visitors had mixed opinions over the fare increase. While some said the rise is acceptable, others believe it is too much and want to see different prices for locals and tourists. One tourist said: "The new fare increase will pose a burden on us." In the first six months of the year around 740,000 people took time to ride the attraction. This is a 9 percent increase over the same period last year. The 5.7-kilometer bi-cable ropeway has ever-changing panoramic views that include the Hong Kong International Airport, the verdant, mountainous terrain of Lantau Island, the Tian Tan Buddha Statue and the 360-degree view of the Ngong Ping Plateau. Ngong Ping 360 is a subsidiary of MTR Corp.

Hong Kong police are beefing up efforts to crack down on crime by entering into agreements with overseas police forces. Police Commissioner Andy Tsang Wai-hung told Sing Tao Daily, sister newspaper of The Standard, in an exclusive interview that the force has signed cooperation agreements with police in Australia, Canada and France. Further agreements are to be signed with Singapore, Malaysia, Thailand, Indonesia and Cambodia, the commissioner said. In addition, police are opening contacts with South America. Tsang said these agreements will allow the countries to share intelligence and track down criminals. He said as a financial and transportation hub, Hong Kong is exposed to such crimes as drug trafficking, money laundering and internet scams. In the past, the city usually tackled cross-border crime with the help of Interpol. But to seek direct cooperation with other countries, Tsang started traveling overseas to enter into agreements after he became commissioner in January. "The money moves very fast," he said. "If a partner says a suspicious amount of money is expected to pass through Hong Kong, we can immediately track where the money is going and prevent Hong Kong from being used as a money laundering place." He is opening contacts with South America following a record seizure of cocaine in Tuen Mun recently. "We also noticed that there has been an increase in Hongkongers consuming cocaine. Fortunately, in this case, we have arrested drug dealers from South America," he said. Tsang added the cocaine trafficked here was probably destined for other areas in Asia. This is why, although the force has not worked with law enforcement agencies in South America in the past, it has opened contacts with the police in Colombia to follow up. Tsang said Hong Kong police recently cooperated with New Zealand to arrest a Chinese fugitive, who illegally kept a large sum of money accidentally transferred into his bank account. Local police also worked with the FBI on child pornography. Meanwhile, customs officers seized 2.7 kilograms of cocaine in the luggage of a 52-year-old woman at the airport yesterday. The cocaine had an estimated street value of HK$2.13 million.

Sun Yat-sen with Soong Ching-ling and Rosamonde. Airports are often named after a person who played a leading role in the country's history, such as New York's John F. Kennedy, Paris Charles De Gaulle and Leonardo da Vinci airport in Rome. Encouraged by the centenary of the 1911 revolution this year, a group of aviation enthusiasts is proposing "Sun Yat-sen International Airport" as the new name for Hong Kong's own gateway to the sky. "Not just the father of the nation, you could say he [Sun] was also the father of aviation in China," said Gordon Andreassand, vice-chairman of the Hong Kong Historical Aviation Society. His speech this month - at the inauguration of the Hong Kong University of Science and Technology's aeronautic-interest group - sparked a student petition to rename Hong Kong International Airport, better known as Chek Lap Kok airport, after the revolutionary leader. Jeff Chen Haoran, a first-year student and co-ordinator of the university group, said: "This act of naming can raise more awareness about his contribution to aviation." In 1923, Sun, with the aid of three American engineers, became the first person to build an aeroplane in China: a two-seat biplane to be used for bombing and reconnaissance work in a country divided by warlords. At its inauguration near Beijing, Sun named the plane Rosamonde, after his wife, better known simply as Soong Ching-ling. "That was the only aeroplane ever produced in China [before modern times]," Andreassand said. "The warehouse in Guangzhou mysteriously burned down only a few months after the first flight, and no more were produced." The original itself was most likely lost in the turmoil that enveloped the mainland in that era, Andreassand said. A replica of the Rosamonde can be found at the China Aviation Museum, near Beijing. Sun's ties to Hong Kong also make him an ideal candidate, he said. "His mother's actually buried here. And he made a very good speech in the 1920s at the University of Hong Kong, [telling] the students [that] what he learned seeing Hong Kong's progress had a big impact on his philosophies. That's where he got his ideas." The group plans to send the petition to both the Airport Authority's chief executive, Stanley Hui Hon-chung, and Secretary for Transport and Housing Eva Cheng once the president of HKUST signs the petition. "Of course, it may all come to nothing," Andreassand said. "There could be objections from Beijing about all sorts of things." The mainland has no big airports named after famous historical figures. The Airport Authority said it had no plans to rename the airport, which takes its name Chek Lap Kok from the small island that was flattened and extended to build the airport in the 1990s.

Hong Kong's top international schools are swamped with applications and are facing record waiting lists. Hong Kong International School has seen a 27 per cent increase in the number of applicants since 2006, and the number of students attending this year is the "highest in the school's 46 years", a spokesman for the institution said. Schools under the English Schools Foundation (ESF) are also seeing record-high figures this year. Some have recently told parents their children will not even get an entrance interview due to the high number of applicants - twice the number of available vacancies. The German Swiss International School says it has received 1,673 applications for 126 vacancies across all age groups. John Walsh, communications manager at Hong Kong International School, warned that the city could become less competitive because of the shortage of spaces at international schools. "The implications of a lack of international school spaces are clearly economic," he said. The school has recently been embroiled in controversy over its attempt to redevelop facilities at its Repulse Bay campus and increase space for students and staff. Local residents oppose the plan, concerned about traffic congestion and other issues. The ESF was expecting about 2,300 student applications for the next academic year, but there were only 1,020 spaces available, it said in a letter to parents. Amanda Chapman, whose daughter has applied to enter Sha Tin Junior School, an ESF school, said the ESF recently told her that her child would not get an interview due to the large number of applicants. "She is a native speaker [of English] and is a permanent Hong Kong resident," she said. Chapman, an English-language teacher, says the situation is ironic. "We are invited to improve the standards of English at local schools in Hong Kong, but we are denied an opportunity to educate our own children in English". Howard Yeung, a data analyst who recently moved back to Hong Kong from San Francisco, said it took him more than one year to secure places for his two children in ESF schools. Lawmaker Emily Lau Wai-hing attributes the growing demand for school places partly to the increase in foreign residents in Hong Kong but also to a lack of confidence in the education system among well-off residents. The city's population of foreign residents has grown by about 5 per cent in the past year, the Immigration Department says. The Indian, American and Australian populations have increased by about 7 per cent, while the British has risen by about 20 per cent. The government has pledged to increase the number of international school places by 5,000, from the current 36,000, in the next few years by providing sites for new schools and helping existing ones expand. "The administration supports the development of a vibrant international school sector to meet the demand for school places from families coming to Hong Kong for work and investment," an Education Bureau spokeswoman said.

A firefighter grabs a protester and pulls him from the canopy at police headquarters in Arsenal Street, Wan Chai, yesterday. The pair landed on a giant air mattress bringing an end to a six-hour stand-off as the man threatened to jump off the four-metre-high canopy after spraying slogans on the wall. He was arrested for causing a public nuisance and criminal damage. Firefighters ended a six-hour stand-off yesterday by pulling an angry protester off a canopy at police headquarters in Wan Chai. Three firefighters climbed above the man and one of them managed to jump down and drag him onto a giant air mattress placed below the canopy, ending a drama that started at about 7am at the Arsenal Street building. The protester, named only as Lau, 36, was arrested for causing a public nuisance and committing criminal damage. Evelyn Lam Man-sai, Wan Chai district commander, said the man "was in a very unstable emotional state. He was pointing a pair of very sharp scissors at his neck, and could have hurt or even killed himself". The man did injure himself when he banged his head with a can of spray paint, and was sent to Queen Mary Hospital, Pok Fu Lam. Police Commissioner Andy Tsang Wai-hung said the drama was believed to be linked to police handling of a case in 2007. A police source said the man has filed several complaints after being arrested and fined for behaving in a disorderly manner in a public place in 2007. During yesterday's protest, the man sprayed characters on a wall with red and blue paint, reading: "no channel for complaints; police framing sergeant; senior superintendent urged me to drop the complaint; police power without human rights." Earlier in the morning, three police negotiators tried to calm the man, but seemed to provoke him further. He threatened to jump off the four-metre-high canopy. The situation became more dangerous at one point, when the man almost fell as he was removing a ladder put up by firefighters trying to bring him down. He sprayed paint on the building's police emblem, which he later covered with a cloth. He also sprayed paint into his mouth. Tsang urged Hongkongers to express their opinions through correct channels. "Police will pass the findings of cases to the Independent Police Complaints Council." In June, a policeman died after falling from the roof of a covered walkway in Central as he tried to reach a chicken trader who had climbed onto a footbridge to protest against government officials.

Hong Kong's economic outlook would be bleak early next year because of considerable uncertainty over the future of the global economy, Financial Secretary John Tsang Chun-wah warned on Monday. Briefing the Legislative Council on the city’s economic situation, Tsang said growth in Hong Kong and other parts of Asia had slowed down in recent months. This was because of the euro zone credit crisis and the slow recovery of the United States economy, he said. “[The] European and US economies will remain bearish in the short term. This will add to the risk of a global economic downturn,’’ Tsang said. “Under this difficult and uncertain situation, the future for Hong Kong’s exports and economic performance is dim,” he said. The financial secretary expects inflation to peak in the fourth quarter as food prices steady while the export outlook remains bleak as Europe’s debt crisis affects global growth, the John Tsang told legislators on Monday. Local inflation has been heading north since the beginning of the year but global food prices have eased in the past six months, Tsang said. “As inflation on food prices in the mainland continues to come down, there are signs Hong Kong food [price] inflation is slowing. I expect inflation will peak in the fourth quarter,” Tsang told legislators. As the economies in the United States and Europe are expected to remain uncertain and weak, it increases the downside risk to global economic growth and the city is no exception, Tsang said. He said the city’s economic performance for the second half of next year will depend on the outcome of the European debt crisis, economic recovery in the United States and if the global economy can avoid being trapped in recession. Chief Executive Donald Tsang Kam-yuen said earlier this month that economic growth could shrink to as little as 2 per cent next year from this year’s expected 5 per cent. The city’s economic growth is expected to slow to 4 per cent next year from 5.75 per cent estimated for this year because of weakening external demand, the International Monetary Fund (IMF) had said in a report. Inflation in Hong Kong should end this year at 5.5 per cent and remain in the 4-5 per cent range throughout next year, the report said. Hong Kong’s September total export volumes fell 10.9 per cent year-on-year. “Facing such a high degree of uncertainty in the external environment, it is hard to be optimistic about Hong Kong’s exports and the city’s overall economic performance next year are,” Tsang told legislators. The financial secretary had said earlier this month that trade performance for the rest of this year and early next year is not optimistic given continued weak demand from Europe and the United States. In response to suggestions by a legislator, Tsang also said Hong Kong can study implementation of a new tax on vacant property in a bid to increase costs for speculators, further cooling the speculative interest on retail space and home. He added that any new tax will not come to the market shortly. In October, Donald Tsang said the government would resume the construction of subsidised housing as part of measures to help low-income earners and soothe public discontent over sky-high property prices. Prices for Hong Kong’s apartments, the most expensive in the world, have risen more than 12 per cent this year, surpassing records in 1997 amid a low interest-rate environment, strong economic growth and buying by mainland investors. On the positive side for Hong Kong were strong consumption fuelled by booming tourism and rising earnings, the financial secretary added on Monday. This, together with low unemployment, would help maintain economic growth in the short-term, he said. Tsang said he would monitor global financial markets closely in the next few months while drafting policies for his next budget in February.

Asia Today: Cheung Kong Holdings Chairman Li Ka-shing trimmed his stake in Bank of China, amid similar moves by Goldman Sachs and Bank of America to sell off Chinese bank shares. Plus, China's auto market enters a new frontier: used-car sales. Three charitable foundations set up by billionaire Li Ka-Shing cut their holdings of Bank of China Ltd.'s Hong Kong-listed H shares during the third quarter, amid a 35% drop in the bank's share price. Bank of China's Hong Kong-listed H shares have fallen due to concerns about the asset quality of China's banks following massive lending to boost the mainland economy. At the midday break, BOC's H shares—Hong Kong-listed shares issued by companies registered and based in China—were down 2.7% at 2.49 Hong Kong dollars (32 U.S. cents) following the news of the stake cut. Hong Kong's blue-chip Hang Seng Index was down 1.8%. Bank of China's Shanghai-listed A shares fell 0.3%, while the Shanghai Composite Index was down 0.4% at the midday break. Li Ka-shing (Canada) Foundation trimmed its stake in BOC's H shares to 0.25% in the third quarter from 0.53% in the first half of the year, but remains the third-biggest shareholder of the bank when other classes of shares are included, according to BOC's third-quarter earnings report. The fund held 700 million of the bank's H shares as of Sept. 30, compared with 1.486 billion on June 30. State-owned Central Huijin Investment remains the biggest shareholder of Bank of China. Li Ka-Shing Foundation Ltd. and Li Ka Shing (Overseas) Foundation slipped from the list of the top 10 shareholders of the bank in the third quarter, according to the earnings report. It didn't give details on their holdings in the third quarter but in the second quarter, Li Ka-shing Foundation held 990 million of the bank's H shares and was the fourth-biggest holder of all shares. Li Ka Shing (Overseas) Foundation held 153 million H shares and was the ninth-biggest shareholder. The moves are unlikely to have much of an impact on BOC's shares as the foundations likely cut their stakes because of their need for cash rather than a loss of confidence in the bank, said Prudential Brokerage's associate Alvin Cheung. "I think the stake cut is based on the funds' strategic arrangement of their portfolios and has nothing to do with the fundamentals of BOC," he said. A spokeswoman for Mr. Li's charitable foundations confirmed the stake reduction, and denied local media reports that Mr. Li had pledged in 2009 to maintain his stake in BOC for five years.

 China*:  Nov 23 2011 Share

The Ministry of Commerce will be asked, by domestic manufacturers, to launch a dumping and subsidy investigation into sales of US solar cells in China. Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance, told China Daily on Sunday that the alliance is finalizing a complaint alleging that US manufacturers are selling their products at prices below cost in China. "The report will be sent to the Ministry of Commerce soon," she said. Gao added that the alliance is also preparing another petition for the ministry regarding an investigation into subsidies allegedly received by US manufacturers. The ministry declined to make any comment on the issue on Sunday. The move is apparently in response to the US anti-dumping investigation into the export practices of Chinese solar cell manufacturers. SolarWorld AG, and several other US-based solar cell companies, filed a petition in October with the US Department of Commerce and the International Trade Commission, alleging that Chinese companies sold solar panels below cost in the US market. The complaint identifies 200 subsidies that the government allegedly provides to the solar industry - including cut-rate raw materials such as aluminum and polysilicon, tax exemptions, massive below-market loans and discounts on land, power and water. The US Department of Commerce and the International Trade Commission officially opened the year-long investigation in November. Polysilicon is a vital component of solar cells and Gao believes that foreign companies have slashed prices of this key product to force Chinese companies out of business. "Foreign companies lowered polysilicon prices greatly in recent years and this has forced many Chinese polysilicon producers to go bankrupt," she said. According to the alliance, many Chinese polysilicon factories stopped or reduced production in the third quarter and more than 2,000 people in the industry lost their jobs in one province alone. Foreign countries, led by the United States, dumped 47,500 tons of polysilicon in China in 2010, 20,000 tons more than the previous year, according to statistics from the alliance. She estimated that sales of polysilicon in the Chinese market will reach 60,000 tons this year. In August, China imported 6,473 tons of polysilicon and in September 6,489 tons, a monthly record high in recent years. Meanwhile, US solar companies are receiving large subsidies from the US government, Gao claimed. Hemlock Semiconductor Group, a US-based polysilicon company, got about $169 million in subsidies in 2010 and Renewable Energy Corporation got $155 million in subsidies for polysilicon production, she claimed. "These companies took advantage of the subsidies to lower prices in China, which seriously damaged the Chinese polysilicon industry," she said. An industry insider, surnamed Hu, in East China's Jiangsu province, where most domestic solar companies are located, said the international price of polysilicon has been falling in recent months and US costs are usually lower than those faced by domestic producers. "US polysilicon producers have advanced technology, complete production lines and large-scale operations, which can help them reduce costs," he said. "They have a longer history and better technology of polysilicon production than most Chinese companies." Another analyst, surnamed Li, who has worked in the solar industry in the country for more than 15 years, said the Ministry of Commerce has to prove that US companies' prices are below their own production costs. "Otherwise, it is normal business competition instead of illegal dumping and US companies are generally more competitive than domestic companies in global market," he said. "To protect our own industry, we, of course, hope that the ministry can start the investigation soon," Li said. "We need to collect enough evidence and it is not a simple task."

China's trade volume with the Association of Southeast Asian Nations (ASEAN) is likely to reach $400 billion this year, Premier Wen Jiabao said on Sunday. Wen made the remarks during a speech at Universiti Brunei Darussalam upon his arrival in Brunei for an official visit, the first by a Chinese premier since the two nations established diplomatic ties two decades ago. "The biggest breakthrough we made in those years (in economic cooperation with ASEAN nations) was the establishment of the free trade area," he said. Brunei is a member of the 10-nation regional bloc. "That has led to the rapid development of trade between China and ASEAN, which is likely to reach $400 billion this year. That means the trade volume between China and ASEAN will surpass that between China and Japan." According to official figures, trade between China and ASEAN reached $295.9 billion in the first 10 months of this year. China has become ASEAN's top trading partner, while ASEAN replaces Japan as China's third-largest trading partner. Still, there is huge potential for Beijing to beef up its economic ties with ASEAN as deals with China only account for 11 percent of its overall trade, Wen added. The premier also raised specified proposals to deepen economic ties with Brunei, including cooperation in offshore oil and gas exploration, as well as upstream and downstream energy cooperation. Brunei is the third-largest oil exporter in Southeast Asia and the fourth-largest natural gas exporter in the world. The Foreign Ministry said earlier that energy deals will be signed during the visit, without giving details. Wen arrived in Brunei on Sunday after he spent three busy days on the Indonesian resort island of Bali at the ASEAN and East Asia summits. The premier told the audience at the university that he came to Brunei to celebrate the 20th anniversary of bilateral diplomatic ties. Ties between the two nations have grown in a stable way mainly because the two countries "respect and treat each other with equality". Located on the northern coast of the island of Borneo in Southeast Asia, Brunei has an area of 5,765 sq km and a population of 406,000. Sultan Hassanal Bolkiah hosted a welcome dinner for Wen on Sunday evening. The two leaders will have an official meeting on Monday before Wen returns to Beijing. Though it has a dispute with China over a small area of the South China Sea, Brunei has maintained a low-profile stance on the issue and stressed it should be settled through mutual consultation. Lu Jianren, an expert on Asia-Pacific studies at the Chinese Academy of Social Sciences, said joint exploration of oil and gas with Brunei is both "a win-win choice and a peaceful way to solve the territorial issue". He added that through closer trade and economic ties with Brunei, one of the initiators of the Trans-Pacific Partnership, China could show its sincerity and openness toward regional economic integration.

Chinese retailers who braced themselves a decade or so ago for an influx of competitors, such as Carrefour and Walmart, have matched, and in some cases, even outclassed their giant international rivals. Fujian-based retailer New Hua Du Supercentre announced last week it would acquire six stores run by E-Mart, South Korea's biggest supermarket chain, for 125 million yuan (HK$153 million). The stores are Jiangsu and Zhejiang provinces. The deal - the first buyout by a mainland retailer of a foreign-invested supermarket in China - will see another Fujian company, Yonghui Superstores, buy E-Mart's only store in Beijing, pending shareholder approval. "Ten years ago many people cried: `the wolf is coming'; thinking international retailing giants would dominate the China market with their `strong' capital and advanced management experience," Pei Liang, secretary general of the China Chain Store and Franchise Association, said. "But now we find that the wolf is not that scary." China opened its retail industry to foreign competitors in 1995, allowing them to form joint ventures with mainland companies. Restrictions were further eased in 2001, when the country joined the World Trade Organisation. Under the WTO deal, China agreed to remove all limits on shareholding, shop numbers, and shop locations for foreign players by 2005. Almost all of the world's top retailers in the world have since opened for business in China. By last August, hypermarket giant Walmart had 189 outlets in China; while its major rival Carrefour had more than 180. Other global players with a China presence include Taiwan-based RT-Mart, Tesco of Britain, Metro of Germany, the CP-Lotus hypermarket chain operated by Thailand's Chia Tai Group, Aeon of Japan, and French retailer Auchan. Pei said foreign companies dominated the hypermarket sector in China, with more than half of the market. But local retailer led in terms of mid-sized supermarkets and convenient stores, which are particularly popular in second- and third-tier cities. "[Local retailers] are fast learners. But more importantly, they have developed their advantages by opening stores in residential communities, being flexible to meet customers' demands, and tapping into multiple businesses," he said. Chong Xiaobing, assistant president of Beijing-based Wu-Mart, one of the earliest supermarket operators in China, remembers the first lesson he learned from a visit to Carrefour's Beijing shop in the late 90's. "Carrefour was the first supermarket in Beijing to use direct mail advertising to promote its products. Before that we hadn't thought of such an efficient way to tell customers what we are selling," Chong said. Since then, site visits to rivals' shops have become part of the job for Wu-Mart's managers. They examine everything in the outlets, from price tags and poster design to product displays and promotions, to learn from them. But Chinese supermarkets have also introduced their own business innovations that have since been adopted by overseas rivals. One was to use a shuttle bus to pick customers up from their neighborhoods and ferry them to supermarkets. The service was first initiated by Merry Mart of Beijing and has since become a regular offering by supermarkets to boost their traffic. Chinese retailers have also been more flexible compared to foreign retailers running large shops in downtown centres. The locals venture deep into residential blocks and rent cheaper and smaller places for shops. They also lease part of their shops to small tenants, such as tailors, small caterers, lottery stations, and chemists, to provide a spread of products and services. In recent years, a number of home-grown leaders have emerged, capturing a bigger slice of market share than foreign brands in regional centres. They include Wu-Mart in Beijing, China Resources (SEHK: 0291)' Vanguard in Shenzhen, Suguo in Nanjing, Yonghui in Fujian province, and Jiajiayue in Shandong. "But so far no local company has become a national leader," said Pei, who expects foreign retailers to speed up their expansion across the nation in the next few years, intensifying competition in the industry. "There are still huge gaps in many invisible aspects [between local and foreign players], from how to establish an efficient and cost-effective sourcing system, to what temperature is the best to store beers displayed in refrigerators. "There's really a long way to catch up for local supermarkets."

Chinese Vice-Premier Wang Qishan warned on Monday the global economy is in a grim state and that an “unbalanced recovery” might be the best option, at talks where senior US officials said the mood at home towards China was souring. The remark marked Wang’s second dire comment on the world economy in just a few days. On Saturday, he said a “chronic” global recession was “certain” and China must focus on its domestic problems. Policymakers globally have expressed increasing alarm at the risks facing the world economy, mainly stemming from financial contagion in Europe. On Monday, Singapore and Thailand forecast their economies would shrink in the fourth quarter and Japan posted a much bigger fall in October exports than expected. “Global economic conditions remain grim, and ensuring economic recovery is the overriding priority,” said Wang, the top official steering China’s financial and trade policy, at the start of the second day of talks. Wang, speaking at the annual US-China Joint Commission on Commerce and Trade, or JCCT, in the southwest Chinese city of Chengdu, also said China and the United States should work together to achieve balanced economic growth. But his comments also suggested that Beijing should attend to bolstering China’s own growth before it worried about global imbalances – in other words, that a strong Chinese economy that brings a continued trade deficit with the United States would be better for the world economy than a slowdown in China itself. “An unbalanced recovery would be better than a balanced recession,” he said. “As major world economies, China and the United States would make a positive contribution to the world through their own steady development,” Wang told dozens of trade, investment, energy and agricultural officials from each government seated in a conference hall. Wang’s Saturday comments on the global economy were the most downbeat to date from a senior Chinese policymaker and weighed down Chinese and Hong Kong stocks on Monday. World markets were also weak, over worries about the euro zone debt crisis, which represents the biggest threat to the world economy. “The one thing that we can be certain of, among all the uncertainties, is that the global economic recession caused by the international financial crisis will be chronic,” Wang was quoted as saying by the official Xinhua news agency. China’s growth is slowing – down to 9.1 per cent in the third quarter from 9.5 per cent in the second-quarter and 9.7 per cent in the first quarter, but the rate remains within the government’s comfort zone. After tightening monetary policy to fight the threat of inflation, the central bank has since loosened its grip on bank credit in a bid to support cash-starved small firms and pledged to fine-tune policy if needed as economic growth slowed down. “It’s clear now that Beijing is ready to make policy fine-tuning [to support growth] at a time when the overall domestic and foreign economic situation is not optimistic,” said Hua Zhongwei, an economist with Huachuang Securities in Beijing. The JCCT talks do not address exchange rate policies, but US officials at the talks warned Wang and his colleagues that they could not ignore rising American impatience with China’s trade policies and investment barriers. US souring with China’s trade-boosting policies spilled into President Barack Obama’s meeting with Chinese Premier Wen Jiabao on Saturday in Bali, when Obama raised China’s exchange rate policies, which many in Washington say keep the yuan cheap against the dollar in order to help Chinese exports. “I think yuan appreciation would bring more benefit than harm to China,” said Zhong Wei, an influential economist at Beijing Normal University in Beijing. “It will force China to improve its economic structure. But the benefits for the United States are nearly zero. “Cheap Chinese goods have been a subsidy for the poor in the US, and now the US government want to eliminate such subsidy while it’s having difficulty creating jobs.” At the heart of the trade friction between the two countries is the US trade deficit with China. It swelled last year to a record US$273.1 billion from about US$226.9 billion in 2009, in spite of both government’s pledges to strive to correct “global imbalances”. The deficit has since come down – Beijing said earlier this month it expects the surplus to be US$150 billion this year – giving China some ammunition for its argument that it has indeed made progress in addressing US concerns. The US Secretary of Commerce John Bryson told the talks that his government welcomed more expanded trade and investment, on balanced terms. “But a reality also is that many in the US, including the business community and the Congress are moving towards a more negative view of our trading relationship, and they question whether the JCCT is able to make meaningful progress,” said Bryson. The first day of the two-day talks “did not make as much we need to,” said Bryson. “It is time to work hard and deliver results,” he added. He and the US Trade Representative Ron Kirk pressed China to make more progress on protecting patents and other intellectual property, opening government procurement purchases to foreign suppliers, and clearing up multinational firms’ worries about policies to encourage homegrown innovation. But Vice Premier Wang had his own salvo of requests: for cutting visa and export red-tape for Chinese businesses; granting China market economy status, so it is less vulnerable to anti-dumping measures; and easing restrictions on Chinese purchases of high-tech goods that Washington deems sensitive. “China is willing to develop even closer and broader economic cooperation with the United States,” said Wang. The outcomes of this session of the JCCT talks will be announced in the afternoon local time.

Female special police is patroling the streets in southwestern China' Chendu city.

The trip to the recent East Asia Summit proved worthwhile for U.S. President Barack Obama. Although the country's "return to Asia" strategy was not well received at the meeting, Obama was able to announce a massive 21.7-billion-U.S.-dollar order for 230 Boeing jets from Indonesia's largest domestic airline, Lion Air. The White House later said that Obama announced business deals worth at least 25 billion U.S. dollars during the trip, supporting around 127,000 U.S. jobs. By contrast, China proposed at the summit to set up a 3-billion-yuan maritime cooperation fund between China and Association of Southeast Asian Nations to promote multi-level comprehensive maritime cooperation with the Southeast Asian nations. China announced in 2009 that it would provide 15 billion U.S. dollars in loans to support more than 50 infrastructure projects in almost all ASEAN countries. This time, China decided to offer ASEAN another 10 billion U.S. dollars in loans, including a preferential loan of 4 billion U.S. dollars. In addition, Japanese Prime Minister Yoshihiko Noda said on Nov. 18 that the country will offer 2 trillion yen, or more than 26 billion U.S. dollars, in aid for the development of infrastructure projects, such as airports and roads in ASEAN countries. At present, the biggest challenge facing the United States is its sluggish economy, so China should pay greater attention to the economic measures of the superpower, which is actively seeking a "return" to Asia. The East Asia cooperation based on the 10+3 (ASEAN countries + China, Japan and South Korea) is now developing prosperously. The trade volume between China and the ASEAN has increased to 37 times as much as it was 20 years ago, and the Southeast Asia has turned into Japanese enterprises' largest overseas investment destination. If Asian countries do not cooperate more closely and reduce their excessive dependence on the Western economy, Asia will turn into a "flooded area" whenever a financial storm comes. Therefore, continuing deepening the practical 10+3 cooperation and strengthening the dominant status of the 10+3 is good for the economic stability and development of the Southeast Asia and even the world. While the United States is participating in the Asia-Pacific Region cooperation, it should shoulder its responsibility as a great power and make more contribution to the cooperation, peace and development of the region. That is the foundation for the United States to obtain profits in the region in the long run. As the largest global economy, the United States should depend on its own efforts to recover its economy. If it only cares about strengthening its dominant status and benefiting itself through "calculation," then it is certain that no Asian country will have time or interest to play the old strategic poker game with the United States.

Foxconn's founder and chairman Terry Guo Saturday said his company won't axe workers in 2012 when it adds 300,000 robots to the assembly line. Guo said in Shenzhen that Foxconn will produce 300,000 robots in the whole of next year, or some 1,000 robots a day, to do routine and more risky jobs to raise the company's productivity. The robots won't affect current staff, he said, pledging no job cuts next year even though the global manufacturing sector is at the bottom and the global economic prospect for 2012 is still uncertain. In July, Guo said Foxconn would replace some of its workers with 1 million robots in three years to cut rising labor expenses and improve efficiency. The robots would be used to do simple and routine work such as spraying, welding and assembling which are now mainly conducted by workers, Guo then said. Foxconn, the world's largest electronics contract manufacturer which assembles products for Apple, Sony and Nokia, is in the spotlight after a string of suicides of workers at its massive Chinese plants, which some blamed on tough working conditions and low pay. Foxconn substantially raised workers' pay at its production base in Shenzhen last year in wake of the suicides and have since then been building more plants in inland regions to reduce labor costs. The company currently has nearly 1.2 million employees at the Chinese mainland plants.

Hong Kong*:  Nov 22 2011 Share

This year's Trailwalker in Hong Kong looked to be the toughest yet, as participants battled high humidity, slippery conditions and at times physical injury - all in the name of ending poverty worldwide. More than 10,000 people - including 4,800 runners and hikers, along with 6,000 support staff and volunteers - joined the Oxfam charity event, now in its 30th year. For many participants - including 64-year-old Antony Wood - it was not so much stamina as sheer willpower that got him and his team through the 100-kilometre trek from Pak Tam Chung in Sai Kung to Yuen Long in the New Territories. "It's the toughest I've ever done, and plenty of others have said the same," said Wood, who joined Trailwalker for the eighth time. "The humidity was astounding. And when you combine that with the very slippery underfoot conditions because of the rain, it really was hard going. Those taking part have shown amazing resilience," he said. He and three teammates aged 66, 64 and 62 - the oldest team to complete the course - put other much younger participants to shame by finishing at a respectable time of 19 hours, 19 minutes. The race, which ends today, can take as long as 48 hours to complete. Much of the excitement was at the head of the trek, where defending champions from the People's Liberation Army (PLA) Hong Kong garrison almost saw their victory snatched away by North Face-Flight. The rival team was closing in on the PLA in the closing stages, but one of its members experienced extreme cramping near the end and dropped down the field. This allowed the garrison to make its third straight podium finish at the Trailwalker. The PLA team clocked in 12 hours and 22 minutes, with second-placed North Face-Flight just three minutes behind. However, it was not the easy victory expected for the army garrison after two years of finishing in the top 2. Ryan Blair, a well-known Hong Kong distance runner, competed with the second-place team and was delighted with the result. "It was just a battle out there, but I take my hat off to the PLA. They have an amazing focus and determination to win this event, which they showed again this year," said Blair, 39. "We were closing on them near the finish, but they deserved their victory." Trailwalker, which began in the early 1980s in Hong Kong as a training exercise by British army regiments, is now held in 12 countries by Oxfam and its affiliates. Over the years, the city's trailwalkers have trekked more than 7.38 million kilometres - equivalent to walking around the earth 184 times. Since Oxfam, a confederation of 15 advocacy groups, took over as organiser in 1986, more than 69,000 trailwalkers have raised HK$340 million for various anti-poverty projects.

Chief executive hopeful Henry Tang Ying-yen yesterday rejected a Beijing loyalist's remark that property developers will decide who gets the top job, saying they were far from powerful enough to dictate the election's outcome. "I don't believe property developers have such a great power to get whoever they support elected as the next chief executive," said the former chief secretary, who announced on Thursday that he would formally declare his candidacy later this month. "If someone said so, it is disrespectful to other members in the 1,200-strong Election Committee [which will select the next chief executive in March]." Tang's comment came after veteran Beijing loyalist Ng Hon-mun said on Friday that the chief executive election would be decided by the city's major businessmen. When asked about suggestions that he had courted property developers for support, Tang declined to comment, saying only: "I have support from many friends." During a visit to Tin Shui Wai yesterday, Tang said he would look into the issue of ensuring fair competition among businesses, as well as better urban planning. He said he hoped this would create more business and job opportunities in the most remote district of Hong Kong. Fellow chief executive hopeful Leung Chun-ying would not comment on Ng's remarks, saying he would continue to canvass support from the Election Committee and the public. Leung is the former convenor of the Executive Council. He said he would formally announce his candidacy next Sunday. Albert Ho Chun-yan, chairman of the Democratic Party, who has obtained his party's endorsement to run for the top job, said Beijing would dictate the chief executive election. Ho said the business community and the pro-establishment camp would look for Beijing's signals in choosing a candidate to support. Regina Ip Lau Suk-yee, chairwoman of the New People's Party, who said last week that she was considering running for the top job, yesterday said that she was not close to property developers, and would balance the interests of various sectors in society. Ip said she would not be ready to make a decision this month.

An idea first investigated more than a decade ago as a way of saving lives on Hong Kong's roads could finally be adopted. The first safety audit of a proposed new road in the city will be carried out by the government. The decision comes as the United Nations World Day of Remembrance for Road Traffic Accident Victims is observed today. If the pilot scheme is a success, safety audits - common practice in much of the developed world - could be adopted for all new roads in Hong Kong. The first audit will be carried out on the proposed Central-Kowloon route running via Yau Ma Tei to Kai Tak. Engineers and road safety activists hailed the initiative. Julian Kwong Tse-hin, chairman of Community for Road Safety, said many roads in Hong Kong were poorly designed and some had metal barriers which could not withstand a collision, leading to more serious crashes. Vincent Chan Man-hong, of the Chartered Institution of Highways and Transportation, said he did not believe Hong Kong's roads were particularly unsafe, but added: "With road safety audits, the chance of having traffic accidents can be further reduced." The audits cover the layout of the road, bends, gradients, barriers, road signs and even drainage and are carried out by an independent team. The Transport Department employed consultants to start studying the possibilities of introducing road safety audits for Hong Kong as early as 2000. A department spokesman could not say why it had taken so long to adopt the system. In July 2003, a truck crashed into double-decker bus and pushed it through the parapet of Ting Kau Bridge on Tuen Mun Road, killing 21 people and injuring 20. Despite calls from the public to establish a safety audit system, a panel set up to examine the cause of the accident recommended only a comprehensive safety review of Tuen Mun Road. Yesterday alone, at least 47 traffic accidents happened across the city that caused injuries, according to the government's Information Services Department. The actual number could be larger, as not all accidents are reported. Inside Shing Mun Tunnel, which connects Tsuen Wan and Sha Tin, a vehicle caught fire as it was travelling towards Tsuen Wan. Its male driver had to escape from the burning car. In Tsuen Wan, a double-decker bus hit a bunch of bamboo poles on the pavement, with the flying wood injuring a female passer-by. A taxi lost control in Shanghai Street, Mong Kok, and mounted the pavement, injuring a pedestrian. The 70-year-old driver apparently felt unwell and was hospitalised. Road safety consultant Kwong, of Community for Road Safety, said Hong Kong lagged behind other countries on road safety. The audit system is currently operated in Britain, the United States, Singapore and Australia. Kwong said that while sections of a road may comply with international standards, the audits would help build a picture of the overall safety of the route. "We hope this will not turn into merely a procedure that requires people to write many reports and fill in forms. We hope there will be quality road safety audits in Hong Kong." According to police figures there have been 12,586 traffic accidents in Hong Kong in the first 10 months of this year, up 198 year-on-year. In the same period 102 people died in traffic accidents, seven more than last year. Kwong added: "The situation clearly demonstrates the inadequacy of the current approach and the need for a far more aggressive road safety strategy." Chan said Hong Kong had about 100 to 150 traffic engineers and it would not be difficult to train them to become qualified auditors.

Jaap van Zweden, newly crowned US Conductor of the Year, is in spotlight as he auditions for Hong Kong Philharmonic's top spot with concert series this month. One of the conductors vying for the post of artistic director of the Hong Kong Philharmonic Orchestra has scooped a top international award. Jaap van Zweden, music director of the Dallas Symphony Orchestra and one of the world's leading conductors, was named Musical America's Conductor of the Year 2012 two weeks before beginning a concert series with the Hong Kong Philharmonic last Friday. "I thought the award would go to [Los Angeles Philharmonic chief] Dudamel or [New York Philharmonic chief] Gilbert. But they picked me. It was interesting," said the Dutch conductor, who is to receive the prize from the performing arts news outlet in New York next month. The maestro, 51, is one of a dozen candidates aiming to succeed Edo de Waart as leader of Hong Kong's top orchestra. Though it has not been formally announced, they are auditioning by acting as guest conductors for major orchestral works. Others include the former music director of the Milwaukee Symphony Orchestra, Andreas Delfs, the Japan Philharmonic's Alexander Lazarev and Vienna Philharmonic veteran Johannes Wildner. The exercise will finish at the end of the season in July. Van Zweden has a long association with de Waart. He was concertmaster of the Concertgebouw orchestra in Amsterdam for 16 years, with which de Waart guest-conducted and recorded. In 2004, he succeeded de Waart as music chief of the Netherlands Radio Philharmonic Orchestra. And next year, de Waart will succeed him to lead the Royal Flemish Philharmonic. "I think there is an advantage for me to work at an orchestra previously led by Edo, although we are totally different," Van Zweden said. "Edo is more an orchestra-builder, and I am more on the performance side." According to orchestra board chairman Liu Yuan-sung, the candidates will be evaluated anonymously by all members of the orchestra and the results will go to the search committee for consideration. "Players will comment and rank the conductor's technique, musicianship and chemistry with the orchestra on a five-point scale," Liu said. "But the final decision rests with the search committee." Despite the prospect that orchestra members may influence the verdict, van Zweden did not go easy on them during rehearsals. He remained sharply critical as he fine-tuned the orchestra for the Asian premiere of Philip Glass' double concerto. "All my bones ached after those rehearsals," said one violin player. But to van Zweden, there is only one way to make music, which he calls the way of life. He believes all musicians have the potential to reach that mentality. "If something is to happen between me and the orchestra, it must be out of free will," he said. "I will not tell them: `Oh, you are so fantastic and great' in order to win the contract. I am not interested in that. "All I am interested in is how far I can stretch them and improve them. That would be the moment for me to say, `Hey, that has potential to be an interesting marriage'." He believes a lasting relationship should not be rushed into, but be built on trust and respect. The first criterion he has for working with an orchestra is that he feels welcome. "As conductors, we are no longer tyrants. Instead we should recognise the orchestra as people we can talk to, share thoughts with and feel for."

The controversial bridge project to link Hong Kong with Zhuhai and Macau was given the green light yesterday as lawmakers approved HK$48.53 billion in funding. Secretary for Transport and Housing Eva Cheng pledged that construction would start by the end of the year. Despite delays caused by a judicial review, the authorities aim to have the bridge finished by 2016, the date originally planned. "Due to the judicial review, the project was delayed for more than a year. It has now come to this stage against all odds," Cheng said. The government said the delay might have pushed up costs by HK$6.5 billion. The funding approval came almost two months after the Court of Appeal confirmed the validity of the environmental permits issued for two key elements of the project in a ruling against Tung Chung resident Chu Yee-wah, who filed the judicial review in January last year. Construction was originally due to begin by the end of last year. The funding includes HK$30.43 billion to build boundary-crossing facilities, HK$16.19 billion for the detailed design and construction of the Hong Kong Link Road, and HK$1.91 billion for the detailed design, site investigation and preliminary work at the Tuen Mun-Chek Lap Kok Link and Tuen Mun Western Bypass. This is on top of the HK$10.3 billion already approved between 2003 and 2009 for preliminary works. Cheng said yesterday that she expected the project to create about 14,000 jobs. Construction methods would change and the number of workers would rise to meet the project's compressed timetable. Lawmakers who opposed the funding included People Power's Wong Yuk-man and Albert Chan Wai-yip, and League of Social Democrats legislator "Long Hair" Leung Kwok-hung.

Hong Kong's civil aviation regulator says it will not recruit more air traffic control officers over the next two years despite complaints of near misses which staff blamed on a shortage of manpower. In the first 10 months of the year the Civil Aviation Department recorded 15 near misses - meaning two aircraft came within five nautical miles (9.26 kilometres) - a jump of 66 per cent from nine such incidents for the whole of 2010. The department said none of the incidents had safety implications, and that statistics for the past five years did not indicate a rising trend. However, Tsang Yuk-poon, chief airworthiness-standards officer, said yesterday the department was considering whether such incidents should in future be reported to the public, as they occurred after a spate of media reports caused public concern to increase. Raymond Li Kwok-chu, chief air traffic control officer, denied the incidents had anything to do with insufficient manpower, and dismissed suggestions that the department should import experienced air traffic control officers from overseas. "We considered [importing staff], but after balancing this with other factors we decided our resources would be better spent on training our own people, because it takes time for an expatriate officer to adapt to our system, and after all the training they are bound to stay for only two years under our current system." The department recruited 120 trainees for air traffic control over the past five years - 48 have graduated so far and of the 72 still in training it is assumed, from previous years, that 85 per cent will pass. Li said 60 new graduates would join the team in the next four years, which he said was sufficient to handle projected hourly aircraft movements of 68 in 2015. Li said they would resume recruitment in 2013. In September the South China Morning Post (SEHK: 0583, announcements, news) reported a near miss between a Cathay Pacific (SEHK: 0293) plane and a Dragonair jet carrying a total of more than 600 passengers. The airliners came within one nautical mile of each other, a distance which two aviation experts said could have led to a collision in six seconds if the two were heading towards each other. An air traffic control officer later wrote to the Post blaming labour shortages for the incidents, saying that controllers' rest time had been slashed from an hour to just 30 minutes for every two hours' work. Many had also been forbidden from taking leave despite having accumulated over 100 days of holiday. Li said yesterday that the 30-minute rest time followed international guidelines, and any extra time off was authorised at the discretion of senior officers. He said that even at 15 near-miss incidents a year Hong Kong's airport still performed two to three times better than ones in the West handling similar traffic volumes. Meanwhile, an investigation into an incident last July in which an AgustaWestland 139 helicopter was forced to ditch into the water in Victoria Harbour has found that the quality of the plane's tail rotor was not up to manufacturing standards. Further inquiries are being made to determine how that happened. Sky Shuttle - owned by casino tycoon Stanley Ho Hung-sun - is still flying five AW139s on its routes between Hong Kong and Macau and Macau and Shenzhen.

 China*:  Nov 22 2011 Share

Photo taken on Nov. 19, 2011 shows gold decorations of Chinese Long (dragon) at a shop in Nanjing City of east China's Jiangsu Province. According to the Chinese traditional lunar calendar, it is still two months to go to embrace the Year of Dragon, however, business operators in China have been busily engaged in promoting dragon-related products in a hope to boost sales. 

A Long March 2D carrier rocket carrying Chuangxin 1-03 and Shiyan Satellite 4 blasts off from the launch pad at the Jiuquan Satellite Launch Center in northwest China's Gansu Province, Nov 20, 2011. The launch was the 151th of China's Long March series of rockets. The Chuangxin 1-03 will be used to collect and relay hydrological, meteorological, and electric power data as well as data for disaster relief. The Shiyan Satellite 4 will be used for space technology experiments and environmental observation. BEIJING - China on Sunday morning put two satellites into orbit from the Jiuquan Satellite Launch Center in northwest China's Gansu Province. The satellites, Chuangxin 1-03 and Shiyan Satellite 4 were launched on a Long March 2D carrier rocket at 8:15 am Beijing Time, said a Xinhua photographer, who witnessed the whole process. The Chuangxin 1-03, developed by the Chinese Academy of Sciences, will be used to collect and relay water conservancy, hydrological and meteorological data and data for power supply and disaster relief from monitoring stations. The Shiyan Satellite 4 will be used for experiments on space technologies and environment probe. Developed by the Chinese Research Institute of Space Technology, it is the country's fourth technology experiment satellite. The launch was the 151th of China's Long March series of rockets. The Long March-2D is one of the derivations of Long March-2. China started development of modern carrier rockets in 1956, and Long March rockets have become the main carriers for China's satellite launching.

Tsai Ing-wen, the former academic seeking to become Taiwan's first woman president, signalled she would avoid antagonising Beijing if elected - after a predecessor's push for independence led to eight years of tensions. "I am not known as a provocative person," said Tsai (pictured), who is looking to return the Democratic Progressive Party to power after Chen Shui-bian left office in 2008. "The DPP is a very different party now." Tsai has erased the lead of Nationalist party incumbent Ma Ying-jeou in a survey conducted by Taiwan's largest cable-TV operator as a widening wealth gap and high property prices spur voter discontent. A win for Tsai in the January 14 election would risk disrupting closer ties with the mainland that helped power Taiwan's recovery from the global recession. Beijing regards Taiwan, ruled separately since a civil war ended in 1949, as its own territory and was enraged when the DPP's Chen pushed for recognition as a sovereign nation during his presidency. Tsai has eschewed talk of independence for the island of 23 million during her campaign, focusing on domestic issues and criticising the pace of Ma's push to forge closer economic links with the mainland. Ma's lead against Tsai has evaporated, a TVBS Poll Centre survey showed yesterday. The two were tied at 39 per cent, compared with 38 per cent for Ma versus Tsai's 34 per cent on October 15. The margin of error was 2.7 percentage points. James Soong, chairman of the People First Party, had 9 per cent support, down from 15 per cent, the survey showed. "It's an extremely close election," said Bonnie Glaser, a China expert in Washington. "The biggest problem is that the mainland associates [Tsai] with the state-to-state doctrine so they are very suspicious of her." Last week, Wang Yi , director of the mainland's Taiwan Affairs Office, urged voters in Taiwan to help "maintain warm relations with Beijing". Wang stressed that the "1992 consensus" - under which both sides agreed there was only one China but that each could interpret this their own way - should not be questioned, the cross-strait relationship should not move backwards, and peace and the interests of both sides should be looked after. Meanwhile, Taiwan's United Daily News reported yesterday that the general office of the Communist Party's Central Committee ordered all provincial party heads last month to clear up all 58 unresolved disputes concerning Taiwanese investments on the mainland before mid-January, a deadline that coincides with Taiwan's election. The report said it was the first formal political document issued directly by the party to help Taiwanese businessmen protect their mainland interests.

Premier Wen Jiabao joins hands with Japanese Prime Minister Yoshihiko Noda (centre) and South Korean President Lee Myung-bak. Leaders of Japan, China and South Korea agreed yesterday to seek a trilateral investment treaty by the end of the year as a way to speed up talks on a free-trade pact among the three countries, a senior Japanese official said. They also agreed to finish studies by their governments, industries and researchers on the proposed free-trade agreement by the end of December so they could start formal negotiations on it. Japanese Prime Minister Yoshihiko Noda told his Chinese and South Korean counterparts at a trilateral summit it was time to seal the investment treaty as their four-year-long negotiations were getting close to bearing fruit. "The liberalisation of investment rules is one of the big elements for broader free-trade pacts," the Japanese Foreign Ministry official said. "Prime Minister [Noda] stressed the importance of having a fully fledged investment treaty in order to move forward to the Japan-China-South Korea" free trade agreement. The official declined to give details on the investment treaty as it was still under negotiation. But an investment treaty in general would boost legal stability for investment and give companies a better ability to make predictions about their business environment. Noda met Premier Wen Jiabao and President Lee Myung-bak on the Indonesian island of Bali ahead of the East Asian Summit, where boosting economic co-operations in the region was on the agenda. Earlier, Japan assured Asia and key ally United States Tokyo was not choosing sides between Beijing and Washington over sensitive trade and security issues, in a balancing act to avoid past perceived mistakes of upsetting its partners. With rivalry between the United States and China in the spotlight at the East Asia Summit, Japan welcomed the recent announcement of greater US military presence in Australia while seeking stronger strategic ties with Beijing. "I welcome that the United States is deepening its presence in Asia-Pacific but that should not be simply taken to mean that it's a threat to China," Noda told reporters on Friday. "On the other hand, we will seek to deepen the mutually beneficial relationship based on common strategic interests with China. China's development is an opportunity for Japan." Meanwhile, Australia also vowed it could maintain ties with both the United States and China, after plans to station 2,500 US marines in the country's north irked Beijing. "The United States strongly engaged in our region is a force for stability and is supported by Australia," Australian Prime Minister Julia Gillard said on the sidelines of the East Asia Summit. "We will continue to have our alliance with the United States and friendship with China," the prime minister said.

Work goes on at a residential construction site in Shanghai. But with the price of new homes falling in more cities, experts are questioning the need for further tightening. The residential price correction has spread to nearly half of mainland cities, a downturn that is expected to ease political pressure for more cooling measures. National Bureau of Statistics data showed the average price of new private housing fell in 34 of the 70 major cities surveyed, compared with only 17 cities in September. Home prices in 20 major cities remained unchanged. Only 16 cities recorded property price growth last month, compared with 24 cities a month ago. The average price of new homes in first-tier cities including Beijing, Shanghai, Guangzhou and Shenzhen began to slide last month, with prices falling 0.1, 0.3, 0.2 and 0.1 per cent from September respectively. In financially stricken Wenzhou, the average price dropped 4.9 per cent, the sharpest fall among all the mainland cities surveyed. "The number of cities which registered month-on-month property price declines has broadened out pretty significantly in October," said Lee Wee Liat, regional head of the property department at Samsung Securities. During the downturn of 2008, 50 out of 70 major cities recorded price declines after the government invoked a series of cooling measures. In the secondary market, the price correction is also obvious. Last month, average prices of second-hand homes fell in 38 of the 70 major cities. Only 25 cities recorded price declines a month earlier. Prices of secondhand flats in Shanghai and Guangzhou also began to fall last month. Lee said the property price decline had broadened, a sign the government's policy was having the desired effect. "As such there is no need for more tightening," he added. "At the same time, I think the government should start to be cautious about property prices correcting on the downside as it will inevitably affect the economy," Lee suggested the policy should start to be more balanced, and officials should be prepared to limit the downside of a property price decline. Alan Chiang Sheung-lai, of property consultant DTZ, said most developers had cut the asking prices of their new projects to boost sales. "Only small flats and flats with cheaper prices have received a better market response in the last few months as demand from end-users remains strong. Sales of luxury flats have stayed at low level." He believes the cooling measures in the property market will continue over the next few months, adding: "I don't think the government will relax the measures in the short term. "Our survey showed prices of new homes in first-tier cities dropped 5 to 8 per cent last month. We expect the prices will drop a further of 15 to 20 per cent in the next few months."

The yuan exchange rate did not cause the trade imbalance between China and the United States, and its appreciation alone would not end high US unemployment, Chinese Ambassador to the US Zhang Yesui said here Friday night. Zhang was speaking before a group of Chinese and US business leaders at an event to celebrate the 6th anniversary of the China General Chamber of Commerce-USA. "The trade imbalance is caused by a combination of factors, including the structural trade and investment differences, divergent patterns of saving and consumption, and the international division of labor, rather than an issue of the RMB (yuan) exchange rate," he said. He said it was important to note that, despite the yuan's nearly 30 percent appreciation since July 2005, US unemployment rates had increased from 5.1 percent in 2005 to 9 percent now. "This proves that RMB appreciation alone will not help to reduce the unemployment rate in the US," he said. Zhang reaffirmed that China would continue to progressively promote the reform of the RMB exchange rate regime and make the exchange rate more flexible in a self-initiated, gradual and controllable manner. He said China's trade with the rest of the world was moving toward greater balance, with a declining trade surplus on a yearly and even monthly basis. Official data showed China's imports grew 5 percentage points higher than exports in the first 10 months this year, and the trade surplus was down sharply by 16 percent in the same period, with the trade surplus accounting for less than 1.4 percent of total gross domestic product (GDP), he said. "In general, China's trade is basically balanced, and China's balance of international payments is within a reasonable range," Zhang said. Against the background of low economic growth and high unemployment rates, the US Senate passed a currency bill targeted mainly at China. Zhang said he did not think legislation was the appropriate mechanism by which to address the currency issue, because to invoke protectionist measures would only push China and the US to the brink of a "trade war." A trade war, he stressed, was exactly what should be avoided at a time of sluggish world economic growth and international financial instability. Zhang highly valued the China-US relationship, saying it was not and should not be a zero-sum-game relationship. He called for a true partnership which would not only benefit the two countries but also the world.

Hong Kong*:  Nov 21 2011 Share

Couples may get to be married at King Yin Lei, the historic mansion saved from demolition in Stubbs Road, if the government adopts a revitalisation proposal. The Lifestyle Group, which manages the renovated century-old Western Market in Sheung Wan, revealed its plan yesterday. It comes as the Development Bureau set out conditions for revitalising four historic buildings. Interested organisations and developers can submit proposals over the next three months. The three other heritage buildings being offered for non-profit use are Haw Par Mansion in Causeway Bay, Bridges Street Market in Sheung Wan, and the former Fanling Magistracy. These buildings, which hold memories for many Hongkongers, attracted more than 100 representatives from 52 organisations to the government briefing yesterday. Structural alterations will not be allowed at King Yin Lei mansion because it is a declared monument, which some at the briefing said limited the creative uses of the property. George Wong Fuk-wah, managing director of the Lifestyle Group, said holding weddings at the mansion required no architectural changes. "It is also a profitable business that will sustain the operation for years," he said. Wong said his firm had been managing Western Market, another declared monument, for the Urban Renewal Authority since 2003, and had found ways of reviving business. For example, a traditional Chinese restaurant on the market's second floor can be turned into a "grand stage", allowing couples to hold wedding ceremonies and banquets at the same venue. "We receive about 40 booking requests a day, which of course is far more than we can handle," Wong said. "About 30 per cent of local weddings take place at non-traditional venues instead of churches and restaurants now." The firm's proposal for King Ying Lei calls for replacing the swimming pool with a small 1930s-style chapel, in keeping with the mansion's design period. Couples could have their wedding ceremonies on-site, which would also be ideal for photography and cocktail receptions. However, banquets would not be practical because of the lack of kitchen space. Wong said his firm was mulling a similar proposal for Fanling Magistracy. Other groups at yesterday's briefing included artists hoping to convert the Bridges Street Market into a Cantonese theatre venue.

Happy expat Fanny Duguet (left) and Consul Arnaud Barthelemy toast with guests at the consulate in Admiralty yesterday. The French consulate yesterday celebrated the registration of its 10,000th citizen in Hong Kong. Fanny Duguet, the project manager for the Swiss luxury goods group Richemont, who arrived in Hong Kong at the end of August, was given free tickets for the premiere of the upcoming "French Cinepanorama" film festival. Consul Arnaud Barthelemy, toasting with champagne with members of the French community, attributed the rapidly growing French presence to the city's service-oriented economy and its proximity to the mainland. He said the French community was young and dominated by entrepreneurs and families with children. "French people are quite happy in Hong Kong," he said of a community that probably numbers as many as 15,000, as not all expatriate nationals register with the consulate. Duguet, 41, said that the day she heard she was the 10,000th citizen was extra special because her husband, Stephane, had also heard he had found a job in the city.

Apple Inc. has begun accepting payment in Chinese yuan for purchases in its online App Store, the company's latest expansion in what has become a key growth market. The change makes it easier for users in China to pay for software applications for iPhones, iPads and iPods. Customers of more than 20 Chinese banks can now make payments to an App Store account to buy games and other downloads. They previously needed a dual-currency credit card—a requirement that led many to either hack their iPhones in order to use apps from other sources, or make purchases in the App Store using false identities and fraudulent gift cards. After long neglecting the Chinese market, Apple has been aggressively expanding in the country in the last two years—opening new retail stores, an ecommerce site and a version of its App Store using simplified Chinese characters, making it easier for local users to navigate. The company's revenue from Greater China rose to more than $13 billion, or 12% of its overall business, in its fiscal year ending in September. That is up from a little more that $3 billion at the end of its 2010 fiscal year. Its recently opened Hong Kong store is one of its largest revenue generators. China is also the hub of Apple's manufacturing, Most of its iPhones and other gadgets are assembled in Chinese factories by subcontractors and then shipped around the globe. Apple is most likely to use its yuan to pay employees and suppliers in China, analysts said. Converting yuan to dollars in order to repatriate profits can mean navigating a difficult bureaucracy, a factor behind many U.S. companies' decision to conduct their trade in China in dollars. "I think there's a natural need" for Apple to use yuan within China, given the large amount of manufacturing done there, said Caroline Owen, head of debt capital markets, North America, at Standard Chartered. An Apple spokesman declined to comment on what the company would do with the yuan. Apple is likely to sell "millions" more applications in China because of the change, though some users will still load pirated apps, said Duncan Clark, chairman of Beijing-based consulting firm BDA China Ltd. Like other tech and media-related companies, Apple sometimes faces extra regulatory hurdles to offering its products in China. The first iPhones that Apple sold in the country came with Wi-Fi wireless Internet capability disabled to comply with government regulations. Several iPhone apps related to the Dalai Lama appear in other countries' versions of the App Store but not in China's. Apple's iPhone took a 10% share of the nearly 22 million smartphones sold in China in the third quarter, ranking the company fourth behind Nokia Corp., Samsung Electronics Co. and Huawei Technologies Co., according to market-research firm Gartner Inc.

Cosco Shipyard along with Hong Kong-headquartered ship management and chandlery companies are among the top 50 unsecured creditors after New York-listed tanker operator General Maritime (Genmar) filed for bankruptcy protection in the United States on Thursday. Jeremy Harwood, a partner in law firm Blank Rome, said it was the "largest maritime bankruptcy ever filed in the US" but it was unlikely to be the last given the state of the shipping markets. Documents filed in the US Bankruptcy Court in New York show Genmar had total debts of US$1.4 billion including a US$300 million bond up to the end of September. Total assets, mainly the firm's fleet of 33 tankers, were valued at US$1.7 billion. Hong Kong's Anglo-Eastern Group, which provides ship and crew management and supervisory services for ships under construction, was owed US$953,335 by Genmar, followed by mainland shipbuilder Cosco Shipyard (Zhoushan) which was owed US$921,932. Court papers show a further US$109,328 was due to Kylin Worldwide (Hong Kong), which supplies marine paints and other coatings, while Wallem, another ship management and ship services firm, was owed US$48,402. Anglo-Eastern chief executive Peter Cremers said Genmar remained a client "so it may not be strategically correct I make comments". But he added: "At this moment, at our level it seems very much business as usual as ships need to earn money. Hence they need to be running, hence operating costs need to be funded." The company manages the day-to-day operations, including providing crew, of several Genmar tankers from its Singapore office. Harwood said a further court hearing was due to be held yesterday that would seek the judge's approval of key elements of Genmar's corporate restructuring. This included clearance for a restructuring agreement that was signed on Wednesday between Genmar, senior secured creditors and OCM Marine Investments, part of Oaktree Capital Management. This would see OCM Marine Investment inject US$175 million of new equity that would be used to fund a reorganisation plan and convert debt to equity. Further equity investment would also be sought. The judge is also likely to agree to Genmar suspending bank loan repayments for up to three years. If the bankruptcy protection plan is approved, Genmar said it could emerge "from bankruptcy in the spring of 2012". Harwood said Genmar's move to seek bankruptcy protection would trigger three or four other shipping firms to file for protection over the next two or three months as they fell victim to poor shipping markets. Shipping companies that had used their cash stockpiles to fund operations since the 2008 financial crisis, when tanker and dry cargo markets crashed and had barely recovered three years later, were now running out of money. "It's going to be a very, very rough six months," Harwood said. While Genmar's financial difficulties were partly caused by the US$620 million purchase of seven tankers last June, the company was also hit by lower charter rates. As a result, spot earnings shrank from US$25,911 per day in the first quarter of last year to US$13,043 per day in the fourth quarter. Average earnings for a supertanker are now about US$20,000 per day, according to Clarkson, the British shipbroker. Harwood said Genmar had "bought a fleet at the top of the market and got overextended". The drop in charter rates had squeezed Genmar's cash reserves as freight revenues barely covered operating costs, while banks also took a tougher line. Nigel Binnersley, a partner in the Hong Kong office of Blank Rome, said decisions favouring other overseas shipowners by the US bankruptcy courts meant "foreign operators with little or no obvious connection with the US can now quite easily seek bankruptcy protection relief. For distressed shipowners looking for a `loan holiday', this looks to be attractive option and one which they should at least consider taking".

 China*:  Nov 21 2011 Share

Chinese Premier Wen Jiabao (2nd R, front) speaks with U.S. President Barack Obama (L, front) before the East Asia Summit gala dinner in Bali, Indonesia, Nov. 18, 2011. 

Premier Wen poses for group photos with other leaders before East Asia Summit gala dinner. Chinese Premier Wen Jiabao (4th L, front) poses for group photos with other leaders before the East Asia Summit gala dinner in Bali, Indonesia, Nov. 18, 2011.

Strong demand in investment and jewelry will drive China's total gold demand to 750 tonnes this year, the World Gold Council (WGC) said here Thursday. Buying gold as means of investment has become a more common choice for Chinese in the past third quarter as it is viewed as a safe investment during these uncertain economic times, said the WGC in its Gold Demand Trends report for the third quarter of 2011. Demand for gold bars and coins in China expanded by 24 percent from a year earlier to 60.2 tonnes in the third quarter. In the first nine months, total investment demand reached 204.1 tonnes, said Zheng Lianghao, managing director of the WGC's Far East division. Meanwhile, Chinese gold jewelry demand was 13 percent higher year-on-year at 131 tonnes as retail chains expanded their networks in smaller cities to meet increasing demand fuelled by rising income levels, said Zheng. This compares to a global demand of 465.6 tonnes jewelry in the third quarter, down 10 percent year-on-year. Globally, gold investment demand reached 468.1 tonnes in the third quarter of 2011, up 33 percent from 352.1 tonnes in the corresponding quarter in 2010. "Unsurprisingly investment demand for gold was a key driver during the third quarter," said Marcus Grubb, Managing Director of Investment. "Increasing levels of inflation, the U.S. credit rating downgrade, a worsening eurozone sovereign debt crisis and the lackluster performance of many assets drove investors to increase holdings in gold in order to protect their wealth," he said. He said investors are likely to continue to seek protection from economic uncertainty, which shows no signs of abating. Global gold demand in the third quarter of 2011 increased 6 percent year-on-year to reach 1,053.9 tonnes, up from 991.1 tonnes in the third quarter of 2010, according to the WGC. Gold supply was 1,034.4 tonnes in the third quarter of 2011, 2 percent higher than year-earlier levels of 1,013.0 tonnes, it said.

Despite massive debts from existing infrastructure projects, Beijing is determined to invest more than 500 billion yuan (HK$612 billion) to make Yunnan a Southeast Asian gateway. "Yunnan is our nation's land passage to Southeast Asia and South Asia. Its strategic position is very important," the State Council said on the government website. "To improve our country's overseas links, the State Council supports the acceleration of the development of Yunnan as an important bridgehead to its southwest neighbours." Authorities want to improve the province's transport, logistics, energy, waterways and information infrastructure by 2015, and to complete several links to Southeast Asia by 2020. The State Council has called for the completion of a railway linking Kunming, Yunnan's capital, Changsha, and Hangzhou as well as a line between Dali in Yunnan and Ruili on the China-Myanmar border. It also wants expressways built, including one between Kunming and Guangzhou. In addition, it designated the new Kunming Airport as a major aviation hub for western China, with auxiliary airports in cities including Lijiang, Dali and Shangri-La. The new Kunming Airport, with an investment budget of 23 billion yuan, aims to achieve an annual passenger throughput of 38 million and 303,000 flights by 2020, according to the airport's website. In July, the Ministry of Transport signed a partnership agreement with Yunnan supporting the province's plan to invest 500 billion yuan into 126 projects to transform the province into a transport hub by 2015. This was two months after Yunnan Highway Investment, an investment arm of the Yunnan government, announced it could not repay 90 billion yuan in bank loans for highway construction projects. Yunnan and 11 other provinces have incurred 759 billion yuan of debt from building toll roads, the South China Morning Post (SEHK: 0583, announcements, news) reported on October 18. Late last month transport authorities admitted the nation's construction projects faced funding shortages. "The idea of infrastructure investment in southwest China is not a bad one. Southwest China has always lacked infrastructure. That has been a critical obstacle to development. The key is finding a sustainable way of funding it," Patrick Chovanec, professor of the school of economics and management at Tsinghua University, Beijing, said. "The question is, what is the appropriate funding and time frame to achieve this? You need a rational time frame for the construction of infrastructure projects and not build them too quickly." Chovanec said there was "tension in public policy in China between building stuff to drive GDP growth and reining in inflation" and infrastructure investments had fuelled inflation. "China sees Southeast Asia as its backyard, as part of its attempt to claim the status of regional power. This could have something to do with its competition with other powers including the US and Japan, to gain a firmer foothold in Burma and Laos," Pavin Chachavalpongpun, a researcher at the Institute of Southeast Asian Studies in Singapore, said. "China is trying to accomplish several goals via infrastructure and energy projects in Yunnan. One goal is to decrease dependence on the Straits of Malacca, where 80 per cent of its oil imports currently pass through," Paul Donowitz, of Earthrights International, an advocacy group on human rights and environmental issues, said. "Another motivation is to fuel industries in Yunnan and western China as part of Beijing's `go west' strategy. The recent suspension of the Myitsone Dam has caused concern in Beijing and among Chinese companies who wonder whether their investments are safe in Burma. However, China is the fastest-growing investor in Burma, and although the authorities are reluctant to become overly dependent on China, the leaders will continue to encourage Chinese investment even as they encourage the ending of Western sanctions and increased investments from other countries. "The biggest challenge to Chinese investment in Burma is the widespread resentment of the people of Burma to the influence of China ... If the people of Burma do not begin to see benefits from these projects, there will be more resistance, as in the Myitsone case." The dam, on the Irawaddy River, was planned to provide 90 per cent of its power output to southern China. In Shan state, near the border with Yunnan, the Myanmar army was attacking ethnic groups, with the aim of securing a corridor for a gas and oil pipeline, Donowitz claimed. The pipeline, controlled by CNPC (SEHK: 0135), the largest Chinese state-owned energy firm, runs through northern Myanmar into Yunnan and is scheduled to be completed in 2013. Large infrastructure projects in Myanmar were often located in ethnic minority areas, Sean Turnell, an associate professor at Macquarie University in Australia, said. "This, coupled with the dislocation of people and environmental destruction, make these projects a lightning rod for anti-Chinese sentiment." Myanmar and Laos felt ambivalent about China's growing influence, Pavi said. "On the one hand, no country can deny China has been rising. But the overwhelming presence of China in these two countries could sometimes backfire. Many bad practices that come with Chinese investment are unwanted. Look at the Myitsone dam project in Myanmar."

China should further open its markets to foreign companies, the US ambassador to China Gary Locke said yesterday, while advocating Washington should also break down regulatory barriers for Chinese investments in America. Locke criticised the Chinese business environment as being opaque and stacked against foreign companies. "The single biggest obstacle is a lack of openness in the Chinese economy," Locke said in a speech to a conference in Beijing, ahead of key trade talks between the two countries which start tomorrow. Analysts expect Beijing's currency controls, market access restrictions and lax intellectual property rights protection to top the agenda for the annual meeting of the US-China Joint Commission on Commerce and Trade. Locke said China had shut out foreign players in mining, power generation and transport, and called on China to liberalise the financial services sector, from banking to electronic payments. He also called for a tougher crackdown on intellectual property theft, which he said was widespread on the mainland. At the same time, Washington will seek to increase Chinese direct investment in the United States. Foreign direct investment accounted for five million jobs in the US, Locke said, including employees of Chinese firms. He said the US would like to issue five-year visas to Chinese visitors and called on Beijing to consider offering reciprocal treatment to American travellers. Meanwhile, US Defence Secretary Leon Panetta appeared to call China and India "threats" on Thursday, in comments that the Pentagon quickly sought to correct. Panetta, addressing workers at a submarine plant in Connecticut, was talking about emerging challenges facing the US as it looked beyond the Iraq and Afghan wars. "We face the threats from rising powers, China, India, others that we have to always be aware of," Panetta said. Pentagon spokesman Captain John Kirby moved to correct the record, saying Panetta believed that relationships with both China and India were absolutely vital. "Any suggestion that he was implying either country was a military threat is just false," Kirby said.

Chinese Premier Wen Jiabao shakes hand with his Indian counterpart Manmohan Singh at the East Aisa Summit held on the island of Bali, Nov 18, 2011. Chinese and Indian prime ministers vowed on Friday to "eliminate disturbance" and improve bilateral ties, which both sides said they greatly cherish despite recent disputes. "China would like to make efforts with India to eliminate disturbance and stick to the path of friendship, mutual trust and cooperation," Premier Wen Jiabao told his Indian counterpart Manmohan Singh on the eve of the East Asia Summit on the resort island of Bali. The meeting between the two leaders came a few weeks after Beijing and New Delhi quarreled over India's overseas oil exploration in the South China Sea. Despite differences, Singh told Wen that India was committed to developing the "best of relations" with China. "We are neighbors and also large, growing economies of Asia. We should cooperate bilaterally and globally," Singh said. "There are enough areas where India and China can enhance cooperation." Singh, noting that the two leaders had been meeting on the sidelines of each of the ASEAN summits held during the last six years, told Wen that he had "benefited enormously" from his conversations with the Chinese leader on each occasion. "No force in the world can stop the growth of relations between China and India," said the Indian prime minister, according to a news release from the Foreign Ministry. The two premiers also agreed in the 55-minute meeting to work toward resolving border issues and maintaining peace and stability along the border. In recent years, India has entered a deal with Vietnam under which Indian companies carry out oil exploration and develop oil wells in the South China Sea, an area which China has indisputable sovereignty. China's consistent position is that it opposes any country engaging in oil and gas exploration and development activities in waters under Chinese jurisdiction. According to the Economic Times, Singh said that "the issue of sovereignty should be resolved according to international law and practice". It quoted Sanjay Singh, secretary on Eastern Affairs of the Indian Ministry of External Affairs, as saying the Indian prime minister argued that Indian explorations of oil and gas deposits were purely commercial. According to an article published by Xinhua News Agency, China has always cherished its bilateral ties with India. However, China's goodwill can by no means be interpreted as a desperate outreach to endear India and other neighbors at any cost. In a report by the Institute for Defence Studies and Analyses, Namrata Goswami, a research fellow at the Indian think tank, wrote, "India should continue to negotiate with China on the border dispute within the framework agreement signed between the two countries on April 11, 2005. "The establishment of a border management institutional mechanism toward the end of this year will be beneficial in resolving difficult issues pertaining to the disputed border in a structured way, thereby creating institutional memory for future reference," Goswami said. "The India-China territorial dispute in the eastern sector, pending resolution for decades together, is not an intractable issue. It can be resolved." He added that "the best way forward to resolve the issue with China is through a mechanism of dialogue and confidence-building".

A model of an Airbus SAS A350 XWB on display at an air show. The European aircraft maker opened a logistics center in Tianjin on Friday. Airbus SAS opened a logistics company in Tianjin on Friday to provide support services for all the aircraft maker's programs in China. Airbus (Tianjin) Logistics Co (ATL), the first such center for Airbus in Asia, will handle all the company's transportation needs, including materials and plane parts, between China and Europe. The logistics center is situated in the Tianjin Free Trade Zone Comprehensive Bonded Area, close to other Airbus facilities, including the assembly line for the A320 aircraft. Airbus has several areas of cooperation - involving materials purchasing and parts manufacturing and assembly - with suppliers in six cities: Harbin, Shenyang, Tianjin, Xi'an, Chengdu and Shanghai, and each supplier organizes its own supply chain. "The fact that every supplier uses their own logistics methods to transport raw materials and deliver products means that we spend a lot of money on logistics," said Liu Qiang, operations and quality manager at ATL. Sometimes, suppliers even transport extra raw materials because of a lack of harmonized supply chain management, Liu said. As the number of Airbus programs increases in China, the cost of logistics is a major concern for the aircraft manufacturer. ATL's management of suppliers' goods flow will help Airbus reduce logistical costs and increase efficiency, Liu said. The center, which has an area of 10,000 square meters, provides storage and transportation capabilities in accordance with the demands of suppliers, he added. "The logistics center in Tianjin has the potential to help us reduce costs by as much as 30 percent, according to our experiences in the US," said Laurence Barron, president of Airbus China. ATL has already supplied services for Airbus' two programs in China. One is the manufacture and assembly of wings for the A320. ATL is able to supply logistics services for 40 containers of A320 wings annually, which almost equates to the production capability of the A320 wing assembly line, Liu said. Another program relates to the testing of wing slats manufactured by a Belgian company, which opened a factory next to ATL in earlier this month. The logistics center will also support Airbus' latest aircraft, the A350 XWB, of which 5 percent of the airframe will be manufactured in China, Barron said. "It will provide services for us and all our suppliers in China in the future," he said, "And ATL, which is our only logistics center in Asia, will also serve our suppliers in the whole Asian region." However, it will take some time to ensure that all Airbus-related goods are routed through ATL, because the company cannot change some existing contracts overnight, said Barron. According to some existing cooperation contracts, suppliers take the responsibility for logistics. Another problem facing ATL is the reorganization of the existing goods flow, said Barron. Airbus spends a lot of time and energy on the harmonization of transportation and management of the supply chain, which was previously owned separately by suppliers, he added.

Hong Kong*:  Nov 20 2011 Share

The Hong Kong and Macau markets were the key drivers for sales growth during the period, the cosmetics chain Sasa said. Talent gap threatens Sa Sa's growth - Mainland expansion is outpacing staff training, the cosmetics chain said, as profits grew 27pc. The cosmetics retailer Sa Sa International Holdings (SEHK: 0178) may consider slowing down the pace of shop openings on the mainland, because rapid growth in China is straining its talent pool. The company, Hong Kong's largest cosmetics retailer, reported a 27.3 per cent increase in net profit to HK$224.3 million for the six months to September, as turnover grew 32.7 per cent to HK$2.8 billion. Excluding the impact of a new bonus points system that was introduced in May, the company said the profit would stand at about HK$250 million, a 42 per cent rise year on year. Its gross profit margin declined 1.1 percentage points to 43.9 per cent. Simon Kwok Siu-ming, the company's chief executive, said yesterday that the Hong Kong market had continued to grow strongly from October to mid-November. The Hong Kong and Macau markets were the key drivers for sales growth during the period, with the 84 Sasa stores and two specialty stores contributing HK$2.2 billion in sales revenue, up 35 per cent year-on-year. However, the mainland business failed to meet the company's expectations. Despite more than 80 per cent growth in total turnover, the retailer recorded a loss of HK$19.7 million in the mainland market, almost double that of a year ago. Same-store sales also fell 3 per cent. The company blamed the increased loss on the opening of 13 Sasa stores across the border, which had put pressure on its limited human resources. "In mainland China, our strategy and operations are undergoing growing pains. Staff training has not yet matched our pace of expansion," Sa Sa said in its interim result report. Sa Sa, which first opened two mainland shops in Shanghai in 2005, planned three years ago to set up 100 Sasa stores on the mainland by 2011. But it now only runs 39 Sasa outlets. Eugene Mak, an analyst with Core Pacific-Yamaichi Securities, said it would be hard for Sa Sa to make a profit on the mainland within two years. "Apparently, the company lacks experienced staff to support its fast growth. Slowing the pace of shop openings would certainly solve this problem," Mak said. Sa Sa International said it would conduct a "careful review of the store-opening plan to decide the pace and methodology of expansion", and focus more on the cities it has already entered. Sa Sa declared an interim dividend of 2 HK cents and a special dividend of 4 HK cents for the period. Its shares dropped 2.6 per cent yesterday to close at HK$4.81.

The casual-wear chain Giordano International (SEHK: 0709) recorded an increase in sales of more than 18 per cent for the third quarter this year, with strong growth in Hong Kong and Taiwan. The company said sales for the quarter ending September 30 were HK$1.33 billion, bringing the total year-to-date sales to HK$3.98 billion, up 22 per cent year on year. Gross profit margin improved 0.8 percentage points in the third quarter, helping raise the year-to-date gross margin by 1.5 percentage points to 59 per cent. The company attributed the improvement to increased volumes, a more attractive price mix, a control over markdowns, and effective advertising. Peter Lau Kwok-kuen, chairman and chief executive of Giordano, said the company achieved sales growth of as much as 24 per cent in the first half of this year owing to strong sales of winter products. The third-quarter sales increase was "slower but in line with overall expectations", Lau said. During the period, the chain retailer added a net 54 outlets globally, bringing total shop numbers to 2,496 across Hong Kong, Taiwan, the mainland, other parts of the Asia-Pacific region and North America. The Hong Kong and Taiwan markets reported a significant year-on-year increase in the third quarter, with sales growing to HK$414 million from HK$329 million. The mainland remains the biggest sales contributor, with total sales revenue of HK$439 million. Giordano's share price rose 1.1 per cent to close at HK$6.23 yesterday. The stock has risen significantly in recent months since Cheng Yu-tung, the property tycoon and chairman of the Chow Tai Fook jewellery chain, used several purchases to raise his Giordano stake earlier this year. Cheng, who holds about an 18 per cent stake in Giordano, is now its largest single shareholder.

HK seeks role as region's IP trade centre - Rising mainland demand for intellectual property spells opportunity for the city. Hong Kong is hoping to compete with Singapore to become the region's trading hub for intellectual property assets, as increasing demand for patents, copyrights, licences and trademarks on the mainland opens opportunities for local traders and professionals. The mainland may be a haven for counterfeit goods, but the number of registrations for patents, trademarks and copyrights has risen sharply over the past two years. From 2008 to 2010, the number of patent applications on the mainland surged to more than 750,000 as the country has surpassed the United States as the world's largest patent-filing nation. Alice Ngan, chairman of the Licensing Executives Society's China-Hong Kong sub-chapter, said: "Instead of protecting the owner of the invention, patents and copyrights are also tradeable assets - some of which are worth millions of dollars, and one can sell the same technology to many buyers." Beijing has declared that technology and clean energy are key areas for development in its 12th five-year plan. And China's imports of technology patents have also grown dramatically, costing mainland buyers US$25.6 billion last year - a jump of 19 per cent from 2009. But there is still ample room for growth. In 2010 China spent on average only US$2.30 per person on licensed goods, compared with US$30 per person in Hong Kong and US$100 in the US. The best known intellectual property (IP) trading involves selling the copyright for movies and songs to overseas distributors or television and radio stations. Thousands of transactions take place daily, with corporations and universities acquiring technology for modifications or application in other areas. However, such trading has been done largely through special agencies, such as merchant bank Ocean Tomo in the US, as there is no widely used system for buying IP products. "We wish to facilitate the set-up of an electronic platform where IP buyers and sellers from Asia can match themselves in not just one-to-one, but on a many-to-many basis," Trade Development Council official Raymond Yip Chak-yan said. "Our strong legal system could also make Hong Kong an arbitration centre for patent and copyright disputes." Singapore is another city aspiring to establish a regional IP trading platform, but Yip said Hong Kong's proximity to the mainland and its strength as a financial and trading hub gave it an edge over Singapore. The council will host the city's first conference on intellectual property on December 2.

Amid shrinking demand, Cathay Pacific has opened a new cargo facility and next year will take delivery of 10 more Boeing 747-8 freighters (front), the planemaker's biggest. Cathay Pacific Airways (SEHK: 0293) is struggling to fill up its cargo space even as its freight capacity is set to increase by 15 to 20 per cent next year. With the delay in delivery until next year of most of the 10 747-8 freighters it ordered, Cathay will be in the unenviable position of having to fill up even bigger cargo holds - the jumbo 747-8 can hold 16 per cent more than its predecessor B747-400F - even as cargo volume is dwindling amid sluggish demand in Europe and the US. All the new freighters will operate between Hong Kong and North America from next month. "The worst-case scenario is that we'll have to park the aircraft, just as we did during the downturn in 2008 and 2009," Nick Rhodes, cargo director for Cathay, said on the sidelines of the topping out ceremony of its HK$5.5 billion cargo terminal at Chek Lap Kok yesterday. To help ease the overcapacity, a B747-400F will leave Cathay shortly as part of the four carriers transferred to its cargo joint venture with Air China (SEHK: 0753, announcements, news) earlier this year. Three more freighters will be leased to Air Hong Kong, a joint venture in which Cathay owns a 60 per cent stake. Still, Cathay's cargo capacity is expected to rise by up to 20 per cent. Its cargo volume, meanwhile, contracted more than 17.5 per cent year on year last month and load factor - percentage of cargo space occupied - dropped to 66 per cent. Cathay's load factor and the cargo division's profitability would drop next year as a result of weak economic growth in Europe and North America, Rhodes said. "[But] it's not all bad, imports into Asia, especially for China, is quite strong," he said. Cathay is planning new routes to the mainland and India as well as new markets in eastern Europe, and Central and South America to use the additional capacity. It opened a new service to Zaragoza in Spain this month after the rapid growth of retail chain Zara in Asia. It also wants to add more services to Sri Lanka, the garment manufacturing centre for many US fashion brands such as Victoria's Secret. Intra-Asia trade is seen as a ray of hope amid the uncertainty in the cargo market, given the volume of IT-related cargo flows within the region. Cathay is also seeking new services into Australia and Mexico via Los Angeles, pending traffic rights talks. It is increasing the five flights a week on its Miami route to seven because of the growth in traffic between Asia and Central and South America. In the longer term, the International Air Transport Association forecasts global air cargo demand to rise 6 per cent a year in the next decade. Cathay's capacity in the next three years is to grow 5 per cent to 6 per cent, in line with global forecasts for demand. The new cargo terminal at Chek Lap Kok, with annual throughput capacity of 2.6 million tonnes, will hire up to 1,800 staff next year. About 1.8 million tonnes of cargo that Cathay, Dragonair and Air Hong Kong carry a year will be moved to the new terminal in phases from Hong Kong Air Cargo Terminals.

Cosmetics retailer Sa Sa International Holdings (0178), a favorite shopping destination for thousands of mainland visitors, reported earnings of HK$224.3 million for the six months ended September 30, up 27.3 percent compared with the same period last year. But it took a hit from mainland operations, booking a HK$19.7 million loss, which chairman and chief executive Simon Kwok Siu-ming said was mainly attributable to overheads associated with 13 new stores as it sought to expand its mainland footprint. But Kwok said yesterday the firm's expansion will continue, with 15 stores in the mainland set to open. He said Sa Sa has a presence in "eight provinces and 14 cities with 39 stores." Last month, Sa Sa opened a flagship store in Henderson Mall in Shanghai. In Hong Kong, Kwok said Sa Sa had to bear rental rises of "26 percent in the first half," when leases were renewed. Sales increased to HK$2.78 billion, up 32.7 percent compared with last year. Sales and profit growth were driven by "a strong performance" in the Hong Kong and Macau markets, as well as by the introduction of new and exclusive products, Kwok said. Turnover in Hong Kong and Macau increased 35.3 percent to HK$2.2 billion. Sales in the mainland increased more than 80 percent to HK$108.5 million. Sa Sa operates a total of 84 stores in Hong Kong, Macau and the mainland, selling brand name fragrances such as Christian Dior and Lalique; make-up from Bobbi Brown and Clinique; skincare from Guerlain and Suisse Programme, as well as bodycare, haircare and slimming products. In August, the company was included in the Hang Seng Corporate Sustainability Benchmark Index. Basic earnings per share was 8 HK cents. The company declared an interim dividend of six HK cents per share.

The 10,000 bottles of red wine found abandoned in To Kwa Wan are all fake, containing only water with coloring, according to the Chilean consulate. A Chilean wine company, Vina Cono Sur, has asked the Hong Kong police to provide them with two samples for chemical analysis of their contents. The bottles in 100 crates were found on Chi Kiang Street in To Kwa Wan on November 7. Speaking for the first time since the incident, Chilean consul general Mario Ignacio Artaza yesterday told The Standard only one-fifth - or 2,000 bottles - purportedly came from Chile's Vina Cono Sur, but the rest are from other countries. He said he had been in contact with the police since reading newspaper reports on November 9. "Furthermore, what is inside the bottle is not wine, but water with coloring," Artaza said. He called on the police to solve the case as it has brought the quality of Chilean wine into question. "We believe any attempt at a criminal act must be sanctioned immediately," he said. Artaza also said the director of Vina Cono Sur's Shanghai office, Gonzalo Marina, met with the local police yesterday to hand over their technical report, which details the number of discrepancies in the fake wines from the real Cono Sur. These include misspelling the place Torre Sur where the winery is located, the wrong microcode and company seal, and a screw cap of different shape and color. Vina Cono Sur also asked the police to provide it with two of the bottles to conduct a physiochemical analysis of the wine and review all the packaging elements. Hung Hom police inspector Andrew Sin confirmed that the bottles abandoned in To Kwa Wan came from other countries besides Chile, but he refused to identify the countries. A police spokesman said all the boxes have been moved to the Hung Hom police station. Guillermo Garrido, consul trade commissioner, suspected that counterfeiters might want to damage the reputation of Vina Concha y Toro, the largest producer of wine in Latin America, which is the parent company of Vina Cono Sur. Artaza said: "We want the police to find out as we want to protect the consumer as well as Chile and its companies which are exporting to Hong Kong."

Zoellick: China Won’t, And Shouldn’t, Save Europe - Earlier in his career, World Bank President Robert Zoellick was a top U.S. official responsible for German reunification, and he’s pained by the continent’s current woes. In his current job, he focuses a lot on China. But he doesn’t believe China will ride to Europe’s rescue — or that it should. “The idea that Europe, where the average per capita income is about $40,000 a year, should be going to China, where the average per capita income is about $4,000 a year with a begging bowl,” doesn’t make sense, he told The Wall Street Journal’s CEO Council conference in Washington this week. Chinese domestic politics wouldn’t allow a bailout anyway, he said. “I will just summarize one Chinese official at [the] Cannes [Group of 20 nations summit earlier this month] said to me and another,” Mr. Zoellick continued. “He said, ‘Well, if Germany isn’t so concerned about this, why should I be so worried about bailing [Europe] out?’” “Now having said that, if Europe comes together then I do think that other countries would be willing to [cooperate],” he added. “But this is the irony of ironies, going back to the period of the late ’90s, they’ll operate through the IMF,” which lectured Asia during the financial crisis of the 1997 and 1998 about how it needs to get its act together.

Most people wear glasses to see. This city's hip young crowd wears them to be seen. That's clear when you look closely at the people crowding Hong Kong's busy shopping streets. In many cases the glasses have no glass. The plastic frames, usually in black, tortoiseshell or bright colors, are empty. Chu Fun, a popular 32-year-old morning-radio host, wears contact lenses for nearsightedness, but she wears glasses, too, choosing from among four pairs of lensless spectacles. She bought her favorite ones, black with purple stems, in Japan a couple of years ago for about $13. She also has a pink pair, a black cartoonish pair and a bright red pair she picked up just the other day. Her husband has three pairs, all black but in different shapes. Besides matching her outfits, or her hair, which until recently also was purple, the glasses are practical. She doesn't have time to put on makeup early in the morning before facing her colleagues. "Those black circles are so seriously bad, I try to find some way to cover it," she says. The no-glass frames also don't blind the wearer when walking out of the arctic air conditioning that blasts through most buildings into the tropical heat. "If you wear this, no fog," she says. And one more practicality: fake eyelashes. "If I have lenses here," she says, sticking her finger through the frames, lashes "may clash with the glasses." This way the lashes can stick through unimpeded. Not everyone is crazy about the trend, which optical industry executives say originated in Japan in the 1990s, mostly died away and then resurfaced recently with a vengeance among urbanites, male and female, in China, South Korea and Taiwan. "I'm deeply confused by it," says Michael Perry, an American public-relations expert who moved to Hong Kong a year ago. "You want to reach out and touch to see if the glass is there…Fortunately, I restrain myself." I've been wearing glasses since high school and always thought of them as a burden, because they slip down your nose and you can lose them. If you don't have to put up with them, why would you?" The paradox of wearing specs without corrective lenses is that people here badly need glasses. Nearly 85% of people in their 20s in Hong Kong suffer from myopia, according to the Myopia Research Center, part of Hong Kong Polytechnic University's School of Optometry. Levels of myopia, or shortsightedness, are similar on the mainland and elsewhere in east Asia and are on the rise.

 China*:  Nov 20 2011 Share

Swiss food giant Nestle SA Thursday officially finished the acquisition of a 60 percent stake in China's Yinlu Foods Group. At a ceremony in the southeastern city of Xiamen, home to the headquarters of Yinlu, the two also announced they will jointly invest 2.5 billion yuan (394 million U.S. dollars) in Yinlu to expand current and build new production facilities nationwide. Chen Qingyuan, chairman of Yinlu, said the company will seek the help of Nestle to make Yinlu an international brand and to expand into the international market. Roland Decorvet, chairman and CEO of Nestle China, said Yinlu has a very good understanding of the tastes of Chinese consumers and the Chinese market and also has very extensive distribution and sales network, while Nestle has rich experience in fields like research and development and management. The two declined to disclose the price of the acquisition. Yinlu, known for its peanut milk and instant porridge products, reported a revenue of 5.4 billion yuan in 2010, up 52.5 percent from a year ago.

China-Pakistan joint military drill held in Pakistan - On Nov. 17, the Chinese soldiers use Pakistani anti-terrorist weapons.

According to the latest data in the 2011 financial year, the number of U.S. visa applications reached 9.6 million, and 7.5 million of them were approved. The approval rate increased by 17 percent compared with last year. The number of U.S. visa applications from emerging markets, such as China, Brazil and India, has increased substantially. A total of 1.8 million Brazilian and Chinese citizens were awarded U.S. visas. In the last five years, U.S. visa issuance rates to Brazil, China, India and Mexico have increased by 234 percent, 124 percent, 51 percent and 24 percent, respectively. The U.S. State Department has repeatedly said it will continue to raise the U.S. visa issuance to Chinese and Brazilian citizens. The person in charge of consular affairs at U.S. Embassy in China said China and Brazil will each receive 50 additional consular officers by the year’s end. In the busy periods for visa applications, more temporary staff will be sent to do related work.

Alice Waters Does Organic American-Style at Dinner in Beijing - Alice Waters (far right) talks with guests at the dinner she hosted at the U.S. Embassy in Beijing. As U.S. chef and food activist Alice Waters rolled out a four-course meal meant to inspire China to eat organic and sustainable foods, something other than pesticides was missing. The founder of renowned Berkeley, Calif. restaurant Chez Panisse organized an elaborate dinner at the U.S. Embassy Wednesday night in Beijing as part of a move to spark a food revolution in China, helping Chinese consumers learn about eating organic foods that are in season and grown locally. But among the several hundred people to whom she dished out this meal—a carefully selected array of Beijing’s seasonal vegetables, followed by butternut squash tortellini, braised pork over mashed potatoes and apple strudel with ice cream—less than a third of the attendees were Chinese nationals. A press representative of the U.S. Embassy, which was in charge of the guest list, said many more Chinese had been invited to the dinner than had attended. Declines flowed in the days before. To be sure, there were some Chinese in attendance, many of whom were well-known. Ge You, one of China’s most famous actors, and Phoenix Television anchor Xu Gehui were both there. Ms. Waters hoped to inspire these cultural icons. “China is at a critical turning point,” Ms. Waters said ahead of the dinner. Fast food restaurants are popping up on every corner, and the pressure to speed up the pace of life, eating on the go, is increasing, she said. But at the dinner, the opening event of a four-day cultural forum sponsored by the Asia Society and Aspen Institute, little was uttered about eating foods free of chemicals and buying from nearby farms. Not a word of Chinese was said. Only a toast was offered as a tribute to a potential food movement in China. “Lift a glass of wine to the people taking care of the land,” Ms. Waters said. A food revolution is only at best in its infancy in China, says Zhang Yinghui, who is one of China’s more prominent food activists and also attended the dinner. Chinese have been buying organic foods, but they’ve largely been buying out of fear after countless food scandals have threatened the health and lives of average citizens. Ms. Zhang, while well-informed about China’s agricultural industry and green farming, is far less vocal than the organic and slow food backers in the West. “There’s less of push here because Chinese, after all, still care about food, even if it is under threat,” Ms. Zhang said. “Chinese families still eat together at a table every night,” said Ms. Zhang. There are some chefs around China who are contributing to a more conscious way of feeding people, sourcing their vegetables and meat locally. Dai Jianjiun, who runs his restaurant out of Hangzhou, an affluent city south of Shanghai, is one. “Unfortunately, these kinds of restaurants are made available only to the wealthy and the government,” Ms Zhang said, adding that the growth of the organic industry in China has largely been propelled by this subset of the population. Critics of the organic movement in West have made similar statements, which could have been applied to Ms. Waters’ dinner in China, where the U.S. Ambassador to China Gary Locke sat across from author Amy Tan on Wednesday, feasting on organic bread and carrots that had been plucked from a nearby farm only hours before.

U.S. handbag maker Coach Inc. is pushing for China to become its No. 1 market in the next three years, expanding stores despite an economic slowdown and the rise of online and second-hand markets for handbags in the country. The New York-based company said it is on track to reach $300 million in sales in China by the end of this year and aims to reach $500 million in sales from China by 2014, said Victor Luis, president of Coach's international operations, in an interview on Thursday. Coach posted China sales of $185 million in 2010. For the latest fiscal year, Coach's global revenue totaled $4.16 billion. The handbag, accessories and leather-goods maker is pressing forward even amid signs of slowing GDP growth and weakened demand for China's exports, showing that executives believe China's economy will still grow at a steady clip despite Beijing's efforts to tame inflation and continued unease abroad. "We see China as having more levers at its disposal to manage debt, property, and economic turmoil," Mr. Luis said. "We feel the wind at our back right now in China." To reach that three-year goal, Coach plans to open about 30 stores each year for the next few years primarily in what are known as China's second- and third-tier cities, or fast-growing urban areas outside the central cities of Beijing, Shanghai, Guangzhou and Shenzhen. Locations include far western Urumqi and Nanning in the southwest. It is also rolling out kiosks at the fronts of department stores to grab attention and building large regional stores where it can have more space to showcase products beyond its core accessories, such as knitwear, coats and eventually perfumes. China is already Coach's fastest-growing market, Mr. Luis said. Coach will operate 71 stores in China's mainland as well as in Hong Kong and Macau by calendar year-end. Coach ranks within the luxury category but its products are more within reach than many high-end brands. Its bags can range from about 600 yuan to 15,950 yuan (about $95-$2,500) in China. Analysts say that as Chinese earn more disposable income, they will continue to look for handbags, belts, and luggage that will mark their economic rise. "There is an ever-growing consumer group having the ability and the desire to buy premium or luxury products beyond China's biggest cities," said Pascal Armoudom, a partner at consulting firm A.T. Kearney in Shanghai. China's luxury buyers show a willingness to spend, doling out an average of 10% of their total household income on items such as jewelry, clothing and bags, according to data from brokerage CLSA Asia-Pacific Markets. Coach is seeing increased competition in China as consumers flock to the Internet, where they believe they can get better deals on sites such as, a popular Chinese handbag website. Milan Station Holdings Ltd., a retailer of second-hand bags for women in China, has been expanding in Shanghai and Beijing since it went public in Hong Kong earlier this year. Coach doesn't yet have an e-commerce site for China, though it will likely be launching one by the end of 2012, said Jonathan Seliger, president and chief executive of Coach's China operations, adding that the current focus is brick-and-mortar retail. Attempting to raise its profile in Asia, Coach is seeking approval from the Hong Kong stock exchange in the next few weeks for a listing through an issue of Hong Kong depositary receipts, Mr. Luis said. The company has also tapped actress Gwyneth Paltrow as a spokeswoman for the international market in hopes of building more recognition. Coach has 6% market share in China, according to the company. Other brands leading the handbag market include Gucci and Louis Vuitton. Coach expects its sales in Asia to pick up in January, after the company has full control of its business in Taiwan. The deal to regain its distribution in Taiwan, where Coach's retail sales totaled $45 million in 2010, was struck last month. Coach has around 25 retail outlets in Taiwan. Coach posted a profit of $215 million for the fiscal first quarter ended Oct. 1, up from $188.9 million a year earlier. Global revenue totaled $1.05 billion.

Foreign architects flock to china as new opportunities open up - With over $1 trillion spent last year on new construction projects, up to 48 billion yuan ($7.5 billion, 5.5 euros) spent annually on concept designs and a skyscraper popping up every three days in China, the amount of opportunities for foreign architects are, as one architect put it, beyond comprehension. "In this time of the world, China is the only place that you can work on so many projects. And these projects are usually ridiculously big, which are unimaginable in other places like New York or London," says Casey McSweeney, an American architect at Graft, an international design studio with offices in Beijing, Berlin and Los Angeles. As China gets comfortable in its new spot as the world's second biggest economy, overtaking Japan, it has also become one of the world's most prolific builders. In the next 50 years, according to calculations by the Financial Times, over 76 percent of China will be urbanized, which will create a major construction market for foreign and domestic architects as well as construction companies. Capitalizing on the exponential growth in the building market, many foreign architecture firms are opening offices in Beijing and Shanghai. Graft, first founded in the US by German architects, opened its Beijing branch in 2004 and soon after designed The Emperor Hotel, part of the Design Hotels chain on the mainland. In major Chinese cities, many major projects have been designed by foreign architects, such as the Bird's Nest by Herzog & de Meuron, the China Central Television headquarters in Beijing by OMA's Rem Koolhaas and the Guangzhou Opera House by Zaha Hadid. Gregor Hoheisel, CEO and founding partner of Graft, says the market for Chinese architecture designs is "humongous". He says since Graft opened its office here, revenue for the company has nearly doubled from the previous year. He says the number of projects in China has also grown. Up to 30 of Graft's projects for this year are located in China. Lin Yuru, a senior architect at Graft, says the building boom in China has provided architects numerous opportunities to work on different types of projects at the same time. "This is the best part of the Chinese experience," Lin says. "China's architecture market is prosperous. I asked one French student why he still chose to major in architecture and he said China has projects," says Mo Tianwei, professor at Tongji University. Apart from the building boom in metropolises such as Beijing, Shanghai and Guangzhou, China's second- and third-tier cities are also attracting architects. "The growth in second- and third-tier cities is just massive and many clients go to international architects. The large population, migration of rural communities to the cities, and the desire for the cities to establish identities through architecture are just unique," says Bob Nation, international design principal for the Asia studio at RMJM, an international architecture company founded in the UK. Massimo Bagnasco, chairman for construction at the European Union Chamber of Commerce in China, says the architecture design market got a big boost when the service sector, which incorporates architecture, was emphasized in China's 12th Five-Year Plan (2011-2015). But despite the opportunities that China affords, challenges are equally numerous. Many of the international architectural firms are having to adjust to different requirements and standards of design, says Reja Bakh, design principal at the Shanghai office of Gensler, a major architecture design firm. "They cannot do the design in the same way as they do in the United States or in Europe. The construction process, the schedule, the culture or value, and the quality are all different," he says. Bakh says one headache for most foreign architects in China is the incredible rate of construction and the small window of time given to design. A design takes two to three years to hash out in the US, but only two months are usually given for architects to complete a design in a Chinese competition. "The speed of construction in China is too fast. When you do something very fast, the quality may suffer," Bakh says. "The architecture design is fine, but the quality of construction still needs to be improved. The contracts are okay here, but the builders are not there yet." Another problem is that many Chinese clients prefer a classic European style, such as chateau-like houses with delicate decorations. Lin at Graft says elegance does not necessarily come from old-fashioned design. "We do contemporary architecture design. We do not want to copy a European house 1,000 years ago," Lin says. Foreign architects in China are also not allowed to draw up construction blueprints after the design is finished, according to regulations from the Ministry of Housing and Urban-Rural Development. The rule forces foreign architecture firms to cooperate with Chinese local designing institutes to finish a project. "We have fantastic cooperation with talented and hardworking Chinese architects," Bakh says. "To ensure that the original idea can be realized, we have to overcome the separation between the architects, clients and contractors, so we work with the local architects. I see fantastic creative ability in the young architects that are graduating in China. And I hope Chinese architects will play a more important role in Chinese city planning because it matters to the development of the architecture culture of this country," Bob Nation says. With more foreign designs, however, has come fierce criticism of their concepts. Many critics have leveled Koolhaas' CCTV design as extreme. But for many foreign architects that China Daily spoke with, the criticism is fine. They see it as a risk that a professional architect must go through in their career. "Clients are sometimes looking for something unique or extreme. So the opportunity for both Chinese and international architects to experiment is more available here than the rest of the world. To me, criticism is healthy, because it brings about dialogues and debate in the public arena," Nation says. "Criticism means debate, and debate means attention," says Bagnasco. "Anyway, we have to create a right way to plan the new cities and the green fields. Principles of a sustainable development must be followed." "This is both unavoidable and beneficial to us. We have to be tolerant and open-minded enough to learn advanced concepts from international architects," says Zhu Xiaodi, president of the Beijing Institute of Architectural Design, a top design institute in China. Bakh explained that foreign architects must follow their principles to make their works appreciated by Chinese people. "It is basically a matter of trust. For me, a good building has to be beautiful, to function properly as a building, and also has to make money," Bakh says. "We would explain to our clients whether it is beautiful, functional and profitable. And this is how we bid for the projects." 

Specialists check the Shenzhou VIII spacecraft, which landed in the Inner Mongolia autonomous region on Thursday after completing 17 days in space. The unmanned Shenzhou VIII spacecraft returned to Earth on Thursday, marking the successful conclusion of China's first docking mission. The spacecraft touched down at 7:32 pm at a landing site in Siziwang Banner (county) in North China's Inner Mongolia autonomous region. During its 17-day journey in space, the vehicle docked, disengaged and re-docked with the unmanned Tiangong-1 space lab module about 340 km above Earth. The two dockings helped China master rendezvous and docking, important procedures for China's long-term plan of building a space station by 2020, experts said. Next year, two more spacecraft, at least one manned, will be launched to dock with the Tiangong-1 space module to better hone the technology. Five helicopters, fitted out with receivers to detect signals from the craft, located the vehicle. After reaching the craft, specialists conducted a series of inspections. Incubators inside the craft were also taken out and sent to Beijing, as they contain biological experiments jointly conducted by Chinese and German scientists.

Premier Wen Jiabao (left) meets on Thursday with Indonesian President Susilo Bambang Yudhoyono in Nusa Dua on Indonesia's resort island of Bali. The Association of Southeast Asian Nations (ASEAN) does not want specific political and security issues to become topics of discussion at the approaching East Asia Summit, the Indonesian president told Premier Wen Jiabao on this Indonesian resort island on Thursday. If they do, they could draw attention at the event away from other important business, said President Susilo Bambang Yudhoyono. The remarks referred to the calls that the US and several ASEAN members have made for territorial disputes in the South China Sea to be discussed at the East Asia summit on Saturday. Yudhoyono said on Thursday evening that, against the backdrop of world economic difficulties, ASEAN countries should concentrate more on development and ensure the summit advances "in the right direction". "ASEAN is not in favor of discussing detailed political and security issues at the summit," Yudhoyono said, according to a press release from the Foreign Ministry. Initiated in 2005, the East Asia Summit was designed as a forum for discussions about regional development. Wen said Beijing wants to see the summit stick to its original purpose. China has long insisted that its territorial disputes with some ASEAN members should be settled through bilateral consultations. It announced this week that Beijing is willing to work further with ASEAN nations to find a way to prevent accidents by observing the code of conduct for the South China Sea. According to the Foreign Ministry, Yudhoyono holds China's work to solve the dispute in high esteem. The two leaders' meeting came a few hours after Indonesia echoed Chinese concerns about a strengthening of the US military's presence in northern Australia. Indonesian Foreign Minister Marty Natalegawa warned that may foster tension and mistrust. The plan to post up to 2,500 Marines in Australia's Northern Territory from mid-2012 was released on Wednesday during a quick visit to Canberra by US President Barack Obama, who said it showed a "commitment to the entire Asia Pacific region". Washington has prominently announced plans to "pivot" its foreign policy toward Asia. That announcement quickly drew criticism from China, widely seen as the target of the plan. The foreign ministry questioned whether strengthening the troops' presence was appropriate or "in the interest of countries in this region". Natalegawa also expressed concerns about the plan, which will give US military aircraft greater access and lead to a troop boost in northern Australia, right on Indonesia's doorstep. "What I would hate to see is if such developments were to provoke a reaction and counter-reaction precisely to create that vicious circle of tensions and mistrust or distrust," Natalegawa said on the Australian Broadcasting Corporation. Wu Shicun, president of the National Institute for South China Sea Studies, said Indonesia's remarks show that many ASEAN states - especially those with no stake in the dispute - do not want the South China Sea dispute to draw attention away from other issues of importance at the East Asia Summit scheduled for Saturday. Chen Shiqiu, former Chinese ambassador to Indonesia, said Indonesia wants to build mutual trust within ASEAN and foster the regional bloc's central role in the summit. Premier Wen will have a tight day on Friday. After attending a 10+1 meeting with ASEAN members, he will go to a 10+3 summit with leaders from Japan and South Korea.

Hong Kong*:  Nov 19 2011 Share

Maureen Fung at APM: "We decided to increase the budget ... after the announcement that East Kowloon was to be redeveloped." Sun Hung Kai Properties (SEHK: 0016) plans a HK$100 million facelift next year for its six-year-old APM shopping mall. The mall is near Kwun Tong MTR station in East Kowloon, earmarked by the government as the site of a second core business district. "Originally, we planned to spend HK$80 million on the facelift. But we decided to increase the budget to HK$100 million after the announcement that East Kowloon was to be redeveloped," SHKP leasing department general manager Maureen Fung Sau-yim said. "We are now working out the details, but the initial plan is to increase the number of shops at APM from the present 180 to as many as 250." The renovation would begin after the Lunar New Year holiday, which starts on January 23, and was due to be completed in two to three years. Fung said the space allocated to retailers of audio-visual equipment and information technology products would be expanded to 100,000 square feet, from the present 45,000. Other revamps would include installing new escalators leading shoppers to upper floors of the seven-level APM, a redesign of the food court, and new toilets featuring differently themed decor on each level. "In order to generate innovative ideas, a toilet-design competition will be held," Fung said. The proposed second financial centre will be double the size of Central and will cover an area that includes Kwun Tong, Kowloon Bay, and the old Kai Tai airport site. The proposal was unveiled by Chief Executive Donald Tsang Yam-kuen in his policy speech last month and is aimed at providing more office space and maintaining the city's competitiveness among regional rivals. Outlining his vision for Kowloon East, or the so-called CBD2, Tsang said the area could provide 5.8 million square metres of office space. To improve the area's infrastructure, the government plans to build a HK$12 billion monorail system with 12 stops connecting Kowloon Bay and Kwun Tong MTR station via Kai Tak. The plan also calls for 33,000 private and public flats on the old airport site, and 20 million square feet of space for offices, shops, hotels and a cruise terminal. "It will definitely inject new life into the area and our shopping mall will need to sharpen its competitiveness to capture the great new opportunities," Fung said. A decade ago transaction prices for office space in the area were about HK$800 per square foot. They have since soared by 837 per cent to about HK$7,500 per square foot. Fung said prices rose another 10 to 15 per cent after the announcement of CBD2. As APM was next to Kwun Tong station and on top of a bus terminus for visitors using the Huanggang border crossing, it attracted a lot of mainland visitors, she said. "Last week a mainland investor was inquiring about making a property investment in Kwun Tong as a result of the plans to turn the area into a second CBD. He also dropped in at apm and spent HK$500,000 on two Rolex watches and other jewellery before heading home," she said. Fung, who oversees more than five million square feet of space in 35 shopping malls, said APM would arrange visits to the mall by 80 tour groups, amounting to about 4,000 people, from Shenzhen, Dongguan and Guangzhou next month to boost Christmas sales.

Wuhan has become the latest mainland city to compete for talent in Hong Kong. Nine major Wuhan-based companies, including Dongfeng Motor (SEHK: 0489), have offered the city's college graduates up to four times the wages of mainland counterparts in a bid to find the right candidates for 500 available jobs. A recruitment expo - organised by Wuhan's municipal government, targeting graduates from the eight local universities - will be held next Tuesday at Kowloonbay International Trade and Exhibition Centre. Wang Yuhua, the city's deputy director of human resources and social security, said the average monthly salary offered would not be lower than HK$12,000. "That would be three to four times higher than Wuhan university graduates, who are paid between 3,000 and 4,000 yuan [HK$4,900] a month on average," Wang said. "But we think Hong Kong students are more innovative, their vision more international and they speak and write better English. These are all qualities essential for our city and companies which are all looking for a technology upgrade during China's 12th five-year plan." The 500 vacancies range across sectors such as public relations, engineering, and biological sciences. However, technical jobs comprise a larger portion, as Wuhan is the third-largest mainland city in industrial design and construction. While Wang said Hong Kong graduates' strengths lie more in the services and finance industries rather than industrial design, he said companies required talents from more than one area. "There will be some mismatch inevitably, but this is the first time we have conducted such a recruitment exercise in Hong Kong, and we will see how Hong Kong students fare," he said. About 50 students attended the briefing yesterday, many of whom were mainland students studying in Hong Kong. Steven Xiang, a student from Hubei who finished his doctoral degree in computer science this year at the University of Hong Kong, said studying in Hong Kong gave him an edge over other doctoral students on the mainland, as the experience gave him wider exposure. Li Zheng, director of human resources at Dongfeng Passenger Vehicle, said some companies preferred mainland students in Hong Kong to local ones. "Hong Kong graduates may have problems in adaptability and there are risks that they will not stay long," Li said. "But after all, we rate the candidate as a whole, not just on where they come from."

Hong Kong and mainland firms were encouraged yesterday to take part in the biggest urban development project in Paris for 150 years, with €35 billion (HK$370 billion) earmarked for transport infrastructure alone, including a 140-kilometre-long driverless metro system. French urban affairs minister Maurice Leroy, told potential investors, developers, architects and consultants the aim was to make the City of Light ''the city-world of tomorrow'' and to build an ''innovative and efficient eco-city that respects its people and its cultural heritage''. Speaking at the MIPIM Asia real estate conference in Hong Kong, Leroy said he remained confident the Grand Paris project would go ahead despite concerns about debt worries in several euro-zone economies. ''The impact [from the debt problems] has not been that great. Like Hong Kong we have been able to weather the crisis. Construction is going on as planned,'' he said. He also confirmed that a French architects association would be visiting Hong Kong soon to exchange ideas on the development of the West Kowloon cultural district. ''French construction experts are proud to have in part contributed to the construction of your city, and our architects will be pleased to discuss with you the design of the Hong Kong of tomorrow,'' said Leroy, who is in overall charge of the Grand Paris scheme. Despite having two meetings with secretary for development Carrie Lam Cheng Yuet-ngor, he would not be drawn into comparing progress of the Grand Paris scheme, which was first proposed in 2007, with the West Kowloon or the Kai Tak redevelopment. ''I don’t interfere in Hong Kong politics,'' the minister said. But he pointed out there had been a ''great deal of public debate'' about the Grand Paris scheme and ''everyone in France…especially the president [Nicolas Sarkozy]'' was confident about the project. These discussions had involved central and regional government, the public and non-governmental organisations and Leroy added there was consensus among political groups on all sides of the political spectrum. The French government gave final approval for the Grand Paris project at the end of August. The scheme is seen as Sarkozy’s lasting contribution to France, despite some political wrangling. Leroy said there was no danger it would be cancelled due to budget cuts – ''it has been guaranteed for the future''. He said 10 teams of foreign and French architects, including Britain’s Rogers Stirk Harbour + Partners, had already prepared concept plans following an international design competition and these were being incorporated into final planning. Individual aspects of the Grand Paris scheme included ''20 billion euros to be invested by 2025'' on the construction of a new metro network linking inner city and suburban areas of Paris. The total cost of the metro would be at least €32.4 billion and would be co-financed by central and local governments and investors. The expanded metro network ''will open up this great city of Paris and its entire region, linking the airport to the centres of industrial and academic excellence,'' Leroy said. In addition, more than 70,000 new homes would be built each year, ''more than double the annual rate of construction'', to meet a planned target of 1.5 million homes. He thought the creation of research and development centres at Saclay, south-west of the city, ''would be very interesting for Chinese investors''. The La Defense area was also the focus of a massive building programme with five office towers due for completion next year and a further 11 office towers, hotels and arenas due to be finished between 2013 and 2016. Conscious he was talking to potential investors, developers, architects and consultants, Leroy said the Grand Paris scheme was ''an ambitious project for which the state has put in place the means to its realisation'' and create significant economic benefits.

Hong Kong Express Airways is to transform itself into a no-frills airline, in a move that could threaten Cathay Pacific (SEHK: 0293)'s lucrative regional routes. The city's first low-cost carrier since Oasis Hong Kong Airlines went bust in 2008 is another sign that budget airlines are increasingly being seen as a threat to mainline carriers. The new carrier will start by serving regional destinations in mainland China, Japan, South Korea and Southeast Asia from July or August next year, said Yang Jianhong, president of sister carrier Hong Kong Airlines. Hong Kong Airlines is owned by the parent of Hong Kong Express, HNA Group, the fourth largest airline group on the mainland. The new budget carrier will be able to use Hong Kong Express' traffic rights, including routes to Beijing, Shanghai, Kuala Lumpur, Singapore, Taipei, Seoul and Osaka. Flights to Beijing, Shanghai and Taipei will strike a nerve at Cathay Pacific, as these are among the most lucrative routes for the city's flag carrier, due to the concentration of big-spending business travellers. It comes at a time when budget carriers in the region are fast being established. Singapore Airlines is launching a low-cost subsidiary, Scoot, serving long-haul routes to Australia and China. Japan, which used to be a highly restricted market for budget carriers, will see three new low-cost airlines next year. The new Hong Kong budget carrier, which has yet to be named, plans to expand its fleet to 15 Airbus 320s over the next three to four years. The existing five Boeing 737-8s operated by Hong Kong Express will be transferred to Hong Kong Airlines early next year. The pilots who are now flying for Hong Kong Express can either work for Hong Kong Airlines or retrain for the A320. Yang said a new management team, including a chief executive who had an extensive background in European budget airlines, would lead the carrier. The fallout from the collapse of Oasis Airlines and Macau-based Viva Macau, however, underscores challenges facing low-cost carriers in Hong Kong and neighbouring areas. The operating costs facing a Hong Kong-based budget airline is likely to be higher than other Asian low-cost carriers given there is no budget terminal in the city. Higher labour costs are another problem. "The new budget carrier will have a tough time competing with AirAsia and Tiger Airways for Southeast Asia destinations because they have relatively low operating costs in their hubs in Singapore and Malaysia," said Kelvin Lau, transport analyst for Daiwa Capital Markets. Hong Kong Express, however, has a more immediate reason to adapt to the new low-cost model. Hong Kong Airlines is undergoing private-equity fund-raising before a planned initial public offering next year. Wary investors are concerned about the overlap and competition between the two related airlines. "The two airlines will be of distinct positioning after the restructuring ... it can help to ease the concerns of potential investors," said Yang. 

Former chief secretary Henry Tang Ying-yen said on Thursday he would formally announce that he would be a candidate in next year’s chief executive election by the end of the month. Tang, who had been the city’s second highest official, said at a meeting with journalists he would also unveil details of his policies and a list of his supporters at that time. Another potential candidate, Leung Chun-ying, the former convener of the Executive Council, the government’s top advisory body, released a statement on Thursday afternoon, outlining his plans. Leung said he would make a formal announcement of his candidacy at a press conference on November 27. Another politician earlier seen as a potential challenger, former Legco president Rita Fan Hsu Lai-tai, announced early this week she would not be a candidate. 

Nan Fung Development has made its first diversification into the Hong Kong hospitality industry with its HK$2 billion investment in a 539-room-hotel in Sha Tin. Managing director Donald Choi Wun-hing said the hotel is to be operated by Marriott International under its Courtyard brand. It would be the largest Courtyard hotel in Asia when it starts operation by the end of next year. Speaking at the groundbreaking ceremony for the hotel, Choi said he was optimistic about the tourism industry in Hong Kong - and mainlanders would be the company's target customers. Visitor arrivals to Hong Kong reached 30.42 million in the period from January to September, 16.2 per cent higher compared to the same nine-month period last year. The mainland led the growth with more than 20 million travellers arriving in Hong Kong in the first three quarters, up 23.6 per cent against the same period last year. Choi said that Shek Mun in Sha Tin, where the Courtyard will be located, has been transforming into a business district and this would help draw more corporate travellers to the hotel. The private company is also building a 500-room hotel, to be managed by Langham Hotels International, in Pazhou, Guangzhou. The hotel is scheduled to open in 2013. "If there are any good opportunities, the group will continue to expand its investment in the hotel sector," said Choi. Paul Foskey, the executive vice-president of Marriott International's hotel development in the Asia Pacific, said the planned Courtyard hotel joins one already in Western. Foskey said 10 Courtyard hotels were planned in Hong Kong and mainland cities. Seven contracts have been signed but the hotels are not yet in operation. The United States-based hotel group recently announced that its 100th hotel in China - a JW Marriott Hotel with 345 rooms which is being built now - will be in Shenyang, Liaoning province. Marriott operates 56 hotels in China and has signed contracts to operate 44 hotels more. Foskey said the group would like to expand its presence in second- and third-tier cities. In view of the strong domestic tourism, Foskey said another potential growth area will be leisure and resort cities such as Sanya in Hainan; Huangshan, a mountain range in southern Anhui province; and Dujiangyan in Sichuan province. The hotel group is also in discussions about possible expansion in other tourism areas such as Lijiang in southwest Yunnan province and Changbai Mountain in Jilin province on the China-North Korea border. Commenting on the property market, Choi believes the market still has support in light of positive sales at recent project launches by other developers. The market would be supported by the stable local and mainland economies even though the global economic environment remained unstable, he said.

 China*:  Nov 19 2011 Share

The Les Suites Orient in Shanghai. The city saw just half of its rooms occupied this year compared to 80 per cent in Hong Kong, raising worries about low demand for hotels. The expansion in China of hotel chains including Hilton Worldwide and Hyatt Hotels may be undermined by low demand as four in 10 rooms sit empty. China's occupancy rate was 61 per cent in the first nine months of this year, the same as the year-earlier period and the lowest in Asia after India among 15 countries tracked by STR Global. In Shanghai, only about half of hotel rooms were filled, compared with more than 80 per cent for Singapore and Hong Kong, it said. The world's biggest chains have been rushing into China, which overtook Spain last year to become the world's third most-visited travel destination after France and the US. The number of internationally branded hotel rooms is expected to surge 52 per cent by 2013 after rising 62 per cent in the past five years, according to Jones Lang LaSalle Hotels, which tracks data in 30 Chinese cities. "The question is whether the increase in demand is going to be big enough to handle all the new hotels," said Nigel Summers, an expert on the hospitality industry. Hilton said it would have 100 hotels in China by 2014, four times the number of properties it manages in the country now. For InterContinental Hotels Group, owner of Holiday Inns and Crowne Plazas, one in four of the hotel rooms it will open globally over the next five years will be in China. In the next decade, China will account for 25 per cent of hotels managed by Ritz-Carlton. Hyatt said it has 31 hotels under development in China, adding to the 14 existing ones. Some cities in China require hotels as part of so-called mixed-use property projects that also may include offices and apartments, contributing to the increase in supply. But an analyst said global chains may find it difficult to maintain their standards in the rapid expansion and risk "diluting their brands".

US President Barack Obama addresses the Australian Parliament Parliament House in Canberra on Thursday. President Obama is in Australia to mark the 60th anniversary of the security alliance between the two nations and to bolster Washington's presence in the strategically important region to counter China. Signaling a determination to counter a rising China, President Barack Obama vowed on Thursday to expand US influence in the Asia-Pacific region and “project power and deter threats to peace” in that part of the world even as he reduces defence spending and winds down two wars. “The United States is a Pacific power, and we are here to stay,” he declared in a speech to the Australian Parliament, sending an unmistakable message to Beijing. Obama’s bullish speech came several hours after announcing he would send military aircraft and up to 2,500 Marines to northern Australia for a training hub to help allies and protect American interests across Asia. He declared the US is not afraid of China, by far the biggest and most powerful country in the region. China immediately questioned the US move and said it deserved further scrutiny. Emphasising that a US presence in the Asia-Pacific region is a top priority for his administration, Obama stressed that any reductions in US defence spending would not come at the expense of that goal. “Let there be no doubt: in the Asia-Pacific in the 21st century, the United States of America is all in,” he said. For Obama, Asia represents both a security challenge and an economic opportunity. Speaking in broad geopolitical terms, the president asserted: “With most of the world’s nuclear powers and some half of humanity, Asia will largely define whether the century ahead will be marked by conflict or co-operation, needless suffering or human progress.” Virtually everything Obama is doing on his nine-day trip across the Asia-Pacific region has a China subtext, underscoring a relationship that is at once co-operative and marked by tensions over currency, human rights and military might. China’s military spending has increased threefold since the 1990s to about US$160 billion last year, and its military recently tested a new stealth jet fighter and launched its first aircraft carrier. A congressional advisory panel on Wednesday urged the White House and Congress to look more closely at China’s military expansion and pressed for a tougher stance against what it called anticompetitive trade policies by China. The expanded-base agreement with Australia is just one of several initiatives Obama has taken that is likely to set Beijing on edge at a tricky time. The US is China’s second-largest trading partner, and the economies are deeply intertwined. China’s leaders don’t want the economy disrupted when global growth is shaky and they are preparing to transfer power to a new leadership next year. Over the weekend while playing host to President Hu Jintao and other Pacific rim leaders at a summit in Hawaii, Obama said the US would join a new regional free trade group that so far has excluded China. That added an economic dimension to what some mainland commentators have called a new US containment policy that features reinvigorated defence ties with nations along China’s perimeter, from traditional allies Japan and the Philippines to former enemy Vietnam, all of whom are anxious about China’s growing economic and military power. China was immediately leery of the prospect of an expanded US military presence in Australia. Foreign Ministry spokesman Liu Weimin said there should be discussion as to whether the plan was in line with the common interests of the international community. Responding to questions at a news conference on Wednesday with Australian Prime Minister Julia Gillard, Obama sought to downplay tension between the world powers. “The notion that we fear China is mistaken,” he said. Obama avoided a confrontational tone with China in his speech to the Australian parliament, praising Beijing as a partner in reducing tensions on the Korean Peninsula and preventing proliferation. “We’ll seek more opportunities for co-operation with Beijing, including greater communication between our militaries to promote understanding and avoid miscalculation,” he said. In a note of caution, however, he added: “We will do this, even as [we] continue to speak candidly with Beijing about the importance of upholding international norms and respecting the universal human rights of the Chinese people.” With military bases and tens of thousands of troops in Japan and South Korea, the United States has maintained a significant military presence in Asia for decades. Australia lies about 5,500 miles south of China, and its northern shores would give the US easier access to the South China Sea, a vital commercial route. The plan outlined by Obama will allow the United States to keep a sustained force on Australian bases and position equipment and supplies there, giving the US ability to train with allies in the region and respond more quickly to humanitarian or other crises. US officials said the pact was not an attempt to create a permanent American military presence in Australia. About 250 US Marines will begin a rotation in northern Australia starting next year, with a full force of 2,500 military personnel staffing up over the next several years. The United States will bear the cost of the deployment and the troops will be shifted from other deployments around the world. Having ruled out military reductions in Asia and the Pacific, the Obama administration has three main areas where it could cut troop strength: Europe, the Middle East and the US. All US troops are being withdrawn from Iraq by the end of this year, and a drawdown in Afghanistan is underway. But the Pentagon has said recently that the US will maintain a major presence in the greater Middle East as a hedge against Iranian aggression and influence. A more likely area for troop reductions is Europe, although no decisions have been announced. The debate over defence budgets is just one aspect of a broader political fight over fixing the nation’s debt problem during a presidential election season. Already, the Pentagon is facing US450 billion in cuts over ten years, as part of a budget deal approved last summer. And if a special congressional committee can’t agree on US$1.2 trillion in more long-term cuts or Congress rejects its plan, then cuts of US$1.2 trillion kick in, with half coming from defence. Australia’s Gillard said, “We are a region that is growing economically. But stability is important for economic growth, too.” She said that “our alliance has been a bedrock of stability in our region.” Obama’s visit is intended to show the tightness of that relationship and he hailed the long ties between the United States and Australia, two nations far away that have spilled blood together. “From the trenches of the First World War to the mountains of Afghanistan – Aussies and Americans have stood together, fought together and given their lives together in every single major conflict of the past hundred years. Every single one,” he said. Obama had a packed day-and-a-half in Australia, his first trip here as president after cancelling two previous tries. After addressing Parliament, Obama was flying to the northern city of Darwin, where some of the Marines deploying to Australia next year will be based.

When Twitter-like microblogging service Sina Weibo launched an English mobile interface in April then announced that it would also launch an English website, some questioned whether the company would have an audience among users outside China. Apparently, it does. According to a public relations representative, Sina Weibo now has 450,000 users in the U.S., or roughly .2% of the 227 million total user accounts the service claimed in September. It’s not clear how many of those users are Chinese students or other Chinese citizens living temporarily in the U.S., but a number of the service’s overseas users appear to use the service mostly as a form of outreach to Chinese audiences. One of those users is San Francisco mayor Ed Lee, the first Chinese American to be elected mayor of the city. U.S.-born Mr. Lee posted on Weibo in English throughout election day, tracking the progress of the election and calling on supporters to vote, finally sending out a triumphant “Thank you San Francisco!” His Weibo name: mayoredlee. Most Sina Weibo users are strangers to the American election process, but that didn’t stop people from responding to Mr. Lee. One user writing under the handle Serenity’s Horizon, questioned whether Mr. Lee’s victory illustrates that ethnic minorities face less racism in the U.S. than in China. Another, The Golden Rock, wrote in English, “I want to know, can you speak Chinese?” In any case, Mr. Lee’s reception on Weibo has been warmer than that extended to certain Chinese government officials. As of Wednesday evening, the mayor had more than 47,000 followers on the website. Mr. Lee isn’t the only overseas public figure to sign up for an account on Sina Weibo. The service also counts Tom Cruise, Bill Gates, “Harry Potter” star Emma Watson, Radiohead and IMF director Christine Lagarde among its verified users. “Sina Weibo has not only built a platform for interaction between Chinese officials and the public, but Sina Weibo’s influence has also extended abroad,” Sina boasted in a statement, citing Mr. Lee and also European Council President Herman Van Rompuy, who used his account on the service to post messages about his trip to China in May. “Important international figures and leaders have used Weibo to publicize slogans and decisions, borrowing Weibo’s ‘popular base’ to develop close, positive interactions with citizens.”

Australian officials said on Wednesday that they didn't consult the U.S. on a plan to allow China to use a space-tracking station in Western Australia that is also used by NASA, despite widespread concerns that the Chinese space program is largely controlled by the Chinese military. The admission comes as a potential embarrassment to Australian authorities as they host U.S. President Barack Obama on his first official visit there. Mr. Obama on Wednesday unveiled plans to boost the U.S. military presence in the country, in large part to hedge against China's escalating firepower. An Obama administration spokesman said late Wednesday that he was unaware of the ground-station issue. U.S. officials and experts have long expressed concerns that China's space program has potential military applications, including enhancing its ability to target U.S. aircraft carriers, and other Navy ships, with a recently deployed antiship ballistic missile. While the site's owner and Australian authorities say there's no risk of China accessing U.S. operations there, some experts say that China could use it to better position spacecraft for military surveillance. China's use of the tracking station in Dongara, in Western Australia, illustrates how Beijing is pressing ahead with international space cooperation, even as U.S. lawmakers escalate efforts to block almost all interaction between China and the U.S. National Aeronautics and Space Administration. U.S. space officials, meanwhile, fear that China could overtake the U.S. as world leader in space if it continues to make rapid advances like the one this month, when the country completed its first space-docking mission—a milestone in its plan to build a space station by 2020. Australian authorities confirmed that they approved a plan for China to use the facility at Dongara, which is owned and run by a Swedish state-owned company called Swedish Space Corp., or SSC, and a U.S. subsidiary that supports U.S. Air Force space surveillance satellites. "Australia did not consult the U.S. on the establishment of the SSC facilities or its customers," said a spokesman for Australia's Department of Innovation, Industry, Science and Research, which handles space issues, on Wednesday. SSC and Australian authorities say the site is used only for civilian purposes and poses no security risks, but they declined to say whether the Chinese entity using it—China Satellite Launch & Tracking Control General, or CLTC—is a military or a civilian entity. CLTC runs China's launch sites and tracks and controls its spacecraft, and is part of the army's General Armaments Department. The department's chief, Gen. Chang Wanquan, also led last week's docking mission between China's Shenzhou and Tiangong spacecraft. There is no publicly available contact information for CLTC. The China National Space Administration didn't respond to requests for comment. China's Defense Ministry said only that it had no contact number for CLTC. An SSC spokeswoman said there were two ground stations at Dongara, one owned and run by SSC, and another by its U.S. subsidiary, Universal Space Network, also known as USN. China uses the one wholly owned by SSC, the spokeswoman said. Lars Persson, SSC's CEO, said in an interview that he didn't know whether his customer was a civilian or military entity, but insisted his company was only "providing civil space services to civil space missions" and had all the necessary government approvals, including for U.S.-made antennas at the station China uses. The Pentagon said it had not been consulted about China using the facility, although it and other agencies had approved a proposal by a U.S. company it didn't identify to provide equipment for the site. "Many space capabilities are inherently dual-use, and China, like a number of other countries, does not have separate military and civil programs," said Lt. Col. April Cunningham, a Pentagon spokeswoman. "These factors increase the need for transparency in order to avoid mishaps, misperceptions, and mistrust." Dual-use refers to technology with both civilian and military applications. Many U.S. and Australian space experts were surprised when a Chinese space official announced in a video message on the docking-mission website earlier this month that China had used a ground station in Australia to successfully guide the Shenzhou-8 and Tiangong-1 spacecraft. One Australian expert on China's space-based intelligence-gathering, Desmond Ball, voiced concern on Wednesday that by using Dongara, Beijing was able to position the Shenzhou and other dual-use spacecraft more precisely, and thus enhance its ability to accurately locate naval targets. "If you've got a platform in space monitoring that activity, when its orbital position is known more precisely, then it's able to locate targets more precisely," said Mr. Ball, a professor at the Australian National University's Strategic & Defence Studies Centre who has worked for U.S. government agencies in the past. "If they approved an agency of the Chinese Ministry of Defense to do this, then it should have been made public. I think there's quite a lot of embarrassment around town." Australia is among many countries that are keen to expand civilian space cooperation with China, even though Canberra is strengthening defense ties with the U.S. to hedge against China. The U.S., by contrast, maintains strict controls on space and dual-use technology transfers, and fierce opposition in Congress continues to block cooperation between NASA and China. The White House has been trying to change that. NASA Administrator Charles Boldentold a congressional subcommittee this month that the U.S. risked being overtaken by China as world leader in space. He pointed out that the U.S. had worked with the Soviet Union on the Apollo-Soyuz test flight in1975, which laid the ground for cooperation with Moscow on the International Space Station. But Rep. Dana Rohrabacher (R-Calif.), who heads the subcommittee, told the hearing: "So, how can cooperating with China now, which is a vicious tyranny and a strategic rival, how can that be a smart policy when our experience tells us just the opposite? Some U.S. and Australian space experts said the risk of aiding China's military space program may have been outweighed by the benefits of improving safety in space traffic, and observing more closely how China tracks and controls its spacecraft. "The one risk is that China could use the station to monitor its military constellations in low-Earth orbit as well," said James Moltz, an expert on space security at the Naval Postgraduate School in California. "But the flip side is that it sets up a dependency relationship on Australia, and Canberra could cut off access in a crisis." China was forced to close a space-tracking station on the Pacific island of Kiribati, from where it monitored U.S. missile tests in the Marshall Islands, after Kiribati recognized Taiwan in 2003. Since then, Beijing was known to use ground stations in Pakistan, Kenya and Namibia, but mostly relied on a fleet of ships of a model named Yuanwang to track satellites and other spacecraft from the southern hemisphere. Now, Beijing uses ground stations in Chile and Australia as well, Xie Jingwen, a designer of the docking mission's tracking and command system, said in the video message on the mission's website. SSC confirmed that China was also using one of its ground stations in Santiago, Chile, which helped to launch six Chinese Compass satellites. They will support a Chinese global positioning system that some U.S. experts say could be used by the Chinese military. The U.S. Defense Security Service, which oversees defense contractors, said the company's USN unit "holds a current facility clearance for access to classified information and technology" but added that the agency had no control over who USN did business with. Australia's Science Department said Australian authorities had approved in 2009 SSC's plan to establish a new station at Dongara and provide services to customers including CLTC. "The Australian government has identified no national security concerns with regard to the current operations of the facilities or the activities being undertaken by the SSC on behalf of its customers, including CLTC," a spokesman said. "The station is fully controlled by SSC, not its customers," he said, adding that the Chinese had one civilian, and some equipment, based at the facility. However, he declined to comment on whether Australian authorities consider CLTC a civilian or military entity.

Chinese farmers will soon be able to control their sprinklers with mobile phones and make sure the devices offer the exact amount of water and fertilizer the plants need - all without setting foot on their farms. The cutting-edge irrigation system designed by France-based Irrifrance Industries, a leading sprinkler producer, will roll out next year and will be first available for Chinese farmers because the state-of-the-art devices were designed in China. "We've transferred all of our technologies to China completely. Our products in China are as advanced as those produced in France, sometimes even more cutting-edge than those developed in our headquarters," says Karim Al-Wadi, China chief representative of Irrifrance. Al-Wadi says the company's market strategy shows its commitment to China and its faith in the industry, which is being supported by the Chinese government's investments in the water industry this year. A total of 4 trillion yuan ($628.7 billion, 451.8 billion euros) will be invested in water conservation projects over the next 10 years, with China aiming to double its average annual spending from 200 billion yuan in 2010, according a top policy document released earlier this year. The check of 4 trillion yuan equals the stimulus package the Chinese government employed to boost its economy during the 2008 financial crisis, a fact that wasn't lost in the agriculture irrigation industry at the recent Water Expo China in Beijing. Many industry experts say the agriculture irrigation market will grow exponentially next year when government funds go into effect. In a country where water resources per capita are only 28 percent of the global average and where there is growing pressure to feed a growing population of just over 1.3 billion people, industry leaders believe the agriculture irrigation industry has a rosy future. According to the central government's plan, total investments in the water industry between 2011 and 2015 will reach 1.8 trillion yuan, of which 20 percent will be invested in infrastructure projects related to agriculture, such as irrigation projects. Although Irrifrance, which recently received the award of 2011's Well-known Water Equipment Companies, began selling its irrigation devices to China in the 1990s, it set up its office in China in 2006. "Some told me that they know our machines are very good, but they just couldn't afford them," Al-Wadi says, adding the market has begun to expand this year because of strong government support. "We are expecting to double our sales in China to around 600 machines this year from last year. And I think the surging growth will continue for at least five years," he says. Of the 120 million hectares of cultivated land in China, only 53.3 million hectares have basic irrigation measures and facilities. And the area equipped with high-efficiency, water-saving irrigation, such as sprinklers and drip irrigation systems, is estimated at just 1.3 million hectares by the end of this year, according to the Ministry of Water Resources. NETAFIM, a global leader in smart drip and micro-irrigation solutions, introduced drip irrigation to China in the early 1990s. Its irrigation systems deliver water and fertilizer to the roots of plants and to save 90 percent in water and 20 percent in fertilizer.

Exports of new energy and energy-saving products will be targeted by trade barriers in developed countries, led by the United States, a commerce official warned. To offset this, exporters will need to improve technology and their capacity for innovation to enhance competitiveness, said Zhang Yujing, president of the China Chamber of Commerce for the Import & Export of Machinery & Electronic Products. Zhang's remarks follow the US Commerce Department's decision last week to investigate if Chinese companies are selling solar cells below cost and receiving illegal government subsidies. The investigation came after a petition was lodged by a group of US solar companies. The ministry said in a statement on its website last week that "China is very concerned about the anti-dumping, anti-subsidy investigation into Chinese photovoltaic (PV) solar cell producers, and it will hurt bilateral cooperation in the clean-energy sector as well as the US solar industry". Zhang warned that a trend was emerging in developed countries to erect trade barriers against exports of new energy and energy-saving products to protect their own industries. Although the US economy recorded solid growth in the third quarter, easing recession fears, economists warned that the recovery remained shaky. The EU is trying to cope with debt woes. China has been a victim of trade protectionism for years, especially since the global financial crisis. But now signs are emerging that high-end products, rather than shoes and clothes, are being targeted. China has been hit by 602 trade remedy cases worth $38.98 billion since entry into the World Trade Organization a decade ago. In October 2010, the US announced it would investigate China's clean energy policy, claiming that the government had subsidized certain companies. Trade protectionism targeting China will be increasingly common, especially regarding high-end goods, Sun Zhenyu, the former Chinese ambassador to the World Trade Organization, said. And protectionist measures taken by the US could be followed by the EU, said Jiang Heng, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce. "If the global economy remains sluggish, it is possible that the EU will follow suit and also set up barriers for Chinese PV solar products." During the past few years, China's new energy sector has witnessed rapid growth in output and exports. PV solar cells are primarily produced for export. Outstanding domestic growth in the sector threatens counterparts in developed regions, including the US, Zhang said. Yingli Green Energy Holding Co is the third-largest solar panel maker in the world. The China-based company's sales in 2010 surged by 72 percent from a year earlier. Trina Solar Limited, a leading Chinese manufacturer of photovoltaic modules, said its total net revenues in 2010 increased by 119.8 percent annually to $1.86 billion, and gross profit grew by 146.4 percent to $584.4 million. In October 2009, the Obama administration announced a $151 million investment in developing the new energy sector. It had previously said that it will invest $50 billion into the green energy industry as part of its $789-billion stimulus bill of 2009. Washington does not want to see a huge influx of goods, stamped "Made in China" flowing into the US, experts said and any extra duties will damage exports. It's estimated that up to 95 percent of Chinese PV solar products are exported to the US and Europe. And 15 to 20 percent of Chinese exports go to the US market. "The Chinese PV solar industry will have a really hard time if the US imposed tariffs," Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance, said. In October, the US arm of SolarWorld AG, a leading German producer, led a group of US solar companies to petition for 100 percent tariffs on Chinese PV solar cells. For Zhang, Chinese enterprises have to "add investment on technology and product innovation, otherwise we will find it harder to establish a foothold in the developed markets". Wei Qidong, former secretary-general of the Photovoltaic Industry Alliance in Jiangsu province, where most solar companies are located, said that Chinese companies could consider establishing factories overseas, create jobs and reduce trade frictions. China-based Suntech Power Holdings Co Ltd, the world's largest producer of silicon-based solar panels, established its first factory in Arizona in 2010 and is planning to establish new factories in other US states.

Hong Kong*:  Nov 18 2011 Share

In a stunning concession, the government has scrapped plans for a mega mall at the Central Government Offices site but will go ahead with redeveloping the West Wing to a 32-story office and commercial building. The changes, which will also expand leisure areas by 10 percent, were made after a public consultation on the development on Government Hill. The top 26 floors - with floor area of 28,500 square meters - of the new high rise will provide Grade A office space for financial services. The government will invite the Hong Kong stock exchange and Securities and Futures Commission to be key tenants. Secretary for Development Carrie Lam Cheng Yuet-ngor yesterday admitted the site's market value may decline because of redevelopment constraints. In the original scheme, 13,500 sq m were reserved for a mega shopping mall. This was scrapped, with only 2,000 sqm now for commercial development. Lam said the offer to the stock exchange and SFC is not intervening in their operations and if they agree to move in, they still have to pay market rental rates to the landlord. "So it does not really affect the ability to generate profits," she said. To minimize potentially increased traffic flow, car parking spaces will be cut from 164 to 93. And to get a coherent design with the preserved building on the site, the external design should adopt a similar style to that of the Main Wing. "This is still a very prime site in Central, which normally would be sought after by developers. It is unavoidable that the value will be affected," Lam said. "Developers will be cautious when deciding the tender price because of the constraints." A Development Bureau spokesman said most of the views received during the public consultation from September to December last year did not support the proposed shopping center. "They considered that there were already too many malls in Central." The spokesman said authorities had not estimated how much less the site will sell for. Surveyor Lawrence Li Yung- sau, however, believes the land's value will drop 20 to 30 percent, or by HK$2 to HK$3 billion. "Without the constraints, the land value could be up to HK$12 billion," Li said. But he said the West Wing would still be attractive to developers because of the high demand for Grade A office space in Central. Public open space after redevelopment will also be increased from 6,800 sq m to 7,600 sq m. It will be managed and maintained by the Leisure and Cultural Services Department. The government does not have a timetable for project completion. Tender is expected to be called in 2013, but Lam said the government will adopt a two-development system where both tender price and the project's design will be considered. Meanwhile, Civic Party lawmaker Tanya Chan Suk-chong described the concession as too little to be acceptable. "It is already wrong that the government would demolish the West Wing and sell the land," she said, criticizing the government for ignoring the views of conservationists.

Huawei buys Symantec stake in HK-based JV for $530m - Huawei Technologies Co Ltd's previous attempts at acquisitions and bids in the United States over the past few years were blocked by US lawmakers. Huawei Technologies Co Ltd, the world's No 2 telecom equipment maker, plans to buy the remaining 49 percent stake in a joint venture with Symantec Corp that it does not already own for $530 million to bolster its corporate security solutions business. The deal allows Huawei to boost its product portfolio for its enterprise customers and helps Symantec improve its bottomline by dropping the loss-making business, even as the value of the deal fell below market expectations. The deal is subject to approval from regulators in the United States, but analysts and company executives foresee few hurdles because the joint venture, called Huawei Symantec, was established in Hong Kong and Huawei already owns the majority stake. "Whether this deal will complete or not ... it is still a question mark for now, but I feel that they have a better chance because this joint venture was established in Hong Kong", outside of the Chinese mainland, said Cathy Huang, an analyst at Frost & Sullivan in Singapore. Huawei expects the deal, which some analysts estimated could be worth about $1 billion, to close in the first quarter of 2012. "We likely overestimated Symantec's hand in the negotiation given the joint venture was operated under the control of Huawei," Citigroup Inc said in a report. Shenzhen-based Huawei and smaller crosstown rival, ZTE Corp, have previously encountered obstacles in clinching some deals in the US. For Huawei, the concerns also stem from its founder and CEO Ren Zhengfei, who is a former Chinese military officer. Earlier this year, Huawei backed away from its acquisition of US server technology company 3Leaf System Inc's assets, bowing to pressure from a US government panel that suggested it should divest the assets. In 2008, Huawei gave up a bid for US networking equipment company 3Com, while in 2010, a group of lawmakers opposed Huawei's bid to supply mobile telecommunications equipment to Sprint Nextel Corp. But this case is different, as the joint venture Huawei Symantec was set up in Hong Kong by Huawei and US security software company Symantec in 2008. "The majority of the assets and customers are located in China and other regions. This is not about the US," said Ross Gan, a spokesman for Huawei. Gan said Huawei would brief relevant government stakeholders as part of the routine regulatory approval process for such transactions based on the local laws and regulations that apply. The venture, in which both Huawei and Symantec contributed around $150 million each, has research and development centers in cities such as Beijing and Shenzhen and in Silicon Valley in the United States, according to the company's website. "It's a good thing for Symantec in that it's been a drag to their earnings per share. I'm sure it's incrementally positive," said Brian Freed, an analyst at Wunderlich Securities. "There shouldn't be any political or regulatory issues related to this." The venture has lost money since it was set up in February 2008, according to Symantec's most recent annual report filed with the US Securities and Exchange Commission. Symantec posted $123 million as its share of the venture's losses from February 2008 to December 2010. The venture, which is expected to continue to be in the red through 2013, was estimated to make a loss of $82 million this year, according to Citigroup analysts. Symantec achieved the objectives that it set out for the venture and is leaving with a good return on its investment, Symantec's chief executive, Enrique Salem, said in the statement.

Macau residents are celebrating a windfall after another government cash handout. All permanent residents will get 7,000 patacas (HK$6,796) in cash, a further 6,000 patacas in their central savings system and 500 patacas in medical coupons. The less-well-off will get even more, including one-year's free rent, while senior citizens can collect up to 45,000 patacas in various allowances during the year. In his third policy address, Chief Executive Fernando Chui Sai-on said the gifts were intended to overcome inflation which stood at 5.11 percent in the third quarter and is expected to reach its peak next month. Non-permanent residents will get 4,200 patacas. He indicated earlier that permanent residents would receive only 4,000 patacas and non-permanent residents 3,000 patacas, but raised the amount after the Hong Kong government started dishing out HK$6,000 to residents. It will be the fifth time that the Macau government gives away cash to its people. The 6,000 pataca injection to central savings accounts will go to all Macau residents. Other gifts include 500 patacas in medical coupons and an allowance of 1,900 patacas for the grassroots, with low-income families getting a monthly allowance of 4,400 patacas and a one- year rent exemption. The sweeteners will cost the Macau government 8.5 billion patacas, pushing next year's budget expenditure to 115 billion patacas. The government will also lower the salaries tax and exempt the hawker license tax, business tax and many others. These measures will cost the government 1.47 billion patacas. Javier Tang Siu-sing, who has both Hong Kong and Macau permanent residency, said he is ecstatic at the size of the windfall. "I just did not expect this much. It is a little over the top," he said. While some have suggested that those who reside in Hong Kong should not be entitled to the Macau handout, Tang said it was his right as he is a Macau resident.

Hong Kong is bent on getting Beijing's approval for local insurers to introduce yuan-denominated bonds and insurance products in the SAR, Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung said. "The mainland onshore bond market has a greater variety of choices. If Hong Kong insurance companies can tap into that market, not only will they have higher yields, investors will also have more choices to park their capital," he said, adding that discussions with mainland authorities are in the early stages. He has just returned from a visit to Beijing. Over the past couple of years, Hong Kong insurance companies have sold life policies denominated in yuan, but are not allowed to do the same for investment-linked products. They can only invest in the offshore yuan bond market. "In the process of yuan internationalization, it is necessary to open up the capital account step by step. As China's trading volume increases, the backflow of yuan is beneficial to Hong Kong," Chan said. Around 9 percent of mainland enterprises' trade settlements are made in yuan, he said, while more than 80 percent of these deals are conducted through Hong Kong banks. During his visit to Beijing, Chan also raised the issue of opening the investment door for the local fund industry. He was accompanied by representatives from the insurance and fund management sectors as he met officials from the People's Bank of China, China Insurance Regulatory Commission and China Securities Regulatory Commission. Chan expressed confidence that Hong Kong has the foreign exchange firepower to take on currency speculators amid global economic uncertainties. As of last month, Hong Kong's foreign exchange reserves amounted to US$281.7 billion (HK$2.19 trillion).

Attractive yields offered to unit holders, modest capital expenditure, stable cash flow, a stable fixed-line operation and a growing broadband business are among factors that would attract investors to the HKT Trust, the telecom business being hived off from PCCW (0008), the incoming chief executive of the business trust said yesterday. PCCW Group managing director Alex Arena, who will take the helm at HKT Trust following the listing, acknowledged that equity markets remain volatile, but described the business trust - which aims to raise between HK$9.3 billion and HK$11 billion - as a "defensive play." PCCW said HK$7.8 billion of the proceeds would be used to pay off debt. The trust offers a yield of between 7.5 and 8.9 percent for 2012, with the first distribution set for December 30. But the trust also cautions in its prospectus that "it may not be able to make distributions at all," and that the "level of distributions may fall." The Hong Kong public offering opens today, with trading in the business trust units starting on November 29. If priced at the high end at HK$5.38 per unit, a board lot would cost HK$5,434.23. Pamela Chung Kong-hung, managing director of Computershare Hong Kong Investor Services, said 207.78 million units will be reserved for some 24,000 existing PCCW shareholders. Arena said many investors prefer a "mature business" and others value growth, as he explained the deal to take the telecom business to the market. Recalling that PCCW has been a household name for decades, Arena said many are eager to see the return of Hong Kong Telecom to the equity market.

 China*:  Nov 18 2011 Share

President Barack Obama insisted on Wednesday the United States does not fear China, even as he announced a new security agreement with Australia that is widely viewed as a response to China’s growing aggressiveness. The agreement, announced during a joint news conference with Australian Prime Minister Julia Gillard, will expand the US military presence in Australia, positioning more US equipment there, and increasing American access to bases. About 250 US Marines with begin a rotation in northern Australia starting next year, with a full force of 2,500 military personnel staffing up over the next several years. “This rotational deployment is significant because what it allows us to do is to not only build capacity and co-operation between our two countries, but it also allows us to meet the demands of a lot of partners in the region that want to feel that they’re getting the training, they’re getting the exercises, and that we have the presence that’s necessary to maintain the security architecture in the region,” Obama said. While the president sidestepped questions about whether the security agreement was aimed at containing China, he said the US would keep sending a clear message that Beijing needs to accept the responsibilities that come with being a world power. “It’s important for them to play by the rules of the road,” he said. And he insisted that the US is not fearful of China’s rise. “I think the notion that we fear China is mistaken. The notion that we’re looking to exclude China is mistaken,” he said. The US and smaller Asian nations have grown increasingly concerned about China claiming dominion over vast areas of the Pacific that the US considers international waters, and reigniting old territorial disputes, including confrontations over the South China Sea. China’s defence spending has increased threefold since the 1990s to about US$160 billion last year, and its military has recently tested a new stealth jet fighter and launched its first aircraft carrier. Defence Secretary Leon Panetta has said that the goal of the new security pact is to signal that the US and Australia will stick together in face of any threats. The only American base currently in Australia is a secretive joint Australia-US intelligence and communications complex at Pine Gap in central Australia. It is common for there to be hundreds of US service personnel in Australia on exchanges and training missions, but a rotation of 2,500 ground troops is unusual. Obama arrived in Australia on Wednesday afternoon, fresh off the Asia-Pacific economic summit he hosted in Hawaii, where the US and eight other nations reached an agreement for a transpacific trade bloc that sets standard rules for commerce. Obama said Wednesday that while the US is not intentionally excluding China from the agreement, joining the pact with require Beijing “to rethink some of its approaches to trade”. The US has accused China of undervaluing its currency to make its exports cheaper and US exports to China more expensive. China had a US$273 billion trade surplus with the US last year and US lawmakers say the imbalance hurts American manufacturers while taking away American jobs. US officials have also pressed China to end unfair discrimination against the US and other foreign countries and to end to measures that undercut its intellectual property. During Wednesday’s brief news conference, Obama and Gillard also fielded questions on a range of issues, from US efforts to address climate change to the debt crisis in Europe. Obama reiterated his call for urgent action by European leaders to back the euro and develop a financial firewall to keep the threat of default facing Greece and Italy from spreading across the euro zone. “The problem right now is one of political will, it’s not a technical problem,” Obama said. “At this point, the larger European community has to stand behind the European project.” Asked whether the US would be able to lower carbon emissions through a cap-and-trade system as Australia is undertaking, Obama conceded the US has been unable to pass such a plan through Congress, but noted US efforts to increase vehicle fuel efficiency and to explore clear energy options. He said emerging economies such as India and China must also assume responsibility for addressing climate change. For Obama and Australia, the third time’s the charm. He cancelled two earlier visits, once to stay in Washington to lobby for passage of his health care bill, and again in the wake of the oil spill in the Gulf of Mexico. “I was determined to come for a simple reason: The United States of America has no stronger ally than Australia,” he said. Obama’s arrival in Australia followed a ten-hour flight from Honolulu that took him across the international dateline. The travelling appeared to being taking a slight toll on the president, who admitted he was having trouble keeping up with the time change. “I’m trying to figure out what time zone I’m in here,” he said.

Penfolds Chooses Shanghai for Bin 620 Release - Penfolds’s Bin 620 will sell for more than $1,000 - The last time Australian wine producer Penfolds made its Bin 620, a special blend of Cabernet Sauvignon and Shiraz grapes from the Coonawarra area, it was 1966, and it was partially foot-crushed. Penfolds waited more than 40 years before it decided conditions were right to produce it again, and it is now gearing up to sell the 2008 vintage at 1,000 Australian dollars (US$1,018) a bottle, about double the price of the recent Grange, its most famous wine that’s produced every year. Thanks to rapidly growing Chinese demand, it’s launching the wine at Shanghai’s Waldorf Astoria on Wednesday. “In Coonawarra we were blessed with a great vintage when the earlier-ripening Shiraz could be blended with the later-ripening Cabernet to highlight the best of both varieties, and their synergistic union,” Peter Gago, Penfolds’ chief winemaker, said in a statement. Penfolds says it only releases limited bottlings of rare, “special bin” wines from exceptional vintages and only when the quality of its flagship Grange and Bin 707 wines are not compromised. Special bin wines were first released in the 1950s during a time of research and experimentation at Penfolds. They are not produced annually and are only released if they offer “something extra, different and unique,” according to Penfolds. So how does the Bin 620 taste? Steve Lienert, senior winemaker, said it is “balanced as a young wine, but has serious cellaring potential, reflecting authenticity, scarcity and exceptional quality from a standout Coonawarra vintage.”

A key measure of China's surplus with the outside world fell sharply in the third quarter, adding to evidence that the country is shifting away from a reliance on exports and undermining the case for a faster yuan rise. China's trade surpluses have drawn criticism from developed economies like the U.S., which say the yuan is undervalued and gives Chinese companies an unfair advantage when selling their products globally. U.S. President Barack Obama, at a press conference at the Asia-Pacific Economic Cooperation summit this weekend, called for China to allow its currency to appreciate more quickly. While there has been a "slight" appreciation in the currency, "it hasn't been enough," he said. Data released Tuesday could bolster China's argument that declines in both the trade surplus and the broader current-account surplus undermine that case. The current-account surplus—the trade surplus plus some other items such as interest payments—fell 43.5% from a year earlier to $57.8 billion in the third quarter, data from China's foreign-exchange regulator showed on Tuesday. As a percentage of the country's gross domestic product, a ratio watched by economists, the surplus in the first three quarters fell to 3%, from 5.1% in the same period last year. "To the extent that [Chinese leaders] have slashed the current-account surplus and cut the merchandise trade surplus, that's a great argument for them," said Arthur Kroeber, managing director of Dragonomics Research, a Beijing economic-consulting firm. "They can go out and say, 'We're doing our job so leave us alone.' " Chinese Commerce Minister Chen Deming made that argument on Friday. Meeting with U.S. Commerce Secretary John Bryson and Rep. Jim McDermott (D., Wash.) on the sidelines of the APEC summit, Mr. Chen said China's shrinking trade surplus illustrates that the yuan "is basically at fair value." The falling capital-account surplus also means that China can now argue that it meets benchmarks the U.S. attempted to implement a year ago in its campaign for faster yuan appreciation. At the Group of 20 major economies summit last November in Seoul, the U.S. had pushed to have the G-20 adopt a 4% surplus as a target by which to judge whether countries' currencies were undervalued. The proposal never went anywhere because of opposition by countries that traditionally run large surpluses, such as China and Germany. Since then, the debate has been overshadowed by the economic travails of Europe, and the G-20 hasn't laid out specific guidelines for capital-account surpluses. But at 3% of GDP, China's surplus is now comfortably within the original proposed target. Still, that doesn't mean China is doing all that economists say it should to rebalance toward domestic consumption. Critics of China's currency policy such as the International Monetary Fund have argued the decline in the surplus is temporary and will likely be reversed once the global economy recovers. In addition, Mr. Kroeber argues that China's rebalancing is being driven by rising domestic investment such as infrastructure projects, not the rising consumption that economists say is vital for the country to transition to more sustainable growth. "The story of the last three years is that China has rebalanced externally, but become more imbalanced internally," he said, adding, "We still do not have a convincing answer to the question of how they are going to make consumption a bigger part of output." In 2010, consumption accounted for 47.4% of GDP, down from 49.5% in 2007, according to China's National Bureau of Statistics. Meanwhile, the share of investment rose dramatically, to 48.6% from 41.7%.

Chinese Premier Wen Jiabao said in Beijing Tuesday that China will make the utmost efforts to promote green growth and curb pollution. "Green growth focuses on energy conservation, reduced energy consumption, sustainable development and environmental protection, " Wen said during a meeting with the foreign participants of the annual meeting of the China Council for International Cooperation on Environment and Development (CCICED). The Chinese government attaches great importance to environmental protection and considers it an important foundation for the country's economic restructuring process, Wen said. Pollution has become a daunting challenge for China's economic development, he said, adding that China will improve its legal system in regards to environmental protection and enhance its environmental monitoring standards. "We will further integrate our standards with relevant international standards," Wen told the guests, explaining that such an aspiration aims to narrow the gap between monitoring results and how the Chinese people feel about their living environment. The premier also spoke highly of the policy suggestions that the CCICED has proposed in the 20 years since its establishment, and expressed his hopes that the organization will continue its role in helping promote China's sustainable development.

There are vulnerabilities in the financial sector, though the financial system is sound overall, the International Monetary Fund (IMF) said in a report released on Tuesday, as it called for further reforms. In its first formal evaluation of China's financial system, the Washington-based lender said China needs to speed up its financial reform. The IMF welcomed improvements in supervision and regulation and the upgrading of banks' risk management systems. "China's banks and financial sector are healthy, but there are vulnerabilities that should be addressed by the authorities," said Jonathan Fiechter, deputy director of the IMF's Monetary and Capital Markets Department and the head of the IMF team that conducted the Financial Sector Assessment Program (FSAP). Ba Shusong, deputy head of the Institute of Financial Studies at the Development Research Center of the State Council, told China Daily that the report is generally positive and it is constructive for the development of the financial system. The FSAP was established in 1999 and carries out assessments in developing and emerging market countries. Appraisal work by the FSAP in China started in August, 2009. China is one of the 25 "systemically important" countries, including France, Italy and Brazil, that have agreed to mandatory assessments at least once every five years. The central bank, the People's Bank of China, said in a statement on its website that although the IMF report was generally objective and positive, there were still several points of view that are not sufficiently comprehensive. "The government's sway over financial markets has already evolved from direct intervention to asserting influence through regulation of financial companies," the bank said. More commercially oriented mechanisms will be developed to form interest and exchange rates, the central bank said. According to the IMF, the main near-term risks stem from sharp credit expansion, the rapid increase of off-balance sheet exposures, relatively high real estate prices and imbalanced economic growth. "If several of the above risks were to occur at the same time, the banking system could be severely impacted," said the IMF, after jointly conducting stress tests of the largest 17 commercial banks. "The banking system's non-performing loan ratio has been on a downward trend, reaching 1.1 percent at the end of 2010," thanks to strong economic growth and improvements in risk management, the IMF said. But if credit increases more rapidly, it may result in a deterioration of bank asset quality in the coming years, the IMF said. In October, the country's new yuan-denominated lending reached 586.8 billion yuan ($92.7 billion), up 17.5 billion yuan from a year earlier. It increased from 470 billion yuan in September, and 548.5 billion yuan in August. Wang Tao, a Hong Kong-based economist at UBS AG, said that new lending may reach 550 billion yuan in each of the last two months of this year, bringing lending in this category in 2011 to 7.3 trillion yuan. Both the growth of credit and money supply are on track for a "normal" range after government economic stimulus policies, said Ba with the State Council's development research center. "To prevent over-dependence on bank loans, the central authorities are encouraging diversified financing channels, including non-bank and non-government financing," Ba said. "That is one of the reasons that off-balance sheet lending is increasing." He was concerned about the still-imperfect regulatory system that may allow non-performing loans to pressure the financial sector. The banking sector's direct exposure to the real estate sector is moderate, about 20 percent, which is relatively low compared with banks in the United States, the report said. "But the indirect exposure is much higher," the IMF report said. Zhang Zhiwei, chief China economist at Nomura International (Hong Kong) Ltd, said that housing investments may fall quickly in the coming month if the world's second-largest economy meets a sharp downturn.

Hong Kong*:  Nov 17 2011 Share

Chow Tai Fook Jewellery Group, controlled by Cheng Yu-tung, yesterday began pre-marketing a US$3 billion Hong Kong initial public share offering - expected to be one of the largest this year. The retailer plans to offer 1.05 billion shares, comprising 76.2 per cent primary shares and 23.8 per cent secondary shares, according to Reuters, which said it had seen the term sheet. The book-building will start on November 28. The shares are expected to be priced on December 8, with listing scheduled for December 15, according to the document. Chow Tai Fook had initially planned to sell shares at a valuation of about 30 times earnings forecast for the fiscal year 2013, which starts in April. Despite economic uncertainties, the jeweller is pushing ahead with its sale in an equity offering market that has virtually shut down. The company, whose name means "good luck" in Cantonese, last week cut the deal's size and valuation because of the global market turmoil. Going ahead with the offering could be a signal that listing conditions are expected to get tougher next year. "The valuation is very high, so I'm not very interested in it," said Victoria Mio, a manager at Robeco Chinese Equities Fund. "Initially there may be interest, but then probably not very sustainable. "Retail is peaking. Whether it's going to slow down dramatically or just slightly, my guess is it's not going to drop off very significantly. But we are going to see somewhat of a softening." Wendy Huang, the research head at SinoPac Securities Asia, said the valuation was reasonable considering the company's leading position in the booming jewellery industry. "Jewelleries are the best-sold consumer goods on mainland markets this year," Huang said. "And the market also expects gold prices will continue to rise next year with the weaker global economy. So I think the [Chow Tai Fook] IPO will be well received by the capital market." Shares of Chow Sang Sang and Luk Fook Jewellery, Chow Tai Fook's major rivals, have risen 17 per cent and 23 per cent respectively this year. The price-earnings ratios of both companies are about 19. Separately, China Polymetallic Mining, a Yunnan-based miner of lead and zinc, has had a successful listing hearing and plans to list in Hong Kong next month, according to a source close to the deal. The deal will be sponsored solely by Citibank, but its size has yet to be confirmed. Edward Au, a partner at Deloitte and head of its national offering group, said the average size of the offerings next year should be between US$150 million and US$200 million, except for a handful of bigger issuers.

Donald Tsang Yam-kuen has proposed to US Secretary of State Hillary Clinton that the United States waive the visa requirement for SAR passport holders entering the country. The chief executive and Clinton met at the Asia-Pacific Economic Cooperation summit in Honolulu, Hawaii. "We talked about the waiver of visa requirements for Hong Kong passport holders to enter the United States," Tsang said, adding that "both sides agreed to actively follow up the matter." They also discussed the possibility of abolishing double taxation for Hong Kong-US businessmen. However, there is no timetable for the waiver request, Tsang admitted. He said there is a backlog from other countries. Tsang asked the US government to consider the high reliability of SAR passport holders who strictly follow immigration regulations set by other countries. Hong Kong people rarely overstay, and waiving visas will not bring extra risks, he said. So far 143 countries or territories, including Guam - a US territory - have given visa-free access or visa on arrival to SAR passports holders. A government source said the possibility of a visa waiver is "very slim." Hong Thai deputy general manager Daniel Chan Kin-pang believes there will be at least a 10 percent increase in Hong Kong tourists visiting the United States if visas are waived, citing the success since Japan waived visas in 2004. The number of Hong Kong travelers to the United States, however, has dropped by 50 percent since the September 11, 2001 terrorist attacks. The visa application cost of HK$1,120 - which is nonrefundable - along with the length of processing time, also deter some visitors. "Hong Kong tourists prefer making spontaneous trips, instead of planning for weeks or months beforehand," said tourism sector lawmaker Paul Tse Wai-chun, who also believes a US visa waiver is unlikely to happen. "It became impossible for Hong Kong to be granted visa-free status after the handover," he said. "The US is concerned about the fact Hong Kong is now a part of China, and it has to be cautious about tourists' entry, especially since around 150 mainlanders come to Hong Kong daily on one-way permits." Citizens of 36 mostly European countries are currently eligible for visa- free US entry. Among Asian countries, only Japan, South Korea, Singapore and Brunei have visa-free status.

Hong Kong and mainland-based airlines will soon be equipped with cabin seats that have been designed in the SAR. The Hong Kong Productivity Council said production of the cabin seats, which comply with international aviation safety standards, will begin in mid-2013. Initially, the plan is to target domestic and mainland airlines. "We started with the development of an aircraft cabin seat to help our industry take off," council chairman Clement Chen Cheng-jen said yesterday. "Now after successfully acquiring the know-how and capabilities to develop a prototype, we believe our industry is one step closer to our goal." The back of the prototype seat is formed from carbon fiber composites, which are 30 to 40 percent lighter than the aluminum alloy that is traditionally used. Apart from the Airbus 340, the seat can be fitted on various long haul and wide-bodied passenger aircraft. "The aviation parts industry is technology-intensive, with high standards in both quality and safety," Chen said. "Each step in the production process has to be accurate and meet current quality-control standards." Traditional aluminum alloy seats are imported from the United States. Since the production line will be set up in the Pearl River Delta, costs will be 30 percent lower than those of overseas competitors. "Our next target will be to diversify into manufacturing other in-cabin equipment, such as trolleys, toilet seats, pantry fittings, storage cabinets and cabin seats for the crew," Chen said. As part of the move, six local firms have formed a consortium - Universal Aviation Industrial. It is the first and only local aviation parts manufacturer. The council will transfer the technology to the company as well as help it set up an assembly line in Dongguan that complies with Hong Kong airworthiness requirements. In addition, the council will consolidate into a technical manual all the design documents, production procedures, test results as well as the experience and technologies acquired from the project and share it with the industry. 

Hong Kong's golden days as the world's largest initial public offering market may be numbered, with the Shanghai Stock Exchange announcing yesterday it was "basically ready" to allow foreign companies to list. The Hong Kong stock exchange has been the number one IPO market worldwide in terms of total funds raised in the past two years, beating New York and London. Local listings have included such major international names as Russia's Rusal and the Italian fashion brand Prada. Local brokers said an international board on the Shanghai exchange would hit Hong Kong hard, as it would lure potential listing candidates away from the city. But experts said it may be too early to worry. Louis Tse Ming-kwong, director of VC Brokerage, said: "The Shanghai international board is going to be a competitor to the HKEx (SEHK: 0388, announcements, news) , but we may not need to worry so soon, since we simply do not know when the international board will happen. The Shanghai Stock Exchange had talked many times about launching its international board soon, but there is no confirmed timetable." China currently does not allow foreign companies to list on the mainland. But for several years, the Shanghai Stock Exchange has planned to introduce a new international board, separate from the A-share market, for foreign firms to sell shares to mainland investors. HSBC, Coca-Cola and Bank of East Asia (SEHK: 0023) have expressed interest in listing there. Shanghai Stock Exchange's executive vice-president, Xu Ming, told Bloomberg yesterday that the international board would start trading as soon as possible but did not give a firm date. Brokers speculate that the persistent delays in the launch - the first study was carried out in November 2007 - may be related to Beijing's worries that mainland investors might prefer trading on the international board instead of the A-share market. Joseph Tong Tang, executive director of Sun Hung Kai Financial, said some deluxe brands that had their eyes on the mainland consumer market might prefer to list in Shanghai. "However, other international firms would still prefer Hong Kong, since it is an established free market, traded by international institutional investors," he said. "China's capital controls ban foreign investors from trading in the mainland markets, which means the international board will only be traded by mainlanders, which is very restrictive."

The government on Tuesday unveiled the latest revisions to plans for the redevelopment of Government Hill, which include expanding a public recreational area and reducing the size of a privately owned shopping mall. The original redevelopment included plans to pull down the 52-year-old West Wing of the current Central Government Offices after staff had relocated to the new Tamar site. Built in its place would be a 32-storey commercial block with 23,000 square metres of floor space, an underground mall, and recreational space covering 6,800 square metres. Secretary for Development Carrie Lam Cheng Yuet-ngor revealed on Tuesday that, due to public demand, the proposed recreational space would be expanded to 7,600 square metres. Another change would be to significantly reduce the size of the shopping mall, from 13,500 square metres to 2,000 square metres. This was because the previous design had attracted strong opposition, Lam said. The development secretary said she had invited the Hong Kong Stock Exchange and Securities and Futures Commission to lease offices in the new commercial block, in order to strengthen the image of Central as a financial centre. Concern groups earlier called on the government preserve the west wing on heritage grounds because it is part of a compound with similar architectural qualities to nearby buildings. But Lam said redevelopment of the west wing had public support. The name Government Hill as first used as early as 1842 to describe the combination of the Central Government Offices, Government House, St John’s Cathedral and the French Mission Building.

Lam Tak-fai, the Acting Head of Ports and Maritime Command, Hong Kong Customs & Excise Department, on Tuesday discusses the seizure of a total of 33 unmanifested rhino horns, 758 ivory chopsticks and 127 ivory bracelets, worth about HK$17.4 million, inside a container shipped to Hong Kong. Customs said on Tuesday they had seized a large shipment of rhinoceros horn and ivory products in a container that arrived by sea from South Africa. Officers found 33 pieces of rhino horn and 885 ivory chopsticks and bracelets, estimated to be worth HK$17.4 million, a spokesman said. The rhino horns, weighing 86 kilograms, were the largest haul ever made in Hong Kong, the spokesman said. He said the banned items had been wrapped in dark plastic and aluminium foil in an attempt to avoid detection by X-ray scanners. The container had arrived from Cape Town. No one has been arrested so far, the spokesman said. Customs officials believed the haul had been intended for trans-shipment to other parts of Asia, he said.

 China*:  Nov 17 2011 Share

Guangzhou Constant Shoes Co is set to abandon Guangdong, the southeastern province at the centre of the mainland's exporting boom since the 1980s, by shifting most of its production 500 kilometres inland. Rising labour costs and a shrinking supply of workers in coastal areas are threatening to sap the mainland's strength in exports, which account for more than a fifth of gross domestic product. To cope, the maker of women's and men's fashion footwear has chosen to tap a pool of cheaper labour in Yongzhou, Hunan province. "Within a year, our Guangzhou factory will only make samples," sales manager Leon Zeng said. The more companies that join Guangzhou Constant in keeping production within the mainland's borders instead of decamping to neighbours such as Bangladesh, Vietnam or Indonesia, the longer the world's second-largest economy may avoid slumping to less than 5 per cent annual growth, an outcome investors in a Bloomberg poll forecast by 2016. "If we do this shift right, we can buy two decades and avoid shock therapy for the economy," said Cai Fang, a Beijing-based member of the standing committee of the National People's Congress who helped draft the mainland's five-year plan through 2015. "We still have low-hanging fruit to pick." The transition won't be easy. While its new location provides Guangzhou Constant with tax breaks and cuts wages by about 17 per cent, transportation costs will rise by about 20 per cent because of the longer distance moving goods to port. Other impediments include fewer suppliers, the reluctance of young inland workers to take factory jobs and a lack of business savvy among some local governments, according to manufacturers in Guangzhou at the Canton Fair, the mainland's biggest trade show. Additional headwinds may come from abroad, as Europe's sovereign-debt crisis and high unemployment in the US threaten to undermine global growth. China's exports rose at the slowest pace in almost two years in October as Europe's deepening turmoil restricted demand. Should firms overcome the obstacles, the mainland's share of global exports could more than double to 23 per cent in a decade, said Zhang Zhiwei, an economist at Nomura Holdings in Hong Kong. That would give the economy more time to shift away from growth led by investment and foreign sales to a greater reliance on domestic consumption, a central plank of the five-year plan. The mainland economy expanded 9.1 per cent in the third quarter from a year earlier, the slowest since 2009, after five interest-rate increases starting in October 2010 cooled property-price gains. Suppliers of goods used to build or decorate homes will benefit as inland factories fuel the need for more low-cost housing, said Andy Mantel, managing director of Pacific Sun Advisors' Mantou Fund in Hong Kong. "I look for good companies that are making products that will benefit from the roll-out of social housing," Mantel said. His fund has held China Liansu Group Holdings, a Foshan- based maker of plastic pipes, since last year. Royale Furniture Holdings, which makes home furnishings and has more than 2,000 stores, may rise 84 per cent to HK$4.13 in 12 months, according to Ethel Ng, an analyst with OSK Hong Kong Securities. The Hong Kong-based company opened 350 stores this year through September, Ng said in a research note. Higher wages from the spread of manufacturing will help buoy inland consumer spending, said Mark Mobius, Singapore-based executive chairman of Franklin Templeton Investments' Emerging Markets Group, which managed more than US$56 billion in assets as of June. That will aid companies such as Uni-President China Holdings, a Shanghai-based seller of juices, teas, yogurt and instant noodles, said Mobius, whose firm owns the stock. Taiwan's Foxconn Technology Group is the highest-profile company to shift some production inland. The maker of Apple's iPhones and iPads opened a factory in Zhengzhou, the capital of central Henan province, in August 2010, and said in December it would invest more than US$330 million in this and several other facilities, including one in the southwestern city of Chengdu. The inland factories will help boost the operating-profit margin at Hon Hai Precision Industry Co, Foxconn's flagship company, as it saves about 40 per cent on worker pay, said Daniel Chang, an analyst with Macquarie Securities in Taipei. He predicts Hon Hai shares will rise 25 per cent to NT$103 (HK$26) within a year. Annual wages of private companies' urban manufacturing workers in Guangdong province averaged 21,644 yuan (HK$26,494) last year, compared with 16,391 yuan in Hunan and 15,495 yuan in Henan, according to government data. "A move inland is a must for companies in labour-intensive sectors," Chang said. A rise in urban factory wages of 94 per cent since 2005 has led some economists to conclude that the mainland is nearing the so-called Lewis turning point, when surplus labour evaporates, pushing up pay, inflation and consumption. The concept, named after the late economist and 1979 Nobel laureate Arthur Lewis, is associated with rapid losses of competitiveness for sweatshop industries in South Korea and Taiwan in the 1980s. "Dramatic" increases in the mainland's inflation-adjusted wages since 2004 indicate the "era of surplus labour is over", the International Food Policy Research Institute said in a May 2010 paper titled "China Has Reached the Lewis Turning Point."

The 54 bullet trains taken out of service following the deadly Wenzhou high-speed-rail crash in the summer are to resume operations on the Beijing-to-Shanghai line after receiving "modifications", state media reported yesterday. The trains, made by China CNR Corporation, were withdrawn in August, less than three weeks after the collision that claimed at least 40 lives. "After a three-month process of modifications and repeated tests, previously reported problems with the CRH380BL trains have all been fixed," Xinhua quoted an unidentified Ministry of Railways official as saying. "Operations will gradually resume starting from Wednesday." The ministry official told the state news agency that six trains would initially be put back into service, while all 54 trains were expected to be back on the tracks by December 6, "if everything goes well". The Beijing News reported that the first train would "possibly" run between Beijing and Qingdao, Shandong province. The CRH380BL model - one of China's newest and most advanced high-speed trains - was not involved in the Wenzhou crash, but technical faults were uncovered in a safety crackdown launched in the wake of the disaster. The timing of the sudden recall of such high-profile technology shook public confidence in the high-speed rail network's safety record, already jolted by the accident and a series of stoppages and major delays on the new Beijing-Shanghai route. Media reports and experts earlier suggested that hairline cracks found in the axles of trains running on the line were linked to the recall. However, the railways ministry sparked controversy just over a week later by stating that it had been a false alarm, as the German ultrasonic detectors used had been too sensitive, and CNR told a Beijing newspaper that the problem had been solved by resetting the sensors' parameters. CNR had already decided to halt delivery of CRH380BL trains shortly ahead of the recall due to "flaws in the model's automatic braking systems", Xinhua reported yesterday, adding that the company "blamed the problems on quality defects with outsourced parts and components". No one at CNR's head office could be reached for comment yesterday. But a senior safety management official at the Tangshan Railway Vehicle Co - the CNR subsidiary that built the trains - said he understood that the CRH380BL trains had been given the all-clear. "I was not directly involved in the process, but as far as I am aware, the safety checks and rectifications have all been completed, and the trains were returned to the ministry," he said. "When they decide to put them back into operation is not part of our remit." There is a "one in 10,000" chance of a fault occurring, said Professor Wang Mengshu, deputy chief engineer of the China Tunnel Railway Group and a key drafter of the high-speed rail plan. "The problems were not major to begin with," Wang said. "It was a case of testing the individual trains one by one, to make sure they were safe and certifying them. "The main challenge ... is management, not the technical quality of the hardware."

Huawei Technologies, the world's second largest telecoms equipment maker, plans to buy the remaining 49 per cent stake in a joint venture with Symantec Corp that it does not already own for US$530 million to bolster its corporate security solutions business. The deal allows Huawei to boost its product portfolio for its enterprise customers and helps Symantec improve its bottom line by dropping the loss-making business, even as the value of the deal fell below market expectations. The deal is subject to approval from regulators in the United States, but analysts and company executives foresee few hurdles because the joint venture, called Huawei Symantec, was set up in Hong Kong and Huawei already owns the majority stake. “Whether this deal will complete or not… it is still a question mark for now, but I feel that they have a better chance since this joint venture is established in Hong Kong, outside of mainland China,” said Cathy Huang, an analyst at Frost & Sullivan in Singapore. Huawei expects the deal, which some analysts estimated could have been worth about US$1 billion, to close in the first quarter of next year. “We likely overestimated Symantec’s hand in the negotiation given the joint venture was operated under the control of Huawei,” Citi said in a report. Shenzhen-based Huawei and smaller crosstown rival, ZTE Corp (SEHK: 0763), have previously encountered obstacles in clinching some deals in the United States due to national security concerns. For Huawei, the concerns also stem from its founder and CEO Ren Zhengfei, a former PLA officer. Earlier this year, Huawei backed away from its acquisition of US server technology company 3Leaf’s assets, bowing to pressure from a US government panel that suggested it should divest the assets. In 2008, Huawei gave up a bid for US networking equipment company 3Com, while last year, a group of Republican lawmakers raised national security concerns about Huawei’s bid to supply mobile telecommunications equipment to Sprint Nextel. But this case is different, as the joint venture Huawei Symantec was set up in Hong Kong by Huawei and US security software firm Symantec in 2008. “The majority of the assets and customers are located in China and other regions. This is not about the US,” said Ross Gan, a spokesman from Huawei, said in an e-mail. Gan said Huawei would brief relevant government stakeholders as part of the routine regulatory approval process for such transactions based on the local laws and regulations that apply. The aim of the joint venture was to provide and develop network security, storage and systems management solutions to telecom carriers and enterprise customers. The venture, in which both Huawei and Symantec contributed around US$150 million each at that time, has R&D centres in cities such as Beijing and Shenzhen and in Silicon Valley in the United States, according to the company’s web site. “It’s a good thing for Symantec in that it’s been a drag to their earnings per share. I’m sure it’s incrementally positive,” said Brian Freed, an analyst at Wunderlich Securities. “There shouldn’t be any political or regulatory issues related to this.” The venture has lost money since it was set up in February 2008, according to Symantec’s most recent annual report filed with the US Securities and Exchange Commission. Symantec posted US$123 million in losses for its share of the venture from February 2008 to December last year. The JV, which is expected to continue to be in the red through 2013, was estimated to make a loss of US$82 million this year, according to Citi analysts. Symantec achieved the objectives that it set out for the venture and is leaving with a good return on its investment, Symantec’s chief executive, Enrique Salem, said in the statement. The company will continue to invest in China, he added. Huawei said both companies had talks over the past few months on the future and decided that the venture would benefit from a single owner. Symantec shares rose 2.8 per cent to US$17.40 in after-hours trading. Huawei is not listed.

The government in Beijing appeared keen on Tuesday to avoid a diplomatic brawl with the USover trade and currency stances, brushing aside President Barack Obama's criticisms and stressing that the world's two biggest economies share a stake in stable ties. Assistant Foreign Minister Liu Zhenmin did not directly address Obama’s comment, made on Sunday, that Washington was fed up with China’s trade and currency practices. “The meaning of President Obama’s comments is a question that you should ask the White House and the State Department spokespeople,” Liu told a news briefing. “China and the United States are also economic partners each of which is important to the other,” Liu told a briefing about Premier Wen Jiabao’s attendance at regional Asean and East Asia summits on the Indonesian island of Bali later this week. The East Asia Summit will be the first attended by a US president. Obama will meet Wen during the meetings, said Liu. “I think that along with the development of economic globalisation, and the development of Asia-Pacific regional co-operation, China and the United States have massive potential to further strengthen economic and trade co-operation.” Tension had been building in the lead-up to the annual Asia-Pacific Economic Co-operation (Apec) forum gathering over a proposed US-led free trade deal that Washington wants as a counterbalance to China’s influence but which Beijing sees as an attempt to force it to play by US rules. A day after talks with President Hu Jintao during the Apec summit on Hawaii, Obama used some of his toughest language yet against Beijing. He urged it to take on the responsibilities of a “grown up” economy and stop “gaming the system”. China’s government will not welcome such remarks, but its leaders have shown throughout this year that they want to keep relations with the United States steady, and avoid feuding that could distract them from a handover of top posts among Communist Party leaders from late next year. Beijing held back from broader retaliation after Obama meet exiled Tibetan leader, the Dalai Lama – scorned by Beijing as a foe of its rule in his homeland – and after the White House announced new arms sales offers to Taiwan, the self-ruled island that China claims as its own. “Some harsh words from President Obama won’t come as a complete surprise because he’s facing a grim economy at home, so Americans are in a bad mood,” said Shi Yinhong, a professor of international security at Renmin University in Beijing. The US election could intensify trade tensions, he added. “But China generally sticks to a pattern of avoiding open quarrels with the President … China wants to ensure that stability remains in place.” The currency dispute between China and the United States has been at the heart of tension between the rivals. Washington has long accused Beijing of keeping the yuan artificially weak to give its exporters an advantage. China counters that the currency should rise only gradually to avoid harming the economy and driving up unemployment, which would in turn hurt global growth. Liu suggested that the two governments should keep an amicable face on relations at the impending regional summit. “China and the United States both have a major impact on the Asia-Pacific region,” Liu said. “For the two countries to carry out co-operation and mutually benefit in Asia suits not only their interests, but also helps regional peace and development.” Last year, US-China relations were beset by a series of disputes, including disagreements over China’s trade and currency practices, US arms sales to Taiwan, China’s military build-up in the Pacific and its human rights record. The East Asia Summit gathers senior officials or leaders from Southeast Asia, China, Japan, India, Australia, Russia, South Korea and New Zealand.

Huntsman Takes Jabs at GOP Rivals for Anti-China ‘Pandering’ - Jon Huntsman Jr., former Utah governor and former ambassador to China, criticized the anti-China “pandering” by his Republican presidential rivals on Monday, warning U.S. policymakers against “impetuous” steps that could poison the economic relationship between the two powers. Mr. Huntsman, appearing at The Wall Street Journal’s CEO Council conference in Washington, specifically targeted former Massachusetts Gov. Mitt Romney‘s suggestion that the U.S. should use international trade channels to punish Beijing for its management of its currency. Such an approach would be “absolutely foolhardy,” Mr. Huntsman said, adding that Mr. Romney “knows better, he’s too smart a man… it’s called pandering.” “You don’t want to jeopardize all the many things we’re trying to achieve in what is the most important bilateral relationship in the world by acting in an impetuous unilateral way,” Mr. Huntsman said. China is quickly becoming a hot-button issue heading into the 2012 presidential elections, as voter dismay about the troubled U.S. economic recovery transforms into skepticism about the U.S.-China economic relationship. A number of politicians on both sides of the aisle have focused on Beijing’s management of the yuan as a stand-in for the broader concerns about the trade gap between the two countries. Mr. Huntsman said China’s management of its currency is a problem, but that Chinese officials will allow the yuan to appreciate at their own speed. He said he expects the currency to appreciate steadily — with or without jawboning by U.S. officials. “They will arrive at a point in the years to come where they’ll have more of a market based currency, whether we tell them to do it or not,” Mr. Huntsman said.

China's two unmanned spacecraft separated and then re-docked smoothly on Monday, following the first successful docking on Nov 3, the Beijing Aerospace Control Center said. The image of Shenzhou VIII spacecraft on the electronic screen in the Beijing Aerospace Control Center, on Monday. Experts said this second attempt was considered more difficult as it was mostly carried out in sunlight, which could interfere with the optical system's performance. After orbiting together since Nov 3, the Shenzhou VIII spacecraft and Tiangong-1 space lab module received an order to undock at 7:24 pm and separated from each other in four minutes. Shenzhou VIII withdrew to a position 140 meters behind Tiangong-1. Then it drew close to Tiangong-1 under the control of the ground station, and the two docked with each other at 8 pm. "Most of the rendezvous process was done in sunlit areas to test the optical telemetry devices' performance in such areas," the control center said in a release. "With the data gained, our goals have been achieved." The final docking was still completed in shadow, it said. In comparison, the first rendezvous and docking practice was entirely carried out in the shadow of the Earth. "You think you can see objects clearer with sunlight on the Earth. But the spacecraft's telemetry system actually produces more accurate results in darkness without interference from sunlight," said Bai Mingsheng, deputy chief designer of the space lab system. The two rendezvous and docking attempts in different environments are expected to give China a breakthrough in the rendezvous and docking technology, and also master the technology better, said Pang Zhihao, deputy editor-in-chief of the monthly publication, Space International. The second exercise is also expected to prove the docking port is up to standard for repeated docking, Pang said. Ma Yongping, vice-director of the Beijing Aerospace Control Center, said that Shenzhou VIII and Tiangong-1 will fly together for two more days. Then Shenzhou VIII will separate from Tiangong-1 and maneuver into an orbit 200 km above earth before its return on Thursday evening, he said. The spacecraft is expected to fall in the Inner Mongolia autonomous region. At the same time, Tiangong-1 will elevate its orbit to prepare for the next rendezvous and docking mission in 2012 with Shenzhou IX, which could be manned, he said. The docking system, developed by Shanghai Academy Spaceflight Technology, is compatible with the docking mechanism and structure used on the International Space Station, the Soyuz spaceship and space shuttles, Xinhua News Agency cited Tao Jianzhong, a research fellow with the academy, as saying. "We've simulated 1,101 dockings and 647 separations on the ground and the first docking precisely fit into our simulation," said Tao, who is an expert on docking simulation. He said that future international cooperation in space would be convenient in light of the compatibility. The country's manned space program spokeswoman, Wu Ping, told an earlier news conference that China's spacecraft would conduct two more space docking missions in 2012, at least one of which will be manned. China aims to build a space lab by 2016 and a space station around 2020, she said.

A waterfall is seen in Bali Valley on Nov 14, 2011. Bali Valley of Henan province depicts a natural art gallery every winter.

President Hu Jintao and other APEC leaders at the traditional photocall on Sunday at the end of their summit in Honolulu, Hawaii. President tells APEC leaders that growth models have to change - President Hu Jintao pledged on Sunday that China will boost both imports and domestic demand as the world's second-largest economy embraces a more balanced economic structure. Hu made the remarks as he addressed Asia-Pacific Economic Cooperation (APEC) leaders who were attending a summit in Hawaii. He called on regional countries to change their growth model to better meet the challenge of a struggling global economy. Analysts said that Hu's speech sent a clear message that China is committed to economic cooperation, both regionally and further afield. Addressing APEC leaders, Hu said sustainable growth was vital for economic recovery and long-term development. "We should speed up the shifting of the growth model and adjust the economic structure". Hu said that developed countries should adopt responsible macroeconomic policies and properly handle sovereign debt and fiscal risks. Emerging markets, he added, should boost domestic demand and promote growth through the combined forces of consumption, investment and exports. Wu Jinglian, a leading economist with the State Council's Development Research Center, said low savings and high consumption in developed countries were key factors behind the current global financial crisis. The opposite scenario was at play in developing economies and this worsened the global economic situation, he said. Both developed and emerging economies should adjust their structures, Wu said. Emerging economies could emerge stronger from the crisis by maintaining high growth levels but developed countries will have to refocus and identify new sources of growth, Wei Liang, a researcher with the China Institutes of Contemporary International Relations, said. "To that end, the US and Europe should place greater emphasis on technological innovation and hopefully that will lead to another industrial revolution to boost the global economy," Wei said. In this respect, there is potential for China and Western countries to cooperate, he said. China, the world's biggest exporter, has seen its trade surplus declining sharply over the past several years while imports have increased. Incomes have also risen and spending on construction has surged. Increasing domestic demand has boosted global production. China's imports are expected to reach $8 trillion in five years, Hu said at a G20 summit in France earlier this month. In the first three quarters of 2011, China's imports have already reached nearly $1.29 trillion, up 26.7 percent. Officials said that this demonstrates how China implemented measures to stimulate domestic demand. Besides high-tech imports, China should also encourage imports of consumer goods, such as food, which only contributes a small part of the total import volume, Wang Haifeng, director of the International Cooperation Center affiliated to the National Development and Reform Commission, said. "More competition from abroad would urge domestic producers to enhance the quality of their products," Wang said. Hu said in his APEC speech that China will unwaveringly put equal importance on imports and exports as well as inbound and outbound investment. Hu also said that China will continue to implement a win-win strategy of opening up new regions. China will redouble efforts to increase transparency and to make sure that its institutions and mechanisms are more responsive to the needs of an open economy, Hu said. "We will seek our own development and at the same time fulfill international responsibilities as our ability permits," Hu said.

Hong Kong*:  Nov 16 2011 Share

Henry Tang, on the day he announced his resignation as chief secretary, has hired a new public relations firm. Three supporters of sustainable development are setting out to break the hold of the Hong Kong General Chamber of Commerce on the Election Committee to decide on the next chief executive. Markus Shaw, Stephen Wong and Dr George Cautherley, running on a platform of sustainable development and environmental protection, will submit their nomination forms for the commercial first subsector of the committee this morning. Shaw, president of WWF Hong Kong, is a grand-nephew of media mogul Sir Run Run Shaw. Stephen Wong is a former investment banker and Cautherley is vice-chairman of the Hong Kong Democratic Foundation. The chamber is fielding 17 candidates for the 18 seats. In 2006, chamber-backed candidates took all 12 seats available for the subsector in the then 800-strong Election Committee. This time round there will be 1,200 members. Henry Tang Ying-yen - likely to be one of the candidates from whom the committee will choose to succeed Donald Tsang Yam-kuen - has meanwhile hired a new public relations firm for his campaign after his two-month contract with AsiaNet Communications expired on Sunday. It is understood that he has hired H&L Fung, a firm owned by PR veteran Jenny Fung Ma Kit-han, wife of former Legislative Council secretary-general Ricky Fung Choi-cheung. Tang's public relations advisers have been blamed for the handling of his disclosure of his extramarital affair after the firm declined to offer an English version of his statement, and turned down media questions after a minute-long press conference by Tang and his wife. The former chief secretary has also been the target of internet criticism after he was pictured lying on a bed during a visit to partitioned flats in Tsuen Wan. Internet users doctored the picture into various versions, some posing Tang in a coffin. Nominations for the Election Committee are scheduled to close today. By Saturday, 1,003 nominations for the subsector poll had been received. Shaw challenged the incumbent lawmaker representing the Hong Kong General Chamber of Commerce, Jeffrey Lam Kin-fung, in the commercial functional constituency in the 2008 Legislative Council election. About 360 candidates running in subsectors such as agriculture and fisheries, sports, performing arts, culture and publication, and Hong Kong Chinese Enterprises Association, are expected to be returned unopposed. The number of uncontested seats will account for 30 per cent of the total number of seats on the Election Committee, similar to the proportion in the 2006 committee poll.

Chinese University is nearing agreement on plans to build a campus in Shenzhen's Longgang district early next year to tap into the burgeoning Pearl River Delta. Business faculty dean, Professor Wong Tak-jun, said the university expected to seal a final deal with the Shenzhen municipal government later this year or early next year, having already signed a framework agreement for the new campus. Construction would begin soon after the deal was signed and students would be accepted two years later. The campus would have three faculties - business, engineering and science - and should have 10,000 students by 2020. The business school would be the first to be set up across the border by a Hong Kong institution, Wong said. "A global business school is one with knowledge about China," he said. "We can do research in the Pearl River Delta, where hi-tech companies and numerous other enterprises are located, and benefit from it like Stanford University benefits from its location in the [San Francisco] Bay Area. Besides undergraduate education, we hope to offer Executive Master of Business Administration and MBA degree programmes." He said the university would also put emphasis on character building, ethics and corporate social responsibility - areas he saw as essential for China's development. Seventy per cent of the future students would be from the mainland. The university's move comes as two American institutions are working to set up branch operations on the mainland. Duke University and Wuhan University have joined forces to establish the Duke Kunshan University about 60 kilometres west of Shanghai, which will begin operation in the 2012-13 academic year. New York University is also known to be planning to set up a branch campus on the mainland. Demand for business education among mainland students is growing strongly. This is backed by the 294 per cent rise in Chinese candidates for the Graduate Management Admission Test, used as a prerequisite for admission by about 5,200 management programmes at nearly 2,000 business schools worldwide. Chinese candidates sat for 40,069 tests worldwide this year.

The world's biggest jeweller began pre-marketing a planned US$3 billion Hong Kong IPO on Monday, as some analysts warned that even with increasing demand for luxury goods among wealthy mainlanders, the company’s anticipated valuation may not be as dazzling for investors. Chow Tai Fook Jewellery Group, controlled by Hong Kong billionaire tycoon Cheng Yu-tung, is strongly placed to tap cash-rich China’s hunger for golden trinkets and all that glitters. The jewellery retailer’s IPO is expected to be one of the largest this year, as the company pushes ahead with its offering in the face of economic uncertainty and an equity offering market that has virtually shut down. Chow Tai Fook – which means good luck in Cantonese – last week cut the deal’s size and valuation because of the global market turmoil, but moving ahead with the IPO now could be a signal that listing conditions will only get tougher next year. Foreign luxury firms are banking on strong China and emerging market demand to offset weaker sentiment in developed countries. London-based jeweller Graff Diamonds plans to raise US$1 billion in a Hong Kong listing next year to help fund further Asian expansion. Italian fashion house Prada listed in Hong Kong earlier this year, and US luxury goods maker Coach is expected to go ahead with its plans for a secondary listing by the year-end. Prada, which raised about US$2.5 billion in its IPO, is to spend some of those proceeds buying into the initial public offering of local handbag maker Sitoy Group, IFR reported on Monday, citing sources with knowledge of the deal. Chow Tai Fook, more than double the size of Tiffany & Co by revenue, plans to offer 1.05 billion shares, 76.2 per cent of which are primary shares and 23.8 per cent secondary shares, according to a term-sheet. Book-building is due to start on November 28, with pricing scheduled for December 8 and listing on December 15. The jeweller has 1,500 stores in Asia and is one of the best known brands in the region, though it has little recognition in the West. The 80-year-old company initially planned to sell shares valued at around 30 times its forecast earnings for fiscal 2013, which starts in April. But the market turbulence prompted it to seek a valuation of about 25 times and to sell 10 per cent of its enlarged capital, down from the usual 20-25 per cent in Hong Kong IPOs, IFR reported last week. Edwin Fan, analyst at BOCI, said Chow Tai Fook’s lowered valuation expectation was still high compared with local rivals Luk Fook Holdings (SEHK: 0590) and Chow Sang Sang Holdings, which are valued at 15 times. “I’d say all three are enjoying the rally in the booming industry, so not one has a hugely significant advantage. You may even see the relatively smaller ones demonstrating growth which is a little bit stronger than Chow Tai Fook,” said Fan. Chow Tai Fook is among just a handful of companies to test investor appetite after market volatility virtually brought Hong Kong’s IPO market to a grinding halt. The current fourth quarter is traditionally the busiest period for capital raisings. Foreign luxury brands not traditionally focused on jewellery, such as Louis Vuitton and Chanel, are starting to see the market as a means to grab a slice of China’s appetite for luxury. Chow Tai Fook, with annual growth of 60 per cent, is a common sight on major streets in Hong Kong and China. At one Chow Tai Fook branch in Causeway Bay district, more than two dozen customers from the mainland eye the gold, diamond and jade on display. “Around 90 per cent of our customers are from the mainland. They are most keen to buy gold bars and gold wedding bangles,” said salesman Eric Yu. While foreign brands Tiffany and Cartier are popular for white gold jewellery, Chinese customers prefer to buy yellow gold due to its strong history in China and investment value. “They want it for investment, not to wear,” Yu said. CLSA Asia Pacific Markets estimates Greater Chinese demand is expected to account for 44 per cent of the global luxury goods market by 2020. Analysts say China consumers spend an average of 10-12 per cent of total household income on luxury items, underlining the high propensity to splurge on high-end goods. Chow Tai Fook Chairman Cheng Yu-Tung, one of Hong Kong’s best known property and retail magnates, also owns New World Development, a multi-billion dollar real estate, retail and transport conglomerate. Among other offers, New China Life (SEHK: 2628, announcements, news) Insurance, the nation’s third-biggest insurer, plans to raise about US$2.5 billion through a Hong Kong and Shanghai IPO to replenish capital. Deutsche Bank, Goldman Sachs, HSBC and JP Morgan are handling the Chow Tai Fook offer.

Public hospitals were investigating reports some mainland pregnant women had been lying about their expected delivery dates to get early maternity services, Secretary for Food and Health York Chow Yat-ngok said on Monday. Chow said there had been reports from public hospitals, particularly Princess Margaret Hospital, that some pregnant mainland women were lying about when their babies would be due. They were doing this in order to meet the quota requirements needed to give birth at these hospitals. “We are concerned that this might cause unnecessary chaos in the hospitals, particularly if these pregnant women came in much earlier than the expected date,” he said after a Legislative Council meeting. The health secretary said hospitals would refer such cases to the police for further investigation. The government has put a cap on the number of mainland women who can give birth in Hong Kong from 2012 at 34,000. This is to ease pressure on medical services and ensure enough beds for local pregnant women. The quota followed a growing influx of mainland pregnant women giving birth here in recent years. Chow said hospital officials were now studying ways to ensure mainland pregnant women behave properly, such as using supersonic scans to double-check the expected delivery dates provided by them. He also urged doctors and medical workers to scrutinise their documents.

 China*:  Nov 16 2011 Share

Myanmar's opposition leader Aung San Suu Kyi yesterday urged an end to current difficulties with China, saying she was "particularly anxious" for good relations with Beijing. Speaking to media on the first anniversary of her release from house arrest, Suu Kyi (pictured) acknowledged "bumps and kinks" in the relationship - now one of the most closely-watched in the region. "China and Burma are neighbours and we will always be neighbours as long as the world stands," she told the South China Morning Post (SEHK: 0583, announcements, news) , using the Southeast Asian country's former name. "Because of that we are particularly anxious that our relations should be good. "We've had very good relations with China ever since we became independent in 1948," she continued. "And although, of course, there can be bumps and kinks in any relationship, I'm confident that we will be able to overcome these difficulties and re-establish the friendly relations we've always enjoyed." She said if China "wished to", it could help Myanmar a great deal in its moves towards democracy - an effort Suu Kyi is now in talks with new President Thein Sein about. Thein Sein, a former general, took office in March after elections sanctioned last year by the ruling junta. "Whether or not it does help in the process of democratisation, I hope that China will remain a firm, good friend to us, keeping in mind what is most desirable for our country and our people," Suu Kyi said. While Suu Kyi did not cite specific problems with Beijing, her remarks follow a government decision to order work frozen on a US$3.6 billion dam being built at Myitsone. The dam - which would have flooded an area the size of Singapore to provide power mostly to China - had faced fierce domestic criticism, including from Suu Kyi's National League for Democracy (NLD) party. Her remarks come during an important week for Myanmar. In Bali, leaders from the Association of Southeast Asian Nations are expected to decide whether to let Myanmar chair the organisation for the first time in 2014 - a long-held junta goal. At the weekend, her party plans to decide whether to formally register to participate in upcoming by-elections. That would be significant considering it boycotted elections last year amid concern over a 2008 constitution that effectively enshrines military power despite establishing a parliament. Participation would end an era that saw the NLD demand the upholding of its 1990 election landslide - a result the military refused to accept amid bloodshed. Recent months, however, have brought a string of compromises from Thein Sein that have been welcomed internationally, including the release of some 200 political prisoners and talks with Suu Kyi. The US as well as European and some regional nations are intensifying talks with the government - factors which could complicate the strategic picture for China in a country until recently seen partly dependent on Beijing. The West still keeps economic sanctions on Myanmar and Suu Kyi has yet to call for them to be lifted. While she said much work needed to be done, she urged the people to have faith, saying she believed the country was "looking at the opening to the road to democracy". "I have met President Thein Sein and I personally believe that he is very genuine in his desire for the process of democratisation," Suu Kyi said. One unsettled issue remained the release of political prisoners, some of whom have been detained since the crackdown on student protests in 1988. The release of some detainees was expected yesterday, but it was delayed after a meeting of top officials, sources said. Suu Kyi's party issued a fresh dossier yesterday detailing some 591 political prisoners - figures that differ from government accounts.

Beijing has told Washington it will abide by the rules only of international agreements which it has helped to draw up, as the two countries locked horns at the Asia-Pacific Economic Co-operation (Apec) summit. Experts said Beijing was growing weary of Washington's attempt to press China into following rules that were made without consulting it first. This refers to the proposal to create a Trans-Pacific Partnership (TPP), which could become the world's largest free-trade zone. While the US has not explicitly ruled out China's joining the TPP, US Secretary of State Hillary Rodham Clinton has linked the agreement to non-tariff issues including government procurement, the conduct of state corporates, regulatory convergence and intellectual property. Some mainland experts said the preconditions were designed to squeeze out China as the US was trying to reassert its leadership and counter Beijing's growing influence in the Pacific Rim region. US President Barack Obama said he wanted a legal document for the trade deal by next year and that the TPP would go beyond the scope of normal trade deals and serve as a model for broader agreements. Mainland experts said that to leave out China - the world's second-largest economy - would make the TPP ineffective and that Beijing would see no obligation to follow its rules. "China believes it is unreasonable to follow rules in whose consultation process it was not involved and with which it does not agree," said Shi Yinhong , a Sino-US affairs expert at Renmin University. At an informal meeting of Apec leaders yesterday, President Hu Jintao warned against protectionism. "We should work to establish a balanced, inclusive and win-win multilateral trading regime so that people everywhere will enjoy the benefits of trade and investment liberalisation," he said. His remarks have been seen by analysts as an indirect rebuff of the trans-Pacific deal. Ni Feng , a US affairs expert at the Chinese Academy of Social Sciences, said China's track record proved that it had followed the rules of international organisations to which it belonged. "Sometimes the US is not transparent about the rules it is negotiating. Under such circumstances, it is not fair to demand China to follow rules that the US has reached with others," he said. Obama earlier took a swipe at Beijing, saying that China was a "grown-up" country that should "play by the rules" on currency and trade issues. He accused China of "gaming the system" to its advantage. The Foreign Ministry hit back hours later. "First we have to know whose rules we are talking about," Pang Sen , its deputy director general, told reporters. "If the rules are made collectively through agreement and China is a part of it, then China will abide by them. If rules are decided by one or even several countries, China does not have the obligation to abide by that."

Shenzhou-8 re-docks with Tiangong-1 China's Shenzhou-8 unmanned spacecraft re-docked with the Tiangong-1, a module of the country's planned space lab, Monday evening.

The Selden Map before it was restored (top). The map being restored by Keisuke Sugiyama (second right), of the British Museum, and Robert Minte (right), of the Bodleian Library. The chance deciphering of an ancient map in Oxford University's Bodleian Library has generated a flurry of excitement among maritime historians. It is changing perceptions about Chinese trade during the Ming dynasty.

The yuan ended down slightly against the dollar on Monday after China’s central bank set the mid-point little changed as President Hu Jintao indicated that the government may keep the yuan exchange rate stable for a while. President Hu was quoted as saying on Sunday that US trade and employment problems would not be solved by even a major appreciation of China’s yuan versus the dollar. Dealers said Hu’s comments signalled that China had no intention to let the yuan rise faster in the near term. That cemented expectations that the yuan would rise to around 6.30 versus the dollar by the year-end, or roughly a 4.6 per cent increase for the whole year. “For now the yuan will not appreciate too much, not only because of the domestic economy, but also because of the overseas crisis [euro zone debt crisis],” said a dealer at a commercial bank in China. He said slower-than-expected export data had sparked expectations that the central bank could slow the pace of yuan rises, while inflation pressures decreased on a pull-back in the consumer price index. Exports were up 15.9 per cent year on year, the weakest in eight months and down from 17.1 pct in September, while China’s annual inflation rate fell to 5.5 per cent in October from September’s 6.1 per cent – the biggest drop in the annual rate from one month to the next since February 2009. Spot yuan closed at 6.3538 versus the dollar, up marginally from 6.3424 at Friday’s close. Before trading began, the PBOC set the mid-point at 6.3301, slightly higher than Friday’s 6.3317. The central bank uses the fixing to signal the government’s intentions for the yuan. Spot yuan has now risen 3.71 per cent so far this year and 7.43 since the it was de-pegged from the dollar in June last year. Steady yuan gains pushed mainland firms to sell most of the dollars they earned until the worsening of the euro debt crisis sparked a global dollar rally in September. Offshore one-year dollar/yuan non-deliverable forwards were bid at 6.3360, up slightly from 6.3260 at the close on Friday. They now implied that the yuan would largely remain unchanged in 12 months from the PBOC’s mid-point. Offshore dollar/yuan forwards have typically forecast yuan appreciation in the past few years. But it has largely implied yuan depreciation since the dollar rally in September.

President Hu Jintao has called for emerging markets and developing countries to have a greater say in global economic governance. Addressing top executives at the Asia-Pacific Economic Cooperation (APEC) forum CEO summit in Honolulu on Saturday, he said changes are taking place in global economic governance, but they are not keeping up with changes in global economics. Emerging markets and developing countries are carrying greater weight and are playing a bigger role in global economic governance, Hu said. "New mechanisms for global economic governance should reflect changes on the world stage," Hu said. "They should observe the principle of mutual respect and collective decision-making and increase the representation and voice of emerging markets and developing countries." Hu arrived in Hawaii on Thursday to attend the 19th leaders' meeting of the APEC group. He was also expected to address the leaders' meeting on Sunday. The way the global economy is run has been increasingly questioned in recent months as the eurozone has grappled with its debt problems and the world has struggled to recover from the economic crisis. Many countries have called for structural reform, and the issue has been high on the agenda of organizations such as the United Nations, the Group of 20 and APEC. Nassir Abdulaziz Al-Nasser, President of the UN General Assembly, said on Friday that one of the assembly's priorities during the current session is to strengthen the UN system for global governance through creative and adaptive structural changes. "Serious concerns relating to food security and the global financial and economic crisis have exposed how fragile and fragmented global economic governance has become," he said. Addressing the APEC CEO summit, Hu also called for an increase in regional economic integration through trade. China supports efforts to build an Asia-Pacific free trade area based on the East Asia Free Trade Area, the Comprehensive Economic Partnership for East Asia and the Trans-Pacific Strategic Economic Partnership Agreement, he said. "The regional multilateral trading regime has played an important role in countering the international financial crisis and opposing protectionism." Hu, calling on all countries to make rules on multilateral trade balanced and inclusive and beneficial to everyone, said China will move faster on the idea of establishing free trade areas, and will strengthen business ties with major trading partners. It will also deepen practical cooperation with other emerging markets and developing countries, he said. "We should vigorously promote regional and sub-regional economic cooperation and the establishment of free trade areas." While focusing on China's plans in developing a regional economy, Hu stressed that China will "open wider to the outside world and take an active part in global economic governance and regional cooperation". He also said China will give equal weight to imports and exports and to inbound and outbound investment, and focus more on encouraging Chinese businesses to invest overseas.

John Hui and Vernon CW Ching say the Hawaii Chinese Chamber of Commerce has become a bridge in economic exchanges between China and the US island state. The Hawaii Chinese Chamber of Commerce, turning 100 years old on Nov 26, has been taking advantage of its geographical and cultural position in serving as a bridge for business and culture exchanges between China and the Pacific island state. The anniversary will be celebrated at the Hilton Hawaiian Village Coral Ballroom. The past decade has been an important one for the chamber, a time when it developed from the Chinese Merchants’ Association founded by 13 young Chinese merchants in Honolulu in late 1911, to an influential organization with more than 350 members today that plays a leader’s role and an active voice for the Chinese community in Hawaii. Recently, China’s rapid growth has brought hundreds of delegates to Hawaii seeking enormous opportunities in business, education and cultural exchange. The Chinese chamber has welcomed and hosted an average of 20 delegates from China each year. “The chamber has actively facilitated this important exchange, making China-Hawaii relations flourish in various fields,” John Hui, president of the chamber, said. Hui started to visit China regularly seven years ago and is very confident in the Chinese market. With his network of contacts and businesses in Chengdu, capital of Sichuan province, the chamber helped in the signing of a new sister city agreement between Honolulu and Chengdu in September. In addition, the chamber is facilitating more exchange students to come from Sichuan and hopefully a direct flight connecting Hawaii to Chengdu, the major city in Southwest China. Talking about the APEC being held at Honolulu now, Hui thinks the recent surge in Chinese tourists to Hawaii will bring Hawaii as well as the United States many business opportunities. “More dramatic growth depends on making the US visa process for Chinese easier and for more direct flights between the Chinese mainland and Hawaii,” he said. According to Hawaii’s Department of Business, Economic Development & Tourism, the number of Chinese visitors to Hawaii will increase annually by 20 percent from 2012 to 2014. By 2014, Hawaii will have 140,000 Chinese visitors a year. As an important part of its centennial celebration, Vernon CW Ching, former president of the chamber and the US China Peoples Friendship Association Honolulu Chapter, is working on a special centennial edition about the chamber’s history. “The centennial book will cover not only the 100-year history of the chamber but will also include individuals, most of whom are Chinese and have done much not only to the chamber but also to the Chinese culture and business in the state of Hawaii,” Ching said.

A 24-meter stone statue of Soong Ching Ling (1893-1981) under construction in Zhengzhou, capital of Central China’s Henan province, on Nov 6. Funded by Henan Soong Ching Ling Foundation, the construction of the statue is reportedly costing 400 million yuan ($63 million). A scandal-ridden charity organization has declined to respond to accusations about its excessive commercial activities. The Henan Soong Ching Ling Foundation, a regional public foundation, came under fire after a Chinese media organization revealed that it gave illegal loans and allocated huge amounts of money to invest in real estate and other profitable sectors, while only a small share of its revenue went to charitable causes. China's regulations require that no less than 70 percent of a public foundation's annual revenue should be used for philanthropic purposes. Yet figures on the China Foundation Center website show that the foundation ranked first among more than 2,000 Chinese charity foundations in 2010, with total assets of nearly 3 billion yuan ($476 million), spent only 140 million yuan on charity projects that year. A report by Xinhua News Agency revealed the foundation raised a great deal of money selling health insurance in the vast rural areas of Central China's Henan province, some of which was then lent to property developer. An anonymous insurance agent in Luohe city, one of the 17 branches for the subordinate body in charge of the insurance - the Development and Management Center for Henan's Charitable Health Insurance - was quoted by Xinhua as saying that he collected about 1.8 million yuan in premiums every year. The agent, who has run the business since 2007, added that the project named "charitable health insurance" was run in such a way that it would appeal to villagers. He explained that most farmers chose to buy the insurance as they were promised they would receive an annual 400 yuan in interest once they paid 10,000 yuan in premiums. Earlier last week, the foundation also failed to explain the source of funding for a giant statue of Soong Ching Ling, wife of the 20th-century revolutionary Sun Yat-sen, and an adjacent complex. The 24-meter-high statue is part of an 800-square-meter complex under construction in Zhengzhou, the capital of Central China's Henan province, which includes a large meeting hall and four six-story buildings that house cinemas, studios and meeting halls. The project will soon be completed, according to workers on the site who are now burnishing and waterproofing the statue. The foundation insisted that the money needed for the project, which reportedly cost 400 million yuan, was "self-collected" and refused to give more details. But media organizations and Web users have questioned this, as it is rare for a regional charity organization to raise so much money for such a project. The provincial government has formed a panel to investigate the allegations. Employees from the foundation told China Daily on Wednesday that the officers authorized to answer media inquiries were out of office and could not be reached for comment. China Daily's later calls to the foundation went unanswered. Xu Yongguang, secretary-general of the Narada Foundation, a private charity focusing on public welfare projects, argued that charity foundations should not be criticized for investment activities that maintain and enhance their asset value. Given China's high inflation rate and low reserve interest rate, the value of donations shrinks if it is simply saved in banks, Xu said. Deng Guosheng, director of the non-governmental organization research center at Tsinghua University, said that it is "vital" that Chinese charities make their work more transparent. Liu Peifeng, an associate professor from the law school of Beijing Normal University, said that China should speed up legislation to regulate the commercial behavior of charity organizations.

Hong Kong*:  Nov 15 2011 Share

Hong Kong firms clean up at technology awards - Hong Kong entrants claim victory in five out of 14 categories at Apicta ceremony in Thailand - With major wins by three local companies and one of the city's oldest tertiary institutions, Hong Kong topped the Asia-Pacific Information and Communications Technology Alliance (Apicta) Awards held last week in Thailand. Apicta, a 16-member alliance, recognises each year the best in innovation in 14 categories from the region's information and communications technology industries. Hong Kong submitted 29 entries this year, compared with 16 a year ago. The city has been a participant in the Apicta Awards since 2002, with all its entries nominated by the non-profit Hong Kong Computer Society. "Hong Kong topped the overall charts by winning in five categories and receiving nine certificates of merit," said Michael Gazeley, managing director of Network Box Corp, which won the Apicta Grand Award for best security application. Last year in Malaysia, Hong Kong had two Apicta Grand Award winners and gained five certificates of merit. "Hong Kong has benefited greatly from the awards and has received good recognition for our entries over the years," said Stephen Lau Ka-men, president of the Computer Society. Kwai Chung-based Network Box won for "Z-Scan", a cloud-computing service that identifies malicious software and blocks it from harming networks. Compared with the typical three to 20-hour response times from traditional anti-virus software vendors, Z-Scan takes as little as three seconds to identify and block even previously unknown malware. It is the same technology that won Network Box the grand award in the technology category at the government's Hong Kong Awards for Industries on June 30. Pulse MediaTech received two Apicta Grand Awards this year for best start-up company, and in new media and entertainment. Quarry Bay-based Pulse MediaTech won for its "JM Digital Publishing Platform", which provides one-stop digital book conversion, online purchase and fulfilment for various mobile systems worldwide. It also claims to deliver the best electronic book reading experience. TalkBox, another start-up firm, won in the communications category for a smartphone application used in iPhones and Android handsets. TalkBox Voice Messenger enables instant audio messages between users and sharing of photos with geographic locations either through Twitter or Facebook. Baptist University picked up the Apicta Grand Award for best tertiary student project, called "Ulcer Detection in Gastrointestinal Videos", by its department of computer science.

The mainland-based garment manufacturer Grand Concord International Holdings is planning to raise HK$80 million through a Hong Kong listing to upgrade production capabilities and expand its sales network. The company, a specialist in the production of underwear and thermal insulation fabrics established in 2000, plans an initial offer of 100 million shares, including a placing of 90 million shares and a public offering of 10 million shares in Hong Kong. The offer price is HK$0.8 a share. Retail subscribers can apply from today until Thursday noon to invest HK$3,200 for a lot of 4,000 shares. Grand Concord expects net proceeds from the initial public offering to be around HK$38.4 million. The company's co-founder and chairman, Wong Kin Ling, said "We'd like to use about 50 per cent of the raised amount on upgrading and expanding our manufacturing equipment and plants to enhance our production efficiency." The company aims to boost its annual production capacity from the current 18.6 million pieces of underwear and 4,000 tons of fabrics to 24 million pieces and 7,000 tons respectively in about a year, said its chief financial officer, Eric Lee Yin-sing. Grand Concord, which has its headquarters in Zhucheng, Shandong province, had sales revenue of more than 378 million yuan (HK$464 million) last year, up 94 per cent from 2009. Its revenues for the first six months were around 140 million yuan, of which over half came from Japanese clients, one third from the mainland and about one tenth from its US customers. Its clients include the lingerie brand Triumph as well as fashion and sports labels such as Puma and DKNY. Its gross profit for the first half of this year was 46.64 million yuan.

James Tien tries his hand at making salted egg yolks. Business visitors lured to Lantau - Unusual cultural activities promoted to regular visitors as an alternative to shopping and dining. From making salted egg yolks in Tai O village to learning kung fu from a shaolin master - the Hong Kong Tourism Board is promoting cultural activities on Lantau Island to appeal to business travellers. Many business visitors return to the city frequently and want a richer experience than the usual round of dining and shopping. They seek physical and cultural activities, and are finding them on Lantau. "Long-haul visitors love cultural activities and nature," said James Tien Pei-chun, chairman of the Tourism Board, which is promoting such adventures for business travellers - whose numbers have not yet been affected by the European debt crisis. Visitors to Hong Kong for meetings, incentives, conferences and exhibitions (Mice) increased steadily to a total of one million over the first nine months of this year - 15 per cent more than the same period last year - according to the Tourism Board. Some end up in Lantau's Tai O village, learning to make salted egg yolks - a traditional delicacy - from retired fisherman Kwok Wa-hei, 75, in his stilt-house built on tidal flats. Salted egg yolks may not appeal to everyone: the American travel-news website labelled them one of the world's disgusting foods - for which it later apologised. They're all in a day's work for Kwok. "You should crack open a duck egg near its top and take out its egg yolk," he said, letting the contents of the shell slide into his palm. He pulled away the egg white, since only the yolk is wanted. Then, with remarkable gentleness, he washed the fragile yolk in a bowl of water before shifting it from one hand to the other. He placed it carefully on a bamboo tray and sprinkled salt onto it, saying: "It will be ready after three days in the sun." Because the yolks break easily, some companies and schools turn the task into a group team-building activity, Kwok said. Other activities for business travellers include learning martial arts at Lantau's Shaolin Wushu Cultural Centre, and joining a tai chi class in Tai O. People interested in cooking can learn to make dim sum at Ming Court, a Mong Kok restaurant awarded two Michelin stars. To cater to nature-loving travellers, free hiking tours will take place every Sunday until December 11, including a heritage walk from Tung Chung to Tai O and a coastal ramble passing by scenic Tai Long Wan. Bookings should be made at the Tourism Board's visitor centres.

Police have been accused of using women as bait after a serial sex attacker labelled a "dangerous sexual predator" was jailed for 5-1/2 years. Billy Chan Ho-leung pleaded guilty to five charges of indecent assault last December and January. The labourer targeted women in bars in Lan Kwai Fong, followed them when they left alone and assaulted them in dimly lit places as they walked home. But police did not release any details of the assaults, despite appeals to do so by one of his victims, until after his arrest in June. The senior police officer who headed the investigation has defended the move as a professional judgment call. "I have no regrets whatsoever about the way the case was handled. It was proven to be the correct way because we got the guy convicted," said Assistant district commander for Central district Kenneth Pemberton. But legislator Emily Lau Wai-hing and Hong Kong Human Rights Monitor said the police had threatened public safety by not publicising the attacks. The revelation of the case comes after police were criticised for delaying the release of information about a series of stabbings in Tseung Kwan O in early October and a series of indecent exposure cases in Kwun Tong on October 18 and 19. Chan was jailed on November 4 for the five attacks. The District Court heard Chan had committed the offences while on probation for indecent assault and that one of his victims had been assaulted twice. Judge Stephen Geiser rejected a defence claim that Chan had mental problems, saying psychiatric reports indicated he was a dangerous sexual predator. One victim told the Sunday Morning Post (SEHK: 0583) Chan attacked her in a lane off High Street, Sheung Wan, as she walked home early on January 1 after celebrating the New Year with friends. She had asked police to warn other women by publicising the attack. "I remember going to the police in January and asking them to warn women in the area," said the woman, an expatriate who is now thinking of leaving Hong Kong because of the trauma of her ordeal. "They told me they didn't want to create a panic or tip off the attacker, fearing that he might flee Hong Kong. "I was sure they were doing a good job trying to find him, but I felt I needed to try to warn women about this. I knew I would feel terrible if the same thing happened to another woman and I had kept quiet." The woman was so worried he would strike again that in March she contacted the Sunday Morning Post, which published her story. At the time, police said there was no evidence a serial attacker was involved and said no other sex attack had been reported in the vicinity either before or after she was attacked. But when the man was caught on June 8, and matched with DNA from blood taken from the victim's coat, it emerged he had indecently assaulted another woman in December in Po Hing Fong, Sheung Wan, about a kilometre from the later attack. Only when the man was in custody did police issue a press release asking for other victims to come forward. Legislator Emily Lau said the police had been wrong not to warn the public at the time of the assaults. "If there is somebody like that lurking around, the public should know," she said. "It is really reprehensible of the police not to inform the public and I definitely condemn them." Lau plans to initiate a Legco debate on press freedom on November 23, when she will mention the police practice of not informing the media and the public in such cases. She said the issue was also due to be discussed by the Legislative Council's security panel on November 25. Law Yuk-kai, director of Hong Kong Human Rights Monitor, said the police had shown "a totally misplaced priority". "It means they are using women as prey, and that is irresponsible," Law said. "To bring someone to justice is one police priority, but preventing [more] people falling prey is even more important and that is why it is important for police to release information." Law said he hoped to meet police to offer help on updating what he called was the "obsolete and outdated practices" on the release of information. "The police really need to revise their guidelines and draft them with public consultation or else they will not address the people's security needs and the need of the public and the media to know," he said. "The police cannot be stationed on every corner to take care of everyone. People have to fend for themselves and information is power. It is wrong to say law and order is only a matter for the police. It is important they release this information as soon as possible. In withholding information, they are doing the public a disservice." Hong Kong Police would not comment on the case but said certain factors - the public's right to know and operational strategies such as covert operations, and privacy of individuals - were considered before information was released in some cases, including rape or kidnapping. "Nevertheless, the police will release related information to the public according to the special requirement of particular cases. When disseminating information, the police will take into consideration the public's right to know and comply strictly with the relevant ordinances and the requirements of the Code on Access to Information."

The chief executive greets President Hu Jintao in Hawaii, where they discussed the economy. President Hu Jintao told Chief Executive Donald Tsang Yam-kuen yesterday that the government should be well prepared for the impacts of global economic uncertainties and severe inflation. Hu called on the Hong Kong government to shield the economy from any fallout and ensure the city's long-term stability and prosperity (SEHK: 0803). James Sung Lap-kung, a political scientist at City University, said Hu's remarks suggested Tsang should pay more attention to people's rising grievances about the government, as the economy might take a hit just as elections were held for the chief executive and Legislative Council next year. Hu met Tsang yesterday in a closed-door discussion in Honolulu, Hawaii, where they are attending the Asia-Pacific Economic Co-operation (Apec) forum leaders' summit. Speaking afterwards, Tsang quoted Hu as saying Hong Kong would face risks to its economy from at home and abroad. "President Hu suggested the Hong Kong government assess the situation comprehensively and be prepared," he said. Hu pointed to the growing threat of Europe's sovereign debt crisis, fluctuations in the world's financial markets and doubts about global economic recovery, Tsang said. He also quoted the president as saying Hong Kong would face intense inflationary pressure but expressing confidence in the city's steady economic growth, low unemployment and social stability. Tsang said the government would take measures at an appropriate time to support small and medium-sized enterprises and to look after people's livelihoods. Xinhua quoted Hu as saying the central government had consistently supported the city's economic prosperity and stability. Government figures released on Friday showed the city's economy grew 0.1 per cent in the third quarter from the previous three months. Tsang has said economic growth could shrink to as little as 2 per cent year on year in 2012. The government forecasts 5 per cent growth this year. Inflation rose by 6. 1 per cent year on year in the quarter, up from 5 per cent in the second quarter. He expressed pessimism about the prospects for the global economy during a discussion session at the forum, predicting rougher times in the coming 12 months and a longer turnaround than after the Asian financial crisis in 1997-98. At the beginning of the discussion, Hu congratulated the Hong Kong government for "successful" district council elections - which saw Beijing loyalist parties including the Democratic Alliance for the Betterment and Progress of Hong Kong and the Federation of Trade Unions triumph in many races. Tsang said Hu's comment did not refer to the "outcome of the election at all. It's quite clear that President Hu was referring to the high turnout in the district council elections." A record 1.2 million people, or 41.4 per cent of the 2.9 million eligible voters, cast their votes last Sunday. Tsang said he did not discuss the election of the next chief executive with Hu. However, he reiterated that he would ensure the smooth transition of government next year in terms of "policy implementation, economic performance, political stability and people's livelihood", even though the city might face bad economic times.

 China*:  Nov 15 2011 Share

Pedenstrians pass by a shoe store in Jilin, Jilin province, Nov 11, 2011. The ad reads "Buy shoes on Signles' Day". Online retailers registered a sales surge on Nov 11, as a result of "Singles' Day", and experts said wider recognition of the event is likely to support the growth of online sales. Taobao Mall, one of the largest online trading stores controlled by Alibaba Group Holding Ltd, said it had recorded some 1.15 billion yuan ($176 million) in sales revenue by 11:11 am on Nov 11 after more than 11 hours of trading. To put that into context, the sales revenue generated by Taobao Mall on Nov 11 2010 was 936 million yuan. Taobao Mall revealed that some 3.42 million consumers flooded onto its online stores at midnight on Nov 10 and the sales revenue had reached some 100 million yuan by just 12:08 pm. "Singles' Day is not a traditional Chinese festival, so it is mainly celebrated by young people. The online shopping model is widely accepted by the younger generation, and some of them have good purchasing power. As a result, when online stores mount promotions for Singles' Day, there will be a big surge in sales," said Wang Ningyuan, an analyst from CIC Industry Research Center. "Unlike the Spring Festival and National Day vacations that last several days, the Singles' Day one-day promotion will tend to help people make decisions quickly, it will better support the sales growth." Eyeing tremendous business opportunities, online store operators had long been prepared for big sales and advertised intensively from early November. Some stores said discounts of up to 50 percent would be offered. Meanwhile, some popular stores increased inventory volumes to guarantee supply. "We have uploaded products worth 60 million yuan to the system to ensure consumers can get what they want," said Hong Yan, an online store manager at the Mark Fairwhale brand on Taobao Mall. Hong said her team operated at full capacity from midnight and had recorded sales revenue of around 8 million yuan by 2 pm. She said the revenue target for the day was 20 million yuan. Singles' Day, or Guanggun Festival in Chinese, was first celebrated in 1993 by four students in Nanjing, Jiangsu province. The event falls on Nov 11 each year when unattached individuals are invited to join the celebrations. The date was chosen because it is dominated by the number 1, which can be used to represent a person's single status. Many involved realized that Nov 11 2011 will be the century's biggest Singles' Day, because the year also contains two number 1s, a fact that provoked wider celebrations. "It is a situation that will not happen again for one hundred years, so I want to do or buy something special to commemorate the day," said Shanghai resident Zhao Ping.

Yang Weihua, general manager of Ningbo Gaobao Investment, makes the winning bid for the right to lease Dayangyu Island, which lies off the coast of Ningbo, Zhejiang province. Da-yangyu, the first island ever to be put up for auction in China, sold for 20 million yuan ($3.15 million) on Friday. Ningbo Gaobao Investment, which deals in real estate and tourism development, won a three-way bidding war for the right to use the land for 50 years and build a luxury resort. "I think 20 million yuan is a reasonable price," said Yang Weihua, general manager of Ningbo Gaobao. "It has rich natural resources, especially in vegetation and seafood, and it's a great spot for sailing on the big, blue sea." She said her company will invest about 500 million yuan into the project, but declined to reveal more details. Dayangyu Island, which lies off the coast of Ningbo in Zhejiang province, covers 258,000 square meters - the size of 36 soccer fields - and was once an orchard and hunting site. It is among the first batch of 176 uninhabited islands made available to domestic and foreign developers by the State Oceanic Administration. "Located between urban areas and scenic attractions, Dayangyu is one of the islands with relatively good resources," said Jin Tengyong at the Xiangshan county ocean and fisheries bureau, explaining the 15-million-yuan reserve price at auction. "It's just 300 meters off the mainland, meaning the island is more suitable for reclamation if you take into account the cost of infrastructure, such as fresh water, electricity and roads." Authorities running the auction invited only companies with registered capital of more than 50 million to take part. The losing bidders were Xiangshan Tourism Group and Xiangshan Movie Development. "Setting the bottom line high is beneficial for the island's future," said Jin, who added that the local government will not cover the cost of infrastructure. As this was the first auction of an island in China, the event was nerve-wracking for both officials and experts at Huacheng Auction House, which organized the sale. "It was a trial for all of us," said the auctioneer, Li Lianmei. "The authorities were worried they couldn't do the auction professionally and there was concern we wouldn't even be able to find three potential buyers in advance. "In the end, we just carried it out as we do all land use sales," she added. According to the country's Island Protection Law, which took effect in March 2010, individuals and companies can only use the islands for up to 50 years after obtaining approval from local governments and ecologists. Getting that permission, however, does not mean developers have the freedom to do whatever they want. "I received a phone call from an interested party one day who was asking about turning an island into a industrial base," said Jin. "I turned him down immediately." Zhejiang has about 2,900 islands, each with an area of 500 to 1,000 square meters. More than 90 percent are uninhabited. Although the State Oceanic Administration's decision to open Chinese islands to developers stoked excitement, few local governments have so far been able to seal deals. "We've had 10 islands on the market since April, but not a single one has been leased out," said Ni Dingkang, an ocean and fisheries official in Zhoushan, the only prefecture-level city in China made up entirely of islands. "The reason is mainly due to the high rent and poor condition of these islands."

President Hu warns against protectionism to deal with economic woes - China's booming consumption and investment demand in the coming five years will generate a huge market for US companies, President Hu Jintao said on Thursday. "China's imports in the coming five years may total $8 trillion and our retail market could expand to $5 trillion by 2015," Hu said. "This will provide a huge market for the United States, which is aiming to revitalize its manufacturing industry and double its exports." But he warned that politicizing trade frictions and resorting to protectionism should not be the way to address trade disputes between the world's two largest economies. The two countries should consult equally and handle their trade disputes properly in line with World Trade Organization rules, Hu said. He made the remarks during a meeting with US business leaders on Thursday, ahead of his meeting with US counterpart Barack Obama scheduled for Saturday, local time, in Honolulu. The US could help resolve its trade deficit and unemployment problem by loosening restrictions on exporting its high-tech products, Hu told the US business leaders. They also discussed the expansion of Chinese investment in the US to increase local jobs. Hu urged the US to take more concrete actions to help Chinese firms invest in the US. US business leaders said that China-US trade ties may be the most important bilateral economic relationship of the century. "We are committed to expanding it and growing it, in a manner that benefits both sides," said Thomas Donohue, president and CEO of the US Chamber of Commerce. The two countries are each other's second-largest trade partners, with bilateral trade volume rising to $385 billion in 2010. Hu also reaffirmed China's commitment to protecting intellectual property rights, saying China will enhance its law enforcement in that area. Hu arrived in Honolulu with other Asia-Pacific leaders to attend the Asia-Pacific Economic Cooperation Leaders' Meeting. Analysts called on China and the US to join hands to help keep alive the flickering hopes of a continued global economic recovery while the European Union is struggling to avoid sliding into the abyss of the debt crisis. "The 2008 crisis has brought home that the fiscal and monetary measures of the US, China and Europe are interconnected, and coordination is very important and urgent to ensure global economic recovery," Gustaaf Geeraerts, director of Brussels Institute of Contemporary China Studies, said at a forum in Beijing. But analysts have warned that protectionism, which is often more prevalent during times of crisis, could hurt China-US economic relations, which are ever more important as Europe is trapped in a debt crisis. In the latest trade measures against China, the US is investigating Chinese solar photovoltaic companies for alleged government subsidies. "China will face a tougher global trade climate in the years to come, because of the ups and downs in the US and Europe," Zhong Shan, vice-minister of commerce, said in a prepared text of his speech for the forum. China has received the most anti-dumping investigations for 16 consecutive years, and also tops the most investigated countries for anti-subsidy cases, Zhong said. He urged countries with trade deficits with China to ease their restrictions on exports to balance bilateral trade, rather than just resort to blocking imports. The world is suffering from more trade protectionist measures, said Gordon Orr, Asia chairman of McKinsey & Company. The Ministry of Commerce also said in a trade report released on Friday that there could be more trade protectionist measures against China next year due to domestic elections and continued economic woes in developed countries. China is making efforts to solve its economic problems, which helps promote global economic stability and rebalancing, analysts said. Official figures show that China's new yuan lending was 586.8 billion yuan ($92.5 billion) in October, the highest since June, which analysts said is a result of monetary loosening to slightly boost liquidity to stabilize the world's second-largest economy. Meanwhile, it has successfully driven down the ratio of trade surplus to GDP to slightly less than 3 percent this year from more than 10 percent in 2007. Its imports surged in October as exports grew at their slowest rate in five months, suggesting efforts to tilt the economy toward domestic demand are paying off.

President Hu Jintao gives a speech as Craig Mundie, Microsoft's chief research and strategy officer, looks on at the CEO Summit during the Asia-Pacific Economic Cooperation summit in Honolulu on Saturday. President Hu Jintao has called for emerging markets and developing countries to have a greater say in global economic governance. Addressing top executives at the Asia-Pacific Economic Cooperation forum CEO summit in Honolulu on Saturday, he said changes are taking place in global economic governance, but they are not keeping up with changes in global economics. Emerging markets and developing countries are carrying greater weight and are playing a bigger role in global economic governance, Hu said. "New mechanisms for global economic governance should reflect changes on the world stage," Hu said. "They should observe the principle of mutual respect and collective decision-making and increase the representation and voice of emerging markets and developing countries." Hu arrived in Hawaii on Thursday to attend the 19th leaders meeting of the APEC group. He was also expected to address the leaders' meeting on Sunday. The way the global economy is run has been increasingly questioned in recent months as the eurozone has grappled with its debt problems and the world has struggled to recover from the economic crisis. Many countries have called for structural reform, and the issue has been high on the agenda of organizations such as the United Nations, the Group of 20 and APEC. Nassir Abdulaziz Al-Nasser, President of the UN General Assembly, said on Friday that one of the assembly's priorities during the current session is to strengthen the UN system for global governance through creative and adaptive structural changes. "Serious concerns relating to food security and the global financial and economic crisis have exposed how fragile and fragmented global economic governance has become," he said. Addressing the APEC CEO summit, Hu also called for an increase in regional economic integration through trade. China supports efforts to build an Asia-Pacific free-trade area based on the East Asia Free Trade Area, the Comprehensive Economic Partnership for East Asia and the Trans-Pacific Strategic Economic Partnership Agreement, he said. "The regional multilateral trading regime has played an important role in countering the international financial crisis and opposing protectionism." Hu, calling on all countries to make rules on multilateral trade balanced and inclusive and benefiting everyone, said China will move faster on the idea of establishing free trade areas, and will strengthen business ties with major trading partners. It will also deepen practical cooperation with other emerging markets and developing countries, he said. "We should vigorously promote regional and sub-regional economic cooperation and the establishment of free trade areas." While focusing on China's plans in developing a regional economy, Hu stressed that China will "open wider to the outside world and take an active party in global economic governance and regional cooperation". He also said China will give equal weight to imports and exports and to in-bound and out-bound investment, and focus more on encouraging Chinese business investment overseas.

Hong Kong*:  Nov 14 2011 Share

Hong Kong lessons pay off with San Francisco first - A man born in the United States but who studied Chinese in Hong Kong yesterday became the 43rd mayor of San Francisco. Ed Lee, 59, becomes the first elected mayor of Chinese descent in a city steeped in Sino-American history. Lee, a bureaucrat and political novice when he was appointed acting mayor in January, finished with 61 percent of the vote. Lee was born in Seattle, Washington, after his parents emigrated to the United States from Guangdong in the 1930s. His father, Lee Gok-suey, worked as a cook managing a restaurant in Seattle and his mother was a seamstress and waitress. His father died when he was 15. Lee, who has five siblings, graduated from Bowdoin College in Maine in 1974 and from the University of California, Berkeley Law School in 1978. He married his wife Anita in 1980 and has two daughters. Lee was appointed mayor after former mayor Gavin Newsom won election last November as California's lieutenant governor. He was San Francisco's city administrator at the time of his appointment and had the support of prominent city political figures in the mayoral race, which he officially entered in August. Lee, who faced off against 15 other candidates in the race, counted an agreement with the city's unions on a pension reform measure as the signature achievement of his 10 months in office and voters endorsed it over a competing measure. When asked in a recent radio interview to name a song that had influenced him, Lee had no hesitation is nominating Let's Stay Together. "People are depending on not just the mayor, but the Board of Supervisors working together with the mayor, which is why I like my song, Let's Stay Together, because we have a lot more to accomplish," he said. 

The discount investors enjoy by buying yuan in Hong Kong is disappearing as the mainland's shift toward pro-growth policies spurs demand for "dim sum" bonds. The discount fell to 0.2 per cent yesterday from a record 1.9 per cent on September 23, according to data compiled by Bloomberg. The currency strengthened 0.5 per cent this month in offshore trading after a 1.6 per cent jump in October that was the biggest advance in a year. Yuan-denominated, or dim sum, debt sold in Hong Kong rose in each of the past four weeks, the longest winning streak since May, according to the Deutsche Bank Offshore Renminbi Bond Index. "As the China bears fade away, offshore yuan will soon return to a premium versus the onshore rate," said Nathan Chow, an economist at DBS Bank (Hong Kong), a unit of Singapore's biggest lender. "China's economy is fundamentally strong. Demand for yuan continues to outstrip supply in the offshore market." Premier Wen Jiabao said last month that policies will be "fine- tuned" to protect Asia's biggest economy against global turmoil, spurring speculation two years of monetary tightening will start to be unwound. The government has since announced tax cuts for companies as well as increased credit for smaller businesses, while the central bank lowered its one-year bill yield for the first time since 2008 and injected 163 billion yuan (HK$200 billion) of funds into the financial system, while inflation appears to be slowing. "With inflation easing lately, they have some room to use monetary policy to help the economy," said Hitoshi Ueda a senior fund manager with Sumitomo Mitsui Asset Management in Tokyo. "That is supportive of growth and will lead to a stable speed of yuan appreciation. We aim to benefit from that strengthening." The yuan gained 0.23 per cent to 6.3550 per US dollar yesterday in morning Hong Kong trade, while the exchange rate in Shanghai rose 0.05 per cent to 6.3428, according to data compiled by Bloomberg. The onshore rate has gained 0.19 per cent this month after climbing 0.5 per cent in October. Analysts surveyed by Bloomberg expect the currency to climb 4.3 per cent to 6.08 per dollar in Shanghai by the end of next year. The average yield on dim sum bonds fell to 3.68 per cent on Thursday from a record 3.95 per cent on October 7. The rally in the securities may slow as Europe's debt crisis hurts exports, deterring policymakers from allowing yuan gains, said Frances Cheung, a senior strategist at Credit Agricole CIB in Hong Kong. Overseas sales rose 15.9 per cent in October from a year earlier, the least since February, trade data showed. "Dim sum bonds' performance depends on investors' expectations of yuan appreciation and as you can see the China exports numbers weren't too great," Cheung said. "Although China will still have relatively better growth, it can't stand alone in this global storm."

Billionaire Cheng Yu-tung's Chow Tai Fook Group may gauge investor demand next week for a US$4 billion initial public offering of its jewellery unit, two people with knowledge of the matter said. The Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) stock exchange approved the listing plan on Thursday and the luxury retailer aims to list next month, the people said. Chow Tai Fook has not decided whether it will sell a 10 per cent or 15 per cent stake in the unit, one of the people said. The larger stake may raise as much as US$4 billion, the person said. The sale targets almost double the amount raised by Milan-based Prada in the biggest IPO this year in Hong Kong, where surging disposable income in China has helped drive monthly retail sales to a record. The jewellery unit may be valued as high as seven times annual revenue, double what LVMH Moet Hennessy Louis Vuitton paid to buy out Bulgari last month, and triple Tiffany's market capitalisation. "I doubt if investors are willing to pay them a high premium over rivals," said Patrick Yiu, managing director at CASH Asset Management. Chow Tai Fook Group has more than 1,300 stores in Asia and plans to increase the number to 2,000 by 2016, according to the Hong Kong-based company's website. The jewellery chain has annual revenue of more than HK$30 billion. Calls to Chow Tai Fook's Hong Kong office and to its public relations representative, Brunswick Group went unanswered. A US$4 billion dollar sale would value the jewellery unit at about US$26.7 billion, compared with US$9.56 billion for Tiffany, according to Bloomberg data. At that price, investors would be paying about 6.8 times revenue, compared with the 3.5 times LMVH paid for Bulgari and the 2.8 times market price to sales ratio for Tiffany, according to Bloomberg data. Prada, the maker of Miu Miu bags and Church's shoes, raised US$2.5 billion in a Hong Kong IPO in June. Coach, the largest US luxury leather-goods maker, aims to list in Hong Kong later this month and Graff Diamonds, a London-based retailer of the gems, is also planning an initial public offering, according to people with knowledge of their plans. "Retail growth has been very strong and the company's profitability looks bright," said Yiu of Cash Asset. "There's always a strong appetite for luxurious products in China." Hong Kong shopping sprees by mainland tourists have fuelled sales of shoes, clothes and jewellery and driven monthly retail sales to record highs this year and prompted global retailers to accelerate expansion. The growth has prompted retailers to go ahead with share sales despite the prospect of economic growth slowing on the mainland and concern about Europe's debt crisis that have helped drag the benchmark Hang Seng index down 17 per cent this year. "Chow Tai Fook should receive strong demand despite the market volatility," Steven Leung, a sales director at UOB Kay Hian said. "We have not come across a sizable IPO for quite a long time, there is abundant liquidity in the market, especially among long-term funds, and they could quickly snap it up." Deutsche Bank, Goldman Sachs, HSBC and JPMorgan Chase are managing the IPO for Chow Tai Fook as global co-ordinators, the people with knowledge of the matter said

Shoppers will be able to buy the new iPhone 4S from Hong Kong's Apple store only by appointment after huge demand caused crowd control problems in the IFC Mall. The announcement was made at noon yesterday after 1,000 people queued to buy 5,000 phones, with many selling on their purchases to dealers for a fat profit. The store received complaints about crowd management on Wednesday that led to the introduction of barriers. About 40 police officers were drafted in on Thursday to ensure order and 10 reinforcements arrived later from the police tactical unit. The store has now introduced an iReserve system, under which customers can seek an online appointment and - if successful - pick up their phones the next day. It means customers can no longer buy the iPhone 4S simply by walking into the store. It also helps to stamp out the reselling of newly released products at inflated prices. Mike Groves, who is in charge of risk management for Apple, said the new arrangement was the only way the 4S would be available from the Apple store until further announcement. "There will be no more lines," he said. Apple did not disclose the numbers of appointments and phones that will be available each day. The appointment and pick-up system is available at all Apple shops for all products, but the iPhone 4S is the only product that is solely available through iReserve. The biggest losers are likely to be dealers who buy large numbers of the phones from people in the queues. One dealer bought more than 100 phones by paying HK$2,000 to HK$4,000 to professional queuers. He said he would sell some to a store in Mong Kok and take the rest to sell on the mainland, where the phone will not be released until next month. He was not concerned about iReserve, as he was certain of turning a profit from mainland customers who will gladly pay the inflated price before the launch there. The shop he sold to was selling the iPhone 4S for HK$6,450 for a 16GB model - HK$1,362 more than the original price of HK$5,088. Shopowners were generally offering HK$6,300 to HK$6,700 to buy the 16GB version. One man who bought an iPhone 4S yesterday said the buyers he encountered were offering HK$6,300. He said that figure was too low and he had decided not to sell. Of the iReserve scheme, he said: "I think it's good for consumers that Apple is doing this. I always thought they were toying with regular customers by making it really difficult for us to get hold of a phone. And it's not like Apple is earning anything from all this reselling business." Wing Liu, an Apple fan who bought a 16GB phone from a reseller for HK$6,100, said: "Yes, Apple say they will take online appointments. But honestly, how many people will manage to get one? "The website might crash. I honestly think it will be very difficult to get an appointment." One customer to lose out was Hussain, from India, who queued for three days only to lose his place when he went to the store's exit to collect money from a reseller to pay for five phones. He was treated as having left the store and was prevented from re-entering by the security guard. "I am just a poor man and I just want to make a bit of money," he said to the guard.

Pui Wai-loi and Stephen Ma Kit-ting tie the knot at the Marriage Registry in Admiralty – just two of the thousands of Asians who chose to get married on the 11th day of the 11th month of 2011– believing the quirk of the calendar makes it the most auspicious date in a century. November 11 is traditionally seen in China as a good day to marry, and in Shanghai nearly 5,000 couples wed. A newly married couple pose with friends in Shanghai. Some say it's for luck. Others choose the date because it's easy to remember. Whatever the reason, sweetness filled the city yesterday as a record number of couples tied the knot on the date with six ones. Pui Wai-loi and Stephenie Ma Kit-ting were among the 1,017 pairs who got married yesterday for its implication of "one life, one love". They added two more 1s to their wedding, as they became husband and wife at 11am at the marriage registry in Cotton Tree Drive, Admiralty. The couple, both 27, were the first to apply through the government's online booking system three months ago. "She's always my No 1," Pui, an IT professional, said, but he downplayed the significance of 11.11.11. "The meaning of this date is only imposed by others and is not important. The essential thing is this love and promise will never be changed." Jodie Fook Siu-chu, who married Joe Cheung Chi-hang, said she had not thought too much about the meaning of the date when they planned their wedding. "We just gave it a try, and in the end succeeded," she said. Cheung, who celebrates his birthday today, said he hoped their friends and family would remember their marriage on the special day. "I hope it will bring luck to our new family," he said. Couples who missed out yesterday and still want to pick an auspicious date could opt for December 12 next year. But they will have to get planning soon. Wedding planner Vicky Chan, of Theme Wedding Design, said bookings for next December were almost full. "Usually couples start planning their weddings six to nine months ahead of the actual day, but next December is abnormally full," she said. The previous date with the most couples tying the knot was on October 10 last year.

Britain's elite colleges look East for funds - As top universities grapple with reduced funding amid drastic cuts to public spending, more Hong Kong philanthropists are willing to step in - Some of England's most prestigious universities, strapped for cash after deep cuts in government subsidies, are to step up fund-raising drives in Hong Kong and the mainland. While Oxford, Cambridge and the London School of Economics say government grants will still make up the bulk of their income, these elite institutes are increasingly looking eastward to diversify funding. And the amount donated by Hong Kong philanthropists is expected to rise this year, with new scholarships and projects to be announced. "Oxford University has put an increasing emphasis on our relationship with China and Hong Kong," a spokesman for the English-speaking world's oldest university said. "We are looking more to philanthropy." Last year Hong Kong businessmen donated at least £2 million (HK$24.77 million) to the top three English universities: Oxford, Cambridge and the LSE. This is expected to increase this year and next. (On top of that, Li Ka-shing donated £5 million to Oxford for an infectious diseases research program in Asia.) The LSE said donations from Hong Kong had surged in recent years - from just £19,000 in 2007 to £45,000 in 2009 and more than £775,000 in the last academic year. "At a time when the UK government has sharply reduced funding of higher education, we, like all universities, increasingly have to look to alternative sources of funding," an LSE spokesman said. Britain's coalition government has drastically cut public spending to reduce a record deficit. In England, university tuition fees have tripled, triggering riots and protests. All but one of England's 130 universities will get less money from the government after adjusting for inflation. Oxford's funding will be cut by 1 per cent in real terms and government grants to Cambridge will drop 3 per cent. But many Hong Kong tycoons are willing to support these prestigious institutes. Dickson Poon, whose companies include Harvey Nichols, donated £1 million last October to St Hugh's College, Oxford, for the creation of a China Centre. Construction of the 6,600 square metre building, to bear Poon's name, starts next year. "We owe a debt of gratitude to Mr Poon and the other donors who are making the China Centre possible, despite the financial climate," said Professor Andrew Hamilton, the university's vice chancellor. Former Sun Hung Kai Properties (SEHK: 0016) chairman Walter Kwok Ping-sheung also donated to Oxford. Two weeks ago, the Walter Kwok Foundation pledged £100,000 to set up a scholarship for Hong Kong students to study politics at Oxford. The billionaire said he was thinking of offering more scholarships in the future - such as sponsoring a joint undergraduate degree programme between Oxford and the University of Hong Kong. "The reason why I chose to partner with UK universities is because Hong Kong inherited its entire legal system from Britain," Kwok said. He also donated to Cambridge and Imperial College London.

The world's largest jeweler is launching one of the biggest IPOs of the year, hoping to capitalize on impressive growth rates and an obsession among many Chinese for gold and diamonds. The jeweler, more than 50% bigger than Tiffany & Co. by revenue and slightly bigger than the jewelry businesses of luxury goods maker Cie. Financiere Richemont SA, plans to raise up to $3.5 billion in a stock offering in Hong Kong, people familiar with the matter said. The big selling points to investors are an Internet-like 60% annual growth rate, more than 1,500 outlets in Asia, nearly all in China, and one of the best-known brands in the region. The name? Chow Tai Fook. The 80-year-old Hong Kong company, owned by one of the city's richest families, may be the biggest brand almost completely unheard of in the West. "They are the dominant jewelry player in China," said Aaron Fischer, a retail analyst at brokerage firm CLSA. "It would surprise people in the West just how big they are. They're one of the biggest luxury names in China." The brand is impossible to miss in Asia. Chow Tai Fook stores line the main shopping streets of China's major cities, with 50 stores in Hong Kong alone, some facing each other on opposite sides of the same street. Its ads are plastered on taxis, buses and billboards. But it's the chain's presence in smaller Chinese cities that sets it apart from its Western rivals such as Tiffany's, which has 16 stores in China. The stores themselves are heavy in gold, which accounts for more than half of Chow Tai Fook's sales. The chain pioneered the sale of nearly pure 24-carat gold, now the standard demanded by most Chinese buyers. There are other Asian touches. Customers looking in the showcases are offered tea or water by eager salespeople clad in identical black pantsuits. While prices of gold items are pegged to the market price, if the browsers find a diamond ring or jade necklace they like, the bargaining begins. The salesperson whips out a calculator and furiously punches in a lower price, with customers free to make counteroffers in a scene that would make a salesperson at Tiffany's gasp. Chow Tai Fook ranks among China's most sought-after brands. A study by CLSA of the most-searched brands on Baidu, China's largest Internet search engine, placed Chow Tai Fook fifth, just below Louis Vuitton, Chanel, Gucci and Coach and ahead of like Prada, Cartier, Tiffany and Rolex. Chow Tai Fook, traces its history to Macau, the former Portuguese colony turned gambling mecca, where jeweler and gold trader Chow Chi Yuen gave it a name that roughly translates as good fortune. The company's now 86-year-old chairman, Cheng Yu-tung, married Mr. Chow's daughter and moved to Hong Kong to expand the family business. Mr. Cheng's son, Henry Cheng, currently presides over a multibillion-dollar real-estate, retail and transportation empire known as New World Development Ltd. The family's third generation is also involved in the business, including Sonia and Adrian Cheng. Both are Harvard alumni and Adrian is a former Goldman Sachs banker who is spearheading the jeweler's push into high-end diamonds and other gems so they are less dependent on lower-margin gold sales. The generational shift is one reason for the IPO, in which the family will sell between 10.5% and 13% of its stake. Chow Tai Fook's size and rapid growth are the big draw for investors. People familiar with the matter say sales were $4.5 billion in the last fiscal year, which ended in March, up 53% from the year before, while profits were $464 million, up 64%. In the current fiscal year, sales are expected to rise 71% to $7.7 billion and profits up 80% to $835 million. That growth is expected to slow slightly the next year. The next-largest pure-play jewelers are Tiffany, with sales of $3.09 billion in its last fiscal year, which ended in January, and Signet Jewelers, owner of Kay Jewelers in the U.S. and H. Samuel in the U.K., with revenue of $3.4 billion last year. Signet has 1,857 outlets, more than Chow Tai Fook. The jewelry companies owned by Richemont, including Cartier and Van Cleef & Arpels, had sales last year of $4.73 billion, and have grown 34% so far this year, putting Chow Tai Fook slightly ahead. Investors are expected to pay up for that growth. People familiar with the matter say they hope the shares will sell for more than 20 times earnings per share in 2013, which assumes two years of 60%-plus growth. It's the same method used to make expensive but fast-growing Internet stocks appear cheap. Chow Tai Fook's IPO comes during a drought in what had been a vibrant Hong Kong IPO market. The family decided to go ahead with the IPO in a meeting Friday morning, a day after the Hong Kong market fell 5%, in part on worries about turmoil in Europe. Given the market's continued volatility, Chow Tai Fook plans to set its IPO price at between 18 and 25 times forecast 2013 fiscal earnings, rather than the more than 30 times valuation it previously planned, implying an IPO size of $2.5 billion to $3.5 billion, down from $3 billion to $4 billion, a person familiar with the situation said. If successful, the IPO would be the fifth biggest in the world this year. One item in its favor is stocks of companies that benefit from the growth in Chinese consumer spending, including two smaller Hong Kong jewelers, have done well this year.

 China*:  Nov 14 2011 Share

Foreign Minister Yang Jiechi and Commerce Minister Chen Deming attended the 23rd Asia-Pacific Economic Cooperation (APEC) ministerial meeting here Friday to explain China's positions and proposals on issues concerning Asia-Pacific cooperation. Yang said at the meeting that the influence of the international economic crisis still exists at a deep level. He said that the economic development of the world and the Asia-Pacific region faces severe challenges and various forms of protectionism are rearing their ugly heads again. As a result, he said, it is necessary to strengthen regional cooperation, especially concerning economy and trade. China believes that regional economic cooperation should uphold equity and tolerance, openness and fairness, sustainable development, mutual benefit and all-win, Yang said. He said that efforts should be made to promote the establishment of a multilateral trade system in a future period of time and to support the Doha Round of trade negotiations. Steps also should be taken to steadily advance the establishment of an Asia-Pacific free trade zone on the basis of the ASEAN 10+3 and ASEAN 10+6 frameworks in order to realize Asia-Pacific regional economic integration, Yang said. The foreign minister called for efforts to advance green economies and nurture new areas of economic growth, and actively create jobs and encourage innovation. Yang also emphasized the importance of APEC cooperation on reform involving the economic structure, of improving and making the mode of economic development more complete, and of transferring the ways of economic growth. He called on APEC members to implement responsible macroeconomic policies, and properly deal with sovereign debt and financial risks. Emerging market economies should actively boost domestic demand, promote their economic growth toward the direction of depending on the driving role of consumption, investment and exports, Yang said. Yang also stressed the importance of boosting cooperation among APEC members to enhance the capacity to prevent and control natural disasters in the region and to alleviate the impact of them on people's lives and property and the regional economy. The Chinese government pays great attention to disaster prevention and relief as well as disaster control, he said. China is ready to share helpful experience with other APEC members and promote cooperation on disaster prevention and relief in the Asia-Pacific region and reduce damages caused by natural disasters, Yang said. While talking about anti-corruption cooperation within APEC, Yang said APEC members should beef up political transparency on the basis of equity and mutual benefit, respecting each others' differences and focusing on effects. China is willing to further cooperation with other APEC members to advance anti-corruption efforts and help create a better commercial environment in the region, promote the competitiveness of the region and make active contributions to its economic development, Yang said. Meanwhile, Chen said it is an established tradition of APEC to support a multilateral trading system and oppose protectionism. All members of the World Trade Organization, including the APEC economies, should show confidence in the multilateral trading system and send positive signals for global economic stability and development, the commerce minister said. The Doha Round of trade negotiations should adhere to the aim of the Doha Round and not deviate from its development goals, Chen said. He said the WTO should always abide by the authorization of Doha Round, and not give up its negotiation achievements of the past 10 years. WTO members should understand and make concessions to one another, narrow their differences and finally reach agreement on the basis of consolidating the existing achievements, Chen said. WTO members should adopt a long-term perspective and make some concessions to promote the advancement of the Doha Round of trade negotiations, he added. China supports Russia's accession to the WTO and hopes the forthcoming eighth WTO Ministerial Conference could make progress, Chen said. Chen said, protectionism has revived since the Yokohama meeting in 2010, while it is relatively conspicuous that China has been subject to harm of protectionism. From January to September, China has sustained 50 trade remedy investigations, involving three billion U.S. dollars. Chen appealed to all parties to be highly alert, and to take practical actions to resist and cancel all kinds of protectionism and make less use of, prudent use of and refrain from abusing trade remedy measures to prevent politicalization of economic and trade issues. Regarding the next generation of trade and investment issues, Chen said that China generally holds an open attitude toward discussions about the next generation of trade and investment issues, but the relevant cooperation should be in respect of differences among economies and the Bogor Goals could not be played down or even replaced. Regarding liberalization of trade in environmental products and services, Chen said that China respects the non-binding nature of the APEC forum, and holds a supportive and open attitude toward liberalization of trade in environmental products and services. The member economies' different levels of economic development and technological capacities, Chen said, should be given full consideration in promoting liberalization of trade in environmental products, which not only require the contributions from developing members but also developed ones. Otherwise, it would violate the principal of "common but differentiated responsibilities," Chen said. Chen emphasized that APEC should firstly take full care of the concerns of developing countries. Secondly, efforts should be made to establish through cooperation a technological innovation system meeting the realities of all member economies, and jointly create a favorable environment for encouraging innovation. Thirdly, he said, steps should be taken to encourage technology transfer and cooperation among member economies, and cancel discriminative policies that restrict the exports of high-tech products, in order to enable all member economies to enjoy the fruits of innovation. On the sidelines of the summit, Yang exchanged views on bilateral ties and common concerns on international and regional issues with many of his foreign counterparts, including Australia's Kevin Rudd, Chile's Afredo Moreno, Mexico's Patricia Espinosa Cantellano, New Zealand's Murray Mccully and Canada's John Baird. Chen, also on the sidelines of the meeting, met with U.S. Trade Representative Ron Kirk; Thomas Donohue, president of the U.S. Chamber of Commerce; Canadian International Trade Minister Edward Fast, Indonesian Trade Minister Gita Wirijawan, Thai Deputy Prime Minister and Commerce Minister Kittirat Na Ranong and U.S. Commerce Secretary John Bryson.

The APEC finance ministers pose for a family photo after the first of their meetings at the APEC Summit in Honolulu, Hawaii, Nov 10, 2011.

US retailers say China essential to their futures - If one were to try to snap a photograph of China, it would be difficult to capture a still shot. That is how rapidly the country is moving and changing, said an official with the National Retail Federation of the United States, the largest retail-trade association in the world. Workers in a toy factory in Ganyu county, Jiangsu province, keep themselves busy working with products that are to be exported to the United States. "Everything's growing by leaps and bounds," David French, senior vice-president for government relations at the organization, said after a four-day trip to Beijing and Guangzhou this past month. "The pace of change is so strong that it was so exciting to see it happening from the ground level. I learned more in 72 hours than in months of research about China." He took to task US Senators who accused China of holding down the value of the yuan and passed a bill that would let the United States place duties on imports from countries found to be manipulating their currencies. He said they "are thinking about the China of five to 10 years ago". He also predicted that China will become the leading market for luxury goods by 2020. Both French and Matthew Shay, president and CEO of the National Retail Federation, met with Chinese retailers, manufacturers, other businesses and US and Chinese government officials. "China is integral to the success of the US retail industry," Shay said in a press release. "High-quality, high-value merchandise produced by Chinese factories is key to US retailers' ability to supply American families with the products they need and want at prices they can afford." China is the leading supplier of imported merchandise to US retailers. Even so, wage increases in China and a recent rise in the value of the yuan have caused the country to become a more expensive source of merchandise and a more attractive market. That is why the representatives of the National Retail Federation took their trip. "We see a lot of opportunities in getting our goods in the consumer marketplace," French said. Even so, French said language, cultural and political barriers must still be broken down. What may work in the US market may fail in China and vice versa. Of the 2,500 retailers French represents, he identified one as enjoying a particularly surprising amount of success in China. "LL Bean has 66 stores in China," French said. "I'm not sure they have a dozen all across America."

Workers make underwear for export to Japan at a factory in Qingdao on Wednesday. Exports increased 15.9 percent to $157.49 billion in October, the lowest level for five months. China's trade surplus narrowed in October as unexpectedly strong domestic demand lifted imports and weak US and European demand curbed export growth, official data released on Thursday show. Imports surged 28.7 percent year-on-year to $140.46 billion, the General Administration of Customs said on its website on Thursday. Exports increased 15.9 percent to $157.49 billion, the lowest in five months, the data show. The result was a trade surplus of $17.3 billion, down 36.5 percent year-on-year. "The nearly 29 percent import increase caught us by surprise," said Hu Yanni, a macroeconomist at China Securities Co Ltd. "The data show that domestic demand remains pretty good. Investment needs in China are better than expected," Hu said in a telephone interview. For the first 10 months, China imported 560 million tons of iron ore, up 10.9 percent, the customs statement said. Imports of machinery and electric products increased 15.6 percent to $619.9 billion, while vehicle imports were up 27.6 percent to 820,000, according to the data. "The strong import growth shows that domestic demand remains strong," Zhang Zhiwei, an analyst with Nomura Securities, said in an e-mailed report. "Robust domestic demand will help to support the soft landing of China's economy," he said. The government has more room to increase domestic demand, Hu said. Infrastructure construction in the western part of the country and investment in agriculture have the potential to further improve import demand, she said. The import surge also reflects the impact of government policies, analysts said. The government has been encouraging an increase in imports to achieve a better trade balance. It is formulating policies such as credit for importers and lower import tariffs, Premier Wen Jiabao has said. Imports will exceed $1.7 trillion in 2011 and total imports will amount to about $10 trillion over the next five years, Commerce Minister Chen Deming wrote recently. But the outlook for exports is less positive. Analysts said that the pace of export growth would keep sliding next year as Europe, China's largest foreign market, remained mired in a debt crisis, while the outlook for the US, the second-largest market, was uncertain. "Weak external demand will restrain exports," said Zhang. "Europe is China's largest market, and it has not shown any positive signs of improvement," said Hu. Shipment growth to the European Union slowed to 7.5 percent in October, compared with a 9.8 percent increase in September, customs data show. The Canton Fair, known as the barometer of China's trade, has also seen a decline in overseas orders. During the most recent session, which ended early this month, US orders were down 24 percent from last year and orders from Europe fell 19 percent, according to organizers of the event. Weakening external demand is causing hard times for small and medium-sized enterprises (SMEs) in southeast China, the country's main export hub. "This is a tough time for SMEs," said Chen Yongfang, a trade official in Guangzhou, capital of Guangdong province. "It has become pressing for these companies to transform themselves," he said. Some small companies, boxed in by a stronger yuan and rising labor costs, may have to close, according to Zhang Yujing, president of the China Chamber of Commerce for Import & Export of Machinery & Electronic Products. "This is a wake-up call for the survivors to modernize," he said. "Many small-scale businesses will die because they have been competing on low prices instead of advanced technology," said Chen Hanhui, vice-director of Tech-Long Packaging Machinery Co Ltd, China's leading packaging machinery manufacturer whose clients include Procter & Gamble Co and Coca-Cola Co. "The industry needs to invest more in technology development and human resources," he said.

According to China News, Nobel Laureate in Economics, "Father of Euro" Mundell said 12 in Hangzhou, China should work with the United States, the European share in the global rights, the yuan and the U.S. dollar, the euro should work together become the world's most important currency. He supports the RMB into Special Drawing Rights (SDR), and continuously improve the RMB in the SDR weights, and other major currencies to reach the same level. U.S. dollar, euro, yuan three currencies should become the cornerstone of a new international currency, and accordingly the establishment of a new international monetary system. But this requires a large country including the United States support. Held in Hangzhou, China Gold Summit, Mondale also support the gold into the SDR. Gold as a reserve, for early warning of inflation. Even if another 100 years, gold will remain in the monetary and financial system. The current international monetary system under the credit, financial crisis, countries often create huge unlimited liquidity to the cost of inflation and stimulate economic recovery, reducing the market's confidence in the currency. Financial market turmoil, much of the country as a strategic reserve of gold assets. In 2010, central banks over 20 consecutive years of net sellers of gold, when net purchases of gold 68 tons. In the first quarter, and net purchases of the world's central banks rose sharply to 129 tons; the second quarter, the amount of global central banks buy gold as compared with the same period in 2010, quadrupled. However, limited global gold reserves, combined with some countries oppose, Mundell believes that difficult to restore the original gold standard. GDP, compared with the global gold reserves, the supply is too small. 12, the "Father of Euro", said the issue comes to Europe, the euro is the world's second most important currency, which in the past 10 years was a success, to achieve the desired goal. Without the euro, the EU will fall apart.

Hong Kong*:  Nov 13 2011 Share

China Vehicle Components Technology Holdings, one of the mainland's leading makers of shock absorbers, is set to go ahead with its listing plans despite the doom and gloom hanging over the Hong Kong stock market. It plans to offer its shares at between HK$1.40 and HK$1.80, raising a maximum of HK$140.4 million. The Henan-based company provides parts to cars and trains at home and aboard, including FAW-Volkswagen. Expecting to net HK$92.1 million, the company plans to spend a third of the money on research and development, including building a research centre in Italy. The rest will go into expanding its production capacity and more buildings. The company has ambitious plans to triple its output from 5.1 million shock absorbers last year to 15 million units by the end of next year. Chief executive Zhao Zhijun said the research centre in Italy was a strategic move that would help boost the firms international image and its penetration into Europe and the US. He said the grim economic outlook and high unemployment rate in Italy meant it would be a good time to tap into its engineering talent pool and industrial facilities. He did not give details of the amount of capital investment or the size of the research centre, as these would "depend on the financial conditions" of the company. China Vehicle has had a colourful history in regards to corporate finance. Between 2008 and 2009, it was involved in inter-company lending involving 144 million yuan, an activity that drew penalties from authorities as the company was not licensed to make such loans. The company said it stopped the loans after 2009. Its cash flow has also been tight. According to the listing documents, it has yet to pay 160 million yuan to complete a 300 million-yuan expansion project. But it has only 53.7 million yuan on its balance sheet. The company's net liabilities in May this year were 23.3 million yuan. The company said it still had more than 200 million yuan of unused bank loans and that its annual net profit should be enough to cover costs. Last year it made a net profit of 37.5 million yuan, up almost a third from 28.4 million yuan the previous year. It saw a net profit of 38.1 million yuan in the first five months of this year, more than double the amount in the same period last year, thanks to strong growth in sales. China Vehicle will fix its offering price next Wednesday and make its trading debut the following week.

Chow Tai Fook Jewellery has obtained approval for its listing from the Hong Kong stock exchange, cutting the proposed size and valuation of the IPO because of turmoil in global markets, IFR reported on Friday, citing sources with knowledge of the plans. The company will start on Monday pre-marketing the initial public offering, which should raise about US$3 billion, said IFR, a Thomson Reuters publication. The sources could not be named as they were not authorised to speak publicly on the matter. Chow Tai Fook initially planned to sell shares at a valuation of around 30 times forecast earnings for fiscal 2013, which starts in April. Given current volatility in equity markets, the company decided to seek a valuation of about 25 times and to sell 10 per cent of its enlarged capital, down from the usual 20-25 per cent in Hong Kong IPOs, IFR reported. Chow Tai Fook declined to comment when contacted by reporters. Goldman Sachs Group, HSBC and JP Morgan are sponsors for the deal and together with Deutsche Bank will work as joint global coordinators. The Hong Kong Economic Journal reported earlier the listing approval and pre-marketing plans, but gave no further details of the offering. The jewellery retailer, controlled by New World Development tycoon Cheng Yu-tung, had planned to raise up to US$4 billion, IFR reported earlier.

Reclamation in Hong Kong outside Victoria Harbour would be a "green" way to ease a space shortage for disposal of construction fill and should not be demonised, the development minister says. But green groups say the ocean should not be treated as a rubbish bin and the government should encourage recycling of the fill instead of dumping it. Launching a public consultation on ways to increase land supply yesterday, Carrie Lam Cheng Yuet-ngor said reclamation in waters other than the much-shrunken harbour was not only a way to create more land, but also would help solve the mounting fill problem. "We have been sending surplus fill to Taishan , [Guangdong,] 170 kilometres away," the secretary for development said, adding that fill always had to be processed somewhere in the world. "Our environmentalist friends say we, as members of the global village, should take our own responsibilities. It does not seem justified to ask others to deal with our fill." Most fill - stone and mud sorted from construction waste - comes from infrastructure and land-formation works. Shipping the materials to the mainland city caused carbon emissions of 50 tonnes a day and cost HK$70 a tonne to handle, HK$33 more than using it for local reclamation, she said. "We will be using the latest technology and strictest monitoring for future projects," the minister said. "One should not demonise reclamation work." Two existing public fill banks in Tseung Kwan O and Tuen Mun will be full by 2020. The first-stage consultation, ending in February, does not identify reclamation areas but asks the public whether they agree with eight proposed criteria for site selection, including whether a project meets local needs, its environmental impact and cost effectiveness. Officials expect the next reclamation project to be completed in 2019. The exercise also seeks views on rock-cavern developments for various facilities from sewage plants to data centres and restaurants. An earlier feasibility study covered five sites in Lantau, Tuen Mun, Mount Davis, Sha Tin and Lion Rock. The two strategies are among six to meet the government's target of providing land for 40,000 flats a year. Vincent Ng Wing-shun, vice-president of the Institute of Urban Design, agreed there was a need to reclaim land from the sea because other land-supply methods, such as resumption of rural land, incurred uncertainties, including compensation and relocation of residents. Dr Man Chi-sum, chief executive of Green Power, said he had not "demonised" reclamation. "Priority should always be given to using abandoned or abused land in the New Territories, like scrap-car storage," he said. "The minister is treating the ocean as a rubbish bin. Once the shorelines are straightened, the natural habitat is lost." He said hardly any developers were using fill from the two existing banks, and the government should encourage them to recycle the materials stored there instead of finding places to dump them.

Hong Kong leader Donald Tsang said the city's financial sector has helped the United States' recovery and created jobs in the largest economy in the world. Tsang, who is the chief executive of Hong Kong, said on Wednesday that the city's "irreplaceable" role in China's economic reform provided "an additional monetary resource that will help address some of the imbalances that have surfaced here in the US and more lately in Europe". "We have been given a spearhead role in the internationalization of the renminbi, which in turn will help our country to continue with the reforms and opening-up of its banking and financial services sectors," Tsang said, who had visited New York City and Boston during a recent trip to the US. The special administration region's top leader said Hong Kong will serve as a "gateway" to improve Sino-US trade. He added that Hong Kong has an expanded economic role in China's 12th Five-Year Plan (2011-2015) with the goal of becoming an international asset management and an offshore renminbi business center. Tsang said Hong Kong will continue to be the global center of finance and banking, logistics, business services and tourism, which in turn will benefit the city's US partners investing in the metropolis. The US is Hong Kong's second-largest trading partner and a major investor in the city's economy. "The Hong Kong dollar maintains its linked exchange rate to the US dollar, as it has done since 1983. We have a long-standing, strong and broad-based relationship, and it is one that I believe will continue to grow," Tsang said. US exported $27 billion in goods to Hong Kong last year, creating the largest US trade surplus with any single partner that year. There are currently 1,330 US companies based in Hong Kong, of which 840 are regional operations. The number of US companies based in Hong Kong over the past decade has increased 65 percent from 2001. More than 50,000 American citizens live in Hong Kong and tens of thousands of Hong Kong residents have studied in the US, Tsang said. "Hong Kong has a pivotal role to play in the future China-US relations," said Martin Indyk at the Brookings Institution, which co-hosted Tsang's visit to Washington.
Donald Tsang will head to Honolulu, Hawaii, to attend the Asia-Pacific Economic Cooperation summit from Nov 11-13.

 China*:  Nov 13 2011 Share

China has contested a United States decision to launch anti-dumping and countervailing duty investigations on Chinese-made solar power panels. Ministry of Commerce spokesman Shen Danyang yesterday criticised the US for initiating trade frictions and that for the first time the probes centred on a Chinese clean-energy export. The US started a probe on Tuesday on whether Chinese-made crystalline silicon photovoltaic cells and modules were sold at "less than fair value" and whether they were subsidised by Beijing. The probe is in response to a petition filed by a solar panel producer in the US. Shen said the US had shifted the blame of the slow development of its domestic solar power industry to China and had deployed restrictive measures on Chinese exports, which prompted "strong disagreement" among Chinese firms. "The Chinese government is seriously concerned about the case," Shen said. "The restrictive measures not only hurt Sino-US co-operation, but the national interest of the US." Solar power panels have emerged as the latest subject of trade disputes between both countries, following a string of disputes over products such as tyres, broiled chicken, raw materials, mineral resources, paper and steel plates. Some economists said the trade dispute arose mostly from China's large trade surplus and the yuan's appreciation against the US dollar, which has been slower than US expectations. The yuan closed at 6.3459 to the dollar yesterday, down from 6.3402 on Wednesday. It has gained 3.84 per cent so far this year, or 7.57 per cent since the yuan was unpegged from the dollar in June last year. Christine Lagarde, head of the International Monetary Fund, said yesterday that Beijing "was willing to let the yuan appreciate" after meeting with Chinese state leaders, such as the central bank governor.

Chinese President Hu Jintao got down to work shortly after his arrival in Hawaii Thursday, meeting with a group of U.S. business leaders to exchange views on investment, trade and protection of intellectual property rights(IPR). "The opportunities for expanding China-U.S. trade and economic links lie in the rapid growth of Chinese investment in the United States," Hu said, adding that he supported companies from both countries in increasing mutual investment. President Hu, on his second trip to the United States this year, made the remarks during a meeting with the leaders of top U.S. companies, including Keith Williams of Underwriter Laboratories, Michael Ducker of FedEx Express, and Thomas Donohue of the U.S. Chamber of Commerce. "We positively perceive the U.S. government's manifestation that it welcomes Chinese companies to invest in the United States, and hope that the U.S. side would take more concrete action in this respect," Hu said. Hu emphasized that deepening and expanding mutually beneficial trade and economic cooperation between China and the United States is in the interests of both peoples and conducive to the global economic recovery and development. China-U.S. trade and economic relations are currently faced with both challenges and important opportunities, he said. "The opportunities lie in economic restructuring in both China and the United States," Hu said. According to the Chinese president, China is expected to import more than 8 trillion U.S. dollars worth of goods in the next five years. By 2015, sales of consumer goods in China are likely to rise to nearly 5 trillion dollars, Hu said, adding that this will provide a huge market for the United States in its effort to rejuvenize the manufacturing industry and realize the goal of doubling U.S. exports. Hu pointed out that opportunities for expanding China-U.S. trade and economic links also lie in the new growth areas of bilateral cooperation, including new energy, clean energy, energy efficiency, biopharmaceuticals, aviation, space and infrastructure construction. "If the potential in these areas is tapped into, China-U.S. trade and economic cooperation will have boundless prospects," Hu said. Closer cooperation at local levels also offers new opportunities for expanding bilateral economic links, he said, noting that over the past decade, 47 of the 50 U.S. states have witnessed a three-digit increase in exports to China. "Growing at the current rate, China-U.S. trade volume will very likely exceed 500 billion dollars in the next three to four years," Hu said. Hu emphasized that China stands firm in its determination to protect IPR, adding that since China has already had a fairly sophisticated legal system in that regard, the future focus would be law enforcement. Hu said China has achieved positive results in its campaign to crack down on IPR infringement and counterfeits. Noting that China will mark its 10th anniversary of joining the World Trade Organization (WTO) next month, Hu said openness in China's service trade sector has come close to the average level of developed countries. He said China is determined to advance the reform and open-up cause, and will firmly adhere to the opening-up strategy of mutual benefit and win-win results, and will provide a sound investment environment for U.S. and other international companies as it always does. Competition between Chinese and U.S. firms is a natural development of free trade and market economy, and virtuous and fair competition is good for the growth and common development of both Chinese and U.S. companies, he said. He said the two sides should properly handle trade frictions through consultations based on an equal footing and in accordance with market rules and WTO regulations. "The two sides should not politicalize trade and economic issues and should not pursue protectionism," Hu said.

Chinese President Hu Jintao (2nd R) meets with a group of U.S. business representatives in Honolulu, Hawaii, the U.S., Nov. 10, 2011, to discuss issues on the expansion of China-U.S. economic and trade cooperation. Chinese President Hu Jintao met a group of U.S. business representatives in Honolulu, Hawaii, on Thursday to discuss expansion of China-U.S. trade cooperation. President Hu was expected to exchange views with the business representatives on the China-U.S. trade ties. The Chinese leader was also expected to encourage the U.S. business sector to play a role in promoting China-U.S. trade cooperation and developing bilateral ties. Hu arrived in Honolulu earlier in the day for the Economic Leaders Meeting of the Asia-Pacific Economic Cooperation (APEC) scheduled for Saturday and Sunday. At the annual meeting, leaders of the 21-member grouping will exchange views on economic growth in the Asia-Pacific region, strengthening regional economic integration and expanding trade. They also are to discuss promoting green growth and fostering job creation in green industries, energy security, and expanding regulatory cooperation.

China's slowing economy makes Beijing more likely to step on the brakes on the yuan's rise, just as U.S. President Barack Obama is to meet with Chinese President Hu Jintao under pressure to convince his counterpart to pick up the pace. The result: Economic frictions between the U.S. and China could build at a time when Mr. Obama has little room to maneuver. He meets Mr. Hu Saturday in Hawaii, amid a clamor in Congress and among a slew of Republican presidential candidates to get tough with Beijing about its currency. Mr. Obama knows it would be a tough sale. His administration has tried to ease the pressure by being tough in other ways, such as bringing cases against China at the World Trade Organization. But the speed of the yuan's appreciation has become a politically potent way to measure the administration's success. "Politics are important in the U.S.," said Wang Tao, the head of China research at UBS in Hong Kong. "But on this side of the Pacific you have politics, too. Don't expect rapid appreciation." Chinese trade and inflation data out this week don't help the U.S. case either. China's inflation rate fell to 5.5% after months of being over 6%, and is expected to moderate further. The U.S. had used the inflation argument for more than a year. Now it will argue that the turmoil in Europe suggests China should rely more on domestic consumption than exports. On Thursday, China reported that growth in exports slowed for a second month, decelerating to 15.9% year-to-year in October from 17.1% in September. Leaving aside data for February, which are distorted by the Lunar New Year holiday, the rate of growth was the slowest since November 2009. A number of analysts expect the export sector to slow further over the coming year as Europe teeters near recession and the U.S. grows slowly. In October, the slowdown in sales to the European Union—China's largest trade partner—was already evident. Exports to the EU grew 8% from a year earlier, down sharply from a 25% growth rate at the beginning of the year. Exports to the U.S. held up better in October, with a 13.9% gain from a year earlier. China's trade surplus with the U.S. remained high in October at $20.1 billion, up 11.4% year-to-year. The slower pace of Chinese export growth translates directly into domestic political pressure. A stronger yuan makes Chinese exports more expensive in dollar and euro terms, and threatens jobs in the politically potent export sector, which already complains that China's relatively tight monetary policy has hurt growth. The administration's case that yuan appreciation could help China fight inflation has also potentially weakened after data Wednesday showed China's inflation is already slowing.The Chinese government clearly factors politics into its yuan policy. It agreed to let the currency float somewhat against the dollar in June 2010, shortly ahead of a summit of the Group of 20 nations in Toronto, where its currency policy was bound to be a central issue. Since then the yuan has risen about 7.5% against the dollar, or about 10% after factoring in China's higher inflation rate. But it has only risen half as fast against a basket of currencies because the dollar has slipped in value in that time. already Ms. Wang, at UBS, figures the annual pace of 5% to 6% appreciation against the dollar will drop to 3% to 4% as exports slow further, especially if the dollar rises in value against the euro and other currencies. RBC Capital Markets economist Brian Jackson also expects policy makers "to slow the pace of gains" of the yuan. For China's opponents in the U.S., even the current pace of yuan appreciation is inadequate and the issue is gaining prominence as Republican presidential candidates jockey for position—spurring Mr. Obama to need to keep raising the issue even though he's unlikely to make much headway. In a GOP debate Wednesday, former Massachusetts Gov. Mitt Romney said the Obama administration should have named China a currency manipulator "a long time ago" to bring action against it at the WTO. Mr. Obama is widely expected to decide against citing China for currency manipulation—meaning that it uses its exchange rate to gain unfair competitive advantage. The Treasury makes such determinations in a semiannual report required by Congress. Former House Speaker Newt Gingrich upped the ante rhetorically. "In terms of dealing with China strategically, I think we're going to have to find ways to dramatically raise the pain level for the Chinese cheating," he said. The Senate last month passed a bill that would force the White House to seek tariffs and other penalties against China unless it speeds the yuan's rise. A majority of House members have signed on to a similar bill. House Speaker John Boehner (R., Ohio) has so far blocked the legislation, which he called "dangerous." But strong interest from rank-and-file Republicans could prompt the GOP leadership to reconsider. Jon Huntsman, another Republican candidate and Mr. Obama's former ambassador to China, called the U.S.-China relationship "troublesome and problematic" in Wednesday night's debate, but warned that assessing tariffs on Chinese products could lead to a trade war. "That's not a good idea," he said. "We have seen some progress, but it's not enough," said U.S. Undersecretary of the Treasury Lael Brainard on Wednesday in Washington. "We're going to keep pushing very hard to accelerate." "The administration is obviously worried about losing control of the issue to the Congress," said Fred Bergsten, director of the Peterson Institute for International Economics. "That's the worst outcome for any administration." The leaders' meeting on the sidelines of the Asia-Pacific Economic Cooperation forum is their first one-on-one since Mr. Hu's January trip to Washington. International Monetary Fund chief Christine Lagarde, after two days of meetings with Chinese officials in Beijing this week, said China's "authorities are prepared to let appreciation continue in the months and years to come," but she didn't say at what pace.

China made its largest purchase of U.S. cotton in eight years, a sign that the scramble for the fiber is heating up again. Growers and merchants sold China 996,100 bales of the most common variety of cotton in the U.S. last week, the U.S. Department of Agriculture disclosed Thursday in a weekly export report. This is the most sold in one week since October 2003 and amounts to about 9% of estimated U.S. cotton exports in the season that began Aug 1. Prices jumped on the news, with cotton for December delivery closing 2.4% higher, at 99.5 cents a pound, on ICE Futures U.S. Prices have plunged 54% since hitting a record in March, when supplies were tight. It wasn't immediately clear why China bought so much cotton at once. Industry officials speculated that China would be using the U.S. cotton to replenish its stockpiles. Over the summer, China said it would do so, but at the time didn't provide much detail as to how the cotton would be supplied. "I think the business was done for the national reserves," said Philip Bogel, chairman of the American Cotton Shippers Association and a cotton trader at Toyo Cotton Co. "I was surprised this large of a sale came out today." The China National Cotton Reserves Corp. wasn't available for comment. Calls to the Chinese Embassy in Washington, D.C., weren't answered.

A young couple look at six pillars marking the date of 11/11/11, also called “Singles Day,” on a shopping street in Shenyang in northeast China’s Liaoning province. Love is in the air — at least in China and Hong Kong, where couples are rushing to tie the knot today: Nov. 11, 2011, or 11/11/11. A spokesman for Hong Kong’s Immigration Department said a record-high number of lovebirds — 1,017 couples — have notified the department of their plans to get married today. “If all of these couples end up getting married today, it would be the day with the highest number of people getting married in Hong Kong in at least two decades,” the spokesman said. But why are the numbers forcing so many marriages on a Friday? The pronunciation of the numbers “11/11/11” is similar to the Chinese idiomatic expression “one life, one lifetime” ( 一生一世, yi sheng yi shi in Mandarin), which means “forever.” Numerology has long played an important role in Chinese culture, factoring prominently into everything from architectural plans to the price of mobile phone numbers. Auspicious numbers are often determined by what words they resemble. The number “8,” for example, is considered a lucky number as its pronunciation is similar to that of the Chinese word for “wealth.” The Beijing Ministry of Civil Affairs said 4,000 couples had registered to get married in the city today. A spokesman for the ministry said that the average is 700 a day. The city record came on the first day of the Beijing Olympics, Aug. 8, 2008, when 10,000 couples registered. “Today is a lot but it can’t compare to 08/08/08,” the spokesman said. The western city of Chengdu expected 2,000 couples to register to marry Friday, according to an official marriage registration office of the city’s Chenhua district. “This will probably be the peak day for marriage registrations this year,” she said. In Hong Kong, the last record was made on Oct. 10, 2010 (10/10/10), when the department recorded a total of 859 couples getting married. Many Hong Kong couples interpreted the triple tens as similar to a Chinese phrase meaning “perfect.” But in China, where a preference for male children and the one-child policy have combined to produce 34 million “extra” men, Nov. 11, 2011 — widely referred to as “Singles Day” in the Chinese press — has been as much about the travails of those who’ve failed to find a mate as it is about getting married. One single man in Chongqing chose to celebrate the auspicious date this week by dressing up in a yellow jumpsuit and collecting 1,111 hugs from strangers. “Bachelor Man,” as the 20-year-old dubbed himself, said he launched the campaign to help other singles find love. Meanwhile, a group called the Chinese Single People’s Association has decided to aid the young and lonely by publishing a list of the 11 jobs Chinese single people find least desirable in a prospective partner. According to the state-run China Daily, poets are the least marriageable, followed by secretaries, lawyers and performance artists. Other undesirables included computer programmers, salesmen, oil field workers and reporters. The association compiled the list by distributing 111,111 questionnaires in 111 cities, according to China Daily. The report did not say how many people responded to the questionnaires.

Hong Kong*:  Nov 12 2011 Share

Hong Kong shares fell 5.3 per cent on Thursday, wiping out almost a week's gains, as Europe's escalating debt crisis and weak results from the likes of HSBC Holdings (SEHK: 0005) sent investors rushing for the exits. The benchmark Hang Seng index lost more than 1,000 points to close at 18,963.9. The China Enterprises index of top locally listed mainland firms, an outperformer this month, dropped 5.7 per cent. Financials bore the brunt of the sell-off, with Chinese banks under additional pressure after Goldman Sachs’ sold parts of its stake in top lender Industrial & Commercial Bank of China. HSBC, Europe’s top lender, fell 9.1 per cent as borrowing costs in Italy surged to near unsustainable levels, while ICBC tumbled 8.7 per cent, its biggest fall in three years. The two accounted for over a third of the Hang Seng’s more than 1,000 point drop on the day. The Hong Kong benchmark index ended 5.3 per cent lower at around 18,964, while the Shanghai Composite fell 1.8 per cent to 2,480. Turnover remained relatively high and at HK$74.7 billion was about 11 per cent higher than this month’s daily average. Shares of China Overseas Land & Investment (SEHK: 0688) fell 4.9 per cent while Sino-Land dropped 6.6 per cent. The escalating political and economic crisis in Italy are spurring fears of a break-up of the euro zone, eclipsing further turmoil in Greece. “Europe and US futures are indicating a lower open as fears of contagion grow. Lots of rumours are circulating but what the market wants is clear facts,” said a Hong Kong-based trader at an American brokerage. “All sectors were hit today and I expect investors to review their portfolios on the basis of exposure to Europe,” the trader said. Underscoring the tough environment for banks, HSBC gave its starkest warning to date that new regulations might force it to leave Britain while at the same time reporting a 36 per cent fall in third quarter profit as the euro zone debt crisis hit investment bank income. Rival Standard Chartered fell 4.8 per cent. Financials, particularly banks, were the hardest hit. A sector sub-index in Hong Kong fell over 7 per cent, led by heavyweights HSBC Holdings, Industrial & Commerical Bank of China and China Construction Bank (SEHK: 0939). The three stocks contributed to just half the Hang Seng index’s drop on the day. HSBC shares slumped 9.1 per cent, their sharpest drop since March 2009, as investors fretted over the bank’s weak third quarter results, which spurred a round of downgrades on the stock. ICBC shares dropped 8.7 per cent, the most in three years, after Goldman Sachs cut its stake in the lender. Chinese property counters extended losses as investors remained bearish on the sector’s prospects as there was little to indicate any relaxation of policies aimed at cooling prices. The Shanghai Composite fell 1.8 per cent to 2,480 as mainland property counters continued to lag as investors remained bearish on the sector’s prospects. China’s property sales fell in October for the first time in six months, confirming anecdotal evidence that the real estate market is weakening across the country under a slew of government measures meted out since late 2009. China Vanke, the country’s largest property developer, shed 1.3 per cent. Poly Real Estate fell 2.5 per cent. Bucking the slide across markets, liquor stocks were a relative bright spot in Shanghai and Hong Kong. Kweichow Moutai rose 0.4 per cent while China’s second-largest brewer by volume, Tsingtao Brewery (SEHK: 0168), rose 1 per cent.

Dual Exchange-Rate Regime For China? An Historical View - Is China going back to a dual exchange-rate system? That’s the way it’s been looking of late with the renminbi trading at a discount in Hong Kong to the mainland rate. The Hong Kong rate, of course, is the more market-driven one. Lately, investors have been selling off the yuan as part of a broad scramble into the relative safety of dollar assets. The rate in Beijing is set by policy makers, not the market. Even as Chinese export growth tails off, the People’s Bank of China continues to nudge the yuan higher, sending a message of support to the teetering global economy. A notable exception to the creeping appreciation came after the U.S. Senate last month advanced a bill to penalize countries that manipulate their currencies. China was ticked off–and the yuan duly ticked down. The gap between the two rates is hardly insignificant. On one day last month the yuan in Hong Kong traded at a discount of close to 3%. The differential is smaller at the moment: Late Thursday, the dollar traded at 6.3459 yuan onshore and 6.3685 yuan in Hong Kong. All this recalls the currency confusion of the 1980s and early ’90s when China operated two distinct–and highly divergent–exchange rates. There was an overvalued official rate and a market rate set by foreign and domestic businesses trading in currency swap centers. (There was also a black-market rate set by stall-holders in places where tourists congregated, like Beijing’s Bar Street in Sanlitun.) Back then, there were also two types of Chinese currency. Foreigners weren’t allowed to own renminbi, literally “the people’s money.” So travelers were supposed to exchange their hard currency for Foreign Exchange Certificates at the Bank of China, and use them at designated tourist hotels and the famous state-run Friendship Stores that sold hard-to-find imported goods like 555 cigarettes and Johnnie Walker whiskey. But the system started to break down as China’s economy opened and private enterprise flourished. In 1994, China unified its two rates at the swap-market rate of 8.7 to the dollar–much weaker than the official rate of 5.8 to the dollar. At the same time, China abolished the Foreign Exchange Certificates. China now had one currency and one exchange rate. (The black market faded quickly). It was the most significant currency reform since Deng Xiaoping launched his economic modernizations in 1979. The decision to seek a role for the yuan as an international currency, taken at the height of the financial crisis in 2009, was similarly momentous. Some would argue it’s the most important reform to the exchange rate since the end of yuan’s dollar peg in 2005. It stands out for its boldness at a time when financial reform in China has largely stalled. Among the newest generation of Chinese economic modernizers, many of them clustered around central bank Gov. Zhou Xiaochuan, the hope is that the internationalization of the Chinese currency will kick-start a broader reform process. The reformers talk optimistically about a “basically” convertible currency by 2015, a move that implies market-driven interest rates, a truly commercial banking system, a deep bond market and a host of other innovations needed to underpin China’s next stage of growth. That is far from assured. Indeed, the recent volatility of the offshore yuan might even be a reminder for China’s leaders of the kind of problems they avoid by keeping the exchange rate for the onshore yuan under tight control. As China prepares for a leadership transition next year, shifting currency policy will offer vital clues to how the reform effort plays out. Reformists have no desire to see two exchange rates creating new confusion. For them the goal is clear: one currency; one exchange rate; full convertibility.

Broadband internet service providers will not be allowed to restrict access to subscribers who sign up for so-called "unlimited use" service plans that, in effect, do impose certain limits, the telecom regulator said yesterday. The latest policy guidelines from the Office of the Telecommunications Authority spell the end to such plans. They are aimed at improving transparency, as well as allowing users to make better choices on how service providers implement the "fair usage policy." Aimed at giving users equal access to the internet, in terms of connection speed and quality of service, contracts signed on or after February 13 have to be bound by the new guidelines. At present, some subscribers who use unlimited mobile data packages even connect their smartphones to laptops for internet access, adding to the burden on mobile networks. "A permissible example is `unlimited plan for data usage up to two gigabytes,' as long as their network can facilitate access," said assistant director Danny Lau Kwong- cheong. Such plans will be banned unless customers agree to the terms. Service providers will be obliged to notify users should they want to lower the internet speed. Download speeds must not be below 128 kb per second. Existing contracts will not be affected. Should service providers want to amend contracts, they must give 30 days' notice to customers, who will have 15 days to end the contracts without penalties. OFTA has received 160 complaints last year and 74 in the first 10 months of this year. Providers such as Hutchison Telecom, 3 Hong Kong and CSL said they will study the new guidelines. Internet Society Hong Kong chairman Charles Mok Nai-kwong said service providers underestimated usage. "It seems fair to slow access to those users with extremely high internet use." Telecom stocks were affected by the news. SmarTone (0315) slipped 1.2 percent to HK$13.54. Hutchison Telecom dipped 0.7 percent to HK$3.02. But PCCW (0008) surged 2.9 percent to HK$3.15 after announcing plans to raise up to US$1.42 billion (HK$11.03 billion) from listing its telco unit.

HSBC's stock price slumped more than 8.0 per cent on Thursday in Hong Kong after the global banking giant reported a third-quarter earnings plunge and warned of “significant headwinds” ahead. Europe’s biggest bank reported on Wednesday that underlying pretax profits sank 35 per cent in the three months to September to about US$3.0 billion, as bad loans rose in the United States, Hong Kong, Brazil and the Middle East. Investors were unforgiving when markets opened in Hong Kong, driving the stock down 8.17 per cent to HK$62.35 by the lunch break. “Revenue progression was weak as GBM [global banking markets] slowed, but the big surprise was in impairments,” Morgan Stanley said in a commentary, according to Dow Jones Newswires. HSBC chief executive Stuart Gulliver said in the earnings release that economic and political uncertainty, particularly in Europe, had hit the banking sector’s performance in the quarter. “Against this backdrop, HSBC remains resilient, with a strong balance sheet and robust liquidity,” he said. Asia-focused HSBC added that its exposure to the debt of weak euro zone states Greece, Ireland, Italy, Portugal and Spain stood at US$5.5 billion at the end of the third quarter, down from US$8.2 billion on June 30. The bank’s share price slumped 5.04 per cent on Wednesday to 510.40 pence on London’s FTSE 100 index, which finished down 1.92 per cent – although equities were down across the board on eurozone debt crisis worries. In Hong Kong, the Hang Seng index was down 4.48 per cent by the break on Thursday, in line with a regional stock sell-off.

With the death of Ricky Hui Koon-ying, 65, on Tuesday, Hong Kong bid farewell to one-third of the Hui brothers trio, collectively regarded as giants of Hong Kong pop culture. Yet individually each was distinct. Sam Hui Koon-kit, the youngest, was known as "the god of Canto-pop" for his looks and lyrics in the 1960s and 70s pop scene otherwise dominated by Mandarin-speaking crooners. Michael Hui Koon-man, the eldest and some say the brains of the trio, earned a reputation as one of Hong Kong's finest comedians and filmmakers. Ricky, it's fair to say, was the loveable underdog. He was not a leading man with chiselled looks, nor a bona fide pioneer like his brothers. As a comedian he played the slapstick joker, his list of film credits reading like a compendium of sly insults: Pighead, Homely Cop, Dumb Ying and Hentai Voyeur. As a pop star, he sang about solitude and lovesickness - tunes for the guy who's down on his luck and doesn't get the girl. But his career propelled him to the heights of stardom, making him a household name during the course of seven albums and more than 60 films spanning four decades. The third of five children, Ricky came from humble beginnings, raised in a squatter's hut in Diamond Hill then a public housing estate in So Uk, Cheung Sha Wan. Unlike Michael and Sam, Ricky skipped university and ended up as an actor in training at the Shaw Brothers Studio. From that point on, it's almost impossible to separate Ricky from his brothers. The trio were comedic dynamite in the 1970s and 80s, breathing life into a local movie industry that teetered after the death of martial arts legend Bruce Lee. Their most popular films followed a similar recipe of slapstick and gags held together by thin plotlines. But the trio injected a particular brand of Cantonese humour and societal commentary that was well received by local audiences. The Private Eyes (1976) - directed by Michael and starring all three brothers - was Hong Kong's highest-grossing production of the entire 1970s, outperforming the films of Bruce Lee, Jackie Chan, and Francis Ford Copolla's The Godfather. Ricky also worked with producer Sammo Hung Kam-bo in the comedy horror flick Mr Vampire (1985), and director John Woo in From Riches To Rags (1979). Ricky, who never married, was one of a vanishing breed of entertainers in an industry that increasingly seeks pretty young things instead of the everyman. "There was a certain authenticity to his acting and to his singing. He didn't seem to be putting on an act," critic Perry Lam Pui-li said. "If Ricky has ever been a celebrity in his own right, it's all because people can relate to him, that people regard him as one of us."

 China*:  Nov 12 2011 Share

Polysilicon prices have more than halved. Only a handful of Chinese producers of polysilicon, the key raw material in solar power panel components, are expected to survive the industry's consolidation, as low prices and central government policies favour the biggest players. The industry is going through an overhaul as small-scale producers, typically using outdated technology, are being squeezed out of the market by a price war. Ray Lian Rui, a Shanghai-based analyst for the industry consultancy Solarbuzz, said: "Next year will be a year of consolidation. It's primarily driven by market forces." He said many loss-making small players had mothballed their factories after polysilicon prices halved. Most of these were not expected to restart production. Domestic producers only supply about half the mainland's US$5 billion solar power polysilicon market, even though domestic polysilicon output last year, at 43,000 tonnes, was less than half the industry's capacity. The problem, analysts said, was that a large number of high-cost new market entrants had yet to start production or were producing using only a small part of their capacity. The solar industry has a long supply chain, in which polysilicon is processed into ingots, sliced into wafers, made into cells and assembled into modules and panels to generate electricity from sunlight. The global production capacity for solar wafers more than tripled last year, which, together with weakening demand in Europe, the world's biggest market, saw wafer and module prices halved. This in turn has resulted in spot-market polysilicon prices plunging by more than half to around US$32 a kilogram, from US$72 a year ago. Luo Lu, a solar sector analyst in Beijing with the renewable energy industry information provider Bloomberg New Energy Finance, said: "Among the around 30 polysilicon makers, only those with chemicals distillation expertise are expected to endure. "Those without the technology will have to invest in the necessary upgrades to remain viable, but it is hard to raise the cash to do so in this environment." Beijing wants the industry to be dominated by perhaps two makers by 2015, with annual capacity of at least 50,000 tonnes, and another three with a capacity of more than 10,000 tonnes. The industry leader, the Hong Kong-listed GCL-Poly Energy Holdings, plans to raise annual capacity to 65,000 tonnes by mid-2012, from 25,000 tonnes at the end of June. The company, based in Jiangsu province, produced 17,600 tonnes last year. The company, with production costs around US$20 a kilogram, is the only maker still comfortably profitable at current prices, Luo said. The second-largest player, the New York-listed LDK Solar, said earlier this month that it planned to raise its annual capacity to 55,000 tonnes from 17,000 tonnes and cut production costs by a quarter to about US$30 a kilogram.

International Monetary Fund chief Christine Lagarde held talks in Beijing on Thursday against a backdrop of worsening economic turmoil in Europe that has rattled financial markets around the world. Lagarde, who is on a two-day visit to the mainland, has warned that Asian economies are not immune to the crisis that has engulfed the euro zone, saying the world risked a “downward spiral” if it did not pull together to tackle the crisis. Details of the IMF chief’s visit were being kept under wraps, but it is all but certain to focus on the crisis in Europe, whose leaders have already called on Beijing to contribute to a fund set up to support troubled euro zone economies. She held talks with the head of China’s central bank on Wednesday, and the foreign ministry has said she will also meet China’s leaders, without giving further details. Asian stock markets slumped on Thursday after Wall Street suffered a pummelling, as Italy became the latest European country to suffer a huge surge in borrowing costs. “If we do not act together, the economy around the world runs the risk of a downward spiral of uncertainty, financial instability,” Lagarde warned in a speech on Wednesday. China holds the world’s largest foreign exchange reserves at US$3.2 trillion, but has so far made no firm commitment to provide financial assistance for the euro zone. Last month Klaus Regling, the head of the European Financial Stability Facility, travelled to Beijing to try to persuade the government to help. Europe has been discussing establishing a special purpose investment vehicle to persuade the mainland and other potential contributors, and is exploring the possibility of linking it to the IMF. Lagarde visited Moscow before heading to China, and on Wednesday the Russian government said it was not prepared to invest directly in the EU rescue fund and would prefer to help the euro zone through the IMF. Any move to help developed European countries out of the current crisis would be a hard sell for the Party leaders in the mainland, where millions of people still live in poverty, and inflation and housing costs are straining household budgets. Men Jing, chair of European Union-China relations at the Belgium-based College of Europe, said in a comment piece published in the official China Daily newspaper that Europe needs to behave in a “responsible way”. “It is ridiculous that rich European nations have their begging bowls out and want money out of the pocket of China, whose per capita income is only about US$4,000,” she said. China has also been burned before on risky overseas investment. It bought stakes in investment bank Morgan Stanley and asset management firm Blackstone only to see values collapse in the 2008 global financial crisis.

Surge in Rich Chinese Who ‘Invest’ in U.S. Citizenship - Despite all the talk of class warfare and punishing success, the U.S. remains a highly desirable place for the world’s rich. Especially for the rich Chinese. According to data from the Immigration Service, thousands of wealthy Chinese have applied for the EB-5 Visa, also known as the “green-card-for-money” program. Under the program, foreign investors must finance commercial projects in the U.S. by investing either $500,000 or $1 million and create at least 10 full-time jobs. The investors have to undergo a background check, identify the source of their wealth and create and sustain 10 full-time jobs. The investors and their families can get citizenship after five years if they fulfill the requirements. Lots of rich people around the world apply. But the Chinese have become far and away the biggest users and beneficiaries.

Consumers leave a Lenovo store in Beijing. The PC maker's sales in mature markets exceeded those in China for the first time in the third quarter, generating $3.3 billion and accounting for 42.6 percent of the company's global sales. The PC company says it is moving focus from the domestic market to go worldwide - Lenovo Group, the largest Chinese PC maker by market share and the second-largest globally, will apply greater pressure to its overseas competitors in mature markets, including the United States and Europe, following the appointment of a new Chairman and CEO, Yang Yuanqing, on Nov 3. "In the last three years, Lenovo has been mainly focused on the Chinese market. Now the company plans to place greater emphasis on overseas markets," said Yang. Lenovo is the world's second-largest PC vendor, with a record market share of 13.5 percent between July and September, according to International Data Corp. The company attributed the growth to previous acquisitions and surging sales in overseas markets. Yang announced that the company plans to increase investment and effort in those consumer markets where it doesn't yet have a strong share. "As the biggest player, Lenovo holds around 20 percent of the market for government and big business globally," said Yang. "Businesses refreshing their hardware will provide more opportunities to further growth next year." However, he also admitted that the company is eager to expand its consumer market too. The update of the Windows operating system next year will stimulate sales of commercial computers, said Raphael Vasquez of the US-based IT research company Gartner Inc. According to Lenovo, mature markets, such as the United States and Japan, contributed more than $100 million of the company's profit last quarter. Meanwhile, sales revenue in the mature markets exceeded that in China for the first time during the third quarter, coming in at $3.3 billion and accounting for 42.6 percent of the company's global sales. Lenovo was one of the first Chinese companies to enter the global market and compete with overseas brands. After buying International Business Machines Corp's PC business in 2005, the company announced a $175 million joint venture with Japan's NEC Corp in January and the acquisition of Medion AG, a German multimedia and consumer electronics manufacturer, in July. Lenovo's special consultant Gianfranco Lanci, the former CEO of Acer Inc, said the company's sales channel in Germany has been fully used by Lenovo following the acquisition of Medion. Reconstruction of other aspects of the business model will be completed by the end of this year. However, Lenovo's competitors, such as Dell Inc and Hewlett-Packard Corp (HP), reported a strong presence in the mature markets during the second quarter. HP reported profit of around $1.93 billion for the second quarter and Dell reached $890 million, while Lenovo's profit was only $108 million. The new chairman said the company will shift focus from growing its market share to increasing profits in mature markets through the introduction of more mobile Internet devices such as smartphones and tablet PCs.

A Johnnie Walker House exhibition hall. Liquor giant Diageo has been increasing its investment in China's second- and third-tier cities, where the rapidly expanding economy has generated great demand for foreign spirits. Managing director seeks to develop a taste for Scotch tipple among nation's alcohol lovers. Joseph Tcheng, a Hong Kong-born British, is a lucky man. He loves what he sells. His greatest challenge, of course, is to convince the people he tries to sell to. Judging by the results, he has done quite well. In alcohol-loving China, sales of whisky and cognac have soared over the past several years. The cognac market in China grew by 17.5 percent last year to 1.9 million cases, according to The IWSR Spirits in China Report 2011. Whisky, meanwhile, grew by a more modest 2.8 percent in 2010. As managing director of liquor giant Diageo's Greater China business, Tcheng developed his love for whisky in his 20s. During his university days in the UK, the Hong Kong businessman cultivated a taste for Black Label, one of the most popular brands of Diageo's Johnnie Walker family, and he has kept drinking it along with dinner or at business occasions for the last 30 years. "It's the flavor that I first tasted at a young age and I have been fond of it ever since," the 56-year-old businessman said. "I like its refreshing taste when diluted with two portions of soda. It's quite suitable to sip it in highball glasses with meals." Tcheng is also a fan of Guinness, the company's Irish dry stout beer. In a similar way to how the managing director developed his appreciation of Scotch whisky, Diageo wants to cultivate an international spirits culture in China, where the younger "Generation-Y" types, who are more familiar with the Internet and expat communities, and the status-conscious wealthy are increasingly exposed to foreign drinking habits. One of the distiller's focuses in China is the so-called super-deluxe market as the nation's economy is set to grow more than three times faster than the US and Europe this year. Currently, the British distiller runs a wide range of brands in China, including Johnnie Walker, Windsor, Baileys, Smirnoff and Guinness. It is especially well positioned to win in the Scotch whisky sector: Johnnie Walker has acquired about a 30 percent share of China's whisky market by volume, or 6 percent behind its rival Pernod's Chivas Regal.
"The gap was much larger before," Tcheng said.

China's imports surged in October as exports grew at their slowest rate in months, suggesting efforts to tilt the economy towards domestic demand may be offsetting the external weakness that has dragged on economic growth this year. Customs figures showed import growth of 28.7 per cent year on year in October, well ahead of the 23.0 per cent forecast and far in excess of September’s 20.9 per cent growth rate. Headline growth in exports meanwhile was its most sluggish in eight months, but strip out the traditionally volatile month of February and October’s growth of 15.9 per cent was the slowest since November 2009 when they shrank. “We were expecting quite a deceleration as external demand continues to decline in Western economies,” said Donna Kwok, an economist at HSBC in Hong Kong. “But the key thing to look at here is the strength of the domestic demand factors as imports grew nearly 29 per cent.” Markets showed scant reaction to the data since investment sentiment is being driven by events in Europe. Imports from all three of China’s key trading partners surged. The rate of import growth from the United States accelerated the fastest at 20.5 per cent over a year earlier, jumping by 7.6 percentage points from September’s pace. Imports from resource-rich Australia grew at 36.7 per cent versus September’s 33.4 per cent, while European Union imports rose 28.2 per cent versus 25.7 per cent previously. The surprise imports surge limited October’s trade surplus to US$17 billion, much lower than a forecast for US$24.9 billion. That may go some way to satisfying critics who say China keeps its currency weak to support exports – despite evidence to the contrary in the form of an appreciation of the yuan of some 40 per cent in real effective exchange rate terms since 2005 when Beijing abandoned a long-standing currency peg. China’s government has been working hard to wean the world’s number two economy off of what many analysts say is an addiction to export-led growth. Others dismiss the notion that exports are so significant to Chinese growth, pointing instead to the infrastructure and consumer demand created by massive urbanisation that draws millions of rural workers into China’s fast-expanding cities every year. The rate of fixed asset investment growth – a principal driver of economic expansion in China – was running at 24.9 per cent year on year in the first 10 months of this year, data showed on Wednesday, again underscoring domestic economic resilience. That kind of expansion in infrastructure spending though could also distort the view of the underlying rebalancing of growth and the ability of the consumer sector to compensate for an extended sharp decline in external demand. “I think the underlying (export) weakness is perhaps even weaker,” said Li Cui, an economist at Royal Bank of Scotland in Hong Kong. “ My estimation is that the real growth could only be around 7-8 per cent, adjusting for export prices.” “The strength of imports is stronger than expected. It shows the underlying industrial demand is fairly solid. Also, it’s likely that the inventory building still continues, partly because of the declining global prices. The producers take this opportunity to build their inventories,” she added. But it’s that inventory build that signals the possibility of risks ahead to analysts at IHS Global Insight, who are concerned that final domestic demand may not keep pace with the level of stock building. “Going forward, we’d expect import growth to slow as the lag of monetary policy catches up with the economic cycle,” IHS senior analyst Ren Xianfang wrote in a note to clients. China has hiked interest rates five times since October last year and raised the amount of reserves banks must park at the central bank – thus cutting the amount of credit available in the economy – nine times over the same period in a bid to tame inflation that hit a three-year peak of 6.5 per cent in July. If that tightening has not yet fully filtered through into the domestic sector, there could be a couple of particularly poor quarters of growth ahead as the impact from a sharply-slowing external sector are amplified. The rate of growth of China’s exports to the European Union and Australia both declined year-on-year in October versus September, according to Reuters calculations – down to 7.5 per cent from 9.8 per cent and to 16.1 per cent from 21.4 per cent, respectively. Exports to the United States meanwhile increased by 13.9 per cent year-on-year in October versus September’s 11.6 per cent expansion. China’s leaders have begun talking in recent weeks about “fine tuning” macroeconomic policy to maintain economic growth, which slowed in the third quarter to 9.1 per cent, its weakest in more than two years. And it’s that sense that the leadership has already turned its attention to growth and is gradually recalibrating policy in that direction which economists say reduces the risk of a hard economic landing for China. “Domestic demand is still resilient and may suggest that the economy would only slow down in a gradual way,” said Wang Hu, an analyst at Guotai Junan Securities in Shanghai. “But there is no risk of a sharp slowdown.”

China's trade surplus widened in October, but was well below expectations, as both imports and exports fell from a month earlier. The trade surplus rose to $17.03 billion from $14.51 billion in September, but fell significantly short of the median $25.8 billion forecast in a Dow Jones Newswires survey of 12 economists. "China's export growth will continue to slow, and the trade-surplus growth will stay on a declining trend," said Cui Li, an economist at Royal Bank of Scotland.  "With the trade surplus coming down a lot, this will relieve pressure for yuan appreciation." Societe Generale economist Yao Wei said she projects that China's full-year trade surplus will come to around $160 billion, which would be down around 12% from $183.1 billion in 2010. Exports fell 7.2% from September, while imports fell 9.5%, according to data released by the General Administration of Customs. Compared to a year earlier, export growth slowed while import growth accelerated. Exports rose 15.9% from a year earlier, down from September's 17.1% rise, but above economists' median forecast of a 15.3% expansion. Imports rose 28.7% from a year earlier, up from a 20.9% rise in September and beating the economists' median forecast of a 21.2% increase. However, the apparent surge in imports was due to a low base of comparison in the year-earlier period, said Li Huiyong, an economist at Shenyin Wanguo Securities. Import and export growth will both likely slow in the coming months, he added.

U.S.-Born Chinese, Back in China to Set Up Shop - Ed Hsu is having an identity crisis. The 37-year-old, American-born Chinese owns two Shanghai branches of Singaporean chain Awfully Chocolate, which he first franchised in 2007. “My parents went to Taiwan during the war but have these romantic memories of China, so they’re confused, which trickled down to me,” he says. “You come to China, and you’re not really Chinese anymore. You go to Taiwan, but they don’t consider you Chinese. Then you go to the States, and you’re a citizen, but you’re not really American.” Mr. Hsu is one of many foreign-born Chinese now flocking to China — Shanghai in particular — eager to get a piece of the economic pie. But what does it mean when your parents fled this place half a century ago in search of a better life, and you’ve now returned seeking the same thing? Like Mr. Hsu, Kelley Lee, 34, who owns six eateries in Shanghai — including brewpub Boxing Cat Brewery, taqueria Cantina Agave, cocktail bar Alchemist and cafe iiiit — and Austin Hu, 31, a former Gramercy Tavern chef who now runs his own Shanghai restaurant, Madison, agree that for foreign-born Chinese, the lines that define ethnicity are significantly more blurred in China. Ms. Lee says she grew up in Cerritos, Calif., thinking of herself as “Chinese first and American second,” but when she moved to Shanghai in 2004, she felt more American than Chinese. “When I say ‘the Chinese,’ I have a separate identity from them, though nor can I relate 100% to being a white-bred American.”

Hong Kong*:  Nov 11 2011 Share

Hong Kong retail landlords are banking on bigger and better Christmas displays to get their tenants' cash tills ringing this holiday season. To lure more people into their malls - especially cash-rich mainland visitors - owners of shopping centres will be vying with each other to offer the most attractive decorations, as well as special deals and promotions. Sun Hung Kai Properties (SEHK: 0016), owner of the APM mall in Kwun Tong, said it would spend HK$18 million, up 20 per cent from last year, to decorate the complex. A 10-metre Christmas tree made from crystals will take centre-stage in a 6,000 sq ft exhibition featuring creative designs and providing the setting for parades by Santa Claus and his Christmas fairies. As a draw card for the fashion-conscious, the developer has secured the rights to display the work of Swedish illustrator Liselotte Watkins - whose distinctive pieces have been incorporated into fabrics used by fashion label Miu Miu. Langham Place in Mong Kok has opted for a "winter carnival" themed Christmas, and Harbour City shopping centre in Tsim Sha Tsui will make a pitch to fans of the Toy Story movies. The encouraging signs of growth in retail spending has prompted shopping mall owners to increase their Christmas budgets. Canis Lee Lai-yi, general manager of leasing at Harbour City Estates, a unit of Wharf (Holdings) (SEHK: 0004), said the Harbour City shopping centre achieved business turnover of more than HK$18.9 billion in the first three quarters, up 36 per cent versus the same period last year and representing 6.4 per cent of the total retail market in Hong Kong. International property consultant Colliers International said the growth in sales was driven by promising domestic demand and an increasing number of tourists visiting the city. The number of inbound visitors continues to grow. Colliers noted that, so far this year, their number had risen 18 per cent from the same period a year earlier. At the end of the third quarter this year, the value of retail sales was growing at an annualised 29 per cent a year, it said. The growth of the retail sector was fundamentally policy driven, said Colliers, and inbound visitors from the mainland were likely to continue to support this industry. But Colliers cautioned that any change in the average spending per visitor would directly affect the sustainability of the consumption patterns of inbound visitors. "Whenever there is a slowdown in visitor spending, prospective growth in the Hong Kong retail market will very much depend on whether local consumption can take up the slack," it said.

It looks like it's the men who are putting in the hard yards in Hong Kong on the work front, if a recent survey is anything to go by. The study by Regus has shown that in the city 39 per cent of women work nine hours or more per day compared to 69.5 per cent of men. Globally, only 5 per cent of women work 60 hours per week compared with more than twice that - 12 per cent - for men. They are also less likely (32 per cent) to take work home to complete more than three times a week, compared with men (48 per cent). Regus, the world's largest providers of flexible workplaces, canvassed the opinions of more than 12,000 businesspeople in 85 countries, including over 100 in Hong Kong. "While women were found to be less likely to work longer hours, probably because they are more likely to be employed in part-time work, small company workers are more likely to clock up the hours than large company employees," Hans Leijten, Regus' regional vice-president for East Asia, said. The study also confirmed that most Hong Kong workers stay late and bring work home with them. More than half (57 per cent) of surveyed respondents in Hong Kong work nine or more hours per day and almost 40 per cent regularly take work home to finish. Pressure during working hours has increased in recent years because of slow economic recovery in established economies and, conversely, very rapid growth in emerging ones. Globally remote workers, such as flexible and mobile employees, are more likely to work 11 hours per day (14 per cent) than fixed office workers (6 per cent), and to take tasks home to finish (59 per cent) than fixed office workers (26 per cent). In Hong Kong, 12.8 per cent of remote workers work 11 hours per day compared with 6.6 per cent of fixed office workers, while 48.7 per cent of remote workers will take tasks home to finish compared with 37.7 per cent of fixed workers. "This study finds a clear blurring of the line between work and home," Leijten said. "The long-term effects of this overwork could be damaging both to workers' health and to overall productivity as workers drive themselves too hard and become disaffected, depressed or even physically ill." Leijten said that although the survey found that remote and mobile workers generally worked longer hours, a growing body of evidence suggested that remote workers were more productive, have a higher job satisfaction and lower stress levels.

Chief Executive Donald Tsang Yam-kuen says Hong Kong's economy may have slipped into recession in the third quarter and could face tough times ahead as Europe's debt crisis deepens. Growth may be as little as 2 per cent next year after a likely expansion of 5 per cent this year, Tsang said yesterday during a visit to New York. The economy grew by 7 per cent last year. "I am pessimistic about short-term global growth," the chief executive said. "I am afraid a major eruption in the largest market in the world, i.e. Europe, is going to affect everyone on earth and Hong Kong cannot be totally exempted." Tsang said that while a full-year recession was very unlikely, it was "possible to have a couple of quarters of bad times". His assessment echoed that of many analysts. Banks including HSBC and Standard Chartered have cut their forecasts for the city's growth this year and next year. "It's very likely Hong Kong has entered into a recession, and I doubt if that will be a brief one," said Law Ka-chung, chief economist at Bank of Communications (SEHK: 3328) in Hong Kong. "There are so many bombs in Europe waiting to explode and the impact on the global economy may be huge, similar to what we saw in late 2008." Nicholas Kwan, head of east global research at Standard Chartered Bank, was more optimistic and said the recession could be technical. (In a technical recession, output declines quarter-on-quarter for six months; in a full-blown recession, output declines year-on-year for six months or more.) Kwan said strong growth at the start of the year had raised the base for comparison. "We may see contraction continuing into the first quarter next year. But by the end of the year [2012], we believe there may be GDP growth in the range of 3 to 3.5 per cent." He said local exports - which fell for the first time in nearly two years in September - might rebound after the Lunar New Year. Tsang said mainland growth and the city's fiscal surplus - which is big enough to fund two years of operations with no revenue - would help Hong Kong weather the slowdown. Tsang steps down in June. Political observers believe his successor will face a tougher time. "Candidates for the next chief executive should think twice before making promises of more public spending, particularly welfare expenditure. They should tell the public where the money will come from before making pledges," said Dr Li Kui-wai, associate professor of economics at City University. "We should prepare for rainy days. Financial Secretary John Tsang Chun-wah should not offer too many sweeteners when he delivers his last budget." Chief executive hopefuls Henry Tang Ying-yen and Leung Chun-ying have both said that more public rental flats should be built for people on low pay. Leung said last month that the government should provide 35,000 such flats a year for the next few years to shorten the queue. Both have also expressed concerns about the widening wealth gap.

The auction for stalls at the Victoria Park Lunar New Year fair saw the highest bid in 10 years for the largest fast-food stall at the five-day event, but two smaller ones went for less than last year. A snack seller who gave his name as Mr Lau paid HK$510,000 for the stall and will need to earn more than HK$100,000 a day to make a profit. The stall, measuring 7.6 metres by 4.8 metres and next to Sugar Street, went for HK$380,000 last year. The previous highest price for this stall was HK$490,000 two years ago. All the stalls saw a higher opening price, which for the first time was calculated by the Food and Environmental Hygiene Department by taking last year's opening price and adding the rise in the Consumer Price Index A from last year, or 5.1 per cent. Ho Leung-shing, senior superintendent of operations at the department, said the increase in the opening price usually had no effect on the selling price. A total of 600 people attended the auction, which saw occasional shouting and bickering between bidders battling for the corner stalls. There were 177 wet-goods stalls up for bidding yesterday, of which 165 were auctioned off. The highest selling price was HK$48,300. Last year the highest selling price for a wet-goods stall was HK$45,000. Fifty-one of them were sold at the opening price of HK$8,410. The total raised from sales of wet food stalls was around HK$300,000 less than last year. The fair will take place from January 17 to January 21. The early arrival of the Lunar New Year is a headache for flower farmers. Last year's fair ran from January 28 to February 3. A major concern is the chilly weather forecast by the Observatory. Lau Hoi-to, also known as the "Peach Flower King, said: "Our peach blossoms may not open in time. The fair is only around 70 days away and the flowers are still little buds. "The cold weather is a concern, but that's not even the worst part. It's going to be terrible for our business if it rains. And you know, we sing in folk songs about spring showers making the flowers bloom, so we need the showers. But it's a headache if the fair is on at the same time as the spring showers." Lau rented 15 stalls this year for around HK$200,000, which he said was less than he had paid in the past. Last year he rented 13 stalls in the same area for around HK$300,000. "People might have more of an incentive to buy peach blossoms to put at home to turn their fortunes around," Lau said. Yeung Siu-lung, who is known as the "Orchid King" and has taken part in the fair for more than a decade, bought 14 stalls for around HK$150,000. He said the cold weather would be a wallet pincher for him because he would have to turn up the greenhouse heat for his orchids. The bidding continues today at the Queen Elizabeth Stadium in Wan Chai, with 284 dry-good stalls and eight thematic stalls up for grabs.

Wandle Investments Ltd, a unit of New York Stock Exchange-listed Yum! Brands Inc (Yum), obtained clearance from China's Ministry of Commerce on Monday to acquire a further 66.05 percent stake in Hong Kong-listed Little Sheep Group Ltd at a premium price of HK$6.50 (83 cents) cash a share. The price is 30 percent above the closing price of HK$5 on April 21, the last trading day before Little Sheep's filing to the Hong Kong Stock Exchange. The transaction must be approved by shareholders of Inner-Mongolia-based Little Sheep, which operates a chain of some 400 hotpot restaurants, mainly in the Chinese mainland. In a statement to the Hong Kong bourse, Little Sheep said that it would notify its shareholders of the timetable "in relation to the proposal, the scheme and the option offer". The transaction would increase Yum's holding in Little Sheep to about 93.2 percent. The remaining minority stake will be held by the co-founders of Little Sheep, Zhang Gang and Chen Hongkai. Yum said it would take over the management and operation of Little Sheep when all conditions are fulfilled and the share acquisition plan is implemented. Little Sheep closed at HK$6.37 on Tuesday, up about 15 percent. The chain posted revenue of 1.9 billion yuan ($299 million) in 2010, up 22.6 percent. Yum made a preliminary proposal in April to acquire all outstanding shares of Little Sheep. The Ministry of Commerce began a review of the deal in June. The ministry's Anti-Trust Bureau decided to extend the review period by 60 calendar days on Oct 25, arousing investor concern that the deal, involving a popular local brand, might find it hard to win government approval. Jing-Shyh Sam Su, chairman and chief executive officer of Yum! Restaurants China, said the deal is another important step in executing Yum's strategy of being rooted in China. Analysts said that the deal would help both companies expand their consumer bases and improve their competitiveness. Linus Yip, a Hong Kong-based strategist with First Shanghai Securities Ltd said the arrangement would give Little Sheep an opportunity to learn advanced operating strategies from Yum, which would mean improved international competitiveness. Little Sheep has about 24 restaurants overseas. Tough competition in the hotpot restaurant sector has pushed Little Sheep to "a bottleneck" and the chain might find it hard to maintain high growth rates. But cooperation with Yum "can help the company expand its presence in the global market and bring better management experience to companies", said Kang Jianhua, an analyst with CIC Industry Research Center. Although industry experts generally took a positive view of the deal, consumers might not see things the same way. According to an online survey conducted by, more than 50 percent of some 2,200 respondents said that they would not patronize Little Sheep outlets as often as before.

US Navy personnel stand on board US aircraft carrier USS George Washington during its routine port visit to Hong Kong Nov 9, 2011. HONG KONG - The US unclear powered aircraft carrier USS George Washington pulled in Hong Kong waters on Wednesday to get replenishment upon her second portal call to the city. Captain David Lausman, commanding officer of the USS George Washington, told the press briefing that the Chinese navy acted professionally when they encountered. "Chinese navy had great improvement in the past two or three decades. We are looking forward to working with them in the future," he added. Commissioned in 1992, the 332-meter, 97,000-ton USS George Washington carries a crew of more than 5,000. The sailors will stay in Hong Kong for about 5 days and participate in some volunteer work.

 China*:  Nov 11 2011 Share

Prime-time advertising slots on state broadcaster China Central Television for next year were once again snapped up by liquor brands this week despite new restrictions on alcohol advertising coming into effect next year. The total value of auctioned and pre-sold advertising on CCTV next year hit a record of 14.26 billion yuan (HK$17.46 billion), up 12.5 per cent. The auction in Beijing on Tuesday itself raised 12.25 billion yuan. The CCTV advertising auction is seen as a gauge of corporate spending power and analysts view the results as a key indicator of business confidence across the whole economy. A total of 245 companies from 28 countries and regions joined the 18th auction, with 104 successful bidders, mostly from the mainland. Liquor companies ranked top, spending 3.35 billion yuan on successful bids, up 37 per cent. Their share of winning bids was up 3 per cent, according to Charm Communications, a leading mainland advertising agency, and they occupied the No1 position for the ninth year in a row. Maotai's total spending of nearly 498 million yuan ranked top among all companies. Three liquor companies - Maotai, Yanghe and Jiannanchun - won the bid for the 10-second slot before the 7pm newscast for 656 million yuan, The Beijing News reported. Bank of China paid 76 million yuan, up 51.7 per cent, for standard 10-second advertising slots after the newscast for two months. "The result demonstrates the strong confidence Chinese companies have in the domestic economy as well as their continued recognition of CCTV's value in building brands targeting China's fast-growing consumer market," Dang He, founder and chief executive of Charm Communications, said. Professor Zhao Xiao, an economist at the University of Science & Technology Beijing, said the CCTV prime-time advertising auction results were seen as one indicator of the mainland's economy and suggested growing corporate spending power, propped up by growing sales in the mainland market. "Liquor sales are very reliant on branding and advertising because the product is mainly for social intercourse or given as a gift," he said. Zhao said big profit margins in the liquor industry helped the sector invest more in advertising. The profits of liquor producers rose 300 per cent from 2004 to 2009, reported. Eight of the 20 most successful bidders were liquor or beer companies, even though CCTV will restrict liquor advertising from the start of next year, allowing just two liquor advertisements in prime time and up to 12 in any one day on each channel, Nine channels targeting overseas markets and children do not show any liquor advertisements. Professor Huang Shengmin, dean of Communication University of China's school of advertising, said the results indicated that liquor companies were more competitive in securing advertising slots and consolidating their branding, especially in the market for luxury goods. "Images of alcohol containers or drinking behaviour have been ordered to be replaced with those of drinking culture and celebrity ambassadors," he said. "So that could reduce the negative influence on the public in response to social criticism while not damaging the industry."

The United States' involvement in the Asia-Pacific region and Chinese currency reform are expected to top the agenda when President Hu Jintao and his US counterpart Barack Obama meet during the Apec summit starting today in Hawaii. Hu will elaborate on China's stance on global economic policy, regional development and hold one-on-one meetings with the leaders of Asia-Pacific Economic Co-operation (Apec) forum countries. While the debt crisis lingers in Europe, analysts expect Obama to use the summit in Honolulu to intensify his focus on the fast-growing region. The US has stepped up its presence in the region and some of its actions, such as a fighter-jet upgrade for Taiwan and military drills in the South China Sea, have upset Beijing. Obama and American officials have recently reiterated that the US will not be leaving the region. US Defence Secretary Leon Panetta recently travelled to Japan, South Korea and Indonesia, and the Obama administration has also engaged North Korea and Myanmar in recent months. Following the Apec summit, Obama will visit Australia before going to Bali, Indonesia, to become the first US president to take part in an East Asia Summit. Ma Zhengang , a former Chinese ambassador to Britain and a former president of the China Institute of International Studies(CIIS), said China welcomed US involvement in the region, but there were concerns over whether the US presence would affect China's position. "Some of the developments in the region triggered fears that the US presence is not mainly for economic gain, but also about containing China," Ma said. "Both sides do not want confrontations, and want to discuss how they can co-operate with each other." Professor Jin Canrong , a Sino-US affairs expert at Renmin University, said China is well aware that the US presence can help allay fears about China's development among countries in the region. "But on the other hand, China also has some worries about the US and wants to discuss them frankly," he said. CIIS president Qu Xing said the two presidents will discuss solutions to the global economic crisis, and he expected the US will press China to allow the value of the yuan to rise more rapidly. "As the economies in Europe, the US and Japan are not in good shape, how China can help tackle the financial difficulties and co-operation with the US in this regard will be a main concern," Qu said. "The US will link the appreciation of the renminbi to economic recovery." The US also wants to expand the Trans-Pacific Partnership free-trade pact, which calls for restrictions on government subsidies for state-owned enterprises, and to persuade all Apec countries to lower tariffs on environmentally friendly products such as solar panels to 5 per cent. China, which has imposed an average 7 per cent tariff on 153 green products proposed by the US, says the two goals are too ambitious.

The dinner at New York's Four Seasons Hotel, a Wall Street coming-out party last April for Chinese conglomerate Fosun Group, was much like any other high-class corporate event—until Guo Guangchang, the company's chairman, changed from pinstripes into white silk pajamas to demonstrate his prowess at tai chi. Guest Mark Grier, vice chairman of Prudential Financial Inc., saw the 10-minute display as a message that Mr. Guo intends "to make a contribution to China beyond the specific commercial impact of running his business." Another person saw it as a way for Mr. Guo to demonstrate his vitality as a "young strong leader." Whatever the intent, the performance was a reminder that Mr. Guo, 44 years old, is not just another apparatchik running a big state-owned Chinese enterprise. Nor is Fosun yet another lumbering Chinese behemoth. The early wave of Chinese investment abroad was led by the purchase of mining and energy companies by China's state sector. But the face of overseas Chinese investment is set to change as private companies like Fosun exploit their lucrative home market for global scale. Private-equity firm Hony Capital Ltd. is looking to put its cash to use abroad, for example. And the parent of Hainan Airlines Co. is bidding for the airport assets of German construction company Hochtief AG. Such firms "represent a new generation of Chinese financial investors, full of drive and quick to move," says David Chin, co-head of investment banking for UBS AG's Asia-Pacific unit. Chinese outward foreign direct investment came to $68 billion last year. That's still small compared with the U.S. figure of $329 billion, according to the United Nations, but more than five times its total five years earlier. The bulk of Fosun's assets are in Chinese steel, mining, pharmaceuticals and real estate. Yet the company last year bought a stake—now 10%—in French resort operator Club Mediterranée SA, which has its eye on China's growing domestic tourism market. Earlier this year Fosun took a 10% stake in Folli Follie Group SA, a high-end global retailer based in Greece. "Our investment overseas will get faster and there will be more of them. We're certainly not going to stop with two," Mr. Guo says in an interview in the company's headquarters, a concrete bunker along Shanghai's riverfront. Not all of Fosun's forays have been successful. The company tried in vain to buy a stake in Italian fashion house Prada SpA and led a consortium that unsuccessfully bid for American International Group Inc.'s Asian insurance unit. Fosun did, however, sign an agreement earlier this year to manage $500 million for Prudential Financial, the money-management arm of the big insurer. And last year it agreed to a $100 million joint venture with Carlyle Group LP to make private-equity investments in China. Fosun's approach is different from that of Chinese firms that have stirred controversy with high-profile bids abroad, such as Huawei Technologies Co.'s attempts to buy assets in the U.S. or Chinalco's effort to raise its stake in Anglo-Australian miner Rio Tinto. Fosun, by contrast, is taking minority stakes in high-profile foreign firms eager to expand in China.

China successfully launched the remote-sensing satellite Yaogan XII Wednesday from the Taiyuan Satellite Launch Center in the northern Shanxi province, according to a press release from the center. The satellite was sent into space aboard a Long March 4B carrier rocket at 11:21 am Beijing Time, according to the center. The satellite will be used to conduct scientific experiments, carry out surveys on land resources, estimate crop yield and help with natural disaster-reduction and prevention. Also hitching a ride on the rocket was the satellite Tianxun I, which will be used to carry out technological verification tests, according to the center. Yaogan XI was launched from the Jiuquan Satellite Launch Center in northwestern Gansu province in September last year.

Hong Kong*:  Nov 10 2011 Share

A museum dedicated to Bruce Lee may happen after all — in Seattle, not Hong Kong. City officials, according to local reports, recently put forth a proposal to examine the possibility of a museum dedicated to the martial-arts star. The Bruce Lee Foundation, which is headed by his daughter Shannon, has developed a concept for what would be called the Bruce Lee Action Museum and envisions a building that would house memorabilia and personal items from his life. The latest plan calls for the museum to be located in Seattle’s Chinatown International District, though before anything proceeds further, it’s up to the foundation to put forth a more comprehensive proposal. Mr. Lee lived in the Pacific Northwest in the 1950s and ’60s. He’s buried in Seattle’s Lakeview Cemetery, next to his son Brandon. According to Ms. Lee, the foundation has begun a campaign to raise $10 million to secure the property and begin drawing up the designs, though she added that the “museum of our dreams” will cost much more. While it’ll be years before the Seattle proposal comes to fruition, it was long expected that such a museum would also be built in the late star’s former residence in Hong Kong’s Kowloon Tong district. The Hong Kong museum is now unlikely, since the current owner of the property and the Hong Kong government could never agree on the plan. Mr. Lee died in that house in 1973. “There was always a plan for a museum in Seattle,” Ms. Lee said in an email. “If the museum in Hong Kong had materialized, then it would have been in addition.” Hong Kong intends to pay tribute in other ways. In October, its top politician, Chief Executive Donald Tsang, said in his annual policy address that the government would set up a gallery in the Hong Kong Heritage Museum to honor Mr. Lee. The city currently has a bronze statue of Lee along Kowloon’s waterfront but has failed to satisfy long-time fans who say the star deserves so much more in the town where he did most of most of his cinematic work.

The defeats suffered by pan-democrats in Sunday's district council elections will weaken their prospects in next year's Legislative Council poll, as the results will undermine their district networks and ability to muster support at grass-roots level, political observers say. The Beijing-friendly Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) emerged the biggest winner with 136 seats, up from the 115 it won in 2007. Added to the 11 seats won by its ally, the Federation of Trade Unions (FTU), the two government-friendly groups accounted for 35 per cent of the 412 seats on 18 district councils. The success rate of the 182 DAB candidates was 74.7 per cent, up from 65 per cent in 2007. The pan-democratic camp suffered an even worse defeat than in 2007. Various groups from the camp won a total of 83 seats on Sunday, down from 96 four years ago - even though their share of the popular vote increased. Just 47 of the Democratic Party's 132 candidates were returned, down from 59 in 2007 when it fielded 108 candidates. A record 1.2 million people voted in the most hotly contested district council elections in Hong Kong's history. Seven of 41 candidates from the Civic Party won seats. The party has attracted criticism for its role in legal cases involving foreign domestic workers' right of residency and the environmental assessment of the giant bridge project linking Hong Kong, Zhuhai and Macau. The government-friendly camp won 34.5 per cent of the vote, up from 29.6 per cent in 2007. And despite the pan-democrats' setbacks, they still won 33.2 per cent of the total, up from 27.5 per cent four years ago. If the votes in the 18 district councils are regrouped into five Legco geographical constituencies, the share of votes won by the DAB and FTU everywhere but on Hong Kong Island was higher than in 2007. The two groups won 30.6 per cent of the total vote in New Territories West, 6.7 percentage points higher than the share won by the DAB in 2007. FTU candidates did not run in elections under the unions' own banner until 2008. Dr James Sung Lap-kung, a political scientist at City University, said the pan-democrats' loss of more than a dozen district council seats would affect their near-term political future. "Many pan-democrat councillors' offices at district levels will be taken up by their pro-government rivals. Pan-democrats will be in a disadvantageous position to maintain their grass-roots network, which is crucial for next year's Legco election," he said. Pan-democrats have usually won about 60 per cent of the vote in Legco elections, while Beijing-friendly candidates polled 40 per cent. "I think the pan-democrats may not be able to maintain the 60-40 golden rule in next year's Legco election," Sung said. "The gap ... may narrow to 55 and 45 per cent." Joseph Cheng Yu-shek, professor of politics at City University, said pan-democrats fared better at Legco election polling stations in constituencies where their district councillors held office. For example, in the 2008 Legco election, the ticket fielded by the Civic Party won 268 votes at the polling station at the German Swiss International School - the highest among all parties. The DAB won just 79 votes at that polling station, which is in The Peak constituency of Central and Western District Council. The Civic Party's Tanya Chan won the seat in the 2007 district polls, but she lost on Sunday. Civic Party leader Alan Leong Kah-kit called on pan-democrats to rally. "Various pan-democratic parties need to learn a hard lesson for the democratisation movement, and sit down as soon as possible to prepare for next year's Legco election," he said.

Two Hong Kong companies, a trust made up of telecom assets and a jewelry chain, are gearing up to raise as much as $6 billion from initial public offerings in the city, while a mainland Chinese solar firm and a cement maker also moved forward with listing plans. PCCW Ltd. plans to start order-taking from institutional investors Wednesday for the listing of its core telecommunication assets as a trust, in a deal that is aimed at raising between $1.2 billion and $1.4 billion for the company controlled by Richard Li, son of Hong Kong's richest man, Li Ka-shing. Gold and diamond jeweler Chow Tai Fook Jewellery Co., controlled by Cheng Yu-tung, chairman of New World Development Co., is planning to seek listing approval Thursday from the Hong Kong stock exchange for an IPO of up to $4 billion, people familiar with the situation said Tuesday. At that size, the jewelry firm would have the world's biggest IPO since Spain's Bankia SA raised $4.4 billion before a July listing in Madrid. Two other companies, based in mainland China, also moved forward Tuesday with listing plans in Hong Kong. Henan-based cement producer Tianrui Group Cement Co., in which U.S. private-equity firm KKR & Co. has a minority stake, is planning to seek listing approval on Nov. 17 for an up to $500 million Hong Kong IPO, people familiar with the situation said Tuesday. Xinyi Solar Holdings Ltd, the solar glass unit of Hong Kong-listed Xinyi Glass Holdings Ltd., started premarketing its roughly $150 million IPO Tuesday, according to a term sheet seen by Dow Jones Newswires. The IPOs come after a period of relative quiet on the deals front following a heavy selloff in markets amid concerns about the European debt crisis and a slowdown globally. Hong Kong's stock market is still down 15% this year, and just one major IPO, the $1.7 billion listing by Chinese brokerage giant Citic Securities Co., has been completed since early October. Citic Securities is the world's biggest IPO since Bankia's deal in July. PCCW's telecom trust will offer 2.05 billion units at an indicative price range of 4.53 Hong Kong dollars (58 U.S. cents) to HK$5.38 each, representing a yield of 7.5% to 8.9% for 2012, a person familiar with the situation said Tuesday. Investors generally buy trusts for their yields, or the expected dividend payout per unit, rather than the potential increase in a trust's share price. The public offering, where the trust is sold to Hong Kong retail investors, will start Nov. 16. Pricing is slated for Nov. 22, and listing on the Hong Kong stock exchange for Nov. 29, two people familiar with the deal said. PCCW will hold a stake of 55% to 70% in the trust after it is listed, PCCW said in circulars released in late September. The trust's main businesses are fixed-line and mobile telecom assets in Hong Kong. While Chow Tai Fook is planning to seek listing approval Thursday, it has yet to decide whether to go ahead and start premarketing. If it gets the green light, it can begin gauging investor views on the deal and come up with a price range. People familiar with the deal said the jeweler has until the end of March to start taking orders, because its audited accounts used for the approval process end in September. Stock-exchange listing rules require that the audited accounts of the company cannot be older than six months from the first day of the IPO's offering to retail investors. Tianrui Group will begin taking orders for its IPO soon if it gets listing approval on Nov. 17, people familiar with the situation said. They said KKR, which invested $115 million in the company in 2007 before the financial crisis, and the private-equity arm of J.P. Morgan Chase & Co have a minority stake in the cement producer. Xinyi Solar Holdings, which makes ultra-clear photovoltaic raw glass, plans to sell 520 million new shares in its IPO. An overallotment option that would boost the deal size by 15% would see the Chinese company raise as much as around $172.5 million, according to the term sheet.

Small investors hoping that China’s biggest instant noodle maker would talk more about its strategic deal with PepsiCo were out of luck when the Hong Kong-listed firm on Monday chose to speak only with analysts at a well attended briefing. The tie-up involves a venture of Tingyi (Cayman Islands) Holding Corp. becoming PepsiCo’s franchise bottler in mainland China, with exclusive rights to manufacture and distribute trademark drinks including Gatorade, Tropicana and other Pepsi soft drinks. The large analyst turnout reflects strong market interest in the deal, announced late Friday by Tingyi, best known for its Master Kong noodles and drink products available nationwide. The company, however, opted to exclude the media and other shareholders from the meeting. Questions over how and when the company could turn around Pepsi’s loss-making China bottling business, as well as the difficulties in managing multi-brand operations, remain unanswered. Some reporters who — were told of the session by helpful analysts — gathered outside the venue to speak with Tingyi’s founder and chairman, Taiwanese businessman Wei In-Chou. But management wasn’t prepared to talk, saying it had nothing to add beyond the announcement. The management team also said it was too tied up with finalizing the deal. “We’re all very busy (preparing the deal). Are you telling us to not get married and not consummate the union, and come speak to you?” asked Chief Financial Officer Frank Lin, who was accompanying Mr. Wei as they left the analyst briefing. Yet the executives had the time — an hour and a half to be exact — to speak with research analysts and field their questions. The setup meant that brokerage clients could potentially learn more about the transaction before the press, and other retail investors for that matter. Tingyi’s arrangement to selectively speak with analysts comes even while the Hong Kong Stock Exchange has for years been recommending companies to “consider opening up their meetings with analysts to the press and the public,” according to existing disclosure guidelines. Though this practice remains common practice among some Hong Kong-listed firms after they post earnings or acquisition announcements, many companies have improved their communication with shareholders, holding either separate meetings with analysts and reporters or conducting joint sessions, in order to avoid potential selective disclosure of price-sensitive information. Ricky Tam, chairman of the Hong Kong Institute of Investors, a group representing the interests of the general investing public, said he was concerned about Tingyi’s decision not to meet with reporters. “Considering that this is a very substantial transaction, the company should have held meetings for both analysts and the media,” he said. “If not, they should at least upload the related presentation materials from the analyst meeting to the stock exchange to ensure fair and simultaneous disclosure.” After chasing the tightlipped Tingyi chairman down an elevator and into a nearby hotel, the persistent journalists were rewarded with a brief comment: The company is considering a separate listing of its beverage business in the long term.

 China*:  Nov 10 2011 Share

Wine critic praises China's passion - Robert Parker sees much to admire in the mainland industry, but talk also touches on image problems - Could China produce world-class wines to compete with the best from countries such as Argentina, Australia, Chile, France and Spain? That remained to be seen, said Robert Parker, a man whose wine ratings can make the market move. Despite that cautious assessment, he said there may be some "pretty special wines emerging from China". "I've never seen such a dramatic transformation of a country, their interest in wine. They're incredibly fast to pick up things, to learn, to immerse themselves," Parker said. "The interest and passion is an important factor in quality and in wine education. That already exists and has existed for some time in China. That's a good sign." The renowned US wine critic was speaking at Winefuture Hong Kong 2011, a gathering of respected figures in the wine industry being held at AsiaWorld-Expo until today. They will be welcome words for Chinese winemakers, who struggle against a negative image rooted in nationwide food safety scandals and the mainland's reputation for fake products. Celia Hay, a wine educator with the New Zealand School of Food and Wine who is looking to teach wine classes on the mainland, said: "[The experts] were saying, since 2006, when the market was deregulated, that 20,000 wine importing companies have been set up. But there's still a lot of fraud, smuggling ... and some companies are just focusing on sales; it's just a commodity. For most of us in the industry, it's a special beverage that needs some respect. "It'll take some time to educate the consumer to experiment and to trust Chinese wine. There are some good-quality wines, but some wines in China are overpriced. If the quality is good, than it's fine to charge a high price, but often the quality is not good," she said. Professor Zhang Fuqing, a viticulture expert with Dynasty, a 30-year-old mainland winery, said, however, that the fake and substandard products "are just a part of development". "Other countries seem to forget their development also included these phases," he said. "I think a lot of foreigners think only their wine is best. It's pride and prejudice. "In reality, they've all done bad things. In the 1990s, they exported a lot of substandard wine to China because they knew Chinese people would not know what was good."

US goals of establishing regional free trade and an environmental policy at the Apec summit are useful but too ambitious for some developing nations, China said on Monday, days before President Hu Jintao heads to Hawaii for the meeting. Apec (Asia-Pacific Economic Co-operation) members from 20 countries have taken a “fundamentally supportive attitude” toward US proposals for green growth and innovation to be raised at the leaders’ meeting in Honolulu from November 12-13, Assistant Foreign Minister Wu Hailong said. “But expectations for outcomes are too high and beyond the reach of members from developing countries,” Wu told reporters during a joint briefing with China’s Commerce Ministry. Sorely lacking jobs at home and looking for ways to cement the US presence in Asia, the Obama administration wants to drive forward the TransPacific Partnership (TPP) free trade pact among nine nations on the sidelines of Apec. The United States eventually hopes to expand the deal from the current nine countries – the United States, Chile, New Zealand, Singapore, Australia, Vietnam, Peru, Malaysia and Brunei – to all 21 members of Apec, which account for about 54 per cent of the world’s economic output and 44 per cent of global trade. Part of the initiative would be strong language that ensures state-owned enterprises (SOEs) do not benefit from government subsidies not available to privately owned firms. The SOE issue is likely to discourage the participation of China, the world’s second biggest economy, where many critical industries are controlled by state-backed firms. “We haven’t participated in the talks, so we cannot comment. The threshold is high. Whether a standard can be achieved, we’ll just have to wait and see,” Assistant Minister of Commerce Yu Jianhua said when asked about the US goals for SOEs in the deal. But whether or not China ever joins what Washington describes as a “21st-century” trade agreement, a top US State Department official said on Monday he thought the pact would help shape Beijing’s behaviour in the trade arena. “If we have high enough principles and practices in it, it will give a signal to China that other countries are playing by a higher set of international rules,” said US Undersecretary of State Robert Hormats. China has said it supports free trade in the Asia-Pacific and will watch progress on the TPP, which some analysts think Japan could ask to join at this week’s Apec meeting. But experts say Beijing prefers other regional frameworks that would not force it to open its markets at the behest of the United States. Those deals might include a Japan-China-South Korea deal, as well as the 10+1, 10+3, 10+6 frameworks – talks between the 10 members of the Association of Southeast Asian Nations (Asean) and other Asia-Pacific countries. “China is in a much better bargaining position when they don’t have the United States sitting at the same table,” Scott Kennedy, the director of the Research Center for Chinese Politics and Business at Indiana University, told reporters. Hu is set to meet with US President Barack Obama at the summit, as well as the presidents and prime ministers from Japan, Canada, Peru and Vietnam. The United States hopes to persuade China and other Apec countries to agree on a deal to lower tariffs on environmental goods, such as wind turbines and solar panels, to 5 per cent. Assistant Commerce Minister Yu said of the list of 153 green products proposed by the United States, average US tariffs are 1.4 per cent compared to China’s nearly 7 per cent. “The problem is, if we set a goal of 5 per cent, the US doesn’t need to do anything. We are the ones that need to do all the work,” he said. “Some economies on one hand promote free trade of green products and services and at the same time abuse trade remedies and protectionism on trade of green products within the Apec region,” Yu said. The US arm of Germany’s SolarWorld has asked a the Obama administration to impose duties of more than 100 per cent on solar imports from China, which they said were unfairly undercutting US prices and destroying American jobs. The US Commerce Department is due to decide by November 9 whether to launch an investigation on the case, which could add to friction before the summit.

Taiwan farmers who set up businesses at a development park in Qingliu county in East China's Fujian province are eyeing a bigger market on the mainland. They hope that the local government helps address their financing problems. Qingliu Development Park for Taiwan Farmers was set up in 2006 and is among the six parks of its kind in Fujian. The parks aim to attract Taiwan farmers to bring investment, agricultural varieties, as well as technological and managerial skills, besides helping them explore the market on the mainland and boosting cross-Straits cooperation in the agricultural field, local officials said. There are 29 such parks on the mainland. "The soil and climate in Fujian are quite similar to those in Taiwan, and it's suitable for growing Taiwan vegetables such as cabbage, balsam pear and okra," said Tang Thin-then who hails from Taiwan's Taichung and has invested around 20 million yuan ($3.15 million) to grow vegetables in the development park in Qingliu last year. Local government laid out many favorable policies to attract Taiwan farmers and help their businesses grow. "We would waive their land use fees in the first two years and let them enjoy a 30 percent discount in electricity price," said Lai Wensheng, deputy head of the park's management committee and deputy director of Qingliu agricultural bureau. The park will also improve infrastructure and provide free facilities to Taiwan farmers, said Lai. A total of 53 Taiwan-invested agricultural companies and 12 individual agricultural families operate in the park, running businesses such as growing flowers, fruits and vegetables, fisheries and processing of agricultural products. "The park grows products worth around 960 million yuan each year and those businesses help provide jobs for nearly 9,000 people in the county," said Lai. Tang Thin-then said his vegetables were popular in the market and that he planned to expand his business next year. But it was not easy getting a bank loan since vegetables were perishable commodities and hence could not be mortgaged. Wu Chia-cheng, a farmer from Pingtung in Taiwan who grows tomatoes on a 40,000-square-meters land in the park, had the same problem. "I want to switch to soilless tomato planting, but I need a loan of around 500,000 yuan to do that. I hope the government could help facilitate the funds," he said. In fact, the local government is trying to find ways to address the problem. Lai said they were considering setting up a credit system within the development park and a company that will act as a guarantor to help promising companies and farmers acquire loans. Lured by the favorable policies, another Taiwan company signed a deal with the park on Sunday, agreeing to invest $50 million to develop ecological agriculture and biopharmaceutical industry there.

Passenger vehicle sales in October showed the steepest year-on-year decline since 2008, as the government tightened up its 2-year-old subsidy policy for fuel-efficient models.

Shanghai will issue China's first ever local government bonds on November 15 in a pilot program designated to help cash-strapped local governments to curb fast-spreading debt risks, officials said Tuesday. The government will sell 3-year fixed-rate bonds worth 3.6 billion yuan ($567 million) and 5-year fixed-rate bonds worth 3.5 billion yuan, said officials with the Shanghai government's bureau of finance. The Ministry of Finance announced in late October that the State Council, or Cabinet, had allowed the cities of Shanghai and Shenzhen and the provinces of Zhejiang and Guangdong to issue bonds on a trial basis this year as authorities explore ways to solve local government's debt issues. The nation's auditing agency said earlier this year that local government debt totaled about 10.7 trillion yuan at the end of last year. About 80 percent of local government debt is raised through local government financing vehicles (LGFVs), which are mainly set up to fund construction projects and have come under fierce criticism due to them being poorly supervised and managed.

Hong Kong*:  Nov 9 2011 Share

Civic Party lawmaker Tanya Chan Suk-chong's loss in the district council election carries major ramifications. For it reflects on her being one of the five legislators who quit their seats in the top chamber last year to force by- elections that were held to be a referendum on political reform. "I am their nemesis," she said of the political establishment. "If they can unseat me it will have a very symbolic effect." Chan made the comment earlier in the day during polling in which she faced Liberal Party upstart and winner Joseph Chan Ho-lim as she sought to retain her Peak seat in the Central and Western District Council. It also came as banker Chan was seen as likely to unseat the Civic Party co- founder and administer a stunning blow to pan-democrats. Tanya Chan was talking hours after she issued a "critical" call for voters to turn out in force because, she said, her party was facing a major defeat. The Peak constituency was also seen as a place where the Civic Party would pay the price for alleged roles in the failed legal challenge to the environmental assessment for the Hong Kong- Macau-Zhuhai bridge and the judicial reviews on right of abode for foreign domestic helpers. Liberal Party stalwarts were confident Joseph Chan would win - better than 50-50 chance, according to a smiling Liberal Party honorary chairman, James Tien Pei-chun. Tien said he had many friends in the district, where most voters are upper middle class. Liberal Party chairwoman Miriam Lau Kin-yee also looked confident when canvassing last night for Chan. And Joseph Chan talked about being familiar with the constituency, having been born and bred in the neighborhood. By contrast, Tanya Chan looked tense and said she was in a desperate fight for the seat, despite having former chief secretary Anson Chan Fang On-sang canvassing for her for about half an hour on Magazine Gap Road. Even the presence of Democratic Party founding chairman Martin Lee Chu-ming, a voter in the constituency, who also came out for her, did not ease Tanya Chan's worries that she faced a powerful force. But political commentator James Sung Lap-kung of City University said the "critical condition canvassing" was a usual tactic for pan-democrats, and Tanya Chan should know she was more likely to win with a high turnout rate. But she disagreed, saying the emergency call was genuine and not a "crying wolf" strategy.

Bank of China Ltd.'s Hong Kong unit will retain its coveted position as the city's sole yuan-clearing bank, a person familiar with the situation said Monday, ending hopes for other lenders seeking clearing status in a move that reflects Beijing's cautiousness over the scope of the internationalization of the country's currency. Bankers and analysts have been awaiting a decision by the People's Bank of China on whether to allow more than one offshore clearing institution, given their view that the current one-bank setup isn't sufficient to satisfy their needs in this rapidly growing market, focused mainly in Hong Kong. China has been developing Hong Kong as the center for offshore yuan trading. China's central bank will sign a renewed contract with BOC Hong Kong (Holdings) Ltd. as early as this week to continue its yuan-clearing role, said the person. "The terms will likely remain the same as in the last contract," the person said, indicating that the bank's contract will be extended by five years, to the end of 2016. BOC Hong Kong, which is 66%-owned by its Beijing-based parent, has been Hong Kong's only yuan-clearing bank since December 2003, shortly before China began allowing individuals to hold yuan-denominated deposits in Hong Kong. The city's offshore yuan market began to develop in earnest beginning in mid-2010, when China relaxed regulations on the use of its currency outside the nation and essentially unpegged its currency from the U.S. dollar. As a clearing bank, BOC Hong Kong earns fees by settling offshore yuan payments between lenders. The bank also receives a bigger quota to invest in domestic Chinese bonds, which offer higher yields than offshore issues. The blue-chip lender's yuan-clearing contract was renewed in January 2007 and was set to expire at the end of this year, the person said. U.K.-based lender HSBC Holdings PLC, which has been a front-runner in underwriting "dim sum bonds," or yuan bonds sold offshore, said in May that it hoped to become another offshore yuan-clearing bank in Hong Kong. Industrial & Commercial Bank of China Ltd.'s main Hong Kong unit has expressed similar interests. Analysts said Beijing's decision to maintain the status quo signals its desire to have tight oversight over the offshore market's development and prevent run-away growth. Yuan deposits in Hong Kong swelled to 622.2 billion yuan ($97.8 billion) at the end of September, more than four times the 149.3 billion yuan of a year earlier, the Hong Kong Monetary Authority said Monday. "It's easier for authorities in Beijing to control the offshore yuan market, such as interest rates and other policy decisions, if the clearing role is restricted to an institution with Chinese backing instead of a foreign bank," said Frances Cheung, senior strategist at Crédit Agricole. A single clearing bank also restricts the scope and size of the yuan business for some lenders because their exposure to any single lender is limited due to risk-management regulations. Having multiple clearing institutions would help them bypass such difficulties. Lenders seeking clearing status are attracted by the benefits of fees and related services income, "which are risk-free and effortless," said Kim Man Ngan, head of yuan strategy at Hang Seng Bank Ltd. He said BOC Hong Kong earns a clearing fee of 0.91 yuan for every 1,000 yuan deposited by other banks. He said the yuan-clearing status could also raise a lender's profile in the booming market. "BOC Hong Kong's unique status lures a lot of fund flows into the bank, expanding its pool of yuan deposits," he said, adding that it gives the bank better market information on yuan fund flows. Analysts estimated that BOC Hong Kong enjoys the biggest market share in yuan deposits, accounting for roughly a third of the city's total yuan deposits.

Gambling revenue in Macau rose 42% to a record high in October, government statistics showed Tuesday, as high rollers from mainland China continued to drive growth despite concern that the authorities' credit-tightening or an economic slowdown will stop the music. Macau, the only place in China where casino gambling is legal, has seen gambling revenue soar since the end of 2009, and is poised to rake in more than five times the gambling revenue of the Las Vegas Strip this year. Gambling revenue in the Chinese territory rose to 26.85 patacas (US$3.36 billion) in October, up from 18.87 billion patacas in the same month a year earlier, data from Macau's Gaming Inspection and Coordination Bureau showed. October's revenue haul beat the territory's previous high of 24.77 billion patacas hit in August. It was boosted by China's "golden week" holidays, which fall in May and October. The strong numbers were recorded during a month of extreme volatility in casino stock prices due to intensifying concern that a liquidity crunch in China could cool the casino industry's explosive growth. Though data don't show any evidence of a slowdown in Macau--in the January-October period, Macau's gambling revenue was 45% higher than a year earlier--investors dumped casino shares in early October with SJM Holdings Ltd., Macau's largest operator by revenue, tanking 26% in just one trading session. The strong October revenue figures led the Hong Kong-listed shares of Macau's six casino operators to outperform the territory's benchmark Hang Seng Index, which fell 2.5%, hurt by a China manufacturing activity report that fell short of economists' forecasts. Galaxy Entertainment Group Ltd. led the way, rising 0.7% to HK$16.26, while Wynn Macau Ltd.'s shares rose 0.5% to HK$22.35. Sands China Ltd.'s shares fell 0.2% to HK$23.85, but that marked a 6% rebound from an intraday low of HK$22.50. Stanley Ho's SJM Holdings was the weakest link, falling 1.8% to HK$13.44. But the Chinese manufacturing data illustrate the complex outlook for the world's second-largest economy, the source of most of the money bet on Macau's baccarat tables. Disappointing Purchasing Managers Index figures, combined with recent government measures to help smaller businesses, have fueled expectations that China's tightening cycle is over, but the poor data also indicate that a tight monetary policy and weakening export demand have started to take a toll on economic growth. Less clear still is the effect any macroeconomic developments in China could have on Macau's gambling industry, which is driven by the opaque and notoriously difficult-to-forecast VIP business. In a recent report, Bank of America Merrill Lynch analyst Billy Ng wrote that the key fundamental drivers of Macau gambling growth are the wages of Mainland Chinese--and hence their net worth--the number of visitors to Macau, and the value of the Chinese currency.

Pro-Beijing parties in Hong Kong trounced the opposition as voters expressed discontent with pro-democratic parties in local elections that may predict the outcome of more important polls next year. Results from Sunday's poll were released early Monday for individual candidates in the neighborhood-council elections, but the government of the Chinese territory did not immediately provide a breakdown by political party. Candidates from two major parties backed by the central government in China won 124 of 336 contested seats while the two biggest pro-democracy parties lost ground, garnering only 53 seats, the parties said. While district councilors wield little power, analysts say the outcome could foreshadow a tougher struggle for pro-democracy candidates in legislative elections next year, which could make it harder to move toward a fuller democracy. "If the democrats are losing the elections they kind of lose their legitimacy in terms of the whole democracy movement, so it will be a more difficult fight for them," said Ma Ngok, a political scientist at Chinese University of Hong Kong. About 1.2 million people, or 41.4% of the 2.9 million registered to vote, cast ballots for 839 candidates in Sunday's election, exceeding the 38.5% turnout in the last district council elections, in 2007. Another 76 candidates were returned unopposed. The big winner was the pro-Beijing Democratic Alliance for the Betterment of Hong Kong, which won 100 seats while the Federation of Trade Unions won 24. In the pro-democracy camp, the Democratic party won 46 contested seats while the Civic Party won seven. Hong Kong, a former British colony, is a special administrative region of China, with its own political system and a high degree of autonomy. Hong Kong's mini-constitution promises eventual democracy and Western-style civil liberties commonly denied in the mainland. Half of the 60 members of the current Legislative Council are elected, with the rest chosen by professional and business sectors, many loyal to Beijing. Next year, the legislature will add 10 more elected seats under a set of limited changes that were approved last year with the help of the Democratic Party. The deal fractured the democratic camp, with some hardline lawmakers calling it a betrayal and forming their own small parties, which may have split Sunday's vote and driven some voters to pro-Beijing candidates.

 China*:  Nov 9 2011 Share

Employment quality in China is relatively low, which is a major reason affecting the quality of economic growth, says a latest report on the labor market. The report, released Saturday by the Labor Market Research Center of the Beijing Normal University focusing on the quality of employment in China, says Beijing, Shanghai and Tianjin were the top three cities in terms of employment quality, adding the overall employment quality in China is still low. "Poor employment quality in China is a major reason for the poor quality of economic growth," said Lai Desheng, a professor with the Beijing Normal University.

Xinhua News Agency celebrates 80th anniversary at Times Square - Photo taken on Nov. 6 shows the advertising screen presenting a video to celebrate the 80th anniversary of the founding of Xinhua News Agency, at Times Square in New York.

Despite recurring trade disputes between the mainland and developed economies, the World Trade Organization rated China's performance in the past decade an "A +." "Considering China as the world's largest exporter and the second largest importer, it's normal to have more trade friction," WTO deputy director-general Valentine Rugwabiza told The Standard on the tenth anniversary of the country's accession to the WTO. During a recent visit to Hong Kong, she said China could be an example for Russia, which is set to join the WTO. Asked whether it is right for China to impose limits on exports of rare earth resources, she said the WTO generally prohibits trade restrictions, but members could adopt measures to protect scarce natural resources. She declined to comment on suggestions that China would seek market economy status from the European Union in return for supporting the euro zone rescue fund. Referring to progress made since the WTO entry, she said Beijing has made vast improvements. "China's tariffs on manufactured and agricultural imports are very low by the standards of the developing countries where it has reduced from an average of 15 percent before accession to 9.5 percent in 2010." Rugwabiza added that every year China has imported goods worth US$750 billion (HK$5.85 trillion) on average and created more than 14 million jobs for trading partners. Looking forward to the Doha Development Round, which addresses issues such as agricultural subsidies, she hopes there will be some progress. The Doha Round began in 2001 but broke down despite several attempts in the past few years as significant differences arose between developed and developing nations.

Shares of Tingyi (Cayman Islands) (SEHK: 0322) Holding Corporation rose more than 13 per cent on Monday morning after the Chinese noodle and beverage maker struck a deal with PepsiCo to jointly tap China’s beverage market. Tingyi’s shares hit a two-month high of HK$23.80 before easing to HK$22.80 as of 10.38am, up nearly 10 per cent versus a 0.59 per cent gain in the benchmark Hang Seng Index. The company announced on Friday that it would buy PepsiCo’s money-losing bottling business in China, giving the US company’s products access to Tingyi’s vast distribution network. In return, PepsiCo will receive a 5 per cent indirect stake in Tingyi-Asahi Beverages Holdings (TAB), a joint venture between Tingyi and Japan’s Asahi Group Holdings. “We believe the strategic alliance with PepsiCo is neutral to positive for Tingyi,” RBS said in a research note, adding that the deal should strengthen Tingyi’s market position, enrich its product mix and increase its bargaining power with distributors and suppliers. But the challenge for Tingyi was whether it could successfully turn around and integrate PepsiCo’s plants and businesses in China, it said. Under the deal announced on Friday, PepsiCo will initially receive 5 per cent of Tingyi-Asahi Beverages, with the option to increase its stake to 20 per cent by 2015, when China is projected to become the world’s largest market for bottled drinks. The company was also considering listing its unit Tingyi-Asahi Beverages Holdings (TAB), a joint venture with Asahi Group Holdings, Tingyi Chairman Wei Ing-Chou said on Monday. But this is only a long-term plan, Wei told reporters, without giving further details. Tingyi announced on Friday that it would buy PepsiCo’s money-losing bottling business in China, giving the US company’s products access to Tingyi’s vast distribution network. In return, PepsiCo will receive a 5 per cent indirect stake in TAB, which Tingyi said has a valuation of US$15 billion. Under the deal announced on Friday, PepsiCo has the option to increase its stake in TAB to 20 per cent by 2015, when China is projected to become the world’s largest market for bottled drinks. Analysts said the deal would create synergy and cut costs, with PepsiCo benefiting from Tingyi’s nationwide distribution network. Bankers and analysts said PepsiCo had been losing money in China partly because it did not have a strong joint venture partner and had suffered from limited access to national distribution networks. PepsiCo’s bottling business in China, which has a book value of US$600 million, has lost money for the past two years amid soaring raw materials costs and intense competition from Coca-Cola, whose share of the mainland market is more than triple that of Pepsi.

At the G20 summit in Cannes last week, the Chinese delegation circulated two versions of a speech by Chinese President Hu Jintao: one in English, the other in Chinese. The English-language transcript of Hu’s prepared remarks, distributed on Thursday night, contained the following passage: “To keep asking emerging markets to revalue their currencies and reduce exports will not lead to balanced growth. On the contrary, it would only plunge the global economy into a ‘balanced recession’ and make sustainable growth impossible.” It was some of the strongest language yet from the Chinese side rejecting yuan appreciation pressure. But that passage was omitted entirely from the Chinese transcript. The upshot was that foreign media reported a tough stance by Hu on the yuan, while official Chinese media reported a much milder speech. The following day, after all the stories were issued, the Chinese delegation belatedly asked reporters to use the Chinese-language version, without explaining why. The confusion highlights the sensitive position that China finds itself in, with slowing growth and exports making a case for slower appreciation of the currency, even as political pressure from abroad to allow a faster rise remains intense. It’s still unclear which version of the speech was actually delivered at the summit. Hu spoke behind closed doors to a small, elite group consisting of the G-20 heads of state and possibly their top staff members. China’s official Xinhua News Agency published a transcript of Hu’s remarks on its English-language service on Thursday night with the language included. But on Friday, Xinhua published the English transcript again, with the relevant passage removed. Xinhua also ran an English-language commentary piece on Friday with nearly identical language on emerging market currencies, but didn’t attribute these comments to Hu. At the conclusion of the summit, the G-20 endorsed stronger language than previously on currencies, calling for faster moves towards flexible, market-based exchange rates, a point highlighted by U.S. officials as a significant shift by China. Chinese leaders, however, may draw a distinction between yuan flexibility and yuan appreciation, as they argue that market forces can move the currency in both directions. Indeed, Chinese Commerce Minister Chen Deming told reporters on the sidelines of the conference that he believes the yuan has already appreciated to a reasonable level, having risen over 30% against the U.S. dollar since 2005. Selling pressure on the yuan that emerged in September shows the market perception of the currency is starting to change, he said. In short, even without confusing mix-ups over speech translations, the U.S. and China may still be speaking different languages when it comes to exchange rates. The G-20’s call for flexible exchange rates may have been lost in translation.

For years, Chinese fine wine buyers have tended to favor high-end juice from France’s Bordeaux region. Lately, however, wines from another part of France — Burgundy — have started to seep into the Chinese market. One highly anticipated barometer of the wine region’s progress among Chinese consumers was a Burgundy-dominated auction held by Acker Merrall & Condit in Hong Kong over the weekend (see video above). Well, the results are in and there was good news for Burgundy producers: 98% of the lots sold for a total of $14.5 million

Hong Kong*:  Nov 8 2011 Share

Gold flow from Hong Kong to the mainland in September rose almost sixfold from a year earlier to a record of 56,896 kilograms, the Hong Kong Census and Statistics Department said on its website - The amount of gold entering the mainland from Hong Kong in the first nine months more then doubled from a year earlier to 201,068 kilograms, the department added. Spot gold prices slumped more than 10 per cent in September, after hitting a record high above US$1,920 an ounce on September 6, prompting strong buying interest on the physical market. The run-up to the week-long public holiday in China at the beginning of October – a buzz week for retailers – also helped boost China’s appetite for bullion. Gold bar premiums in Hong Kong doubled during September to US$2 an ounce over spot prices by the end of the month, and subsequently jumped to more than US$3 in early October. China does not publish gold trade data.

US film director and multi-Oscar winner Francis Ford Coppola yesterday likened movie-making to his other great passion, wine, at the opening of the three-day WineFuture expo at the Convention and Exhibition Centre. The director of modern classics such as Apocalypse Now and The Godfather trilogy said producing a fine wine had features in common with directing a great film. "Cinema and wine-making are similar in three areas," Coppola said. "You have the gathering of source material, choosing from the material and adding the finishing touches." But he said he had no plans to give the subject the big-screen treatment. "I am Italian-American. I recall wine at the table since my earliest memories. I got into wine purely because I love it, not as a businessman." Hong Kong has become the wine hub of Asia since the government abolished duties on imports in 2008, helping the market expand beyond a handful of local connoisseurs. "I am very impressed by the changes and gladdened by the removal of the duties," said Coppola, who is on a panel discussing "The New World Approach". WineFuture is an annual gathering of some of the most important wine personalities. This year it features one of the world's most influential wine critics, Robert Parker, who will lead three South China Morning Post (SEHK: 0583) -sponsored events - a masterclass and two wine dinners. The Trade Development Council said Hong Kong's wine imports rose from HK$2.86 billion in 2008 to HK$6.98 billion last year. In the first eight months of this year, imports reached HK$6.67 billion, a 65 per cent increase year on year.

The pro-Beijing camp scored a landslide victory in Sunday’s district council elections – with the Democratic Alliance for the Betterment of Hong Kong (DAB) and Federation of Trade Unions winning 146 of the 412 seats. In contrast, the pan-democratic camp suffered an even worse defeat than it had experienced in 2007. The Democratic Party won only 47 seats, while the Civic Party won seven. A record turnout of 1.2 million people voted on Sunday in the most hotly contested district council elections in Hong Kong history – which saw 839 candidates contest 336 constituencies. Some 76 councillors were returned. Of the 2.9 million eligible voters, 41.4 per cent cast their ballots – compared with a turnout of 38.8 per cent in the 2007 district council polls and 44.06 per cent in 2003 – when there were nearly 500,000 fewer registered voters. All results were tabulated and released by 4am on Monday. DAB chairman Tam Yiu-chung said he was satisfied his party had secured more seats. DAB lawmaker Ip Kwok-him defeated Leung Kwok-hung of the League of Social Democrat (LSD). Ip received 2,723 votes, while Leung, also known as “Long Hair”, only got 973 votes. Ip said this showed voters were unwilling to back radical politicians. Civic Party legislators Tanya Chan and Ronny Tong Ka-wah both lost their seats. Chan was beaten by Liberal Party first-time candidate Joseph Chan Ho-lim in the Peak constituency of Central and Western. Tong lost to incumbent independent Wong Ka-wing in City One, Sha Tin. Civic Party leader Alan Leong Ka-kit said the goal of achieving full universal suffrage would be more difficult after the landslide defeat. The party only won seven seats, despite fielding 41 candidates. The Democratic Party also suffered, as its lawmakers Lee Wing-tat and Wong Sing-chi were defeated in Kwai Tsing and North District, respectively. The party’s vice-chairman and former lawmaker Sin Chung-kai lost to incumbent councillor David Wong Chor-fung, of the New People’s Party, in Wan Chai’s Tai Hang constituency. However, party chairman Albert Ho Chun-yan fended off a challenge from People Power candidate Albert Chan Wai-yip and independent Shum Kam-tim in Lok Tsui, the Tuen Mun District. Ho said the party had “passed a test” because it did not lose too many seats. However, the party now has three fewer seats. He said the pan-democrats would need to review their strategy. Democrat lawmakers Kam Nai-wai and James To Kun-sun held on to their seats in Central, Western and the Yau Tsim Mong District. Radical pan-democratic group People Power – whose goal was to punish the Democratic Party and Association of Democratic and People’s Livelihood for backing the government’s reform package for the 2012 elections – was the biggest loser. Of its 62 candidates, only one achieved a victory. Its campaign mostly received lukewarm support from voters. The radical LSD which fielded 28 candidates failed to win any seats. Party chairman Andrew To Kwan-hang lost his seat in Chuk Yuen North, the Wong Tai Sin district. The New People’s Party – which contested the elections for the first time – secured four seats. The party fielded 12 candidates this year. The Electoral Affairs Commission said it had received about 2,200 complaints from voters.

A record turnout of 1.2 million people voted yesterday in the most hotly contested district council elections in the city's history. Of the 2.9 million eligible voters, 41.4 per cent cast their ballots, as 839 candidates contested 336 constituencies, while 76 councillors were returned uncontested. The count was expected to be completed by 4am today. The turnout compared with 38.8 per cent in the 2007 district council polls and 44.06 per cent in 2003, when there were nearly 500,000 fewer registered voters. Early results indicated the pan-democrats were in for a long and painful night. Civic Party legislators Tanya Chan and Ronny Tong Ka-wah both lost out. Chan was beaten by the Liberal Party's Joseph Chan Ho-lim in the Peak constituency of Central and Western, while Tong lost to incumbent independent Wong Ka-wing in City One in Sha Tin. Wong said he was surprised by the size of his victory, polling almost twice as many votes as Tong. Another pan-democrat heavyweight, Lee Cheuk-yan of the Confederation of Trade Unions, was defeated by Wong Kwai-yung of the Federation of Trade Unions in the Fu Yan constituency in Yuen Long district. Democrat Party vice-chairman and lawmaker Sin Chung-kai became another major scalp, losing out to incumbent councillor David Wong Chor-fung of the New People's Party in Wan Chai's Tai Hang constituency. Sin said it was a "painful loss" and showed that the public had "sounded the alarm bells for the pan-democratic camp". He said his party needed deep reflection. It was a colourful day for some candidates, with Democrat Ricky Lam Wai-kei remaining calm and silent while People Power's Edward Yum Liang-hsien yelled at him for five minutes in front of television cameras in the Lung Sheung constituency of the Wong Tai District Council election. The radical pan-democratic group People Power fielded 62 candidates, of whom 36 challenged the Democratic Party, while nine more took on the Association for Democracy and People's Livelihood (ADPL). People Power said its goal was to penalise the two moderate groups for backing the government's reform package for the 2012 elections. The Democrats and the ADPL warned that People Power's move would split the democrat vote. The elections were widely seen as a milestone on the way to universal suffrage, and sparked unprecedented interest among political parties. More was at stake than usual this year: under the electoral reform package passed last year, district councillors will be eligible to contest the five "super seats", to be decided by 3.3 million voters in next year's Legco election. The 412 newly elected district councillors can take part in the election committee subsector polls next month and the 117 winners can vote for the chief executive in March. Ma Ngok, a political scientist at Chinese University, attributed the higher voter turnout to the creation of five "super seats" in the Legislative Council and the pan-democrats' repeated warnings of the dire political consequences if they did not produce a good showing in the district council polls. Electoral Affairs Commission chairman Mr Justice Barnabas Fung Wah said that by 5pm yesterday it had received 1,600 complaints from voters.

 China*:  Nov 8 2011 Share

Beijing is likely to inject more than 1 trillion yuan (US$158 billion) into the money market in the next two months via annual subsidies from the Ministry of Finance, the official China Securities Journal on Monday quoted a research report as saying. The injection will help improve liquidity, which has been impacted by the government’s tight monetary policy in place since October last year, the newspaper quoted the report by China International Capital Corpotation (CICC) as saying. The Finance Ministry typically offers subsidies to various industries and sectors in the last two months of each year as part of distribution of the government’s annual tax income. The ministry does not publicise these subsidies but the market estimated they totalled 1 trillion-2 trillion yuan last year. The People’s Bank of China (PBOC) has not raised interest rates or bank reserve requirement ratios (RRR) since July in a sign that the government may be considering loosening its tight monetary stance amid the market turmoil sparked by the euro zone debt crisis. The central bank previously instituted a slew of rate and RRR hikes as inflation repeatedly hit three-year highs. Those steps offset the impact of liquidity injections via Finance Ministry subsidies late last year, but the market widely expects the PBOC will leave the subsidies to improve market liquidity this year, traders have said.

A waitress serving customers with fresh water crabs at a restaurant in Nanjing, capital of East China's Jiangsu province. Demand for online Chinese meal ordering and delivery services has increased in recent years in mega cities such as Beijing and Shanghai but experts say companies need to improve service quality to attract more customers. The growing pace of life and the long lines of people waiting outside famous restaurants have driven many white-collar workers and young people to switch to online ordering services to save time and money. Currently, most online ordering services are provided by third parties rather than the restaurants themselves. "Some Chinese restaurant operators may not consider developing an e-commerce division so there are big market opportunities for us," said Jiang Xing, the founder of Canzhuowang, one of the online meal ordering and delivery service providers in Shanghai. Compared with the price of meals served in traditional bricks and mortar restaurants, the cost of dishes offered online is considerably lower. In some cases, consumers might receive as much as 10 percent off a meal ordered online. "Stress from the growing pace of life discourages many young people from preparing a meal at home. Home delivery is a convenient way for people to enjoy life without lining up for a long time outside a restaurant," said Mo Daiqing, from China E-Commerce Research Center. Jiang said the number of orders received online grew significantly in 2011 compared with demand in 2008 because the business model is gradually being accepted by Chinese people. "When I established Canzhuowang four years ago, we had fewer than 3,000 orders a month and our main customers were from Taiwan and Hong Kong. Now, we need to meet more than 20,000 orders a month," said Jiang. The entrepreneur said changing consumption and expenditure habits were key factors contributing to business growth. He said customers were getting familiar with home delivery services and had begun to trust the business model. "Many Chinese were not willing to pay delivery fees at the beginning because they thought home delivery should be free. It was a big challenge for us to educate consumers to pay this extra fee. However, the delivery fees charged by foreign companies such as Pizza Hut and KFC made people realize that home delivery is not a free service," said Jiang. At present, there are several companies offering home delivery services including and in Shanghai. However, Jiang said business was not easy even though the potential market is big. "We do not have great bargaining power in negotiating with restaurants, so the profit margin is pretty low," said Jiang. "Online orders are not numerous enough so restaurant operators do not pay a lot of attention to this sector." According to Jiang, the gross profit margin is around 25 percent because he only focuses on orders from restaurants. He said the gross profit margin is comparatively lower for other companies who offer delivery services for casual meals. Industry experts say not all food supplied in restaurants is suitable for home delivery, which means less choice for customers. "Hot and spicy food is suitable for home delivery because the tastes will not change a lot. However, food made with flour such as noodles does not work well as a delivery item," said Jiang. Although industry experts say the future is promising for online meal home delivery businesses, potential customers are still hesitant about ordering online. "I know there are several service providers but I am not sure whether they can really be on time. I will get frustrated if orders cannot be delivered on time," said Wang Rui, a Shanghai resident. Jiang said more than 70 percent of orders are delivered on time, which is good by industry standards. Some say the restaurant experience is markedly different from eating the same meal at home and are willing to pay for the difference. 

The government may revise regulations covering joint offshore oil exploration with foreign companies following a spill off the northeastern coast at a field operated by ConocoPhillips China, sources said. The proposed revision is being led by the Ministry of Land and Resources (MLR) and aims to strengthen government oversight of offshore oil and gas exploration involving foreign enterprises, according to a source who requested anonymity. The source said that the revised amendments to the regulations would nail down regulator responsibility, especially for the MLR, the National Energy Administration, the General Administration of Quality Supervision, Inspection and Quarantine, the Ministry of Environmental Protection and the State Oceanic Administration. Detailed penalties for environmental damage caused by companies and violations of other rules would also be covered. A senior official from the MLR, who also declined to be named, confirmed to China Daily that the amendments are under discussion among officials and experts, and may be sent to the State Council this year. He did not disclose any further details. Amendments to the regulations, which were introduced in 1982, have been carried out before, in 2001 and 2011. But these could be the most comprehensive changes. Under existing rules, China National Offshore Oil Corp (CNOOC) is authorized by the government as the exclusive entity to carry out domestic offshore oil exploration activities with foreign companies. The regulations currently are not specific on obligations and responsibilities concerning the government and companies, particularly when accidents occur. The recent oil spill has exposed shortcomings of regulators and the inadequate punishment for those responsible, said Feng Fei, director of the industry department at the State Council's Development Research Center. "The supervisory capabilities of related regulators should urgently be raised," he said, suggesting that amendments should seek greater insight into just how experienced various companies are in offshore drilling. Chen Bi, executive vice-president of CNOOC, said earlier that he did not know about the possible amendments. But he added that the spill in June will make the company consider reviewing the cooperation model with foreign companies. CNOOC holds a 51 percent stake of the Penglai 19-3 oilfield off Bohai Bay. More than 3,300 barrels of oil spilled from this field. ConocoPhillips China, a subsidiary of the Houston-based energy company ConocoPhillips, holds the remaining 49 percent and operates the production base. The field is the biggest offshore oilfield so far discovered in China with estimated recoverable reserves of about 500 million tons. "The incidents have caused very negative effects on both the environment and society," Chen said. More stricter regulations, both in terms of safety and environmental protection, will be introduced, he said. Donna Xue, spokeswoman for ConocoPhillips China, refused to comment on the proposed revisions but said that the company is not familiar with possible regulatory amendments. The June spill was widely considered by industry experts as a catalyst to propel the government to review existing regulations introduced when China was short of capital and technology. Offshore oil exploration has been going on for about 30 years and revisions are inevitable, a senior researcher from China National Petroleum Corp, the country's biggest oil and gas producer, said, on condition of anonymity due to the sensitivity of the issue. "The spill is a stimulus to the revisions," he said. In addition, Feng also questioned the exclusive rights of CNOOC in the offshore oilfield by saying that the country should let more Chinese companies participate in joint exploration activities. Competition may help boost the industry to develop in a much healthier way, he said.

Hong Kong*:  Nov 6 - 7 2011 Share

When Stanford graduate Andrew Toy Jong-kein quit Morgan Stanley and launched a technology company, he decided not to base it in Silicon Valley. Instead, he started it in Hong Kong, where the economy is geared around finance and property rather than technology. Born locally and educated at Island School, Toy, 33, chief executive officer of Enterproid, also insisted on employing local graduates. "When we showed our technology to Google headquarters in California, they were amazed by what we had done ... our technology is better than technology coming from people in Silicon Valley," he said. In less than two years the company has grown into a multinational with bases in Hong Kong, New York and London. Toy set out to change the practice of people using the BlackBerrys provided by their companies for business and another phone for personal use to avoid compromising sensitive information. His company's Android app, Divide, which allows users to split one smartphone between work and personal use, has won two international awards and attracted US$11 million in investment from companies including Google and partnerships with AT&T and Dell. Toy met co-founder David Zhu Wei while they were studying computer science at Stanford University in California. They went on to work as engineers in various companies, including Morgan Stanley, where they met third partner Alexander Trewby. Toy wanted to give Hong Kong a try, and his partners agreed. "The one thing that is really good about Hong Kong is the talents. We have been very, very happy. It exceeded our expectations in terms of the quality of the people that we can hire," Toy said. Zhu, 32, said Hong Kong graduates were good academically, but lacked problem-solving skills and were reluctant to take risks. But with the trio's experience in Silicon Valley, they were able to create a team of passionate engineers. They will have 20 staff in Hong Kong by the end of this year. Enterproid started life early last year with US$500,000 and the use of a conference room in a Tsim Sha Tsui office owned by Toy's uncle. The company says it is now dedicated to encouraging more hi-tech entrepreneurship.

Wine lovers toast record-breaking imports - HK$7.3 billion worth poured into the city in 9 months, following HK$6.98 billion for the whole of last year - Visitors toast a new German brand of sparkling wine on offer at a booth yesterday. A total of 930 exhibitors set up shop at the Wine and Spirits Fair. The curtain fell on Hong Kong's biggest wine and spirits fair yesterday as figures emerged showing that the city had already brought in a record-breaking HK$7.3 billion worth of wine in the first nine months of the year alone. It beats the HK$6.98 billion worth of wine imported for the whole of last year, the highest market-value figure at the time. Year on year, the third quarter results showed a 57 per cent increase. The rise is put down to Hong Kong's development as a regional hub in the industry at a time when an increasing number of mainlanders are becoming wine drinkers and collectors. Wine re-exported this year is expected to exceed 50 per cent of the overall imported wine in terms of volume, according to figures provided by dealer ASC Fine Wines, one of 930 exhibitors at the International Wine and Spirits Fair. Re-export volume has tripled since 2007 from 5.1 million bottles to 16 million last year - out of a total of 51 million bottles imported into the city. "Hong Kong is edging towards becoming a hub for the alcohol trade," said Hong Kong Trade Development Council deputy executive director Chau Kai-leung. The three-day wine fair at the Convention and Exhibition Centre also set its own records: 19,403 retail buyers - a 37 per cent increase from last year - and more than 19,690 visitors on the final day. One of them, Christopher Britton, who was about to enter an Italian fine wine tasting session, said: "By tonight, we will probably be a little bit worse for wear." Rich Xu, who runs a wine trading firm in Shenzhen, had some specific shopping in mind. "I have spent about 2 million yuan [HK$2.5 million] on wine futures, but here I am looking for some vintage wine," he said. David Andrews, ASC Fine Wines general manager for Hong Kong and Macau, said that robust growth in the mainland market had been an enormous help for wine dealers based in Hong Kong. The company's Hong Kong office is set to expand by 50 per cent in terms of manpower, he said. Mainland demand is "higher than the amount the French can produce", Andrews said. Last year, Hong Kong imported 35 million bottles of wine for local consumption. Andrews cited a study by wine expert Debra Meiburg showing that more than half the wine consumed in Hong Kong is priced at less than HK$300 per bottle.

The number of Hong Kong property transactions agreed to in October fell 14% from September and 53% from a year earlier, Land Registry figures showed, as potential home buyers retreated because of rising mortgage rates and volatile markets. The total came in at 5,675 transactions, valued at 27.6 billion Hong Kong dollars ($3.55 billion), down 12% from September and 52% from a year earlier. There were 4,643 transactions in the residential property sector, down 3.7% from September and 51% from a year earlier. In terms of value, residential property transactions totaled HK$22.5 billion, down 2.2% from September and 50% from October 2010. Transactions have declined in recent months as mortgage rates have risen, albeit from a base of less than 1% for some adjustable-rate loans. Uncertainty over the euro-zone sovereign debt crisis also damped sentiment. Although Hong Kong property prices began to fall in a month-on-month basis in July, they were still 12% higher than at the start of the year as of August, government statistics show. The price increases earlier in the year followed a 24% surge in 2010, the result of abundant liquidity and persistently low interest rates.

Gambling revenue in Macau rose 42% to a record high in October, government statistics showed Tuesday, as high rollers from mainland China continued to drive growth despite concern that the authorities' credit-tightening or an economic slowdown will stop the music. Macau, the only place in China where casino gambling is legal, has seen gambling revenue soar since the end of 2009, and is poised to rake in more than five times the gambling revenue of the Las Vegas Strip this year. Gambling revenue in the Chinese territory rose to 26.85 patacas (US$3.36 billion) in October, up from 18.87 billion patacas in the same month a year earlier, data from Macau's Gaming Inspection and Coordination Bureau showed. October's revenue haul beat the territory's previous high of 24.77 billion patacas hit in August. It was boosted by China's "golden week" holidays, which fall in May and October. The strong numbers were recorded during a month of extreme volatility in casino stock prices due to intensifying concern that a liquidity crunch in China could cool the casino industry's explosive growth. Though data don't show any evidence of a slowdown in Macau--in the January-October period, Macau's gambling revenue was 45% higher than a year earlier--investors dumped casino shares in early October with SJM Holdings Ltd., Macau's largest operator by revenue, tanking 26% in just one trading session. The strong October revenue figures led the Hong Kong-listed shares of Macau's six casino operators to outperform the territory's benchmark Hang Seng Index, which fell 2.5%, hurt by a China manufacturing activity report that fell short of economists' forecasts. Galaxy Entertainment Group Ltd. led the way, rising 0.7% to HK$16.26, while Wynn Macau Ltd.'s shares rose 0.5% to HK$22.35. Sands China Ltd.'s shares fell 0.2% to HK$23.85, but that marked a 6% rebound from an intraday low of HK$22.50. Stanley Ho's SJM Holdings was the weakest link, falling 1.8% to HK$13.44. But the Chinese manufacturing data illustrate the complex outlook for the world's second-largest economy, the source of most of the money bet on Macau's baccarat tables. Disappointing Purchasing Managers Index figures, combined with recent government measures to help smaller businesses, have fueled expectations that China's tightening cycle is over, but the poor data also indicate that a tight monetary policy and weakening export demand have started to take a toll on economic growth. Less clear still is the effect any macroeconomic developments in China could have on Macau's gambling industry, which is driven by the opaque and notoriously difficult-to-forecast VIP business. In a recent report, Bank of America Merrill Lynch analyst Billy Ng wrote that the key fundamental drivers of Macau gambling growth are the wages of Mainland Chinese--and hence their net worth--the number of visitors to Macau, and the value of the Chinese currency.

 China*:  Nov 6 - 7 2011 Share

Yang Yuanqing (right), CEO and Chairman of Lenovo Group, gives a farewell present to outgoing Chairman Liu Chuanzhi on Wednesday in Beijing. China's largest PC maker, Lenovo Group, announced the resignation of its founder and Chairman Liu Chuanzhi on Wednesday. The announcement coincided with the release of results for its second fiscal quarter, which ended on Sept 30. For the quarter, Lenovo recorded an 88 percent year-on-year gain in net profit to $143.9 million, while revenue rose 35 percent to $7.79 billion. Lenovo has become the world's second-largest PC vendor, with record market share of 13.5 percent during the July to September period, according to International Data Corp (IDC). In the second fiscal quarter, Lenovo's worldwide PC shipments rose 35.8 percent year-on-year, against the PC industry's global growth rate of 5 percent. The company attributed the growth to previous acquisitions and surging sales in overseas markets. Lenovo's overseas mature markets, such as the United States and Japan, exceeded Chinese sales revenue for the first time in the most recent fiscal quarter, with revenue of $3.3 billion, accounting for 42.6 percent of the company's worldwide sales. After buying International Business Machines Corp's PC business in 2005, Lenovo announced a $175 million joint venture with Japan's NEC Corp in January this year and the acquisition of Medion AG, a German multimedia and consumer electronics maker, in July. Added by the sales revenue of the two companies, Lenovo's gross profit for the second fiscal quarter increased 59.8 percent year-on-year, to $948 million, with a gross margin of 12.2 percent. "We still consider acquisitions as an important method to drive our growth," said Liu. The company said that Liu, who returned as chairman in February 2009 to help turn the company around in the wake of the global downturn, would end his duties as chairman effective Thursday. His successor, Yang Yuanqing, will assume the dual roles of chairman and CEO. Liu said that after Yang takes over, Lenovo won't just focus on acquisitions in the PC sector but will also look at companies in other emerging industries. "The change of CEO means that Lenovo has emerged from its crisis, which started from 2009, and entered a stable phase," said Wang Jiping, a senior analyst with IDC China. "Sooner or later, we'll be number one in the global PC market, if we keep growing at the same pace," Yang said. Wang said Lenovo does have a very strong homefield advantage in the Chinese market, with $3.2 billion sales last quarter, but if it wants to surpass Hewlett-Packard Corp and become No 1 in the global market, it must find new growth drivers and regions beyond China. Liu will remain chairman of Lenovo's parent company, Legend Holdings, and his focus will be on building the company's core operating assets in new industries such as agriculture and new materials. He will also help it achieve a listing in Hong Kong between 2014 and 2016.

A 24-meter stone statue of Soong Ching Ling (1893-1981) is going up in Zhengzhou, capital of Central China's Henan province, on Nov 3, 2011. Soong Ching Ling is former vice-president of China and wife of Sun Yat-sen, the leader of the 1911 Revolution that toppled the Qing Dynasty (1644-1911), China's last dynasty. The statue's base is designed as a meeting hall with an area of 800 square meters and construction is expected to be completed by the end of this month, according to construction workers. One of the workers said the statue belongs to the Henan Provincial Soong Ching Ling Foundation. 

G20 members on Friday agreed to boost the resources of the International Monetary Fund (IMF) to prevent the European debt crisis from pulling the world economy into a fresh recession - but failed to agree on how. Speaking at the end of the two-day G20 meeting, French President Nicolas Sarkozy, the summit's host, said finance ministers of G20 members would be tasked with examining various options. Earlier reports on Friday said G20 leaders spent a large amount of time discussing how to inject billions of dollars into the world economy through the IMF. Sources also told Reuters that Sarkozy was pushing to include a reference to special drawing rights - a supplementary foreign exchange reserve unit maintained by the IMF - in a final G20 communique on Friday. Reinforcing the IMF would help boost confidence, said Dirk Willem te Velde of London-based think tank Overseas Development Institute. "I believe the IMF proposal could help stabilize the eurozone in the short term. But in the longer term, we need to reduce global imbalance by encouraging deficit countries to export more and surplus countries to increase demand." The fiscal problem in the eurozone is just the short-term side effect of the ongoing crisis, said James S. Turley, chairman and chief executive of accounting firm Ernst & Young. The long-term problem that European nations need to fix is a possibly significant slowdown of the economic growth. "In the eurozone overall, there is not much of a growth story. That is as severe an issue that needs to be dealt with as the fiscal situation," Turley told China Daily in Beijing. President Hu Jintao on Thursday called for reform of the international monetary system, including expanded use of the special drawing rights and creation of an international reserve currency with stable value, rule-based issuance and manageable supply. US President Barack Obama hailed what he said was good progress in talks with his G20 partners on finding ways to solve the eurozone debt crisis, which has threatened the world economy. "We came to Cannes to discuss with our European friends how they will move forward and build upon the plan they agreed to last week to resolve this crisis," he said after the G20 summit. Tax haven fight - Apart from boosting the IMF, Sarkozy said other key achievements of the summit include warnings against tax havens. Sarkozy said tax havens - and countries that don't share tax information - will be shunned by the international community. "We don't want any more tax havens. Our message is clear," he said, adding G20 members have agreed to boost growth and, for the first time, had agricultural issues on the agenda. Sarkozy's remarks were partly in response to earlier complaints the summit was "shadowed, or even hijacked, by the euro crisis issue", said te Velde. "It would be essential for the G20's credibility that the G20 meeting in Cannes initiated long-term solutions to foster sustained growth globally rather than commenting only on quick fixes to the eurozone crisis," he said. China has called for more help to be given to the less-developed parts of the world. In his speech, Hu said food security, infrastructure, and tariff-free and quota-free treatment to least-developed countries have been the focus of the G20 consultations on development this year. "To further help the least-developed countries in their endeavor to develop, China will, in the context of South-South Cooperation, give zero-tariff treatment to 97 percent of the tariff items of exports to China from the least-developed countries having diplomatic ties with China," he said. Unlike a day earlier, the Greek issue didn't dominate Friday's discussions after it was clear that the country had called off a referendum on whether to stay in the eurozone. Greece's Prime Minister George Papandreou may yield power to a coalition government after a confidence vote in parliament late on Friday. Government sources told Reuters on condition of anonymity that Papandreou has struck a deal with ministers to step down and hand power to a negotiated coalition government if they help him win the vote. One source was quoted as saying Papandreou "agreed to step down" and the situation was "very civilized, with no acrimony". Papandreou surprisingly raised a referendum plan on Oct 31 on whether the debt-ridden nation will accept the bailout plan European leaders reached last week. The referendum plan shocked other European leaders such as German Chancellor Angela Merkel and Sarkozy, who said Greece would not receive one cent in aid until it votes to meet its commitments to the eurozone. Under intense pressure, Greek Finance Minister Evangelos Venizelos confirmed on Friday the referendum had been scrapped.

Hong Kong*:  Nov 2 - 5 2011 Share

The mainland's railway companies were among the worst performers of the stock market yesterday following unsatisfactory third-quarter results. The share price of China Railway Group (SEHK: 0390) fell 14 per cent to HK$2.63, while that of China Railway Construction Corporation (SEHK: 1186) (CRCC) was down 11.7 per cent to HK$4.70. CSR Corporation lost 10.1 per cent to end the day at HK$4.70. Although China Railway's 48.6 per cent drop in net profit to 1.14 billion yuan (HK$1.38 billion) during the third quarter was in line with market expectations, the poor market sentiment towards the industry has been dragging stocks down, said Guotai Junan Securities analyst Gary Wong. As of September 30, the state-owned firm's loss from a highway construction project in Poland stood at 644 million yuan. Recently, a Polish court ordered China Railway and two other companies to pay US$41.3 million over an aborted highway project. State-owned CRCC did better as it swung into the black with a net profit of 1.35 billion yuan in the third quarter, against a 1.35 billion yuan net loss for the same period last year. "If you exclude the loss in the third quarter last year, CRCC's results don't look that good. The market fears heavy risks," Wong said. Although the net profit of CSR, a train maker, grew 9.7 per cent to 772.6 million yuan in the third quarter, the state-owned firm suffered a net operating cash outflow of 13 billion yuan in the first nine months of this year. Money owed to it more than tripled from 11.18 billion yuan at the end of last year, to 35.09 billion yuan on September 30, mainly due to delayed payments from the country's cash-strapped Ministry of Railways. CSR yesterday received 6 billion yuan in payment from the railway ministry, which is likely to help its finances. A Citic Securities report said 2011 has been a devastating year for China's railway industry, with "no light at the end of the tunnel. The mainland rail sector's growth has ground to a near-halt following the arrest of former railway minister Liu Zhijun in February, the high-speed train crash in July and public concerns over the ministry's massive debt, which stood at 2.1 trillion yuan - or 5 per cent of the nation's gross domestic product - in the first half of this year, said Citic Securities. A JPMorgan report, however, said spending in the sector appeared to be recovering in light of favourable government policies.

A pilot scheme under which homeowners can invite the Urban Renewal Authority to redevelop their blocks attracted just 25 applications by the deadline yesterday. The biggest site covers 21 blocks and the applications come from Central and Western, Island East, Yau Ma Tei, Kowloon City, Sham Shui Po and Wong Tai Sin districts. District councillors say one was received from the dilapidated "Thirteen Streets" area on the fringe of the former Kai Tai airport. It is unattractive to private developers because of limited profitability. Another is from Hai Tan Street, Sham Shui Po, near an existing authority renewal site. Many of the applicants will be left disappointed as the authority earlier decided to take on only one or two such projects this year. "A panel will review the applications. The successful cases will be included in our annual business plan for the following financial year," a URA spokesman said. It would decide whether to expand the scheme after reviewing the first year's operation. The so-called demand-led scheme was launched in July. Buildings on a site over 400 square metres and in poor condition are considered for redevelopment with two-thirds support from owners. An application gets higher priority if renewal brings urban planning gains such as more open space. Many councillors helping flat owners to organise themselves blame the two-third-majority threshold for the small number of applications. The authority said the high threshold was needed as it would respond only to groups of owners where there was keen demand. Kowloon City district councillor Pius Yum Kwok-tung said homeowners in a street in To Kwa Wan, behind the site of a fatal building collapse last year, wanted to have the whole street rebuilt but they failed to get consent from two-thirds of owners. One block in the middle of the street was already acquired by a company. "There are many buildings nearby with similar problems. Developers or their agents have acquired some units in the blocks, making it difficult for owners who haven't sold to make up the majority," he said.

Two activists at the forefront of efforts to protect Victoria Harbour say they are stepping down from their campaign, satisfied that the harbour has become significantly safer from large-scale reclamations. Christine Loh Kung-wai, chairwoman of the Society for Protection of the Harbour, and Winston Chu Ka-sun, the society's adviser, said their mission had been accomplished. "We have come quite a long way," Loh said yesterday. "Sixteen years ago, we started this [campaign] to help raise young people's awareness of their duty to protect the harbour ... It's time to be handing over the baton to someone else." In a sign of how things have improved, Loh said next Sunday's "Walk For the Harbour", an annual event for the past five years, would be the last. Loh said her group had made great strides by drafting legislation now known as the "Protection of the Harbour Ordinance", saving it from the provisional legislative council which wanted it eliminated in 1997. It had also launched several lawsuits against the government over large-scale reclamation projects. The law and a subsequent Court of Final Appeal judgment in 2004 prevented the government from reclaiming the harbour if there is no "overriding public need". Chu said their campaign opposed most proposed reclamations. Only about 30 hectares out of a proposed 584 hectares were being reclaimed. "We are not immortal," said Chu, a lawyer. "We can't do this forever. The task of looking after the harbour should be shared among Hongkongers." The society will, however, continue to exist. Chu said: "We are not chickening out, we are not selling out. If the government proceeds again on [large-scale] reclamation, we will sue them." Dennis Li Kit-wai, the society's director, will take over Loh and Chu's task of monitoring the government. In September, Chu extended an olive branch to the government by presenting his "proportionality principle" to the Harbourfront Commission. He suggested that in determining whether there was an overriding public need for a reclamation project, the primary consideration should be whether any enrichment of the public enjoyment of the harbour would justify the loss and damage to the harbour. Minor reclamations such as the building of a pier, lighthouse, landing steps, breakwater or slipway should be allowed, Chu had said. Carrie Lam Cheng Yuet-ngor, secretary for development, welcomed the proposal at the commission meeting, but said that it offered symbolic meaning rather than a technical solution, because there could always be another party who could go to court. But she said the activists' gesture would encourage officials to proceed with several projects involving small-scale reclamations, including a public promenade under the Island Eastern Corridor, public piers for water-taxis at the West Kowloon Cultural District and a monorail connecting Kai Tak with Kwun Tong. Chu said the society would continue to call for the establishment of a statutory harbour authority to centralise urban planning and construction work around the harbourfront.

 China*:  Nov 2 - 5 2011 Share

Nearly half of the mainland's super-rich are considering emigration, according to a survey of people with assets of more than 10 million yuan (HK$12.17 million) that has raised concern about the country's worsening social and business environment. The survey, released jointly by the Hurun Report, which also publishes an annual China rich list, and the Bank of China, also found that 14 per cent of the 980 millionaires surveyed had either already moved overseas or were applying to do so. The results were based on one-on-one interviews in 18 major mainland cities, from May to September. The average respondent was 42 and worth more than 60 million yuan, the survey found. Forty-six per cent said they planned to emigrate, citing the better quality of education available for their children overseas, concerns about the security of their assets on the mainland amid political and economic uncertainty, and hopes for a better life in retirement as the main reasons. A third had engaged in "investment immigration", which allows a person to emigrate after they agree to first invest a certain amount of money in the host country. The report did not list the most popular destinations for mainland millionaires, although Hong Kong has long been one of the most attractive places for mainlanders who can afford to live elsewhere. In the past decade the city has attracted at least HK$50 billion in investment immigration from the mainland, with some of this money fuelling the property boom. A recent Xinhua report also listed developed countries with good health care systems and less polluted environments, such as Canada and Australia, as top options for mainland millionaires. After education, protecting assets and retirement, other reasons listed for wanting to emigrate included the lack of a sufficient legal framework on the mainland leading to too many grey areas, a worsening atmosphere for investment, and rising living costs and taxation. Some - corrupt government officials and businesspeople - wanted to leave because they obtained their money illegally. The yawning wealth gap on the mainland has also fed a resentment that makes some of the wealthy uncomfortable. "This massive insecurity about the safety of their assets is like a huge black cloud hanging over their heads," independent business commentator Ye Tan was quoted as saying in the survey report. Other observers say this indicates a worrying trend for the Chinese leadership and the country, whose uneven jump to capitalism over the past three decades has created hundreds of super-rich but left a string of problems behind including corruption, pollution, food safety fears and a creaking health system. "Getting a foreign passport is like taking out an insurance policy," one millionaire from Zhejiang province was quoted as saying.

Groupon Gets Lukewarm Review from Chinese Partner Tencent - It wasn’t the enthusiastic cheer you might’ve expected from a partner. Asked about his company’s joint venture with online-coupon website Groupon, the chairman of Chinese Internet giant Tencent Holdings replied in decidedly lukewarm terms. “Groupon is our partner, so in a public setting we do not want to say much directly criticizing them,” Pony Ma said Monday at Disrupt, a conference hosted by Techcrunch at the China National Convention Center in Beijing, when asked about criticisms of Groupon and other foreign Internet companies looking to expand in China. “We have an open attitude toward trying these new things, but once again it has proven that the China market is totally different from the U.S. or other markets,” Mr. Ma said. The Wall Street Journal reported in August that the joint venture, which operates the website and is also funded by private-equity firm Yunfeng Capital, had closed offices in some cities and laid off hundreds of employees. Other U.S. Internet companies from eBay to Google have also had trouble expanding in China. Mr. Ma did have some positive things to say about Groupon, arguing that the company had “proved this is a good business model, providing online marketing to local companies,” and that the market for that service has good prospects. But one problem is that competition is usually tougher in China than elsewhere, as “dozens or even over a thousand” competitors will quickly crowd any new online industry, Mr. Ma said. “The same night or even the same hour, Chinese companies… will all act at the same time” to imitate a new business model once it becomes known, Mr. Ma said. Analysts estimate there are hundreds of online deals websites like Groupon operating in China, including Lashou Group, which last week filed with U.S. regulators for an initial public offering. The Groupon-Tencent joint venture had a net loss of $46.4 million in the first nine months of the year on revenue of $2.1 million, according a Groupon regulatory filing.

New banking, securities and insurance regulators have been appointed in the biggest reshuffle of financial officials for almost a decade. Shang Fulin, 59, former chairman of the China Securities Regulatory Commission (CSRC), replaces Liu Mingkang, 65, as chairman of the China Banking Regulatory Commission, according to the Xinhua News Agency which quoted an unidentified spokesman with the Communist Party of China (CPC) Central Committee's Organization Department as saying on Saturday. Guo Shuqing, 55, former board chairman of the China Construction Bank (CCB) and a former head of the State Administration of Foreign Exchange (SAFE), takes over from Shang as securities regulator. In addition, Xiang Junbo, 54, the former board chairman at the Agricultural Bank of China (ABC), replaced Wu Dingfu, 65, as chairman of the China Insurance Regulatory Commission (CIRC). The CCB and the ABC are among the country's four largest State-owned banks. Age was the key factor behind the reshuffle, analysts said. Both Liu and Wu have reached the compulsory retirement age of 65 for senior government officials. Guo, a former academic known for his down-to-earth demeanor, will find his new role at the China Securities Regulatory Commission gives him with an opportunity to put his knowledge of global finance to good use for the benefit of the capital markets. Guo has taken some crucial decisions over a three-decade career, including asking CCB shareholders last year to cough up billions to recapitalize the bank after a State-led lending binge in 2009 to prop up China's economy during the global downturn. "Guo is a politician who also has a profound understanding of the global economy," a CCB source, requesting anonymity, said. "He may not be familiar with every aspect of the banking business, but he has a long-term vision that has placed customer-service at the core." The philosophy major and Oxford-educated scholar, who speaks English fluently, has moved easily between academia, government and a rapidly growing commercial sector that has helped China become the world's second-biggest economy. Guo, a native of the Inner Mongolia autonomous region, says he washes up the dishes at home most days. "I don't want to use a dishwasher and waste water or electricity," he said in an interview with Reuters. A pragmatist, Guo studied for a master's degree in Marxist and Leninist theory, writing a thesis entitled "Thoughts About Certain Fundamental Problems in China's Economy" that cautioned of grave risks in using Western macro-economics theories in a China which had just begun to embrace reform. The new securities regulator has published several books on China's economy, including one co-authored with Zhou Xiaochuan, head of the central bank. His ascent through the ranks of the financial elite saw him serve as vice-governor of inland Guizhou province, and later as chairman of the country's foreign exchange regulator, the State Administration of Foreign Exchange from 2001 to 2005. Guo came in for criticism while at SAFE for using taxpayers' money to bail out the major lenders in an attempt to make them more market-oriented. He joined CCB, which counts Bank of America as a strategic shareholder, as chairman in 2005 after SAFE's $22.5 billion bailout left the agency as the bank's largest shareholder. Seven months after Guo took over, CCB sold shares publicly for the first time in Hong Kong and two years later in Shanghai, making it the first State-owned Chinese lender to float shares in both bourses. China's financial markets have achieved impressive growth in recent years. The country overcame a $650 billion bailout of State-owned banks and a five-year bear market to become home to the world's two biggest lenders and the third-largest stock market by value. "China's financial industries have seen tremendous changes and the new regulators are facing a much better starting point than 10 years ago, when the banks were seen as technically insolvent and the stock market was chaotic," Bloomberg cited May Yan, a Hong Kong-based analyst at Barclays Capital as saying before the announcement. Shang became chairman of the CSRC in December 2002. Prior to that, he served from 2000 to 2002 as president of the ABC and was a deputy governor at the central bank from 1994 to 1996. Liu became head of the banking regulatory commission in March 2003, and Wu was appointed head of the CIRC in November 2002. Xiang was a State auditor and deputy central bank governor before joining the ABC in 2007 to lead the restructuring. An initial public offering three years later raised $22.1 billion in the world's largest first-time sale.

Photo taken on Oct 30, 2011 shows the Three Gorges Dam, in Yichang, Central China's Hubei province. The water level of the Three Gorges Dam, the world's largest water control and hydropower project which spans China's Yangtze River, reached its designed full capacity of 175 meters on Oct 30. China's Three Gorges Dam on Sunday reached its designed highest mark, the second time for the world's largest water control and hydropower project to run at full capacity. The water level hit 175 meters at 5 pm after storing water for nearly two months from the water level of 152 meters, said an official with the China Three Gorges Project Corporation (CTGPC), the developer of the project. A dozen hydropower turbo-generator units started operation on Sunday, generating power capacity of 8.2 million kw, said the official. The dam in central China's Hubei province completed its first full-capacity test last October. Operating at full capacity should give full play to the dam's functions of generating hydroelectric power, delivering water to the lower reaches to alleviate spring droughts, and containing water from summer flooding, as required by the State Flood Control and Drought Relief Headquarters. The Three Gorges Project was launched in 1993 with a budget equivalent to $22.5 billion. So far, monitoring shows the dam is operating smoothly.

A modified model of the Long March CZ-2F rocket carrying the unmanned spacecraft Shenzhou- VIII blasts off from the launch pad at the Jiuquan Satellite Launch Center in northwest China's Gansu Province, Nov. 1, 2011.

China on Monday rejected a US accusation that it had hacked into an American satellite system, calling the claim "factitious". Foreign Ministry spokesman Hong Lei made the comments when questioned about a recent report on the suspicions by the United States-China Economic and Security Review Commission. "This commission always observes China through tainted glasses. The report is totally factitious, made with ulterior motives, and does not warrant refuting," Hong said. China has been a victim of hacker attacks as well, Hong said, adding the country opposes any kind of cyber crime.

Hong Kong*:  Nov 1 2011 Share

The Hong Kong paradise fish (top) and the rice fish require conservation. The only freshwater fish named after Hong Kong, identified recently as a new species, is already dwindling in numbers, spurring efforts by scientists to step up a breeding programme. The Hong Kong paradise fish, Macropodus hongkongensis, found only in the city, is threatened by man-made damage to its habitat. Researchers are now examining its genetic make-up with a view to aiding the government's breeding programme. Last year, Chinese University obtained funding of HK$854,440 from the Environment Conservation Fund for a three-year study to see if there are genetic differences within species of fish found in different parts of Hong Kong. Six species are being studied, including two that are of conservation concern - the Hong Kong paradise fish and the rice fish, Oryzias curvinotus. "Animals in the ocean or on land can go anywhere they like, but this is not the case for freshwater fishes in streams," Tsang Ling-ming, a post-doctoral fellow at the university, said. "You can have two streams that are very close together, but the water may be from different sources; the water could be different in temperature or pH level, which means one gene pool of fish may survive in one stream but not the other." The Hong Kong paradise fish is the only fish that breeds by attaching its eggs to bubbles and then stays with the eggs - an uncommon habit, because most parent fish will leave their offspring to fend for themselves. The fish can be found only in Tai Po, Sai Kung and parts of the New Territories where the land is not too hilly, so that the currents in the streams are more gentle. The Agriculture, Fisheries and Conservation Department has listed so far 21 fish species as requiring conservation. Tony Chan King-tung, a nature conservation officer with the department, said it was important to protect the genes of the fish, because they will determine whether newly bred fishes under the breeding programme will survive when they are reintroduced into a freshwater environment. "One species of fish may still have genetic differences," Chan said. "They adjust to the place where they live, and some fishes may have adjusted to more sunlight or a faster water current, and their bodies will become adapted to the environment over generations." It was therefore important to record the genetic information of the fishes found in each location, Chan said. "We definitely do not want fishes with different genes but of the same species mixing together in their habitats, because that may weaken their ability to adjust."

Hong Kong's currency was linked to China's silver dollar until 1935 when the value of silver became unstable. It then switched to a sterling standard, which remained until sterling became unstable in the early 1970s, and it was floated from 1974 until the currency crisis of 1983. As editor of the Asian Monetary Monitor at the time, I proposed linking the Hong Kong dollar to the US dollar. This system was adopted and has worked well for 28 years, but recent instability in the US economy has raised questions about its future. Instead of going over familiar arguments for keeping the US dollar link, I should first point out that Hong Kong is in a monetary union with the United States. Europe's monetary union, of course, is now faced with unprecedented pressure, which may end in the exit of one or more of the participants, or even the break-up of the union itself. Why has the European monetary union come under such immense stress after only 12 years of existence? Why is Hong Kong's monetary union with the US more robust? Economists have always cited these criteria for a successful monetary union: labour mobility; openness, capital mobility and price/wage flexibility; a central fiscal transfer mechanism to redistribute income; and similar business cycles between the participant economies. These are, in my opinion, necessary but not sufficient conditions for a successful union. Based on Hong Kong's experience, there are eight criteria for success: wage/price flexibility; labour and capital mobility; a limited welfare state; fiscal discipline; strongly capitalised banks; banks maintaining ample liquidity; low household debt; and low corporate debt. The first three conditions are necessary for an optimal currency area; the next five are needed to avoid bubbles or busts. Essentially, they require that the balance sheets in the major sectors - government, banks, households and non-financial corporations - must not be allowed to become so overleveraged as to precipitate a crisis. Hong Kong limits the build-up of leverage. Consequently, when a bubble bursts in Hong Kong, negative equity in the household sector or corporate bankruptcies are limited. In terms of fiscal discipline, since 1983, the Hong Kong government has maintained an average annual budget surplus of 1.4 per cent of gross domestic product, deliberately accumulating in good times a fiscal reserve that can be run down in recessions. The virtue of fiscal prudence has been repeatedly emphasised by successive financial secretaries. Banks in Hong Kong today generally maintain capital ratios of 14-18 per cent. Banking supervision in the city is widely admired in Asia, and loan underwriting standards are carefully monitored. Since 1991, Hong Kong has limited household leverage by imposing a maximum loan-to-value ratio of 70 per cent (recently tightened) on all residential mortgage loans by banks; the city has never permitted the 120 per cent "Ninja" loans - no income, no job or asset - of the kind seen in the recent US and British housing bubbles. In addition, since last November, loan-to-value ratios have been extended to commercial property loans, effectively restricting all property-related leverage. Since it is predominantly companies that buy commercial property, this restriction limits corporate debt. Applying these rules to, say, Greece, it is clear what it and other peripheral economies in the euro zone needed to do to be viable members of the monetary union. One could say that European monetary union was too lax in applying the Maastricht convergence criteria, which included a maximum 3 per cent budget deficit and a maximum 60 per cent government debt-to-gross domestic product ratio, and a maximum consumer price index inflation rate. The maintenance of a fixed exchange rate is not a purely technical matter. In Hong Kong's case, the authorities have long taken the view that while the exchange rate is fixed, the economy must be as flexible as possible, but that alone is not enough. They have therefore sought to ensure, in addition, that Hong Kong's institutions are as robust as possible to ride out the inevitable external shocks. I believe these eight fundamental rules accurately convey the spirit of the monetary and financial regime that Hong Kong is currently attempting to operate. I know some in Hong Kong are investigating the idea of linking the HK dollar to a "basket of currencies", but I basically agree with those who, like former government economist K.C.Kwok, argue that Hong Kong has many other problems to fix and should not focus on fixing this one: "If it is not broken, don't fix it!"

LifeTech chairman Xie Yuehui answers questions about its upcoming offering on the GEM. Trading in the stock begins on November 10. Biotechnology company LifeTech Scientific Corp aims to raise up to HK$282.5 million through an initial public offering on the second board today to fund new manufacturing and product development. The Shenzhen-based company, which specialises in implants for treating cardiovascular disorders, will offer 125 million shares at a target price of between HK$1.91 and HK$2.26 each. LifeTech has earmarked 55 per cent of the expected net listing proceeds, or HK$88 million, for expansion of its production base in Shenzhen and a further 35 per cent, or HK$56 million, for product development. The remainder will support its sales and distribution network in emerging markets. The new listing comes as the Hong Kong stock market continues its roller-coaster ride, with the Hang Seng Index closing at 20,019 points on Friday, after falling to as low as 16,250 on October 4. LifeTech's shares, to be listed on the Growth Enterprise Market, will begin trading on November 10. The company, established in 1999, claims to be the world's second-largest provider of congenital heart defect occluders - devices used to close an abnormal opening in the wall between the two upper chambers of the organ as an alternative to surgery. Its net profit rose to 10.97 million yuan (HK$13.4 million) in the first four months of the year, from 1.84 million yuan a year ago. Turnover grew 40.9 per cent to 44.58 million yuan. Last year's net profit was 3.79 million yuan, against a loss of 4.49 million yuan in 2009, with revenue increasing 31.3 per cent to 104.7 million yuan. LifeTech is involved in a court case in India, in which a rival alleges copyright infringements on some occluders. LifeTech has rejected the allegation but warned of possible ramifications arising from the dispute. Forgoing sales in India might reduce gross profit by 13 per cent in the four months to April this year, LifeTech said. Cross examination of witnesses is expected to be completed by January 6. Lifetech Scientific (Shenzhen) operates as a subsidiary of EastBridge Investment Group Corp.

 China*:  Nov 1 2011 Share

Vice-Premier Li Keqiang on Thursday said negotiations on a free trade agreement between China and the Republic of Korea (ROK) should move at a faster pace, and said he hoped the two countries could expand their investment cooperation. "We have to speed up efforts to conclude a free trade agreement," Li told representatives from the Korea Chamber of Commerce and Industry and other business leaders at a banquet. He said the two countries agreed on the need for such a deal and the foundations had been laid through years of research. "A China-ROK free trade agreement will help us jointly cope with international economic risks and boost both countries' national welfare," Li said. He also suggested the ROK should expand its investment in China in the service sector and agriculture. He said the two countries should strengthen cooperation on banking and securities to jointly push forward the development of a securities market in the region. China is the ROK's largest trading partner, with annual bilateral trade surging to $188.4 billion in 2010 from $6.3 billion when diplomatic relations were established in 1992, Huh Chang-soo, chairman of the Federation of Korean Industries, said at the banquet. Huh called for more economic cooperation and personnel exchanges with China to expand trade and fuel growth. Prior to the banquet, Li met ROK Parliamentary Speaker Park Hee-tae at the National Assembly to talk about ways to promote regional security. According to the Seoul-based Yonhap news agency, Li briefed Park about his meeting on Monday with Kim Jong-il, the top leader of the Democratic People's Republic of Korea (DPRK). Li told Park that Pyongyang is willing to seek dialogue with Seoul and ease tensions on the Korean Peninsula in accordance with the principle of denuclearization. Li on Thursday concluded his tour of the Korean Peninsula, which included a three-day visit to Pyongyang. During his two-day stay in Seoul, Li met ROK President Lee Myung-bak and Prime Minister Kim Hwang-sik, and the two countries agreed to expand their currency swap agreement to the equivalent of $56.5 billion. Analysts say such a rare back-to-back trip to the DPRK and the ROK showed China has acknowledged the equal importance of the DPRK and the ROK and takes a balanced attitude toward them. Kang Jun-roung, a professor with the ROK's Hankuk University of Foreign Studies, on Thursday told a group of 200 visiting Chinese young people in Seoul that the rapid development of the China-ROK relationship is a great achievement since the two countries had only had diplomatic ties for 19 years. He said that people on the Korean Peninsula do not want a war and need help from both China and the United States to ensure this. AFP and Ma Liyao contributed to this story.

The overseas market may eventually contribute as much as 80 percent of ZTE Corp's total sales, said Hou Weigui, the president of China's second-largest telecom-equipment maker by sales. At a news briefing in Beijing on Friday, Hou said ZTE's overseas presence has expanded in recent years. The Shenzhen-based company took its first step toward globalization in 1995, when it established branches in Indonesia. Overseas sales amounted to 20.8 billion yuan ($3.27 billion) in the first half of this year, accounting for 55.7 percent of its total sales. Hou said the figure will continue to grow and may reach as much as 80 percent, but he did not predict when ZTE will realize that goal. "We are particularly interested in big countries, where market demand is large," said Hou. However, political concerns from foreign governments and currency volatility have already hurt ZTE's global expansion. Like its larger rival Huawei Technologies Co, ZTE has also faced difficulty in selling telecom equipment in the North American and Indian markets. Hou also claimed that the US government has hindered ZTE's sales because of concerns about national security. "It's useless making further efforts (to persuade the US government to trust the company). The problem cannot be solved," Hou said. He added that ZTE will only perform well in less sensitive areas, including the fields of mobile phones and enterprise IT solutions. Another challenge facing the company is that of currency volatility, which has eaten away at profits. The company reported net profit of 1.07 billion yuan in the third quarter, a year-on-year decline of 21.5 percent. However, the comparative weakness of the euro against the stronger yuan meant that earnings from European sales were lower than expected. "We cannot ignore the currency issues any more. Measures should be adopted to help avoid this risk," Hou said, without elaborating. Founded in 1985, ZTE has grown into a leading global vendor of telecom infrastructure equipment, along with Ericsson AB, Nokia Siemens Networks BV and Alcatel-Lucent SA. "ZTE's success is attributed to hard work, creativity and government support," said C.W. Cheung, Asia-Pacific consulting director at the researcher Ovum. "ZTE's competitiveness in low price and high quality helped it stand out amid the global financial instability of the last three years," Cheung said. However, given the weaker investment in telecom-network construction from global carriers, makers of telecom equipment worldwide have started to tap new fields to boost growth. Hou said ZTE has seen a fast growth rate in terms of its mobile-phone business. The company expects to ship 12 million smart terminals in 2011, with total terminal shipments reaching 120 million units, up from 90 million in 2010. He Shiyou, executive vice-president of ZTE, also said that the company wants to become one of the world's top three mobile-phone vendors by 2015. Hou said ZTE would like to rely on flagship products to increase its sales of mobile phones. The ZTE Blade V880, an Android-based smartphone, has sold more than 5 million units worldwide. The company said the number of ZTE Blades sold in China has so far surpassed Apple Inc's iPhone series.

China will adhere to its family planning policy so as to maintain a low reproduction rate, said the country's family planning chief on Sunday, expected to be the eve of the world's population reaching seven billion. "Over-population remains one of the major challenges to social and economic development," said Li Bin, director of the State Population and Family Planning Commission in an exclusive interview with Xinhua, adding that the population of China will hit 1.45 billion in 2020. Li said maintaining and improving the existing family planning policy and keeping a low reproduction rate, along with addressing the issues of gender imbalance and an aging population, will be the major tasks in the future. Li's words came just one day before Oct 31, the day on which the United Nations estimates the world's population will reach seven billion. Zhai Zhenwu, a leading Chinese demographer, said earlier this week that China's family planning policy had postponed this day for at least five years, as it prevented 400 million people from being added to the country's population, which is 1.34 billion at present. "The population of China would have hit 1.7 billion had it not been for the family planning policy, and it would have created difficulties for society," said Li. The most populous nation in the world, China introduced its family planning policy, often referred to as the "one-child policy", in the late 1970s to curb pressure on the environment and resources. Li said the policy has made a favorable environment for the country's economic development and social stability by alleviating demand for fundamentals including education, employment and housing. Thanks to the policy, China's average education term has reached nine years and its population's life expectancy 73.5 years. In addition, maternal mortality rates and infant mortality rates are among the lowest in all developing countries. "The Chinese government seriously fulfills the World Population Plan of Action and the Millennium Development Goals set by the United Nations, making positive contributions to the world's population development," said Li. However, Li said that besides overpopulation, China is still facing other population-related challenges, including gender imbalance and an aging population. For every 100 girls born in 2010, 118 boys were born. And 13.26 percent of China's population are aged 60 or above. It is expected the ratio will hit one third, or 440 million, by 2050. One fifth of the population will be 80 years of age or older in 2050, according to Li.

Hong Kong*:  Oct 30 - 31 2011 Share

A Maybach on display at the Mercedes-Benz dealership in Hong Kong. Maybach aficionados in Hong Kong have a more convenient spot to swoon over the luxury land yacht. Mercedes-Benz’s high-end brand vacated its seaside showroom in Repulse Bay and in August opened a more modest dealership in the commercial district of Wan Chai. Maybach set up shop in the corner area of what is now called the Mercedes-Benz Excellence Center, which also offers retail services for the AMG line of performance vehicles. Agnes Chung, a senior manager at Mercedes-Benz, said that the move was part of an effort to improve exposure for the brand, as the company looks to carve a larger slice of the ultra-luxury market. (The 62S model sells in Hong Kong for about 8 million Hong Kong dollars, or US$1 million, partly due to luxury taxes.) “We love Repulse Bay as a location, but if you looked at the accessibility, I would definitely say there is no comparison to where we are at the moment,” Ms. Chung said. “Within that Wan Chai area, we will be able to find target customers who are around, and would like to look for a car of that range.” The Maybach name isn’t as widely known (despite photo ops with Russell Simmons and an ill-fated appearance in a Kanye West video) as other luxury competitors such as Rolls-Royce and Bentley, and its sales have struggled, with fewer than 200 sold world-wide last year. In its current form, Maybach has been in the market since the late 1990s, as parent auto maker Daimler stepped up competition with BMW and Volkswagen.

Daniel Libeskind’s latest project, an angular, nine-story academic building, opens today in Hong Kong. The Run Run Shaw Creative Media Centre is located on City University of Hong Kong’s campus and named after the local media magnate who donated 100 million Hong Kong dollars (US$12.9 million) to the institution last year. The 263,000-square-feet building features several Libeskind design touches, such as reflective surfaces and irregularly shaped windows, and houses a theater, classrooms and exhibition spaces. According to the starchitect’s site, its design “enhances the spirit of limitless possibility and outside-the-box thinking.” Run Run Shaw’s opening comes soon after that of Mr. Libeskind’s remake of the Military History Museum in Dresden. And by the end of this year, his Reflections at Keppel Bay, a condominium complex in Singapore, are expected to be complete. Given how prolific he is, Mr. Libeskind has been questioned on whether his designs are borrowing too much from each other. The Toronto Star asked him about it earlier this week, pointing out the similarities between the Military History Museum and his project at Toronto’s Royal Ontario Museum, which he finished in 2007. “They’re completely different buildings,” he told the newspaper. “People see an angle in a building, and they think they’re all the same. They’re blind.” The Star’s architecture columnist, Christopher Hume, couldn’t resist a last shot at the architect, saying that the strip windows of the new Hong Kong building were “reminiscent — you guessed it — of the ROM.” Elsewhere in Asia, Mr. Libeskind is working on Haeundae Udong Hyundai I’Park, a mixed-use project in Busan, South Korea. When finished, the tallest of the towers, at 72 floors, is expected to be the loftiest apartment building in Asia. He’s not the only high-profile architect building up his Asia credentials. Austrian firm Coop Himmelb(l)au also took on a Busan project with its Cinema Center, and Frank Gehry told Bloomberg earlier this week that he hoped to work on a museum in China and a “spiritual kind of building” in India, not to mention his residential tower in Hong Kong.

 China*:  Oct 30 - 31 2011 Share

China said yesterday that the purchase of European Financial Stability Facility (EFSF) bonds would not be on the agenda of the upcoming G20 summit in France, but added that President Hu Jintao would focus on the lingering European debt crisis and commodity prices. Zhu Guangyao , finance vice-minister, said China needed more time to study the details of the EFSF's new initiative before deciding on investment and urged Europe to take investors' needs into account. Zhu made the remarks after a meeting with EFSF chief Klaus Regling, who was in Beijing yesterday to persuade China to help restore the euro zone economy after European leaders reached a last-minute deal to contain the bloc's crisis. "We need to wait for the technicalities to be clear and also to carry out serious study before we can decide on investment," Zhu told a press briefing on the G20 summit. He said the EFSF's guarantee amounts for treasury bonds of troubled countries and the composition of the special purpose vehicle would not be finalised for at least a month. "I don't think how the member states will contribute to the EFSF will be discussed at the G20. It will not be on the agenda," Zhu said. While stressing that the resolution reached by European leaders to increase the leverage of the EFSF could help stop the crisis from spreading, Zhu called on Europe to make greater efforts to implement its agreements. Deputy Foreign Minister Cui Tiankai told the briefing the G20 summit would focus on stabilising financial markets and tackling urgent problems, including the debt crisis, based on the principle of mutual benefit. Other issues such as global monetary system reform and increasing the representation of emerging markets would also be discussed, he said. European leaders reached a deal on Thursday after a meeting in Brussels that private banks and insurers would accept 50 per cent losses on their Greek debt holdings. The EFSF, set up last year to aid troubled European nations, will be leveraged to give it firepower of €1 trillion (HK$10.9 trillion) to put a safety net under bigger euro zone states. Ding Chun , a European affairs specialist at Fudan University, said China would also want to see how the markets respond to the deal before deciding how to invest. "Indicators such as whether the market is convinced by the deal will be used," he said. "There are other alternatives for China to help, such as doing it through the [IMF]. That is the other factor China wants to consider." Before meeting officials from the Ministry of Finance and the People's Bank of China, Regling said he expected the country to continue buying bonds issued by the EFSF, but added that a conclusive deal with Chinese leaders was not expected. He said 40 per cent of EFSF bonds were purchased by Asian buyers this year, with China a "good" and "loyal" buyer. "We all know that China has a particular need for investment as its surplus has to go somewhere. The EFSF can offer some commercially interesting products [for China]," Regling said. The EFSF chief said the European Union was trying to come up with new mechanisms for investment in the financial facility to restore market confidence in the debt-laden region. He will discuss with China and other investors how to structure a special purpose investment vehicle and explore the possibility of linking it to the International Monetary Fund. China had not set any conditions for buying the bonds and there were no "special deals" between the EFSF and Beijing, Regling said. Critics have suggested that the central government may press Europe for trade concessions or to refrain from human rights criticisms. Fu Ying , another vice foreign minister, said she hoped Sino-EU trust would be enhanced after the crisis and both sides would treat each other without "outdated prejudices".

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

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